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My budget would be a lot better off if I deleted the Uber app from my phone, and I’m sure plenty of other people could say the same thing. You see, in the last year, I’ve spent nearly $1,000 on Uber rides. As bad as that might sound, it could have been worse.
For the last year, Capital One and Uber have had a deal where customers using Capital One QuicksilverOne and Quicksilver cards get a 20% statement credit for every Uber ride — I took full advantage of the offer. (Other credit card issuers also have similar deals with rideshare companies.) I remember setting the card to my default payment method as soon as I heard about the promotion (behold: the power of marketing), and I had my husband update the payment info in his app, too. Not quite a year later, we’ve saved $242.21.
Of course, we had to spend $1,211.05 to get to that level of savings. I’d say the majority of those trips were totally justified, given that we don’t have a car and Uber is at times our best transportation option. Many of the most expensive rides happened on business trips, meaning they were reimbursed, so it wasn’t quite the budget buster it may seem. Since we would have taken most of these rides anyway, I’m thrilled we saved some money on them.
But there’s another side to this story, one that often comes up when rewards credit cards are at play: We didn’t always feel so bad about the spending, knowing that we were saving 20% with our credit card. That’s a dangerous mindset. Spending more than you should, just to earn rewards, makes it more likely you’ll go over budget and find yourself unable to pay your credit card balances in full. At the moment, my card has a 17.15% APR, so carrying a balance would cost me quite a bit. (The card has a variable interest rate and differs by cardholder, partially based on the cardholder’s credit standing.)
We never found ourselves in credit card debt, but I definitely felt better than I should have for taking those rides as often as I did when it wasn’t totally necessary. For example, there were a few times I didn’t leave myself enough time to get somewhere, and instead of paying $2.50 in train fare, I took a $12 Uber instead. I’d think, “At least I’m getting 20% back,” when really, I was barely saving enough to buy a cup of coffee. Another example: Last week, my husband didn’t leave himself enough time to get to our polling place via bus after work, so he took an Uber to go vote. You might say $19.61 (minus 20%) is a small price to pay for democracy, but as far as the cost of procrastination, it’s a little steep. We’re both guilty of using Uber to compensate for poor planning, and probably more so because that 20% discount makes us feel a little better about ourselves. Sadly, the phrase “Try not to use Uber this month” has become a common part of our budget discussions. (I don’t see us using it much more before the deal ends April 30.)
Still, a little overspending doesn’t totally negate the value of the rewards. (On top of the Uber discount, you get 1.5% cash back on every purchase using the Quicksilver, reviewed here, or QuicksilverOne cards.) My experience is a good example of how a credit card can be a helpful tool for maximizing your purchasing power, as well as how tempting it can be to abuse that power. It’s also important to know that many of the best rewards credit cards require cardholders to have good or excellent credit scores, so make sure you get an idea of where you stand before you apply. You can get two free credit scores every 14 days on Credit.com.
At publishing time, the Capital One QuicksilverOne and Quicksilver credit cards are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for this card. However, this relationship does not result in any preferential editorial treatment.
Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.