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I don’t know about you, but until recently, I was still using the same credit card I’d had since university. At the time it was logical. It was affordable for me because I was in school and offered student discounts.
Fast forward over a decade later, and I’m still using this card. Why? There is no reason. And, to be honest, there were no benefits from a card that doesn’t take into consideration my new lifestyle, earnings, or what’s important to me.
What’s even more important? What was even more important? huge deals — deals I can use to save money and invest.
You can find any bank or credit card company. Every bank institution will have a page dedicated specifically to deals and promotions. You will find at least one credit card in these deals. What usually happens is these credit cards will offer a number of rewards points if you spend a certain amount of money on them in the first three to six months — usually around $3,000.
It gets even better. They want you to sign up Their card, they’ll usually offer you a bunch of extras. You could get a year of no fees, additional points for purchases, purchase protection, extended warranties, or other benefits.
What are the points? I’ve been able to find a few that offer anywhere between 55,000 and 70,000 reward points if you manage to spend that $3,000 in a just a few months.
Isn’t spending a lot?
If you’re just buying here and there, $3,000 in three months could be difficult. This is why it’s important to put money aside. Everything on a credit card — big or small; do it all: bills, gas, groceries, and even your coffee. You will be able to reach these numbers, and you’ll get a bonus as well as the most rewards.
The rewards can be used to buy anything you like! You can use the rewards for travel, hotels, rentals or even to pay down your credit card. It can also be used to assist you in investments.
If you have a Tax-Free Savings Account, it’s possible to use your reward points to pay for commission fees. That’s $10 you save each and every time you make a trade. With share prices at such a low level, now is the perfect time to think about it. But where should you invest? Which card should you purchase?
Get a BMO
BMO (TSX-BMO) (NYSE:BMO), offers the most attractive options for investing and credit cards. Three BMO credit cards offer welcome bonuses, waived annual fees for the first year and waivers on the second. These points can range from 60,000 to 90,000. You can also opt for cash-back.
BMO offers a number of excellent exchange-traded funds, but I prefer to invest in the bank. To help the bank through a recession, the Big Six banks offer loan loss provisions. However, shares have fallen 7% over the past year. You can therefore lock in this stock, its 4.48% yield, and look forward towards growth.
How much growth? BMO stock has increased 746% over two decades. That’s a compound annual growth rate (CAGR) 11.26% as of writing.
A way to save money is something that we could all benefit from. While you definitely need to be responsible when it comes to signing on to new credit cards, there’s nothing stopping you from taking advantage of promotions. A $120 annual fee can be dropped to $0. There are tens to thousands of rewards you can earn that you can use for cash savings. You can also use these rewards to help save money at a time you might not otherwise be able to.