Maybe it’s a fool’s game, but it’s my game

Credit cards

Image via Wikipedia

** Huzzah! I’m in this week’s Carnival of Personal Finance. Thanks to Well Heeled for hosting. **

Spending $25,000 on a credit card over two years is unlikely to earn you even $180 on reward schemes, a survey has revealed.

I consider myself a savvy credit card user, and stories like these annoy the hell out of me.

Unless you spend heaps on your card…and fully pay off your card at the end of each month, most of these schemes won’t be worth it.

Well, no shit, Sherlock. That’s the credit card game, isn’t it? Don’t spend more than you can repay, and you win. Plus you get points or cashback. There’s nothing good about the alternative.

Sadly, unless you manage to be completely self sufficient – work for yourself, grow your own food, generate your own power and so forth – you need to spend money.

I will admit, I’m not making oodles of money from CC rewards. In fact, I would need to spend $27k to earn $180 in rewards. But I certainly am making something for nothing. If I must be ripped off by supermarkets, petrol stations and the like on a regular basis, I’m going to claw back every cent I can.

Let’s say $150 a week goes on the Visa (a ridiculously low number. That’s full groceries plus bus topup, or perhaps petrol plus a supermarket shop minus meat and veggies.) That earns $1. That’s $52 in rewards for $7800 spent in a year for doing nothing but LIVE LIFE. Or perhaps a more realistic $200 a week, earns $67.60 a year. That does not include the countless other expenses which crop up over those 12 months. Insurance. Clothing. Mystery shops. Concerts. Other dining out. Presents. Travel. Car registration and repairs. Purchases made for people we know who don’t have their own credit cards. Oh, and I can now pay Sky TV by Visa for no extra charge.

In fact, I put everything I possibly can on my credit card, and only regret I can’t do the same for rent. At a guess that might double or triple what we put on the card, and thus earn rewards for. One has to feed, dress and transport oneself, and this one would rather get something out of it. In the meantime, my money earns a little bit more interest in my account, which is calculated on a daily basis.

Quite frankly, I would find it near impossible to live without a credit card. I buy stuff online semi-regularly, from contact lenses to guitar strings to daily deal coupons to event tickets to hotel bookings. (Well, some of those are more regular than others.) My other options would be to, uh, ASK someone with a credit card to do it for me, or get one of those Visa Debitplus cards. In which case, I may as well get a real Visa, with a rewards programme. I don’t doubt Visa Debitplus is a fabulous option for many people, but it offers me absolutely nothing. The idea is you use your own money, but you do get charged a fee for it. I’d rather use the bank’s money for a month and earn wayyyy more than enough rewards dollars to cover the higher fee. And I won’t even get into the other benefits that some credit cards also offer.

I get it. It sounds like too much trouble for some people, especially given our relatively crappy rate of return. Especially for those who have fallen into the debt trap using credit cards. But others, like me and my mother and many more, can handle ourselves. And who else would book tickets online for our friends and family with shot credit and who don’t have a Debitplus for whatever reason? If you can handle money responsibly, there’s a bit of free money in there for you.

Please. Trust us. We’re grownups and we know how to play the game. Maybe the majority of Kiwis don’t, but there’s no need to treat us all like imbeciles. Or is there?

8 thoughts on “Maybe it’s a fool’s game, but it’s my game

  • Reply Nicky at Not My Mother February 15, 2011 at 15:38

    I agree with you. I’m in Australia and we’ve got a mortgage offset facility, so we put as much on the credit card as possible so our money remains ours longer (and saves us interest). We spend a minimum of $3000 each month that way, and yes we pay it off in full. I’ve got Flybuys which might not be the best but we pay no fees and I get cashback every month or so. I love it, the rate of return might not be huge but I see it as a little bonus reward for being good with my money 🙂 I do spend it though, it goes towards things we want to buy for the house that we otherwise have to save for, so that’s a second treat right there 🙂

  • Reply Sense February 15, 2011 at 18:15

    do you pay an annual fee for that card? I am searching frantically for an NZ rewards card with no fees.

    Sigh. I refuse to pay annual credit card fees so i just use my capital one (US cc) everywhere–it doesn’t charge me any foreign conversion fees. No annual fee, two points per dollar spent (5000 points = $50). it really does add up!!

    I also game the US cc’s–i watch for air miles deals and if i spend $4000 in six months on the card I have now, i get 75000 airmiles and a $100 voucher with a certain card. LOVE IT!!!

  • Reply eemusings February 15, 2011 at 19:39

    Let me know if you find one – although I’d be loath to give up the convenience of having almost all my accounts with ASB.

  • Reply Amanda February 16, 2011 at 00:23

    I’m not sure what the details are on my mum’s (main household) credit card, but it’s a BNZ one with AirNZ airpoints. I agree with you on that article though – everything said there is just plain common sense… so surely there must be a lot of dumb NZers out there to have required the publishing of such an article…

  • Reply Daisy February 16, 2011 at 03:27

    Ohhhh I do this!
    I take fullll advantage.
    My CC earns 1%. I pay it back every month, & I put the vast majority of my purchases on it. Last month I got last years’ reward – $180. I put $18,000 worth of stuff on my card. Addmittedly, $5000 was mexico, and another huge chunk was tuition, & now thier not letting me use my cc for tuition anymore.
    But still!
    Then, if you think about taking that $180 and putting it in a savings account which earns 2%, over the year you get $3.60 more. Doens’t sound like a lot, but it does add up.

    • Reply eemusings February 16, 2011 at 17:31

      But you could only earn that $180 through putting the money on your CC – you wouldn’t have got it any other way! You see what I mean? You could’ve just put that all on your debit card too but you wouldn’t have made the cashback. Comparing cashback to interest on savings is moot, because it wouldn’t exist to be put in savings anyway. (Ugh, that doesn’t make much sense, but hope you get the drift.)

  • Reply First Gen American February 18, 2011 at 23:52

    I charge everything too and live in a smallish town so I do a lot of shopping online. I hardly ever have any real money in my wallet. I keep it simple. 1% back and no annual fee.

  • Reply Stupid tax | Musings of an Abstract Aucklander June 23, 2011 at 10:37

    […] had a $37 fare sale, I jumped on it immediately. I even paid by bank deposit – not by Visa, despite my love of reward points – because airlines now charge extra fees for paying by credit […]

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.