Friday, July 29, 2016

SAVING Money with Credit Cards

Personally, I sleep on airplanes and I travel budget, which is why I have zero care about miles cards. I'm a rebates guy and it just makes sense for me. If you travel a lot, perhaps a miles card might be better for you. I enjoy getting back cold hard cash rather than accumulating points for a trip which I might never take.

To be honest, I know very few people who are struggling with credit card debt, while I know plenty of people that don't have credit cards. Perhaps it's just my social circle, but that's my experience.

A lot, a lot, A LOT of people that I know just shun credit cards. There is a general fear of credit cards being unsafe, prone to scams and fraud, and just the general aversion to "having debt". What is so interesting is that many of my friends are in the higher educated social class who have easy access to pretty much all the banks and all their cards.

I've talked about the perks of having a credit card before (and starting your credit history), and I'm a strong proponent of smartly using your credit cards to actually lower your spending. In fact, I did a simple case study of myself from July 2014 to June 2015 with my OCBC Frank Card (before the horrible changes) and I found out that in a year, I saved about 2%, or in dollar terms $278.56 by using a credit card!

Recently, I blogged about some Android Pay lobangs that I found. I have actually gone out to use the DBS and OCBC promotions!

DBS Android Pay Promotion
DBS Spending: $41.40
DBS Android Pay Promo Rebate: $10
Total Rebate %: 24.15%

OCBC Anrdoid Pay Promotion
OCBC Spending: $187.48
OCBC Android Pay Rebate: $9.37
Total Rebate %: 5%

Guess what? This isn't even counting the normal card rebates of 0.3% on all spending, and the pretty amazing 3%/6% rebate on weekday/weekend dining with the OCBC 365 card. Much of my spending actually goes towards food, so I'm sure there's plenty more of savings to be had there.

OCBC Wow Deals Rides Promotion and Grab Promotion
Uber / Grab Spending: $41
Total Rebate: $19
Total Rebate %: 46.34%

After a late night out drinking, usually the only option left to go home is a cab. Not anymore. Instead of paying about $13 for a normal cab ride home, I open up Uber and get an UberPool ride for just $8, and that's including the surge fare! After you knock off the $5 discount from the OCBC Wow Deals, my midnight taxi fare home was just $3! Taking public transport during normal hours already costs $1.50, so it's just marginally more for a midnight taxi ride home! Sure, you sometimes share the ride with someone, but it's a small price to pay to save you a few bucks, especially if you are not in a hurry!

Summary of Credit Card promos in July
Total Spending: $269.88
Total Rebate: $38.37
Total Rebate %: 14.22%

So there you go. In the month of July, I've managed to use credit cards to spend on things that I would have spent on anyway and I've managed to save myself a nice sum of $38, or basically, a 14% discount on the usual stuff that I buy, but had promotions!

The savings from credit cards isn't mindblowing because it shouldn't be. You are already spending money on things that you would have bought anyway, which means that you have the weakest bargaining power as a consumer.

However, credit card promotions work in a beautiful way in the sense that they target all cardholders. So while the promotion might be running to convert 1st time users to a certain brand or service, if you are already a user, you stand to benefit by being in the same indistinguishable group as everybody else!

Using credit cards to help you save money doesn't work if you instead end up spending more money buying things that you would not have bought in the first place. And always, always pay off your balance in full.


I wouldn't be too surprised if the casual credit card user can end up saving a few hundred dollars within year!

2 comments:

  1. Wah how much time did you spend on all these! Amazing. My credit card rebates skills are nowhere as good as you man!

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  2. There are plenty of credit cards that give out rebates for spending as seen from http://www.moneylobang.com/what-is-the-best-credit-card-for-cash-back.php Just need to pay off the bills on time and will be fine

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