It has been almost exactly one year since I opened my first real adult credit card! Discover matched the cash back I accumulated throughout my first year, so it’s time to do a little shopping for rewards. Discover provided me with a year-end activity summary that shows how much money I spent broken down by category and how much I spent versus how much I paid down my balance on a monthly basis. The most popular category for my purchases was merchandise at 37%, followed by supermarkets (27%) and restaurants (13%). But my favorite metric was the interest accrued:
I successfully made it through my first year without collecting any interest! I’ve taken full advantage of having a credit card without falling victim to my nightmares of not having enough money to pay it off. Some months I can see my fear creep in, where I didn’t want to pay off my entire bill. I would chip away at it or pay it all off at the start of the next month.
My personal reward for not accruing any interest is that now I get to use my cash-back bonus for more than just paying off my credit card—I get to spend it on my favorite things! Discover has four options for redeeming cash back: cash (deposit or apply to bill), pay with rewards (available on Amazon and PayPal), gift cards (starting at $5) and charity. There were around 100 gift card options, including restaurants, health and beauty, department stores, entertainment and travel. Since Discover includes up to 10% added value with each gift card, I’m already getting a better deal than if I were to use my cash back to pay off my credit card. I thought about my immediate needs and landed on three gift cards to use the majority of my cash-back bonus on: $50 at Target, $85 at Barnes & Noble and $100 at Sephora. You can see below that I didn’t have to pay full price for these gift cards:
I still have some cash back left over, but I’m not sure if I want to apply it to my account or wait to accumulate more. I’m hoping to take even more advantage of my cash back now that I’ve made it through this first year unscathed. My strategy for paying off my credit card twice a month whenever my paycheck comes in still stands. That way, I only have to acknowledge my balance when necessary, and I can spend the rest of my free time doing my skincare and reading my books 😊.