topic Re: Consolidating Spend in Credit Cards

Consolidating Spend

afinch1992 — Mon, 09 Mar 2015 18:28:24 GMT

I think this is probably the opposite situation to most on this board, but I am considering ending the CC rewards game and consolidating most of my spend to one card/rewards system. I would like the opinions of those who have either made similar moves or have attempted this approach.

I got my first credit card about 4 years ago, but did not get into expanding my portfolio until about 18 months ago. Since then I have increase my credit lines from 3k to ~71k; picking up about 10 cards in the process. Now I am getting to the point where tracking all these cards and their rewards is becoming slightly time consuming and borderline annoying. Ive never had issues paying them as I use Mint and pay multiple times a month, but I think I may be spreading myself too thin across my cards sometimes.

I probably won't close any cards outright, but I may let them die on their own. The only exception being my CSP if I dont consolidate to it. I usually spend around 1-2k per month depending on if there are major purchases. Most of that spend is grocery, gas, misc online purchases (a good amount on Amazon), and misc non-major category spend. At first the obvious answer would be to use my Salie Mae card nearly exclusively and maybe the Citi DC for anything not in the categories. This has been my trend the past couple of months give or take. However, I started looking at my spend and wondering if I might get similar or better returns by simply throwing all spend on a CSP (w/ Freedom for categories) or AMEX EDP. It may take a bit longer, but I would be able to achieve a larger reward (plane ticket, etc). Given the potential and average value of the UR and MR rewards, I could potentially outperform a straight cash back approach while only needing to track a single account.

Anyone have some insight or thoughts on this approach?

Re: Consolidating Spend

Creditaddict — Mon, 09 Mar 2015 18:54:06 GMT

I think you have it figured out just right... you have to decide if you travel enough to make the UR rewards easy enough for you to move to some travel program which seem to be dropping like flies and then get your ticket vs just straight cash that you know at all times what you are getting.

While my partner and I have varied from time to time to do bonuses and stuff like that... we have now found for how much we travel and what now CASH is king when it comes to rewards... (for us)

Re: Consolidating Spend

kdm31091 — Mon, 09 Mar 2015 19:54:31 GMT

Definitely see how much you can get out of the points, and go from there. It also depends on preference, some would rather redeem for cash as its more flexible, others want to eek more out of the points; the only way to do so is travel redemptions.

I do understand about consolidating and I want to pare down to 4 cards by the end of the year. Once I get a few CLIs, it's done.

CSP and Freedom would be fine if you want to consolidate down to those two -- this way, you retain the flexibility to redeem for cash back at full value, and can transfer points from Freedom, but you can increase your value with travel redemptions. If you are going to keep just two, those are a good pair for this situation.

Re: Consolidating Spend

Anonymous — Mon, 09 Mar 2015 20:14:37 GMT

I'm in the same boat as you OP. I think cutting down to the freedom, CSP, and Salie Mai would be a great way to go for you. It gives you the option of earning points and cash back.

Re: Consolidating Spend

CluelessJohn — Mon, 09 Mar 2015 23:17:10 GMT

I'm going in the opposite direction but, at the end of the day, you should do what works/makes sense for you based on your spend and your willingness to use mulltiple cards. For years I only used Chase Freedom but realized (too late) that I was leaving money on the table. I went on an app spree recently to reap sign up bonuses, so now I have 6 cards. Consolidation makes sense to me on some level so I really only spend on 4 cards to maximize rewards/redemption. With some exceptions, I get at least 2% back on what I spend. I use Quicken, but as long as you use something similar, management is simplified. Plus, all my cards are now arranged to cut stmts within days of one another. That way you I only have to deal with all the cards on one day after the the last stmt is cut. I did that today and processed $95 in cash back. Sweet.

Re: Consolidating Spend

CreditJim — Mon, 09 Mar 2015 23:45:06 GMT

I can understand it. I've done the same. Almost all my spend now goes on my SPG. If I remember I'll use my Freedom or Discover for gas, but mostly I put everything on my SPG. I value those points, they're transferable to other programs, I'm covered by good protections from Amex and it just makes life easier.

Re: Consolidating Spend

afinch1992 — Tue, 10 Mar 2015 05:14:38 GMT

thank you for the opinions and thoughts everyone. After crunching the numbers a bit with the help of a Mint export of all my 2014 activity I think that I am going to try and consolidate all my spend to mostly an AMEX EDP. There are some reaccuring items that will be on my BOA Better Balance and Cash +, but my goal was to get down to 1 main card with a back-up of another issuer in my wallet (in this case I'll carry the Cash + for times when the AMEX is not accepted or I remember its a bonus category). Forgot to mention that Amazon spend will likely go to the Sallie Mae. The rewards from that single category were too large to ignore and it will not need to see wallet time to take advantage.

I think there are probably a few more points that I could gain from adding a CSP+Freedom into the mix, but for the time being I want to simplify my credit card situation. Will update soon once I pull the trigger on AMEX

Re: Consolidating Spend

takeshi74 — Tue, 10 Mar 2015 13:12:24 GMT

@afinch1992 wrote:
Anyone have some insight or thoughts on this approach?

The same sort of analysis is required regardless of number of cards. You have to look at your spend, where the major categories are and find the card(s) that offers the best overall rewards on that spend. I would guess that with 1-2K/month you may be better off with cash back but you really just have to crunch the numbers. With points/miles you also need to look at redemption as it has an impact on the value of the points/miles. See how it all compares versus something like the DoubleCash or a 1.5% card. With Mint you definitely have an easy tool to review historical spend.

You also have to factor in how many cards you want. Some really want to simplify down to just one card. Some may want a few. With any decision it's a matter of balancing the compromises until you reach a solution that works for you.

@afinch1992 wrote:
The rewards from that single category were too large to ignore and it will not need to see wallet time to take advantage.

Are they really that significant if your overall spend is 1-2K?

Re: Consolidating Spend

afinch1992 — Tue, 10 Mar 2015 13:27:33 GMT

@takeshi74 wrote:

@afinch1992 wrote:
The rewards from that single category were too large to ignore and it will not need to see wallet time to take advantage.
Are they really that significant if your overall spend is 1-2K?

Every month is different. A single $800 purchase results in nearly $25 in rewards difference between say a 2% card and a 5% (althought the 5% would cap at $750, but you get the point). My Amazon purchases alone were around 1.5k, so ~$50 in rewards difference between say a DC and Sallie Mae and around $35 difference between EDP and Sallie

Re: Consolidating Spend

toothgrind3r — Tue, 10 Mar 2015 14:32:39 GMT

I'm in the same boat OP...I want to consolidate, ideally, down to one card. Not only for simplicity, but in the back of my mind I feel it seems less lucrative to have a lot of small amounts of rewards, wether it's cash back or points, scattered across multiple cards...as opposed to having a larger amount of rewards on one card/system.

Just throwing made up numbers out here, but in one month I could get 500 Starwood points, $25 cash back with Double Cash, $50 worth of "miles" on Venture...doesn't seem very valuable to me. If I throw all that spend onto one card, seems I would get more use of the rewards.

But that's just me. I tried, and realized, I'm not good at rewards chasing and trying to fugure out the best value for redemption. It's too much work for me.

Of course I wont pair it down to one card...but one main card with one or two as backup.

*EDIT*

If I could get in with Chase, I might do the CSP/Freedom combo. Seems simple and valuable. But Chase hates me.

Re: Consolidating Spend

kdm31091 — Tue, 10 Mar 2015 14:49:12 GMT

@toothgrind3r wrote:
I'm in the same boat OP...I want to consolidate, ideally, down to one card. Not only for simplicity, but in the back of my mind I feel it seems less lucrative to have a lot of small amounts of rewards, wether it's cash back or points, scattered across multiple cards...as opposed to having a larger amount of rewards on one card/system.
Just throwing made up numbers out here, but in one month I could get 500 Starwood points, $25 cash back with Double Cash, $50 worth of "miles" on Venture...doesn't seem very valuable to me. If I throw all that spend onto one card, seems I would get more use of the rewards.

But that's just me. I tried, and realized, I'm not good at rewards chasing and trying to fugure out the best value for redemption. It's too much work for me.

Of course I wont pair it down to one card...but one main card with one or two as backup.

*EDIT*
If I could get in with Chase, I might do the CSP/Freedom combo. Seems simple and valuable. But Chase hates me.

This.

That's exactly how I feel, and what I was getting at in the Fast food card thread -- someone mentioned using a Cash+ for fast food and AARP for extra dining. While that is definitely the way to go rewards-wise, I am not one to chase rewards to that extent, and you're right -- having bits of money in rewards scattered across many cards is annoying.

I prefer a simpler approach, even if it will cost me a bit in rewards. I won't pair down to one either, but certainly going to have one main card (QS), my Discover for categories, BCE for groceries at the actual grocery store and BJ's for BJ's. That's enough for me. I'd rather rack up rewards on a couple cards vs 6, 7, 10, etc. If you are spending a lot and gaining a lot on all of them, it can make sense but I prefer my rewards more consolidated. I do feel like I am "earning" more, even if mathematically I am not. Also, redemption minimums come into play -- I've racked up roughly $12 on my Amazon card using it strictly for dining, but the caveat is that I cannot do anything til I hit $20 which will take another month or two. That's the other issue with having "too many cards" at a moderate spend, it can take forever to reach redemption thresholds.

Re: Consolidating Spend

afinch1992 — Tue, 10 Mar 2015 18:50:29 GMT

@kdm31091 wrote:
@toothgrind3r wrote:
I'm in the same boat OP...I want to consolidate, ideally, down to one card. Not only for simplicity, but in the back of my mind I feel it seems less lucrative to have a lot of small amounts of rewards, wether it's cash back or points, scattered across multiple cards...as opposed to having a larger amount of rewards on one card/system.
Just throwing made up numbers out here, but in one month I could get 500 Starwood points, $25 cash back with Double Cash, $50 worth of "miles" on Venture...doesn't seem very valuable to me. If I throw all that spend onto one card, seems I would get more use of the rewards.

But that's just me. I tried, and realized, I'm not good at rewards chasing and trying to fugure out the best value for redemption. It's too much work for me.

Of course I wont pair it down to one card...but one main card with one or two as backup.

*EDIT*
If I could get in with Chase, I might do the CSP/Freedom combo. Seems simple and valuable. But Chase hates me.
This.

That's exactly how I feel, and what I was getting at in the Fast food card thread -- someone mentioned using a Cash+ for fast food and AARP for extra dining. While that is definitely the way to go rewards-wise, I am not one to chase rewards to that extent, and you're right -- having bits of money in rewards scattered across many cards is annoying.

I prefer a simpler approach, even if it will cost me a bit in rewards. I won't pair down to one either, but certainly going to have one main card (QS), my Discover for categories, BCE for groceries at the actual grocery store and BJ's for BJ's. That's enough for me. I'd rather rack up rewards on a couple cards vs 6, 7, 10, etc. If you are spending a lot and gaining a lot on all of them, it can make sense but I prefer my rewards more consolidated. I do feel like I am "earning" more, even if mathematically I am not. Also, redemption minimums come into play -- I've racked up roughly $12 on my Amazon card using it strictly for dining, but the caveat is that I cannot do anything til I hit $20 which will take another month or two. That's the other issue with having "too many cards" at a moderate spend, it can take forever to reach redemption thresholds.

Similar to your Amazon card, I have this issue with my AMEX BCE. Around $15 in rewards, but I need $25 to redeem them (I think). This and the ease of tracking less cards lead me to this new rewards practice.

Related to my status, I pulled the trigger on the EDP today (5k initial limit). I will more than likely redeem my points for Avios and use for domestic tickets. Depending on the timing and price of the flight that brough my redemption value to between 1.5 and 3 cents per point, but more realistically 1.75 cents per point without a transfer bonus. With a 25% transfer bonus the value could get into the 3.5 cents per point territory (20,000 mile round trip cost for 16,000 points at $600 value).

edit: with the Amazon card are you not able to use the credit directly with no minimum on Amazon? I haven't used my Amazon card in a while, but I thought that was the case.

Re: Consolidating Spend

core — Wed, 11 Mar 2015 00:38:00 GMT

Yes with the Chase Amazon you can use the points directly on Amazon with no minimum. You can even buy Amazon gift cards that way for the exact amount. But the better value is purchase the gift card normally (get 3% again) then do a statement credit.

Games always seem harder before you have learned the rules.

Re: Consolidating Spend

chwebb1 — Wed, 11 Mar 2015 05:20:25 GMT

@afinch1992 wrote:
I think this is probably the opposite situation to most on this board, but I am considering ending the CC rewards game and consolidating most of my spend to one card/rewards system. I would like the opinions of those who have either made similar moves or have attempted this approach.

I got my first credit card about 4 years ago, but did not get into expanding my portfolio until about 18 months ago. Since then I have increase my credit lines from 3k to ~71k; picking up about 10 cards in the process. Now I am getting to the point where tracking all these cards and their rewards is becoming slightly time consuming and borderline annoying. Ive never had issues paying them as I use Mint and pay multiple times a month, but I think I may be spreading myself too thin across my cards sometimes.

I probably won't close any cards outright, but I may let them die on their own. The only exception being my CSP if I dont consolidate to it. I usually spend around 1-2k per month depending on if there are major purchases. Most of that spend is grocery, gas, misc online purchases (a good amount on Amazon), and misc non-major category spend. At first the obvious answer would be to use my Salie Mae card nearly exclusively and maybe the Citi DC for anything not in the categories. This has been my trend the past couple of months give or take. However, I started looking at my spend and wondering if I might get similar or better returns by simply throwing all spend on a CSP (w/ Freedom for categories) or AMEX EDP. It may take a bit longer, but I would be able to achieve a larger reward (plane ticket, etc). Given the potential and average value of the UR and MR rewards, I could potentially outperform a straight cash back approach while only needing to track a single account.

Anyone have some insight or thoughts on this approach?

Looking at your cards, I'd personally keep the Sallie Mae, BCE or EDP, and BoA BBR, and get rid of the rest if you're wanting to simplify. The Sallie Mae is usable wherever AMEX isn't accepted since it's a MC, and has some great rewards (5% cash back bookstores, grocery stores, and gas stations). It might be wise to also keep a Visa just in case you run into a place that won't take MC (but I haven't personally seen this in a while). So maybe keep Cash Rewards (if you can get a CLI) or Chase Freedom?

I've been considering doing the same thing (cutting cards), and first up on the chopping block for me would be the Citi DC. I find their website and mobile apps to be buggy, and their offshored customer service to be dreadful. Because of that, I just don't really use their card (even though it's my highest CL). Do you have any cards like that where it's an easy choice to cut? If so, I'd get at the low hanging fruit first and then look at your other cards and make decisions from there.

Re: Consolidating Spend

celluloid17 — Wed, 11 Mar 2015 17:58:11 GMT

If you want to simplify, maybe you should move your entire (or majority) CL from Amex BCE to your new Amex EDP and then close the BCE. I'd cash out whatever you have remaining on your Amazon card (as the previous poster mentioned, you can buy a gift card for the exact amount of current banked rewards rather than waiting to hit the redemption threshhold) and see about moving the CL to your Freedom card. If you're going all in with your Amex EDP card and don't plan to use your CSP much, maybe you should close it and save yourself on the AF, but before you do, move the CL to Freedom and let that be your back up Visa card. If you ever do decide to open up a CSP again in the future, perhaps for a nice sign-up bonus, you will already have the Freedom card to partner it with.

I'd close the Fidelity Amex and Cash + unless the Cash + categories still work for you (fewer and far between these days I imagine?). The trickier question is what to keep between Citi DC or Cap1 QS or if you should close both? You have a nice CL on Citi DC, but it's easier to redeem your cash on QS, plus it has no FTF. That's a tough choice, but if you're not spending a lot on either, I would close both or keep the QS.

I'm a big fan of the Sallie Mae card, so I can't fathom closing it (obvious bias), so my suggestion would be to use it as a back-up reliable workhorse for gas and groceries (including at Target or Wal-Mart) when you're not using your EDP, as well as for your Amazon spend. Logically though, this could be eliminated as well if you really want to maximize points/rewards on your other cards.

Keep the BOA Better Balance Rewards for the easy quarterly $25 (or $30?) and close the Cash rewards.

Re: Consolidating Spend

afinch1992 — Wed, 11 Mar 2015 19:12:35 GMT

@celluloid17 wrote:
If you want to simplify, maybe you should move your entire (or majority) CL from Amex BCE to your new Amex EDP and then close the BCE. I'd cash out whatever you have remaining on your Amazon card (as the previous poster mentioned, you can buy a gift card for the exact amount of current banked rewards rather than waiting to hit the redemption threshhold) and see about moving the CL to your Freedom card. If you're going all in with your Amex EDP card and don't plan to use your CSP much, maybe you should close it and save yourself on the AF, but before you do, move the CL to Freedom and let that be your back up Visa card. If you ever do decide to open up a CSP again in the future, perhaps for a nice sign-up bonus, you will already have the Freedom card to partner it with.

I'd close the Fidelity Amex and Cash + unless the Cash + categories still work for you (fewer and far between these days I imagine?). The trickier question is what to keep between Citi DC or Cap1 QS or if you should close both? You have a nice CL on Citi DC, but it's easier to redeem your cash on QS, plus it has no FTF. That's a tough choice, but if you're not spending a lot on either, I would close both or keep the QS.

I'm a big fan of the Sallie Mae card, so I can't fathom closing it (obvious bias), so my suggestion would be to use it as a back-up reliable workhorse for gas and groceries (including at Target or Wal-Mart) when you're not using your EDP, as well as for your Amazon spend. Logically though, this could be eliminated as well if you really want to maximize points/rewards on your other cards.

Keep the BOA Better Balance Rewards for the easy quarterly $25 (or $30?) and close the Cash rewards.

You brought up a lot of good points I either mentioned or didnt go into detail about, so I figured I would provide more background on my thought process for anyone in a similar situation.

With regards to the CSP, that is actually the reason I considered this strategy in the first place. I originally signed up for the bonus, but now that the AF is approaching I need to make a decision. I know several people that exclusively use their CSP and seem happy with it, so I wanted to analyze the cost-benefit of that approach. Given the lackluster points structure compared to my spending habits, the CSP on its own has little benefit to me. My travel expenses are very low compared to other areas. Dining was the only aspect that kept it intrigueing. More than likely I will transfer rewards to Avios, so that was a plus. Adding in a Freedom for 5x categories is compelling, but ultimately defeats the point for me.

After downloading and analyzing my previous year's expenses through Mint, I realized I spend most of my money in groceries, gas, restaurants (50-50 fast food and traditional), and online (60-70% Amazon). Based on this analysis, I knew the Sallie Mae has been and would be my best bet for cards I currently own, but I wasn't ecstatic about potentially placing a lot of 1% spend. This led me to the EDP as I am already a fan of AMEX and felt the EDP structure had a lot of potential to be a go-to card.

Again assuming I cash in rewards for Avios most of the time, I valued MR at 1.5-3.0 cents per point. I also assumed I met the 30 swipes per month minimum Looking at my historical redemptions from the CSP bonus I valued the MR at a fairly conservative 1.75c per point for my analysis. This placed my non-category spend at an equivolent of a little over 2.5%. Groceries and Gas would then be worth 4.5 RP (~7.85%) and 3 RP (~5.25%). After creating a simple model using my spending by category and a combination of different cards, I found that the EDP for all of my purchases resulted in a similar rewards output as a Sallie Mae and DC combo. However, by including my Sallie Mae as an exclusively Amazon card (just trying to cut down my wallet) and Cash + as a back-up Visa / Fast food card, I was able to outperform my previous rewards output of all of of my cards combined while consolidating my spend.

Time will tell if this works out, but on paper it seems like a winner to me. If I really had to I would not miss out on too much by exclusively using the EDP with a backup card.

edit: forgot to mention I have my electric bill go to my BofA Better Balance, so thats technically in the mix as well.

edit2: I do plan to move my BCE limit to the EDP if I am unable to get a CLI on activation