Credit Card CLD and Banked Cash Rewards Question

[Anonymous]

During the last economic downturn, Citi devalued TYP. From that point forward, I moved mainly to cash back cards or cards with points that convert to cash back, although they carry some risk, and I guess even straight cash back cards carry a tiny bit of risk.

They "re-valued" the points when the economy improved. 

Points can be altered much easier than cash cards, because its a lot less transparent on the surface. 

I always cash out my cash back when it hits the threshold or around at least $3 for those cards without a threshold (Cap 1).

[Anonymous]

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@Anonymous wrote:

During the last economic downturn, Citi devalued TYP. From that point forward, I moved mainly to cash back cards or cards with points that convert to cash back, although they carry some risk, and I guess even straight cash back cards carry a tiny bit of risk.

They "re-valued" the points when the economy improved. 

Points can be altered much easier than cash cards, because its a lot less transparent on the surface. 

I always cash out my cash back when it hits the threshold or around at least $3 for those cards without a threshold (Cap 1).

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Right, the example I am most familiar with is Penfed, that just silently devalued: the points needed for various redemptions went from the equivalent of 1point=1c to 1 point = 0.85c.     I would think a lot of people didn't really notice, unless you had been saving up for X and realized that you needed many more points now!

Was Citi as silent?

[Anonymous]

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@torebuild2014 wrote:

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@Anonymous wrote:

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@torebuild2014 wrote:

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@K-in-Boston wrote:

A CLD wouldn't impact your existing rewards.  I have not heard of any of the issuers of cards from the major points programs (MR, TYP, UR) closing cards for any reason other than abuse or prolonged inactivity.  Points earned on cobranded cards will be collected in their respective loyalty account and would be safe unless there was abuse and they were clawed back.  Cash back cards generally have a window to redeem after closure.  I don't see any reason to doing the credit card equivalent of having a run on the banks and shoving cash under the mattress.

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Thanks, I think this is information is what I was looking for. I don't usually reedem as frequently as most so didn't want to risk the cash being forfeited if for some reason a cashback card was closed for whatever reason.

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But the word "generally" can be critical so it depends on your card.   You can also, depending on the card, lose rewards earned but not credited that month.  I lost a LOT of cash back that way when Amex closed my card (for good reason to be fair).  

As others have said, with a very limited number of exceptions (e.g. discover when you are redeeming for discounted gift cards) for cash back it makes sense to redeem as soon as you can.  Redeem into a special savings account if you are one of those that need to "feel" the reward as a lump sum.....

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Amex is one of the ones that I had been accumulating for our vacation travel and offset the expenses. Since they don't allow cashing out and only applying as a statement credit, I will have some ideas to be a bit more creative. 

I will move the rewards that I have with Cap One cards and will just reedem for a check however, I don't want to bring additional attention to the accounts while they are in the midst of CLD. I want to stay under the radar and this is the reason that I initially asked the question. Bottom line is I need to manage the cashbacks a bit differently in the current environment. 

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If you want to keep all of your cash back rewards for vacation savings and you get them mainly from statement credits, every time you obtain a statement credit (e.g. $25), take that same amount and move it from your checking account to your savings account.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

During the last economic downturn, Citi devalued TYP. From that point forward, I moved mainly to cash back cards or cards with points that convert to cash back, although they carry some risk, and I guess even straight cash back cards carry a tiny bit of risk.

They "re-valued" the points when the economy improved. 

Points can be altered much easier than cash cards, because its a lot less transparent on the surface. 

I always cash out my cash back when it hits the threshold or around at least $3 for those cards without a threshold (Cap 1).

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Right, the example I am most familiar with is Penfed, that just silently devalued: the points needed for various redemptions went from the equivalent of 1point=1c to 1 point = 0.85c.     I would think a lot of people didn't really notice, unless you had been saving up for X and realized that you needed many more points now!

Was Citi as silent?

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Yes. I only found out when I knew I had enough points to get something I wanted and found I was quite a bit short and that the "price" went up. I wasn't too happy. 

So the only "bank" that I keep my rewards in is an actual bank. I accumulate nothing in reward accounts.

[Jccflat]

Does paying back as of statement credit with Amex  points worth? The value 

[RSX]

I think it is

here is my deal

cash rewards on a CC are owned by the issuer

cash in my bank account is owned by me

if I store the cash rewards in the card, they can be taken away.  If I don't use them as a statement credit, I have to use cash from my bank account to pay the bill.  

so I would rather get a statement credit (and ensure you pay the minimum payment as some issuers do NOT count it as a payment) and keep the money in my bank. If I want to use it as savings, I move it to my savings account

each to their own, but I redeemed $0.75 on my Cap1 this morning - -cause why not?

[K-in-Boston]

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@Jccflat wrote:

Does paying back as of statement credit with Amex  points worth? The value 

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Membership Rewards are only worth 0.6 cents when redeemed for statement credit.  Having a Schwab Platinum Card can make it worthwhile, as you can deposit them into a Schwab account at 1.25 cents.  There are sometimes gift card promos where you can get 1 cent, but you'd generally want to move them to a transfer partner for the best bang for the buck, or use Amex Travel in certain circumstances.

[Loquat]

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@Jccflat wrote:

Does paying back as of statement credit with Amex  points worth? The value 

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Using Membership Rewards for statement credit is an option...not one I'd ever take advantage of but an option nonethless.  Before I start coverting MR points to statement credit I'd just drop Amex all together and get a PNC Cash Rewards/BoA 3-2-1 card or something similar.  Most Amex cards that have decent MR multipliers have an annual fee and no reason to pay and annual fee if you're just going to cash out as statement credit.

[RSX]

I wasn't aware of the $0.60 redemption, but though I feel this is all free money anyway, I will likely look into another way to use the MR points.  So thank you for the education

but for Citi and Cap1 (which I think the OP was asking about) it is real cash

i guess I am not maximizing the absolute most out of points, but I have never felt like I deserve them anyway.  

[UpperNwGuy]

On my cash back cards, I redeem for cash as soon as I hit $15 or hit the minimum redemption (which is $50 on two of my NFCU cards).  For my Chase cards, I've been redeeming the points for travel.  For a long time I had high balances of both Chase URs and United MileagePlus miles, but I worked those balances down over the last 18 months.  I absolutely do not use credit cards as a "bank" for points, miles, or cash rewards.  I want the rewards under my control, not the bank's control.