One of my goals for 2013 was to put every purchase on a credit card. Before I’d even published that post, I had a plan in place and it’s been enacted. I really should have done this sooner, but I didn’t want to while the refinance was in progress and my brain totally forgot about doing it after I closed on the condo because I’ve gotten so used to paying for everything with my debit card.
What did my plan entail? Asking.
I asked my primary credit union to increase my limit to $10,000. They said yes, basically on the spot. That card gives 1% back on everything and it will get automatically deposited into my membership accounts every month. Easy cash back, awesome.
The second step was to ask my other credit card company to increase my limit to $10,000 as well. I didn’t get the answer I wanted at first and I didn’t give up. I politely explained that 30% of that amount represents a very small amount of my monthly income and my monthly spending and asked if there was anything further they could do. I was transferred to someone with more authority who did give me a bit more of an increase from the initial offering. I’m happy with that. This card essentially gives 2% back on gas stations, drugstores, and restaurants.
For the next 6 months, I plan to ask for no new credit. In July, I will investigate refinancing again and I will also look into a third credit card. I’m considering looking for a no foreign transaction fee for that one, for use when traveling.
My tentative new credit card strategy is as follows:
- My dividend rewards checking account pays a pretty healthy amount of interest that would take a LOT of spending to make up for losing, so I will use my debit card for the first N in-person transactions each month. I may decide to skip this step later or figure out another way to get to the N transactions.
- All purchases from the following will go on credit card #2: Amazon.com, restaurants (unless I learn that they don’t match the merchant code for that), gas stations, and drugstores.
- Everything else will go on credit card #1. This works out great because it has the highest limit.
There. I finally feel like a grown-up, having a credit card with a limit > $1,000. It’s pretty cool logging onto the online banking and seeing how much I’ve earned in cashback for not even modifying my habits. I figure that I should be able to earn $15-30/month in cashback, with which I might be able to stay above $1,000/year in passive income for 2013.
Readers, what is your favorite credit card?