Tag Archives: reward credit cards

Why I Love Reward Credit Cards

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I admit, I love my reward credit cards, and I run everything through them as much as possible.

When I go to some store (like Target), I even buy a pack of $1 gum with my credit cards!  So you might be wondering why I love to own credit cards such as the American Express Blue Cash Card and the Chase Freedom cards?

Credit Cards

Credit Cards

Well basically, it’s because I like the discount that the cards gives me on all of my purchases!  Why would I want to pay with cash if it’s cheaper to pay with a credit cards via reward points?  It’s kind of ironic if you think about it.  I’m getting a discount in the form of reward points, but when I use such reward credit cards, the store that I’m using the credit cards at, pays the credit card companies extra fees.  You’d think they would do the opposite and charge less for cash and more money for the credit cards. But they don’t!

Perhaps someday they will, but until that time I’m going to continue to get my discount on items bought at such stores and vendors.

I Love Money Hacks

Another thing I love about credit cards is the potential to discover money hacks to maximize the benefit of using reward credit cards.  Often with me and others it’s a game to find a way to maximized the benefit of using the credit cards.  In my case, I only pursue legal money hacks!

An example of a common money hack today is when you have a reward credit card, and then guy gift certificates at a grocery store like Giant Eagle.  You see in this example you get a higher reward rate because you are using the card at a grocery store, but you are also getting the fuel perks from Giant Eagle to make a purchase there.  So basically you are getting a double benefit for what would cost you much more if you were paying cash for the gift certification at Giant Eagle.

If you look around for such deals, they are possible to find!  You don’t hear about them much because after a while the loophole becomes know and the store that has such a loophole closed it eventually.

Controlling Credit Cards

The thing about credit cards is that they are just a tool.  You much control the tool and not have the tool control you.  So that said, if you carry a credit card balance more than a few months, the rewards credit cards lose their advantages and you are better off going for the lowest interest rate credit cards you can find.  The reward credit cards carry a slightly higher interest rate than non-reward credit cards.

In my particular case, I don’t carry a balance, so the reward points is all true savings for me.

What do you think?  Are you a fan of reward credit cards too?  If not, then why, especially if you don’t carry a balance?

Regards,

MR

Making Your Credit Cards Work For You Instead Of Against You

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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?

MR

 

 

 

Financial Planning Isn’t Really A One Size Fits All Model

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There isn’t a “One Size Fits All” model for financial planning.

 

Credit Cards

I love credit cards, no wait, I love reward credit cards!  But this is my one exception where I deviate from the norm with respect to my friends and their spending habits.

I have a few friends that have gone bankrupt (in 1 case a few times) and so I will never say “I love credit cards” to them.  I don’t want them to think that it’s okay to spend so easily.  We have to know our limitations and weaknesses.

However, for me, credit cards are a wonderful discount on my purchases.  Sometimes, I use the reward points to splurge and buy a nice gift that I would have had to spend money on.

Mortgage Pre-Payment

I took a path that I know isn’t considered the best for most, but it was the best for me.  You see, I pre-paid and them totally paid off my mortgage early.  I know that from a mathematical perspective it makes more sense to put that extra money in investments.  But I couldn’t stand the debt hanging over my head, and I doubt I would have consistently put the extra money into investments, thus defeating the plan.

I very proud of my accomplishment with my house, and if I had to do it all over, I’m pretty sure I would have done it exactly the same.  I especially like that fact that the money that I don’t have to pay anymore is like getting a 2nd job in many ways, especially with respect to cash flow!

While mathematically it makes sense to put the extra money into investments, missing in the formula is the human element.  The equation is mathematical but the human element takes away some of the straight math properties and adds emotion and impulse buying elements.  Shoot, I consider myself good with money, and even I sometimes have problems controlling my spending, especially when it some to my kids!

Investments

I tend to invest in stocks, but most of my money is in the mutual funds that are included within my 401(k) plan at work. 

In my stock dividend “Lunch Experiment“, I run a high beta investment portfolio.  This isn’t advisable and I’m only running such a portfolio because the money was money that I would have spent.  I don’t advise anyone to follow such a risky portfolio, but it’s still fun to play with!

Conclusion

So what I’m really trying to convey is that there isn’t a single generic “one size fits all” type of model to follow when it comes to financial planning or advice.  Perhaps start with one of the three financial advisors and then customize it after you find one that mostly fits your goals.  Personally, I’ve always liked David Bach with just a slight hint of Robert Kiyosaki.

-MR

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