May 2008: My Discover Card Paid Me $14.15

One of the common themes in saving money by using credit cards is the cash back you get each month just by shopping. We pretty much use Discover to cover our expenses for the month and highly recommend the card.

Now I don’t go out and charge my card up to its limit, but pay off the balance each month to avoid the daily period rates credit card companies charge you. Also, remember to pay it off early so you don’t get chardged a late fee.

This month I saved $14.15 by spending $1,532.74. I was expecting to earn $15.33 back or 1% of the spending. I’m not exactly sure why I didn’t get the full month, but April is my anniversary so sometimes they reset the annual amount so the first 1,000 you spend, you get 0.5% back instead of the full amount. It’s only a dollar, so I’m not too concerned at this point.

Taking a look at what I bought:

Merchandise/Retail: 363.60 (23.7%)

Gasoline: 345.80 (22.6%)

Services: 12.88 (0.8%)

Supermarkets: 638.49 (41.7%)

Home Improvement: 171.97 (11.2%)

Almost 25% of my spending was in the Merchandise/Retail sector. Unfortunately Discover Card categorizes CVS perchases into this area. Thus, any pharmacy items that you use to charge on your credit card get lumped into Merchandise/Retail category.

I like to keep Merchandise and Retail down to about 15% of my spending budget $1,500 per month. With rising gas prices, it’s not too difficult to exceed my monthly credit card budget.

You Can Actually Save More Than 1%

Here just are a few examples you can save using your Discover Card by shopping online:

• 5% Circuit City
• 10% Nike
• 15% PetSmart
• 20% FTD.com

To get these discounts, you need to login to your Discover account and connect to the merchant sites.

On a final note for this month’s saving tip, always pay off your credit card and if you can’t pay as much as possible to get out of debt as soon as possible. Send out your payment a week earlier that it is due or login to your Discover Card to schedule your payment the day before it is due.