Over on The Simple Dollar, there is a post about using a portfolio of credit cards for specific purchases, a way to try to maximize rewards and benefits on cards.
The “ideal” portfolio described seems like a lot of work to me – not in remembering to pay the bills, but simply in remembering which card to use when.
I currently use two main cards – an Amazon Visa from Chase and a Discover card. I use the Amazon Visa for most of my purchases – I get 3% back on Amazon.com purchases and 1% on other purchases. Everytime my rewards hit $25, I get an Amazon.com gift certificate in the mail. Given the myriad of things you can buy on Amazon.com, this has been a great rewards program for me.
I only use the Discover card for their 5% cash back bonus offers – every quarter, Discover sets up a few categories where all your purchases in that category gets you 5% cash back. Last quarter, it included things like travel and hotels. This quarter includes clothing and department stores. Take note people – next quarter includes gas purchases. To keep track of which things I should buy with the Discover card, I put a Post-It note on the card with the categories very clearly listed. Discover allows you to take your rewards as cash back or in the form of gift cards, and you often get a little bonus if you take the gift card – $20 will get you a $25 gift card from certain stores, for example.
I also have a few store credit cards, mainly because of the coupons provided. These are stores I shop at regularly, so the rewards and coupons are worth it. They don’t get much use though.
Again, I never carry a balance on any of my cards, which makes the rewards worth it. And also makes me a drain on the credit card companies, if you think about it! I’m happy with my current use of credit cards. I’m careful to keep track of what I’ve charged on each of them, and I can’t say that I’ve spent more just because I’m using multiple cards. Over all, it’s a good system that works for me. Of course, as with everything, your mileage may vary.
Megan is a 30-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:
In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.
While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.
Except that’s not what an emergency fund is for.
So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.
I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.