by Maurie Backman | Feb. 10, 2021
This simple trick is my ticket to avoiding impulse buys.
Like many people who have multiple credit cards, my goal in opening new ones is to make sure I'm signing up for great rewards programs. One of my credit cards, for example, gives me extra cash back at the pump. That's a good thing because my family normally takes a cross-country road trip every year and does a bunch of local travel, too. Another card of mine gives me extra cash back at my local warehouse club where I do a lot of shopping for staple items like produce and cleaning supplies.
Not only do I enjoy racking up credit card rewards, but I also have a very specific system for putting mine to good use. In fact, my strategy actually helps me avoid overspending and wrecking my financial goals in the process.
We all have our little things in life that make us happy. For some people, it's takeout or gourmet coffee. For others (me), it's books and chocolate. While I do have a little money worked into my monthly budget for indulgences, I try to keep that spending category to a minimum because I know surprise expenses have a way of creeping up. And when they do, I generally prefer to cover those with my paycheck rather than raid my emergency fund. But I do often manage to enjoy extra treats beyond what my budget allows thanks to my credit card rewards.
The cash back I get from my credit cards isn't money I earn from a job or depend upon. So I figure it's mine to use as I please rather than having to save or apply it to existing bills that my paycheck is already covering. And having that extra treat money, so to speak, actually helps me avoid falling victim to impulse purchases or overspending.
When I'm tempted to buy something out of the blue, I check my rewards balances on my credit cards. If I have enough cash in that pot to cover whatever the item is, I can move forward without guilt. If I don't, I make myself put that purchase on hold. It's a system that's kept me in check for a long time but also allows me to treat myself without worrying about any sort of financial backlash.
Of course, you could argue that there are better uses for credit card rewards points or cash back. I could use that money to pad my savings or, as mentioned earlier, pay other bills. But right now, I have a solid emergency fund. I also don't have any debt other than a mortgage, which is a reasonable expense to bear. As such, I don't see any reason why I can't treat my rewards as fun money that's mine to spend.
To be clear, I also use my credit card rewards to treat my family to things. For example, I'll sometimes let my kids choose new books or a board game to share as a reward for being extra helpful around the house. But either way, those reward points have really helped me manage my money. So I'm grateful to have found a number of credit cards that are a good fit for my lifestyle and spending habits.
If you have credit card debt, transferring it to this top balance transfer card can allow you to pay 0% interest for a whopping 18 months! That’s one reason our experts rate this card as a top pick to help get control of your debt. It’ll allow you to pay 0% interest on both balance transfers and new purchases until 2022, and you’ll pay no annual fee. Read our full review for free and apply in just 2 minutes.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2021 The Ascent. All rights reserved.