Sometimes spending is inevitable. When things break down, emergencies come up, or if you want to indulge in something (we’re only human).
So if you’re going to spend, do it wisely. What does this mean?
In a nutshell, you want to get something back for spending and these days it’s easier than ever to do so, mainly via credit card points which result in rewards.
I’d like to mention that if you’re someone who is swipe happy (i.e., can’t control credit card spending), this may not be for you. Instead, stick to carrying cash for the most part.
More Usage Could Mean Better Rewards
The ability to earn credit card points has been around for many years now. And I’m not sure why it’s taken me so long to catch on. This concept didn’t sink in with me right away either. I went out with some friends recently and one of them said he’d pay the bill with his credit card. He said if he charges $3,000 in the first three months, he would earn a $500 cash back bonus. So he was trying to use his card every opportunity he got, but nevertheless prudently.
He went on to say that he pays all of his bills with his credit cards so he can earn travel rewards and fly for little to no cost and so it got me thinking. That’s not a bad idea. For me, I pay off my balance each billing cycle if not before and really only use a couple of cards. I’m going to spend on things anyway and I’m going to continue to pay my bills too, so why not have something to look forward to on the back-end?
Simple Ways To Earn While Spending
Here are some simple ways to earn while you spend:
- Always use a credit card with a great point/rewards system. And use your credit card to pay for any bills you can. I’ve just recently started to use my credit card to pay for my cell phone bill but I wish I had set this up years ago. I would have stacked up a ton of points. Oh well, better late than never.
I did an exercise of going through each one of my expenses, line by line; to see if any of them could be paid with a credit card. I found a couple more like my Sling TV bill and Verizon for the internet. So now, I’m earning points while paying the bills! It’s important to keep in mind that, for your budgeting and expense tracking purposes, when you are paying off your card to allocate expenses in the proper categories and not just “credit card bill”.
Don’t forget to redeem points if there is an expiration date attached. Usually, this is years after you have earned the points, but it is still a good idea to have a rough idea of the points you’ve accumulated and when amounts are set to expire.
- You pretty much have to use a credit card when shopping online, but using Ebates is a bonus! It’s an add-on to your web browser and is super easy to install. Ebates, which is not called Rakuten provides cash back in the form of percentages or whole dollars from merchants all over the internet. You are simply getting paid to shop online, something you may do anyway. Once you accumulate about $50 worth of cash back, Ebates will mail you a check. It’s that simple.
- Even if it’s somewhat of an emergency, you can sometimes find a deal. All it takes is a simple google search, locating a professional that has great reviews and is willing to offer a free quote.
For example, this past spring my gutters became really clogged up and it was raining more than usual this past spring. So I decided to find a contractor on Groupon. I got a great deal for a gutter cleaning for less than $100 with a contractor that had many great reviews. Ofcourse I paid with my credit card to earn points. The service-professional showed up did a great job and took before and after pictures all over to show the work he did. He asked for a review and so I gave him a great one as well to pass along my experience.
Leveraging Big Purchases
When you have a big purchase or expense coming up (e.g., vacation or home improvement), a credit card with a good point system in that expense category can be very useful. For example, some credit cards may give you seasonal 5% cash back when you spend at certain stores at certain times of the year. So in the case of home remodeling, if you spend $500 at Home Depot, 5% cash back would be $25 (5% Cash Back Earning Formula – $500 = 500 points X 5% = $25 Cash Back)
The point here is to simply be cognizant of the credit card you decide to use for a big expense; one that captures the most points.
It’s a good idea to cut out coupons and store them in a dedicated place. Recently, we got a couple of dinner sets from Bed Bath and Beyond. They were on sale, plus we used a 40% coupon, and on top of that ee used an old gift card that was collecting dust. Following the transaction, the gift card still had money left over!
We’ve found that going out and looking for deals may be sub-optimal. Instead, see what you already have to reduce your costs such as coupons and gift cards and start from there.
Redemption Feels Good
I’ve redeemed credit card rewards in the form of a statement credit, merchandise, movie tickets, and gift cards for restaurants all this year and for roughly $200.
Personally, I use the Pentagon Federal Platinum Rewards card for gas because I can earn 5 times the points. Our gas expense is generally more than the average household because we have a lot of families close by and visit each other often.
I wouldn’t recommend any specific card because it would depend on where your expenses lie. But there are many sites that can provide recommendations. A simple one I’ve found is Wallet Hub. There is way out there for all of us to spend so in an optimal manner.
Join The Discussion:
- How are you earning while spending?
- How many of your bills do you pay via a credit card?
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