The Point System

15,645

No, that’s not the number of days I’ve been out of work (although it feels that long). It’s the number membership reward points I’ve accumulated on my American Express card.

Why is that important? Well, if you are unemployed and looking to gain some extra buying power, cashing in those reward points on your credit cards is one way to do it.

With those points, you can obtain gift cards to stores like the Gap or Kohls or chain restaurants. Or you can get a prepaid AmEx card, which can be used anywhere and for anything. A $50 AmEx card can buy groceries for a week.

The dollar amount on the card depends on how many points you redeem. Cashing in those points came in handy during the ’09 holiday season when I got my niece a gift card to the Gap, her favorite store. I’ll probably have to do the same this year.

Admittedly, racking up charges on your credit card during a jobless period just to gain reward points is not advisable. Use your credit cards sparingly! But if like me, you used your card for traveling expenses on business trips while you were employed, now is the perfect time to redeem those reward points for gift cards or other items (small appliances, computers, clothing) offered by the credit card company.

This is just one way an unemployed person can ferret out some hidden cash and save money during a financially fallow period. But there are many others.

I won’t bore with the obvious, like buying only on sale and using coupons, or even eliminating unnecessary expenses, like newspaper and magazine subscriptions (you can see them online). Even before you were unemployed, you were probably clipping coupons. And keeping a close eye on your expenses is always a good idea, whether you’re employed or not.

Yet there are other ways to make it through a fiscal rough patch:

Negotiate. Speaking of credit cards, many offer programs to extend or suspend payment periods when a holder is unemployed. So why not call them up and ask if you can participate? Be proactive. It’s better than getting bombarded with calls from collection agencies and having your credit score plummet. Getting a job and regular paycheck won’t automatically raise your credit score if you allowed it to tank when you were jobless.

If you’ve been paying on time, but are suddenly getting behind in payments, the credit card company may be able to accommodate you. A while back, my credit card company called me, wondering why I was late on a payment. My balance was particularly high because I was forced to buy my new computer on credit when my old computer went up in smoke—literally, plumps of smoke came up from the keyboard. When I explained my situation to the gentleman, he offered to work with me, even voiding my late fee.

So I paid the minimum amount that month, and I’ve been paying as much as I can each month. But it’s nice to know the credit card company is willing to help me during my unemployment.

The caveat, of course, is that you must have a history of paying on time before you lost your job. The goodwill of a credit card company extends only so far.

Same goes for doctors and dentists. If you’ve been up to date with your payments in the past, they will allow you to pay over time for an expensive procedure while you are out of work. Again, explain your situation and they should understand. They would rather get a little each month than nothing at all. (I’m still paying off my root canal done in January.)

Use Up What You Got. This morning, I counted six lipsticks in my bathroom cabinet. So do I really need to buy another lipstick? No. Although it’s nice to have things in stock when you need them, it’s perhaps better to use up whatever you have in your home before you go out and buy more detergent, shampoo and cosmetics.

There are other small ways to save money. I only get my car washed on Wednesday so I can save $3 because it’s Ladies Day. And I can’t remember the last time I bought an item of clothing. Do I really need another T-shirt when I already have so many?

But the biggest money-boosting tip of all? Getting a regular paycheck.