Poll:Using credit cards for monthly spending

[audreyh1]

Well it's fairly apparent that the CC is the way to go. I've just been worried about overspending due to the ease of "letting it ride". Don't know why I worry about debt so much (because we have none I guess). Just seems less stressful to pay as you go.

I'm going to try going the CC route for a while and see if our spending habits change.

Hard to move from the savings mode to the spending mode

Most of the posters here are quite disciplined about their spending, have little debt beyond mortgage, and aren’t inclined to go overboard with plastic. Most pay their credit cards off monthly, so don’t get into trouble with credit card debt.

Even the folks on the “blow that dough” thread post because they already have the extra money to spend.

 

[rk911]

This has probably been covered a million times but....

We retired about a year ago. 1/2 of our savings is in a taxable brokerage account, the other in IRAs. We spend our monthly needs out of our brokerage account and are living mostly off dividends.

Having said all that, we have a Cap One card that pays 2% cash back on everything. Our brokerage pays 1% to 2% on our idle cash.

Seems to me, we should be buying everything on the Cap One card and paying it off each month (as we've done forever).

Is everyone already doing that?

yes, for everything possible except we use a discover card. we'd use it even if there was no cash back. we haven't carried a CC balance since 1972. discover has superb on shore customer service. that alone is reason enough for us.

 

[Doribe]

Thanks for the quick reply. I'll check out the pointsguy link. I was thinking about setting up monthly payments on electronic "auto-pilot" so we never miss a due date.

I use a separate credit card for all auto payments. It streamlines the statement for easy review and reduces the chance of fraud on this card since it isn't used here and there. I learned the hard way, when there is a breach, it takes a bit of work to maintain the auto-pay machine.

 

[Bamaman]

We use the credit card Rewards to purchase flights to Europe. Our trip to Spain in June had one of our flights covered. Yesterday an airfare dropped 50% for a few minutes and we grabbed it since I had enough $ in the Rewards to pay for it.

 

[Dtail]

Try to use a mix of 5 CC's to maximize rewards. They do add up into the thousands for the year.

 

[pb4uski]

.... Seems to me, we should be buying everything on the Cap One card and paying it off each month (as we've done forever).

Is everyone already doing that?

Yes. For years we have had 2% cashback credit cards and put all our spending as possible on them (unless there is fee with a vendor for using a credit card). On auto-pay paid off in full every month... so in effect 2% free money.

I've fine with 2% on everything as it is a good reward and keeps life simpler than dealing with rotating bonus reward categories.

Currently use Citi DoubleCash card. It also gives us an additional two years on the manuturer's warranty for a lot of purchases (appliances, etc but not cars).

Our accumulated rewards is close to $1,000.

 

[Tiger8693]

We use two different cards for everything we can, split between Chase Hyatt (best points/room I have found), and then Sam's Club for Gas (5%0 and Dining (3%).

We did get an AA Aviator card for the sign up bonus, but as with most airline cards, I find the restrictions on which flights you can use the points to travel on makes it very inconvenient to use. Now I am thinking about one of the non-affiliated travel cards where the points are just used for $ to pay for the flight. Have to research them.

 

[Golden sunsets]

The only thing I use a debit card for is to take cash out at an ATM and I haven't done that since January when I took out $100. I still have $30 in my wallet after 7 months. How is that possible

 

[WhenIsItTime]

We primarily use 1 card that provides 1.75% back on everything. Keeps it simple.

 

[Chuckanut]

Thanks for the quick reply. I'll check out the pointsguy link. I was thinking about setting up monthly payments on electronic "auto-pilot" so we never miss a due date.

On the CCs I use the most I have an automatic payment of the minimum amount made every month. Of course, I pay off the card each month. But, in the event I forget, at least I don't get hit with late fees.

FWIW, I rarely forget to make a CC payment. I guess I am a bit of a belt and suspenders kind of guy.

 

[gwraigty]

Yes, everything that can go on a cash back credit card, does, with the balances paid in full. It does add up to $XXX in cash back each year, money that you miss out on by paying with cash everywhere.

 

[steelyman]

This thread has caused me to review the cash back percent options on the (small) number of cards I regularly use for day-to-day and automatic purchases.

It won’t be hard to adjust my habits/loyalties and double the cash back percent on common purchases (e.g., groceries, gas, pharmacies) by using the proper card. Great nudge to wake up from er.org.

 

[audreyh1]

DH writes on each card in big market what it’s for, because he can’t keep track of the rewards categories.

 

[GrayHare]

I hope people realize this cash back is just coming out of your other pocket. Service providers charge merchants more for cash back cards, and guess who the merchants pass that along to, yes, you. tanstaafl

 

[Mr._Graybeard]

I hope people realize this cash back is just coming out of your other pocket. Service providers charge merchants more for cash back cards, and guess who the merchants pass that along to, yes, you. tanstaafl

Me and everybody else, so it makes sense to get my money back.

DW and I had dinner at a restaurant this week that offered a 5% discount on cash payments vs. plastic. That beat the 3% reward we'd have received from Citi. The discount was announced in a handwritten note at the cash register, so I wasn't aware of it until we walked through the door. I had the dollars in my pocket, so I paid the bill and tip in cash.

I've noticed while traveling in greater Chicagoland that some filling stations have different fuel prices for cash and credit. Whether the difference matches the reward my card offers, I'm not sure.

 

[REWahoo]

I hope people realize this cash back is just coming out of your other pocket. Service providers charge merchants more for cash back cards, and guess who the merchants pass that along to, yes, you. tanstaafl

I haven't seen many places that offer a discount for cash, so even though we may all be paying for it out of our other pocket, at least we are getting some of it back using these cards.

 

[pb4uski]

I hope people realize this cash back is just coming out of your other pocket. Service providers charge merchants more for cash back cards, and guess who the merchants pass that along to, yes, you. tanstaafl

Nah.... I pay the same as the person paying cash or by debit card or check or even by a credit card with no rewards.

 

[rk911]

This thread has caused me to review the cash back percent options on the (small) number of cards I regularly use for day-to-day and automatic purchases.

It won’t be hard to adjust my habits/loyalties and double the cash back percent on common purchases (e.g., groceries, gas, pharmacies) by using the proper card. Great nudge to wake up from er.org.

we put virtually everything on our discover card. in the past 12-mos we've gotten "back" $712. not inconsequential but not exactly life altering either. discover has superb customer service which is the primary reason we've used their card since it was first introduced.

 

[steelyman]

we put virtually everything on our discover card. in the past 12-mos we've gotten "back" $712. not inconsequential but not exactly life altering either. discover has superb customer service which is the primary reason we've used their card since it was first introduced.

That’s the way I’ve been with Discover. I got my card when they began in the 80s (I think). No complaints and I agree about their customer service. I faithfully use their 5% cash back offers (currently restaurants). They’ll still have my fall back transactions.

So, just looking out for and using other existing cards that offer higher percent cash back. It’s low hanging fruit using cards I already have.

 

[Walt34]

I was one of the last holdouts for cc use, paying for most things cash or check when feasible. Within the last two years or so I switched to using cc for almost everything. I have a Sears M/C that more often than not has some "special" going on that gives from 5% to 15% (!!!?) statement credit for gasoline, restaurants, and groceries. Two months ago all online purchases were 15% statement credit so I used that card for all Amazon and Home Depot purchases that I did online.

And realizing that "resistance is futile" I got an Amazon cc for stuff I buy there.

We use a spreadsheet to keep track of what is on which cc and to avoid unpleasant surprises when the cc bill comes in. Every time one of us charges something it goes on the spreadsheet, and that recalculates how much discretionary income we have left that month. So far it works for us.

 

[PandaBear]

Well it's fairly apparent that the CC is the way to go. I've just been worried about overspending due to the ease of "letting it ride". Don't know why I worry about debt so much (because we have none I guess). Just seems less stressful to pay as you go.



I'm going to try going the CC route for a while and see if our spending habits change.



Hard to move from the savings mode to the spending mode

I also worry about overspending with a credit card. So i write down each credit transaction in my check register as if it was a debit transaction and transfer the money from my checking to a “credit card” savings account and pay the bill from that. I feel that seeing the account go down helps me out.

 

[Nature Lover]

I used to use my cc for larger non-routine purchases only. I was mostly a cash and online bill pay guy. But, as I automated more of my routine spending to make retirement bill paying simpler, I started seeing the points increase substantially. Biggest bump up was health insurance...now automatically billed to my cc. All in, I'm now seeing ~$40-50/mo in cash back equivalent points, and I cash 'em in as credit to the cc bill ~once/qtr.

 

[misanman]

This has probably been covered a million times but....

We retired about a year ago. 1/2 of our savings is in a taxable brokerage account, the other in IRAs. We spend our monthly needs out of our brokerage account and are living mostly off dividends.

Having said all that, we have a Cap One card that pays 2% cash back on everything. Our brokerage pays 1% to 2% on our idle cash.

Seems to me, we should be buying everything on the Cap One card and paying it off each month (as we've done forever).

Is everyone already doing that?

I like uto

 

[COcheesehead]

Yes, of course. I put everything I can on my 2% back card including business expenses. I made over $2200 last year and I am at about $1600 YTD. I pay it off monthly religiously.

 

[Cobra9777]

We pay almost everything with 3 cash-back CCs and no annual fees:

1. AMEX Blue Cash: 5% on gasoline, groceries, and drug stores
2. Amazon/Chase VISA: 5% on all Amazon purchases
3. Fidelity/Elan VISA: 2% on everything else

The AMEX is a grandfathered version of Blue Cash that has no annual fee and no spending limits, but only 5% instead of 6% with the newer version.

Our average cash-back works out to be ~2.9%. I'm trying to get that up by shifting more purchases to Amazon, as long as the price makes sense. YTD cash back is $1189. Last year was $2148.

The only items that don't go on a CC are federal tax, property tax, and our health insurance premiums. Both our former employers require the premiums to be auto-drafted from a checking account. On rare occasions, we'll pay a medical bill or other service providers via bill pay or check.

I monitor spending almost every day using Fidelity Full View (Fidelity's in-house account aggregator tool). I've trained the tool how to categorize everything, which provides a nice summary.