Tonight Discover wanted to know whether I had made a purchase for more than twice my credit limit. I have not used the card at all since a $5 purchase a few months ago. I’d not previously heard of the business or location where the purchase was made. The physical card has been in my possession and I have no reason to suspect anyone I know.

I think that I follow the FTC’s guidelines fairly well. I am not sure what I could have done to prevent something which seems so random.

In one way I think that this is just a normal hazard of using credit cards and has not really hurt me. But in another way I think that it probably should not happen to me twice a year. I have no idea how I could stop it. Well, that is not quite true. Having fewer credit cards would be a very good thing. I cannot get rid of any cards right now since the only one with no ballance is also the one that I have had longest. It is not worth hurting my credit score just to eliminate one of my cards.

I don’t know about you, but this would make me more reluctant to fly with them in the future even if the flight was perfect (which it wasn’t). Of course, if their flights are the cheapest, I’ll probably end up doing so anyway.

Have you ever run into credit card advertising someplace you didn’t expect? Tell us about it in the comments!

Photo by DCE licensed under Creative Commons

I’ve seen many personal finance sites recommend that when trying to keep a budget, you should only spend money in cash rather than using a credit or debit card. This, the common wisdom says, will help you be more aware of the amount of money that you’re spending and make you less likely to part with it. There’s just one problem. It doesn’t work for me.

When I go into a store, I almost always know what I’m going to buy. But on those rare occasions that I don’t, paying with cash is one of the surest signs that I’ll be parting with my money. The problem is this. When I spend cash, I inevitably end up with lots of smaller bills which are harder to keep track of (at least psychologically) and seem less worthy of my attention. So if I’m going through checkout with a loose $1 bill, I’m much more likely to get that pack of gum, or box of matches, or mini-lint-roller-that-I-don’t-really-need than I am if I go through with with larger bills and pay with plastic.

I don’t claim to know why it works this way for me, but it does. I consistently spend less when I use a credit or debit card than I do when I use cash.

What about you? Does plastic or cash cause you to spend more? Does it even make a difference at all?

I am not too scared of this because I know exactly how it happened, and have an idea of how we can pay it off, but still… It’s more than $10k! In addition, I owe around $19k in student loans, and In Debt has about $10k left on his car.

**Around 80% are mine. Okay, eight of them are mine. I know. The funny thing is, I’ve had lots of cards and no debt in the past. I just have a card addiction. Along with eliminating debt, my goal for this year is to also reduce the number of credit cards. But I’ll leave that for another post… and another day.