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Wednesday, September 16, 2009

Credit Card Perks

I'm writing on this topic because a commenter on a previous post marveled at my receiving $20.00 in gift cards from the LL Bean Visa.

I have plain vanilla rebate credit cards. The American Express has a sliding scale of rebates and gives me back a few hundred dollars a year and the Chase Freedom Card gives me 1% back. Then I have the LL Bean card, which I got to get free shipping and monogramming on the de rigeueur backpacks when my kids hit middle school.

I charge just about everything because I am lucky to have a built-in limit (built in, that is,to my brain or consciousness or something). So I never have a finance charge. I did a rough calculation and decided that airline miles linked credit cards were not better than what I already have. Plus, I figure that anything hawked with such enthusiasm by the purveyors (car leases, variable rate mortgages, variable annuities, whole life insurance) must be better for the purveyor than for the consumer.

As an amusing sidenote, a person I know slightly exclaimed that she and her husband had earned 2 tickets to Europe with a frequent flyer card in just one year. She was "playing middle-middle class," because she and her spouse had gone to Europe the previous year, also, she said, on frequent flyer credit card miles. When I said, "Wow! That's a lot of miles," she said, "I charge everything. Even groceries." Little did she know that she was revealing yearly spending on her card of perhaps $80,000.00, since you need about 40,000 for a plane ticket. A lot of groceries.

Anyway, I tend to ignore the various offers that arrive with my statements. So how did I acquire the $20.00? I bought my parents some luggage on sale. I got a few other things. I think LL purchases earn 3% back. Other purchases earn only 0.5%. I used the card a lot in Europe, since many places only take Visa, and that's my only Visa card. So somehow, I got $10.00!

Then, out of the blue, I got a $10.00 just because credit. I assume this was just because business this year, as my children would say, sucks. So it is to encourage spending. Hence, my $29.00 tote bag purchase.

If you don't have the card already, I think you get a $20.00 gift card just for applying. Then you get free shipping, returns, and monogramming. I seldom use the card, but even these little freebies are fun, pure lagniappe.

A few years ago, I earned a lot of credits and rebates when we were buying our Honda Civic. I put half on the American Express and half on the LL Bean Visa. We had saved up enough to pay cash since our previous car was 14 years old. But we figured, Why not get the rewards?

I was so scared that the bills would arrive late or that I would forget to pay, incurring a huge finance charge, that I sent the full payments to the companies that very day. And checked to make sure they got there.

So my story of credit cards involves paying them off in full and using them lackadaisically to get rewards now and then.

Do you make wise or clever use of credit card rewards? If so, how?


FB @ said...

I absolutely LOVE using my credit card for everything.

I get points to use as dollars in the grocery store. I charge our plane tickets, hotel, everything on there (BF reimburses me his half), and clear it immediately

When I did that for our trip to Portugal, it gave us $60 in free money to use at the grocery store :)

It's awesome.

Duchesse said...

I have a business Visa and a personal one. The business one b/c our accountant says the taxman looks at our expenses (we own a small business) and his sense is that things look more "legit" if you paid by Visa. (Weird.)

The personal Visa is air miles card for a reason: It encourages DH to travel! Charge everything and pay even before I get the bill.

Before a trip I often send money so I have a credit balance, and use my Visa like a debit card- but with air miles.

SarahA said...

I have used credit for everything for a while because I can't remember what I spend cash on but my credit card bill has a nice list for me to look at. Since I use it anyway, I got a card that pays me back into my IRA. It does it automatically, too.

I pay my card off twice a month. That way I can see what is going on often and I've been told it's better for my credit.

Frugal Scholar said...

@FB==And the rebates aren't taxable! Love it!

@Duchesse--You are the only person I know who does that--besides me. I've always wondered if prepaying like tht would cancel the fees for cash advances. I don't dare try it.

@SarahA--I've been reading about others who pay off the card more than once a month. I'm going to look into this.

Suzy said...

I've been using Discover since around March I think and so far I've been paying it off - sometimes twice a week I'll make a payment just to be sure! I've earned over $100 cashback that I've been letting build there. I think it has to be $30 before you can take it out but I'm thinking I'll leave it til the end of the year then move it to my checking account then ING savings. I did find myself not 'remembering' purchases so I got one of those little atm registers and log in my purchases so I know what's coming up. Any bill that doesn't charge extra(AT&T, electric) I have charged to that card. I also do a little online shopping through Discover if I know the store is available. Some purchases get 5% cashback depending on the promotion and purchasing through their online link also gives more back.