When you think of budget tools most people do not think about credit cards. Actually credit cards are the last thing that comes to mind for so many of us. There is a reason for it too – it’s too easy to spend too much using a credit card.
I have mentioned before, but it doesn’t hurt to say it again. You should not use a credit card if you have any problems with debt or if you do not have the will power to say no. For the longest time we did not use a credit card because we didn’t feel like we were financially responsible enough for one. We were too busy trying to pay off our individual cards that we racked up debt on from before we were married, so when we finally got those paid off the last thing we wanted was another one.
After a few years of no credit card, we decided to give one a try. We agreed to only use it for gas and groceries. Once we were able to stick to our monthly budget for our groceries, it made using a credit card a lot more feasible.
I also researched different cards available to find one with the best reward points. I had a vision of letting our reward points grow so we can turn them in for cash back. Then we can use that cash to help our budget. It has worked out great!
Now, before I share with you what we use our reward points on I want to have an honest conversation. Credit cards work for some, but not everyone – and that’s okay. When you’re in the trenches of paying down debt then having a credit card can be used as a crutch. It can actually hold you back.
You can be working so hard on paying down one bill, but at the same time spending too much on your credit card without realizing it. It’s too easy to swipe a card when you’re unsure of your bank balance. So before even considering a credit card, you need to make sure your budget can handle it. You need to make sure you can handle it.
Once you have your budget ready and your financial mindset focused then you need to do your research. You need to think of what you want this credit card to be used for. Do you want to use it only when traveling? Do you want to use it when you’re grocery shopping? Do you only want to pull it out when online shopping? Whatever your goal is for your credit card is fine, but you need to have a spending vision for it.
Having a vision of how you will use the credit card will help you from overspending on it. Since we use it for gas and groceries then we understand that it’s off limits for other purchases like eating out, going to the movies, buying clothes, and so on.
So many people talk about needing a credit card for emergencies. Like “what happens if I’m traveling and I need to buy a plane ticket?” or “What if I have to buy a tire while I’m out of town and my debit card won’t go through for the high amount?” Credit cards are even used as a cushion between paydays for a lot of Americans.
And that’s scary.
We know we shouldn’t use our credit card unless we have the money in our account right then and there to pay it off, but yet, we swipe it anyway. I want you to avoid making those mistakes, so make sure you have your budget ready, your mindset ready and the vision of your spending in focus.
Here are some areas you can use your reward points on:
You can use it for birthday gifts
You can use it for the slush fund, which means the fun stuff you want to do with your family. Like trips to the zoo, overnight trips, and days at the water park.
You can use it for Christmas gifts, which is what we use our points for.
Around the middle of November we cash in our reward points and transfer the cash to our bank account. Then we earmark that money to use for Christmas presents. We pride ourselves on sticking to a pretty tight budget for Christmas. Using our credit card reward points is one way we can do it.
We use the same concept I talked about in a previous post to set a budget for each person in our family. After the budget is set then we brainstorm gift ideas. On Black Friday and Cyber Monday I do most (if not all) of our shopping online. I even use our Ebates accounts (which I love) when I do online shopping to help build even more cash back.
If you have a credit card, what do you use your reward points on?