Savvy Budget

Day 8 - Redeeming FF Miles Update

I looked into the situation further. As it stands now, I will continue with my current CC. I would have to change to a Mastercard from Citi and the APR is not as good. It's not terribly bad, but it is more than I pay currently. I am also leary of non-disclosed issues that may pop up. Knowing CC companies like we do, we know they will screw us anytime they can.

The other problem is that to get the $500 Target card I need a few more miles. By the time those post, the window for a refund of my annual fee will have expired. So to get $500, I need to pay $50. It is a little more complicated but that is what it boils down to.

I will start charging my rent and possibly my gas. I will up my Auto Pay each month to cover the rent ( plus gas) and the amount I am currently paying toward the balance. I will be charged the annual fee, but I can turn my everyday expenses into rewards worth far more than the annual fee.

The reward GC used frugally will allow me to cut cash expenditures from certain categories. These categories include groceries, certain misc. expenses and a portion of my gifts. Used wisely I could come out ahead.

I looked at GC's for gas. The stations they listed were more expensive than where I purchase gas. Wise investigation on my part. I will continue to monitor.

I am also aware that Target is more expensive than Wal-Mart. I am confident that despite the extra cost, I will reap more than the $50 annual fee in free giftcards.

Just for the sake of argument, I could assume Target is 25% higher than Wal-Mart. I would still be receiving $375 in benefits. Weighed against the $550 I have paid in annuals fees in the last 11 years, that is not great. Still better than a fat lip.

I envision myself utilizing this card frugally and still recouping my annual fees from day one. The next project will be to recoup the inflation adjusted cost of all interest I have paid to Visa. Then I will declare myself the Victor! I need to create a file for these projects. I love a challenge!

In order to maximize the benefit of the Target card I can:

• Scour the sale paper
• Not buy items "just because" I have a GC
• Continue to make most of my own gifts or get them from alternate sources.
• Continue to plan my meals as frugally as possible- buying from other sources if it is the MOST cost efficient solution
• Scour the clearance section, especially in the grocery section. They do have really good deals from time to time.
• Take advantage of the fact that my job takes me right in front of at least one Target location each week ( one is about to open- which should net excellent Grand Opening sales- ONLY BUY IF I NEED IT AND IT WILL SAVE ME MONEY)
• Use Target (in ad and online)and Manufacturer coupons
• Maintain a list of needed items ( I do this already) and monitor for the best deals
• Accept that occasionally I CAN have something I want. I have already scoped out the ER DVD's.Target is definately the cheapest source. - don't stress, My focus is on getting out of debt. But "earning" the DVD's by working toward debt free levels could definately inspire me to work harder.

There is also the point that I have already spent the money on fees and interest. If I do not redeem them and allow them to expire then I have gained nothing at all.

I am sure the cost of this program will eventually outweigh the benefits but I have decided to go this route for the time being. I will be cautious and I will monitor the situation for any problems- like out of hand spending.

Even moving and not being able to charge my rent to my CC will not negate this deal. The amount I spend on gas alone will earn more rewards than the cost of the annual fee.

I am grateful I looked into this issue. I made the best choice in light of all the information and choices. I am grateful I discovered I could swap the miles for something other than a flight. AA has high rates and I think I could get a better deal online elsewhere.

I looked at other participating merchants and so far I like the deal with Target best. Although, I will be ordering GC's to resturaunts for my oldest sister's Christmas gift next year. ( I already redeemed her GC's for Christmas this year from another program.) I may also find a good choice for gifts for my father. I will continue to monitor this also.

To recap, I will use my FF miles to redeem for Target GC's. I will use them for frugal grocery, misc, supplemental gift purchases and for purchase of my personal reward program items.

The personal reward program would entail allowing myself to "earn" credit twoard the purchase of ER DVD's each time I reach a goal. I like this plan. I know me and I know I am willing to make more sacrifices if I know it will take me tangibly closer to getting ER to watch at home. It helps when I play games with myself.

If I know by taking my lunch, skipping a soda or cutting back on cigarettes I get visbly closer to obtaining my beloved ER then I can tough it out. Hmmmm- this may be the perfect way to stop smoking- Which by the way blows $1500 a year and increases my future medical cost.

I have already earned Season One- but have not purchased it for various reasons. Among those reasons are buying a box set is a better deal than buying each one individually and I had to pay for a stolen laptop which blew ALOT of my onhand cash.

All in all I had a decent 24hrs and increased the value of my finacial future.

posted by Casper @ 10:49 AM