Thoughts on cash back

[rockbttm442]

So for my example I earn 0.75% so if I deposited $200 I'd earn $1.50 a month plus what auto deposits from my paycheck. I basically am trying to create a rainy day fund so if I ever get in a financial funk ie lose my job or want to take my son to a sporting event. I know $1.50 a month isn't a lot but like most said its better than sitting on my card making nothing. 

[kdm31091]

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@rockbttm442 wrote:

So for my example I earn 0.75% so if I deposited $200 I'd earn $1.50 a month plus what auto deposits from my paycheck. I basically am trying to create a rainy day fund so if I ever get in a financial funk ie lose my job or want to take my son to a sporting event. I know $1.50 a month isn't a lot but like most said its better than sitting on my card making nothing. 

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If you want to create a rainy day fund, a savings account is not the way to do it, unless you are going to actually add money to it every month. But on the interest alone? No, unless your rainy day fund is for a pack of gum!

[rockbttm442]

I have about $50-$100 a month that comes out of my paycheck but I just started doing that about a month ago. So the extra $200 would help pad what I've started. 

[longtimelurker]

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@kdm31091 wrote:
The statement is not wrong, the savings account will earn you more than nothing. Its just dubious how much 3 cents really matters. And if you have enough rewards to make a significant amount in savings, then you shouldnt put them in savings, put them in something higher earning. Just my opinion

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There are lots of people who have posted rewards upwards of $1K a year, including bonuses.   Since you can get 1% savings accounts, that might average say $5.   Not huge at all, but a little, and,safer than keeping it in the cc account.  My point is really there is no reason to keep it there.

[longtimelurker]

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@rockbttm442 wrote:

So for my example I earn 0.75% so if I deposited $200 I'd earn $1.50 a month plus what auto deposits from my paycheck. I basically am trying to create a rainy day fund so if I ever get in a financial funk ie lose my job or want to take my son to a sporting event. I know $1.50 a month isn't a lot but like most said its better than sitting on my card making nothing. 

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That would be nice, but the savings is 0.75% a year, not per week.   So you eanr $1.50 a year, so a few cents per month!

[Anonymous]

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@longtimelurker wrote:

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@rockbttm442 wrote:

So for my example I earn 0.75% so if I deposited $200 I'd earn $1.50 a month plus what auto deposits from my paycheck. I basically am trying to create a rainy day fund so if I ever get in a financial funk ie lose my job or want to take my son to a sporting event. I know $1.50 a month isn't a lot but like most said its better than sitting on my card making nothing. 

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That would be nice, but the savings is 0.75% a year, not per week.   So you eanr $1.50 a year, so a few cents per month!

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Be nice if interest worked like that, at least for savings.

[red259]

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@rockbttm442 wrote:

I don't plan to app for anymore cards for awhile. QS1 is about to hit 6 mo this in 2 weeks and want my CU and Freedom to age more. The only other cards I want is probably the Barclay rewards card for the 2% on utilities and maybe AMEX(they are like my unicorn) always been unattainable now just a few finger tips away. 

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Just cash it out then. If your not getting the CSP or Ink anytime soon having the cash in hand is better and safer than leaving it in the CC account. Most of my cards generate points, but I do have some cashback cards where I leave the money in the credit card account such as the arrival+ and venture cards. That is because I intend to redeem those on travel at a better redemption rate, but for straight back cash cards I would redeem anytime you get a decent amount in, or more off if you are so inclined. 

[UncleB]

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@longtimelurker wrote:

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@rockbttm442 wrote:

So for my example I earn 0.75% so if I deposited $200 I'd earn $1.50 a month plus what auto deposits from my paycheck. I basically am trying to create a rainy day fund so if I ever get in a financial funk ie lose my job or want to take my son to a sporting event. I know $1.50 a month isn't a lot but like most said its better than sitting on my card making nothing. 

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That would be nice, but the savings is 0.75% a year, not per week.   So you eanr $1.50 a year, so a few cents per month!

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+1

This is why I don't bother with a traditional savings account.  For the amounts I deal with ($300-$400) it makes sense for me to just use my Serve card as a storage vehicle. 

When I decide to use the money, I can use the Serve card itself (it's an Amex), I can withdraw funds for free at a nearby ATM, I can have it deposited via ACH to my checking, or I can use the Serve bill pay feature to pay my credit card bill (the most likely method for me, since I'll want to use a credit card for the new purchase to earn additional rewards).

The convenience and flexibility of using the Serve card is worth more to me than a few cents of interest.  (In my case, it would literally be just a few cents).

I truly don't believe there is a "one size fits all" answer to the OP's original question; it's very 'personal' as to what works for each of us.  I do see wisdom in cashing out rewards as soon as possible, but realistically there are times when the risks of forfeiting/losing the rewards may be the 'lesser of two evils' - again, folks just need to do what works for them.

I'm happy to share what works for me, but I won't tell somebody else they are 'wrong' for doing something different.  That would be like someone telling me I'm 'wrong' for not liking seafood... it's just silly.

[Callandra]

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@rockbttm442 wrote:

I have about $50-$100 a month that comes out of my paycheck but I just started doing that about a month ago. So the extra $200 would help pad what I've started. 

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Nothing wrong wtih that; we all have to start our savings account somewhere! 

I have a 1% online savings account with Barclays and I like it since it's easy to use and I have almost enough in it that I'm ready to just leave it and open a [Roth] IRA (but totally overwhelmed and terrified of doing so) and make regular contributions to that instead. I know 1% isn't much but I like having some money stashed away in case of an emergency that I can get easily but not too easily so I'm not tempted. I think it's good to have some in savings (in case of a medical issue or you lose your job). It's up to you whether you want to use your cash back for that or just it for statement credit (that's what I always do) but if it helps you, then that's good. 

[rockbttm442]

I want to do a Roth IRA myself but I'm not that knowledgeable in that. So may read up on that.