We’ve talked on the blog before about credit card rewards and why GOLD doesn’t offer them. In a nutshell, it’s because nothing in life is free. Credit card companies use profit from high interest rates to subsidize rewards they pay out to consumers. We’d prefer our Members just keep their hard-earned money, so we keep our credit card rates low.
Now, if you’re at a place in your financial journey where you pay off your credit card balance in full every single month, a rewards credit card might be the best choice for you. The interest rate doesn’t really matter since you’re paying the balance before any interest gets charged.
On the other hand, if you’re living in a financially tough time and carrying a balance, those rewards will be very quickly canceled out by the interest you’re paying. A low-interest card like GOLD’s would be a much better choice for you. The savings on finance charges far outweighs any potential rewards.
The Best of Both Credit Card Worlds
But maybe, like me, you fall somewhere in the middle. Which should you choose then? I typically pay off my statement balance in full every month, but life tends to throw all of us curveballs, and I’ve had my share this year. My personal curveballs in 2022 so far have included three unplanned for bills in amounts ending in “thousand.” Ouch, right?
Like many Americans, I’ve got more than one credit card in my wallet—the GOLD Credit Card plus one of the major ones you see cute TV ads for (those high interest rates are paying for those TV spots, too). And I’d love to get 1% cashback on those big bills, but the unexpected expense has been too big for me to absorb in a single month, and that means paying interest. I’ll take the GOLD card for that, please.
But here’s where a little financial know-how comes in really handy, because I can have both. It’s true, I can charge the expense to my rewards card, but pay the low interest of GOLD’s card. Here’s how:
I pay the (enormous) bill using my rewards card.
When my statement for the month comes through, I’ve got my cashback rewards for making the purchase. I take some deep, calming breaths while looking at the statement total balance.
I review my budget and bank account balances to figure out how much of it I can afford to pay right away, and calculate the amount left over. I don’t pay the bill just yet.
First, I log into GOLD Online Banking and click the Transfers tab to perform a new transfer. I move the amount of money I’m coming up short on for my payment from my GOLD Credit Card to my Checking account. This is just a cash advance, but at GOLD there’s no fee and the interest for cash advances is exactly the same as purchases.
I go back to my rewards card portal and pay the statement balance in full from my checking account.
It’s as simple as that. My rewards card is paid off, and I get my cash back. It's important to note that while this worked for me using my GOLD Credit Card as the cash advance source, most credit cards treat cash advances differently than GOLD does. Card issuers often charge a cash advance fee as a percentage of the advance you take and also charge a higher interest rate for cash advance balances. So, if you’re thinking about using this principle with different cards, make sure you understand the terms and conditions of what’s in your wallet first. Or better yet, get yourself a GOLD Credit Card of your own!