The Six Commandments of Credit Cards
Optimize credit cards
The Six Commandments of Credit Cards is a framework for optimizing credit card usage to maximize rewards and minimize fees. It provides a step-by-step guide on how to pay off credit cards regularly, waive fees, negotiate lower APRs, and keep main cards active. By following these commandments, individuals can improve their credit score, reduce debt, and earn more rewards.
- Pay off your credit card regularly to improve your credit score.
- Try to get fees on your cards waived to minimize expenses.
- Negotiate a lower APR to reduce interest payments.
- Pay off your credit card regularlySet up automatic payments to ensure timely payments and improve your credit score.Pro tipUse the 50/30/20 rule to allocate your income towards necessities, savings, and debt repayment.WarningMissing payments can lead to late fees and negative credit score impacts.
- Try to get fees on your cards waivedCall your credit card company to request fee waivers, especially for annual fees or service charges.Pro tipBe polite and persistent when negotiating with customer service representatives.WarningSome credit card companies may not waive fees, so be prepared to switch to a no-fee card if necessary.
- Negotiate a lower APRContact your credit card company to request a lower APR, citing your good payment history and competitive rates from other cards.Pro tipUse online resources to research and compare APRs from different credit card companies.WarningAPR negotiations may not always be successful, so be prepared to explore other options.
- Keep your main cards for a long time and keep them activeSet up automatic payments to keep your main cards active and improve your credit score.Pro tipUse a credit card tracker to monitor your accounts and ensure timely payments.WarningClosing old cards can negatively impact your credit score, so consider keeping them active or closing inactive ones.
Eric forgot the due date for his credit card and was charged a late fee and interest. He called the customer service line and was able to get the late fee and $20 of the interest charge refunded.
Lyla negotiated car loans, student loans, and home loans, saving $15,000 to $25,000 in interest alone.
The framework was developed by Ramit Sethi, the author of the book 'I Will Teach You to Be Rich, Second Edition'. The commandments are based on his own experiences and research on personal finance and credit card optimization.