I admire using credit cards, and I always try to maximize my rewards. To quote a poster on MSN money boards “they’ll have to pry my CC out of my cold hands.” I concept his quote highly droll. My DH and I are not your typical credit card user, neither DH or I have ever paid a penny of interest or paid a late fee on any accounts since we were 14. So we’ve had CC for more than half our lives and haven’t misused it ever.
But for now I’ll explain our current credit card strategy and how much we’ve earned in rewards this year. First we typically use our Citibank Simplicity card for everything. It gives us 5% cash back on all gas station and drug stores purchases, and 1% back on everything else. The maximum cash back reward is $300/calendar year. Another bonus is no late fees, which I’ve never outmoded but is a nice benefit. We got this card almost one year ago in April, but have earned so far $273 in this year, and $140 of it since January 2007. Not bad just for using the card. It would have been more, but our other credit cards upped their rewards so we’ve been using them more.
The second card we use is the American Express Just Earnings Card. We picked this card mainly because it works at Costco, where we are die-hard members. Now with the true earnings card you get 3% cash back at eating out anywhere, 2% cash back from any travel related expenses, and 1% cash attend on everything else. Great deal, so we’ve started to use it for eating out and as always costco shopping. This year we earned a total of $180 from American Express.
Finally we started this past summer we started using a Discover card for specific items. 4x a year they have a program where you get 5% back on specific categories. This summer it was school supplies until Sept 30th, then in the descend it went to shopping and eating out, and this winter it was for recede. You also get 1% back on everything else on the card. Since we started using it in June our cashback bonus this year has been $142. For discover we also usually double our rewards because we get gift certificates to restaurants or coupons for videos. So our actually rebate was closer to $280. That sums up our regular employ cards.
We also use three store cards. First the Gap because every $250 spent you get a $10 gift certificate and special coupons in the mail. I shop there occasionally, so it adds up over the years. The second card we use is Home Depot. We like this card because we often catch a 10% off purchase promotional coupon in the mail, and get up to 0% APR 1 year. We’ve broken-down this deal 3 times buying stuff like cabinets, paint, and curtains for our home. This allows us to cash flow our home repairs, if we don’t feel like outputting such a large sum of cash upfront. Finally we use the Best Buy credit card. We’ve used it to purchase a washer and dryer set twice and it’s saved us a lot of money on interest and 10% on the occupy price of the region. The great thing is we can often land a 24 months 0% APR deal. I typically do not sign up for store cards but I’ve found that these three places are where we shop a lot and net coupons in the mail for having these cards.
Finally I want to discuss airline cards. They can be great if you travel a lot and use the same airline. But we don’t travel enough, nor with the same airline to construct this worthwhile. However in 2005-2006 we did obtain an Alaska Airlines mileage card. This is because Bank of American offered us 100k free miles if we opened the card and paid for 1 year annual fee. That 100k miles is 3 free round trip tickets, so we figured why not pay $75 for the annual fee. We then decided we would max out usage on the card for the year we paid for and then cancel it. We did exactly that and now on Alaska Airlines have about 120k miles for the year. Not a bad deal for $75.
This sums up my experiences with reward and store credit cards. Guess you can explore why they’ll have to pry it out of my cold hands. But seriously credit cards are not for everyone, nor should they be used to live a lifestyle you cannot afford in cash. They are just a tool for frugal people who need to squeeze a penny out of everything. I like looking at my itemized statement, I can easily reconcile it with our budget, and I enjoy seeing how much I’ve made back. Maybe credit cards don’t make you rich, but in my experience people who use credit cards responsibly are the type of people who max out their retirement accounts, establish for a rainy, and in general very conscious about how they spend money. So it doesn’t make you rich, but maybe it’s a ticket of how diligent you are about your money.
Census Bureau's Holiday Season by the Numbers
