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Thread: Making more from my cash back credit card than from my savings account

  1. #1
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    Making more from my cash back credit card than from my savings account

    I finally bit the bullet and got a 2% cash back credit card. It's from my bank and the deal was if I got the credit card I would get around 1.5% on my savings account depending on interest rates.

    My only regret is not doing this sooner. I pay off my credit card daily, and never pay interest. My previous credit card had air miles, which we've always used, but I hesitated to add another credit card. 20 some years ago we were deep in debt and I've felt an aversion to credit cards ever since. We've been debt free, including the mortgage for a long time now, and I want to keep it that way.

    So the new credit card will be our main card, and the old one will be the backup.

    What credit cards do you use? I've resisted "playing the game" with credit cards for so long because I didn't want to fall into a trap, but after 20 some years of good self discipline, I don't think that will happen.

    Do you pay your monthly bills by credit card? I'm still using online bill pay through my checking account. We're using the credit card for everything that we used to pay by debit card.

  2. #2
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    Interesting. I use a 1% cashback card for internet purchases and emergencies and travel. Like you, I pay it off daily, and like you, was in debt several years ago and am very credit card shy because of that. I have always followed Dave Ramsey's advice that you tend to spend more with one, so the benefits are cancelled out by spending more.

    I don't want to put my bills on the credit card because we pay them from the bank account. It would complicate our system, as we each have accounts and each pay different things.

    When I do get points back, I use them for gift cards, usually for Amazon and spend them in the normal course of things.

    But 2% would be better, of course.

    I just don't want to add that to my credit score, etc. It's pretty good right now, and I don't want to have to fuss with two different cards.

    But it sounds like it is working really well for you!

  3. #3
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    Tybee - I hesitated to get the new credit card for all the reasons you stated. I'm also a student of Dave Ramsey. And right now, I don't want to pay my bills by credit card because the online bill pay feature from my checking account works just fine. I'm concerned about complicating things.

    The deal breaker was the interest rate on my savings account if I got the card. If I didn't get the card, the interest rate would be almost nothing.

    The other thing I like is when I log into my bank account each morning I see a snapshot of my checking, savings, credit card and cash back account. I can easily transfer $ from my checking to the CC account.

    I've earmarked the cash back account for travel.

  4. #4
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    I've used an earning card for 25? years or longer. We get 1.5%. Everything possible is paid with it and I have every bill automated. Yes, monthly bills included-utilities that will accept CC. I make 1 payment/month. And yes, it is paid off every month.

    I wouldn't pay it off daily. Why not keep YOUR $ in that now "high earning" savings account for the month? You are giving your money away by paying the balance daily.It

    By setting up autopay on everything, the desire to spend took a backseat to "that $ needs to stay there to pay the bill". Best decision we ever made to get a handle on our money!

  5. #5
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    Gardnr - How do you automate your bills with your CC? Do you give them your CC number and trust they'll deduct the correct amount? Some of my bills vary each month; water, electric, gas, etc.

  6. #6
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    We have a cash back CC but only use it for big purchases or online. I pay it off monthly. Otherwise we use our debit cards and bills go through the bank.

  7. #7
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    Quote Originally Posted by Molly View Post
    Gardnr - How do you automate your bills with your CC? Do you give them your CC number and trust they'll deduct the correct amount? Some of my bills vary each month; water, electric, gas, etc.
    Yes, they have my CC. I have never had an error. I check my statement every single month.

  8. #8
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    You only make more by spending more and being the product. I regularly get offers for cash back, to use my card at places like Gas stations (never have), grocery stores (never have, and was taught don't charge something that is gone before the bill), restaurants, etc. These are all places that help them turn you into a product, so people can more effectively market and predict you, as well as places where if one uses a card, orders typically run higher, by impulse purchases.
    I would rather have the pile of money, then a bit of interest or money back from spending it, and choose not to be the product. I do use plastic for online purchases, however, some of those are for work, and certainly screw with their algorithms.

  9. #9
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    Quote Originally Posted by ToomuchStuff View Post
    You only make more by spending more
    We do not. We make money on what we spend anyway. Carrying and using cash would be a loss for us. Why would we give up that free money?

  10. #10
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    Quote Originally Posted by Gardnr View Post
    I've used an earning card for 25? years or longer. We get 1.5%. Everything possible is paid with it and I have every bill automated. Yes, monthly bills included-utilities that will accept CC. I make 1 payment/month. And yes, it is paid off every month.

    I wouldn't pay it off daily. Why not keep YOUR $ in that now "high earning" savings account for the month? You are giving your money away by paying the balance daily.It

    By setting up autopay on everything, the desire to spend took a backseat to "that $ needs to stay there to pay the bill". Best decision we ever made to get a handle on our money!
    Ditto... We get 2% back and pay the cc off each month. It is surprising how this adds up for things that you normally buy anyways. The cash is stashed in a drawer in the kitchen and we raid it to do silly things... out for coffee, restaurant, garage saling. It saves us from having to get cash for sundries.

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