I received my TD Visa “dividend” check today. It was for $1,036.43 and represented 1% of my 2005 purchases made with my TD Gold Elite Visa card. Those of you who are good at math will be able to figure out that in order to earn a $1,036.43 dividend I had to charge $103,643.00. That’s quite a bit of money and even I’m shocked that I charged so much in 2005.
Now, this might beg the question, what the hell did I bought? Well, a lot of the charges are not really for personal use, but are in fact used for my business. The cost of hosting the TTZ network servers are charged to the Visa, along with a bunch of other site related expenses.
Whenever possible, I try to charge purchases to my Visa card. Sure I can pay cash for it but why would you if you can get 1% cash back? This is the smart way to use a credit card. Instead of paying cash, you charge it, earn 1% or some other reward (like Air Miles), and pay the card off when the bill comes. However, you have to be very careful with these types of reward cards because they can twist your thinking – instead of thinking how much something will cost, you start working out how much reward you’ll get and forget that you will have to pay the bill when it comes. Do too much of that and you’ll soon find yourself running a balance and incurring interest charges, which will not be offset by any reward you will get. Read my post on the credit card trap for more info.
I am happy to report, that although I charged over $100,000 last year to my Visa, I was able to pay off the balance every month and incurred zero interest charges. Now I just have to decide how I want to spend that check. It is Valentine’s Day so I may blow it on a huge night on the town with Sarah. It’ll be charged on the Visa of course.