Jessica Quindlen: Welcome back to the Sound Cents Podcast. I'm Jessica Quindlen. Today we're discussing all things credit card points and rewards. I have today, Bree Shellito, our Senior Manager of Community Impact.
Hello, Bree.
Bree Shellito: Hey, Jess.
Jessica Quindlen: And Nate Juvera Community Education Events Lead. Hi, Nate.
Nate Juvera: Hey, how's it going?
Jessica Quindlen: It's good. How are you?
Nate Juvera: Good, good, good.
Jessica Quindlen: All right, so let's just dive right in. What is the best way to divide spending amongst your credit cards so that you can really maximize all that rewards potential?
Nate Juvera: Yeah, I think first having your credit cards align with your spending habits.
What I mean by that is thinking about where and what purchases you're making and then aligning credit cards to match that. I think depending on what you value and where your spending habits are going to be, do that.
Also understanding the rewards that are offered with each of your cards. One of my cards I use specifically for gas and groceries, because I get really good points for that.
Jessica Quindlen: Nice.
Bree Shellito: Yeah. Some of the cards are getting wise too, to even offer things for your subscription services. So, they'll have great rewards for that.
Jessica Quindlen: Oh, nice.
Bree Shellito: If you're carrying a balance on that card, it's not going to outweigh the interest. Any of the rewards, they could be the best rewards any card has to offer, but the interest is typically going to be much higher than that.
So, setting up automatic payments, not only to pay it, but if there's certain rewards for a specific card, just getting those set up so you're not tempted to pay it another way.
Jessica Quindlen: I love that. So, it's speaking of all these different choices, it's a bit overwhelming, right? I mean, sometimes it's very obvious, you know, you go into a store, and they are asking you or advertising their cards, but in general, there's so many cards, so many varieties.
How can I easily find the right cards for my lifestyle without spending 20 hours researching everything?
Bree Shellito: It's a great question, Jessica, because there's tons of cards and, and as Nate was saying earlier, it's really about your priorities.
What are your spending habits? Because even the three of us at this table, it's not going to be the same card for any one of us, right? However, you spend your money. As Nate said he doesn't have the Amazon card because he doesn't shop at Amazon. I do.
Jessica Quindlen: I don't understand. Same. I'm like, I don't live that life. I also have the Target card.
Bree Shellito: Yeah. You know, so like, it makes no sense for somebody who otherwise wouldn't shop at those stores. So, depending on how you spend your money, you definitely want to be able to choose the card that makes the most sense for you. But there are some great comparison sites. One I would highly recommend is NerdWallet.
Jessica Quindlen: Okay.
Bree Shellito: The ability to view the different cards side by side, everything including the annual fee, what the interest rates are, what the rewards look like, and then even some of those kinds of like sign up bonuses is super helpful. But the idea of just looking for the right card that fits your spending, because that's going to be where you get the best rewards.
So doing that, just looking at what you value, if you value travel, having a travel card makes a ton of sense. If you're somebody that travels often and you're going to get great rewards for doing so, then that's great. I'm not a traveler, so having a travel card for me makes no sense. So really just what is important to you and what card fits that lifestyle.
Jessica Quindlen: I love it. All right, so jumping on what you said earlier, these sign-up bonuses, so what is the best way to sort of take advantage of those?
Nate Juvera: Yeah, I think first of all, one thing we always talk about right is doing your best to plan ahead. I think if you can plan ahead to where maybe you have a big home project or something going on and you're like, yeah, I am definitely, I have this money already set aside that I was going to use anyway.
Might as well sign up for this credit card. And get the bonus, get the extra money that now I have a little bit of extra money to use for this home project or whatever it is. I've done this, I use a home project because I've done this before with home projects. But I've also done this with traveling where, you know, we're planning a big vacation trip ahead of time and then we use that signup bonus for extra spending money.
But because we've had that planned ahead of time, we go ahead and sign up. And what's really cool about these signup bonuses too is a lot of them will have not only “spend this much in this amount of time,” but a lot of them will have interest free timeframes that are a lot longer than normal.
Maybe it's 18 months or billing cycles without any interest. Take advantage of that too because maybe you don't have the total amount saved up, but within this timeframe I gotta make this large purchase anyway. I plan to go ahead and get that paid off.
So making sure that it's realistic for you. And just kind of thinking ahead on what signup bonuses can best benefit you.
Bree Shellito: As with anything, always read the fine print, right? There are times that that 0% for however long is only valid if you pay the entire thing off within that amount of time.
If you carry a balance, there's times where it goes back to even the original bonus, even if that was six to 10 to 12 months ago, and that's what they charge you interest on. So knowing the fine print is key.
Jessica Quindlen: That's very good to know. So Bree, what should I pay for with my credit cards?
Bree Shellito: It's a great question, Jess. I personally, myself, pay for everything with my credit cards. The only thing I use my debit card for typically is to access the ATM. Or for any reason, one of the cards is doing something weird, but outside of that, the idea that maximizing everything that I put on that card is going to get me something.
The typical cards I use have at least 1% cash back for every dollar I spend. So just not leaving that money on the table, I guess. But like we said earlier, my intention is to always pay those off every single month, so the interest isn't adding up because then it won't balance out.
But if you can use them, especially for some larger purchases, as Nate was saying, if you're looking to do some home repair or if there's something going on, the idea that you're going to get those points if you otherwise pay for it with your debit card or cash. Might as well.
Jessica Quindlen: It's almost mentally treating it like it's a debit card, even though it's a credit card. In the sense of that you're spending money, you have. It's just in this account that you got to pay the card.
Bree Shellito: And then like anything else, keeping an eye on it, logging in frequently, paying it frequently, in fact will help to avoid that shock. Right? If you are somewhat swipe happy, like I tend to be.
The idea that logging in might be a shock if you've just been kind of swiping it without paying much attention. But, like anything else, log in frequently, check how much you're spending, keep an eye on that and that won't be a problem.
But just paying it frequently, like if it were your debit card, that helps a lot. So, I personally use everything, but whatever you're comfortable with and can keep up on is what I'd recommend. And then of course, the one, one other tip we have to keep your credit in line.
Because of course that's going to be in effect, is ideally you don't want to actually utilize any more than 30% of the available credit limit. So let's say your card is $1,000. That's the limit. You do not want to brush over that 30%. So you don't want to spend more than $300. A lot of folks don't know that. Once you max out a card that immediately reports, so, you don't ever want to max out a credit card if you could avoid it.
It's sometimes hard to keep track of when they're going to report and how much they're going to report. So if you just make it a common thing that you stay under 30%, you're going to keep yourself safe from affecting your credit score.
Jessica Quindlen: Okay. So, it sounds like, you know, you're paying for everything with your credit cards, but you're really also making sure you're spreading it out among several. So, you're spending the same amount of money, but keeping that 30%.
Bree Shellito: Yeah. And also just knowing what those limits are. Right? That's the only way you're going to know whether you've spent more, but especially if you have something big. Nate mentioned the home repair. We have a colleague that's getting married soon.
So knowing what type of rewards each credit card offers so that you can use them to maximize. Nate mentioned groceries and gas. That's a big one that a lot of credit cards offer, but sometimes they have some very interesting categories that they'll give you credit for dining out, subscriptions.
So just making sure you're using the right cards that offer the rewards for the spending that you're doing.
Jessica Quindlen: I love that. Any more tips and tricks around credit card rewards?
Nate Juvera: Last one I'll throw out here is just making sure to download whatever app or some type of login account that that credit card provides. So yeah, I would say just keep track and, don't go crazy.
Jessica Quindlen: Well, there we go. That's how we're ending it. Don't go crazy, folks. Well, that brings us to the end of our show. Bree, Nate, thanks so much for being here. It was great to have you.
Bree Shellito: Thank you.
Nate Juvera: Yeah, thank you.
Jessica Quindlen: Thank you for listening to Sound Cents from Ent Credit Union. Be sure to follow our podcast as well as rate and review us. I'm Jessica Quindlen. I will see you next week. Same time, same place.
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