So after the first chapter of my little talk about credit cards I think I left you somewhere in between doom and gloom, a delicious sour beer and Free Money! I don’t know about the rest of you but the previous post had a little bit of a lecture tone to it. I did not do that on purpose but after re-reading the post I still feel it was necessary (by the way I read my posts about 100 times before I post them and I still screw up grammar somewhere). Please forgive me and enjoy Credit Cards and Hangovers Part 2 because it is going to have a way happier tone.
Oh those little magical pieces of plastic. The ease of being able to whip out a little rectangular piece of plastic and purchase almost anything (or any beer) in the world is a luxury in and of itself. This can also lead you down an easy path to spending sprees that you cannot afford. Resist those temptations and you will be rewarded. Credit limits will help a little. They stand in your way of buying very large and expensive items or lots and lots of stupid little things and when used correctly can keep you from drowning yourself in debt. I like to keep a lowish credit limit. Enough to make a large purchase if necessary and to keep my month to month expenses at or below 50 percent of my limit; but not large enough I could go crazy and buy a car or a brewery. Budgets and Beer Brewing Company has a nice ring to it, right? Ok, probably not but a guy can dream! Even with a lower than average credit limit I would not recommend, bar emergencies, getting close to that limit. It would be like buying a case of beer and trying to finish it all in one day. Don’t do that. Stick to the 12 beers or 50% threshold and you still may regret it after the night is over; or in this case the credit card statement cycle when your bill comes due. Not only will you feel better each morning by not going on spending sprees everyday but keeping what you owe on your credit card under that 50% goal is really good for you credit score.
Credit cards can also be a wonderful form of safe, efficient and budgetable way to spend your hard earned money. Most credit card companies will track what you spend your money on and even help you fight illegitimate charges. Most of the time you can dispute a charge with ease and have it removed from your statement. I sure as hell did not buy that 30 pack of Natural Ice in West Virginia! Get that crap removed…and they usually do.
Another perk of credit cards are those rewards programs they all advertise to death. Find a program that suits your interests. They toss miles, cash back, gift cards, hotel points, etc. at you. When used appropriately this is free money. Yes, you read that right. Free money! I am still looking for a brewing company that gives me a free 25th beer every time I buy a case. Seriously someone tell me if this exists! But here is where we get very, very serious. You absolutely must be able to pay off your bill every month or you will get screwed with fees and interest out the ass. I will repeat this. You must pay off your credit card statement every month in full or it is no longer free money and those credit card companies will have you by the balls paying stupid interest rates.
Two cards that I recommend here at Budgets and Beer are the Chase Freedom and Citi Double Cash. Chase Freedom gives you 1% back on everything and has 5% back on rotating categories that changes every three months. Gas, grocery stores and drug stores come up often and sometimes multiple times a year for the 5% categories. The 5% caps at $1,500 worth of cash back points per quarter. On top of all that cash back when you open a new account Chase gives you $150 worth of points if you spend $500 in the first 3 months. With a craft beer habit, little dude’s diapers, and gas at $2.59 a gallon I would probably hit that quicker than I would like to. Chase also offers extra cash back from 1-15% when you shop through their Ultimate Rewards program. It will redirect you to familiar sites like Wal-Mart, JC Penny, Kohl’s and ProFlowers.com. Right now it is advertising a stupid 30% cash back at ProFlowers.com…cough Mother’s Day…cough. I don’t know about you but I would much rather shop online from my couch with a beer in hand than fight through the crowds at the mall. Public service announcement: do not drunk shop online. Only bad things come from that. Next I really like the Citi Double Cash card. It gives you 1% back on all your purchases and another 1% back when you pay off your statement in full every month. A total of 2% back on everything you buy could really add up and there is no cap on how much you can earn back. Here at Budgets and Beer we like to stay on a budget, obviously, and destroy debt so we really like and recommend this card because it rewards you for paying your statement off every month. Hopefully this will give you an incentive to stay out of credit card debt all while paying you to do so.
Well what do you do with all this Free Money? When I was younger and had a crap ton of student loan debt I used to save up my points all year and then get a cash payout at the end of the year. I would deposit that check and immediately turn around and slap it all as an extra principal payment on my loans. Boom, just took 3 months of payments off the life of my loan. Suck it Navient! This works for all debt or loans; pay down your car or slap extra cash towards your mortgage. Now with less student loan debt I still like to save my points up and use them for the purchase of something expensive that I need around the house. New lawnmower, grill, huge box of diapers for the little dude. Damn, I feel old some days. If you’re a legit debt killing machine and are sitting pretty at zero than this is the perfect opportunity to do something nice for yourself and toss extra money into your Roth IRA. Ok, ok…I give in. Go get yourself a case of that really good and expensive beer you have been eyeing up all year but could not bring yourself to buy because its $80 and then you can throw what is leftover into that IRA. I’m frugal but not a monster.
My beer of the blog this week is Mocha Marlin by Ballast Point. I love coffee. It is what gets me through having to be up at 5am everyday while having a 7 month old. This beer is everything I have ever wanted in a coffee porter. Strong and rich coffee flavors from start to finish leaving nothing to the imagination about what this beer is meant to be. I do not get much Mocha as the name suggests but it may come from the perfect sweet/bitter combo from what I suspect are dark roasted chocolate malts. Well done Ballast Point. I would drink a Mocha Marlin every morning if I could. Cheers!