One month into the COVID-19 pandemic, my family and I are spending dramatically less on travel, dining out and entertainment, and significantly more on groceries and other household supplies. Here’s how that has changed my credit card strategy.
Like most households, my family has been spending money very differently of late.
We’re spending dramatically less on travel, dining out and entertainment, and significantly more on groceries and other household supplies.
I have been working from home since March 10, when the COVID-19 pandemic really started to ramp up in the New York City area (I live in the suburbs and work in the city). That’s saving me about $350 per month in train ticket costs. Plus, we haven’t bought gas since March 1. In more normal times, we averaged $100 per month on gas and car maintenance.
We haven’t eaten in a restaurant or even ordered takeout or delivery in more than a month. Normally, we spend approximately $350 a month on outside food. We’re saving about $300 per month on our daughter’s after-school activities and $250 on gym memberships. We’re also saving roughly $100 in haircuts and beauty treatments. Total monthly savings: $1,450.
Pretty much the only things we’ve spent any money on over the past 30 days are groceries (almost $1,200, up from $900 typically) and other household supplies (about $600, which is double our usual $300). Some of this represents stocking up, and some is a function of eating at home more. Even though these categories are up by a combined $600, the coronavirus shutdown is still saving my family $850 per month.
How the COVID-19 crisis has changed my card strategy
Cash back cards are much more useful than travel cards at the moment. I’m getting a lot of value at the grocery store from my Blue Cash Preferred® Card from American Express. It gives me 6% cash back at U.S. supermarkets (up to $6,000 in annual spending, then 1% after that). Just a few days into the second quarter, I’m already halfway to that threshold.
I’m glad my Chase Freedom card is giving 5% cash back at grocery stores, gym memberships and fitness clubs, and select streaming services in April, May and June (up to $1,500 in combined purchases after activation, then 1% after that). I’m going to max out the Freedom promotion and then go back to the Blue Cash Preferred. At some point, likely by August or September, I will have exhausted both grocery limits and I’ll need to use my best “everything else” card, the Capital One Venture Rewards Credit Card (2 miles per dollar on all purchases).
This is a first-world problem, but the Venture card (which I signed up for in February), hasn’t been as lucrative as I had hoped. Its miles are most valuable when redeemed for travel (1 cent apiece when you use the Purchase Eraser feature, and potentially even more if you transfer to Capital One’s airline partners).
With my travel spending halted, I have tens of thousands of miles waiting to be used. I would have considered redeeming them for gift cards, because Venture miles used to be worth the same 1 cent apiece for gift cards, but Capital One recently discontinued that option. I could spend my miles at Amazon.com for 0.8 cents per mile, but for now, I’m going to sit tight.
I also (at least temporarily) lost $85 in value from this card because I was going to use its TSA Precheck fee waiver. However, I had to cancel my scheduled Precheck interview because of social distancing. Plus, while I redeemed 32,200 miles for my March train pass, I didn’t get anywhere near the $322 retail value because I unexpectedly stopped commuting 10 days into the month.
My Citi Premier® Card has been idled for similar reasons. Again, first-world problems, but I inadvertently picked a bad year to start dabbling in travel cards that charge annual fees. I’ve heard some Citi Premier cardholders are getting their $95 annual fee refunded. I’m going to ask for that when mine renews in the fall.
I probably won’t book a big trip for a while, even after COVID-19 quiets down. I’m anticipating that my June family trip will be canceled, so if we’re able to reschedule for later in the year, we’ll use those credits.
I suspect my experience is typical. It indicates why it should take a while for travel and credit card companies to recover, even after the economy opens back up. There will be some pent-up demand, but surely a lot of activity has been lost forever, and there’s going to be a backlog of credits to process before new money is spent.
Saving money isn’t worth it in the social distancing era
I want to be clear: We’re very fortunate. I’m thankful that my family and I are healthy. Also, having a steady job and being able to work from home are luxuries.
I feel very bad for everyone who has been victimized by the medical and economic aspects of this pandemic. And I offer my heartfelt appreciation to the doctors, nurses and first responders fighting on the front lines.
Even for the most fortunate among us, this is a tough time. It’s sweet when I see my five-year-old FaceTiming with her classmates and joining her dance class via Zoom, but it’s also heartbreaking. I want her to be part of things, not sequestered behind a screen.
In the context of what has been happening, saving $850 isn’t worth it at all. It’s savings in the sense that it’s money we didn’t spend, but it’s not the way we want to live our lives any longer than necessary.
Simple pleasures are the silver lining. Tossing a ball to my daughter, eating dinner with my family, reading a book in the sunshine and running around the neighborhood have taken on greater importance. These are things I want to continue to treasure after the world speeds up again.
Have a question about credit cards? Email me at firstname.lastname@example.org and I’d be happy to help.
*All information about Chase Freedom has been collected independently by CreditCards.com and has not been reviewed by the issuers. These cards are no longer available through CreditCards.com.