Use your credit card to SAVE money? Did she really say that?

Yes, yes I did. Credit card companies are evil…that I don’t dispute. But what happens to you when you use a credit card is no one’s fault but your own….and, if you do it correctly, no one’s reward but your own.

Last year at this time we paid off the last of our credit card debt. Gone. We hadn’t used our cards in over 3 years…and worked hard to bring that balance to zero. We met with our advisor who, after congratulating us, suggested we really start using our Discover card.

WHAT?!

They key is…we use our Discover Card for our NORMAL purchases…and pay it off, in full, every month. We do not use it for unplanned expenses that we do not have money for. We use the card for groceries, utilities, supplies, gas…you name it. We just found out our friends use theirs to pay their mortgage each month. Why would we do this? Cash back. Normal purchases net you 1% cash back. Not much, you say? Its better than the NO cash back you get when you write a check or use your debit card. Every quarter there are incentives for 5% cash back on certain genres of product.

To date we have earned nearly $400 cash back this year…all those little 1% bonuses add up. We choose to put our bonus directly back into our card…we use the money to pay on the balance. A friend of mine recently added that she and her husband routinely get nearly $600 cash back each year…they save their bonus until year end, use the bonus to purchase gift cards…which in turn they use to purchase the year’s Holiday gifts.

Couple this with ideas like shopping through eBates where you can accumulate cash back on your purchases and you are doubling your incentives. Right now, if you made a purchase at Old Navy.com and you arrived there via eBates and paid with your Discover Card…you would be netting $15 in cash back for each $100 you spend.

Of course…you can do this with any type of rewards card. I’m simply using the example of Discover because that is what we use. Fly a lot? Use a card that rewards you with bonus miles. You get the point.

But I cannot say enough….do NOT spend money you don’t have…don’t make frivolous, unplanned purchases unless your budget allows for that type of thing. Pay your card of each and ever month, on time. This is the ONLY way to make a credit card work for you.

For more money saving tips and for the latest coupon match ups, deals and freebies be sure to follow along each week as we share with you!

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