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Fun With Credit Cards
By: Terry Mitchell
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.
About the Author:
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. |
