Money Transfer Services that Accept Discover Credit Card
Using cash back credit cards
You can actually use a cash back credit card to pay off your card sooner and to help with your budgeting. Read more on how you can use cash back and credit card rewards to their fullest advantage.
How important is a cash back credit card in financial planning and saving you money?
First let’s talk about whether having two credit cards is a good or bad thing. If you are going to use your credit card to track your expenses or keep a record so you can budget better, you have to have two credit cards. One should be focused on the lowest interest possible, with no annual fees and at least some sort of reward program. The other card should be focused on one of the many cash back reward programs. The reason for this is simple one you will only use one incase of emergencies and the other with the cash back is going to help you pay down this card faster.
This is important - The credit card you are using for tracking expenses must be paid in full every month, otherwise you are defeating the whole purpose of trying to budget. And you must use it for gas purchases so you can reduce the cost of a gallon of gas. Every little bit is going to help lower your monthly costs and expenses.
Matching your spending habits with the right credit card reward program is as important as the interest rate you are going to pay if you carry a balance. The first card that you should have is a chase freedom card read our review about this cash back credit card on this page The other card we have picked is one of the many discover cards of which are listed on our discover credit card page, they have the lowest interest rates, this is the card you will use only for emergencies. Their rewards are good but not as good as the chase cash back. What you will like about it is the pay on time bonus equal to a full month’s interest each time you make 6 on-time payments in a row- twice a year, every year when you pay on-time every month. The 5% to 20% Cashback Bonus looks really good but it is only for their online retailers. So you really only get up to 1% cash back on other purchases.
Now what you will be doing is taking full advantage of the cash back offers on a daily basis whenever your buy something. The money you get back will be used to pay down your emergency credit card, if it has a zero balance you will put this money in a separate account for a rainy day so to speak.
Why you don’t pay down your main card with this bonus?
This one is supposed to have a 0 balance at the end of every month because it is your budgeting credit card. If it doesn’t you have used the wrong card for something. The credit card that you use to track expenses with can only have a self-imposed limit of 75% of what you take home every two weeks. It takes a tremendous amount of dedication to budget this way but you will find that after awhile your debt will be going down and your savings at the end of every month will be going up. This happens because at the end of every month you will be looking at your credit card statement and seeing exactly what you have been spending your money on. This can be a real eye opener for some people. I can guarantee you that after two or three months of doing this you will be starting to stop buying some of the things that you had previously been purchasing.
Please note; this isn’t an easy fix for spending money it takes a great deal of dedication on your part, and you have to take the time every month to look at your bill to see where you money is going. If you have a spouse or partner using a credit card in the same way, you will both have to come to an agreement on sitting down together to discuss finances, each and every month to make this work. People are starting to use this as a form of budget planning and using credit wisely. You will notice other people doing this if you keep your eyes open for it. Have you ever noticed when you are in a line say to buy a coffee and someone is paying for a small item with a credit card. Chances are it’s not because they haven’t any money it’s because they are tracking where their money is going.
| By Bev Dodd Published: 4/29/2007 |
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