Credit Cards, Taxes, and Points

Not that long ago, I was looking at my points balance on my credit cards and was thinking that I should write some strategies on how to utilize your points for your credit cards so they will really benefit you. As of right now, the benefits that you receive, such as credit card points, are tax free. So why not use it to your advantage, right? And you know what’s great about points? They can be redeemed for anything from gift card to merchandise, from cash to vacations. Yep… I said cash and vacations!!

First things first. Look at your credit cards and find out which ones offer points and what you can use the points for. Each major credit can have different benefits, so keep that in mind. Next, you want to find out what type of points are offered for certain types of transactions. Some credit cards might have double points if used to make purchases at certain establishments, for gas, or groceries, and limit the amount of points for every other transaction.

As we are going into the tax season, it’s unfortunate that many people will owe money, but the good news is that you can pay with your credit card. If you just pay with a check, you lose out on the points. So instead, pay it with your card that earns points and then pay off your card. Voila! You just earned points! There is only one downfall that I’ve found with paying your tax bill with your credit card. The convenience fee.

If only use this one strategy (paying your taxes) with your credit card to earn points, you’re missing the boat. Depending on the type of card and the transactions, you can use it for your every day transaction. For example. You go grocery shopping, instead of using your debit card where the funds come directly out of your bank account, you pay for your groceries using your credit card that gets points. As soon as you see transaction hit your online account, pay the entire amount off. A week later you fill up on gas for your truck. Once again, you use the credit card instead of the debit card. As soon as you see it hit your online account, you pay it off. This will do a few things for you. 1. Earns points! 2. Shows your credit card company that you are a responsible individual and will more than likely raise your credit limits. 3. Raise your credit score. Looks like a win, win to me!! If you need help or have questions, call Jeff at (859) 816-1288 or schedule an appointment to go over your finances https://nkyaccounting.youcanbook.me/

 

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