As I recently wrote about, Mint.com (along with Square, BillGuard, and a handful of other apps) has revolutionised the way Americans handle their personal finances & transactions with others.
Using Mint.com regularly has given me an all-too-clear view of my finances, and has brought me to this sobering realisation: I have too many accounts, specifically, I have too many credit card accounts.
The reason for this was quite simple: since I founded one of the Web’s popular credit card deals comparison sites, Outlaw, I was often in a situation where I’d apply for a card we planned to write about so that I could review it first-hand, experience the quality of customer service, ease and speed of cash back redemption, and so on.
This has just become too complex, though. My goal now is to get down to ONE credit card, and use that for almost all purchases. Ideally, I wouldn’t even need an app like Mint.com, because my finances would be so utterly simple I’d know where I stand at all times. How will I accomplish that?
– Pay down my credit card balances to $0 outstanding, but keep the old accounts open! This is very important. Closing a credit card account lowers your available credit, which in turn can adversely impact your credit utilization ratio (and thus your credit score).
– Pick and stick to one rewards credit card for almost all daily purchases. I plan to use the Capital One Venture Rewards card as my personal primary card. analysing Mint’s transaction data has shown me that a large chunk of my personal “wealth” is going toward travel expenses these days — due to sky-high jet fuel prices, and recent acquisitions which have limited domestic route competition, air travel is expensive these days. Venture Rewards gives you 2 air miles for each $1 you spend on the card, and the miles don’t expire, making this an ideal choice for cutting down on my airfare costs.
– Stick to hard paper statements for this one card account, rather than e-statements. Why? Although Mint.com makes it easy to peruse your recent transactions/purchases, and categorizes them brilliantly, I want to have the old-school experience of reviewing my statement once per month, and then filing the hard copy away for record keeping purposes. No passwords to remember, no complicated stuff. And then I plan to write a check for the amount owed and send it to the bank. Or pay electronically via my bank’s Bill Pay service. Either way, the plan is to review that hard copy (looking not only for fraudulent transactions, but for signs of personal over-spending in dumb areas) and then immediately conquer the outstanding balance. Travel rewards cards tend to have high interest rates, so it doesn’t make sense to keep any balance on the card.
– Start making a habit of moving extra cash into my checking account. Mint.com has also shown me that I rarely have enough “emergency cash” in any of my accounts; my reliance on credit is too high. A sudden loss of job-related income would put me in a bad place.
I’ll let you know how this financial improvement plan works out!
Disclosures: We’re a credit card promotions site, and as such we maintain financial relationships with numerous banks and financial institutions, including some of the offers and cards mentioned or featured herein. This article originally appeared in slightly different form on Credit Card Outlaw.
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