Life with credit cards, -or- learning to dance with the devil

TurboMinivan

Still plays with cars
Location
Lehi, UT
Even before I had ever heard of Dave Ramsey, I have been generally against credit cards. Oh, sure, I've always had one (or more) active at all times, but I treat them with considerable caution and use them very sparingly, if at all. I haven't carried a balance in years, and I always felt this was a crucial step in staying out of financial hot water.

Over the last I-don't-know-how-many years, I've used cash almost exclusively everywhere I go... just to make sure I don't get entangled in paying interest. This causes a few of my co-workers to frequently tease me. "Why don't you ever use a credit card?" they would say when we go out to dinner after work. "You could be getting free points/money back/other random reward!" I constantly rebuffed them, saying I didn't think the risks were worth it.

Back in June, I finally gave in. I did a little comparison research, then decided to apply for a CapOne cash rewards card. They approved me immediately, and I received the card a few days later. I made sure to completely pay off my old America First card (as usual), and then began using the new CapOne one.

Over the last few years, I have developed a solid track record of saving money and investing. Whenever you seek out any sort of book/article/video about getting your finances in order, Step One is always the same: sit down and track/write out all your expenses. Step Two tells you to look for areas where you can conserve/cut back, and Step Three is to then start saving money. I always skip steps one and two. In fact, throughout my entire adult life I have never written down or tracked my basic monthly expenses--I simply estimated what I thought I was spending and moved on.

As I was looking at the CapOne web site and phone app, I saw that it neatly itemized all my spending by date, store, and amount spent. It suddenly dawned on me: this could be a simple way to very accurately track my spending. With that in mind, I decided to forget all about carrying cash--I began using my CapOne card for everything. Buying a dollar fountain drink at a convenience store? (swipe) Buying a couple 10-cent bolts from the bulk aisle at Ace Hardware? (swipe) No expense was too small to charge, I decided.

I had to wait until August to have an entire calendar month to look back upon and analyze my spending, but here we are. As I added up all my general grocery spending and also all my fast food & restaurant spending for July, I was amazed to see that I spent less than I had always assumed I did. My total "grocery" bill (which covers all Wal-Mart shopping and thus includes many non-food items) came to $187, while my restraurant/fast food/drinks tally came up to only $154. In the past, I blindly estimated these monthy costs at $250 and $300 each, respectively. Wow. Was July an anomaly? Or have I been grossly overestimating my expenses all this time?

I guess I'll wait to see how August turns out.
 

jeeper

I live my life 1 dumpster at a time
Location
So Jo, Ut
At our house, every receipt goes in an envelope, and every penny is accounted for at the end of the month.
Never had a credit card. Never will.

Family of 5, our groceries (also include walmart extra items, shampoo and such) hover around $900 on average. It was significantly less ($500-600), but she has upped the food storage since Covid, and kids are home eating more.
 

N-Smooth

Smooth Gang Founding Member
Location
UT
We've used a credit card this way for almost 15 years and have never carried a balance. We have the Chase Amazon card and the rewards are pretty awesome. I understand not everybody has the self control necessary to use credit cards intelligently but it works for us.

EDIT: If I ever feel like being shocked I log on and look at our annual spending report :grimacing:
 
I'm more along the line of Dempsey. Almost all of my spending goes on a couple of cards which are paid in full every month. I generally get benefits split between frequent flier miles and cash back in the form of a credit on my bill. I don't see a downside. I still carry some cash, but I'm pretty frugal, so spending isn't determined by what is in my wallet. I get a fair amount of satisfaction from carrying a bit of cash around and seeing how long I can go without using it.
 

TurboMinivan

Still plays with cars
Location
Lehi, UT
187 bucks a month at Wal Mart???? My wife spends that weekly.

LOL. Well, it is just me at home now.

At our house, every receipt goes in an envelope, and every penny is accounted for at the end of the month.

I've thought about this strategy in the past. I've even piled up receipts in preparation for the end-of-month accounting. But by the time the end-of-month comes around, I would look at the disorganized stack and would always lose interest.

Kudos to you for doing what you do. :beer:
 

TRD270

Emptying Pockets Again
Supporting Member
Location
SaSaSandy
Dove into this myself about 6 years ago, went from cash to everything on a credit card. Pay it off every month and enjoy the rewards. Was primarily using travel card and went on several vacations without paying for airfare. Recently switched over to cash rewards cards and am surprised how much cash back I get. Have a couple different ones that offer better % for different things.
 

Pike2350

Registered User
Location
Salt Lake City
I dont track my stuff other than in my head. I dont carry a balance except for the no interest promo period on things...but otherwise my wife and I have separate reward cards and a joint one. All paid off each month. This year we will be around $1200 combined in rewards....which will likely be vacation spending
 

jeeper

I live my life 1 dumpster at a time
Location
So Jo, Ut
Dove into this myself about 6 years ago, went from cash to everything on a credit card. Pay it off every month and enjoy the rewards. Was primarily using travel card and went on several vacations without paying for airfare. Recently switched over to cash rewards cards and am surprised how much cash back I get. Have a couple different ones that offer better % for different things.

What kind of $$ are we talking as far as rewards? Lets say an average spending month of $4,000.
 

mbryson

.......a few dollars more
Supporting Member
What kind of $$ are we talking as far as rewards? Lets say an average spending month of $4,000.


I think our highest payback is normally 1% but on some purchases (groceries or gas) 2% and maybe 3% on hotels and airfare (depends on card)? I tend to put all my work expenses on a personal card just to get the points
 

Homefryy

Active Member
Location
Salt Lake City
I use the Chase trifecta.

Chase Freedom Card - 1% back on all purchases but has changing categories (grocery stores, gas stations, etc...) every 3 months that get you 5% back. We only use this card for the 5% categories

Chase Freedom Unlimited Card - 1.5% back on all purchases. This is what we use for most things.

Chase Sapphire Reserve - 1% back on all purchases but travel and restaurants get 3% back. This card has a high yearly fee ($500 or something) but every year you get a free $300 credit toward travel expenses that makes up for a lot of the fee. There are other perks like access to a lot of airport lounges, reimbursement for Global Entry or TSA pre-check application fees, and other things that can make this worth it if you travel enough.

The real trick is that with the Chase Sapphire Reserve you get 1.5x the value from your points if you go through their portal to purchase things like flights. You can transfer the points from the other two cards to the Sapphire Reserve card to take advantage of the 1.5x multiplier. That means that the 5% you got back from the rotating categories on the Freedom card turns into 7.5% of actual value.

You can also do this with the Chase Sapphire Preferred card which has a lower fee but less perks and I think you only get a 1.25x multiplier on points used through their portal.
 

Cody

Random Quote Generator
Supporting Member
Location
Gastown
My wife and I have flown to Germany, Greece, Ireland, Mexico, Denver (twice), Minnesota, and my partner flew his entire family to Maine all on AmEx points in the last 6 years. We still have 300k points in the bank.

You can spend your cash how you want. That's a great way to live. If you trust yourself, why not spend the same but on a credit card and use teh cash to pay the bill and travel at a 35% discount with points?

The card I really want is that Sparks Rewards 2x point card. That's a bad ass card, but with so much hanging on my credit from the brewery at the moment, I'm not going to get approved.
 

Evolved

Less-Known Member
My current accounting goes as follows:

1 - Buy whatever The F I want when I want it
2 - Hope for the best
I am this too. I work hard for my money and enjoy spending it. It makes me happy.

We only have 1 credit card in this house. We have a Skymiles card that only gets used for bigger purchases ($500+). The dumb thing is, those large purchases get paid off that same month or the following month because I hate carrying a balance. We never put more on the card than we have cash to cover. I guess I do it to get more Skymiles but I travel so much that the miles from the card are insanely small compared to the miles from flights. I currently have over 350K Skymiles banked. Hoping to take the family to Europe on Delta’s dime one day.
 

TurboMinivan

Still plays with cars
Location
Lehi, UT
What kind of $$ are we talking as far as rewards? Lets say an average spending month of $4,000.

I like to use the web site Nerd Wallet. Google 'best credit cards August 2021' and follow the link. They will give a rundown of the best deals currently available. They do admit that they get kickbacks from some of the banks/cards listed, but their reviews contain their own words and are also based on reader feedback--I feel they are about as unbiased as they can be.

In my case, I wanted a cash back card with no annual fee. Rather than a card with revolving quarterly or monthly special categories, I ended up choosing a card with a flat 1.5% cash back on all spending. As an added signup bonus, there was a promotion: charge $500 within the first three months and receive $200 cash back. Thanks to my frenzy of charging, I've already earned and cashed in that promo bonus. :)

It is worth browsing around that web site to see what deals are out there.
 

Cody

Random Quote Generator
Supporting Member
Location
Gastown
I get 1x point on each dollar spent, 5x points on fuel spent, 2x on advertising, and I think it's 5x on travel/hotel purchases. Then if I book on my preferred airline (Delta) using points, I get 35% of the points back, I get $200 in airline credits (for drinks, wifi, checked bags etc) per year. I get free TSA pre check every 4 years. I get free rental car insurance when paid on the AmEx. Free cell phone replacement when the bill paid with the card. Adds an additional year warranty to most things purchased with it etc etc.

It costs $400 per year, but the value of the rewards each year are at least double that.

The sparks 2x card gives you 2x points on every purchase and you can transfer the miles to almost any other airline or hotel program, so you're getting better value than even the 35% kickback on the AmEx. Plus, it doesn't feel like a codpiece like the gaudy, heavy, metal AmEx they give you.
 

spaggyroe

Man Flu Survivor
Location
Lehi
I was in the same boat Dempsey. I totally rejected credit cards for many... many... years.

Since the wife and I like to travel, I finally started looking into ways to get some perks. I ended up with a Chase Sapphire Preferred about a year and a half ago. We set it up to pay all of our bills with, and we buy our groceries on it as well. All of our living expenses go on it (money we were going to spend anyhow).

It has already allowed us to get free airfare for an upcoming trip to Hawaii... so.... worth it!

The catch is to NEVER let yourself get caught paying any interest. Our card is set up to automatically pay in full every month.
 

N-Smooth

Smooth Gang Founding Member
Location
UT
Bringing this back from the dead!

We’ve had the Chase Amazon Visa card for a few years and it’s cool. Cash back last year was just under 2%. This year is looking like 1.6%. I think I can do better though and get some travel benefits so I’m thinking about mixing it up. We would just use the Amazon card for Amazon purchases (5% cash back) and use other cards for other things.

I’m waffling between an Amex Platinum or a Chase Sapphire Preferred. Big difference in annual fees but the Amex also has a lot of neat features. Downside to that card is since we’re already on the chase network I can easily add the sapphire card.

Also, like @Homefryy mentioned above, a lot of experts recommend doing cards in 3’s so I’m looking at adding a Marriott Bonvoy Boundless card to the fleet. I really just don’t want to stay in crappy hotels anymore and it seems like a good value. The wife isn’t sure if the Marriott card is needed on top of the Platinum/Sapphire but I think we can easily use 3 cards for different things.

Anybody have experience with the cards in question since we last discussed this???
 
Top