We've been participating in Dave Ramsey's Financial Peace University course through our church, and Dave has a strict no-credit-card policy. I agree with him completely..... Except when it comes to our Visa that earns points.
Now before those of you who've been around for a long time starting wondering if I've lost it, let me explain. You know that I'm TOTALLY anti-credit card. We quit using our credit card about a year and half ago, and we almost have it paid off. (YAY!)
However, we have a Visa with no balance that earns points. We use it for large purchases (car repairs, etc.) that we would have been buying anyway or things like our monthly prescriptions. Our insurance company makes us pay 100% up front and then reimburses 90%. So we would charge the prescriptions, earn the points, and then use the insurance check (plus 10% of our own money) to pay the balance each month. We were cruising along quite nicely, earning TONS of rewards points and redeeming those points for gift cards.
That all came to a screeching halt a couple of weeks ago.
I had been waiting for a reimbursement for my yearly eye exam and a year's worth of contacts, and I had left the charge sitting on the card. My plan was - as usual - to pay it off when the check arrived. But somehow this check was delayed.
... And I wasn't paying attention.
........ And we paid a few dollars in interest fees.
................ And I vowed to NEVER use that card again.
I know that Dave said that it doesn't pay to use credit cards just to earn points. I heard him loud and clear. I smiled and nodded. But I thought that I was the exception to the research that he's done for the past 20 years or so. Ahhh... vanity... pride...
The day that I found the interest charges was the day that I told my husband that it wasn't worth it. I realized that he had that idea all along and that I wasn't listening to him. (My pride again.)
We now have an envelope of cash earmarked for prescriptions. We have money in our bank account to cover car repairs or other emergency purchases, and larger planned purchases are budgeted. We really have no need for a credit card, points or no points.
The biggest irony of the whole situation.... Our bank awards points for using their debit card too. They don't accumulate as quickly, but it doesn't matter. It's not worth finding another stray interest charge on our account, especially when it's my own fault.
Lesson learned: I'm NOT the exception to the rule, even when I think I am.
Am I alone in this? Have you learned a lesson the hard way like this? Feel free to share your story.... and make me feel better!
This post is linked to:
:: Works for Me Wednesday hosted by We Are THAT Family
:: Frugal Friday hosted by Life As MOM