topic Re: Hard Truths-Actual annual spend vs rewards. in Credit Cards

Hard Truths-Actual annual spend vs rewards.

swankytiger — Thu, 14 Sep 2023 16:37:38 GMT

If you are in the Credit Card game then you really need to know your annual spend and how much you are realistically getting in rewards/cash back. I know it is a hobby, but you still need to be realistic.

I just calculated all of my Credit Card spending for the year to date.

Based on my normal annual spending(ignoring my abnormal travel spend this year welcome bonus chasing)

The difference between most credit cards, even with category optimization.

Is $50-100 for the entire year based on 0.6cpp for Amex, and 1cpp for thankyou/UR.etc

Going by 2cpp or other points value its even less of a difference depending on card minus AF and any statement credits.

i.e. Comparing the CSR, CSP and CFU the points i would get is 28k on csr, 31k on CSP(online grocery category work around use would be necessary), and 28k on CFU. using the 1.5cpp CSR and 1.25cpp CSP chase portal valuations it would be a difference of like $110 for a normal travel year between the CSP and CSR.

Depending on how you calculate United Miles and Hilton Points + FNA's and cashing out MR at 1.1cpp I have netted $1800-2k in SUBs this year after annual fees. Most of that was manufactured spend for travel that I would normally spread out over a longer period. So realistically you make signifigantly more through subs than you do for normal spend.

So how much is your time worth for scrutinizing every $ of spend for a difference of $100-200 a year?

Re: Hard Truths-Actual annual spend vs rewards.

Horseshoez — Thu, 14 Sep 2023 16:58:33 GMT

I don't have the time and energy to fuss with getting enough cards to eek out the absolute best reward for every purchase, I have four cards I use on a regular basis and you're right, a hundred or two per year is all I'm leaving on the table. Trying to maintain more cards for more optimal rewards is a zero sum game as far as I'm concerned.

Re: Hard Truths-Actual annual spend vs rewards.

swankytiger — Thu, 14 Sep 2023 17:04:20 GMT

@Horseshoez wrote:
I don't have the time and energy to fuss with getting enough cards to eek out the absolute best reward for every purchase, I have four cards I use on a regular basis and you're right, a hundred or two per year is all I'm leaving on the table. Trying to maintain more cards for more optimal rewards is a zero sum game as far as I'm concerned.

Yea i am planning on PC'ing my CFU to a CSR and just using that as my main card, maybe moving a ton of my limit from the United gateway to it and just having it and the other 3 be sock drawer cards.

Re: Hard Truths-Actual annual spend vs rewards.

Beefy1212 — Thu, 14 Sep 2023 17:26:28 GMT

"I know it is a hobby, but you still need to be realistic."

I don't think you appreciate the game aspect many people view this hobby as. It isn't a matter of saving 100 or 200 or even 5 more dollars. It is about squeezing every last bit of optimization out of it.

If I didn't care that much I would get an Alt Reserve get 3% base of most of my purchases, an AF that virtually pays itself and redeems at 4.5x for travel and basically call it good.

but more cards means more subs, more cards means more targeted offers, more cards means more options to transfer balances around to save money, a higher total limit to brag about to my other fellow players, more reasons to look over my credit report, not caring to optimize means why read over the forums.

in short for some possibly many the rewards are in how you got there not in what they are.

Re: Hard Truths-Actual annual spend vs rewards.

swankytiger — Thu, 14 Sep 2023 17:36:08 GMT

@Beefy1212 wrote:
"I know it is a hobby, but you still need to be realistic."

I don't think you appreciate the game aspect many people view this hobby as. It isn't a matter of saving 100 or 200 or even 5 more dollars. It is about squeezing every last bit of optimization out of it.

If I didn't care that much I would get an Alt Reserve get 3% base of most of my purchases, an AF that virtually pays itself and redeems at 4.5x for travel and basically call it good.

but more cards means more subs, more cards means more targeted offers, more cards means more options to transfer balances around to save money, a higher total limit to brag about to my other fellow players, more reasons to look over my credit report, not caring to optimize means why read over the forums.

in short for some possibly many the rewards are in how you got there not in what they are.

I'm mostly talking about the people with 18+ credit cards and 8-10 of them having annual fees.

Re: Hard Truths-Actual annual spend vs rewards.

Kforce — Thu, 14 Sep 2023 17:43:39 GMT

If it is a hobby the math does not count.

If you are looking at rewards in relation to your time, CC rewards is not a good vehicle for making money.

If credit cards are not a hobby the best 3-6 cards should be the goal

Re: Hard Truths-Actual annual spend vs rewards.

Anonymous — Thu, 14 Sep 2023 17:47:30 GMT

Yes, a long while back I was posting that basically

MS>>>SUB>>Organic Rewards

(with your own interpretation of the ">" factor!)

If you had a flat 5% cashback card on everything, which is better than most people here achieve, it could be a sizeable amount with very heavy spend, but, of course, represents just 5% reduction which isn't much of a game changer. (The fact that it really is a hobby for most MyFico users is to imagine the number of posts if an unrestricted uncapped 5% cashback card came out)

The one exception, in some view anyway, is aspirational travel. There is a set of people who

a) want aspirational travel, usually first class long haul international flights with great hotel for example and

b) don't have enough disposable income to pay the (huge) price tag themselves and

c) can get the trip via spend on their credit cards

If you value such trips enough it can go beyond the "thrill of the chase" type hobby and become a means to an end.

Re: Hard Truths-Actual annual spend vs rewards.

okurosetta — Thu, 14 Sep 2023 18:00:17 GMT

I think it all comes down to whether a person is enjoying juggling cards. Speaking for myself, I had been chasing SUBs for much of the year and only recently started using my keeper cards again - and it has been fun! I am back to juggling a bunch of cards, but I am enjoying it.

I could see this changing at some point - and if I do trim my line-up, I'll have many cards to choose from to adjust to whatever my preferred set-up would be at the time.

The cards that have been getting my attention in the past year are ones where I don't need to spend a ton to get something out of. Meanwhile, if one currently earned 3% on gas and was debating getting a card that earned 4% on gas, even $5k worth of gas per year would only add $50 in return.

Hotel cards can provide value - Marriott Business' $125 AF recently saw a certificate used in downtown Montreal, $256 (USD) if paid with similar bookings going for $220+. My Choice Privileges Select gives 30k Choice Points for $95 AF, two uses of 30k Choice Points so far have been worth over $300 each.

Or PenFed Pathfinder - easy enough to get the AF waived, with $100 in flexible domestic airline ancillary credits per year. Heck, the checked bag one gets reimbursed for even helps with keeping the card active.

Recently, that's been my jam - acquiring cards that increase return without requiring any/much spend. When I look at how much 5% somewhere would earn over 3%, most of the time it would indeed not be worth it, especially with how built-up my set-up is already. So I won't make my day-to-day spending more complicated, but I will add cards that add $100-200 in value without requiring any/much spend.

Re: Hard Truths-Actual annual spend vs rewards.

Priory_Man — Thu, 14 Sep 2023 17:57:47 GMT

I fall under part of your statement, I have 21 cards currently, with no plans to obtain anymore at this point in time. I have 2 high AF cards and 4 others that, to me are minimal, I actually just PC'd away from two more high cards by downgrading my Hilton Aspire and Delta Reserve cards to lower the fees.
In answer to your question though, to me it is worth every minute I spend looking over the various offers each card has for me and signing up for whatever I think I can get the most use from. I don't have an exact figure to date, but I am certainly well ahead of my AF fees in savings, free hotel stays, discounted flights etc.
One day I will start to cut back on what I carry and reduce all AF cards to the minimum, but for now I am in a good place and all cards are working for me and not the other way around.

Re: Hard Truths-Actual annual spend vs rewards.

ptatohed — Thu, 14 Sep 2023 17:58:11 GMT

I can not speak to "points", "miles", and the like. I'm strictly cash back on organic spending, no AFs.

So, yeah, I could, and I have thought about using my 3% AOD for everything and call it a day. One card, done. I know mrs. ptatohed would like that.

But, as brought up, for me it's a fun challenge to see how I can maximize getting 5% CB or more when I can. I enjoy it. And I do know for sure, for me it's much more than $50 - $100 or $100 - $200 extra per year. Lots more.

Re: Hard Truths-Actual annual spend vs rewards.

PNWRambler — Thu, 14 Sep 2023 18:53:58 GMT

I play the game and I enjoy it. I have $279 in combined annual fees, and I get a couple thousand a year in rewards and SUB's. I know mathematically it's not worth my time as far as considering it "extra income" but for me it's more about just playing the game. I redeemed $2,720 in rewards last year and I'm at $1,622 for this year so far. It more than covers my annual fees, so I'm not worried about that. And I mostly use them for things I would already be buying, like recurring bills and gas/groceries so in my case it doesn't increase my spending much.

Re: Hard Truths-Actual annual spend vs rewards.

iced — Thu, 14 Sep 2023 19:03:44 GMT

@swankytiger wrote:
If you are in the Credit Card game then you really need to know your annual spend and how much you are realistically getting in rewards/cash back. I know it is a hobby, but you still need to be realistic.

I just calculated all of my Credit Card spending for the year to date.

Based on my normal annual spending(ignoring my abnormal travel spend this year welcome bonus chasing)

The difference between most credit cards, even with category optimization.
Is $50-100 for the entire year based on 0.6cpp for Amex, and 1cpp for thankyou/UR.etc
Going by 2cpp or other points value its even less of a difference depending on card minus AF and any statement credits.
i.e. Comparing the CSR, CSP and CFU the points i would get is 28k on csr, 31k on CSP(online grocery category work around use would be necessary), and 28k on CFU. using the 1.5cpp CSR and 1.25cpp CSP chase portal valuations it would be a difference of like $110 for a normal travel year between the CSP and CSR.

Depending on how you calculate United Miles and Hilton Points + FNA's and cashing out MR at 1.1cpp I have netted $1800-2k in SUBs this year after annual fees. Most of that was manufactured spend for travel that I would normally spread out over a longer period. So realistically you make signifigantly more through subs than you do for normal spend.

So how much is your time worth for scrutinizing every $ of spend for a difference of $100-200 a year?

I'm definitely in the "can't care" crowd on this one. Any optimization I could be doing isn't worth my time and what I'm currently doing still nets me what I want through organic spend so I'm content.

I hear a lot of people espouse the value of SUB over organic spend, but the thing I don't hear them talk about is dealing with the Frankenstein's monster of points it creates. With organic spend, I can build up 500k points to use on a flight, but with SUBs I have 50k here and 30k there and 70k way over there. The SUBs on their own are inadequate to do anything worthwhile (to me at least), so one is left either finding ways to merge stuff together or settling for lousy redemptions they wouldn't have otherwise pursued.

Re: Hard Truths-Actual annual spend vs rewards.

CreditCuriosity — Thu, 14 Sep 2023 19:05:32 GMT

Its a hobby as value my time at 125-150/hr. So I certainly am losing money having 30+ cards and being active on this forums and others. Otherwise I am just pure stupid if I thought I was making money off this lol. I could easily go down to likely 5-7 cards, but I enjoy playing the system and getting some bonuses although if value my time at above amount per hour I certainly could have another job for amount of time I spend on this and come out WAY AHEAD

Re: Hard Truths-Actual annual spend vs rewards.

redpat — Thu, 14 Sep 2023 19:10:53 GMT

It's all about my business spend that gives me the rewards for free travel, FC redemptions and hotel stays.

If it was just my personal spend then there wouldn't be as many free vacations or weekends away.

"Somtimes it's better to lucky than good......"

Re: Hard Truths-Actual annual spend vs rewards.

Beefy1212 — Thu, 14 Sep 2023 20:13:00 GMT

@Anonymous tell me more about this uncapped 5% card...

Re: Hard Truths-Actual annual spend vs rewards.

Hansolojr — Thu, 14 Sep 2023 20:17:16 GMT

I am one of those that target SUBs, but organically

As in, if I have $6,000 of organic spend coming up without a high cash back % card to use, I will look for the best cash SUB on that $6,000 spend.

My card setup is at a point where like Op said, a new card is rarely worth the incremental $100-200/yr. And I do not anchor to any specific loyalty programs, so cash works best for me.

tely in the "can't care" crowd on this one. Any optimization I could be doing isn't worth my time and what I'm currently doing still nets me what I want through organic spend so I'm content.

I hear a lot of people espouse the value of SUB over organic spend, but the thing I don't hear them talk about is dealing with the Frankenstein's monster of points it creates. With organic spend, I can build up 500k points to use on a flight, but with SUBs I have 50k here and 30k there and 70k way over there. The SUBs on their own are inadequate to do anything worthwhile (to me at least), so one is left either finding ways to merge stuff together or settling for lousy redemptions they wouldn't have otherwise pursued.

Re: Hard Truths-Actual annual spend vs rewards.

cws-21 — Thu, 14 Sep 2023 20:40:01 GMT

@Hansolojr wrote:
My card setup is at a point where like Op said, a new card is rarely worth the incremental $100-200/yr. And I do not anchor to any specific loyalty programs, so cash works best for me.

I wish a new card would yield an "incremental $100-200/yr" for me. My 10 card cash back setup is at a point in which a new card would yield at best a very few dollars per year.

Re: Hard Truths-Actual annual spend vs rewards.

Drifter73 — Thu, 14 Sep 2023 21:14:52 GMT

@ptatohed wrote:
I can not speak to "points", "miles", and the like. I'm strictly cash back on organic spending, no AFs.

So, yeah, I could, and I have thought about using my 3% AOD for everything and call it a day. One card, done. I know mrs. ptatohed would like that.

But, as brought up, for me it's a fun challenge to see how I can maximize getting 5% CB or more when I can. I enjoy it. And I do know for sure, for me it's much more than $50 - $100 or $100 - $200 extra per year. Lots more.

Exactly! I'm 95% cb only myself, with the exception of my FNBO BW for the emergency or vacation hotel points.

Just x3 of my 5%ers save an average of $600 per year alone. That's not counting all the 3%, 2%, and 1% action going on other cards.

Still not substantial, Sure, but the CB game is fun to play when you stay on your toes and leverage dedicated categories properly. 😀

Re: Hard Truths-Actual annual spend vs rewards.

delaney1 — Thu, 14 Sep 2023 22:15:02 GMT

This is exactly why I still use my QuickSilver instead of getting a 2% card for my catchall purchases. Combined with my other cards that give 5, 4 and 3 % back in certain categories I'm pretty satisfied with my setup.

Re: Hard Truths-Actual annual spend vs rewards.

Tcal — Thu, 14 Sep 2023 22:38:04 GMT

For me, I went from using a Debit card for everything to optimizing my spend. Hell, my Cash+ gets me $22-$25 a month just from my cellphone bill. My biweekly Costco runs net me ~$8-$30 a month (depends on rotators), my grocery store runs get me at least $15 a month.

It all depends on your circumstances, but I'm almost at a point where all of my regular purchases I made prior to starting all of this are optimized to at least 3%. (Need to get something for mobile wallets & a safer dining card).

Everyone's situation is different, but I love seeing the returns for doing things I already do. That I have to do.