I generally despise credit cards. They are financial quicksand. No matter how quickly you think you can pay them back, there is that ever present sucking sound as those damn cards continue to suck hard earned cash out of your bank account. The sales pitch is always “Hey, we’ll give you 2% back on everything you spend!” The card companies know that they’ll give 2% so long as they have you at 20% APR, or an eighteen point spread! Eighteen points cash-on-cash is crazy. I am generally willing to invest for 15% cash on cash return.
Well, I’m flirting with the devil. We received an invitation in the mail to get a new credit card with a $200 signing bonus. We needed to spend $500 within the first three months of having the card and we would receive 20,000 points, which is redeemable for $200.
I signed on the dotted line. I knew we needed to purchase our CSA share for the summer. For those of you that don’t know, CSA stands for Community Supported Agriculture. We essentially prepay a farmer to produce our produce for a set period of time. It is sort of an insurance policy for farmers. They have their cash up front, so regardless of the year, they know they won’t lose the farm in the winter.
At the beginning of this year, we set a budget for all of 2014. We knew we were going to purchase a CSA share this year, so I knew how much to set aside on a monthly basis so we were ready for the purchase. Well, the credit card offer came along, and the ‘early bird special’ came for the CSA, a perfect match for the 2014 frugal budget.
I paid the $750 for the CSA (Yes, it’s a LOT of veggies…but it’s still expensive). After paying for the CSA, I destroyed the card, so I can’t use it for anything else. I was a little nervous waiting for the 20,000 points to post to my account as no communication from the Chase card services mentioned anything about the points except the initial teaser. Well, we received our statement today and I actually eagerly opened the envelope and found…20,000 points applied to my account, redeemable for $200.
The $200 will be applied to the CSA payment, for a net-out-of-pocket of $550 for the CSA. Not too bad.