As I have gone through in recent blog posts about how I basically run all our family's spending through credit cards, one might ask other than the limited liability the credit cards provide and building a credit score, why should I bother! Why don't I just use a debit card, spend only the money I've got, and forgot about all this credit limit debt payment stress?!
Well... the answer is... the extra Perks!
There are many different ways credit card companies entice you to choose their cards. Remember to always check the terms and conditions to make sure they suit your needs. It's important to also check the duration of that offer, sometimes they entice 🫣🤫🤔 you with a sweet deal like a 5% cash back, but actually it is only for the first year etcetera. More than often, the deal that they offer may only last for the first few months.
Sometimes, when the offer sounds too good that lasts for a long time, check that there isn't a fee attached to it. Once you get used to seeing a fee, you get to realise 'there is no such thing as a free lunch'. If a perk or reward sound too good, it's either short lived or they actually have an annual charge for using the card. 🧐
When looking at credit card deals, do not forget the think about the downside. Do not get tempted by short term great deals and yet not looking at the high APR interest or annual charge they impose on your credit loan. ALWAYS focus your attention on the downside/risks. 🤔🫡
When choosing your credit card for yourself or for your household 🏠, spend a little time thinking about that is actually important for your household. Is it cashback 💵? Or is it access to tickets 🎫 and events? Is it air miles ✈️? Or is it shopping 🛍 & dinning 🍽 discounts/priority access? Even car insurance 🚗 offers!
Everyone will have different priorities so take your time to look through all the offers. Try and minimise the various points or perks systems you subscribe to, as I will demonstrate below why it is important.
Rewards and Cashback
Cashback 💵: Earn a percentage of your spending back as cash.
Points 💯: Accumulate points that can be redeemed for various rewards like flights, hotel stays, or merchandise.
Travel Miles ✈️: Earn airline miles that can be used for flights and upgrades.
Gift Cards 🎁: Receive gift cards to popular retailers or restaurants.
Travel Benefits
Airport Lounge Access: Enjoy complimentary access to airport lounges for relaxation and amenities.
Travel Insurance: Receive coverage for trip cancellations, medical emergencies, or lost luggage.
Priority Boarding : Board flights earlier for more convenience.
Shopping 🛍 Benefits
Extended Warranties: Get additional coverage for your purchases like washing machines, dishwashers.
Purchase Protection: Protect your items against theft or damage like laptops, mobile phones, tablets.
0% Interest Periods: Enjoy interest-free periods on purchases for a specific time.
Other Perks
Mobile Wallet Compatibility 📳: Use your card with mobile payment apps like Apple Pay or Google Pay.
Fraud Protection🦹♀️: Get assistance in case of fraudulent activity on your card.
Customer Service: Access helpful customer support for inquiries and issues. Credit card providers tend to provide better service than standard bank debit card providers.
Money First Aider Note: These offers change constantly so all listed examples at the top are just to give you a feel for what to look out for. Do your own due diligence and make sure you find the deal for youself.
Joining up all the perks...
Another idea I would like to introduce is the importance of joining up all your points systems in various aspects in your spending.
What we did before
We used to collect points from all the following brands and companies
Tesco 🛒 for grocery's
Sainsbury's for grocery's
M&S for grocery's
BP ⛽️ for fuel
Shell for fuel
Boots 🏥
Costa
Starbucks
John Lewis credit card which gives waitrose coupons 4 times per year
Seoul plaza Korean supermarket (only physical card, we always forget to bring, so we basically don't maximise it)
many other fasion brands like Nike
Hotel Chocolat
This problem with this is none of those brands/stores actually communicate together. They all have their own points and loyalty systems. The ability to collect points encourage us to spend more, but actually we are spreading out so thin that we actually never collect enough points to benefit from any of them!
Furthermore, we can never remember 🤔, as a family, who is keeping which physical card to take out at the shop to scan! About a quarter of the time, we get so frustrated we give up scanning for some purchases. Most card nowadays allow such benefit cards to be added to your phone digital wallet. If you subscribe to one system, it would be easier if it is one that can be saved on your phone for yourself and rest of family so everyone contributes to it!
What we do now
I have to give credit to my wife 🌹 who is the real expert at this. Basically we sat down a couple of years ago and decided which aspect of our lives mean the most to us. We decided that travelling ✈️ is pretty high up there. So, after research, we decided to focus our perks/loyalty point collection system on one thing, collecting air miles with Avios. It may not be the BEST deal there is around, but it was most benefitial for US as a family.
Only after prioritising our points collections before we actually start claiming and benefiting from such perk systems. I am not going to lie, it does take effort! Of course, it is impossible to make ALL purchases come under one point system, but at least this has halved the amount of effort trying to remember each and every 20-ish deal detail and offer expiry dates.
American Express for all spending which feeds points to Avios
Barclay's Avios credit card for Avios points
Sainsbury's for groceries which feeds points to Nectar card which feeds to Avios
Only filling up our cars in ESSO which collects Nectar points which again, feeds to Avios. Hardly go to other petrol stations anymore
Boots, cause there isn't really an equivalent store for healthcare and beauty products
Costa as I work in a hospital with one, hardly go to starbucks anymore
UK Credit Card Comparison Websites
Here are some popular comparison websites you can use to compare credit card deals in the UK, along with their direct links:
MoneySavingExpert: https://www.moneysavingexpert.com/
Compare the Market: https://www.comparethemarket.com/
GoCompare: https://www.gocompare.com/
MoneySuperMarket: https://www.moneysupermarket.com/
Uswitch: https://www.uswitch.com/
These websites offer a variety of tools and filters to help you find the best credit card deal based on your specific needs. Remember, simplify but yet optimise your credit spending & perks!
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