Yes, it is the reaction that I feel every time I am in a store and I watch a person select Debit, or hand over a wad of cash for something, even a small something, as they are leaving savings on the table; these savings are huge over a year, and by huge I mean game changing to your financial well being, just this simply attitude adjustment will put Thousands back into your Wallet.
Rewards from Credit Cards are like income, they are the Alpha in your portfolio. In the current banking environment the most you can earn on savings is around 1%, but you can get Credit Cards galore that offer you 2%-5% back in terms of Cash or Travel benefits, so if you spend in a year $10,000 in retail transactions then that is $200-$500 worth of money left on the table.
At Saverocity we never carry a balance on our cards; we just use them as the tool to purchase with, and in doing so get not only the Rewards savings, but also the following; dependent on the card you hold:
- Product Insurance (on my American Express Platinum) anything I buy with this card comes with 90 day comprehensive insurance, so if I buy something that gets stolen, lost, accidentally damaged they will replace it for free! Insurance, whilst it is a bit of a mugs game when you are paying for it is wonderful to have for free.
- Itemized Billing for Budgeting – especially when you link your accounts to a site like Mint.com you get the benefit of tracking all your purchases which allows you to tweak your monthly spending habits and save more over time.
- Price Change Protection (some of my Citibank cards have this) if the price of an item I purchase drops by $25 or more they send me a check for the difference –automatically.
The thing to keep an eye on when using your card is which card where – if it becomes too much to wrap your head around then just make a sticker with labels like ‘Grocery’ ‘Dining’ etc and you know what to use when.
For me right now I use the Hilton Surpass Card from American Express for Groceries and Drugstores and get 6x HHonors points per transaction, these points are paying for my next vacation in the Maldives at the Conrad Maldives Rangali Island with its wonderful underwater restaurant and Whale Shark diving; and The Conrad Tokyo, located next to Tsukiji the famous Japanese Fish Market for Sushi- Trip Reports will be coming to our Travel Section on these after we get back. Both hotels would cost me thousands of dollars per night without these points, and frankly I’d never be able to go to the Maldives at all without them.
For dining and travel I love the Chase Sapphire Preferred, it gives me 2x points on these, which isn’t as nice as the 6x from Hilton in their categories, but the Chase points are worth a lot more in terms of value than Hilton are. I’ll get into a comparison of these points in a later post.
In addition to the actual purchase, where and how you purchase any item makes a huge difference too – these days anything that is about $25 and upwards I would buy online, and when I do I use price comparison AND kick back comparison websites to doubly benefit. A recent purchase doing this netted me thousands in savings on a big ticket item; I’ll talk about my Panerai in the next post, and how I used online shopping comparisons, kick backs, coupons and credit cards to reduce the price by over $3,000!
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