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Monday, February 8, 2010

Reward Points vs Cash

I have a dilemma: When we use our credit cards (or debit cards as credit) we earn reward points through our bank. A lot of banks offer rewards programs. Since I signed us up we have earned a lot of points and are hoping to earn enough to redeem for a gift certificate for a large purchase or travel. This originally was a sound idea; not anymore.

JB (my husband) and I came to an agreement about a budget and a spending plan. Having actually accomplishing this is leaps and bounds from where we have ever been in talking about our finances. One piece of the pie is to use jars, the spin-off of the envelope system. We agree that this will make us more accountable for our transactions instead of just whipping out a card every time we turn around.

The downside of this is obviously that by using cash only we will not earn our reward points. The only things we would earn points on are our gas expenses. We will continue to pay-at-the-pump for our gas because most of the time we have at least one, if not all, of the 3 kids with us. We are also comfortable with what we spend on gas because we normally spend right about the same amount each month, except when we go to visit family; even then sometimes we get a little assistance there.

What do we do? Do we continue with the plan of using the jars or go back to using the card and just keep a VERY close eye on the budget? If we go to cash only, will there be a time we are comfortable enough to go back to debit cards?


  1. I have the same dilemma! We use our credit cards for everything (and pay off the balance in full each month) for the rewards, but I often wonder if we'd spend less if we stuck to cash only. You could always try the cash only route for a month and see if that helps you make up your mind as to which route to go.

  2. Have you thought of buying gift cards with your credit cards? For example, if you spend $400 on groceries each month you could always buy a gift card in that amount for the grocery store. That way, you are still getting points and still using cash (sort of). Obviously the downside is you can't move money between jars. Just a thought....