I don’t define myself as being frugal. I don’t mind buying the car of the year if I think I can afford it. And one thing I enjoy is rewarding myself for the accomplishments achieved throughout the year. This does not mean I would buy just any toy out there and get a bank loan to finance it.. So I would define my expenses as being priority-oriented. However, frugal tips and savings help me achieve this priority-oriented budget. I think that one good savings tip is to have a reward card.
Gifts Rewards Card or Cash Back Rewards Card?
Reward cards of all sorts are well-known. From the typical Air Miles to your local store credit card rewards, the choices are just about unlimited. Yet, it is easy to get trapped in a reward plan that might not satisfy your needs. I have in mind my Air Miles points running for more than ten years without much pay back. Maybe it is because I don’t travel that much and also because I don’t check out the “gifts” available for me as often as I probably should.
Therefore, I would rather advise you to find you a cash back rewards card. There are many cash back rewards cards on the market, most of them giving you a percentage of your purchases back in cash. To me, that can result in more savings than a defined reward like an iPod or travel tickets. You get to choose what you will be using it for, whether it is for your college tuition, your next trip to Europe or your car repair.
Credit or Debit Rewards Card?
Another concern towards rewards cards is the “credit” word often coming with it. Credit cards with rewards are obviously better than the ones without. MasterCard is one I use quite often because of that. Although my interest rate is very low, I still try to avoid overuse so I don’t get into credit card debt. Actually, one of my 2011 goals is to pay off this credit card of mine. So I am not sure how much it’s a good idea to rely on credit cards for rewards. You might end up purchasing more than you can actually afford.
So, if your goal is generating rewards with the money you already have, well a debit reward card seems to make sense. How does it work? You sign up for a card, load it with money and use it to pay your purchases. Every time you make a purchase, it gives you a reward in cash back. As I said above, what I like about it is that it is not a credit card, so you don’t owe anyone money, there are no interest fees and you get rewards in cash back. These cards suggest more a mentality of save-then-spend than one of spend-then-pay. They can be very nice for students, although I recommend you read all the disclosures to make sure you notice some other related fees such as ATM fees or Balance Inquiry fees.
The SmartyPig Cash Rewards Card
This is one of many cards I found about during my research. Why did I choose to talk about this one? Because it can be used everywhere they accept MasterCard, it gives cash rewards up to 10% of your purchases and it enables you to create short and long-term goals to achieve. It does not only reward in cash, but also helps reward good habits.