How to Make Your Everyday Spending More Rewarding

By Sharon Cook

I’ve worked in the financial industry for a while. Because of this, you’d probably expect that I’d have my finances set up to reap the most benefit, right? Maybe most of the time, but not always. I recently learned how much money I was leaving on the table.

When it comes to credit and debit, I’ve always leaned more toward my debit card for regular spending like gas, groceries and utilities. Don’t get me wrong—I use my credit cards. But mostly for travel, because they work just about everywhere, and large purchases, because I have a grace period before I have to pay the bill. My debit card seemed like a better choice for everything else—the money was taken directly from my checking account, I didn’t have to worry about accruing interest, and it seemed safer than carrying cash or checks.

My “light bulb” moment
One day, a coworker and I were discussing the benefits of credit cards. She mentioned how, instead of her debit card, she used her rewards credit card for most of her everyday spending. She explained that, to truly maximize her money, she uses her rewards credit card everywhere she can, and then pays those charges off right away—she does this a couple of times a week, so she doesn’t get too far behind. With this strategy, she’s always earning rewards points.

Smart.

I realize, of course, that this strategy will not work for everyone. But, if you can embrace change and are disciplined enough to pay your bill in full, this could be a great spending strategy.   

Pros and cons
Before you decide to make a change, be aware of the pros and cons of using your credit card for everyday purchases. Rewards points are nice but, if you fall into the habit of spending more just to get points, you may soon find yourself owing more than you’d like.

Here’s what you need to know:

Pros—

• Maximizes rewards points




• Helps to build your credit score




• Grace period limits out of pocket costs in cases of fraud or lost/stolen/damaged products




• Carry less cash




• Easier to track spending




• Comes with consumer protections (extended warranties, price adjustments)

Cons—

• Possibility of overspending




• Interest and fees




• Could lower credit score if you pay late or max out your credit limit

What’s next?
If you’re trying to find the right strategy for your personal finances, try this option on for size. Test it out for a month or two and see if it works for you. For myself, I’m all in!

Sharon Cook is a wife, a mother and a Chief Marketing Officer/SVP of Mountain America Credit Union, where she oversees the marketing, PR, social and web departments. She has dedicated her life to helping people make smart decisions—whether financial, professional or personal. “It’s why I love all of my roles,” says Sharon.