• We’re Still Using Credit Cards, But Not Adding To Our Debt

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    Last month, we paid off all of our non 0% credit card debt. We’re currently on track to pay off the rest of the credit card debt, which is at 0%, by the end of the year. So we thought we would celebrate in the most logical way possible: by getting another credit card.

    I applied for, and obtained the Citi AAdvantage card. The rationale: to pay for our honeymoon flights.

    My company gives us the freedom to book our own travel whenever we need to go somewhere for business. Since Her had a ton of American Airlines miles from her college days, I decided to book all of my travel using that airline as well. Since I started this job a little over two years ago, I’ve racked up about 15,000 miles.

    On this card, every dollar spent is equal to a mile. Once we spend over $300, we get 20,000 “free” miles. Also, this card will give me one complimentary companion domestic flight ticket when I book a American Airlines flight with this card. Since I’m going to go on a few business trips during the summer, we thought this would be a great way to get a very cheap vacation.

    In order to use this card wisely (responsibly?), we’ve made a couple of rules for ourselves, at least for now. The first order of business was to open a joint savings account at Chase, where we already do our checking (of course I waited until there was a $25 bonus for opening the account). We opened up this savings account so that every time we use this card we could go home and immediately transfer the amount we charged from our checking to the savings account. This ensures that we’ll have the funds to completely pay off the monthly bill.

    Next was to determine out what expenses would go on the card. We decided at first that recurring monthly expenses would be automatically charged to the card: cell phone, cable, phone/internet, insurance, etc. We figure that since we have to pay for all of that stuff anyway, why not get the miles?

    Finally, we determined what else can go on the card. Our answer: wedding stuff. Same rules apply here: as soon as we charge something for the wedding we go home and transfer money from our online savings account to our “holding” account.

    Not all credit card use is evil. Just irresponsible use.

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