One day a Cleveland-area man walked into a Bass Pro Shop, and they offered him a credit card with a promotion that would pay the sales tax. The savings amounted to $50, so he accepted. A few weeks later, he received a letter in the mail informing him that his credit score was 848. Perfect score is 850.
1. Never charge something without having something to show for it.
I take that an extra step. I don’t like to spend money at all without having something to show for it, so generally I’m more likely to buy a $5 magazine than I am to eat lunch at a fast-food joint. I’ll learn something from the magazine. Lunch at a fast-food joint is mostly low-quality calories.
2. Never spend money without knowing when you can repay it.
I absolutely agree with that. If I can’t make a major purchase with cash, or with a credit card that I’ll repay at the end of the month, I don’t buy it until I have a plan for repaying it. And once you’ve gotten used to making plans, it doesn’t take long to make one. I had to have some very expensive dental work done a year ago and my insurance was only going to pay about 5% of the cost; I got second and third opinions of course. Once I knew the highest-price option was the only one that made any sense in the long term, I formulated a plan in my head for paying it back, then made my decision.
I got the work done without making any compromises to my long-term health, and without having to pay any interest on it. And I paid off the debt in May.
3. Pay your bills on time.