I’ll start off by saying that credit cards aren’t for everyone. If swiping a card doesn’t feel like spending “real” money to you, stick with a cash system. But I feel the hurt no matter how our money is spent, so rewards credit cards are just a way to get back 1% to 5% of what we were spending anyway. Heck, if they’d let me pay my mortgage with my credit cards, I would.
Cash Back, Baby
There are a billion different rewards credit cards, but I prefer to stick with ones that give solid cash back options. I avoid travel rewards for now, but may be looking into them if I start taking more flights again. For right now, we use three main cards:
- CapitalOne Visa – 1.5% cash back on everything
- Discover It Card – 1% cash back on everything and 5% cash back on rotating categories
- Chase Freedom Visa – 1% cash back on everything and 5% cash back on rotating categories
We end up using the Discover and Chase cards on the 5% cash back things that are in the rotating categories (like using Discover for gasoline right now or the Chase one for groceries right this second) and the CapitalOne card for everything else. We then use the Chase and CapitalOne cash back towards our end of year credit card statement. The Discover cash back is used to buy discounted gift cards to places we shop or eat frequently.
For example, we use $20 cash back to buy a $25 gift card to Bath and Body Works about once a year so I can stock up on great smelling hand soap during their semi-annual sales. We also use $45 cash back to get $50 gift cards to Salt Grass Steakhouse for our nice date nights and $50 gift cards to Starbucks to buy smaller gift card amounts for presents for others.
In order to keep things simple, I printed out tiny notes on what categories are 5% categories during which months and taped them onto our credit cards directly. We also don’t kick ourselves if we forget or slip up. It’s just great when we don’t and can watch the cash back build up.
Right now, we have a few hundred dollars of cash back available between our three cards. It isn’t going to make us rich, but it is nice to be rewarded for expenses we were going to pay for anyway.
Do you use credit cards? Why or why not?