Credit Is Neat.. IFF Used Correctly

I know you’re thinking I misspelled “if” in the title .. actually, “IFF” is shorthand for “if and only if” (ask any computer programmer).

Anyway… credit is awesome! – Credit cards, lines of credit, preferred accounts with vendors, etc.. ALL GOOD STUFF — IF AND ONLY IF used correctly.. let me explain:

I have a preferred account with Newegg – what that means is:

  • Free Rush Processing – my order goes to the top of the queue and gets filled fast
  • Discounted shopping – there are promotions that are exclusively for preferred account holders
  • Line of credit! – which means I can buy now, but pay later!

More specifically, if the order is over $500, I don’t have to pay anything for 6 months (before they start charing an arm and a leg in interest) – and if the order is over $999, I have 12 months of deferred interest.

So basically, I don’t have to pay BECAUSE I have good credit and Newegg trusts me.. which is great for if I need computer equipment NOW but don’t want to pay the full amount, NOW.

Here is where is gets tricky… IF YOU DON’T PAY it all off within that given period of time, YOU WILL BE CHARGED INTEREST!

And I THINK (but am not sure on this, someone comment and let me know) that the amount of interest you had deferred in the time period will get tacked on in full (if you don’t pay it all off in time).

I could be wrong about that, but if it’s true, it would REALLY hurt.

And the same is true for any credit card.. they say: 0% APR for 12 months!

— OK GREAT! What happens after 12 months when you’ve put $3,476 on your card and haven’t paid a dime towards it.. you think they are going to start charging you interest on the 13th month? NO – They are going to charge you for all the months that you used their money and didn’t pay them back!

It’s only 0% APR if you pay the minimum payment during the 12 month period and then have it paid off by the end of the 12th month.. OTHERWISE you will be charge interest – and it won’t feel good.

But again, if you know you’re going to be getting paid (like you have a steady job or stream of income) – then using a credit card isn’t bad.

You get to have what you want/need immediately and pay for it when you have the money.

Just make sure you will actually have the money within 30 days (50 days max, depending on when your credit account revolves).. 🙂

I’m not an expert in this stuff, but I’ve never paid a lick of interest in my life – yet I am always using credit cards and over extending myself by a couple hundred bucks until the next paycheck.

THE BEST PART ABOUT CREDIT CARDS: I can’t believe I forgot this until now.. The MAIN reason I even use credit cards (aside from building my credit for future needs) – is for the POINTS! duh!!

My philosophy is this: If you have the money, and you’re going to spend it anyway.. why pay cash or with your bank check card? .. I have 2 free round trip flights (48 states) thanks to using 2 credit cards for a couple years..

I would have spent that money anyway, but didn’t have to go to the bank to take money out.. instead, I had to log into online banking and transfer funds from the checking account to the credit card, easy.

Now if you tend to forget things – then this method might not be the best for you in that you do need to remember to pay your credit card on a monthly basis (but they have email reminders now-a-days.. so this shouldn’t be an excuse).

Anyway, let me know if you have questions, I’m going to go buy some beer on my credit card now… good day!