Saving money by using credit cards

[leslie826]

Wow! I need to get better about this. I've been putting everything on our Disney Visa to get the rewards for our trip next month, but I think it's time to switch to something that will give me more than a measly 1%.

 

[scottmel]

Great post! I couldn't get the deals I do without credit cards. My top scores in 2011 are:

1. Opened SW visa in my my name and DH;s name. NO annual fee first year and got $1,000 in SW gift cards and 2 round trip tickets.PLUS earned points for travel. Needless to say we got to FL for free this past summer, are flying for free again in June 2012 and I wll have enough left for 2013 I believe. FREE

2. Opened CHase Rewards for me and DH each and got $300 for free on each card. Total of 600. This has become my mini savings account for vacation. Have earned great bonus points all thru the holiday season and the 600 free money will continue to grow with rewards and I will withdraw in April for my version of free disney dining.

3. Disney Visa. I have it, I don't think it is that great. But nice to know of early specials etc. I only have about 200.00 on there in points but hey that will be something for the trip next summer.

I have had credit cards since I was 22 and never paid a dime interest. My dad taught me well but honestly it is foolish not to have them to take advantage of the deals...

 

[clutter]

I've been sticking with the Disney visa (which will pay my DVC annual dues this year) for a while now. Thinking of changing, but we'll see.

Anyway, my 'trick', that I've been using since I used to use the ToysRUs card when my dd14 was a baby, is to use my visa like a check. I'd record every transaction (unless it was something I knew I was paying for from savings) in my checkbook. If I deposited my monthly budget each month, I could make sure I was staying within my budget amount, and its easier, for me, to do it when making the purchase, rather than come home and enter in a computer.

 

[Piecey]

I try to do the same thing, with about 4 or 5 credit cards. I really have to make a conscious effort to stay on top of it though, to make sure I pay the bills ontime because these cashback rewards cards typically have higher interest rates.

I'd also like to add that I particularly like the Chase Freedom card. You can redeem your points to get discounts on a few selected gift cards, which change I think quarterly. For example, I believe it was around September that I noticed I could get $25 Kohls gift cards by redeeming $20 worth of points. Currently you can get a Bath and Body Works $25 gift card for $20.

I LOVE the Freedom for that! I check every quarter and stocked up on gift cards for Black Friday shopping this year! I still have some leftover.

I got sneaky, Land's End can be used at KMart and they go 20% off all the time!

I love the Kohl's cards because you can use them online and if you leave your Kohl's charge as the "backup" form of payment you still get to use the special MVC % off codes!
I got 6 Pyrex 6 pieces sets for $4.11 OOP (+ $10 Kohl's Cash back!) for Christmas presents with one of those 20% off Kohl's GCs from my freedom & a 30% Kohl's Charge code.


I kept track and we earned $800 in rewards last year. I figure this year will be up, as I started working and our income/spending increased. We charge EVERYTHING we can.

 

[budafam]

I couldn't agree more with this. We have been using strictly credit cards for a little over a year now and have received well over $1,000 in perks. We haven't paid a penny in interest either.

I got the Chase Freedom card a few months back and I'm waiting to cash out for our trip in May. Right now I have $430 in rewards.

We got a Disney gift card with over $300 on it for our trip last May.

I just signed up for a Southwest card and even though it was a $99 annual fee (I'll cancel once we use our 50,000 free points up in May), it is still going to save us almost $600 total... so yeah, $1330 for free this year all thanks to plastic

I try to talk my brother in law into getting a credit card but he swears they are the devil. I do not think he would have the discipline to pay it off every month.

 

[Sandy61]

After seeing all this, I am thinking about getting more CC with a sign up bonus. Will getting more CC help my credit score or hurt it? Right now it is 850 so it could dip down a little.

 

[bumbershoot]

My dad taught me well but honestly it is foolish not to have them to take advantage of the deals...

It would be foolish for YOU, but not for those who don't have someone to teach them and haven't figured out the discipline on their own. It was foolish for ME until just a couple years ago, and if I weren't around it would be drastically foolish for DH even now.

Anyway, my 'trick', that I've been using since I used to use the ToysRUs card when my dd14 was a baby, is to use my visa like a check. I'd record every transaction (unless it was something I knew I was paying for from savings) in my checkbook. If I deposited my monthly budget each month, I could make sure I was staying within my budget amount, and its easier, for me, to do it when making the purchase, rather than come home and enter in a computer.

Such a great idea!

 

[calypso726]

The biggest thing is this,unless you have the discipline to SET A WRITTEN BUDGET ahead of time monthly ,and STICK TO IT- instead of just paying "whatever" off at the end of each month, you shouldn't mess with cc's!!!
(most people can't do that)

Couldn't agree more! I also like clutter's method of using the CC like a checkbook and recording transactions to make sure one is staying within their budget. Yes, it takes discipline and a bit of work. But those with the discipline can easily save several hundred per year.

Thanks for expaining this so well OP. Educating yourself (on everything including fiscal responsibility) is very important to having a rich and rewarding life (and not just with material and monetary items).

You're welcome I very rarely post on the BB but I do lurk here a LOT Thanks to the suggestions and experiences of others here I have learned a lot! I'm happy I finally had something to share that may help someone else.

Thank you OP for this info, very helpful.

I have a question about using credit cards. Does anyone know if there is a minimum that a business pays when someone uses a CC?

For example, I get 2% using my Costco Amex at restaurants. If we go to McDonalds and spend a few dollars, I use it.
But if McD has to pay a minimum, say .75 per transaction, and I only get a dime, seems kind of stupid to do that to a business.

I hope that makes sense. I like to make money on my CC, but at the same time I don't like to make the businesses pay high fees for my dime!

Yes. Businesses do pay a fee for credit card transactions.This is why some businesses will offer discounts for paying in cash. When a business prices their goods and services though, their cost of those goods and services also assumes the credit card transaction fee when setting profit margins.

Wow! I need to get better about this. I've been putting everything on our Disney Visa to get the rewards for our trip next month, but I think it's time to switch to something that will give me more than a measly 1%.

I was doing that too. Made sense since we go so often we knew we'd be spending the money there. Now, I can't justify using it for every day purchases since the other cards will pay me back more. Capital One is my go to card for anything not in a category that is 2% or greater since it pays me 1.5%. I won't get rid of my Disney Visa though. If we want to book a Disney Cruise we can put the deposit on it and get a nice on board credit. Last year the 0% interest on up to $10K came in handy when we bought 150 AKV points. We put half on my Disney Visa card and half on DH's and PIF before the 6 months was out. Then there are the coupons/offers for buying Disney merchandise using your Disney Visa. If I was planning on buying it anyway and the percentage off is more than the rewards on another card then I'd use it. This hasn't happened yet though I usually buy at the parks and use my annual pass for the 10% discount and whatever reward card is paying the most at that time

After seeing all this, I am thinking about getting more CC with a sign up bonus. Will getting more CC help my credit score or hurt it? Right now it is 850 so it could dip down a little.

HOLY FICO Batman! That's an AWESOME score Anytime you apply for a CC it will result in a "hard pull" on your credit score. The hard pulls will take 2 years to drop off completely but only affect your score for one year. Hard pulls make up 10% of your credit score. If you aren't planning for applying for a loan any time soon, I'd go for it. Honestly with your credit score I'd go for it even if you were as it won't make a significant dent.

 

[Southernmiss]

It was nice to use my Disney Rewards points to pay for MVMCP last week. We had $150 points left after paying for 6 adult tickets to buy lunch at Earl of Sandwich and dinner at Pecos Bills with a bit left for a couple of ornaments and magnet soveniers. Makes it easier to palate a unexpected car repair in December right before your trip (I know from experience). A free day at
Disney is better than any day anywhere else!

 

[hsmamato2]

FWIW, what cc gives out limitless rewards? been using one that caps at 300 per year,considering switching it anyway....

 

[calypso726]

It was nice to use my Disney Rewards points to pay for MVMCP last week. We had $150 points left after paying for 6 adult tickets to buy lunch at Earl of Sandwich and dinner at Pecos Bills with a bit left for a couple of ornaments and magnet soveniers. Makes it easier to palate a unexpected car repair in December right before your trip (I know from experience). A free day at
Disney is better than any day anywhere else!

Just an FYI for those who might not know. Earl of Sandwich gives a 15% discount if you are a AAA member and show your card.

FWIW, what cc gives out limitless rewards? been using one that caps at 300 per year,considering switching it anyway....

Capital One. You earn 1% unlimited all year that you can redeem anytime and then on your anniversary date you are given a .5% bonus on what you earned all year.

 

[mrodgers]

Just a question on what most people do as most say "pay off balance at the end of the month." Do most wait until the statement to pay it off?

We don't shop. We don't spend hardly anything other than on bills and normal living expenses. We had CC debt, a good bit, and still have debt because I consolidated. Our debt came from low income that couldn't easily catch up once my income finally grew to something reasonable and my wife went back to work after caring for the children when they were young. I was "forced" into a brand new car at the recommendation of a parent rather than buying a cheap used out of high school, and that gets you trapped into car payments whether new or used for years. We have recently consolidated and can now easily afford to pay off the debt rather than it sucking us down further. We also now budget to see where the money is going rather than where it went.

I still have 1 credit card that has rewards. I use it to pay the monthly bills when they are due each week. My budget is weekly, per paycheck, not monthly. When I pay say the electric bill, phone bill, and insurance bill, I use the CC online to pay the bills, then that week I log onto the CC site and pay that amount to the CC when it shows. I don't wait for a statement, I do it as soon as I see it posted which is just a few days.

I don't have a CC that pays 1% or more back. I can redeem gift cards to various places of which my plan is for Exxon gift cards since that is the only local gas station to me. That is like getting cash for me since it is something I will need to use on a weekly basis (a lot of it too.) I can get restaurant gift cards or merchandise cards, but that isn't something we would spend money on so more like a free gift rather than cash in our pocket like a gas card would. I get 1 point per $1 used and it takes roughly 6-7000 points to redeem a $50 gift card, so it is a bit less than 1% back.

When I consolidated CC I canceled most of the cards. Unfortunately after canceling, I realized I had a ton of points that I didn't know of on my Chase CC and lost all of them. Throughout the years of having CC to get us buy with living expenses (a lot of groceries, gas, bills, etc built up on CC) I never paid attention to the rewards. I had a LOT of rewards through those years that expired before ever redeeming.

So, back to what I was wondering, do you really mean that you wait for the statement and pay it then or do you pay online as you use the CC as I've described I do?

 

[jerseygirl81]

Wow! I need to get better about this. I've been putting everything on our Disney Visa to get the rewards for our trip next month, but I think it's time to switch to something that will give me more than a measly 1%.

I agree with you, i've been using my Disney visa for everything as well. I was thinking of switching to a cash back rewards card so I can use it to pay for any part of my vacation not just in disneyworld. Linda

 

[Patience]

In late October, I received an offer for a Chase Freedom credit card with a $200 cash back bonus and no annual fee. The only credit card I carry is an Amex that we always pay in full every month but the $200 cash back bonus for the Chase card was appealing because I wanted to buy our oldest daughter a macbook pro for Christmas and discounts on macbooks are hard to find. I used the Chase card to purchase a macbook from amazon that was $150 off on Black Friday (to match best buy's promotion) with free shipping and no tax. So I saved a total of $350 off the newest version of the macbook pro and I immediately paid the balance in full. I received the $200 check in the mail yesterday. Free $200? Why, yes, thank you!

Edited to add that I also redeemed points on my Amex for a $50 Amex gift card that I am giving to my daughter for Christmas.

 

[disney1990]

We only use one credit card, our Disney Visa. Everything possible goes on it. I write down in my checkbook all of the charges so that they are accounted for. Larger expenses, such as car insurance, coming out of other accounts. We never pay interest on our charges and, of course, do not have to have the credit card.

Right now, we are saving up for our Disney cruise next year. So far, we have about $420 in reward points to be used on the ship and we don't sail until next October, so we will probably have another couple hundred dollars by then.

 

[ICF]

So, back to what I was wondering, do you really mean that you wait for the statement and pay it then or do you pay online as you use the CC as I've described I do?

Yes -- I pay my bill once a month.

Before reading this site, I had never heard of people paying off CC's as often as every few days. Part of the benefit of the card is buying today and not having to pay it off for a few weeks.

 

[NancyIL]

Yes -- I pay my bill once a month.

Before reading this site, I had never heard of people paying off CC's as often as every few days. Part of the benefit of the card is buying today and not having to pay it off for a few weeks.

That's what I do, too. I arrange for payment online from my checking account, but I set the payment date to one day before the bill is due. That's very helpful for when we are on vacation, as I can arrange for the payment several weeks in advance. I write the bill amount in my checkbook, and then I don't worry about a late payment.

 

[stocker1042]

My wife and I have had Southwest Visa cards for years now. Needless to day, we have not paid for a flight for years. Someone earlier said that the annual fee is $99 but mine is $69.

That $69 fee is well worth it. They just changed the program, but even so...we average about 4 flights a year each to FL from NJ. Those flights usually range from a low of $141 up to $270. Sure they offer "deals" every now and then but those flights never really seem to be when we want to go.

I recently traded off 3 flights I had on the old program that were about to expire for some oil heater work that would have cost me about $400.

Although it is difficult to put an exact figure on the SW card as far as earnings, I would have to say a very fair number is $500 a year even with the annual fee being deducted. Plus, they offer all sorts of ways to earn extra miles if you use some approved vendors for purchases. For example, if you use Teleflora for sending flowers, you earn 500 points (or about 10% of a trip) for just a $30 purchase. I send flowers about 5 times a year anyway, so just for switching companies I earn half a flight.

Love the program. Pay off the card every month and just keep track of what's on it every few days.

 

[Muushka]

We pay ours, by check/snail mail monthly.

We also have ours set up to alert us when any charge over $10 is posted.

 

[kkmcan]

We have 2 cards that we use exclusively- Disney Visa and Capital One Miles. At the moment we have $100 in DVR because we just used $100 in Oct at DL and $500 in June to buy our annual passes.

On Capital One we've got enough for 2 free flights approx $250 each. We don't fly very often and we only use our Cap One about 5-6 days a month when we are in between billing cycles with our Disney Visa but it still slowly adds up.

We buy everything we can with these including paying bills and I pay them off when they are due. I could never figure out how to pay them once a week. I'm afraid I wouldn't pay enough to cover the total amount due for the month and would get hit with interest charges so it's just easiest to pay for everything when the bill is due. Money sits in our checking acct until its time to pay.