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August 2021 came, and I began using my credit card for everything that’s not a utility or fixed priced monthly bill: groceries, gas, clothes, entertainment, etc. I got the idea from a Financial Advisor during a podcast interview.
The talked about how using hit debit card does nothing for your credit. He went on to say that credit cards is other people’s money and that credit card accounts offer better protections for thief, fraudulent transactions, and things like that. Those things sounded cool.
A couple of other benefits of using credit card over a debit are what sold me on the idea. One reason is that I can spend and always have money there. The other reason is rewards/points.
uChoose Rewards Program
I’ve had this Service Credit Union VISA credit card (Everyday Preferred Credit Card) for 12 years, and I never paid attention to the rewards program. I’m short, the points accrue at a rate of 1 point per $1 spent.
There are also a list of vendors that offer special rates of points. For example, having my card at Buffalo Wild Wings earns 5 points per dollar. There’s hotel companies, restaurants, gift cards, and my favorite, cash back.
When I logged into the rewards card program, uChoose Rewards, I have 5600 points. Turns out that points only accrue from purchases — as opposed to cash advances, which I’ve use the credit card for primarily. I cashed in 5000 of those points for $45 cash back and deposited that free money on the card’s payment.
Ideally, the balance should be paid off each month
I like this credit card thing. Ideally, I’d want to do it when I can payoff the balance each billing cycle. I just didn’t wait until my balance was zero before paying.
I didn’t wait because right before the first of each month, I take the money I have left in my checking account and pay it to my credit card. I figure if that if I take my entire direct deposit and pay it to the credit card, then my monthly payment will be lower by the first of each month if/when I spend less than my direct deposit — which I do routinely.
Even in break even situations, I’m not paying more per month for my credit card. So, I’m not really losing unless I overspend the amount of my monthly direct deposit. BAM.