2.25.2009

Works for Me Wednesday - Credit Cards

Works-for-Me Wednesday has actually moved to We Are That Family's blog. In any case, I wanted to share how Captain America and I rack up the credit card every month, and pay it off every month, earning ourselves cash or gift cards in the process.

Ever since we've been married (10 1/2 years), we've put everything we can on the credit card every month. Target. Gas. Groceries. Restaurants. Everything. Every. Thing. But the trick is, every time we make a purchase on it, we write it down in our checkbook as if we had written a check (or used a debit card), only we code it VISA instead of a check number. That way the money is subtracted out of our checking, and we consider it gone. When the bill comes, everything is accounted for. We sit down with the bill and the checkbook, and mark each item off. Then if we've missed one (it is McDonald's, never fail) we write that into the checkbook. And then we pay the card off online (the entire amount is already subtracted out of our checking, just by the individual purchases throughout the month).

We have never carried a balance. We have never been charged interest. Meanwhile, we're getting points on a rewards card, and every couple of months we either get cash or gift cards for bonus spending. Since we use the card so much, our points add up quickly. We also happen to have a card that gives us triple points for gas, grocery store & drugstore purchases. Sometimes we get cash as our reward, and we split it for some extra fun money to blow. Last time we were able to cash out $300 in Target gift cards to cover a few of our regular Target trips. That was free money, because we never paid a dime in interest and our card has no fees.

It's also like giving yourself some revolving credit. We sometimes let ourselves go a little in the hole in checking, because a good deal of the money is on the card and we'll get more paychecks before it needs to be paid. It just gives us a little flexibility.

The key is, you HAVE to be diligent about it, and write down every single purchase you make on that card. I usually just hang on to my receipts, and then write them into the checkbook every few days (ideally, but I sometimes forget and then have a bunch to do after a week or two). In the meantime, we have built up some great credit, we've always paid the card off every month, I'd bet we've saved a bit in using less checks, and we get some great rewards just for using a credit card instead of a debit card. See? Credit cards don't have to be evil.

I have to give COMPLETE credit for this process to Captain America. It never would have occurred to me. Left to my own devices, I would probably be swimming in credit card debt. But being married to Mr. Financial Responsibility sometimes has really nice benefits. Like Target gift cards.

5 comments:

Aimee said...

We do the SAME thing. Crazy. Yep, I was just drooling over all the options for giftcards now that we've got a ton of points racked up that we need to redeem. As long as you're responsible about using them, credit cards can be a wonderful way to handle the finances while earning points/rewards.

Amy said...

Gotta love that Captain America.

Katie said...

I admire your discipline. It would never have occurred to me either. Maybe once we are out of the pile of credit card debt we incurred during a period of unemployment a few years back we will try this method.(Our pile is almost gone, which is exciting for us)

Audrey said...

Oh, I like this......we use our credit card for most purchases then pay it off on payday. It never occured to me to write it in the checkbook. That's probably because I always seem to make these little "extra" purchases :) Thanks to you and your man for the great idea!

Ellen said...

What credit card gives you extra points for the regular shopping? I'm curious; I'm thinking about switching over to this system. Thanks for the tip!