Winemaker
Thinks s/he gets paid by the post
+1 But flights to everywhere!
Poll:Using credit cards for monthly spending
- Thread starter fireorbust
- Start date
+1 But flights to everywhere!
Before DH retired in 2010 I used cash back credit cards for most of our spending. DH was totally hands off on anything having to do with our finances - income, spending, savings, investing, taxes. I enjoyed the cash back credit card thing. I kept track of which card offered a quarterly deal on a category and made use of plenty of those deals. I had fun with this and usually used the cash back for a statement credit or bank deposit. I never missed a payment or paid any interest as I paid off all credit cards monthly.
When DH retired I asked him to get more involved in our financial life. His years of work created a pension that supports us and he should understand our income and expenses. He found the use of multiple credit cards to be overly complicated and abstract and he asked me to simplify everything so he could participate.
While I hated to give up on cash back I can understand where he's coming from. So we changed to cash for all of our local spending. That's things like the grocery store, home Depot, Walmart, etc. Stuff bought online is put on the Amazon card or Chase card or PayPal.
I still put anything medical on the Chase 1% cash back card because medical expenses can be big and lumpy and don't show up for a month or two after going through a billing cycle and waiting for the insurance company to process. This way I also get a clear summary for HSA record keeping.
We are 95% of the way through a (Blow That Dough level) kitchen renovation and all of that went on the Chase card, generating a nice hunk of cash back. Chase even had home improvement stores as one of their 5% quarterly categories. We blew through that right away!
I kind of miss the fun and games of maximizing cash back cards. Changing to cash for local spending has made DH feel a little more involved in the finances. And like Robbie said, nobody knows what you're buying.
When DH retired I asked him to get more involved in our financial life. His years of work created a pension that supports us and he should understand our income and expenses. He found the use of multiple credit cards to be overly complicated and abstract and he asked me to simplify everything so he could participate.
While I hated to give up on cash back I can understand where he's coming from. So we changed to cash for all of our local spending. That's things like the grocery store, home Depot, Walmart, etc. Stuff bought online is put on the Amazon card or Chase card or PayPal.
I still put anything medical on the Chase 1% cash back card because medical expenses can be big and lumpy and don't show up for a month or two after going through a billing cycle and waiting for the insurance company to process. This way I also get a clear summary for HSA record keeping.
We are 95% of the way through a (Blow That Dough level) kitchen renovation and all of that went on the Chase card, generating a nice hunk of cash back. Chase even had home improvement stores as one of their 5% quarterly categories. We blew through that right away!
I kind of miss the fun and games of maximizing cash back cards. Changing to cash for local spending has made DH feel a little more involved in the finances. And like Robbie said, nobody knows what you're buying.
It can be even more than 20 days..........took me a while to realize it but I just moved my closing date up 1 wk.........previously if I paid my taxes by cc on the 15th, the statement period closed a few days later and I would have to pay the cc the next month on the 15th so I got a float advantage of about 3.5 wks compared to paying by check. By moving the closing date up a week, the tax payment occurred in the next period so the payment was 3+ wks later for a total of 6.5 wks........so the cash can earn 2%+ for that much longer plus you get a small differential cash reward (2% reward less 1.87% service charge).
Repeat 4x/yr.
AaronGoodman
Dryer sheet wannabe
I use credit or debit cards to pay for everything. Whichever card gives me the best cash back incentive.
jazz4cash
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
+1
I switch between Cashback cards halfway through the billing cycle and it stretches the float out to > 40 days. Sometimes o can’t even recall the expense when the statement shows up but I rely on text or email updates as charges are posted. That also helps me from overspending.
Amethyst
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Like many others here, we use cash back cards and travel points cards for everything that doesn't incur a fee or charge for doing so. Where possible, we also go through online rebate sites (E.G. Rakuten) to reap a few more pennies on the dollar.
Unfortunately, we can't pay our biggest expenses with a card, unless we want to pay a fee that's higher than the card rebate: taxes, property taxes, and contractor fees. Some small businesses don't even take a credit card. I had a hard time even convincing some of them that a laser-cut check from our CU was a real check from us!
Unfortunately, we can't pay our biggest expenses with a card, unless we want to pay a fee that's higher than the card rebate: taxes, property taxes, and contractor fees. Some small businesses don't even take a credit card. I had a hard time even convincing some of them that a laser-cut check from our CU was a real check from us!
mickeyd
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Like 82+% of you, we use CC to pay for anything we purchase, no matter how small. We have done this for 25+ years and it's just a natural way to buy stuff these days. Of course, we always pay off the entire balance each month. Visa is our main card with DC used as back up whenever it makes financial sense, i.e. 5% specials.
BTW, what is cash?
BTW, what is cash?
If you have a 2% rewards card, you can pay Fed taxes w/ a fee of 1.87% at pay1040.com so
there some positive differential. In addition, you can get 3-6wks more of interest since payment for credit cards is delayed compared to a check.
There is a Chase Freedom Unlimited that gives 3% up to 20K in spending after
which it reverts to 1.5%.
We use our Chase Freedom for almost everything- all set to auto pay. Usually 3% cash back & on certain categories 5% quarterly (you have to activate that which is silly).
I wish they would take it at the car dealership- I'd love the reward for a 15-20k purchase (or more by the time I buy a certified used again). I guess they don't want to pay the merchant fee .
While you cannot buy the entire purchase price of a car, most will take it for a down payment, varying from 2 to $5k. Bought a new BMW 2 months ago and put down $5k. (Even got an added $1000 off for financing at 0.99%, more free money, for a total of $13k off sticker). A few years ago, $2500 on a Mini. We also take care of DWs elderly 91yo ex MIL (long story) with her money, but use our CCs. (She has none). Typically the first $30k per calendar year on CC is a BA card to get the free companion ticket on points, as we go overseas once a year in either business or FC, so typically use 100k points and get 2 business (or 130k points and 2FC) tickets for the price of VAT/taxes that normally run us about $2k-$3k total for $7k to $12k worth of tickets. We moved to out new townhouse last year, plus the new car, and we have hit over $60k in CC purchases 2 years in a row. Lots of cash back and points. Well worth the trouble, and points are not taxed income like cash back is.
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Cash back is considered a discount and not taxed income.
rk911
Thinks s/he gets paid by the post
that’s been our experience. never have received a 1099 or any other tax document from any CC issuer regarding cash back.
I use my CC for everything that doesn't incur a "surcharge".
Amex (6% groceries, 3% gas, and then anything I have am Amex offer for)
Discover (5% categories)
Capital One (1.5% cash back on everything else), should have gotten a 2% card but too lazy to apply for another.
Everything is on auto-pay.
I have also signed up those cards for various other cash back programs which gives me all types of additional rebates which would not be available if I didn't use CC.
Amex (6% groceries, 3% gas, and then anything I have am Amex offer for)
Discover (5% categories)
Capital One (1.5% cash back on everything else), should have gotten a 2% card but too lazy to apply for another.
Everything is on auto-pay.
I have also signed up those cards for various other cash back programs which gives me all types of additional rebates which would not be available if I didn't use CC.
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You probably will be fine, and I used to share your sentiment, but it would take a huge incentive for me to give out my account number nowadays. The differences include: on a check, it's not in a database for the bad guys to exfiltrate, and the big difference is, when you give them your bank info, you agree (through the fine print) to a bunch of stuff that weakens your position to get your money back if you disagree. And the whole time you are in disagreement, you don't have your money. I had a vendor keep charging and my bank said I couldn't "stop payment" or maybe couldn't stop payment without big fees. So I had to close the account! So I haven't forgotten that pain, and the account number never gets shared.
Thanks for that tip........might have to use it someday.
Probably 80% of my spending goes on a Cap One points card but there are exceptions (HOA dues, property taxes for example) where a CC is not accepted.
There are two other exceptions that I’ve imposed on myself: I charge my groceries and Amazon purchases on my debit card. I found that I was spending way too much in these two categories when using a credit card, even though I always pay the balance in full from checking every month. When expenses start coming directly out of checking via my debit card, I find that I immediately stop spending as much.
I find that high-friction transactions (i.e. cash or debit) tend to slow my spending and that avoiding spending is more efficient for saving than getting cash back for things that I might not really need. I don’t see the benefit of saving 5% on Amazon purchases using a CC when paying cash (debit) reduces my spending by 25%. One might argue that this is a discipline problem and not a finance problem, but we all have our weaknesses that require creative solutions.
Since I am now tracking my expenses against a budget every week I feel that this strategy to reduce spending is less helpful, but it’s a habit I’m slow to change because it works.
There are two other exceptions that I’ve imposed on myself: I charge my groceries and Amazon purchases on my debit card. I found that I was spending way too much in these two categories when using a credit card, even though I always pay the balance in full from checking every month. When expenses start coming directly out of checking via my debit card, I find that I immediately stop spending as much.
I find that high-friction transactions (i.e. cash or debit) tend to slow my spending and that avoiding spending is more efficient for saving than getting cash back for things that I might not really need. I don’t see the benefit of saving 5% on Amazon purchases using a CC when paying cash (debit) reduces my spending by 25%. One might argue that this is a discipline problem and not a finance problem, but we all have our weaknesses that require creative solutions.
Since I am now tracking my expenses against a budget every week I feel that this strategy to reduce spending is less helpful, but it’s a habit I’m slow to change because it works.
nhcycling
Recycles dryer sheets
Almost every purchase goes on a CC - I love getting those points!
OldGuy
Recycles dryer sheets
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We use credit cards for almost everything. RIght now I've to $27 in my wallet, and DW probably has about the same (besides her $20 mad money).
Probably 90% of our expenses are charged, and balances are paid off every month. One card is dedicated to automatic payments & online purchases, and we don't carry that one. If you've ever had to switch auto payments to a new card, you'll know how painful that can be.
It's a matter of self-control, and anyone who's already LBYM'ing should have that mindset in place.
Probably 90% of our expenses are charged, and balances are paid off every month. One card is dedicated to automatic payments & online purchases, and we don't carry that one. If you've ever had to switch auto payments to a new card, you'll know how painful that can be.
It's a matter of self-control, and anyone who's already LBYM'ing should have that mindset in place.
Dean56
Recycles dryer sheets
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Yup, cc all the way. Paid for a car once...we had paid our deposit, then went to the bank and prepaid the balance for the car on the same car. We wanted the Air Miles! When we went to the dealership, they told us “you can’t pay for the car with your credit card!”. We said they hadn’t told us that upon purchase and now all our payment was on the card, so they had to take it. ��
LarryMelman
Recycles dryer sheets
Chase Freedom gives 5% cash back on rotating categories, up to $1500 spend per quarter. In recent years, 3 of the 4 quarters have included either gas or groceries. I use both to buy Kroger store gift cards (inside the store or at the gas station, as appropriate). In addition to gas and groceries, Kroger sells gift cards to practically every business that issues them, so I buy them during "bonus fuel points on gift cards" sales which happen at least once a month. By my fuzzy math, that often increases the return on my original credit card dollar to at least 11%. Where else can you get 11% return for doing "nothing".
Everything that can be put on credit card with cash back, is.
Property taxes and college tuition and housing both charge a higher fee for using credit card - so I pay with e-check on both those.
Husband's medicare drug plan can't be on a credit card - has to be an eft or ach from checking... but his f+ medicare plan is on credit, as are the insurance premiums for the rest of us.
Property taxes and college tuition and housing both charge a higher fee for using credit card - so I pay with e-check on both those.
Husband's medicare drug plan can't be on a credit card - has to be an eft or ach from checking... but his f+ medicare plan is on credit, as are the insurance premiums for the rest of us.
drb391
Recycles dryer sheets
have 2 - one for daily usage, ex small purchases (<$10), and for for all internet or phone usage, that one, I know the # by heart. also 1 debit card I use for ATM only; think I even have "For ATM use only" written in the signature block on back
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Koolau
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
If anyone else mentioned it, I didn't see it: We have (for many years) charged as much as possible on our card(s) and paid them off at EOM. When we went for a loan (after the great unpleasantness ca. 2010) we were told we had an "awful lot of outstanding charges" on our credit cards. We probably averaged $3k to $7K, depending on things like whether we had just charged airline tickets or other moderate ticket items, etc. We also learned that we were probably costing ourselves as much as 15 or 20 points off our credit score due to our "excessive use" of our available credit.
We asked how to deal with this "problem" (even though we paid everything off every month and never paid a cent of interest.) "Our" banks suggestion: Prepay our credit cards so that we wouldn't have outstanding charge balances. Since our score hovered around 815, we weren't too worried about it. Still (detailed in much earlier posts) we really struggled to get that mortgage!
I'd like to think credit has opened up again (wouldn't know - we don't anticipate going for a mortgage - ever.) BUT, just wanted to mention this as a potential issue with the current subject. YMMV
We asked how to deal with this "problem" (even though we paid everything off every month and never paid a cent of interest.) "Our" banks suggestion: Prepay our credit cards so that we wouldn't have outstanding charge balances. Since our score hovered around 815, we weren't too worried about it. Still (detailed in much earlier posts) we really struggled to get that mortgage!
I'd like to think credit has opened up again (wouldn't know - we don't anticipate going for a mortgage - ever.) BUT, just wanted to mention this as a potential issue with the current subject. YMMV
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