This is the way to go. Plus, it'll teach you how to use them. It will be frustrated maxing out all the time, but you get used to it. Bring along some cash, just in case. And use that card ALL the time. Then, when you can, get a card that gives you good rewards. Amex Blue is what I recommend- cash. Get two cards, one Amex and one Visa/ MC. Don't get any more. And then life will be easy and simply.

Oh, and pay off your credit card every month. NEVER carry a balance.

If you never carry a balance, don't count on your card being available. We never used to carry a balance, and the credit card companies cancelled several of our cards. In Credit Company parlance, we were deadbeats.

Oh yeah!! I lost over $35K in credit through cancellation of cards with zero balance. Nice! The bastards.

Us too. Plus, they also lowered our limits on two cards, without telling us.

There's a difference between paying off a credit card and not carrying a balance. I pay off all of my credit cards every month, but my average balance on the cards is in the $3,000-5,000 range since I am continually using them.

If you have no balance (meaning you don't charge anything) then I see why they cancel the cards, you are an expense with no revenue.

If you pay off the cards every month interest rate isn't overly important. I look more on the card rewards than the rates. A card can be paid off monthly if it is treated like cash. I would say checking account but since I hear how much my wife has to deal with people having NSF fees it's clear that they don't treat a checking account like cash either.

NEVER go above using 30% of your limit! For more info see the credit forums like creditboards.com

They still consider you a deadbeat, because they aren't making any money off of you if you aren't carrying a balance. One of the cards they cancelled without telling us, they cancelled two days after we charged $5,000.

They still make money off of the people who pay their balances monthly through two primary methods. One, through any advertising co-branding revenue and through fees charged to vendors who accept their card based on the percentage of the charge.

Yes - be careful about carrying too large a balance on your card - you can end up damaging your credit pretty badly even if you pay the minimum balance every month.

And it's best to only charge an amount that you can pay off in full. FiLife (which also has a lot of information about how to use credit cards in a healthy way) has been publishing "True Debt Horror Stories" over the last few weeks. The last one was about a guy who found himself with $150,000 in cc debt. yikes. If you're interested: <link>

I've never carried a balance in my ten years of credit card ownership and I've never had a card cancelled by a company. They make their money off the percentage of the purchase, not just you. They WANT that percentage. If you're losing your card by not keeping a balance, there's something else happening. Look at the issuing institution and go with someone more reputable. And just keep two cards.