Discover Point Hoarding

[Anonymous]

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@Anonymous wrote:

Those that allow your CB to build up for long periods of time, I'm curious as to why you do so.  I've always seen it as giving the creditor an interest free loan.  I feel I could be doing more with a few hundred bucks than letting it sitting an an account as unclaimed rewards.  I'd like to hear from those that do allow their rewards to pile up though so I can understand different perspectives on this.

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As others have said, Discover IT (not the miles card) is a special case, you can get an extra discount if you have enough to redeem for certain gift cards.   In most other cases (maybe all?) I agree with you, and transfer cashback as soon as it is earned to an interest bearing account   (Well, Freedom and FU I keep as URs and transfer them to the CSR account)

For small amounts of money, I can see it might be too much effort to transfer,   but as people seem to like having a fairly large amount, I don't really get it.  I would much rather see my rewards in a savings account (e.g. the 1.15% available with no extra rewards checking stuff) where they are a) safe from any AA and b) earning me some interest.

[austinguy907]

So, a quick calculation of my 2.5% CU APY would net me $1/mo on the $500 cashback if I were to move it over.  The significance of it all is meager at best.

Now, if it was a couple of grand then it would be worthwhile to shift funds over to an interest bearing account.

For another instance of keeping cash on hand and getting that interest to compound would be using your savings account as your escrow account for mortgage expenses like Insurance ($700/yr) or property taxes ($7500/yr) instead of just paying into a non-interest escrow account with your servicer.  Rejecting escrow can work in your favor if you have the discipline to do the saving on your own and not spend what you NEED to have when those bills come due.  

For the sake of arguement using your rewards to pay a bill might be worthwhile if you can't stand seeing that "free money" staring you in the face when you login but, 20% redemptions down the road are a better return than putting it into your savings account for $0.50/mo in interest.  It helps to step back and look at the forrest instead of the leaves or trees.  

[Anonymous]

Im going to be a horder with my Disco, Im just a month in with the card.

I have no 'plan' yet but to sit on it for now. LOL