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Fun with Credit Cards
For those of us who know how to use them properly, credit
cards can actually be quite fun and lucrative. To those who do
not know how to use them properly, I would say that you should
stop reading this column right about now, or at least I would
advise you not to try any of this stuff at home. What I'm about
to describe is not one of those illegal credit card schemes.
Instead, I'm talking about taking full advantage of the benefits
and offers that credit card companies and store chains offer
their customers all the time.
I get several credit card offers each month, but I only accept
those that come with no annual fee and pay me at least one
percent cash back or credit on my purchases. I don't care about
the interest rate. It could be some exorbitant rate like 50% for
all I care, since I never carry a balance and always pay off what
I owe at the end of each month. Right now, I probably have about
15 different cards, but I only regularly use three of them.
I have one card that gives me an instant five percent credit
on my gasoline purchases. Therefore, I buy all of my gasoline
with this card and never use cash to buy it. I have another card
that gives me five percent cash back on any purchase I make at a
drug store or grocery store. Needless to say, I try to use that
card exclusively at those establishments. The third card I
regularly use gives me a one percent instant credit on all
purchases. I use it for just about everything except purchases of
gasoline or purchases at drug stores or grocery stores. The more
I use my cards the more credits and cash back I get. The credit
card companies are, in effect, paying me to use their cards and I
am more than happy to oblige.
Some credit card companies will take things one step further
and even pay you to take their cards. These payments will take
the form of gift certificates, bonus cash back, and/or bonus
credits. There is one minor catch in that most companies will
generally require that you use the cards at least once each to
get those benefits. That's never a problem for me as I will use
them once to get the benefits and then toss them into my
"inactive" drawer.
Having lots of credit cards means I get lots of offers in the
mail (and sometimes by phone) from the credit card companies in
which I am asked to try out some kind of worthless subscription
for 30 days. Most of the time, I just throw these offers in the
trash can. However, there are some that I will try because they
will "bribe" me adequately to do so. However, they must offer me
at least $10 and the offer must have a free trial period. I will
then cash their check, put the money in my pocket, and cancel
before the free trial period ends. However, I have found that I
need to be careful with these offers. Sometimes they'll offer me
$10 to try something that costs $10 (or more) per month, with no
free trial period. I avoid those like the plague, since the best
I can do is break even.
Speaking of worthless subscription offers, most credit card
companies will push some kind of credit card insurance. The way
it works that you pay about half of one percent of your monthly
purchase totals so that this insurance will make your minimum
monthly payment in case your are disabled, laid off, have a death
in the family, or suffer some other kind of qualifying malady.
This insurance may be a good idea for those who run a monthly
balance and only make the minimum payment, but it's worthless to
those of us who pay off our balances each month. However, the
credit card companies will never acknowledge this fact and will
pay you to try it and will usually give you a free trial
period.
I take these subscriptions only for cards that I don't use, so
it never costs me anything. What's better is that when I try to
cancel it, they bribe me again to keep the subscription active!
The bribe is usually in the form of rebate tickets of $10 to $25
per month for about six months. When I make a purchase that
equals or exceeds the face value of the ticket, I send in the
receipt along with the ticket and get a cash rebate about eight
weeks later for the face value of the ticket. Then, when the
tickets run out and I attempt to cancel my subscription again,
they offer me even more tickets to stay subscribed. Sometimes, I
have tried to cancel before the six months ran out and got even
more tickets for the same card in overlapping months! If you have
several cards you don't use, each with one of these
subscriptions, the rebates could really add up!
In addition to the cards issued to me by the credit card
companies, I have several cards issued by store chains like
Sears, JC Penney, Hecht's, etc. Most of the store chains that
issue credit cards will offer discounts of 10, 15, 20, or even 25
percent at various times for simply using those cards to make
purchases at their stores. Some will even offer a bonus discount
for just signing up (and being approved, of course) to take one
of their cards! They can afford to do this because they know that
most people will not pay off their balance each month, but will
instead make the minimum payment along with paying an ungodly
amount of interest. The stores will more than make up for those
discounts right there. Meanwhile, those of us who don't run
monthly balances reap the benefits of discounts that other people
are paying for!
What I have just described is not illegal, immoral, or
unethical. Credit card companies and store chains are in the
business to make money and sometimes they'll offer things that
don't seem to make sense in order to maintain and/or expand their
customer base. Contrary to popular belief, credit card companies
do indeed make money off people like me, who never pay a dime in
interest or annual fees and take full advantage of all of their
offers. The money comes from the businesses that accept those
cards by way of the fees they pay each I time I use one of my
cards. Those businesses, in turn, are willing to pay these fees
in order to attract as many customers as they can. Therefore,
everyone in the credit card cycle benefits. Those who use credit
cards the way I do are just making sure they are getting their
piece of the pie.
Terry Mitchell is a software engineer, freelance writer, and
trivia buff from Hopewell, VA. He also serves as a political
columnist for American Daily and operates his own website -
http://www.commenterry.com - on
which he posts commentaries on various subjects such as politics,
technology, religion, health and well-being, personal finance,
and sports. His commentaries offer a unique point of view that is
not often found in mainstream media.
MORE RESOURCES:
Credit - Google News
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