I have decided to give my usual Sunday Special post a miss this week and write about something eIse that has been on my mind lately. A credit card!
I have currently got two credit cards: one is a foreign credit card that is closed with an outstanding balance that still needs to be settled (work in progress) and one active UK credit card with a £300 limit that is paid off in full. Since my first credit card is closed, naturally I am only able to use my second credit card. I took it out last year (with a higher credit limit, but paid it off and lowered my credit limit since then), and use it mainly for its rewards. I initially received 5000 bonus points when I signed up for the card; it converted to £25 worth of vouchers, and I have since accumulated more points. Basically, I use my credit card to pay for all my purchases, and every £1 spent gives me a set amount of points. I have had this card for less than a year and so far I have received £80 worth of vouchers. I can’t say that I have always used the card to collect points as there was a time not so long ago when it was maxed out, however £80 worth of vouchers in rewards is still pretty good.
It got me thinking about the benefits that I can get if I use my credit card correctly. A credit card is a powerful tool that can work to your advantage. You can actually use it to make money! I redeemed some points last week and received £20 worth of Sainsbury’s vouchers yesterday. It’s like money in my pocket! To get this “money”, I haven’t worked extra hard, I simply used my credit card to pay with instead of cash or a debit card. I would say it takes me around 2 months to collect enough points to redeem for a £20 voucher. I normally order Sainsbury’s or M&S vouchers, but there are many more suppliers to choose from. You can also redeem your points to pay for your flight with selected airlines, hotel stays, experiences such as a visit to the London Zoo and much more! I prefer rewards to cash back as I find that points are faster to accumulate and for every £10 in cash back I can get £20 worth of vouchers!
I’ve done some research and found out that there are so many great offers out there. The best part is that when you first sign up, you get a bonus! I have found one credit card that gives you £30 worth of vouchers of your choice with your first spend of £300 in the first 3 months. Easy, especially now that I have some of my trips coming up. I am now considering closing my current credit card and signing up for a new one with a low credit limit. I need a credit card anyway since I am travelling more or less on a regular basis. Why not get some free stuff along the way! I have heard of people who open up one credit card, collect their rewards and then apply for a new credit card and do exactly the same, and so on. I am not sure if this is something I will be interested in (as this can easily lower my credit score and is a bit of hassle), however, since I am looking for a new credit card anyway (my current credit card provider charges me interest if I use my credit card abroad and this is something I am not happy with) I might as well get the one that I can benefit from. It goes without saying but I thought I’d make it clear just in case: I will not use a credit card to my disadvantage ever again and if I ever use a credit card again, I will make sure I get some sort of benefit out of it! The more, the better!