Put your cash to work

I’ve heard of a small movement in which people live solely on cash.  They only pay cash for their necessities.  And they keep the extras to a bare minimum. They don’t use credit at all.  I don’t think that’s very smart.

I completely agree with not buying something unless you have the cash for it and cutting out the extras. I wish I were able to stick to those ideas a little better. However, use credit cards to your advantage. You could be earning cash, gift cards, flights, etc. There are so many cards out there that will make your money work for you.  You just have to know what you’re looking for and what works for you.

  • I don’t apply for any credit card that has an annual fee. I’m cheap. I’d rather not pay for my freebies.  However, the earnings potential goes up greatly when you have a card that has an annual fee.  As far as I know, none of the major airlines offer a no annual fee credit card. But if you know you’re going on vacation, it might actually be worth it to pay a fee for a card that’s going to earn you free flights.  Just do the math first.
  • I use my credit card as much as I possibly can. Unless a store doesn’t take major credit cards or there’s a transaction fee or I have a better deal with a store credit card, I use my credit card that earns cashback for every single purchase I make. I’ll use it for ANYTHING.  I charged the maximum amount ($5000) that the car dealer would let me charge when I bought my car (I had the cash to cover it).  I’ve used it for a 59 cent bag of M&M’s.  I have no shame. I earn at least 1% cashback on every purchase and sometimes up to 5%. If they’ll give it, I’ll take it.
  • I pay my credit card off every month. If I don’t pay off the entire statement amount, I pay interest. My interest rate is 12.99%. I’m no calculator, but that appears to be about 11.99% higher than my 1% cashback earnings.

You can still live the “Envelope Budgeting” lifestyle with a credit card. You just have to have a lot of self-control and a little spending savvy.

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It actually does pay to Discover

If you’re an online shopper like me, you should think about getting a Discover Card.  It used to be the joke of the credit card world.  I went to so many places that would tell me “Oh, we don’t take Discover.”  It was rather embarrassing.  But Discover has come a long way in the past few years.  And now there’s Shop Discover.

A decent list of retailers are included in their Shop Discover mall.   If you link to the retailer’s site from there, you have cashback earning potential of 5-20%. And that’s on top of whichever discount codes or sales you use on the retailer’s site.  Some current examples: Macy’s (10%),  Best Buy (5%), 1-800-Flowers (20%).  If you’re good at stacking,  this is just another wonderful layer.

Discover also offers five to six different categories per year that earn an additional 5% cashback bonus for online and in-store purchases.  Like gas stations, movie theaters, restaurants, hotels, and ONLINE SHOPPING.  Yes, an additional 5% cashback on your online shopping!!  They do that bonus Oct-Dec.  AND if you’re shopping through the Shop Discover mall, the 5% bonus is on top of the regular cashback for the retailer.

You can redeem your cashback for retail and travel gift cards, statement credits, Discover gift cards, direct deposit and charitable donations.  On many of the retail gift cards, you get an extra bonus.  I can currently redeem $80 cashback for a $100 Banana Republic card or $80 cashback for a $160 for Universal Orlando Resorts certificate. Many are available as an e-Certificate or a mailed gift card.

My Discover Card has no annual fee so they’re basically paying me to shop.