So I think I may have mentioned this some time before, but my unusual-but-effective way of paying my credit cards each time I pay with it goes a little something like this:
Buy something for $5 on my credit card.
Log it into my budgeting tool to track my expenses.
Log online and pay the $5 immediately towards the credit card.
I have been doing this since I got my first credit card at 16, and I have never paid a red cent in interest, nor have I ever forgotten to do so before being charged for my mistake.
The rare problems I encounter are all because I’m human and I make mistakes:
- I forget which card I used so I pay to the wrong card — happens once a year
- I transpose the numbers and pay 7.89 instead of 7.98 — happened once
- I end up getting cash back in the store, so I pay the wrong amount — rarely happens
- I think I already paid the amount, so I don’t pay it — happened for the first time today!
FORGETTING TO PAY FOR ONE ITEM
So what happened is we were shopping at the same store, but I was buying something for the common budget (our household budget), and something for myself.
I took two receipts so I could enter them separately and not deal with the hassle of calculating taxes.
When I got home, I logged in what I thought were all the expenses, but I totally forgot that I had two receipts from the same store.
I had only logged one amount, but not the other.
When I combed through my credit card statement today (as I always do, once a month), I copied all the transactions into Excel, went through and deleted all the cells of the matching debits and credits (a.k.a. charges and payments).
It kind of looks like this when I go through in Excel. Each matching cell has a store charge, and a payment to coincide with it.
If I am off by even ONE PENNY, I can tell.
It also makes it easier to find out where I went wrong, if I don’t see a matching payment.
I was left with almost empty cells, except for that one transaction (not pictured above), I forgot to enter because it was two receipts from the same store.
Without my tracking system and credit card paying method, I never would have caught my error.
I was dumping out all my receipts onto the floor, searching for all the ones from that store, and I was about to call CIBC and scream “FRAUD! FRAUD!!!!” with a pitchfork in my hands, and fire in my eyes, but thankfully, I came out of it without any egg on my face.
Frankly, it’d be easier to pay everything in cash or with a debit card, but credit cards give me back 1% in either cash or grocery points, and … well, 1% is 1%, considering how much I spend per year for myself and my business.