Last month, we finally applied for the Costco American Express. We’ve been going to Costco for several years and always pay with a check, since they don’t take Visa, the credit card we use for everything else.
We don’t tend to keep money in our checking account though, because it doesn’t earn interest. Instead, we move it to our HELOC (where the interest rate that it saves us is 8.3%) or we put it into our ING account. Usually we have just a couple hundred dollars in the checking account in case of an emergency. Whenever we were going to Costco (about once every 6 to 8 weeks) I would move money back from the HELOC to the checking account, and then we would have to remember to take the checkbook with us when we went shopping (we don’t normally carry it with us).
Anyway, we decided that the Costco American Express would make things easier. We get 1% cash back on everything we buy at Costco, which is a nice bonus. We get that with our other credit card for everything else, but our Costco purchases had never gotten us cash back before. And as Costco members, there’s no annual fee for the AmEx card. So now we can go to Costco without remembering to grab the checkbook or transfer funds. Much easier.
Ed says
Don’t forget to get the Executive Card — 2 more percent back.
Govern says
you just finished paying off your discover card on aug 29, 07 and barely one month later you get a costco am ex?
statistics prove that people overspend by 13% using any charge card. 1% back encourages people to spend more.
why don’t you reread your own posts, esp Maxxed Out.
Fools are born every day.
FrugalBabe says
Govern, perhaps you need to go back and read a few more of my posts. We put EVERYTHING on a credit card. And we pay it off every month. Always have, always will. The only time in my life that I have had any debt was when my husband and I started our own business. We put a lot of business expenses on credit cards, and it took about three years to pay them off. That’s it. I have never had a car loan, worked my way through college, so no student loans, and we have never had consumer debt on a credit card. The Discover Card we were paying off was a zero percent interest offer that we had used when we were paying off business debt. There was no consumer debt on that card.
We will continue to put all of our expenses on our Visa. I check the transactions every day, and we pay off the balance in full every month. And they give us cash back. We will do the same thing with the AmEx, only it will be just at Costco. We’ve had the card for a month now, and have used it once – at Costco, spending about the same as we always did when we took the checkbook to Costco.
It’s true that for a lot of people, credit cards are a trap, because they feel like they’re not spending “real” money. But if you’ve read many of my posts, you’ll see that we don’t tend to spend much money period. Cash or credit, it doesn’t matter.