Tuesday, October 28, 2008

Effectively using credit cards - works for me

Not too terribly long ago, we were very deeply in debt, mostly on credit cards. When you look back and realize that you've been paying on a "cheap" dinner out for several years, it's pretty depressing! It took a long time and a lot of work, but we got out from under the debt and now our only debt is our home.

Even though credit cards were a major contributor to our past debt, I still use them today. However, I never carry a balance. What I do is I keep the credit card that I use in my checkbook. Then, whenever I pay for groceries or gas or whatever, I pull out my checkbook, scan the credit card, and proceed to write the transaction in my register just like a check. I put my abbreviation for the credit card where the check number would go, the date of the transaction, the company, and the amount. Then, when my bill comes, I can quickly make sure all amounts are accurate and just write a check for the total, as all amounts have been accounted in the checkbook. (I do a credit for the amount of the charges reflected in the register and then a debit to pay the bill, just to keep my accounting straight.)

Sometimes a charge might be missed, particularly if my DH used the card, but for the most part, I always have everything needed to pay the bill each month. And as a bonus, I earn points that I can redeem for cash, gifts, or gift cards. I figured it up today and for the last 3 years, I've gotten $300 or more in gift cards each year! I use those for Christmas presents, or for shopping for things I want or need. I ordered gift cards today for teacher gifts. Earning $25 a month on average for stuff I'm going to buy anyway is a great deal!

If you're careful and keep track of your spending, this can be a very effective way to use your credit card/s. It probably won't work for everyone, but it certainly works for me!!


Tammy K. said...

Way to go on being debt free. We hope to be there agian soon. I also have a cc that pays us cash back. I have receive $300 this year. This is my Christmas fund. I love free money!

Tammy K.

Tina said...

Good idea! What a great way to make sure you can always pay off the balance!