How did you do on CC rewards in 2018?
Others may be concerned about managing their cards, optimizing credit limits, making their collection more prestigious, polishing their FICO score, etc. I don't care much about that; those things are useful only as a means to an end, and that end is rewards!
I've pretty much completed my spreadsheet for 2018, and the totals look like this:
Value of rewards earned: $5,641.77 (down from $6,891.66 in 2017)
Value of rewards redeemed: $8,050.62 (up from $6,573.46)
Actual cash received: $3,308.20 (down from $4,414.37)
While this was a record year in total rewards redeemed ($8,050.62), much of that was point redemption for travel (airfare, cruise fare, hotel rooms), so I don't consider it actually cash (see discussion below). Actual cash redemption was the lowest it's been in five years, but I reckon the reason is that I'm getting a better redemption value by redeeming for travel instead. And $3k+ in cash isn't bad. $5,641.77 in rewards earned is also a five year low, and I think that largely reflects that fact that I'm getting fewer SUB's because I'm being more careful about applying for new cards. The 5/24 effect.
The distinction between earned and redeemed is because rewards persist across years. Not all of the rewards I earn in a year are redeemed that year, and rewards I redeem this year may have been earned a previous year. In many cases, I don't when or even how I will redeem rewards earned.
The "rewards earned" value reflects a nominal redemption value for rewards accumulated over the year. Cash is, obviously cash. Points that can be redeemed for cash I generally value at the cash redemption rate, even when it's quite possible I will redeem them at a better rate for travel, gift cards, etc. Airline miles I value at 1¢ per point. Other point systems get more squishy; I try to value the points based on the amount of cash I would otherwise pay for what I would likely redeem points for. For example, we stay at LaQuinta hotels quite often. When we do redeem points, it's usually about a 1¢ redemption rate; we're choosing between using 60,000 points or spending $60, so on calculating earnings, I value those points at 1¢ per point. OTOH, we rarely stay at Hilton, and when we do, there are other choices we could make. We could stay at the Hilton near O'Hare for about 27,000 points. But we could alternatively Hotwire or Priceline a nearby hotel for around $90. So I value Hilton points at $.003 per point. I try to be conservative so that I don't create the impression that my rewards are greater than what they actually are.
As an overall rewards percentage, I averaged about 7.25% rewards (down from 9.06% in 2017) on my spending for the year, which isn't shabby. My best percentage was back in 2011 when I nailed it at almost 14% rewards, while my highest dollar level earned was in 2016 at $7,570.
The "rewards redeemed" value reflects actual redemptions during the year. This can be similarly squishy. If I redeem miles for a flight, is the redemption value what I would have paid for the ticket in cash? What if we could have gotten a comparable flight on another airline for less cash, but we decided to use our miles instead? If we have a buttload of miles, maybe burn a few more to go business class. But would we have upgraded if it actually took more cash to do so? I try to make my best estimation of what using these points actually *saved* us on our bottom line, and that can be tricky.
On the other hand, "cash received" is simple. It's the amount of actual funds received from rewards, whether that be ACH deposits, statement credits, checks or Visa/MC/AmEx/Discover gift cards. Those are the rewards that definitively affect the bottom line, and it's the main metric I like to look at.
This time each year I look at the stats and wonder what the new year will bring. But whatever I thnk, I'm usually wrong. Throughout the year things happen that surprise me. Most years, between DW and I we apply for somewhere between 3 and 6 cards, including some juicy cash SUB's. But partly because of 5/24, we've become much more application-resistant. As it turned out, the only card we acquired in 2018 was the Chase Ink Preferred with a 100k URP SUB (we also both applied for the CapOne Savor but were both declined ). So no cash SUBs this year, just harvesting cash rewards as they accumulate on existing cards and exploiting targeted usage offers (e.g. AmEx, BofA, Chase).
Looking forward to 2019, it's hard to tell, but I'm guessing it's going to be another lean year. I only have about $100 cash banked going into the year. I can safely rely on my $480 in BofA Better Balance Rewards. Utilities on Cash+ will probably bring in another $200 or so. I will probably redeem my 100k+ URP on the Ink Preferred as cash (URP freaks, stop throwing things at me), so I'm at about $1,800. I also have banked points in various programs which, if redeemed flat out for cash would add another $2k or so. Added together that would top this year's cash total but still remain about average. But many of those rewards (e.g. URP and Discover CB) are likely to continue to be hoarded pending redemption options more favorable than cash. OTOH, it's hard to predict what bright shiny card with a big cash bonus might stride on the scene and tempt me. And if I want to keep earnings up, I'll need to get more aggressive about applications. Then we'll see how it all panned out in about 12 months.
2018 is no good, just 2% w/o SUB. But then again, I just started getting into this late 2018. I think I can probably do 3-4% w/o SUB in 2019.
That is an excellent writeup and analysis. I'm impressed with both the numbers you shared and the fact that you were able to sustain that kind of %cashback over so many years.
I shared mine in CB's thread, but I averaged about 3.3% cashback total not including SUBs, but like you I really only opened 2 cards in 2018 so the SUBs weren't crazy (Delta Business Plat and SDFCU Premium Cash+), shouldn't effect that number too much.
I'll keep track again this year and we'll see if we can't get my rookie numbers up a bit LOL!
Oh man, last year was a good one.
100K from plat, 50K from biz gold, 20K from ED plus other points accumulated. I redeemed 180K for a Thailand trip for 4.
Marriott/Starwood - 200K
Hilton - 500K
AA - 150K so far
Based on some of the feedback, I'm assuming we are also counting rewards attained via OPM/business spend as well? Or just personal?
Last year I really focused on meeting some subs & CB for me it was:
Merrill Lynch Visa Sig $3k spend in the first 90 for $500 CB
Alliant Rewards Visa $3k spend in the frst 90 for $300 CB
Marriott Business Rewards 80,000 MR points
Amex HH Business 120,000 HH points
TD Aeroplan Visa $1k spend in the first 90 for 25,000 Air Canada points
Amex Cash Magnet $350 statement credit for $6.5k spend
This will be a verry quiet year for me.
Life is simple for me.
I average 3.2% cashback with my 5 cards.