Thursday, November 10, 2011

Thrifty Thursday:Work that Plastic

**Disclaimer** The post that you are about to read could be controversial to some.  The following method may not classify as thrifty or financially savy to you.  That is fine.  I write only about what I know and what works for me.  Okay, 'nuff said.  Let's get on with this.

If you've been following me for longer than just a couple of posts, you may remember that I mentioned something a few posts back about making a quite large payment to my credit card.  Yes, it was kinda grand.  Well, more like three grand.  Wowza.  No, I do not make buckets of money where I can afford to make any payments that high to anyone.  What I do do (hee, hee. . .doo doo, get it?  Okay, I'm about as mature as my six year old.  Lovely.) is charge everything.  EVERY-THING.  Yep, you heard read that correctly.  I charge everything on my credit card.  See, I told you that you weren't going to think it's thrifty or even intelligent on my part.  But, I beg to differ.  Hang in there with me.  I'll explain.

So, my method of thinking is that I have to pay my bills regardless, right?  Oh how I wish there were a way around it, but so far I haven't managed to find one.  Anyways, since I have to pay these bills every month, I figured I might as well be making it work for me.  I work for a bank so I started looking into what types of rewards cards that my bank offered.  NOTE: There are a TON of different rewards credit cards out there.  I am not an advocate for any particular one.  If you choose to go this route, you would need to really look at the terms of each card and program to decide which is right for you.  I ended up selecting a rewards card with a fairly decent interest rate and the rewards were awesome!  Seriously, I get something crazy like 5 points for every dollar I spend at drug stores, grocery stores, and gas stations.  1 point for everywhere else.  Plus, since it is through the bank that I work for, there is an employee program where I can earn additional points (sometimes up to 20 points per dollar!!!) by shopping online through a huge list of retailers. 

In order to rack up the points as quickly as possible, I literally charge every.single.thing. that I possibly can to the card and then just make a huge payment to my credit card every month.  Seriously, any bills that can be charged to my card (without incurring additional charges, of course) get charged.  Tyler's daycare: charged.  Groceries, gas, daily incidental expenses: charged.  I mean EVERYTHING! 

Now, you may be wondering just how this is really helping me in the end.  As of today, I have approximately 27,618 points accumulated.  I started with the card in April of this year.  So in a little over 6 months, I've been able to really rack up the points.  Oh yeah, and that total will be over 30,000 by Monday.  Here's how this whole crazy hairbrained idea is going to really pan out for me.  I can exchange 5,000 points for a $50 gift card to a whole list of retailers that are a part of the program.  There are stores like Home Depot, Lowes (two of my favorites at the moment), Target and Wal Mart.  Four stores that I pretty much live in.  So, with 30,000 (and still counting!) points, I have at least $300 in gift cards coming my way.  All just by paying my bills and living my life as I normally would have if I had been paying cash for it all.  That $300 in gift cards is like an insurance policy.  If I need to use it for Christmas, I can.  If I ever have one month where I'm particularly short on cash, I could use $300 at Wal Mart for food and necessities. 

Some people don't understand rewards programs or they rack up credit card debt just to enjoy the rewards that they get.  Let me be very clear about something, comparatively speaking, the rewards that you get by using one of these cards are NOT NOT NOT worth the monetary exchange.  Here's a scenario to back that up:  I have to exchange 5,000 points to get a $50 gift card.  While my program is different, some reward programs are set up so that you get 1 point for every $1 you spend.  So, 5,000 points would amount to $5,000 you'd spend just to accrue the points needed to get a $50 gift card.  Spend $5,000 to get $50.  See where the problem is?  So, I will stress again: I do not advocate charging things on your credit card just to get the rewards points.  That's how people end up in severe financial crisis.  What I am doing is paying my bills and living my life as financially savy as I can (which means I pinch pennies, clip coupons, deal hunt, and budget just like someone who was paying cash for every little expenditure) but I charge everything on that credit card (and then pay it off in large chunks each month) because I might as well be getting a little somethin'-somethin' on the side. . .wow, that could have totally been taken the wrong way, if you know what I'm sayin'.  Heh heh!  The way I see it, if I'm still making every attempt to be financially smart and I'm watching my incoming and outgoing every month and trying to manage to a budget, I feel that my method of doing things is actually helping me.  Afterall, I could pay everything in cash but then I wouldn't have those $300 in gift cards hanging around.  And I like an extra $300! 

1 comment:

  1. ohhhhh em geeeeee. this is the best idea ive ever heard. hahaha WHY DIDNT I THINK OF THAT?!


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