Younger and wiser: How I helped my 88-year-old grandma maximize her credit card spending
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My grandma is nothing if not financially literate. She pays her bills every month (by paper check) and maintains an impeccable credit score. At 88, she has accumulated plenty of credit cards. Unfortunately, most of them are store cards -- Sears, Macy's, Sam's Club, Bloomingdale's, Walmart, Union Plus -- and the lone Chase Freedom Flex. The store cards don't allow her to get any real benefits except store discounts.
So, how do you teach someone who is knowledgeable about credit cards how to take full advantage of their benefits, much later in life?
Related: My mom got her first rewards card after using cash for 50 years
The most important thing when trying to break a bad habit is to teach the value of a better direction. My grandma has always been a traveler and loves to explore the world. But the pandemic changed her outlook on being in crowded spaces such as airplanes, especially with the additional risks she faces. Now, using points to travel has less value to her -- but that doesn't make the points worthless.
A great place to start in her credit card journey is with a card she already holds -- the Chase Freedom Flex. This card earns 5% cash back on rotating bonus categories (on up to $1,500 in combined purchases) each quarter when activated. It also earns 5% on travel when booked through Chase Ultimate Rewards, 3% on dining at restaurants, 3% at drugstores and 1% on all other purchases.
Unfortunately, by not being tuned in to how this card works, my grandma missed out on a great cash-back opportunity. She recently completed a kitchen renovation in July. However, she didn't know that the bonus category for home improvement was available between April and June. She was upset to learn that the $75 received from this project could have been $125.
Although she might not be jetting off to Paris these days, the points or cash back she earns on credit cards can be used toward other expenses. TPG generally frowns on redeeming points for statement credits, but it's a solid option when you're not traveling. Since the Freedom Flex card is part of the Chase Ultimate Rewards program, cardholders have the unique ability to use the Pay Yourself Back program through Sept. 30th 2021.
This is how we found a new use for her accumulated cash back that would give her much more satisfaction. Now that her bonus categories have been activated, and she's getting a better return on purchases, my grandma had a little extra money laying around. Every few weeks, she donates money to different charities she supports.
The Freedom Flex only allows you to use the Pay Yourself Back feature to offset dining purchases and donations to charities. Points donated to charities can be redeemed at a rate of 1.25 cents per point. So, if 200 points are donated to a charity, they would be redeemed for $250 dollars.
While getting a better understanding of the capabilities of credit cards was one battle, another was figuring out how to continue to save my grandma money and make her life (and my own) a little easier. One way was teaching her how to take advantage of her Amazon Echo devices.
Now that she's older, my grandma finds it helpful to have things delivered instead of having to lug them from the store. With Alexa, she can just ask for an order to be placed and it appears. This increase in spending through Amazon prompted us to talk about her opening the Amazon Prime Rewards Visa Signature Card. She loves her store cards, and this no-annual-fee addition allows her to save 5% on Amazon and Whole Foods purchases.
The information for the Amazon Prime Rewards card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Bottom line
No matter how skilled we think we are at managing our finances, there's always room for improvement. And age or experience shouldn't be a deterrent from saving money. With a little patience and guidance, my grandma has picked up some better credit card habits -- and some tricks to make them work better for her. The next challenge? Getting her to close all those store cards.