Smart Reasons to Save, Use and Invest Money

Making Your Credit Cards Work For You Instead Of Against You

Chase Freedom Credit Card
Chase Freedom Credit Card

Making Your Credit Cards Work For YOU!

Okay, let me start by saying that I’m the master of my credit cards and they work for me not against me!

I use my credit cards for everything that I possible can!  I use them for the typical stuff (clothes, groceries, gas, etc), and even non-typical things such as fast food, taxes, car insurance and really anything that I can charge with them!  I’ve even tried to buy a new car with my rewards credit card (the dealer wouldn’t bite on that one though)!

So why do I charge so much with credit cards?  CREDIT CARD REWARD POINTS

Yes, I love credit card reward points that I get for using credit cards!  I’ve use my points to buy computers, camcorders, jewelry, clothes and other such items.  But my favorite thing to buy with reward points (other than getting cash back) is gift cards.

I’ve found that if you buy $100 denominations of gift cards, you get a better point to value ratio!  So I almost always go for these types of rewards today.

The trick with reward credit cards is that you must pay your balance in full each and every month.  If you don’t do this, it greatly diminishes the benefits of the reward points provided by such credit cards because the interest on carrying a balance on such cards is usually much higher than the bargain non-reward credit cards.  So please don’t use reward cards if historically you have carried a balance!

Present Day Purchases

My last three purchase (from oldest to newest) has been Nintendo DS, Sony Camcorder and a ASUS Computer (it was only $700!).

Although I’ve bought TVs in the past, I’m going to buy a LED or LCD Big Screen TVs and then take a different direction with future purchases using reward points from my reward credit cards.


Future Plan Purchases

I’ve come up with what I think is a clever solution to take some of the bite out of minor, future emergencies, at least to some degree.

My house is over 10 years old now, and this means that my some of my appliances are starting to get pretty old too.  So lately, I’ve thinking about letting my balance ride until my dishwasher, clothes washer or dryer, or any appliance start to fail, at that point I’ll redeem my points and buy a new appliance with the reward points.  The only caveat is that I’ll have to cash out some of the point every 5 years or so.  Some of the credit card companies have the points start to expire around this time period.  You really should check your policy to determine when the points start to expire.  Another option would be to call credit card company’s customer service 1-800 number and ask them if and when the points start to expire.

As an alternative, I’m also thinking about getting reward cards such as Chase Freedom that will give you cash back instead.  That way I can create a special emergency fund this way.  Actually I’m kind of fond of the idea of a free emergency fund (lol).

The key is to have total control of your spending!  I only spend on what I normally would spend money on, nothing more and nothing less.

Do your credit cards work for you, or you for them?





16 Responses to Making Your Credit Cards Work For You Instead Of Against You

  1. I love using my rewards cards for everything and staying on top of the bills. It just makes everything easier and the cash back and gift cards are nice too. 🙂

    • Yeah, that’s a hidden benefit, the “being able to see exactly what you spend on”!

      Both my wife and I mainly use the same credit card, and that we we see what happened for the month, it’s part of our automatic budget process…

  2. I have a frequent flier rewards card. I use the miles to travel overseas (first or business class). Since I pay my entire balance off every month, my card is working for me. We are planning another trip next year and I already have enough miles to fly first class.

    • While I’m happy with my small saving with my credit cards, you my friend, are what I consider an advanced user of credit cards! Kudos to you 🙂

      From what I’ve read in the past, the way you use your points provides the most value for them!

  3. Hi! It’s a happy and welcome change whenever I hear of someone being master of his or her credit cards and not being mastered by them. I have 3 credit cards myself and I also enjoy collecting rewards points.
    Everyone should really learn to master the trick of paying the balance every month and using their cards to buy the things that they will normally buy with cash.
    I love the emergency fund idea!

    • Thanks, after I pay for the TV, I won’t need any new gagetry for a while, so why not save for obvious future appliance failures 🙂

      It sounds like you use your cards to get the maximum reward point spread! Nice job 🙂

  4. There are many people I know who use credit cards thinking it’s an inherited wealth. They don’t think that they’re using credit facility of the bank and have to pay it back in time. The credit card should work for us and not against us.

  5. Works for me, of course! I have made nearly 2K off credit card rewards, this year alone. Most of that cash — but also some hotel stays and other things mixed in. It’s free money as far as I’m concerned. My only issue is that I have too many cards now! Time to scale it back…

  6. No question that credit cards are amazing tools. They are well-worth using on absolutely everything — as long as you have the self-discipline to pay them off every month.

    Perhaps you should have tried another dealership. Some will let you put a portion of the price on credit cards.

  7. I’m not sure whether this is the case in the States or Canada but in the UK credit card purchases between £100-£30,000 are protected under Section 75 of the Consumer Credit Act. This means if a company goes bust or they’re otherwise unable to provide or deliver a product or service you’ve already paid for on credit, then your credit card provider is bound by law to foot the bill. Having this kind of protection is pretty useful for big ticket items!

    As ever though people must always make sure that they’re able to pay off their credit card spend. For however nice the protection and the rewards are, neither are any use when you’re racking up huge amounts of debt you’re unable to shift.