Over the last few weeks, several people have written to me asking about the credit cards that I actually use. I use two of them, and here’s how I use them and why.
My primary card is a cash back credit card: Citi Driver’s Edge Options Platinum Mastercard (here’s Citi’s page about the card). It gives me 6% cash back (for the first twelve months) on all supermarket, drugstore, and gas station purchases (it goes to 3% cash back after that), 1% back on everything else. On top of that, I earn $1 cash back for every 100 miles I drive, which I can prove with regular auto maintenance receipts – it basically winds up being $30 back every time I get an oil change, the 1% I save on that purchase. Over the first seven months of use, I’ve received back about 4.7% of what I’ve put onto the card.
My other card is the Chase Amazon Visa (here’s Chase’s page about the card). I use this one exclusively for Amazon purchases, which include a lot of my non-perishable goods and almost all of my entertainment expenses. I earn 3% of the purchase in store credit at Amazon, which has added up quite a bit in the last year ($125 in credit).
These two in tandem have earned about 4% in rebates since I began using them. Their rewards match my life very well (I commute and most of my card spending is at supermarkets, gas stations, and online) and thus I can really capitalize on them.
How do I keep them paid off? Each week, as part of my bill paying routine, I check the balance of both cards online and pay it off. This keeps me from ever seeing a dime in fees. This does mean, though, that I have to be very vigilant in not spending too much with the credit cards; I have to remember at all times that “future me” is going to have to pay this off, and “future me” is very, very real.
Aren’t credit cards in opposition to your “no debt” philosophy? My view is that a credit card in which you don’t carry a balance (effectively a charge card) is just a tool to make purchasing easier, and with the rebate options available, it’s a tool that actually pays you to use it. If I end up paying for this debt, it’s my own fault for not properly managing the cards. Credit cards are only dangerous if you start allowing yourself to regularly carry balances on them, and the greater the balance, the greater the danger.