Frugal Idea #17

To stay on point with your finances, try earning the points!

I remember swiping my debit card for a purchase and my friend asked why I preferred to use my debit card instead of my credit card. After all, you can earn points with your credit cards. You can then use your points to earn cash back, pay for trips, or buy gift cards. The only catch: you must pay off your card in full.

I had to admit, I was not in the right situation to swipe the credit cards. I had run a large balance during and after college and I finally had grasped the concept of managing your cash and NOT using credit cards. I wanted to freeze my cards, cancel them, or shred them to bits and pieces with a pair of scissors. While the cards had bought me lots of good memories (on credit), I also had a lot of guilt, remorse, and hatred towards them for the debt and troubles I found myself in.

I started off small. I would use credit cards to only purchase gas. I then paid it in full. No harm there. Working in a role that requires a lot of business development and team bonding: treating a client out to lunch, driving to a business meeting, or buying a co-worker lunch just because you wanted to, I decided to be brave and add work expenses to my list of approved credit card purchases. I noticed my points were adding up nicely.

After some time, the practice became close to perfect, and I now use my credit cards for majority of my purchases – large and small. To stay on top of my spending, I downloaded the credit card apps on my phone for easy access. I check my activity once a day. I make sure that I am always aware of my credit card balance and to make sure I can pay it off within the next month. After some practice and discipline, you will learn your “safe spot”. The safe amount you know you can pay next month in full.

I also created a list of my rewards:
Virgin America
Citi Bank
and so on….

I then evaluate who gives the biggest point for purchases. Example: Citi offers more points for restaurants. If I eat out, I will use that card. Also, Citi offers travel points for flights, while Chase does not offer travel points for flights – just hotel & cars. Since I love to travel, I tend to gravitate towards Citi. I also learned that I can earn points for United by eating at certain restaurants (sync your cards to your account!). I then choose restaurants that I know earn me points via credit card AND by visiting. Let’s just say, I love when a friend or client asks me to choose the spot. SURE!

Thanks to the points, I have booked a hotel and will have a discounted flight with my next flight in September. I have also earned gift cards when it was time to buy a new suit for work (and more business lunches).

I really am glad that my friend pointed me in the right direction.