Not all life hacks are created equal. Some DIYs turn out to be more expensive or time consuming than just buying the item that you wanted to recreate. Some goals take too long to achieve. Some hacks are only helpful for a small group of people.
One hack on my list that probably isn’t worth the time: paying an extra fee to purchase a product or service with a credit card. If the amount of cash-back rewards you get exceed the fee, you come out on top, right?
Reddit user EMF911 explained it in the r/frugal subreddit:
I had a personal tax bill I had to pay. When I called the payment office, I inquired about credit cards. The receptionist told me they do take credit cards but there is a $5 fee.
Well, my credit card was going to get me 2% back and the bill was for $310. 2% of $310 would be netting me $6.20 in rewards. After paying [a] $5 fee I would still be coming out ahead – making paying this way worth it.
EMF911 noted the other benefits of paying with a card too, like building credit. A few others chimed in and said that when the fee is less than the cash back you’ll earn, it’s worth it. Of course, you have to be one of those people who never carries a balance on your credit card from month to month to reap the benefits.
If you’re comfortable using credit for just about everything, like this particular Redditor, you might not think twice about doing this.
The potential for error for everyone else is just too large. Paying a bill with a credit card — and eating the accompanying fee – can be a crucial last resort if your budget is a bit short. But all too quickly, the habit of paying for everything with a credit card can snowball into debt. If you aren’t paying your complete credit card balance every single month, any gains you would have enjoyed from cash-back rewards are getting cancelled out by =interest charges.
Not every tip or trick comes with this level of risk — if a DIY project goes awry, the stakes are usually pretty low — but when it comes to your finances, sometimes it’s better to play it safe. Would you rather save money now, or pay up front to get a buck or two back later?