Money Forward

This blog is about money and trying to keep my money from flying out the window.

Thursday, November 09, 2006

Rounding off with credit cards

I was reading some of the comments from a post on All Financial Matters about tipping, and I noticed a lot of people talking about rounding up for their credit card. This may make things easier, but with certain cards this may not be getting the best "bang for your buck." It's being picky about change, but a lot of change can add up.

The most obvious problem would be with a card that rounds off your purchases and puts the change in a savings account. If you go out a lot and round off for the tip, then you're missing out on that change.

You can also miss out on certain rewards cards. A card that gives double miles for dining out would be an example. Say you often go out to the same restaurant and you order the same thing all the time and the bill comes to $21. You generally tip 18%, so the bill plus tip equals $24.78. You round up the amount so it's an even $25. You would get 50 miles total for the purchase. If you paid just the $24.78, double that you would get the same 50 miles for the purchase (49.56, and then they round up to the nearest dollar when it is over 50 cents). That last mile, although minimal would be for 44% less than the others. Plus you would have an extra 22 cents. This isn't much, over time it will add up.


Post a Comment

<< Home