If credit were as simple as cash, we wouldn’t need cash anymore. Credit cards are very complicated sometimes, yet the fundamental financial skills needed to use them are not taught in schools or colleges. Here are my secrets to success in managing credit accounts.
#1 Always have at least two credit accounts
This is the number one, most important lesson. Credit cards help to establish your history of responsible borrowing, whether or not you use them at all. For pilots especially, it’s a good idea just to have a credit card in the airplane in case of unexpected expenses while traveling. And believe me, a credit card can stop working at any time for a wide variety of reasons. Two “reliable” credit accounts is my bare minimum. If one credit card is restricted to specific stores or small spending limits, then I need to have three cards or more so that I always have a fallback.
#2 Get your rewards
All the best credit cards put something back in your pocket when you spend money. Rewards might be in the form of billing credits, gift certificates, or free air travel. If you’re not getting rewards, it’s a bad deal. Look into it. Shop for what you like. Don’t take bad deals. Don’t open accounts that mention any annual membership fees. If you are attending a flight school that accepts credit card payments, this will be a matter of hundreds of dollars in rewards! Do the shopping before it’s too late.