Credit Cards

Contents

How to use a credit card

  1. Pay for things using the credit card
  2. Set aside money to pay the credit card each time you use it
  3. Pay the statement balance by due date

What happens when you use a credit card

  1. Pay for items (charge)
  2. Cost of items are added to the current balance
  3. The current balance can never exceed the credit limit
  4. On the statement date, the current balance becomes the statement balance
  5. The statement balance must be paid by the payment due date
  6. Any portion of the unpaid statement balance is subject to interest after the due date

Best Practices

  1. Pay statement balance when due every month, preferably on auto-pay
  2. Know your statement and payment due dates
  3. Using your credit card does not build credit. Paying without incurring fees builds credit.

Basic Glossary

  • Statement: a detailed summary of the charges, payments and credits to your account that have occurred since the last statement date
  • Statement date: the cut-off date for transactions that are included on the statement, usually comes a few days after payment due date
  • Statement balance: amount you owe the day of statement date
  • Minimum payment: amount that must be paid by the due date. Failure to pay this amount can result in late fees and negative marks on your credit file.
  • Payment due date: date that minimum payment is due (see late payment fee). Pay the full statement balance by this date to avoid interest charges.
  • Remaining statement balance: statement balance minus any payments that have been made since the statement date

Extended Glossary

  • Credit limit: Maximum amount of money that can be charged to your account at any given time.
  • Minimum payment: the amount that must be paid by statement date to avoid late fees and negative marks on your credit report. If interest is charged, the minimum payment will include those charges.
  • Late payment fee: a fee charged on the next statement if the minimum payment is not paid by the due date
  • APR: annual percentage rate used to determine how much interest is charged
  • Cash advance: a cash withdrawal from your account. There is usually a per-transaction fee, either a small percentage or a flat fee. Interest accumulation begins immediately until the cash advance amount is paid.
  • Balance transfer: a cash advance that goes directly to pay off a balance on your account with another creditor.
  • Annual fee: Yearly cost of having a premium credit card. Cards that have annual fees usually offer services, benefits, coupons, etc. that will offset the cost.
  • Auto-payment: payment is made automatically each month before the due date from your bank account. Payment options are usually:
    • minimum payment
    • statement balance
    • amount you specify
  • Grace period: the time between statement date and payment due date when no interest is charged for charges made during that time. The grace period often is only valid after the statement balance is paid on the due date.

Notes on Interest

  • You will never have to pay interest if you always pay your statement balance by the due date.
  • Monthly interest can be roughly calculated by multiplying the current balance by your APR and dividing by 12.
  • There are separate APR’s for cash advances and purchases. Cash advances usually have a higher APR than purchases.
  • Sometimes credit cards will have an introductory APR of 0% that will be in effect for a specific amount of time, usually measured in months. If the balance is not paid by the end of the introductory period, the entire balance can be subject to interest including interest charged retrospectively.
  • Cash advances and balance transfers are sometimes offered with a 0% introductory APR but a one-time fee is charged.

Advantages

  1. Cash back/rewards
  2. Can spend during low cash flow
  3. Fraud protection
  4. Travel benefits

Disadvantages

  1. Misuse leads to excessive interest
  2. The Float: a false sense of security based on bank balances

Benefits (in progress)

Some benefits are common across cards. Premium benefits are usually available on cards with a membership fee.

Statement Credits

You charge a thing and receive reimbursement for it on your next statement.

  • Travel: reimbursement for common travel expenses like hotel stays, ride sharing, airline incidentals (baggage, seat assignments, etc), and expedited airport security.
  • Category credits: utilities, streaming, restaurants
  • Service credits: delivery services,
  • Vendors: Saks, Dell,
  • Services: Lyft, Gopuff, Uber, Walmart+, DoorDash, Instacart

Travel

  • Access to member travel booking portals
  • Enhanced status for hotels and airlines
  • Foreign transaction fees
  • Insurance: car rental, trip delay, trip cancellation, trip interruption, luggage
  • Free night certificates: offered by co-branded hotel cards like Marriott, Hilton, Wyndham
  • Free checked bag: offered by co-branded airline cards
  • Airport lounge access

Non-travel Protections

  • Purchase protection
  • Return protection
  • Extended warranty
  • Cell phone protection

Rewards

Rewards are complicated.

Vital Statistics

Lower deck finished

Bike miles in 2022: 0

Aches & pains: sciatica, right shoulder, left knee

Current reading: The Seven Habits of Highly Effective People by Stephen R. Covey

Recent listening: Talking Heads, Making Sense with Sam Harris, Very Bad Wizards

Recent viewing: Air Disasters, Call the Midwife, Seinfeld, Five Days at Memorial, The Patient

Recent playing: Wordle, Quordle, Duotrigirdle

Recent events: Columbia River Gorge adventure, annual birthday party, first public performance, Thomas visited, new glasses (goggles)

Visited family in Iowa, Graham & Kate got engaged, several family members got Covid

Recently accomplished: Finished replacing lower deck, fixed ice maker, cleaned shed roof, carpet cleaning

Imperative To Do: Fix the Spector, fall lawn care, clean the gutters, paint touch-ups

Vital Statistics

With my mom in Iowa

Bike miles in 2022: 0

Aches & pains: sciatica

Current reading: The Seven Habits of Highly Effective People by Stephen R. Covey

Recent listening: Hidden Brain, Planet Money, This American Life, Crazy Little Thing Called Love, Making Sense with Sam Harris

Recent viewing: The Sandman, Stranger Things, Hustle, For All Mankind, Surface, Trying, Five Days at Memorial, Black Bird, Synecdoche New York

Recent playing: Wordle, Quordle, Duotrigirdle

Recent events: Visited family in Iowa, Graham & Kate got engaged, several family members got Covid

Recently accomplished: Deck demolition, credit card churning, new glasses, yard debris disposal, landfill trip, lumber purchase, bought “new” grill

Imperative To Do: Lower deck replacement, fix ice maker, clean shed roof, clean gutters, fix the Spector

Vital Statistics

At Devil’s Punchbowl

Bike miles in 2022: 0

Aches & pains: sciatica, ankles

Current reading: Frankenstein by Mary Shelley

Recent listening: Hidden Brain, Planet Money, This American Life, Dark Side of the Mule, Mr. Morale & the Big Steppers

Recent viewing: Better Call Saul (season 6), The Wonder Years, Nova, Frontline, Made for Love, Barry, Hacks, The Flight Attendant, The Time Traveler’s Wife

Recent playing: Wordle, Quordle, Duotrigirdle

Recent events: Mini-vacation on the Oregon Coast, visits from the Codys and John January, working at the office, Kate’s graduation, Graham’s birthday

Recently accomplished: Replaced jack in the Ibanez, lawn mowing, Portland Heritage trees, called before I dug, mail for Mother, paid taxes, planted grass and root vegetables

Imperative To Do: Go on a bike ride, fix Graham’s bass, store CDs, Graham’s interview, buy new grill, landfill trip

Vital Statistics

Bike miles in 2022: 0

Aches & pains: right shoulder, sciatica

Current reading: Frankenstein by Mary Shelley

Recent listening: “Crazy Little Thing Called Love” by Queen., Hidden Brain, Planet Money, Unlimited Love by Red Hot Chili Peppers, The Miseducation of Lauryn Hill,

Recent viewing: Better Call Saul (season 5), Billions, Severance, Slow Horses, The After Party, The Power of the Dog, Cowboy Bebop (live action), Lost In Space

Recent playing: Wordle, Quordle

Recent events: Drew Eubanks signed by Portland, Thomas visited, snow in April including a fallen tree

Recently accomplished: Bass lessons, spring yard work, Portland Heritage trees, plumbing estimates, finished bathroom repairs

Imperative To Do: Go on a bike ride, fix Graham’s bass, store CDs, pay taxes, coastal getaway

Gratitude

The Crickets, led by Buddy Holly, had their first hit with “That’ll Be The Day” in 1957. Many more hits would follow  for Buddy Holly and the Crickets until his tragic death on February 3, 1959. He had just left a gig at the Surf Ballroom in Clear Lake, Iowa, when his plane crashed in the middle of a frozen cornfield. All three passengers – Holly, Richie Valens and J.P. “The Big Bopper” Richardson – and the pilot were killed instantly. 

Last summer I visited the site of the crash which is only 45 minutes from where I grew up. There are no signs on the gravel roads leading to the cornfield and there is no dedicated parking. Once you get near, though, the presence of other visitors is soon evident.

The site lies at the end of a half mile walk along a dirt road with weeds and grass growing in the center. There is a small entrance at the start of the road that is festooned with horn rimmed glasses, flowers and other mementos.

The Entrance

As I walked past the entrance and down the half mile path to the crash site, I couldn’t help but notice something remarkable – crickets! Every person I encountered on the path I asked, “Can you believe it? Crickets!” The younger ones looked puzzled but the people my age nodded politely and kept walking back towards their car. Eventually, I stopped telling people about the crickets.

As I walked out of the cornfield and approached the entrance, a man about my age walked towards me in the opposite direction. I said to him, “I can’t believe the crickets!” He looked at me puzzled at first and then realized what I meant. He pointed at his ears and said, “I can’t hear high frequencies any more.”

As he walked by me, I stopped for a moment, pulled the hearing aids out of my ears and I could no longer hear the crickets. I put them back in and the crickets were audible again.

On that day, I was extra grateful for my hearing aids because they helped me hear the crickets singing for Buddy Holly.

Vital Statistics

Bike miles in 2022: 0

Aches & pains: right shoulder, neck

Current reading: Foundation by Isaac Asimov

Recent listening: “Just the Two of Us” by Grover Washington, Jr., Hidden Brain

Recent viewing: Super Bowl, Pose, Call the Midwife, Shameless, The Book of Boba Fett

Recent playing: Galaga Wars+

Recent events: Eply maneuver, Drew Eubanks traded and waived, start of the espresso era

Recently accomplished: Filed taxes, plumbing estimates, bass lessons, baked a cake, sold Rory’s cat food, turned compost, video for Mark’s birthday

Imperative To Do: Go on a bike ride, replace toilet seat, fix Graham’s bass, prep for plumbing repairs,

Vital Statistics

Bike miles in 2022: 0

Aches & pains: right shoulder, sciatic, benign paroxysmal positional vertigo

Current reading: Foundation by Isaac Asimov

Recent listening: Very Bad Wizards, John Parr, Planet Money

Recent viewing: The Witcher, Shameless, NFL Playoffs

Recent playing: Galaga Wars+

Recent events: Xmas in New Mexico, ate a smash burger

Recently accomplished: Installed knife bar, installed bidet, ice maker deep clean, leaf removal, invented Mac ‘n’ cheese-burger, bass lessons

Imperative To Do: Go on a bike ride, schedule roof estimates, file taxes, plumbing estimates, replace toilet seat, Eply maneuver

All I Got For Christmas 2021

Most all I got for Christmas
  • Beacock Music folder
  • Blue Eyes, Brown Eyes: A Cautionary Tale of Race and Brutality
  • Gutter cleaning pressure washer attachment
  • Lawnmower deck cleaning tool
  • Philips Hue starter kit
  • Luthier toolkit
  • Magnetic knife bar
  • Ernie Ball guitar strap
  • Counter top water distiller (not pictured)
  • $25 Visa gift card (not pictured)
  • New Mexico Christmas 2021 commemorative stocking cap
  • Benign paroxysmal positional vertigo (not pictured)
  • Soldering pen and accessories (not pictured)

Vital Statistics

Bike miles in 2021: 0

Aches & pains: right foot, right shoulder, hands

Current reading: Against Empathy by Paul Bloom

Recent listening: Hidden Brain, Radiolab, Trip Shakespeare

Recent viewing: Curb Your Enthusiasm, Succession, Invasion, Vera, Get Back

Recent playing: n/a

Recent events: Kitchen warranty repairs, Lightspeed holiday happy hour

Recently accomplished: Finished Xmas shopping, sold Tina’s iPad and my iPhone 11, found three heritage trees, cat flea treatment

Imperative To Do: Go on a bike ride, schedule roof estimates, feed Baxter