topic Re: My Rewards cards strategy in Credit Cards

My Rewards cards strategy

Anonymous — Tue, 02 Jun 2015 00:59:20 GMT

I was in debt so long in my life I never dreamed I'd ever be able to use credit the way I wanted it. When that opportunity happened suddenly a few months ago, I swore I'd close all my CC and just pay everything as it came in with my debit card because I'd never give into temptations to carry a credit card debt again. So, I did close them all down except my Capital One Platinum. I then got obsessed with credit scoring and studied up about other successes. One common thing I was finding out was, don't leave money on the table, utilize it to my benefit since the tables have now turned into my favor.

I slowly started adding cards again. The Discover, Citi Double Cash and my PSECU bank card were the first three, but I got scared and closed the Citi the day it arrived in the mail. I did the same thing with the USAA card. Then the big app spree began in April and I now have a total of 13 cards. I've been trying to utilize all of them at one time, and I'm finding out this is not a good idea, and a set up for failure. I paid each balance in full before the due dates, but I allowed cards to report balances, which I know was a mistake. All these cards makes it difficult to keep track of.

So, last night I brain stormed a new strategy. I'm going to rotate my rewards cards. This month I'll be using my US Bank Cash+, BJs Perks MC (Comenity) and Discover. The US Bank Cash+ will be replaced next month with my Capital One QS, then that will be replaced with my Barclay Rewards in August, the Chase Freedom in Sept. and Discover in October.

The BJs MC and Discover cards will be used monthly because with BJs I get 10 cents off per gal. of gas and Discover will be used for all other purchases throughout the month - food, insurance, etc. Each of the idle cards will not get used for 4 months in between. I will let the Discover card post around $20 each month, but everything else will be posting $0 each month so my usage will show low, even though I'll be spending over $1,500 each month on the 3 cards.

This will make keeping track of these cards a lot easier for me, I will be paying before the Close dates, let a small balance post on Discover, and hopefully my FICO score will also respond and I can reach my goal of 800+ from each CRI.

Anyone see any flaws in this strategy? Is 4 months idle for cards too long? Should I report a small $20 balance each month, or should I report $0 each time? Thanks in advance for your comments to help me out here. I've done a ton of reading up on myFICO since joining the end of April and think I've got this pretty down pat.

Re: My Rewards cards strategy

Anonymous — Tue, 02 Jun 2015 02:10:10 GMT

I'll let others say more since I'm on a bouncy school bus in my phone, but four months idle isn't a biggie. And you lucked into the Discover promotion having given up your double cash

Re: My Rewards cards strategy

Anonymous — Tue, 02 Jun 2015 02:15:34 GMT

@Anonymous wrote:
I'll let others say more since I'm on a bouncy school bus in my phone, but four months idle isn't a biggie. And you lucked into the Discover promotion having given up your double cash

Ok thanks for the info on the 4 months idle. As for Discover, it really is my favorite card, first with the CLI love and now the new promo. I've got the Citi Double Cash on my list for next year when I drop the cards I really don't use and open up new ones.

Re: My Rewards cards strategy

Anonymous — Tue, 02 Jun 2015 02:16:42 GMT

And when discover is no longer 2%

Re: My Rewards cards strategy

Anonymous — Tue, 02 Jun 2015 02:18:01 GMT

@Anonymous wrote:
And when discover is no longer 2%

Exactly! Or maybe QS doubles up their 1.5% to 3%

Re: My Rewards cards strategy

Anonymous — Tue, 02 Jun 2015 03:00:09 GMT

Since no one else is chiming in, I'm still captive in the bus, and I like strategizing, I'll continue.

I don't get the rotation thing. Unless you're just saying you'll use those for a token purchase only. (C+, QS, BR). My strategy would be to put my cellphone on C+, I think BR is good for other until, (but not sure), and I'd do something token and small on QS. I think I just put TIVO on my QS, and have my cell phone on C+.

Unless you don't want to have to deal with the usage on that many differ t cards in a month. I guess that could be the reason for rotation.

And for score optimization you want one card only reporting a few% only. Not each one. And not all $0.

Re: My Rewards cards strategy

Anonymous — Tue, 02 Jun 2015 03:06:39 GMT

@Anonymous wrote:
Since no one else is chiming in, I'm still captive in the bus, and I like strategizing, I'll continue.

I don't get the rotation thing. Unless you're just saying you'll use those for a token purchase only. (C+, QS, BR). My strategy would be to put my cellphone on C+, I think BR is good for other until, (but not sure), and I'd do something token and small on QS. I think I just put TIVO on my QS, and have my cell phone on C+.

Unless you don't want to have to deal with the usage on that many differ t cards in a month. I guess that could be the reason for rotation.

And for score optimization you want one card only reporting a few% only. Not each one. And not all $0.

This is what I'm trying to avoid. I guess I should maybe use the Cash+ for the cell phone bill only and the rest on the "card of the month in rotation". So that would mean I'm dealing with 4 cards total. For me, it was getting too confusing when I would purchase something on all cards then try to figure out when was the best time to pay them off to avoid reporting.

Re: My Rewards cards strategy

sunkissed — Tue, 02 Jun 2015 03:08:44 GMT

BTW

I filled up at BJ’s this morning and noticed they’re offering an additional $0.05 off per gallon if you shop in the warehouse before you head over to the pumps for a total of $0.15 off per gallon through July 5th. Apparently the promo started Memorial Day. I wish I had noticed sooner.

Re: My Rewards cards strategy

Anonymous — Tue, 02 Jun 2015 03:18:19 GMT

@sunkissed wrote:
BTW
I filled up at BJ’s this morning and noticed they’re offering an additional $0.05 off per gallon if you shop in the warehouse before you head over to the pumps for a total of $0.15 off per gallon through July 5th. Apparently the promo started Memorial Day. I wish I had noticed sooner.

Funny you mention this, as I also was at the local BJs filling up on Sunday night in Lancaster and in the middle of filling up I was like DANG, how did I miss that!! I was actually going to purchase some bananas but was getting close to closing time. So, I will definitely do that next purchase in a couple of weeks. You can't beat the price. I paid $2.59 with the discount and would have been $2.54 if I would have noticed sooner.

Re: My Rewards cards strategy

Anonymous — Tue, 02 Jun 2015 03:31:31 GMT

Here's my strategy.

1. Get an app to keep track of everything.

2. Use the card that yields the highest rewards for non-everyday spend. If 2 cards are tied, make a decision based on which card is inactive, close to rewards, or other reasons.

3. Use every card you want to keep active once every 4 months.

4. Split everyday spend amongst all the cards you are considering applying for CLI (or trying to keep a good relationship with). I have a Double Cash, but I think it's worth giving up 1% to increase my chances of CLI on other cards.

Re: My Rewards cards strategy

Anonymous — Tue, 02 Jun 2015 03:40:26 GMT

@Anonymous wrote:
Here's my strategy.

1. Get an app to keep track of everything.
2. Use the card that yields the highest rewards for non-everyday spend. If 2 cards are tied, make a decision based on which card is inactive, close to rewards, or other reasons.
3. Use every card you want to keep active once every 4 months.
4. Split everyday spend amongst all the cards you are considering applying for CLI (or trying to keep a good relationship with). I have a Double Cash, but I think it's worth giving up 1% to increase my chances of CLI on other cards.

This is a good strategy if you think of your cards as "keepers"

It the real goal is to maximize gains, in most cases rewarrds from spending are pretty negligable (and so is the diffference between using the "right " card and another one) , it's the bonuses that you need (well, that and the thing we shouldn't mention.)

So then the strategy becomes:

1) Get a high bonus card.

2) Use almost exclusively till min spend is met

3) S/D and repeat.

Re: My Rewards cards strategy

dmFICO8 — Tue, 02 Jun 2015 06:28:35 GMT

Why do you rotate your cards when you are going to pay in full before statement billing date? Why not just make a charge to all cards and pay them few days later then do it again 4 months later? At least that way you don't have to worry for another 3 months, and focus on what card that actually maximize your cashback for the purchases.

I use Excel sheet to keep track of all my cards' activities, you will need a tool or two to help you keep track of the cards, mint.com comes to my mind as pretty often seeing people mention it, though I have no personal experience. I also change all my cards' due date to the same day, that way I know when my cards' statements are most likely going to close and before what day to pay them all, some people prefer spreading the closing/due dates in interval, again it is personal preference.

As for inactivity, from my personal experience and judgement, once every 3 months is 99.99% safe, once every 4 month is 99.9% safe, once every 6 months is 99% safe, I personally use "once every 4 months", though some cards require you to make at least 1 purchase during a certain period otherwise you forfeit your rewards, Citi Dividend requires at least 1 purchase every 12 months, Barclays Priceline requires 1 purchase every 4 months. You also don't need to charge a large amount, $10-$15 will be more than enough though some people are fine with $5-$10. If you have cable/phone bill, just split your bill to your cards, that's what I did.

I don't follow the "1 card reports 1-4% balance rest report 0" rule as most people here want to optimize the score, I only follow "no more than half of your cards reported a balance" rule, say 20 cards, you let max 9 reported, even then I am not so strict, sometime I let more than half my cards report, of course this is not for everyone. And I only have 1 rule I will strictly follow, never let my score fall below 760 after trashing/sinking it.

Re: My Rewards cards strategy

kdm31091 — Tue, 02 Jun 2015 12:36:10 GMT

@Anonymous wrote:
@Anonymous wrote:
Here's my strategy.

1. Get an app to keep track of everything.
2. Use the card that yields the highest rewards for non-everyday spend. If 2 cards are tied, make a decision based on which card is inactive, close to rewards, or other reasons.
3. Use every card you want to keep active once every 4 months.
4. Split everyday spend amongst all the cards you are considering applying for CLI (or trying to keep a good relationship with). I have a Double Cash, but I think it's worth giving up 1% to increase my chances of CLI on other cards.
This is a good strategy if you think of your cards as "keepers"

It the real goal is to maximize gains, in most cases rewarrds from spending are pretty negligable (and so is the diffference between using the "right " card and another one) , it's the bonuses that you need (well, that and the thing we shouldn't mention.)

So then the strategy becomes:

1) Get a high bonus card.
2) Use almost exclusively till min spend is met
3) S/D and repeat.

Right, depends on your goal. If you're into maximizing gains you need to follow something like what you said.

If you're in for long term, though, it isn't the way to go. You are also correct in that over worrying about rotating or "using the right card" on a purchase can turn out to be relatively neglible -- I got the Discover double bonus, so my base will be 2%. I already have bills set up to auto pay on my Quicksilver each month. Switching them to the Discover each month (2% vs 1.5%) would net me a couple dollars more in rewards, yes, but that's the problem -- literally a couple dollars. It's probably not worth switching things over.

The point is that there is no need to stress about "the right card" or "rotating" and all that for normal spending. While it can occasionally be a big difference (as in 5% vs 1%) it's usually not, and nothing that you should spend too much time worrying about. I've messed up before and used the "wrong" card for a transaction and yeah, maybe it cost me a dollar for the month, but it's not the big of a deal. I won't use any of the apps, mostly because I do not really have the time or desire to "check the app" before each purchase (I hate how there is an app for every little thing we do now, as if we are incapable of thinking, but that's a different story).

Re: My Rewards cards strategy

CreditDunce — Wed, 03 Jun 2015 02:41:44 GMT

My advice is to maiximize your score for the first month. Get the 800 score across the three major CRA's. Then not worry about how many cards are reporting unless you are about to apply for something. Just use the cards and pay before the due date. Having only one card report all of the time doesn't help your score long term. It is just a way to maximize your score at any one time.