I have hesitated posting this, but it is an important tool in our financial tool belt so I feel that I should. Here is my disclaimer: I do not in any way want to promote debt through the use of credit cards. In my opinion credit cards should never be used as a financing option for a long term debt. We unfortunately did have to use one in our early married years for a medical debt. It took us years to pay it off (we now maintain an emergency savings for things like this). Credit Cards should only be used as a tool to increase the buying power of money you already have. Be honest with yourself. If you can’t pay off something you are putting on a credit card, DON”T BUY IT! Both my husband and I have a credit card, we pay off the balance in full every month, and never ever have a late payment or missed payment. In fact we add all payments made with a credit card in our budget tracking system as if it was coming directly from our banking account. Then at the end of the month pay it all. So the money has already been removed from our account and we don’t have to sit around scratching our heads wondering how we are going to pay it. If you have had problems handling a credit card in the past or don’t trust yourself with one. Don’t get one! There are other ways to stretch your money, that don’t have nearly as many drawbacks!
So here it goes:
I use the Chase Sapphire Preferred Credit Card. It does have a yearly fee, but the first year is waived. I sought out this card because I had heard about it’s introductory offer: 40,000 reward points when you spend $3000 on the card in 3 months. That seems like a lot, but I used it for just about everything those three months. The rewards points with the bonus at the end of three months added up to around $500 which we cashed out and used to finish remodeling our basement. Hooray!
I have maintained the card and continue using it for most purchases paying off the balance in full EVERY month. One highlight of the card is that points can be used directly on Amazon (we used some accrued points around Christmas to replace a TV that went out)
So we are planning a trip to Florida. We are very excited! We haven’t taken a real vacation in 5 years! Ouch! We have our hotels covered for while we are there (I’ll post about that separately) but we needed a hotel for 1 night on our drive out and 1 night on our drive back. Chase offers a travel booking program, that you can use points on. I hopped on logged into my account and started looking for hotels in the areas we wanted to stop. We booked lovely 5 star hotels for both nights. The rooms have two beds and kitchenettes. (A must with kiddos in my opinion). And points from purchases that I already have to make (like groceries and fuel for my car) covered all of the cost except for $28. I could have waited a few more weeks and booked when I had enough points to cover it all, but I was ok with paying the $28 to make sure I got the rooms I wanted in the hotels I wanted and to make sure I got it done.
So there you go. If you have a credit that does not have a rewards program I highly recommend that you switch cards. As long as you are not keeping a balance on the card and paying interest those reward points are just like extra money!