Thursday, November 15, 2007

Treat Your Credit Card Like a Debit Card

I've found some really great tips through Bankrate's Frugal $ense contest. Click here to read my all-time favorite submitted by Patrick Hardy of Cumming, GA.

Like my financially-savvy mom taught me, I've always paid my credit card in full. I use rebate cards like Discover Card so that I can get a bonus for buying every day stuff (i.e. groceries) and bigger things too (i.e. plane tickets). Everything goes on my credit card, partly as a nice way to consolidate bills and partly as a way to maximize the card's rebate. I believe my money should work as hard as I am, and the credit card rebate is one way my money is producing income. However, Patrick's tip helped increase my earnings through the credit card.

I tweaked his tip a little bit to work better for me. I have a certain dollar amount transferred from my checking account to my high-yield savings account automatically semimonthly. Then, I pay my credit card bill from the savings account. (Of course, if you try this tip, be sure you aren't taking too many withdrawals each month from your savings account or your bank will penalize you with a fee.)

If it's a month when I have spent more than what I automatically transfer, I will manually send more money from my checking account to my savings account. If I've spent less, I just leave the money in the savings account for the future. I've been doing this since April. I have been able to keep my expenses low most months. So, now that extra money is my Christmas gift fund! Of course, it's been earning decent interest over the months too.

If you want to use this tip and need a high-yield savings account, email me. I'll send you an invitation to get $25 when you open a new ING Orange Savings Account. (Surly, you've seen ING's ads, commercials, and sponsorships everywhere. It's a legitimate online bank. It's the bank that is now the title sponsor of the New York Marathon and the Georgia Marathon & Half Marathon -- the latter of which Michael and I completed this past March.)

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