topic Re: Credit Card Rewards?? How valuable?? in Credit Cards

Credit Card Rewards?? How valuable??

grillandwinemaster — Mon, 29 Feb 2016 18:12:48 GMT

Ok, my credit has significantly improved over the last couple of years, and I'm contemplating wether I should begin playing the credit card rewards game. It seems to me that one wrong move, and programs like these could really bite you in the A$#!! I would like to start a thread/project where people tell us about their rewards credit cards, and how they have truly benefited, or if in the end, are rewards truly just an amazing marketing tactic by the credit card/airline/hotel/travel people. Maybe a format such as the one that follows would be useful for people to post their experience. Please share your experience with your credit card rewards. Please feel free to add categories if it seems helpful. Thanks for helping out the "new Kid" on the block when it comes to rewards! :-)

CREDIT CARD:

INITIAL BONUS:

SPEND REQUIRED:

HOW REDEEMED:

EASE OF REDEMPTION:

MONEY SAVED:

After Initial Bonus Redeemed:

Was CC sock-drawered, or was it used agian to gain more points?

Any other Additional Notes:

Thanks a bunch! Looking forward to your replies!

Re: Credit Card Rewards?? How valuable??

Chris679 — Tue, 01 Mar 2016 10:28:06 GMT

I get 5% back on gas, groceries, bars, restaurants and Amazon.com. I get 2% on everything else. I pay for absolutely everything with one of three credit cards and PIF twice per month. It's free money with no drawback as long as you are responsible. None of that even takes the sign up bonuses into consideration and they can be substantial.

Credit card rewards are absolutely the real deal. People like myself and so many on this forum benefit from the majority of Americans that carry credit card debt and treat them like installment loans. These companies can easily afford to pay 2-5% in rewards to the minority when the majority are paying them 15-20% apr. That is on top of the 2% or so swipe fees that they are already collecting on every transaction.

Re: Credit Card Rewards?? How valuable??

Credit_hawk — Tue, 01 Mar 2016 10:44:12 GMT

I agree with Chris. The benefit is obvious so long as you're responsible. Meaning you treat your rewards card like a debit card, only buying what you need or would have bought with cash rather than buying things for the rewards points; followed by always paying in full every month and you can easily see how you benefit with no cons. I probably make $30-$50 a month in rewards on a regular month. The cherry on top is you build credit while doing this.

Re: Credit Card Rewards?? How valuable??

Loquat — Tue, 01 Mar 2016 12:21:27 GMT

My Sam's Club MC has become my daily driver. My wife and I both have long commutes and we both drive big SUV's (Yukon Denali & Infiniti QX80) so fuel purchase is one of our largest expenses. They're both gas guzzlers and of all my cards, my SC MC is the best option for us at the moment with the 5% cash back on fuel purchases. There may be better options out there for fuel savings but right now I'm not looking to app until some of my accounts age. Maybe in a year or so I'll start looking browsing for a better fuel rewards card.

Re: Credit Card Rewards?? How valuable??

Anonymous — Tue, 01 Mar 2016 14:42:24 GMT

@Chris679 wrote:
I pay for absolutely everything with one of three credit cards and PIF twice per month.

Do you pay rent/bills/mortgage by credit card?

Re: Credit Card Rewards?? How valuable??

takeshi74 — Tue, 01 Mar 2016 15:05:42 GMT

@grillandwinemaster wrote:
Ok, my credit has significantly improved over the last couple of years, and I'm contemplating wether I should begin playing the credit card rewards game. It seems to me that one wrong move, and programs like these could really bite you in the A$#!!

Of course. If you can't responsibly manage your credit accounts then you can get into trouble whether you're in the rewards game or not. If you can't responsibly manage your account or if rewards might influence you to spend what you don't have then definitely don't play the rewards game. You cannot spend what you don't have. If you carry balances you're subject to interest which more than wipes out any rewards. You have to have your finances in order, budget & stick to it, and treat credt cards as cash. You can earn rewards on spend that you already have and I'd advise using that approach versus letting rewards drive your spend which can get you in trouble.

Bonus chasing is a popular apporach but if you've just come out of rebuilding it's probably not a good idea to immediately jump into churning.

@grillandwinemaster wrote:
I would like to start a thread/project where people tell us about their rewards credit cards, and how they have truly benefited, or if in the end, are rewards truly just an amazing marketing tactic by the credit card/airline/hotel/travel people.

To what end? What you really need is an understanding of where your spend is going. If your finances are in order to play the game then you should have this info. If not, then you need to work on getting there first.

Use that info to find cards that maximize rewards on your major spend categories (including noncategory). Run the number for you spend and determine if that amount of rewards is worthwhile to you.

Polling others isn't the way to approach this. I can tell you that I earn a lot of rewards with my Chase Sapphire Preferred but that won't mean anything unless you have sufficient spend to take advantage of the Ultimate Rewards program, have spend in suitable rewards categories and can leverage redemption options with Ultimate Rewards that maximize point value. Sorting it all out with cash back cards (versus programs like Ultimate Rewards, Membership Rewards, Thank You, etc) is a bit easier though since it's just a matter of spend * earn rate and you can easily calculate that to determine what you'd stand to earn.

@grillandwinemaster wrote:
Thanks for helping out the "new Kid" on the block when it comes to rewards! :-)

You're going about it backwards. It's not just about the cards themselves. It's about what cards suit you. You have to sort out your needs/wants and use that to find cards that suit you. For rewards you need an understanding of your spend in order to determine how to maximize rewards on that spend. Think of it this way. 5% cash back sounds great, however, 5% of 0 is 0. 5% of a very small number is a very small number. Focus first on the big numbers (where your money is going) and earn rates that are the highest for those categories.

You can't just poll others. Different people have different incomes, budgets and different amounts of spend in different categories. These are not universal matters. If it was just a matter of find the universally best cards then all we would need is a top list to refer to.

Re: Credit Card Rewards?? How valuable??

Anonymous — Tue, 01 Mar 2016 15:08:23 GMT

I would say that travel reward bonuses are most valuable. It definitely much more valuable than cashback credit cards. But there are a bunch of issues like decreasing AAoA, CS decrease, applying limits. Second value is sign up bonuses for cash back cards. It is usually $100-$150 if you spend $1000-$3000 per 3 month. The last is cash back itself. There is number of 5% cash back options (rotated or constant) like 5% quarter rotating categories on Discover it, Chase freedom or permanent 5% cash back for grocery/amazon/gas on Sallie Mae (caps) or 6% cash back on grocery on AmEx BCP (AF apply). For non category spending there are a bunch of 1.5% or 2% cashback cards (I like Citi DC).

I'm kind of lazy, so I applied only for two travel cards so far.

CREDIT CARD: Chase Sapphire preffered / AmEx PRG

INITIAL BONUS: 50k points / 50k points

SPEND REQUIRED: 3000 per 3 month / 1000 per 3 month

HOW REDEEMED: international flight / not yet

EASE OF REDEMPTION: easy / don't know

MONEY SAVED: ~$900 / probably ~ $500

After Initial Bonus Redeemed:

Was CC sock-drawered, or was it used agian to gain more points? closed to avoid AF / active

Re: Credit Card Rewards?? How valuable??

Anonymous — Tue, 01 Mar 2016 15:07:06 GMT

The more spending you can funnel through reward cards, the happier you'll be. Last month was a typical month for me, spending-wise, and I earned $44 cash back on Discover. Extrapolate that throughout the year, and that's not chump change.

Re: Credit Card Rewards?? How valuable??

Anonymous — Tue, 01 Mar 2016 15:21:20 GMT

I encourage anyone who uses rewards cards to have some kind of low interest bal transfer card. Generally speaking reward cards tend to have higher APRs...you never know when some unexpected expense comes up and you need or want to carry a bal for a short time. I have a Ring card for this exact purpose. Get the bal transfer card before you need it...otherwise the options and limits won't be available when utilization gets high.

Re: Credit Card Rewards?? How valuable??

galahad15 — Tue, 01 Mar 2016 15:27:28 GMT

@Anonymous wrote:
I encourage anyone who uses rewards cards to have some kind of low interest bal transfer card. Generally speaking reward cards tend to have higher APRs...you never know when some unexpected expense comes up and you need or want to carry a bal for a short time. I have a Ring card for this exact purpose. Get the bal transfer card before you need it...otherwise the options and limits won't be available when utilization gets high.

Btw, as I mentioned in a few other posts and as a related data point, the Western FCU Fixed-Rate VISA has as low as 8.99% F advertised on their website, with no BT fees and also no cash advance fees, in case anyone was interested in apping for it. Similar to the Ring's no BT fees, but whereas the Ring has a $3 fee per cash advance, again the WFCU Fixed-Rate VISA has no cash advance fees. WFCU also has no geographical membership restrictions to join.

Re: Credit Card Rewards?? How valuable??

Anonymous — Tue, 01 Mar 2016 15:27:55 GMT

@Anonymous wrote:
The more spending you can funnel through reward cards, the happier you'll be. Last month was a typical month for me, spending-wise, and I earned $44 cash back on Discover. Extrapolate that throughout the year, and that's not chump change.

Not necessarily. For exampe:

Spending is $1000 per month (different categories).

Discover have 5% on gas right now if I'm not mistaken and 1% on everything else. So, the cashback will be about $10-15.

But if you spend the same $1000 through new opened AmEx PRG than you will get 51k points. Statement cash value is $306, travel value is $510 or more.

So, it not even close to each other. There are many travel sign up bonuses on the market right now.

Re: Credit Card Rewards?? How valuable??

Anonymous — Tue, 01 Mar 2016 15:30:15 GMT

Yep, it all depends on whether you find value in travel rewards, or where else you find value.

Re: Credit Card Rewards?? How valuable??

SMikulski49 — Tue, 01 Mar 2016 15:32:23 GMT

I put everything on my credit card, where I can use it. I always pay in full and just collect rewards on that. I just got the Citi DC for my daily driver, I will charge every utility bill on it that I can, and all my purchases.

I have a question about MINT BILLS application. I use that to track my due dates and kinda get remainders of when what is due and what my balances are for every account. I know you can pay all your utilites using that app. It is free when you pay through you bank account and I read there is a fee if you want to pay using a credit card. Does anyone know what fees they charge for using that option? Is a a flat fee or does it depend on how much you are paying?

I know some utilites/rent/mortgage/car laons/student loans don't allow you to use your credit card to make payments. Does anyone have any experiance or tricks to go around that to maximise your credit card usage? Would it be beneficial to use something like MINT BILLS and pay a lil fee when the total rewards will be a lot more?

Also with all the different credit cards out there can we have a basic list of best cards for: groceries, restaurants, gas, bills, home improvment stores, etc. to kind of get an idea of how many cards would one need to maximise the rewards, maybe the cards will overlap a lot and one card could be a good choice for most people?

Re: Credit Card Rewards?? How valuable??

Anonymous — Tue, 01 Mar 2016 15:41:57 GMT

@SMikulski49 wrote:

Also with all the different credit cards out there can we have a basic list of best cards for: groceries, restaurants, gas, bills, home improvment stores, etc. to kind of get an idea of how many cards would one need to maximise the rewards, maybe the cards will overlap a lot and one card could be a good choice for most people?

For groceries: AmEx BCP 6% (cap $6000/year, AF $75), Sallie Mae 5% (cap $250/month)

For gas: Sallie Mae 5% (cap $250/month), BankAmericard 3.3% (no cap, checking account required, 3% without checking account)

Just google it, there are a lot of good web sites where you can put your spending and see how much reward you can earn.

Re: Credit Card Rewards?? How valuable??

Chris679 — Tue, 01 Mar 2016 20:00:05 GMT

@Anonymous wrote:
@Chris679 wrote:
I pay for absolutely everything with one of three credit cards and PIF twice per month.

Do you pay rent/bills/mortgage by credit card?

All of my loan are through my CU. The payments come out automatically as often as they let me directly from my checking account.

Re: Credit Card Rewards?? How valuable??

Themanwhocan — Wed, 02 Mar 2016 13:02:10 GMT

@SMikulski49 wrote:
I put everything on my credit card, where I can use it. I always pay in full and just collect rewards on that. I just got the Citi DC for my daily driver, I will charge every utility bill on it that I can, and all my purchases.

I have a question about MINT BILLS application. I use that to track my due dates and kinda get remainders of when what is due and what my balances are for every account. I know you can pay all your utilites using that app. It is free when you pay through you bank account and I read there is a fee if you want to pay using a credit card. Does anyone know what fees they charge for using that option? Is a a flat fee or does it depend on how much you are paying?

I know some utilites/rent/mortgage/car laons/student loans don't allow you to use your credit card to make payments. Does anyone have any experiance or tricks to go around that to maximise your credit card usage? Would it be beneficial to use something like MINT BILLS and pay a lil fee when the total rewards will be a lot more?

Also with all the different credit cards out there can we have a basic list of best cards for: groceries, restaurants, gas, bills, home improvment stores, etc. to kind of get an idea of how many cards would one need to maximise the rewards, maybe the cards will overlap a lot and one card could be a good choice for most people?

You haven't seen my lists of cash back credit cards? http://ficoforums.myfico.com/t5/Credit-Cards/Cash-Back-credit-card-charts/m-p/4004740#M1124387

Re: Credit Card Rewards?? How valuable??

Themanwhocan — Wed, 02 Mar 2016 13:04:02 GMT

I never did finish working on this list of 5% cash back cards...

Re: Credit Card Rewards?? How valuable??

SMikulski49 — Wed, 02 Mar 2016 16:21:47 GMT

I have not seen your post yet, very usefull information and nice comparison at the reach of your finger tips. This will definately save a lot of time.

Thank you

Re: Credit Card Rewards?? How valuable??

grillandwinemaster — Thu, 03 Mar 2016 05:31:04 GMT

Thank you all for your excellent advice. I want to be conservative as i venture into the world of cc rewards. Im in a favorable position compared to when i started this journey. Many thanks to all the valauble input from the very knowledgeable MyFico members! I decided to apply for a discover card. I was really expecting maybe a $1,500 starting limit. Im pleased to announce a starting CL of $4,500! A most welcome surprise indeed. So, im well on my way to starting the CC rewards game. I have every intention of playing a conservative game, and of course, pif at least twice a month. Thanks again for all the "mentoring!" :-)

Re: Credit Card Rewards?? How valuable??

grillandwinemaster — Thu, 03 Mar 2016 05:33:43 GMT

Themanwhocan, thats an amazing chart! Its memebers like you, who take the time to do this type of research that makes the MyFico forums such an invaluable resource!