Grandpa Points: Embracing Credit Cards After Years of ‘Cash is King’
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I admit it — my name is Grandpa Points, but I was a check-a-holic with a side addiction of using cash. This was true for years, for decades and for most of my life. Part of that was just a byproduct of the time period in which I was born and raised. Credit cards existed, but they were not the big business they are today. Most everyone I knew in the 1950s, 60s and 70s had a gas company credit card and a department store credit card or a Diner’s Club card — but not me.
I went through checks by the thousands. Probably over 40,000 in total. A big national check provider company knew me by name and had my check style preference memorized. I could call them up (pre-computer), and I could be greeted with, “Hey, Buddy, you want the usual?” I would, as likely as not, reply, “Better make it a double.” As I have said, I wrote a lot of checks.
Saying No to Credit Cards for Decades
I can hear you asking, “Why the aversion to credit cards?” Well, I am glad you asked, or this blog would come to a screeching halt. I was fortunate to have two wonderful, loving, intelligent, salt of the earth professional parents who could never let themselves charge enough for their services to rise above an almost week-to-week financial and economic existence. I witnessed way too many overdraft charges, bank fees and overdue notices, and I saw the burden and strain that came with them.
They had the typical major oil company credit card(s) that were used when cash was short and as a stop-gap measure to cover an unexpected expense. These cards came with the inevitable rollover balances and subsequent interest charges. I was very sensitive to these monetary dilemmas and the never-ending cycle that accompanied them. I have always been very good with basic math, and it didn’t take long to figure out that interest and bank charges could quickly consume 15 – 20% of one’s total income. Not good. Not for me.
I also saw many of my contemporaries get into the credit card death spiral. The credit card would become like a good ol’ boy loan officer that would never say no. Everything stayed rosy until (cue the theme music from Jaws) judgment day arrived, and card-a-heaven became card-a-geddon. Credit cards looked to me like a way to live today on tomorrow’s possible income, but at the expense of a chunk of today’s earnings. Not good. Not for me.
So, I pledged a vow of abstinence from credit cards, interest and bank fees. I am a man of my word, and my life unfolded sans the aforementioned “instruments of ill.” Until….in an Alanis Morissette kind of ironic twist, I had to get a credit card as secondary identification so that I could…wait for it…write more checks. Life can be quite entertaining at times.
With my two forms of identification, I happily continued to write check #27451 and check #27452 and check #_____. I was good at it, and I adhered to the axiom of if it isn’t broke, don’t fix it. This went unabated until only about seven years ago when a seismic event occurred, and dramatic changes ensued.
Getting a First Credit Card at 62 Years Old
What happened in 2011 at the age of 62 to create a new pattern in my life? I had always thought “old dogs couldn’t be taught new tricks.” Apparently, it depends on the teacher and the subject. The professor turned out to be our daughter, Mommy Points, and the course was Credit Card Miles and Points 101. She was a dedicated and persistent educator. Like a bulldog, she would not let go. The reality of what she was espousing really didn’t click until Spirit Airlines had a promotion in our area to introduce its presence in the Houston market. Spirit was handing out hundreds of certificates for free valued at 20,000 miles each on a first come, first served basis at a local travel agency.
Our family went and stood en masse, and we all received our free miles. My wife and I were, and are, frequent visitors to Las Vegas. We soon realized that we could each make four round-trips each to Vegas with the miles we had been given for free if we got the Spirit Airlines credit card which allows you to book award flights starting at just 2,500 Spirit miles each way. Shortly afterward, we were airborne on the first of many such flights and we got our first true taste of what miles and points could do.
About the same time, Mommy Points convinced us to take the plunge and apply for credit cards that offered a significant sign-up bonus. We held our breath and dove in (from the low board, at first). My wife and I were both quickly approved. Our credit card scores reflected our years of good financial management, and the issuing companies were seemingly glad to have us on board. They didn’t seem to care if we were diving in from the low board or the high one.
Mommy Points was thrilled for us and probably a little proud of herself for bringing two more sheep into the fold. She emphasized that the key, the most important rule to follow to maximize the benefits of credit cards was, and forever will be, that the card’s balance must be paid off in full each month. No exception. She told us that there was usually a spending requirement on the card that must be completed before the points and miles would be officially transferred to our possession. These days, that requirement is usually in the neighborhood of $2,000 to $5,000 spent on the card in the first three months of ownership.
We learned to use our card(s) for almost every purchase and expense, large and small, so the spending requirements that looked ominous at first were actually quite doable. We essentially used the card as cash, and with each use, we generated more points that accumulated for our later use.
Through the subsequent years, we have applied and been approved for many cards. We have both recently added another new card to the mix (the Gold Delta SkyMiles® Credit Card from American Express for me and the Hilton Honors American Express Ascend Card for my wife) and we will likely apply again in the new future. We have received bonuses of 50,000, 60,000, 75,000 and 100,000 miles on personal and business cards ranging from the previously mentioned Spirit Airlines Card to even the Chase Sapphire Reserve. These miles and points have been converted and utilized countless times to open up the country for us and our travels.
I must admit that the miles and points aspects were a little hard to grasp, as it seemed as though we were getting something for nothing, or that we were abusing the system. But upon further reflection, we determined that we were just playing by the rules provided and using those rules to our benefit. While the credit card providers may not benefit as much from the “transactors” (those of us who pay off our monthly balances) as they do the “revolvers” (those that always carry balances and the related interest charges), all this is taken into account and worked into the business equation.
Do not feel sorry for the credit card companies for the rewards you earn as we did at first. The issuance of credit cards is a very lucrative and very competitive business. Generally, the company comes out ahead as indicated by the average credit card debt in the United States of about $6,000 per cardholder and with the total debt approaching one trillion dollars. For the privilege of using and owing that amount of money, Americans last year paid slightly over one hundred billion dollars in credit card interest and fees.
But sometimes the consumer can get the better part of this relationship, and you can be that person by following the rules and having good rewards credit card strategies in play. Study the current offerings, and then apply for the card that best suits your spending habits and your travel goals. In no time, you will be on your way to your next destination, be it the color and the buzz of the big city or the dynamics and splendor of the mountain west.
I am sure that somewhere in the big national Check Provider Company headquarters our rep is wondering what went wrong and where we went. We can assure him that we are fine, and that all is good. For old time’s sake, we will try and wave next time we fly high overhead their offices, as we jet off to another adventure courtesy of the world of miles and points. It is the least we can do.
Safe travels to all and be sure, and pay off your balances each month. Mommy Points will be so proud that we were such good studies.
Feature photo by PeopleImages/Getty Images
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