Friday, October 24, 2008

The Joy of Credit Cards

Note that I didn't say the Joy of Credit Card DEBT.

Ken has an American Express card account where he accumulates "points" for every purchase. (I have an American Express Blue, and I get points, too, but I don't use it nearly as much as Ken uses his card.) You can redeem these points for all kinds of items through American Express--appliances, electronics, kitchen gadgets, golf clubs, and even better, gift cards for restaurants and stores...and even better, general AmEx gift cards that can be used as cash.

A few years ago, we had accumulated enough points that we were able to get a pool table for the basement! We bought a ping pong tabletop for it later. If you let the points rack up, you can get some really cool stuff.

We were at the point where Ken had gotten a lot of points, and we started talking about what to do with them. We decided it would be really nice for Ken to have his own laptop for here at home, rather than having to haul his work laptop to and fro from work. We weren't thrilled with the choices through the American Express website, so we opted for AmEx gift cards and went to Circuit City today. Ken got a nifty Compaq notebook with plenty of RAM and a whopper (remember "War Games"?!) of a hard drive, and he's been getting it set up this afternoon. We've even got some cash left over, which we'll roll back over into the checking account. (By the way, it's taken a few years to get all these points--it doesn't happen overnight.)

Rewards cards are great, but here's a very BIG caveat: there is no advantage whatsoever to these cards unless you pay your balance in full every month. I don't care if you've got the lowest interest rate in the history of the credit card business, it's not low enough to justify racking up credit debt just to get the cash back or rewards, especially in the current economic atmosphere. We put almost everything on credit cards, including our groceries, but we pay off the balance on each card every month. Pretty cool to put groceries on the credit card and eventually end up with a pool table and a new laptop!


  1. Hi Beth,
    Like you, I've accummulated these Amex points for years (actually, I have probably 10 years worth of points now). I've never cashed them in for a single thing and, like you, I use the card a lot but pay the bill immediately. I've no idea what I could get for these points but I guess I should look into it!

  2. Unfortunately like in the UK, someone earning peanuts gets several credit cards then cannot even afford the minimum monthly payment, people have been getting into massive debt over the last few years and some even commiting suicide, and now with the credit crunch and being offcially in a recession, people are going to be losing their homes, simply because they have been robbing Peter to pay Paul, we too need a new government!There's a post in there somewhere I'll have to do some research.

    Have a good weekend


  3. The points are great, but like you said, it is for naught if you run up a balance.

    By the way, this new computer rocks!

  4. I chose the 5% cash back on my Blue American Express, so at the end of the year I get a check instead of rewards.

    Before I used to try and rack up enough for a plane ticket to New England to visit my children but I could never use the rewards for the date I wanted to fly up.

    Hugs, Rose

  5. The points are a cool idea. I haven't had a card in 7 years. Too much of a temptation for me, so....
    :) Leigh

  6. For some people like you and Ken it's ideal. For me ex gave me a bad taste with credit cards. He maxed them out before the divorce, making me legally responsible for half. Never again. If I don't have money for something I wait it out. If I still want it after waiting to save enough, the it's worth the buy.

    Way too many people don't know how to live withing their means, I think credit cards make it too easy to accumulate debt.

    However I do think it's awesome Ken was able to get a free computer from points accrued. Glad to hear he's enjoying it. (Hugs)Indigo

  7. We get points like that for using our debit card to make purchases. We rarely write checks and never have cash so it'll be interesting to see how many points we have at the end of the year.

  8. Sounds like you both have a pretty good set-up. It's a win win situation!!!

  9. You guys understand credit, unfortunately, many Americans don't. Oh, they "want" something, and it is easy to whip out the AMEX, but those 30 days roll around real quick...the cycle continues. Kudos to you for being debt free, and getting some cool toys with rewards!

  10. I own ZERO credit cards, thank God. Me and credit cards do not go well together. Congrats on the new laptop. XO

  11. I've been considering purchasing laptop. Was it expensive? BTW, good advice to Rose on paragraph spacing. I was resorting to cheating by using the word "and" between paragraphs and changing the color of the font to match the background.


  12. Great minds...I just ordered my new laptop from Dell. I built it just to my specs and it should be a butt kicker!! Congrats to me & Ken, woohoo!!

    We use our visa for everything - we get points towards a Royal Caribbean cruise. We now qualify for one FREE 7 day cruise!! At this time they dont' expire so by the time we can actually take a vacation we should be good for a trip around the world. LOL. *that is more sad than funny now that I think about it. :(

  13. I should have added unless one pays their balance in full each month the interest charges usually negate the points. We never carry a balance, it's fun to use their money!!

  14. I do the same but as my ordinary account pays interest I buy using my credit card and than pay the bill off at the end of each month. Meanwhile the interest I accumalate on the ordinary account gets put aside and pays for Christmas


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