Poll:Using credit cards for monthly spending

[fireorbust]

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?

 

[walkinwood]

We do. And with multiple cards
The costco citibank card is great at Costco & for dining out / travel - 3% back
The Amex card we have (forget which one) gives us 6% back at grocery stores.
The cap one card is 2% off on all other purchases.

Go to the Pointsguy.com or some of the other card gurus and you'll learn a lot. Be careful though. Good record keeping and timely payments are a MUST.

DW has a little sticky note in her purse to remind her of which card to use where.

An added benefit for us is that we download all transactions into Quicken so keeping track of our spending is easy too!

 

[Red Badger]

We use a card (CSR) for almost every purchase. We use the points for travel. Cash back might be better, but good is good enough.

 

[Livefree]

Yes we use a Citi card 2% back. We have Electric, cell phone, cable, etc. auto paid from this card

 

[HI Bill]

I use:

Amazon VISA for Amazon purchases: 5% back at Amazon and Whole Foods, 1% all others

Costco Citi VISA for Costco purchases: 2% Costco, 4% Costco Gas, 3% restaurants, 1% others

 

[foxfirev5]

It would be irresponsible for me not to use my cash back card for all available bills and expenses. Plus it simplifies.

 

[fireorbust]

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.

We do. And with multiple cards
The costco citibank card is great at Costco & for dining out / travel - 3% back
The Amex card we have (forget which one) gives us 6% back at grocery stores.
The cap one card is 2% off on all other purchases.

Go to the Pointsguy.com or some of the other card gurus and you'll learn a lot. Be careful though. Good record keeping and timely payments are a MUST.

DW has a little sticky note in her purse to remind her of which card to use where.

An added benefit for us is that we download all transactions into Quicken so keeping track of our spending is easy too!

 

[Ronstar]

I use my credit card for approx 95-99% of my spending. I use cash for my morning diet pepsi and fast food drive-ups. So I voted "a little of both". not all of my spending is on cc.

 

[Senator]

I do. Many of my rental expenses are put on the Credit card.

I have many 5% categories, Amazon, Gas, Home Utilities, Cell Phone, etc.

I typically get ~$5K a year in cash back.

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.

Exactly what I do. I reconcile to the penny and let the payment happen.

 

[Floridatennisplayer]

Southwest card to cover my flights to Fla

 

[travelover]

Just got a summary from Fido - $428 back so far this year, tax free. I charge everything I can.

 

[euro]

I have been using cashback credit cards almost exclusively for many, many years.
I do still carry about $100 in cash (old habits die hard), but this seems to be so very old-fashioned these days. Case in point, someone broke into my locker at the gym a couple of weeks ago. I had several credit cards together with the said $100 in cash in my wallet. The thief took all the credit cards, but left ID and cash behind. Maybe the guy didn't know what to do with the cash...

 

[Midpack]

We use our two cash back cards for almost everything, have for many years. The only significant exceptions are various automatic bank bill pays for some utilities and health care premiums.

 

[harley]

I use my credit card for approx 95-99% of my spending. I use cash for my morning diet pepsi and fast food drive-ups. So I voted "a little of both". not all of my spending is on cc.

We use our cashback cards for virtually everything, including the $1 drive through diet cokes at McDonald's.

I do write checks for the few bills that either don't accept cards (lawn care, other small businesses) or charge a fee for them (gov't payments, mostly). And I tip in cash. But I chose All on the poll since I would use the card if it was accepted or fee-free. Although I'd still tip in cash.

Between my reseller business purchases and pretty much all personal expenditures being put on CCs, we haven't actually had to pay cash for anything on Amazon in years. And with our Discover points we get gift cards to some restaurants and places like Lowe's, which saves us another 10% ($50 card for $45). I keep waiting for them to pull this free money away, but as long as they offer it I'll keep milking it.

Oh yeah, I also use Amazon Smile when I remember to. The money goes to my nephew's Chamber Choir, and it doesn't cost me a thing.

 

[Floridatennisplayer]

We use our cashback cards for virtually everything, including the $1 drive through diet cokes at McDonald's.

I do write checks for the few bills that either don't accept cards (lawn care, other small businesses) or charge a fee for them (gov't payments, mostly). And I tip in cash. But I chose All on the poll since I would use the card if it was accepted or fee-free. Although I'd still tip in cash.

Between my reseller business purchases and pretty much all personal expenditures being put on CCs, we haven't actually had to pay cash for anything on Amazon in years. And with our Discover points we get gift cards to some restaurants and places like Lowe's, which saves us another 10% ($50 card for $45). I keep waiting for them to pull this free money away, but as long as they offer it I'll keep milking it.

Oh yeah, I also use Amazon Smile when I remember to. The money goes to my nephew's Chamber Choir, and it doesn't cost me a thing.

I can’t count the amount of times I have used my southwest card through the McDonald’s drive-through to get my large Diet Coke for $1.08

 

[fireorbust]

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

 

[harley]

If you pay the card off every month it's the same as paying as you go. It's just consolidated. If you find yourself overspending, stop. But the secret to success is never incur a fee. Let the foolish majority pay for your cashback.

 

[fireorbust]

We never carry a balance. We only have one CC. Our credit score is about as high as they go. I think i'll start shopping for a couple more cards and try to use them to optimize points. We are hilton rewards members, maybe I'll start there.

2% risk free is hard to beat these days on the money you have, let alone the money you spend...

If you pay the card off every month it's the same as paying as you go. It's just consolidated. If you find yourself overspending, stop. But the secret to success is never incur a fee. Let the foolish majority pay for your cashback.

 

[Red Badger]

We never carry a balance. We only have one CC. Our credit score is about as high as they go. I think i'll start shopping for a couple more cards and try to use them to optimize points. We are hilton rewards members, maybe I'll start there.

2% risk free is hard to beat these days on the money you have, let alone the money you spend...

The Hilton Aspire (Amex) card provides diamond status, PP lounges, free night (W.E. only) and several other perks. The fee is $450, but we recover that easily.

 

[Dtail]

Why a public poll?

 

[ERD50]

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 believe the key to this is something that most posters here implicitly understand, hence the poll results so far (almost unanimous in using the card for the cash back - currently 30-0-1 for use CC, no, sometimes). That is, every purchase should be considered for its value. Sometimes that is being frugal, sometimes that means spending in any way you feel that brings joy (see the "Blow that Dough!" thread).

From my perspective, the OP question should be - "is there any reason I wouldn't want to take a 2~4% discount on most things I buy, and have 20 (more?) days to pay?" Really, that's what these CC rewards give you. You get a discount on purchases, you get some lead time to arrange your cash flow to pay off that CC at the end of the billing period, that is great. For example, I may have a big expense, say total HVAC replacement. $10,000 or more. I pay by CC, get 2% off ($200 in real money), and I have plenty of time to make a transfer from my brokerage account if I need it, so my money keeps working for me.

To my mind, if your spending habits change because of the availability of your money (which is your money, regardless of availability), then you need to re-evaluate your relationship with your money. If having a CC makes you spend it easier, you have a problem with your relationship. Maybe not having a CC is a needed crutch for you in that case, but you would be far better off to develop a sound relationship, and then get most everything you buy for a 2-4% discount, and take advantage of the float.

edit/add: Our Costso card is 4% on gas, 3% on restaurant, our Fidelity card is 2% on everything, so 2-4%.

-ERD50

 

[ERD50]

Why a public poll?

I think that got fixed, refresh and try again. -ERD50

 

[Kwirk]

We have (as most here probably do) the full amount automatically paid from our checking account each month. We would have to go out of our way to "let it slide."

 

[GalaxyBoy]

I've been known to put a $0.50 purchase on my cash back card. Plus, all my CC transactions download to Quicken where I track my spending, whereas I have to remember to manually record cash. Pay it off each month, of course.

 

[ERD50]

I've been known to put a $0.50 purchase on my cash back card ...

Yep. If I don't, I end up with some metal discs in my pocket. Now what the heck am I going to do with these?

-ERD50