No Debt Plan

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We use our credit cards for every purchase that we possibly can. As I’ve said in the past, credit cards are not evil.

We got several mailers today from American Express encouraging us to spend our money with them. One was showing off a new tool they have for Blue Cash users that lets you track how much money you have spent on the card. This is important for the Blue Cash because rewards are based off one of two tiers. The more you spend, the higher the cash back percentage. The new tool is called the Cash Back Tracker.

The Good

The Cash Back Tracker is actually a pretty nice tool. You can track how much you’ve spent and earned for the current year, as well as what you earned last year in rewards.

As you can see from the image, we’ve earned $279 in cash back thus far this year on $16,819 worth of spending. That comes out to 1.66% overall cash back. In comparison, we earned $432.15 year ending July 2007. That was a big year — we got married and charged everything associated with it and our honeymoon.

The Bad

Unfortunately, AMEX wants to encourage me to spend even more money with them in the hopes I will carry a balance they can charge interest on. To that end, they let you set a rewards goal for the year. I could let them know I want to earn $500 in cash back. To earn that, of course, I’ve got to spend, spend, spend. This may seem innocent enough because it could be used just to show me what I’ve got to spend to get to that goal. I just don’t think it is too innocent.

Conclusion

The important piece for us is we are earning a couple of hundred dollars each year for free. We pay off the balance every month, and in turn get rewarded for it. Some others, like Free Money Finance, are earning more than 2% from multiple cards. We’re content with what we are currently earning because it keeps it simple. We don’t juggle ten different cards to get the highest return. I love paying our utilities with the card to earn a return on money I would have spent regardless. Sounds like a win-win to me. The tracker is quite handy because I can see how much we are earning in an up to date format.

As always, be careful. Don’t go spending just to earn a small percentage back in rewards. Use your credit card like a debit card.

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