The Seven Phases Of Credit Card Maturity

Phase 1: no credit cards of your own (me until 1989)

Phase 2: low-limit cards in college + minimum payments - who cares about interest expense... it's all about cash flow! (1989 - 1992)

Phase 3 (optional) : can't make monthly minimum payments (a.k.a. wreck your credit) - don't answer the phone because Discover is calling (1992 -1993)

Phase 4: slowly start paying down credit card balances - credit still sucks and all of your consumer lending expenses are way too high (car, mortgage, etc.) (1993 - 1994)

Phase 4.5: you hate all forms of credit and resolve to pay cash (I skipped this one)

Phase 5: use credit cards as a convenience but always pay them off every month - this is where my parents live (1994 - 1999)

Phase 6: start getting reward & miles cards - charge like crazy, receive unusable miles & fret about it (1999 - 2002)

Phase 7: seek out cash-back cards and attempt to use them exclusively (a.k.a. easy money) (2002 - present)

Phase 7 is netting me about $1,100 per year of tax free savings and an extra month's float on $2-4k of expenses. The float's annual value is between $50 - 100 (based on my tax-free muni sweep interest in my E*Trade account).

Some would argue that using balance transfer offers to arbitrage interest rates could be a Phase 8, but I don't like the effort and potential credit score risk.

As soon as I figure out how to link you to my favorite cards, I'll post a follow-up