Despite the difficulties we had last May trying to earn credit card sign-up bonuses, I gave the credit card game another try this winter.
It’s been an interesting experience, and made me think more about budgeting. More specifically, about all those “one-time” purchases that come up.
As a reminder, the credit card rewards game doesn’t work if you can’t afford to pay your bills. So it only makes sense to sign up for a new card if you can pay the bill on time. Once you start paying interest at 20%+, you pretty much lose the benefits of your bonus points.
My issue seems to be making sure I purchase enough to earn the bonus. After all, if you miss the minimum spending amount, you don’t get whatever bonus is being dangled as an incentive to get the card.
My first card this winter was easy: I only had to spend $500 in three months. Since this is close to the annual membership fee for one of my professional organizations, I got this new card in time to pay for my membership. A few more purchases (actually I ended up donating for Giving Tuesday), and voila! I earned a bonus.
I was feeling pretty excited about that, and after some deliberation (and consideration of some upcoming purchases) decided to try another card.
This one has a requirement to spend $3000 in the first three months.
At first, I was confident. I had to pay for a license (medical) renewal; those aren’t cheap.
After a few weeks, though, I started to get worried. I wasn’t really spending much, and the deadline seemed to be getting closer. Our biggest line items in the budget these days are utilities, which aren’t really payable by credit card (OK they are, but the fees that get charged are so high that I don’t think it’s worthwhile), and groceries, which my husband buys.
I put aside some time yesterday, to beef up my spending. I was amazed at how quickly the money went, once I decided to spend it:
- There was a January deal on personal training sessions at the gym: 9 sessions for the price of 6. Sold!
- I had already planned to use this card to pay for registration for a big school reunion. Paid!
- It turns out that my share of costs for some medical things last December is higher (much higher) than I had thought. I used up the last of my 2019 FSA funds, and used the new card to pay off the rest. I guess getting points is my silver lining here.
Suddenly, I wasn’t worried about hitting my minimum credit card spend anymore. Instead, I’m wondering how I have so many “unexpected” or irregular costs in my life.
Thank goodness, I can cover this. But it underscores the importance (for me) of putting aside extra money for irregular purchases.
One of the benefits of reviewing your spending on an annual basis is that you can see how all these “one-time” things add up over the year. If you use this information wisely, it can guide you to put aside money–for travel, for house and car repairs, for work expenses–on a regular basis. A nice savings account, or collection of savings accounts, can be ever so helpful when multiple expenses show up all at once.
Luckily for me, the personal training bundle isn’t that much, and I can just pay it out of my regular paycheck, when it comes.
The money for my reunions will be coming out of the vacation fund. The medical costs will come out of the house fund. I will eventually get reimbursed for my licensing fees, but I’ll have to pay for them out of the house fund too.
And next month I will be beefing up my savings accounts again, so I’m ready for the next month of surprises.