Quantity of Credit Cards

[Anonymous]

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@Remedios wrote:

I dont have "that many" opened accounts by standards here, 13 or 14.

My rewards are not diluted, because of my spend. Never racked any debt, and I doubt I ever will

I currently have at least three cards on 0%, without balances, because 0% wasnt why i got them. 

@Kinglord  whenever this question is asked, you get two kinds of answers, one being "I have as many as I want, works for me", and "No one needs more than 2-3 cards, look at the real world etc"

If people in real world knew what they were doing, they would have more than 3, but probably not 15.

There is no right or wrong answer, and no number that's going to work for everyone. 

I dont see it as a game or hobby. To me, it's a financial tool, and I treat it as such. 

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This. While there is a gameification part for me (I like setting goals and achieving them), the main purpose I have for credit cards is to (i) maximize the return on spend; (ii) build a robust and soild credit file; and (iii) use both to my advantage as a tool when I need it. 

[Anonymous]

I started opening up cards with the idea that I could get 5% cashback on as much of my ordinary spending as possible, one card is for groceries, one for gas, etc.  After accumulating a few cards with high rate of return I then realized that putting non-category spend towards SUB chasing is often a 10-20% return on spend.  Again I'm going to spend this money either way so I want to put as much cash back into my pocket as I can.  Now it's turned into a hobby, a credit card collection if you will.  Threw them all onto a spreadsheet to keep track of, always pay in full, and haven't paid a penny of interest in years. 

[Kinglord]

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@Anonymous wrote:

I started opening up cards with the idea that I could get 5% cashback on as much of my ordinary spending as possible, one card is for groceries, one for gas, etc.  After accumulating a few cards with high rate of return I then realized that putting non-category spend towards SUB chasing is often a 10-20% return on spend.  Again I'm going to spend this money either way so I want to put as much cash back into my pocket as I can.  Now it's turned into a hobby, a credit card collection if you will.  Threw them all onto a spreadsheet to keep track of, always pay in full, and haven't paid a penny of interest in years. 

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Impressive collection you have!  Do you mind clarifying about the "SUB chasing is often a 10-20% return on spend?"

Thank you!

[Citylights18]

Take a typical cash back SUB; spend $1000 dollars and get $100 back. That is a 10% return right there.

Some of them are far better like the AMEX Blue Cash Preferred, $250 back on $1000 spend. They also have an AF of $95.

There is a school of thought that churning through SUBs is the way to go over aligning max categories. I have used big purchases as an opportunity to hit an SUB amount that I would normally not generate enough spend for.

[Anonymous]

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@Citylights18 wrote:

Take a typical cash back SUB; spend $1000 dollars and get $100 back. That is a 10% return right there.

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What he said! 

[longtimelurker]

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@Citylights18 wrote:

Take a typical cash back SUB; spend $1000 dollars and get $100 back. That is a 10% return right there.

Some of them are far better like the AMEX Blue Cash Preferred, $250 back on $1000 spend. They also have an AF of $95.

There is some school of thought that churning through SUBs is the way to go over aligning max categories. I have used big purchases as an opportunity to hit an SUB amount that I would normally not generate enough spend for.

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Not sure it is a school of thought, if your profile can support it, it will obviously produce bigger rewards.  We get excited about a 3% everywhere card, 3% is really pretty small.   As you say, 10%+ will beat that.  (And spend $1000 get $100 back is slightly better than 10% because you also get the normal rewards on the $1000 spend)

Generally MS>>SUB>>organic spend.   Choose your place in the spectrum!

[wasCB14]

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@longtimelurker wrote:

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@Citylights18 wrote:

Take a typical cash back SUB; spend $1000 dollars and get $100 back. That is a 10% return right there.

Some of them are far better like the AMEX Blue Cash Preferred, $250 back on $1000 spend. They also have an AF of $95.

There is some school of thought that churning through SUBs is the way to go over aligning max categories. I have used big purchases as an opportunity to hit an SUB amount that I would normally not generate enough spend for.

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Not sure it is a school of thought, if your profile can support it, it will obviously produce bigger rewards.  We get excited about a 3% everywhere card, 3% is really pretty small.   As you say, 10%+ will beat that.  (And spend $1000 get $100 back is slightly better than 10% because you also get the normal rewards on the $1000 spend)

Generally MS>>SUB>>organic spend.   Choose your place in the spectrum!

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A lot of my skepticism about category cards (and general emphasis on SUBs and perks) is over how some people will take the "a card for every category" approach to extremes.

If someone spends $20k a year in some category and a new card would give 5% instead of 2%, then a special card may be appropriate.

But if someone spends $1000 a year in a category and a new card would give 3% instead of 2%, then getting a big SUB elsewhere probably makes more sense.

It's not really about a school of thought, just quick calculations using rough estimates. Some cards just take too long to become worthwhile, but I'll go for BBP for 2x MRs or WWFCR for 5.25% on online shopping and 3.5% at Costco.

[Citylights18]

5x categories on Chase are about as good as it gets, since they can be redeemed at 7.5 CSR or higher on Hyatt.

The question is what do you with Chase when you don't have 5x bonus on categories like Gas & Groceries. Its nice to have a 5% cash back card available as a stand in or something like the Blue Cash Preferred which is 6% Groceries, 3x Gas for those off quarters. 

There is also something to be said to having a lower tier everyday card for going through the drive through or 7-11 instead of waltzing out your Chase Sapphire Reserve. A PNC Cash Rewards looks small time but consistent 4% cash back at gas and 3% dining isn't a bad way to go for convenience runs to limit threat of fraud where walking in with a big time card you're sort of asking for it. 

[coreysw12]

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@Citylights18 wrote:

There is also something to be said to having a lower tier everyday card for going through the drive through or 7-11 instead of waltzing out your Chase Sapphire Reserve. A PNC Cash Rewards looks small time but consistent 4% cash back at gas and 3% dining isn't a bad way to go for convenience runs to limit threat of fraud where walking in with a big time card you're sort of asking for it. 

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I really don't think the exposure to potential fraud is any different with a top-tier card versus a lower tier card.

I use my cards the way they're meant to be used regardless of where I'm using it - If I'm that worried about the place stealing my card info, I just avoid doing business with that place altogether.

I have my CSP for dining and travel, and I use it for ALL dining and travel.... even when all I'm getting is a $1 cup of coffee at a mcdonald's drive-thru. If the person at the drive-thru window steals my card info and uses it fraudulently, then that's between the drive-thru person, Chase, and the police. Not me.

That's (part of) the reason why we are using credit cards in the first place, not debit cards. Any respectable credit card has excellent zero-fraud-liability policies, and in fact the only ones which might not are those lower-tier cards. In any case, Federal law states that if your card number is stolen, you’re not responsible for any fraudulent charges.

[elixerin]

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@coreysw12 wrote:

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@Citylights18 wrote:

There is also something to be said to having a lower tier everyday card for going through the drive through or 7-11 instead of waltzing out your Chase Sapphire Reserve. A PNC Cash Rewards looks small time but consistent 4% cash back at gas and 3% dining isn't a bad way to go for convenience runs to limit threat of fraud where walking in with a big time card you're sort of asking for it. 

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I really don't think the exposure to potential fraud is any different with a top-tier card versus a lower tier card.

I use my cards the way they're meant to be used regardless of where I'm using it - If I'm that worried about the place stealing my card info, I just avoid doing business with that place altogether.

I have my CSP for dining and travel, and I use it for ALL dining and travel.... even when all I'm getting is a $1 cup of coffee at a mcdonald's drive-thru. If the person at the drive-thru window steals my card info and uses it fraudulently, then that's between the drive-thru person, Chase, and the police. Not me.

That's (part of) the reason why we are using credit cards in the first place, not debit cards. Any respectable credit card has excellent zero-fraud-liability policies, and in fact the only ones which might not are those lower-tier cards. In any case, Federal law states that if your card number is stolen, you’re not responsible for any fraudulent charges.

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i think he meant tier as in points vs cash back, i'd consider points cards to be a tier higher than cash back cards same way as the "elite" cards are a tier higher than even those ( Plat < Centurion, Reserve < Palladium etc..)

Also a respectable bank (CapitalOne comes to mind) can target all three types of individuals without discriminating thru the terms and agreements by means of reduced or non-existent warranties/benefits.. to be fair starter cards aren't exactly in the mix for this example it's more so for cash back vs point cards

I agree the main decision of what card to pull out probably shouldn't be based off whether or not the person swiping the card will commit fraud, it make's no sense.. that is indeed one of the foundational points of a CC, if a shiny Reserve gets more than my 1.5% plastic Cash Magnet, im gonna use it. Same way i would also use a CU or smaller FI CC if it earns higher for said purchase. "Asking for fraud" just cause the logo is different is kind of odd (You'd be surprised a whole lot of people here even who have a Chase/AMEX and a CU or smaller FI membership almost always have a CC by that institution for 5-25x the limits they have everywhere else)