topic Re: Why the need for Rotating Category Cards? in Credit Cards

Why the need for Rotating Category Cards?

Beast26 — Thu, 27 Aug 2020 15:37:57 GMT

I was sitting here thinking how popular Discover it card is and was thinking I could get it and get the cashback match. But after the first year it would become just a rotating 5% card. The thing is I already have plans of getting a card for all categories in the future. The only reason I could think of getting it is to earn extra cash along the way of acquiring all of the cards that I want. Once I have all those cards I would literally keep it just for the credit limit and history.

Should I start with discover or go straight to getting the PayPal MasterCard? My profile is good enough for either one but I'm just weighing the pros and cons of getting the discover it.

Re: Why the need for Rotating Category Cards?

wasCB14 — Thu, 27 Aug 2020 15:43:33 GMT

There are some popular categories like dining, groceries, mobile payments, etc. where it's hard or impossible to get 5% year-round without paying an annual fee or having some other banking relationship.

Re: Why the need for Rotating Category Cards?

Anonymous — Thu, 27 Aug 2020 15:52:40 GMT

@wasCB14 wrote:
There are some popular categories like dining, groceries, mobile payments, etc. where it's hard or impossible to get 5% year-round without paying an annual fee or having some other banking relationship.

Yes, but the rotators don't give it year round either. Now for groceries and dining, you can probably use it in which ever quarter it appears (but possibly not max it out), some of the other categories that appear are more problematic.

Also, if you are in the UR system, the 5x given by the Freedom are URs, and thus can be worth more than 5%

IF you can get all the categories you need handled at a high enough reward level, rotating cards might be not worth the effort. 3% everywhere cards like AOD and USAlliance raise the bar somewhat. If your category spend in the quarter (chosen by them, not you!) is low, the extra 2% may not justify having an extra card.

Re: Why the need for Rotating Category Cards?

Anonymous — Thu, 27 Aug 2020 15:53:55 GMT

Except for until the last year Discover had been unlikely to close your accounts on you.

While Synchrony cards have value do not want all your eggs in that basket.

Re: Why the need for Rotating Category Cards?

Credit12Fico — Thu, 27 Aug 2020 16:06:54 GMT

@Anonymous wrote:
@wasCB14 wrote:
There are some popular categories like dining, groceries, mobile payments, etc. where it's hard or impossible to get 5% year-round without paying an annual fee or having some other banking relationship.
Yes, but the rotators don't give it year round either. Now for groceries and dining, you can probably use it in which ever quarter it appears (but possibly not max it out), some of the other categories that appear are more problematic.

Also, if you are in the UR system, the 5x given by the Freedom are URs, and thus can be worth more than 5%

IF you can get all the categories you need handled at a high enough reward level, rotating cards might be not worth the effort. 3% everywhere cards like AOD and USAlliance raise the bar somewhat. If your category spend in the quarter (chosen by them, not you!) is low, the extra 2% may not justify having an extra card.

Well the Chase Freedom, Discover It combo more or less gets you half the year at 5%. Discover and Chase hardly ever overlap their quarters.

If you are looking for simplicity, then the rotating category is not for you perhaps? There isn't a general "need" for rotating categories that is applicable to everyone. You either have a lot of cards, including every rotating type to optimize every basis point on every dollar you spend year round, or you just get a simple doublecash/paypal card, and a travel card and call it a day.

If you are not chasing that last 1-2%, then you don't have a need for a card like this. If you are, then you do. You are the only one who can make that decision and it depends precisely on how much you spend in these categories, to determine if rotating card brings value to your wallet. That math is different for everyone. There isn't a general consensus. Not everyone needs a rotating category card.

Re: Why the need for Rotating Category Cards?

TSlop — Thu, 27 Aug 2020 16:03:56 GMT

I think it just depends if you want 5% cashback or not. I don't think there is anything above 2-3% on general spend that is no AF. So for the cashback maxers, 5% with Chase/Discover will get you the greatest amount back. But it is up to you if it is worth the effort to get the extra 2-3% cashback.

Re: Why the need for Rotating Category Cards?

Beast26 — Thu, 27 Aug 2020 16:09:59 GMT

I will have:

PayPal MasterCard

Walmart MC

Amazon Visa Signature

US Bank Cash+

PNC Cash Rewards

These cards will cover everything the discover does. Would I be wasting my time getting discover?

Re: Why the need for Rotating Category Cards?

Credit12Fico — Thu, 27 Aug 2020 16:14:22 GMT

@Beast26 wrote:
I will have:
PayPal MasterCard
Walmart MC
Amazon Visa Signature
US Bank Cash+
PNC Cash Rewards

These cards will cover everything the discover does. Would I be wasting my time getting discover?

Unless you are HEAVY gas spender, then yes it's a waste.

Re: Why the need for Rotating Category Cards?

wasCB14 — Thu, 27 Aug 2020 16:28:45 GMT

If I was keeping a minimal number of cards while trying to maximize rewards, I wouldn't bother with rotators. 3% cards and the like are better. I'm just saying they can add at least a little extra cash back over what someone can earn a no-AF, no-relationship-perk "permanent" set of card. Some cards like Uber and Cash+ with year-round or customizable categories can still be nerfed heavily!

@Credit12Fico wrote:
@Beast26 wrote:
I will have:
PayPal MasterCard
Walmart MC
Amazon Visa Signature
US Bank Cash+
PNC Cash Rewards

These cards will cover everything the discover does. Would I be wasting my time getting discover?
Unless you are HEAVY gas spender, then yes it's a waste.

Depends a bit on your spend...

Do you do online shopping at places other than Amazon?

Do you buy groceries at places other than Walmart?

Do you eat at restaurants that aren't fast food?

(I know I sound like a snob, but these are important category considerations!)

Re: Why the need for Rotating Category Cards?

Credit12Fico — Thu, 27 Aug 2020 16:35:17 GMT

@wasCB14 wrote:
If I was keeping a minimal number of cards while trying to maximize rewards, I wouldn't bother with rotators. 3% cards and the like are better. I'm just saying they can add at least a little extra cash back over what someone can earn a no-AF, no-relationship-perk "permanent" set of card. Some cards like Uber and Cash+ with year-round or customizable categories can still be nerfed heavily!

@Credit12Fico wrote:
@Beast26 wrote:
I will have:
PayPal MasterCard
Walmart MC
Amazon Visa Signature
US Bank Cash+
PNC Cash Rewards

These cards will cover everything the discover does. Would I be wasting my time getting discover?
Unless you are HEAVY gas spender, then yes it's a waste.
Depends a bit on your spend...

Do you do online shopping at places other than Amazon?
Do you buy groceries at places other than Walmart?
Do you eat at restaurants that aren't fast food?

(I know I sound like a snob, but these are important category considerations!)

I agree, my understanding, is the OP doesn't have any of the cards he put above, but rather they are "goal cards" so he's already worked out that those cards are profitable to him based on his buying patters, but he'll need to clarify. I only see Discover and Fingerhut in his sig.

Re: Why the need for Rotating Category Cards?

Beast26 — Thu, 27 Aug 2020 16:41:53 GMT

98% of my online shopping is on Amazon. I spend 100+ on Amazon every month. I shop groceries only at Walmart. I rarely eat at restaurants. Fast food is my go to!

Re: Why the need for Rotating Category Cards?

Anonymous — Thu, 27 Aug 2020 16:58:00 GMT

@TSlop wrote:
I think it just depends if you want 5% cashback or not. I don't think there is anything above 2-3% on general spend that is no AF. So for the cashback maxers, 5% with Chase/Discover will get you the greatest amount back. But it is up to you if it is worth the effort to get the extra 2-3% cashback.

I think this overlooks the negative of the rotators. Yes, most of us would like 5% (or more!) but, for example, if I want 5% off wholesale clubs, I better have that need in Q2 for Discover. As I said, some categories such as dining and groceries are probably more uniformly distributed over the year, but some other things are less likely to be.

From a pure reward viewpoint, the more (free) cards the better, to have a greater opportunity to maximize each transaction. But there are diminishing returns, and, IMO, rotators are more subject to this because you do not know what categories will be selected for you.

Re: Why the need for Rotating Category Cards?

AverageJoesCredit — Thu, 27 Aug 2020 17:01:09 GMT

It makes some people feel all tingly

Re: Why the need for Rotating Category Cards?

Beast26 — Thu, 27 Aug 2020 17:24:34 GMT

This is correct. All of the cards I listed are "goal cards" that I will have in the end. My current cards are in my signature. But I will apply for my next card next week.

Re: Why the need for Rotating Category Cards?

Anonymous — Thu, 27 Aug 2020 17:29:04 GMT

The thing i don't like about rotators is that you're beholden to that card for that specific period, since I shop monthly all ywar long for grocery I prefer that flat % earner rather then waiting for specific time to try and maximixe every red cent.

Plus the rotating categories may not always line up with my shopping pattern for those places like Target or Walmart etc. To me it just feels like extra work to earn a few precent more in certain quarters than just going on with my life doing what I do.

Re: Why the need for Rotating Category Cards?

Anonymous — Thu, 27 Aug 2020 19:41:33 GMT

Yes, rotators ARE extra work.

I have Chase Freedom, and one big disadvantage is that (unlike Discover) you cannot know the upcoming quarterly category until 2 weeks before the end of the current quarter.

If you are a structured person, as I am, it makes planning for shopping, to best use the 5% categories, very difficult.

For example, the grocery category is usually offered in the second quarter (April to June). This is useless to me because I have AMEX BCP which offers 6% on groceries all year long. I buy about $6000 annually in groceries, so I do not want to commit any grocery spending to Chase Freedom, in case I have trouble meeting the $6000 cap on AMEX, which runs on a calendar basis. Also, I do NOT play the "buy gift cards at Kroger to meet the $6000 cap" game (too much work).

Restaurants are a useful category, but we are not eating out much these days (like everybody). We do a moderate amount of delivery and takeout, but It is only maybe $50 a month, and over the quarter, that only amounts to $7.50.

Gas is useless for us, since we are both retired and drive much less frequently than when we worked.

Drug stores and warehouses are useful, but you do not know when they are coming. Target quarters are useless because we have the Target Redcard, for 5%.

The bottom line (and sorry for the length) is that quarterly category cards can be a lot of planning, and, for me, at least, a nice flat-rate 2% EDP card like Citi Double Cash, plus AMEX BCP for 6% groceries, are less hassle and easier to use for rewards.

Re: Why the need for Rotating Category Cards?

Credit12Fico — Thu, 27 Aug 2020 20:43:11 GMT

Agree with above poster. The one benefit is just getting "In" with chase. You can then product change to a few other interesting cards with more perks.

So when starting out on your credit journey, a freedom is nice fast track to give you a taste of a high earning category spend, while you wait for your profile to mature. Once you start getting access to things like BCP and other bells and whistle cards, you can product change the Chase Freedom into something else like the Unlimited or the Annual fee Sapphire cards with the travel perks if you travel a lot. A single chase card is valuable because it can be turned into many of their other cards.

Re: Why the need for Rotating Category Cards?

wasCB14 — Thu, 27 Aug 2020 20:50:25 GMT

@Credit12Fico wrote:
Agree with above poster. The one benefit is just getting "In" with chase. You can then product change to a few other interesting cards with more perks. So when starting out, a freedom is nice, but once you get kitted out with a BCP, and other bells and whistle cards, you can product change the Chase Freedom into something else like the Unlimited or the Annual fee cards with the travel perks.

Better to go the other way IMO...SUB chase the AF cards then PC to the 5% or 1.5%. My CFU was a CSP and Freedom number 2 was a CSR.

Freedom number 1 and Discover are my oldest cards. They sit in the SD some quarters but deliver value over time. When some people fret about whether to close an old Cap1 Platinum because it has no rewards, keeping Freedom is a pretty easy decision for me! (Discover is a little different for me, though, because of the hassles of a joint account. I have considered closing that.)

I like MRs and BBP...but 5% cash never really gets old...especially with minimal travel during COVID.

Re: Why the need for Rotating Category Cards?

sxa001 — Thu, 27 Aug 2020 20:51:08 GMT

I don't believe anyone needs any particular card and I would encourage anyone to get the cards that are going to most match their spend. If you are looking for simplicity then keeping up with the rotating categories may not be something that you are looking for, I know I am pretty bad about not maximizing my benefits. There is nothing wrong with a general spend card that will get you 2% on everything, like the Citi Double Cash. 20 grand a year on the Citi Double Cash is $400 a year automatically. If you maxed out the Dicover Quaterly Categories and had no other spend on the card you would be looking at $300 in cash back.

Lots of good advice on these forums from people who do maximize benefits, but they work at it and pay attention. The best card to pay for something is the one in your wallet (physical or mobile).

Re: Why the need for Rotating Category Cards?

Anonymous — Thu, 27 Aug 2020 21:10:53 GMT

@wasCB14 wrote:
@Credit12Fico wrote:
Agree with above poster. The one benefit is just getting "In" with chase. You can then product change to a few other interesting cards with more perks. So when starting out, a freedom is nice, but once you get kitted out with a BCP, and other bells and whistle cards, you can product change the Chase Freedom into something else like the Unlimited or the Annual fee cards with the travel perks.
Better to go the other way IMO...SUB chase the AF cards then PC to the 5% or 1.5%. My CFU was a CSP and Freedom number 2 was a CSR.

Perhaps during normal business hours a PC is great, but currently Chase is offering 5% on grocery spend on both CFU and the CF cards as a part of their SUB. So right now those sound better option during the current situation. The AF cards will always be around later.