Rewards Card

I decided last year to bite the bullet and start using a credit card for all of our purchases. I did a ton of research and decided to use a travel credit card since we want to start taking more vacations but never seem to have the money set by for that. So, I ordered up the travel credit card with the best balance of initial bonus and bonus points for things that I will always have need of. We went with Bank of America, but it would be the one that works for you. The cash reward cards didn’t seem a good bet because the points required for rewards were too high. I can get reimbursed for travel expensess at a higher rate than I could have gotten cash back.

The secret to doing this is to NEVER carry a balance. I pay it off once a week. That’s what actually convinced me to do it this way was seeing someone say they paid theirs off every other day. I needed that reminder that you are not restricted to paying it once a month, you can pay it every day if you want. We have since paid for a long weekend to Washington D.C. and I’m saving up to help pay off a cruise that we have booked for next year (assuming the plague is under control by then).

We pay for everything with it. Gasoline, groceries, Amazon purchases, some of our streaming subscriptions, our automatically refilling toll road account, all kinds of things. I don’t pay bills on it generally (utilities and mortgage). No good reason except some of them don’t accept credit cards for payment, they require bank information or debit cards. So those come out of the bank acount. Everything else? Credit card. The credits built up quicker than I thought they would. I’m looking forward to paying off $1000 or more of the cruise next year just using points.

You do need to keep control of your spending to make sure that you never carry a balance and you need to make sure to pay it off regularly so that you don’t incur charges. But it can be a really nice feeling to pay things off with rewards points. The points will take a couple of days to post to your account, but it’s nice to see that credit. It is free money after all. Silly to leave it on the table if you are able to be disciplined enough to claim it without going into debt for it.

If you aren’t that disciplined or are already in credit card debt, this wouldn’t be my plan of choice for you. Get out of that debt first, then consider trying this only if you can swear to yourself that you will pay it off ever day or every other day. Rewards cards have higher interest rates than regular cards so, if you do go into debt, it will cost more to get out of it than it would with a regular card. It’s no good trying to get rewards if you are paying interest on the money you spent. It’s not free money then. You are paying through the nose for those rewards at that point.

It is working for us because I stay on top of it. That is the takeaway I guess. Only if you can stay on top of it and never carry a balance.

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