Credit Card Benefits - Am I missing something?

[MeredithLepore]

I've always been a little conservative wrt credit card spending. Given the high interest and previous financial struggles, I used to find them a little risky. But now I'm slowly starting to see potential in credit card benefits and utilizing them to my advantage and getting out of that headspace.

I recently read this article: https://www.credello.com/financial-resources/trending/you-used-credit-cards-wrong-whole-time/ and it made me curious if I'm missing any major perks... What's the best benefit you've received from a credit card? How do you compare, vet them, etc?

Looking to hear from people who preferably have good experience with credit cards.

[Gollum]

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@MeredithLepore wrote:

I've always been a little conservative wrt credit card spending. Given the high interest and previous financial struggles, I used to find them a little risky. But now I'm slowly starting to see potential in credit card benefits and utilizing them to my advantage and getting out of that headspace.

I recently read this article: https://www.credello.com/financial-resources/trending/you-used-credit-cards-wrong-whole-time/ and it made me curious if I'm missing any major perks... What's the best benefit you've received from a credit card? How do you compare, vet them, etc?

Looking to hear from people who preferably have good experience with credit cards.

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It took years before I decided the best benefit from a credit card (other than its ramifications regarding my overall creditworthiness) is cash back. It's a small amount, but now I figure I might as well get it, too.

[MeredithLepore]

Makes sense! I feel like with cashback cards, whatever amount I get feels very less at face value. I don't get that feeling of achievement. What's a good cashback rate to expect though?

[FireMedic1]

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@MeredithLepore wrote:

I've always been a little conservative wrt credit card spending. Given the high interest and previous financial struggles, I used to find them a little risky. But now I'm slowly starting to see potential in credit card benefits and utilizing them to my advantage and getting out of that headspace.

I recently read this article: https://www.credello.com/financial-resources/trending/you-used-credit-cards-wrong-whole-time/ and it made me curious if I'm missing any major perks... What's the best benefit you've received from a credit card? How do you compare, vet them, etc?

Looking to hear from people who preferably have good experience with credit cards.

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@MeredithLeporeYour hyperlink is dead. The page that you are trying to access cannot be loaded.

[MileHigh96]

Definitely agree with @Gollum on the cashback feature.  Since I emerged from going through a BK7 and from all I have learned here, I make the credit cards work for me instead of the other way around.  I had my bank debit compromised 3 times in the last 24 months, so I no longer use it anywhere because dealing with fraudulent charges on a debit card can be a pain in the behind.  I use credit cards for absolutely everything and all the cards I use for things are cashback cards.  Sure, you aren't getting a huge amount back with every single purchase, but it can add up in a hurry.

For example, I do a lot of grocery shopping at Walmart, so I am still in the first year of the 5% cashback on the CapOne Walmart card by using Walmart Pay in store.  I use my CapOne Savor One card to pay all my cable/streaming bills and any time I'm at a restaurant, and any other grocery store that isn't Walmart, and I get 3% back on all of that.  I use my NFCU card (1-1/2% back) and my Bread AmEx card (2% back) everywhere else, I just spread it around.  

I pay off all my cards once a week (every Monday morning for me), so the interest rates on the cards mean absolutely nothing to me because by paying them off constantly, I don't accrue interest and I am getting money back on every purchase that I would have made anyways back when I was using my debit card.  Just on my CapOne Walmart card, I've gotten a few hundred dollars back in cashback rewards just for buying groceries.  So I am actually making money from using credit cards instead of the other way around and letting them make money off of me.  The biggest mindset you need to get into is, making sure that you always pay the cards off.  Now you don't need to do it weekly like I do, but you just need to do it before you accrue the interest.  The hardest thing is remembering which card to grab for which purpose to maximize the cash back.

Hope that gives you some insight into my thoughts in using cards. 

[MeredithLepore]

Have updated, thanks for pointing out!

[redpat]

Yes you are missing a lot if you travel.

Example, Delta Reserve card comes with a annual companion certificate that can more than pay the AF and get you access to sky clubs.

So if you can prepay an airline flight the perk is free.

The Amex plat card can do the same when it comes to perks if you can use the credits that come with it.

So for little or no spend on these two cards you can get a lot travel perks.  

Getting cash back is just a discount for items that you purchased not a perk in my opinion.  While getting access to airport lounges, gold status at Marriott and Hilton, gold status at hertz, FHR property credits and free breakfast are perks for making travel more pleasant without a high cost of entry.

[MeredithLepore]

Thanks, this is helpful and gives me new perspective on cashback benefits. I strongly vouch for fraud protection as a benefit!

[Anonymous]

Since this is a self-selecting forum I think we tend to get over-excited and over-value many of the benefits.   Sure, 5% off things is "nice" but not earthshaking, and coupon cutting and/or shopping around can achieve better results.    I would originally have said "But using a card instead is easy and much less time-consuming" which is true for the average person, but look at some of the spreadsheet/app tracking questions that arise here!   So for many here it is basically an enjoyable hobby with some rather marginal rewards (although I agree with @redpat that for some the travel rewards/benefits can have significant value)

So maybe somewhere there is a screwdriver forum, where people discuss what is the best screwdriver for particular purposes and keep spreadsheets (where bought, construction type, price paid, warranty, times used per material, last used, last polished/oiled etc)   Mmm, think I better search now!

[Kforce]

Using CC's is convenient and has a safety factor.

It lets you pay a little later and also depending on where & how much you spend give rewards

Those with lots of travel, hotels, etc can have far better rewards per spend than those just getting cash back cards.  That said many just don't have the travel or spend or patience to save points/miles for the longer term, better return.

To answer you original thought of approx value.

Cash back value = (general spend * general card rate) + (rewards spend * rewards card rate)

One need's to know where they spend and what % can be moved to rewards cards from general spend. Basic general spend card are between 2%-3% and average rewards category is ~5%

With 50/50 the numbers are ~ (2.5+5)/2= 3.75%.  Good travel cards and lots of travel could double+ that number. 

A free 3%-%4 percent is better than nothing.  Even a 3 to 4 card set should net ~3% for the average cash back user.  So $8,000 a month spend >= $240/month rewards for just using CC's in place of bill-pay & debit or cash.