What is a “Plastic Card Budget”?

Plastic Card Budgeting is a simple (but special) budgeting technique that can help you spend less money, and at the same time enabling you to realize a discount on your purchases.  So quite literally, it’s a win-win!

How Does a “Plastic Card Budget” Work?

At a time frame specific to your buying patterns (usually monthly), buy all of the expected gift cards or refill a special prepaid card at the beginning of each month.  The prepaid card will server the purpose of a catch-all for those purchase that are gift card specific. The prepaid card is usually a debit card that can be refilled with occasionally to cover non-topic purchases.  You will also need to carry at least $100 in cash for emergencies where you can’t used plastic, but you’d be surprised at how far $200 goes since you can use plastic for practically everything.  In fact, I only use cash for two purposes… 1.) Kid Allowances and 2.) this one small restaurant that doesn’t take credit cards that I wouldn’t go to except the kids love the place.

So when I go out to eat with the family, I usually use a Darden’s Gift card (which can be used at Olive Garden, Red Lobster, Longhorn Steakhouse, The Capital Grill, Bahama Breeze, Seasons 52).  Between my prepaid card and my Darden’s gift card, 80% of my disposable income needs would be met.

So How Do I Save Money This way?

Mainly with buying the gift cards at a discount via using my rewards credit card (my Favorite being the Amex Blue Card), I’m able to give myself a decent discount on my future discretionary spending!  Depending on where you buy your gift cards at, and the rewards card that you use, you can save 1%, 2%, 3% or maybe even 5% on your gift card purchases.

This article was provided by AXA Business Insurance.

Bests,

Don