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Up until a couple of years ago my parents wrote checks or used cash for everything. Even after the rest of the world moved on at least to debit cards, and eventually credit cards, they resisted. Even after I started dabbling in the world of rewards credit cards, they resisted. And then, something changed. My 60ish-year-old retired parents saw the light and made a relatively radical change in how they conduct their finances (while still avoiding interest charges). I certainly wouldn’t refer to my parents as “old dogs”, but I will say they learned some new tricks. Here is their story, in their words.
I feel like I have been to a revival. I went in with one persona and I came out with another. I went in a sinner and came out a winner. I have been ( in your best preacher’s voice and intonation ) ” a’ heeeealed “. Yes, brother and sister, I am a new man. I have seen the light. I now walk down the righteous path to salvation. I have seen the evils of my past and have tossed them aside for the rewards of my future. That’s right, I have crossed over from the world of cash and checks to the world of credit cards miles and points. Can I have an amen?
How did this transformation take place? And why? What was the genesis?
A little historical perspective is necessary. I was raised in a very middle class family in a small Texas town. I am very proud of both. I am also extremely proud, privileged and blessed to have had the parents that I had. They were intelligent, hard working, honorable and giving. They were self employed professional partners. They chose perfection over profit and diligence before the dollar. Consequently, they were occupationally respected and successful, but economically challenged. I am also proud of these choices.
I do not know what in my makeup caused me to be so attuned and sensitive to our family’s financial situation, but, I was. I knew about bank charges and interest. I knew about loans and past dues. I knew debt was expensive and uncomfortable. I could easily see that you had to work extra and make more money if you were having to pay someone else for the use of their capital resources. It bothered me that an item that cost $80.00 cash could eventually cost $100 – $125.00 if charged and then subsequently paid out over time. The cost could escalate further if late fees or insufficient funds came into play. Credit cards to me were only instruments that allowed you to do things you couldn’t really afford at the time. And they came with a price.
I was not the smartest person in our family, but I was observant and a good study. I was impressionable. I realized that I was not likely to achieve significant wealth so I had better maximize what I did make and minimize what I wasted. So, I evolved into a conservative spender and a patient purchaser. I was always able to save money and plan for the future. I believed in paying cash for most all transactions. If I couldn’t afford it, I waited until I could. This applied to everyday items, trips, cars, houses, and property.
I appreciated the security this brought. I do not know when I got my first credit card. I was probably in my 50’s. My wife had some charge cards with various department stores for most of her adult life that she occasionally used. I may have been technically on the cards, but never used them. I think my first credit card was obtained for identification purposes, emergency use, and as a payment guarantee to hold a hotel reservation. I am now in my mid 60’s and I do not remember when I actually first used a credit card to deflect or postpone immediate payment. It was very recent and very rare.
So, that is background story. What has caused a shift from this well established and sound financial lifestyle? Now, as Paul Harvey might say, comes the rest of the story.
Several things happened near simultaneously in our little universe that prompted this metamorphosis. First, my wife retired three years ago after 37 years in education. She was eligible for a lump sum payout for non-used vacation and sick days that she had accumulated. We decided she should use part of that money to pay off any small balances she had on her charge/credit cards and that all future similarly incurred debt would be paid off every month. Also, about that time our grand-daughter was born and with that came new dynamics and adventures. Last, but not least, in this triumverate of circumstances, was our oldest daughter’s total immersion into the world of, the business of, miles and points.
Mommy Points became her blogosphere moniker and cheap or affordable travel became her calling card. So with no outstanding credit card balance, good credit, a desire to travel and with free advice, we were ready to put our foot into these new waters. We were advised as to which credit cards were offering the most bonus miles/points upon sign up. We were shown how to accumulate extra miles/points by going through shopping portals. Although we were slow converts at first, soon we pretty much went all in.
We decided to use credit cards for almost all our normal expenses and purchases. Groceries, gas, insurance, medical, trips, business, repairs, large and small everyday needs, gifts, meals, entertainment, dues, clothing and anything and anywhere that “plastic” was accepted found its way on to our cards. We totally replaced cash with cards and we just paid for everything at the end of each card’s billing period. We carry no credit card balances month to month. To play the game, you must avoid interest charges.
We do not frequently apply for credit cards, but we are willing to get new cards when it is beneficial to do so. If a company offers 50,000 or 75,000 bonus miles and is soliciting your business, what can be wrong with taking advantage of the opportunity to establish a relationship with that bank? You just need to make the system work for you. We never flew anywhere in our youth or even in our early and mid adult lives. It just seemed cost prohibitive, so our trips usually meant long, all night car rides.
I can’t begin to express the excitement and joy we felt a couple of years ago when a trip to Colorado was made flying on miles and within a few hours after leaving home we were driving in the mountains. Wow, we thought, this is cool. Way cool. And we didn’t have to hope for an open gas station in Dumas at 2:00 in the morning, or search for clear radio stations trying to fight off sleepiness till the eastern sky brightened up and morning would arrive.
We have enjoyed our traveling since retirement. We have had some fun and memorable trips and look forward to many more. Miles and points have proven to be a real assistance in facilitating our adventures. I do not feel guilty in the least. I know my parents have already paid plenty.
I am so proud of my parents (affectionately dubbed Grandma and Grandpa Points) for finding a system that works for them. They still avoid incurring debt, but they use rewards credit cards conservatively to earn miles and points for many of their exciting retirement adventures! The world of rewards cards isn’t for everyone, but it also is not a game reserved for Generations X and Y. The Baby Boomer generation that is now largely enjoying retirement can also get in to the action and make travel way more affordable than they thought possible!