The Downside of Using Credit Cards Responsibly

downside using credit cards responsiblyIn the personal finance blogosphere, you’ll find many mixed views regarding the usage of credit cards. Some will say they’re evil and you shouldn’t ever use them, others will say go ahead and use them as long as you’re responsible. On top of those, you’ll find those who suggest only using them for emergencies and those who talk about how wonderful they are and how you can actually earn money by using them.

Personally, I’ve been talking about using them responsibly and earning rewards because I was using them for everything. Yep, that’s right—I was credit card happy. Things were going brilliantly and I loved it. I wasn’t paying any interest because I was paying it off right away and I was also earning tons of rewards. Was? Things don’t always go as smoothly as we expect them to. So, with a heavy heart, I’m going to share with you the downside of using credit cards responsibly.

About the Card

The credit card that stole my heart was the Best Buy Reward Zone MasterCard even though they didn’t seem interested in increasing my credit limit. I had a tiny limit of $600 on the Best Buy MasterCard, but that was okay.

I kept making payments so that we wouldn’t get too close to the meager limit since we had started using it for everything to increase our reward earnings. I’ve had the card for a while, so it was a large chunk of my credit history and I sucked up the $36 annual fee to keep my credit score going in the right direction. I figured if I could earn more than the annual fee in Best Buy reward certificates, then it wouldn’t suck too much.


We would use our credit card for everything from gas and groceries to paying bills, so at least once each week, I’d send off a payment for the amount we charged to the credit card. Sounds easy enough, right?

Nope, it appeared that every time I made a large payment and we were really close to our credit limit, they would decide to put a hold on that large payment. Pretty lame. Okay, so hold off on using the credit card until the payment goes through and it’s all good.

Unless you have automatic payments set-up on the card for some of your recurring bills, such as renter’s insurance, Netflix and GameFly.

3 small payments spread out over the month, but enough to stress me out when the balance is so close to the credit limit. I kept freaking out that one of those payments would make us go over our credit limit. It’s not just worrying about an over-the-limit charge, nope, there’s more to it.

If we go over the limit, we’ll get charged a fee (of course), they can raise our interest rate (not much to worry about since we don’t pay interest), it could show up on our credit report, and it can raise our interest rates on other credit cards and accounts that aren’t even attached to that account. That’s quite the punishment for going over the credit limit once.

When my honey and I were on vacation last October, we had another issue. I made a couple large payments to our MasterCard before we left so that we’d be covered for the whole vacation. I figured the payments would go through and cover the charges as they arose. We ended up with a large credit on our credit card and charges that were taking much, much longer to go through. It was awful, stressful, irritating and embarrassing. When we checked in to our hotel, they couldn’t even charge our entire stay on the credit card because of the low amount of available credit.

The hotel was awesome though, they worked with us and took out small amounts here and there until the total amount was paid. I called the credit card company to ask what was going on and they said that it can take up to 14 days for charges to go through and until then, they will be pending. It didn’t matter that we had a ginormous credit. They didn’t care that we were on vacation and kinda screwed, they said that we could apply for a credit limit increase. So I said fine, totally forgetting that it would show up on my credit. No credit increase for me, nope, we were denied an increase. I honestly have no idea why we were denied an increase, we don’t have horrific credit or anything. It was so frustrating.

I was glad that we had brought some cash and other cards with us in case of an emergency; otherwise we wouldn’t have been able to do anything on our vacation or even eat. It was a crappy situation, but we made the best of it; by planning ahead (just in case) we were still able to have a great vacation.

So in all, the second half of 2011, they held 3 or 4 payments when we were super-close to our credit limit. Each time I totally freaked because I didn’t want it to make us go over our limit. I shouldn’t have to stress out if I’m being responsible with my credit card usage, but they were out to get me.

In 2011, I earned a total of $345.00 in Best Buy reward certificates from using the Best Buy reward zone MasterCard, I didn’t pay a cent of interest, and I made all of my payments on time (well, actually way ahead of time). So it sound like I’m a good customer and responsible credit card user…but not in their eyes.

After the last time they did this, I finally sent an email to the credit card company asking them if they keep doing this each time I get close to my credit limit because they’re trying to make me go over the limit.

I didn’t expect them to even reply, but they did. Of course they didn’t answer my question at all, instead they danced around it and told me the same old shit they always told me when I called and asked them about it.

Their Side

In the eyes of the credit card company, I was awful. They weren’t making any money from me (aside from the $36 annual fee) but they were dishing out tons of reward certificates each month. I wasn’t going over the limit, paying late or racking up interest charges.

Credit card companies aren’t out there to reward you for being responsible consumers; they’re out there to make money. They want you go incur interest charges, late fees and over the limit charges, that’s how they run their business.


So in December, I started backing off on being credit card happy and went back to primarily using our debit card again. I won’t be earning as many rewards as I was before, but the amount of stress I’m saving myself will be worth it.

I still have my 3 automatic payments on our Best Buy Reward Zone MasterCard and use it to pay our bills online, but that’s about all I’m using it for. It sucks that being responsible with my credit card ended up having a downside, but I had a pretty good run. Maybe one day I’ll get back into it…or not.


Has anybody else had this happen?

About Jen Perkins

Likes: saving money, being debt free (aside from our house), zombies, travel, getting money, blogging and dogs. Dislikes: debt, being broke, bunnies, wasting money, not having enough money to travel the world and paying interest. Facebook  ♥  Twitter  ♥  Google+  ♥  RSS


The Downside of Using Credit Cards Responsibly — 55 Comments

  1. It does sound like they were playing games with the charges as you got closer to the limit. Store cards usually have a lower limit, however, so I don’t know how strange the $600 was.

    The lesson? The Best Buy Credit Card is no good for day to day usage. Have you since closed the card?

    • Yep, they were definitely out to get me. $600 for a MasterCard that I can use anywhere seems really weird to me, I swear it should be higher. I haven’t closed the card because I’ve had it forever, and still kinda want to earn rewards here and there for paying bills and stuff. I’m just going to barely use it and pay it ASAP; there’s no way they’re gonna get any money out of me. 😉

  2. I had a friend who had the same type troubles with auto-pay bills through her bank. She would make a deposit but they would hold it for various amounts of time and several of her auto-pays were late. I had not heard of this happening with credit cards. It is bizarre that they can say it takes up to 14 days for a payment to clear. It really sounds like they were pushing you to go over your limit. I would cut that card up. It’s not worth the stress!

    • Yeah, it’s pretty shifty of them. That sucks that your friend had similar issues with her bank and paying bills, hopefully she didn’t get charged any late fees. :-(

  3. Sorry to hear about all the hassles that they were putting you through with this credit card. That is the major disadvantage of a card with a low limit. Still, they shouldn’t be able to play games like that to try to get more fees.

    What I would do is wait a while and then call them back to ask for a credit limit increase again. Explain that if they can’t do that, you will just be taking your business elsewhere. Phone reps often have more flexibility when it is a customer retention type situation. If they really can’t help you, go ahead and apply for a different rewards card elsewhere. If that limit is low too, consider keeping both cards active.

    • Totally, low limits really suck. I’ve been thinking about a card that earns air miles, since we’re really wanting to travel more. My credit should improve a lot in the next few months, so maybe I’ll check into that then. :-)

      • You might want to consider a card that gives you the option of airline miles or cash back. Sometimes you get tempted into a vacation you can’t really afford just because you have some airline miles on your card. My old boss once gave me 2 airline miles flights as a bonus, but then I spent thousands on the other vacation expenses.

  4. Sometimes the hassle isn’t worth it when it comes to rewards. I have a few rewards cards and I’ve been lucky, but I definitely wouldn’t want to have those kinds of headaches from a dumb credit card.

    • It certainly makes you question how much it’s really worth to you. I have enough headaches without stressing about the credit card—usually at least 3 a week.

  5. Simply threaten to switch to another card. I recommend the Capital One cards. Check them out, I’m sure you’ll get the amount of credit you need to make sure this doesn’t happen again!

    • I used to have 2 rows in the nav. menu, and I dropped it down to 1. I’m trying to make it more user-friendly and have room for a couple new pages I’m working on.

      It’s definitely nothing compared to what you’ve done at your blog. OMG! I wasn’t sure I was even at the right blog, it looks AWESOME!

  6. How frustrating! That would be so stressful when you’re on vacation – especially since hotels and car rental companies will “hold” part of your credit limit.

    Last year, we moved from the U.S. to Australia. At least from what I’ve seen, I had so many more issues with delayed payments and banking issues in the States. Here, no one uses checks because it’s so easy to electronically transfer funds (for free) from one bank account to the other. Then again, interest rates on both credit cards and savings accounts are way higher.

    • Yeah, it really stressed me out. That’s cool that things have been better in Australia so far. We rarely use checks anymore, just 1 per month to pay our rent. Savings accounts with higher interest sounds nice, and the credit cards could be avoided if you were able to pay it off each month. Sounds like you guys have it a lot easier there. :-)

  7. They definitely are there to make money no doubt! I went a little overboard for my Jan spending due to a trip to the island. Yikes. Glad you’re back on track!


    • Yep, they’re not tricking me out of my money, no sir. I’d probably go a bit overboard on my spending too if I got to go to Hawaii. Thanks Sam. :-)

  8. Bummer–I got the captcha wrong and it erased my comment!

    Way to let go of some drama in your life!

    I use credit cards as much as possible to reap the rewards, and diligently pay them off each month before any interest has accrued. To date (since 2006), I have paid one $39 fee for a mistake (I shut down a bank account without shutting off the automatic withdrawal), and have reaped over $1500 in gift cards. Woohoo!

    • I’m sorry Amanda, the captcha SUCKS! I keep meaning to check out the kind where you just click the little box—so much easier.

      Okay, $1,500 in gift cards is AWESOME! That sucks about getting that one fee, but you’re still rockin’ the rewards. :-)

    • Hah, I just found this site and was reading through some posts and comments and found this one. I just started my own blog last week and one of my first posts was about how much I hate captcha. And you have now answered my question about what happens to everything you’ve entered on the page if you get the captcha wrong! If it’s just one comment box I’ve filled in, I’ll copy the text in case I get the captcha wrong, but I’ll request new words until I’m relatively certain I can read them.

      I also use my credit card for all of my purchases to accrue rewards, while of course paying the bill on time and in full each month. I always opt for statement credits, because you get the most bang for your buck with those.

      • Congrats on starting a blog, it’s a ton of fun. :-)

        I know, captcha is the devil—I can rarely read it. Too bad everybody doesn’t just do away with it.

        With this card, I never got the option for statement credits, just reward certificates to spend at Best Buy. I will be looking into getting a different credit card soon and I’ll look into the statement credits. :-)

        • I have options for all sorts of rewards with my credit card. I did the math and statement credits are the best value. But I can understand why it could be psychologically easier to get a gift card or a specific item with the rewards points. Before you cash the points in, they don’t have a “real” value, but if you get a statement credit, those points are transformed into something that has a very real value – dollars. If there are other rewards that you’re interested in, I can see how trading your points, which have no “real” value, for that item is psychologically easier than getting the statement credit and earmarking some of that now real money for the purchase of the item at a regular store. Once it’s in a form that’s real to me, I don’t want to spend it. :)

  9. Don’t think that just because you are not paying interest that they are not making anything from you. They make over 1% of every purchase plus your annual fee. That adds up over time. You are a valuable customer even if you are a no interest “dead beat.”

    I only use cards with high limits to make sure I don’t get stuck in a bind.

    • I didn’t know they actually made money off my purchases, that’s nice to know. I would prefer to use higher limit cards too, $600 is cutting it too close.

    • Yep, and those people just end up going into debt. Sad but true. :-( I’m not completely off the train, but I’m backing off and watching my step. :-)

  10. I have a Best Buy Credit Card that we use form time to time to make big purchases. The last on was a dishwasher and we paid it off in 12 months with zero interest. Love the 12 months no interest.

    • One of Best Buy’s greatest lure is that 12 months no interest. I think that’s what originally convinced me to get the card years ago.

  11. You have to remember, the credit card company is like a Vegas casino, the odds are always in their favor because they design it that way. They will always find a way to make money.

    That’s why I don’t use credit cards and haven’t for about seven years now. The best thing you could possibly do is to work a good get out of debt plan and go cash/debit card only from here on out. I’ve been debt free for several years now (except for the house) and it really takes your stress level down a few notches.

    You can do everything with a debit card that you can with a credit card like buy plane tickets, rent a car, and get a hotel room, I’ve done it many times. When you’re able to save and pay for a vacation with cash, it’s really a great feeling!

    • You’re right, they will always find a way to make money. Saving and paying with cash is an amazing feeling, I can’t seem to bring myself to buy stuff we can’t pay cash for anymore. :-)

  12. Most of our cards are high limit, but I still call them and let them know about my travel plans. Because once when we went out of town, after the first purchase they put a fraud alert and just didn’t let anything go through. I loved my current 2% schwab card. It is a shame they discontinued it and it became BOA card, after that it went downhill. We just got the 2% Fidelity card, hope that one stays.

    • I always forget to let the credit card companies know when we’re going out of town. I know I should, but I just can’t seem to remember. I hope the new Fidelity card works out good for you guys. :-)

  13. wow, I’m the same way, I charge and charge and payoff most of the time before my bill is due. You said it though the credit card companies are not out there to reward good behavior. they want you to pay the minimum

  14. I only have 1 card for that reason but I used to have a card that tried to charge me a yearly fee. It was very sneaky so I cut them off. And no I didn’t pay the fee.

  15. I’ve had the same credit card for 15 years. I know the terms well and the credit union doesn’t play any tricks. This is the danger of having multiple credit cards, you need to understand how each company manages it so that you don’t get caught up in problems like this. Keep it simple.

  16. This story is the perfect example of why credit cards need to be researched carefully before getting one. The only time I’ve ever gotten a store credit card was to get the interest free loan. After I paid off the loan in a timely manner, I’ve always just cancelled the card. For every day usage I’ve always gone with large limit cards that offer cash back and that don’t make me pay a yearly fee. So for me I find it confusing that you chose to use a store credit card with a low limit for every day usage. Can you explain why?

    • First, it was the only credit card that allowed me to earn any kind of rewards. None of my other cards would offer me an upgrade to a rewards card. I also hadn’t wanted to apply for another card yet since I’d been trying to improve my credit.

      As for the Best Buy MasterCard, it didn’t seem like it would cause me a hard time. I figured as long as I sent in the money to pay it off each week, it would never really matter about the low credit limit. I still haven’t paid any interest on it, nor have I gone over the limit. I earned $345 worth of rewards to spend at Best Buy last year, which saves us money on things we would normally purchase.

      Overall though, the low credit limit just caused me a lot of stress—which is why I’ve backed off on using it often. I’m going to be looking around for a new credit card with rewards, which will be easier with my higher credit score now, but I’ve got a lot of research to do first.

      Thanks for stopping by Kellyology. :-)

  17. Seems to me that the other issue with credit cards is that, if we are really trying to conserve and reserve, that plastic burns a hole in the pocket more easily than shelling out green paper. Just my experience. But then again, I had to learn that I shouldn’t just buy stuff because I could and the stuff was deductible… I probably ought to actually need the stuff….

  18. So I represent evil credit card companies. I love love love responsible adults such as yourself that make your pymnts on time. even without interest being billed, there are always the interchange fees. everytime you swipe banks make money. everytime. and oftentimes the answer i have to a cardmembers question makes no sense to me personally. but whatev. I have a personal abhorration for credit cards myself, but it is the land i am in because the paycheck has been the most consistent.

  19. I too had an experience with the infamous Best Buy Card. My husband and I purchased several household appliances last summer–flat screen TV, washer, dryer, fridge and stove. Now, some of these appliances had 0% interest for 6 months and others had 0% interest for 12 months and others for 18 months. The problem is that they don’t apply your monthly payments to the 6 month items, just to the entire bill. So, here it is 6 months into it, and I get smacked with a huge interest fee because the 6 month 0% has expired. What happened to my 12 and 18 months 0%?? Anyway, I just paid the entire thing off so I wouldn’t have to worry about it.