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Valued Contributor
dddewdrop
Posts: 1,060
Registered: ‎02-06-2013
0

$100 Cash Reward is it

worth it to apply for a credit card mainly for the $100 cash back bonus? There are 3 cards that I like that give $100 cash back after you spend $500 in the first 3 months. I already got one of them of the three. My strategy I was considering goes something like this:

 

     I am interested in buying some gold at this level. A couple months gold was at $1750 an once. Then it dropped to $1390 an ounce.Now with it trading around $1450 I want to buy an ounce of gold because I think it will rebound in price at some point. The stock market is at all time highs but if it sells off, gold should rebound, or at least stay around the same price. Anyway, if I get 2 credit cards with $100 cash back deals, then I use them to each buy an ounce Krugerand coin for $60 over the price of an ounce of gold, then with the cash back I can buy 2 Krugerrand gold coins for effectively $40 below the price of gold. So say with gold at 1472, I can buy it for $1440 effectively. I was about to buy and ounce for $1700 a couple months ago so I would be doing much better with this strategy.

    

    Anyway, I am pretty sure I qualify for the capital one card with the cash back bonus and I may qualify for the BofA one and possibly the Citi one. What is the downside of taking these companies up on their offers (not including the market risk of what I choose to spend my cash back on) ? If they have no annual fees then the cost of them to my credit seems to be an inquiry. I am willing to burn an inquiry for $100. My AAoa is very low now anyway and additional tradeline will ultimately help more then they hurt me even if I end up ultimately closing the accounts in a year or 2...

0/10001100/13001346/16001699/2000Prepaid ,,Recent scores:FICO EX 632,EQ 635,TU 632...Link to my Rebuild Log
Mega Contributor
LS2982
Posts: 15,434
Registered: ‎04-09-2011
0

Re: $100 Cash Reward is it


dddewdrop wrote:

worth it to apply for a credit card mainly for the $100 cash back bonus? There are 3 cards that I like that give $100 cash back after you spend $500 in the first 3 months. I already got one of them of the three. My strategy I was considering goes something like this:

 

     I am interested in buying some gold at this level. A couple months gold was at $1750 an once. Then it dropped to $1390 an ounce.Now with it trading around $1450 I want to buy an ounce of gold because I think it will rebound in price at some point. The stock market is at all time highs but if it sells off, gold should rebound, or at least stay around the same price. Anyway, if I get 2 credit cards with $100 cash back deals, then I use them to each buy an ounce Krugerand coin for $60 over the price of an ounce of gold, then with the cash back I can buy 2 Krugerrand gold coins for effectively $40 below the price of gold. So say with gold at 1472, I can buy it for $1440 effectively. I was about to buy and ounce for $1700 a couple months ago so I would be doing much better with this strategy.

    

    Anyway, I am pretty sure I qualify for the capital one card with the cash back bonus and I may qualify for the BofA one and possibly the Citi one. What is the downside of taking these companies up on their offers (not including the market risk of what I choose to spend my cash back on) ? If they have no annual fees then the cost of them to my credit seems to be an inquiry. I am willing to burn an inquiry for $100. My AAoa is very low now anyway and additional tradeline will ultimately help more then they hurt me even if I end up ultimately closing the accounts in a year or 2...


IMO if it isn't a really good bonus ($300 an up), it isn't worth the HP and new account dings.




Silver Spade Garden Club Member - Last App 12/16/13 - Looking for a clean slate NO INQ's / Diamond Inspired!
Starting Score:
EX (PLUS) 583 EQ FICO 565 TU FICO 590 3/15/2011 / Goal Scores: 720
Current Score: EX FICO (PSECU) 671 (myFICO) N/A / EQ FICO 679 / TU08 FICO 678 / TU VS 706 3/6/2014
Valued Contributor
dddewdrop
Posts: 1,060
Registered: ‎02-06-2013
0

Re: $100 Cash Reward is it


LS2982 wrote:

dddewdrop wrote:

worth it to apply for a credit card mainly for the $100 cash back bonus? There are 3 cards that I like that give $100 cash back after you spend $500 in the first 3 months. I already got one of them of the three. My strategy I was considering goes something like this:

 

     I am interested in buying some gold at this level. A couple months gold was at $1750 an once. Then it dropped to $1390 an ounce.Now with it trading around $1450 I want to buy an ounce of gold because I think it will rebound in price at some point. The stock market is at all time highs but if it sells off, gold should rebound, or at least stay around the same price. Anyway, if I get 2 credit cards with $100 cash back deals, then I use them to each buy an ounce Krugerand coin for $60 over the price of an ounce of gold, then with the cash back I can buy 2 Krugerrand gold coins for effectively $40 below the price of gold. So say with gold at 1472, I can buy it for $1440 effectively. I was about to buy and ounce for $1700 a couple months ago so I would be doing much better with this strategy.

    

    Anyway, I am pretty sure I qualify for the capital one card with the cash back bonus and I may qualify for the BofA one and possibly the Citi one. What is the downside of taking these companies up on their offers (not including the market risk of what I choose to spend my cash back on) ? If they have no annual fees then the cost of them to my credit seems to be an inquiry. I am willing to burn an inquiry for $100. My AAoa is very low now anyway and additional tradeline will ultimately help more then they hurt me even if I end up ultimately closing the accounts in a year or 2...


IMO if it isn't a really good bonus ($300 an up), it isn't worth the HP and new account dings.


    Is there a card that offers $300+ bonus LS?

0/10001100/13001346/16001699/2000Prepaid ,,Recent scores:FICO EX 632,EQ 635,TU 632...Link to my Rebuild Log
Mega Contributor
LS2982
Posts: 15,434
Registered: ‎04-09-2011
0

Re: $100 Cash Reward is it


dddewdrop wrote:

LS2982 wrote:

dddewdrop wrote:

worth it to apply for a credit card mainly for the $100 cash back bonus? There are 3 cards that I like that give $100 cash back after you spend $500 in the first 3 months. I already got one of them of the three. My strategy I was considering goes something like this:

 

     I am interested in buying some gold at this level. A couple months gold was at $1750 an once. Then it dropped to $1390 an ounce.Now with it trading around $1450 I want to buy an ounce of gold because I think it will rebound in price at some point. The stock market is at all time highs but if it sells off, gold should rebound, or at least stay around the same price. Anyway, if I get 2 credit cards with $100 cash back deals, then I use them to each buy an ounce Krugerand coin for $60 over the price of an ounce of gold, then with the cash back I can buy 2 Krugerrand gold coins for effectively $40 below the price of gold. So say with gold at 1472, I can buy it for $1440 effectively. I was about to buy and ounce for $1700 a couple months ago so I would be doing much better with this strategy.

    

    Anyway, I am pretty sure I qualify for the capital one card with the cash back bonus and I may qualify for the BofA one and possibly the Citi one. What is the downside of taking these companies up on their offers (not including the market risk of what I choose to spend my cash back on) ? If they have no annual fees then the cost of them to my credit seems to be an inquiry. I am willing to burn an inquiry for $100. My AAoa is very low now anyway and additional tradeline will ultimately help more then they hurt me even if I end up ultimately closing the accounts in a year or 2...


IMO if it isn't a really good bonus ($300 an up), it isn't worth the HP and new account dings.


    Is there a card that offers $300+ bonus LS?


There's a few but they carry large AF's and are more for the big spenders. Every now and then an average prime card will offer a really good bonus, you just have to keep your eyes peeled for it!




Silver Spade Garden Club Member - Last App 12/16/13 - Looking for a clean slate NO INQ's / Diamond Inspired!
Starting Score:
EX (PLUS) 583 EQ FICO 565 TU FICO 590 3/15/2011 / Goal Scores: 720
Current Score: EX FICO (PSECU) 671 (myFICO) N/A / EQ FICO 679 / TU08 FICO 678 / TU VS 706 3/6/2014
Valued Contributor
navigatethis12
Posts: 1,952
Registered: ‎01-24-2012
0

Re: $100 Cash Reward is it

As LS2982 said, $100 is not worth a hard inquiry and new account, unless it has a long period of no interest, or no fee balance transfers that can be deposited into a bank account.

 

The Chase Sapphire Preferred right now is $400 for 3000, though that is a little more than the $1500 you would have to spend with the lower offers.

Established Contributor
modernsurrender
Posts: 805
Registered: ‎02-01-2008
0

Re: $100 Cash Reward is it

[ Edited ]

navigatethis12 wrote:

As LS2982 said, $100 is not worth a hard inquiry and new account, unless it has a long period of no interest, or no fee balance transfers that can be deposited into a bank account.

 

The Chase Sapphire Preferred right now is $400 for 3000, though that is a little more than the $1500 you would have to spend with the lower offers.


I don't really understand why the CSP bonus which is about 13% return would be better than the OPs bonus which is a 20% return... I mean, I get that it's more cash back per HP but it's a smaller return percentage wise when compared to the required spend.  Saying $100 isn't worth the HP isn't necessarily true.  If the OP isn't going to actively be seeking additional credit in the near future then HPs don't matter.

 

For the OP, I would say that if you don't mind the HPs and the drop in AAoA and are seeking credit in general (and the cash back offer is just a bonus) - then a 20% return with such a small required spend isn't bad.  You could also wait around and see if Barclays opens any $400 for $1000 spend deals in the near future since 40% is about as good as it gets lol

Start 2/2008: TU 495 || EX 539 || EQ 528
Now 5/2013: TU 716 || EX ??? || EQ 702

Slate: $5000 Simplicity: $5000 David's Bridal: $3500 SW Chase: $3000 FNBO: $3000 Barclay NFL: $2500 BofA: $2400 Discover IT: $1700 Walmart: $1500 Victoria's Secret: $1000 Cap1: $750 Amex Zync: NPSL
(2 derogs to go until I'm squeaky clean in 2014!)
Valued Contributor
dddewdrop
Posts: 1,060
Registered: ‎02-06-2013
0

Re: $100 Cash Reward is it

I guess it is a question of percentage wise versus actual dollar wise. It is also a question of how many inquires one has already and thus the marginal "cost" of an additional inquiry. In my situation, I have no need for credit in the immediate future. I am not planning on applying for a mortgage or loan of any kind...

0/10001100/13001346/16001699/2000Prepaid ,,Recent scores:FICO EX 632,EQ 635,TU 632...Link to my Rebuild Log
Contributor
ElCamino
Posts: 208
Registered: ‎03-20-2013
0

Re: $100 Cash Reward is it

Cashback cards with cash rewards (that I am aware of):

 

Chase Freedom - $100 (You can apply for both Visa and MasterCard versions)

Citi Dividend - $100

BoA BankAmericard Cash Rewards - $100

CapOne Cash Rewards - $100

Amex BCE - $100

Amex BCP - $150 (Has AF)

Sallie Mae World MasterCard - $25



Amex BCE: $16.5k, Discover It: $5k, Chase Freedom Visa: $10k, Fidelity Amex: $7.5k, PenFed Cash Rewards Visa: $3.5k, CapOne Union Plus MC: $4.5k, Barclays Upromise MC: $5k, BoA Cash Rewards 123 MC: $1.5k

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