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Credit lessons from top personal finance bloggers

Emily Crone

A few weeks ago, I was interviewed by CESI Debt Solution for a blog post on frugality tips. They asked me and 18 other personal finance bloggers a series of questions about frugality and posted it as a group interview. I was inspired by this concept and decided to do something similar: I interviewed seven of my favorite personal finance bloggers about their thoughts on credit cards and debt.

Read on to learn some tips and tricks about paying off debt and using credit cards wisely, and find out what these bloggers think of the new Credit CARD Act. You will also find out whether these bloggers think it’s possible to live without credit cards. Be sure to leave a comment and give us your two cents, too!

1. There are many different strategies people use to pay off credit card debt. What do you think is the best approach?

You have to make a commitment to pay off credit card This has to be something you are going to do every day until your debt is gone. For every purchase you make on your card, you are delaying the day you will be out of credit card debt. Cut back on spending in general, stop adding debt to your card(s), and pay off as much as you are able every month. Pick one card and attack the debt vigorously. Once it’s paid off, move to eliminate the next.

If I carried a balance, I would pay off card debt with the highest interest rates first.
But more specifically, I do my best to pay off my cards in full each
month. If I notice myself with a larger balance than usual during a
given month, I do what I can to refrain from using my cards until I pay them off completely.

I like Dave Ramsey’s debt snowball to pay off credit card debt. If the balances are somewhat close, then go with the highest interest rate first. Don’t forget to call each credit card company and ask for a lower interest rate.

Before thinking about paying off your credit card debt, save enough for an emergency fund first — at least six months’ expenses. That is because things such as a car repair, or having to fix a leaking basement can cause you to pile on more credit card debt if you do not have an emergency fund. Once you have that emergency fund, then come up with a budget and set aside a sum every month to pay more than the minimum balance on your credit cards. You can either start with the card with the highest interest or the one with the lowest balance. Once you have paid off one card, apply the savings to pay off the next (this is the snowball method). Transferring your balance to a card that offers a 0 percent introductory rate will help speed up the process as well.

The best approach for paying off credit card debt will vary from person to person. The important thing is that you make a plan and follow through. If you’re motivated by seeing being-frugal.pngbalances paid off quickly, paying the smallest balance off first is the way to go. If you’re motivated by paying the least amount of interest, you’ll want to start by paying the debt with the highest interest rate first. Once you find a plan, make sure you can stay motivated. Post notes around your house, keep a chart that shows your progress or blog about it. The best approach is whatever keeps you motivated to follow your plan through until the end.

I think the key to paying off credit card debt starts with budgeting. If you want to use a credit card wisely, you need to pay it off each month. To do that, you have to make sure you spend less than you earn, and that’s only possible if you budget your spending. Once you’ve set that up, start contributing a little extra each month toward your credit card debt. You can use strategies such as a debt snowball to help, but ultimately, it’s a simple numbers game.

Paying off credit card debt takes discipline and resolve. It’s easy and tempting to get caught in the trap of making minimum only payments that can take many years to pay in full. The first and best approach to paying off credit cards is to stop using the cards (at least until they are paid) and never make only the minimum payment. Start with the account carrying the highest APR and apply as much as you can to that account. You should strive to consistently pay more than the minimum payment due every billing cycle. When your balance starts to drop, continue to make a consistent payment (as much above the minimum as you are able) and you will see progress much more quickly. As you pay off one debt, make sure to apply the funds you were using for that debt to another debt in addition to the payments you were making already. Using this strategy, your debt repayments will begin to snowball and you should see results.
— Tracy East at CESI Debt Solutions

I’m not sure there is any wrong way to pay off credit cards — as long as you pay them off! That said, I suggest what I call the “Debt Tsunami,” where you list out every debt and then pay them off by which has the most emotional impact (or weight) on you. Debt is a very emotional process and topic. By paying off the debt you hate the most, you’ll be building momentum!
Man Vs. Debt

2. What are your best tips for using credit cards wisely?

You need to know what your budget is for the month. Credit cards aren’t evil, it’s just that it’s easy to lose track of your spending. Track your receipts and log onto the card’s Web site to check your balance weekly. This helps to make sure you aren’t overspending.

Credit cards can easily be misused. If you must use a credit card, then deduct the sense-to-save.pngamount from your checkbook ledger with each purchase, or move the exact amount to a savings account specifically for paying your card in full each month.


Spend only what you intend to pay off every month. Set up autopay feature so you will never be late or never be accused of being being late. Get a credit card that gives rewards like cash rebates to get some money back from using your credit cards. Credit cards these days have shopping portals that give you rebates and even “rotating categories” of rebates where you get more than the standard 1 percent rebates every so often … Use your credit cards for large purchases because they have extended warranty features that will save you money, since you don’t have to pay for extra warranties on the product. Use your credit card for car rentals because you can save on auto rental collision insurance. Also use your credit card for airline purchases because you get things such as baggage insurance. To sum up, use your credit cards for everything, but only if you pay in full. Use it as a tool and not an ATM machine.

Never miss or skip a payment as this will affect your credit report. Understand your spending patterns and apply for rewards cards that fit your patterns best. If you find yourself falling deeper into credit card debt, cut your cards and get your debt under control before using plastic again. Read the terms and conditions of your cards carefully before signing up for a new card so that there are no surprises (or you minimize them).

Don’t use credit cards. That’s the short answer. But if you insist on using credit cards, pay off the balance every month. Period. If you find yourself relying on your cards to inflate your lifestyle, it’s time for them to go.

You have to treat credit cards like cash. Unless you have the money to pay for it right this second, you can’t buy it. If you use a credit card, set aside bargaineering logothe cash so you can pay off the credit card in full at the end of the month. If you don’t have the cash, don’t charge it on your credit card!

Credit cards used wisely can help you keep track of your spending. They can be useful for travel and afford you convenience when you want to make purchases online. Many people get into difficult situations with debt because they had no emergency cushion or savings in place for items that come along unexpectedly (new tires for the car, an unexpected medical bill, etc.) and were forced to use their credit cards to make up that shortfall. When this happens without a plan in place to pay the balances down, a debt spiral can quickly get out of control. A wise approach to credit card use is to only use them for items you know can be paid off in a short amount of time.
CESI Debt Solutions

Frankly, I suggest NOT using credit cards. In order to use them wisely, I would ensure that I pay only regular, fixed bills. This would eliminate the increased spending that many have when using them for frivolous purchases.
Man Vs. Debt

3. Do you think you could live without a credit card?

If I couldn’t use a credit card I would adjust. A credit card is a convenience, not a necessity. That said, I’d rather have the option of using a credit card.

I would prefer to live without a credit card, but living in a world that demands credit, it’s not easy. I have no debt anymore. I’m renting an apartment and would like to get a mortgage in the near future, so I’m keeping my card active for the time being. Also, it’s handy to use a credit card when renting a car or booking a hotel room.

No. Because I’m not the type of person who carries any cash around. ask-mr-credit-card.png You’ll be lucky to find $5 in my wallet. I also hate thick, fat wallets.

I don’t believe I can live without a credit card. I love credit cards but that’s because I use them as a tool of convenience and as a way to save while spending (via rewards). I have never had any problems with using cards — in fact, they’ve been a great help to me throughout my life. Some reasons why I can’t live without them: I don’t like carrying cash (I’m paranoid), I am able to dispute payments if need be as my card acts as a buffer for me, I love the convenience of using plastic and I like the rewards I earn from my cards.

Absolutely! I’ve been living without credit cards for almost two years. I haven’t missed them yet, and I don’t anticipate that I will. Sometimes I have to be creative in an emergency, because I can’t just charge it, but I enjoy the freedom of knowing I’m not beholden to a credit card company. I also find my definition of “emergency” has changed. It’s a good thing.

I think I could, but life is made much easier with a credit card. I like not having to carry around a lot of cash, which has no consumer protections, and instead relying on credit cards. If I were to have my wallet stolen, I know my credit cards are protected, whereas my cash isn’t. If credit cards were gone, it would be inconvenient, but I wouldn’t lose all that much.

I know that I could live without a credit card because I’ve been doing it for about two years as I am paying off my cards. I use my debit card for most purchases to track my cesi.pngspending and for convenience. If I don’t have the money in my checking account to make a purchase, I simply wait until I do. It’s tempting to use a card when I really want something I can’t afford, but the freedom of not having those debts to weigh me down is much more appealing than the quick fix of a dinner out or a new pair of shoes!
CESI Debt Solutions

Absolutely! My wife and I have been credit card free for well over 1.5 years now, including traveling through Australia, New Zealand and Thailand. It’s actually incredibly easy!
Man Vs. Debt


4. Do you think the CARD Act will make a difference in consumer behavior in regards to credit and debt?

I hope the CARD Act helps in containing consumer debt. If I could have seen what my debt was costing me as the act discloses now, I think I would have woken up to getting out of debt sooner. Knowing how long it could take to pay off a balance with only the minimum is quit sobering. Will the act be perfect? No. People like to spend and when you are young it’s hard to control. But I think the changes will help many people.

Yes. The restrictions ought to help lower the amount of fees people are charged, and I especially like the restrictions for those younger than 21. I got my first credit card at age 19 (without my parents’ knowledge, I should add). If they had co-signed for it (I doubt they would have) or if I had to prove my income, maybe my now-husband and I wouldn’t have racked up almost $10,000 in credit card debt.

The CARD Act should in theory make it harder for students to get credit cards (or at least they will not get ridiculous credit lines). This will prevent more students from getting into too much credit card debt, and I think there will be a positive impact on college students. The fact that credit card companies cannot be marketing on campus blatantly also helps as many students innocently get credit cards to help a friend or a club, but ends up abusing the credit lines given to them out of ignorance. I think we will also see consumers being more cautious about applying for new cards if they do not intend to use it more than once. Lastly, because credit card companies have to disclose in their statements how long it will take to pay off a credit card if all only minimum payments are made, I think over time consumers WILL be carrying smaller balances overall because that information will be in front of them every time they read their statements.

I hope the CARD Act will bring more awareness to consumers with regards to credit carddigerati-life.png use and their credit card debt. I also hope this will benefit consumers in the long run, but I think that a long-lasting recession does a better job with consumer behavior than does legislation. But I could be wrong … let’s see how it goes!

I hope the CARD act will be effective in preventing college students from getting into credit card debt before they fully understand the ramifications of running up credit card bills. I also think we’ll see more consumers opting to close their credit card accounts, rather than agreeing to interest rate hikes or other changes to their credit card terms. I think it’s going to be harder for consumers to get credit cards, which is a good thing. Less available credit means people will be forced to live within their means. It will be a painful adjustment, but in the long run, it’s a good adjustment.

I think it will help educate consumers about how credit card debt affects them. Knowing how much their debt costs them every month will be very eye-opening, and the publicity these new reforms are getting will go very far in opening people’s eyes about their own behavior. I don’t see credit card companies as evil conglomerates trying to deceive you; they’re simply helping you do whatever you want and profiting along the way. We need more education on this, and the CARD Act does help. There are some parts of the act that I disagree with, such as the restrictions for students, but for the most part I think it will have a positive impact on consumers in the long run.

I think that for consumers who are paying attention and are aware of the changes that have been made, it will make a difference. For those who are not aware or do not read their statements, it may not have much of a difference. I know for me it has been an eye-opening experience to see the new statements I have received in the mail from my credit card companies. When you see in black and white what the cost of credit will be if you only pay the minimum payments on your debt, it can be quite shocking. I think that all the press that the CARD Act received was helpful to make people aware of what is going on with their accounts. An informed consumer is always better off and tends to make wiser decisions.
CESI Debt Solutions

I think in general, it’s a good thing. It’ll have a very small effect in the short term, man-vs-debt.png but eventually it won’t do much to change consumer habits. Luckily, it’ll help give consumers a tool to punish the companies, which try to abuse shady practices, though.
Man Vs. Debt


My thanks to all who participated — and offered such great advice!

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  • Lori Anne Freeman Flanigan

    Please cut up yout credit cards. Save only one if something big comes up! Have a nest egg you put money into an account! Some day maybe the interest rates will be fare Maybe 10%.

  • Stephan

    Great conversation. The tip that stood out to me was way at the beginning. Create your emergency fund first, and then pay off your credit card bills. Couldnt agree with this more, as financial surprises can pop up at any moment and severly cramp your budget ( it happened to me)!