It’s been one year since I started my new credit life.
I have had credit cards since I was 18, but I was never responsible with them. I paid minimum payments for nearly 20 years. It took until I was in my late 30’s to realize (and embrace) that I could be earning money from the credit card companies instead of the other way around. I’ll probably never earn enough cash back to offset all of the interest that I’ve paid in my life, but once I opened my first cashback card last year, I vowed to never pay interest going forward. 🙂
I opened the Discover It card one year ago yesterday, and just saw what my cashback match would be for the first year. It made me curious how much cashback I’ve earned in the last year altogether, so I totaled everything up. A couple of cards I just opened this year, so they’re not all a year old yet, but this is what my first year of cashback looked like over all the cards:
Discover It (Opened Sept 2017): $512.76 + $75 Amazon Credit
PNC Cash Rewards Visa (Opened October 2017): $52.37
AMEX Blue Cash Preferred (Opened October 2017): $426.04 – $95 annual fee: $331.04
NRA Visa (Opened Dec 2017): $133.61
US Bank Cash+ (Opened Feb 2018): $298.34
Amazon Visa (Opened March 2018): $51.26 + $70 amazon credit
Total cashback: $1,524.38
Total interest paid: $0
I’ve also never had an emergency fund in my life, so I started a savings account with Discover (currently 1.80% APY) and started putting the cashback money in there. I didn’t start this right away, so the total amount isn’t in there, but there’s a little over $1,000 in savings now. I realize that this is small potatoes for a lot of people, but for someone who never had more than $5 in savings in my whole life, this is a game changer. I typically spend my Discover cashback on gift cards since they give you a 10-20% bonus on those, but I just replace that same amount to the savings account with my paycheck. It’s comforting to know that if the dishwasher dies, or the brakes in my car need replaced, I can just replace them without having to try to borrow money, or pay bills late.
I just wanted to share my story for the sake of others who are in the shoes that I was wearing a year ago. Pay those cards off every month. Use them like a debit card instead of like a high interest loan! This seems so obvious now, but I’ve always seen the credit limit as the goal of how much to spend instead of just spending what I could afford to pay off. It sickens me to try to estimate how much interest that I’ve paid over the years, but I’m glad that I finally figured out the right way, and I look forward to years of interest free credit card use to come.
I only wish I had done this sooner. 🙂