I know, I know…I am a huge fan of Dave Ramsey, and he is NOT a fan of credit cards, even those used responsibly and paid off each month.
But hear me out.
In the past year, I have charged nearly $60k on my LL Bean Visa card. My reward was 1%, or $600, in bonus dollars at LL Bean, a store my family frequents regularly. Two years ago, I charged a good chunk of my home renovation on the Bean card, earning me a lovely new braided wool rug at a substantial discount. This year, I used my Bean dollars to buy four new pieces of luggage for $200. The original retail value was $1100*, so this was a BIG win! And I needed the new luggage, so it wasn’t one of those “I have $400 to spend at Bean…what shall I treat myself to today?” purchases.
Anyway, my better half and I wondered if there were other ways to accumulate more rewards from our credit card spending (and ALWAYS paying off) habits.
We recently joined the local Costco. Well, I say “local” but it’s actually about a 45 minute drive to the nearest location. Perhaps that will help to curtail my spending? But, hey, this Costco membership will provide me with numerous blogging opportunities, so let’s just say it’s “research.” Right.
Aside from the case of snack-sized potato chips for the kids’ lunches, several boxes of Halloween candy, stadium seats, enough of my favorite snack bars to last me at least three months, new pillows, new towels, and 30 small lunch-sized cups of organic guacamole, what else did we pick up?
A credit card application.
That’s right. The first new credit card in more than a decade. But why? Let me first declare that I have LOVED my Bean card. Free shipping! Free monogramming! All those bonus dollars!
BUT the Costco card offers 4% back on gas purchases, 3% back on restaurants, 3% back on travel, 2% on Costco purchases, and 1% on everything else. I should be way ahead of the earnings on my Bean card, right? It offers 3% on Bean purchases and 1% on everything else.
To be fair, I will only be using the Costco card on gas when a) I’m not at my favorite local station or b) gas goes over $2.50 per gallon at this favorite local station. You see, right now, I get 10 cents back on every gallon when I use my Cumberland Farms app to pay at the pump. It’s too bad that the app links to my checking account and can’t be attached to a credit card, otherwise I could double-dip on my savings!
As for restaurant spending, we average about $400/month, so my rewards earnings should go from 1% or $4 on the Bean card to 3% or $12 on the Costco card. And, we’re also planning a 16-day international trip next summer, so that will add up too.
I just got the first statement. The balance due, $1,223.05, helped me earn $19.79 in rewards dollars. This monthly balance was fairly low for us. Last year’s credit card expenses of nearly $60k was an anomaly, as we charged expensive driveway work ($13k) one month. I would say that our monthly average should be more like $3,500. So, my rewards earnings could be as much as $50/month!
NOTE: I do not condone the use of credit cards if you are NOT going to pay them off each month! (Genuine shout out to my Dave Ramsey peeps!)