What’s the most annoying part about being an “adult”? No, it’s not the fact that you can’t pick your nose in public anymore. Or that every time you walk into a Toys ‘R’ Us by yourself, parents eye you suspiciously and assume that you’re gonna kidnap someone. Or that it’s only 10pm on a Friday night, you’ve had one beer, and you’re already exhausted. No, no. To me, the most annoying part about being an adult is that there’s so much damn admin to do.
Admin. Really. It’s such a pain in the ass. Remember when you were a kid? Everything was given to you. You just had to get good grades, do your chores, eat your vegetables, and if all else fails, whine. And the entire world would fall into your lap: Happy Meals, GI Joe toys, Disneyland, Spiderman comics… without you ever having to bother where it all came from.
Annoying admin
Now, I have bills to pay and file, and a budget to take care of, an investment portfolio to monitor, and I have to check that my credit card statement doesn’t have a $2,000 charge for DONATION TO NIGERIAN PRINCE on it. There’s so much admin we do on a regular basis, we could at least hope for a hassle-free experience when it comes to claiming our rewards, right?
Wrong. So last year, I tried to redeem my reward points from my credit card. I’d spent like 10 months charging every last dollar to my card, racking up points #likeaboss and feeling really good about myself. So when I logged onto the online rewards portal to claim my well-deserved prize, I was led through a dazzling array of choices: perfume? Briefcase? Shoes? Suit? Dubious vibrating contraption you strap around your waist to help you to lose fat? Too many choices, but they all had one thing in common: they were way too expensive. If I wanted to redeem any of ’em, I’d have to fork out like another couple of hundred dollars, enter my claim, collect a voucher, go to the store, get my item, pay the difference, and complain to the cashier about their terrible customer service. When it comes to rewards, I don’t want to have to go through a whole bunch of annoying admin just to claim it. I sometimes think that the credit card companies make it ridiculously hard to claim anything just so you’d give up.
Cash is King
There’s another way to maximize the returns on your credit card without you ever having to do any annoying admin. It’s called a cashback (or dividend) card. These cards are straightforward, transparent, and best of all, don’t require any effort on your part to enjoy its benefits. And you know I love anything that doesn’t require effort, because I’m lazy as hell.
Cashback cards work like this: Every time you charge something to your credit card, a certain percentage gets credited back to your account as “cashback”, which will help to offset your total bill. Think of it as having a discount on everything that you spend on. I’m a pretty big fan of the StanChart Manhattan card, which gives me a cashback of 0.5%-5%, depending on how much I spend every quarter. I literally charge everything that I possibly can to it to maximize my cashback. I’d charge my daily $0.65 cup of coffee to it if I could, but I think the coffee shop owner would yell at me. And every quarter, I get a huge discount on my credit card bill in the form of cashback. It’s like finding free money.
0.5%-5% of your bill doesn’t sound like a lot of money, but add that up over the year and it’ll possibly be the same, or higher, value as the “rewards” you redeem from the usual reward cards, except that this one doesn’t require any effort on your part. If you drive and dine out a lot, the Citibank Dividend card is a pretty sweet deal too.
Feelin’ like a kid
I’m not saying that other types credit cards are bad. If you’re the type that likes to shop, and visit the hellish, sardine-packed places they call “malls”, then rewards cards have their place. Or if you travel a lot, then a card that racks up miles may be a good option too. But for people like me who hate admin with a vengeance, a cashback card offers the simplest, easiest way to have money falling from the sky into our laps. It’s like feeling like a kid again.
Your blog always makes me smile/laugh – as well as learn something too. Agreed the nth degree of hoops to redeem visa points is likely purpose-built to ensure no uptake. On the dividend side, a well-known pub where I live used to purchase the bulk of their beer on this card and give their employees paid vacations south with the savings. As an adult, “if all else fails, wine”. 🙂
Hey Lionel! Thanks for writing this, it’ll prepare a totally un-finance-y person like me for the big world next year. 🙂