Hi all
I've got my Verizon Visa earning 2% cash back on my Verizon bill every month, which is nice.
However, it ocurred to me that if I apply my Verizon dollars towards my bill as soon as I get them, my next payment will be lower and earn me less rewards.
Does it make more sense to hold on to Verizon dollars and use them on something big (like a whole bill or phone upgrade or something) or do I not come out ahead either way?
Would love to see the math explained as well.
Of course it makes way more sense to build it up than to use it every time you get a dollar or two
@Kforce wrote:Don't have a Verizon Visa so just some thoughts.
Rewards might be earned on charges to you and not be affected by credit from rewards. Would need to have real numbers from statements for a couple months to see what is happening. If they are really using the bottom line and subtracting rewards before calculating you would be getting 1.96% reward not 2.00%. The only CC I know that punishes one for getting statement credit is the Citi Double Cash.
PS: The numbers would be the same if every month or saved up if redeemed as a statement credit. If you can get gift cards, check or another full value out side of statement credit you gain 4c per 100 dollars. Need info from other Verizon card holders that knows if they include the rewards or not in calculations.
Yeah the way the rewards works is you get Verizon dollars, which can be applied toward your bill or other Verizon purchases. So if I apply my rewards towards my bill, it reduces the bill amount, which reduces how much I earn on the next card statement.
Of course, same goes if I save them up and use it to pay an entire bill... my next card statement would have zero rewards earned from my bill payment because there isn't one.
The more I ponder this and try to spreadsheet this out, the more it seems like it's a wash either way.
EDIT: Actually it seems like I may come out ahead using rewards every month as the increased monthly discount more than makes up for the reduced rewards earning. Of course my math could be wrong. Maybe one of you accounting/finance nerds could help me out.
🧮 ready!
I think the rest of you figured this out, but if rewards are earned on purchases (not payments, or a combination like Double Cash) and they do not deduct rewards for applying a credit (it acts like a payment made, not like a merchant credit for a return or something), then the order and manner you do this in makes no difference at all.
In addition to losing out a fraction of a percent by using a statement credit rather than a payment that earns the other 1% with Double Cash, a similar scenario is presented with the Amazon store card. If you apply your rewards toward a new purchase at Amazon, you don't earn the 5% cash back on that portion of the purchase, but if you instead apply it as a statement credit you always get the full 5% on all purchases.
With an even $100 a month (monthly vs saving)
Save a few cents waiting a few months for rewards.
or
Have a couple extra dollars every month to invest, save, etc.
@Kforce wrote:
With an even $100 a month (monthly vs saving)
Save a few cents waiting a few months for rewards.
or
Have a couple extra dollars every month to invest, save, etc.
So using these scenarios and thinking about after month 5: With the use each month, after month 5 you have paid 492.12 + have 1.96 reward dollars
The other way you have paid 492 and have 1.84 reward dollars left. So the 12c less in reward dollars offsets the 12c paid in cash.
My initial thought had been that they should be exactly the same, but I convinced myself otherwise by doing something similar to the above but considering just two months. In the use reward scenario, I spend $198 and have 1.96 reward dollars. In the other, I spend $200 and have 4 reward dollars, and the amounts don't match (4c better off waiting). But once I use the reward dollars, as in the example above, that cancels out.
@Kforce wrote:The Math:
Bill #1 : $100, earn 2% rewards, $2.00
Bill#2: $100 - Credit of $2 from rewards last month = Bill for $98
Bill #2: Rewards = (98*0.02)=1.96
Rewards/Spend = Reward % = (1.96/100) = 1.96%
* This is assuming things not in evidence as they say *
* They might be removing cash back credits before calculating current rewards *
Don't forget to add the $5 Verizon UP credit you get each month that can be transferred to Verizon Dollars since you have this card (if you choose that option).
So you would actually be cashing in your monthly 2% as well as $5. Using your $100 example:
Bill #1 : $100, earn 2% rewards, $2.00
Bill#2: $100 - Credit of $2 from rewards last month + $5 UP = Bill for $93
Bill #2: Rewards = (93*0.02)=1.86
Rewards/Spend = Reward % = (1.86/100) = 1.86%
