Yesterday I wrote about how I changed my thinking about credit cards and changed my debt status. But in finding spending harmony I didn’t shun credit cards altogether like many financial advisors tout. (Having too many credit cards was never my problem, though. Maxing out the one I did have was.) No, instead I learned how to use credit cards to make them earn for me.
Sign Me Up for That Reward Program!
For the longest time I couldn’t get a Discover Card because my credit was so bad. (Not only did I have that maxed out balance on my Citi Card, I also had an incident with a gas card that never got paid. But that’s a whole other story and wasn’t my fault.) Eventually I got a Discover Card, though.
The reason why I always wanted a Discover Card was for their Cashback Bonus program. Getting money back? Heck yeah! More spending power!
Except…this was before I changed my thinking. (I like to think the Financial Gods wanted me to learn my lesson about responsible credit card ownership before I was entrusted with one that had a reward program.)
A Neighbor’s Tip: Deduct It From the Checkbook
About eight years ago my neighbor and I were talking about money and credit cards. At this stage, I never carried a balance anymore and always followed Wayne’s rule of never charging anything I didn’t already have cash for. Basically I never charged much.
But Jo-Anne’s approach was so novel –and money-making—I wanted to try.
Basically, she used her credit card as a debit card. Anytime she used it, she noted it in her checkbook the same as she would if she wrote a check. This automatically deducted the money from her account. (On paper at least.) When her credit card bill came, she then tallied up what she needed to add back in to pay the bill.
Sounds Like a Lot of Math
It does, doesn’t it? But it’s so easy.
I’ll admit the first couple of months took a little getting used to. I had a lot more to pay attention to on the statement. But then when I realized everything was accounted for on the bill, I simply had to add that lump sum back in to my account.
For example, if my statement had 10 entries totaling $250, I first made sure I noted those ten entries in the checkbook for the proper amounts, then I added back in the $250 before writing the check to the credit card company.
The Result
My Discover Cashback Rewards started adding up fast. (Because I was charging everything from Target supply runs to gas to grocery store visits.)
Suddenly I had racked up $100 in Cashback Bonus Dollars. I could either opt to get the cash back at the face value ($100) or I could cash in with one of their Cashback Bonus Partners and get up to double my money back…and satiate my spending desire.
For us it’s worked really well. My husband’s happy we’re not paying interest on any balances and we’re making money, and I’m happy because I can go shopping to places like Bed, Bath & Beyond or Bath & Body Works guilt-free.
Courtney Mroch also writes in Pets and Marriage. For a full listing of her articles click here.
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