Credit card debt is FUN!
No, no it’s not. It sucks eggs.
I should know. I’ve had major issues with plastic debt. Ten years ago, I was nearly $20,000 in the red with Discover, American Express, and some random Visa card (probably those predators at Capital One). Even as recently as five years ago, the Mrs. and I still had a co-signed and complex debt situation thanks to aggressive home renovation project decisions and poor spending habits. Oh, and one shithead contractor who couldn’t stay on budget, but that’s another post for another day.
Fast forward to the 2nd decade of the 21st century and things are radically different. On one front, I am fanatically obsessed with paying off, in full, every single credit card bill every single month. I haven’t seen an opening balance on a credit card statement in years. We still have monthly credit card bills though because I am also obsessed with accumulating a myriad of reward and award points that credit card companies are more than happy to give away for, in most cases, free. I’ll start using cash the day the treasury department launches their rewards program.
Already this year, I set the Mrs. up with a new Chase Freedom card that offered, through a snail mail deal, a 1st use bonus of, essentially, $300! And there is no annual fee on the card. This was a no-brainer. She will keep her Chase Freedom Visa and use it for her hefty college tuition invoices 3 times a year. That’s it. We received 30,000 Ultimate Freedom Reward points after she used the card once and already redeemed that for the afformentioned $300 check which arrived promptly, and get a minimum of 1% cash back for every dollar she charges to the card (the card has a unique structure offering more cash back, 5%, on certain purchases throughout the year. For example, during the 1st three months of 2012 you get 5% back at gas stations and on Amazon.com purchases). With the spring semester of school paid for, we already tallied up an additional $50 check which has already arrived. That is $350 in our we-intentionally-try-to-forget-about-it-secret-vacation checking account! Brilliant.
I also signed up for a Southwest credit card (also through Chase) when I was ready to purchase the tickets for our President’s Day Weekend getaway to California. The offer there was 10,000 bonus Rapid Reward points + $100 statement credit when applying for the card during the booking process and then using the card (which was possible thanks to the miracle of the internet without me knowing yet the number/expiration date/security code). This card has a $68 annual fee charged immediately during the first billing cycle but that $100 credit more than cancels that out. If you keep the card into the 2nd year, you will receive 3,000 additional bonus Rapid Reward points on every anniversary date but I do not anticipate keeping this card very long. The airfare has already been paid for and I will now cancel the card knowing I scored 10,000 bonus points (enough for a future free flight when added to my existing balance) and what amounted to a $31 statement credit after the annual fee. Not too shabby, right?
And finally, my biggest coup! Last year, I got the Marriott Rewards Visa card (also through Chase*) that came with a boatload of bonus Marriott Reward points and a free night certificate in exchange for an $89 annual fee (which is at least partially, but more than likely completely, offset by the additional free night certificate given each year on your anniversary…of the card not your relationship although that would be very sweet!). Those bonus points + free night gave us a free 5 night stay in Oxnard, CA at the Courtyard Hotel there and an additional 1 night free at a Courtyard near LAX. This is how we were able to turn our originally-planned, summer of 2011 one week San Diego vacation into a 2 week Southern California one, all because of 6 free nights courtesy of a new credit card. Amazing.
If you have good credit, are diligent about your balance payoffs to pay ZERO interest, and get these kinds of offers, you should consider taking them. One potential risk is the possible damage# to your credit score(s) as you open and close numerous accounts throughout the years. For me this is not an issue; we already have our mortgage, own both of our cars, and have an existing line of credit already in place should we ever need it. I do not have any big credit-score-necessary purchases ahead of me. But you may, so consider this when thinking about maximizing the reward offers from credit card companies, k?
*I swear this post was not sponsored by Chase. Just a strange coincidence that all my cards, save my small business AMEX Blue, are with them.
#I do not claim to know or understand what does and doesn’t damage a credit score. Just something to consider, that is all.
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