topic Re: Cashing in Amex points from grocery spend in Credit Cards

Cashing in Amex points from grocery spend

redheadtempe36 — Mon, 30 Nov 2020 17:05:37 GMT

I was thinking about this the other day, as I have around 120,000 points from my Amex Gold over the past few years.

"Everyone" always says it is a bad use of the points, and I would agree compared to using them for airline tickets.

I was doing the math though, and I actually think it is not so bad when you consider the multipers.

Savor/CSP/Double cash all earn 2 cents/points per dollar currently on grocery spend, so $100 = $2.00.

The Gold earns 4 points per dollar, which yes, gets cashed out at $0.006, but you still come out ahead. $100 X 4 = 400 X .006 = $2.40.

I'm posting this because I assume I am missing something, as every always says cashing out your points is so "bad", but as far as resturant and grocery spend go, I actually think it is pretty good.

What am I missing? Why is it considered so "bad"?

Re: Cashing in Amex points from grocery spend

Anonymous — Mon, 30 Nov 2020 17:09:18 GMT

$250 annual fee makes it harder to get upside on it with cash redemption

Schwab cash-out would make it 1.25cpp, which would more than cover the fee on a Schwab Platinum, too

BCP or any grocery card at 3% would beat it if only cashing points out at .6cpp

Re: Cashing in Amex points from grocery spend

simplynoir — Mon, 30 Nov 2020 17:28:08 GMT

@Anonymous wrote:
$250 annual fee makes it harder to get upside on it with cash redemption

Schwab cash-out would make it 1.25cpp, which would more than cover the fee on a Schwab Platinum, too

BCP or any grocery card at 3% would beat it if only cashing points out at .6cpp

The only cash redemption that makes sense for MR points is the Schwab route as pointed out above. If you have no travel plans and don't want the points sitting there at least consider the gift cards that are possibly useful to you and offer a 1:1 return ratio or at least close to it

Re: Cashing in Amex points from grocery spend

K-in-Boston — Mon, 30 Nov 2020 21:27:56 GMT

It's bad value when compared to other uses. Just using Delta SkyMiles for non-sale economy travel (aka getting the worst value) as an example, you would literally be getting half the value cashing the points out as for exchanging them for SkyMiles. If the sole purpose is to rack up 4x on grocery and restaurant purchases at 2.4% net, one would be much better off with one of many cards offering 3% or more on those same categories and not having to worry about recouping the not-insignificant $250 annual fee on top of that.

If cashing out is really what you want to do and no other options work for you, I'd still suggest cashing out for 10k per $100 gift cards and reselling them; anything more than 60% of face value you're coming out ahead.

Re: Cashing in Amex points from grocery spend

SouthJamaica — Mon, 30 Nov 2020 23:19:07 GMT

@K-in-Boston wrote:
It's bad value when compared to other uses. Just using Delta SkyMiles for non-sale economy travel (aka getting the worst value) as an example, you would literally be getting half the value cashing the points out as for exchanging them for SkyMiles. If the sole purpose is to rack up 4x on grocery and restaurant purchases at 2.4% net, one would be much better off with one of many cards offering 3% or more on those same categories and not having to worry about recouping the not-insignificant $250 annual fee on top of that.

If cashing out is really what you want to do and no other options work for you, I'd still suggest cashing out for 10k per $100 gift cards and reselling them; anything more than 60% of face value you're coming out ahead.

You can re-sell a gift card?

Re: Cashing in Amex points from grocery spend

simplynoir — Tue, 01 Dec 2020 00:03:41 GMT

@SouthJamaica wrote:
@K-in-Boston wrote:
It's bad value when compared to other uses. Just using Delta SkyMiles for non-sale economy travel (aka getting the worst value) as an example, you would literally be getting half the value cashing the points out as for exchanging them for SkyMiles. If the sole purpose is to rack up 4x on grocery and restaurant purchases at 2.4% net, one would be much better off with one of many cards offering 3% or more on those same categories and not having to worry about recouping the not-insignificant $250 annual fee on top of that.

If cashing out is really what you want to do and no other options work for you, I'd still suggest cashing out for 10k per $100 gift cards and reselling them; anything more than 60% of face value you're coming out ahead.
You can re-sell a gift card?

Without getting too far into the subject (dunno where the MS line is here) yes you can. Searching on Google for "sell gift cards" or something similar will give you the results to get an idea

Re: Cashing in Amex points from grocery spend

kdm31091 — Tue, 01 Dec 2020 00:09:48 GMT

If it were just 2.4% cash back for dining/groceries, that would be okay, not wonderful, but not horrible. The problem is the annual fee. Since you can get free 3% dining and/or grocery cards, why pay $250 for the Gold to get an effective 2.4% on those categories?

Re: Cashing in Amex points from grocery spend

redheadtempe36 — Tue, 01 Dec 2020 00:15:52 GMT

Thanks Dumbee. I knew I was missing something.

I question if you can get consistently above 2.4% on most grocery spend because Chase and Discover can duplicate categories, but I was not factoring in the $250 AF.

Re: Cashing in Amex points from grocery spend

K-in-Boston — Tue, 01 Dec 2020 00:20:34 GMT

For retail gift cards, MS isn't really a concern - I can't imagine that ever really making sense. I suppose "the MS line" would be if it's a great way to turn $1000 cash into $700 cash plus $30 worth of rewards, it's fine to post. The rewards abuse team at Amex needs a good laugh every now and then.

There are numerous perfectly legitimate companies who sell gift cards at a discount, and they buy them as well. Other than just liquidating them (at a usually significant loss) like this, it's the perfect way to get something out of the useless gift card you received for the holidays or birthday. There's always eBay as well, but you'll pay fees and almost certainly still take a loss on face value. But most of the money for a gift card is better than it collecting dust!

Re: Cashing in Amex points from grocery spend

Anonymous — Tue, 01 Dec 2020 12:48:21 GMT

@K-in-Boston wrote:
For retail gift cards, MS isn't really a concern - I can't imagine that ever really making sense. I suppose "the MS line" would be if it's a great way to turn $1000 cash into $700 cash plus $30 worth of rewards, it's fine to post. The rewards abuse team at Amex needs a good laugh every now and then.

Well,not buying retail cards, but there are times.... A "friend" who MSd used to have the 5x Thank You Preferred card and acquired a lot of points through the usual means. And at the time, the best way to cash out (assuming the mortgage route due too much attention) was to redeem the points for Walmart gift cards, and resell, they had about 90% resale at the time.

Re: Cashing in Amex points from grocery spend

Anonymous — Tue, 01 Dec 2020 12:57:58 GMT

@redheadtempe36 wrote:
Thanks Dumbee. I knew I was missing something.

I question if you can get consistently above 2.4% on most grocery spend because Chase and Discover can duplicate categories, but I was not factoring in the $250 AF.

BCE is 3% on up to $6K and there are other similar cards that are 3%, sometimes capped. Penfed Platinum Rewards is an effective 2.54% uncapped, so your questioning is misplaced!