Understanding the World of Credit Card "Points"

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
Small Law Survivor
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Understanding the World of Credit Card "Points"

Post by Small Law Survivor » Mon Dec 04, 2017 10:35 am

I've recently become aware that there is a whole world of credit card points out there. Yes, I was vaguely aware of this, but I ignored it completely - just didn't have time to deal with it.

However, now I've listened to a few financial podcasts where "experts" in this area of commerce are interviewed, and it's very confusing to me. I like to keep things simple, and some of these people carry a lot of cards, move points from one place to another, and so forth ... It seems like a full-time (ok, part-time) job, which I don't need. And, I'm not sure how much money they are making/saving from all of this. On the other hand, I'm suffering from a mild case of FOMO.

That said, my family does a lot of business with Amazon, and I'm wondering if that isn't the one credit facility we should have? Any others, but keeping it simple?

Any thoughts or advice would be appreciated. I would like to just continue to ignore this area of personal finance, but, yes, FOMO ...

mouses
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Re: Understanding the World of Credit Card "Points"

Post by mouses » Mon Dec 04, 2017 10:41 am

I don't devote any thought to this. I see people chasing points, taking into account categories of the quarter, etc., no interest in that level of complexity.

However my two primary cards have 1.5% cash back on all purchases. I charge almost everything, for convenience and so that I have a monthly total of what I'm spending. So I get about $500 back a year.

I buy less and less from Amazon because of their abysmal shipping times of weeks.
Last edited by mouses on Mon Dec 04, 2017 7:05 pm, edited 1 time in total.

andrew1976
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Re: Understanding the World of Credit Card "Points"

Post by andrew1976 » Mon Dec 04, 2017 10:54 am

Check out these blogs:

https://millionmilesecrets.com/step-by- ... t-started/
https://thepointsguy.com/
http://mommypoints.boardingarea.com/

A popular first credit card to get is the Chase Sapphire Preferred since you get 50k points if you spend $4k within 4 months. The game isn't as lucrative as it used to be but it still is helpful as long as you are disciplined with paying off your credit card each month and keeping track of the minimum spend requirements.

BackOfTheNet
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Re: Understanding the World of Credit Card "Points"

Post by BackOfTheNet » Mon Dec 04, 2017 10:59 am

I think that signup bonuses can be worth the effort. Between my wife and I, we open probably 10 new accounts each year just for the bonus. For example:

https://creditcards.chase.com/rewards-c ... -preferred

50,000 bonus points when you spend $4,000 within 3 months. $0 annual fee the first year. These points could be used for a $500 credit ($.01 per point) to your account OR could be transferred to a hotel or airline partner ($.015 per point, or more).

Then, close the card when the free year runs out. We have been doing this for years and both have credit scores over 800.

pshonore
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Re: Understanding the World of Credit Card "Points"

Post by pshonore » Mon Dec 04, 2017 11:08 am

I believe if you use the Amazon Prime Rewards card (not sure about that name) to charge your purchases at Amazon, you get a 5% "credit" to be applied toward future Amazon purchases.

I use AX Blue preferred for groceries (6% back but there is an annual fee)
Costco Visa card for gas (4% back but not if you buy the gas at Sams or BJs as I found out last month)
Everything else goes to USAA (2.5%) or CitiX2 Mastercard (2%).

All you have to do is remember where to use which card. If you travel a lot, other cards may be better.

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lthenderson
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Re: Understanding the World of Credit Card "Points"

Post by lthenderson » Mon Dec 04, 2017 11:17 am

I've never been interested in points. But I do have the Citibank DoubleCash card that gives me 2% back on all purchases. Other than one other credit card that I keep for emergencies should my primary get hacked or I need additional balance room for a bigger purchase, I don't have any others and don't "churn" them. I like it because it is extremely simple and other than requesting an occasional refund, there is nothing required of my time.

snowox
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Re: Understanding the World of Credit Card "Points"

Post by snowox » Mon Dec 04, 2017 11:18 am

I was torn with this as well because of the travel I do etc... So to simplify for me I just got the Citi Mastercard 1% when you purchase and 1% when you pay your bill. I know I left some on the table but its about how much time or energy do you want to invest. We have everything possible set up on this card and this year we got over 1200$ back. Between that and our points card for our Health Insurance (16) 25$ Amazon cards we basically did 100% of our Christmas shopping . So that works for us.

technovelist
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Re: Understanding the World of Credit Card "Points"

Post by technovelist » Mon Dec 04, 2017 11:24 am

I am a relative novice compared to the experts on flyertalk.com.

But I have still built up a balance of about a million points in total, mostly via signup bonuses, in various programs (british airways, american airlines, american express membership rewards, marriott/starwood points). At 2 cents each, that's about $20k in total. I've also obtained numerous domestic and international flights and hotel rooms along the way, and have almost certainly saved that much ($20k) in the last 5 years or so.

I think it's worth it for an hour or two a month.
In theory, theory and practice are identical. In practice, they often differ.

snowox
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Re: Understanding the World of Credit Card "Points"

Post by snowox » Mon Dec 04, 2017 11:32 am

technovelist wrote:
Mon Dec 04, 2017 11:24 am
I am a relative novice compared to the experts on flyertalk.com.

But I have still built up a balance of about a million points in total, mostly via signup bonuses, in various programs (british airways, american airlines, american express membership rewards, marriott/starwood points). At 2 cents each, that's about $20k in total. I've also obtained numerous domestic and international flights and hotel rooms along the way, and have almost certainly saved that much ($20k) in the last 5 years or so.

I think it's worth it for an hour or two a month.

And just curious, all this doesn't affect your credit rating? it sounds awesome.

Halicar
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Re: Understanding the World of Credit Card "Points"

Post by Halicar » Mon Dec 04, 2017 11:37 am

It's a continuum. On one end, you can effortlessly get 2% to 5% cash back on all your purchases, and if you don't do this you're just leaving money on the table. On the other end is the world of "churning" where you can make a lot of money with signup bonuses and "manufactured spending" but it's a fair amount of work. I suggest at the minimum to get a card that pays 2% cash back and a few retailer-specific cards (for places you already shop) that pay 5% cash back.

technovelist
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Re: Understanding the World of Credit Card "Points"

Post by technovelist » Mon Dec 04, 2017 11:37 am

snowox wrote:
Mon Dec 04, 2017 11:32 am
technovelist wrote:
Mon Dec 04, 2017 11:24 am
I am a relative novice compared to the experts on flyertalk.com.

But I have still built up a balance of about a million points in total, mostly via signup bonuses, in various programs (british airways, american airlines, american express membership rewards, marriott/starwood points). At 2 cents each, that's about $20k in total. I've also obtained numerous domestic and international flights and hotel rooms along the way, and have almost certainly saved that much ($20k) in the last 5 years or so.

I think it's worth it for an hour or two a month.

And just curious, all this doesn't affect your credit rating? it sounds awesome.
My credit score is over 800, so no.

Of course you can't go crazy and apply for 10 cards at one time, and you have to keep your utilization down as well, but that's not hard.
In theory, theory and practice are identical. In practice, they often differ.

snowox
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Re: Understanding the World of Credit Card "Points"

Post by snowox » Mon Dec 04, 2017 11:49 am

technovelist wrote:
Mon Dec 04, 2017 11:37 am
snowox wrote:
Mon Dec 04, 2017 11:32 am
technovelist wrote:
Mon Dec 04, 2017 11:24 am
I am a relative novice compared to the experts on flyertalk.com.

But I have still built up a balance of about a million points in total, mostly via signup bonuses, in various programs (british airways, american airlines, american express membership rewards, marriott/starwood points). At 2 cents each, that's about $20k in total. I've also obtained numerous domestic and international flights and hotel rooms along the way, and have almost certainly saved that much ($20k) in the last 5 years or so.

I think it's worth it for an hour or two a month.

And just curious, all this doesn't affect your credit rating? it sounds awesome.
My credit score is over 800, so no.

Of course you can't go crazy and apply for 10 cards at one time, and you have to keep your utilization down as well, but that's not hard.


I gotta give it a shot, thanks!

RollTide31457
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Re: Understanding the World of Credit Card "Points"

Post by RollTide31457 » Mon Dec 04, 2017 12:01 pm

It’s a balance between adding some amount of complexity via credit card usage to gain some “cash back” points versus paying with cash or debit card. Most of our points have come from the new card member bonuses.

H-Town
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Re: Understanding the World of Credit Card "Points"

Post by H-Town » Mon Dec 04, 2017 12:15 pm

Small Law Survivor wrote:
Mon Dec 04, 2017 10:35 am
I've recently become aware that there is a whole world of credit card points out there. Yes, I was vaguely aware of this, but I ignored it completely - just didn't have time to deal with it.

However, now I've listened to a few financial podcasts where "experts" in this area of commerce are interviewed, and it's very confusing to me. I like to keep things simple, and some of these people carry a lot of cards, move points from one place to another, and so forth ... It seems like a full-time (ok, part-time) job, which I don't need. And, I'm not sure how much money they are making/saving from all of this. On the other hand, I'm suffering from a mild case of FOMO.

That said, my family does a lot of business with Amazon, and I'm wondering if that isn't the one credit facility we should have? Any others, but keeping it simple?

Any thoughts or advice would be appreciated. I would like to just continue to ignore this area of personal finance, but, yes, FOMO ...
If you are not willing to invest in the knowledge of credit card points, you'll miss out on those benefits. Simple as that. Don't use "keeping it simple" as an excuse for not learning things by yourself. "Keeping it simple" refers to people who have acquired the knowledge and understand it thoroughly in order to execute the plan as simple and effective as possible.

ccieemeritus
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Re: Understanding the World of Credit Card "Points"

Post by ccieemeritus » Mon Dec 04, 2017 12:19 pm

I keep it simple by ignoring the world of points. My primary card is my Costco executive Visa card, which gives me “pretty good” cash back at the end of the year without work.

DrGoogle2017
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Re: Understanding the World of Credit Card "Points"

Post by DrGoogle2017 » Mon Dec 04, 2017 12:32 pm

I did play the credit card games once I retired because I finally had the time to keep track of them. But the minute I harvested the bonus points, I closed the card and I also use the points. Right now I only have points on British Airways. But I must say, it has been profitable. My kids and their friends got some benefits out of it as well.
But since the Equifax hack, I’m done playing this game.

MI_bogle
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Re: Understanding the World of Credit Card "Points"

Post by MI_bogle » Mon Dec 04, 2017 12:40 pm

Small Law Survivor wrote:
Mon Dec 04, 2017 10:35 am


However, now I've listened to a few financial podcasts where "experts" in this area of commerce are interviewed, and it's very confusing to me. I like to keep things simple, and some of these people carry a lot of cards, move points from one place to another, and so forth ... It seems like a full-time (ok, part-time) job, which I don't need. And, I'm not sure how much money they are making/saving from all of this.
It's very simple to open a card when you get an offer for a sign-up bonus, use that card for a bit until you hit the required spending level, and then collect the points/cash/whatever. Probably an hour's worth of work total, if that. For anywhere between 100 and 500 dollar-equivalents

The return on time investment is great.

You don't have to maximize every point, have 12 open cards, transfer balances, or whatever to get a lot of financial value out of credit card offers

You can also do that for bank account offers, I get them all the time. Move a few thousand to a savings account, get a 150 to 300 dollar bonus. Again, less than an hour's work for a decent payout.

benevo
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Re: Understanding the World of Credit Card "Points"

Post by benevo » Mon Dec 04, 2017 12:43 pm

Small Law Survivor wrote:
Mon Dec 04, 2017 10:35 am
I've recently become aware that there is a whole world of credit card points out there. Yes, I was vaguely aware of this, but I ignored it completely - just didn't have time to deal with it.

However, now I've listened to a few financial podcasts where "experts" in this area of commerce are interviewed, and it's very confusing to me. I like to keep things simple, and some of these people carry a lot of cards, move points from one place to another, and so forth ... It seems like a full-time (ok, part-time) job, which I don't need. And, I'm not sure how much money they are making/saving from all of this. On the other hand, I'm suffering from a mild case of FOMO.

That said, my family does a lot of business with Amazon, and I'm wondering if that isn't the one credit facility we should have? Any others, but keeping it simple?

Any thoughts or advice would be appreciated. I would like to just continue to ignore this area of personal finance, but, yes, FOMO ...
I don't go as intense as swapping/trading points and all that jazz - but I do have a few specific cards for strategic reasons:

- American Express Blue Cash Preferred - 6% back on groceries, 3% back on gas, 1% back on everything else. I use this for groceries and gas, not for the remaining 1%. NOTE: this one has a $95 annual fee. In my situation, when doing the math, I made more even paying this fee than the fee-free version ("AmEx Blue Cash Card") which only gives 3% back on groceries. Do the math to see if it works for you or not, though!
- Discover It card - 5% rotating in quarters throughout the year for specific categories. Could be home improvement one quarter, department stores the next, etc.
- Amazon Prime card - 5% back on all Amazon purchases. As we buy a lot on Amazon (including things like toothpaste, etc.), I use this for all Amazon purchases.
- Capital One Venture card - 1.25% on everything. I use this for all other purchases. (there's also a version of this card with a fee and higher %, but it didn't make sense for me/us).

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munemaker
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Re: Understanding the World of Credit Card "Points"

Post by munemaker » Mon Dec 04, 2017 12:48 pm

If you want to know about credit card bonuses, see the doctor:

https://www.doctorofcredit.com/credit-cards/

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DaftInvestor
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Re: Understanding the World of Credit Card "Points"

Post by DaftInvestor » Mon Dec 04, 2017 12:57 pm

I used to collect a lot of points for travel but not find (other than sign-up bonuses) getting cash back is the best deal and requires a lot less management.
I use two cards now:
1) Citi DoubleCash back - 2% back on everything (most points programs are only 1%-1.5% back if you do the math on worthiness of the points)
2) Amazon Prime Credit Card - 5% back on all Amazon purchases - can't be beat. This is a no-brainer to get if you are an Amazon Prime member and spend a lot with them. I don't even carry this card with me - I just registered it in my Amazon account and threw it in a drawer.

So I use Doublecash for pretty much everything except for on Amazon were I use the Chase Amazon card.

Nate79
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Re: Understanding the World of Credit Card "Points"

Post by Nate79 » Mon Dec 04, 2017 1:00 pm

It's nice to get the cash back, get some extra sign up bonuses, etc. Also can do sign up bonuses for checking/savings accounts. It's peanuts compared to income and it's not going to make anyone rich but it's pretty easy money regardless.

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Watty
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Re: Understanding the World of Credit Card "Points"

Post by Watty » Mon Dec 04, 2017 1:14 pm

pshonore wrote:
Mon Dec 04, 2017 11:08 am
I believe if you use the Amazon Prime Rewards card (not sure about that name) to charge your purchases at Amazon, you get a 5% "credit" to be applied toward future Amazon purchases.

I use AX Blue preferred for groceries (6% back but there is an annual fee)
Costco Visa card for gas (4% back but not if you buy the gas at Sams or BJs as I found out last month)
Everything else goes to USAA (2.5%) or CitiX2 Mastercard (2%).

All you have to do is remember where to use which card. If you travel a lot, other cards may be better.
+1
I just use the no fee Amex blue without a fee for 3% for groceries.
The Costco card also give you 3% back on travel and dining and has a great extended warranty for some electronics.

About once a year I will do a signup for a bonus.

Small Law Survivor
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Re: Understanding the World of Credit Card "Points"

Post by Small Law Survivor » Mon Dec 04, 2017 2:15 pm

OK - I have the COSTO "executive membership" card that gives 2% annual cash back (!) Since I bought hearing aids at Costco this year, that's $50 right there! That will cover (almost) the additional cost of the card :happy

And, I just applied for the Amazon card.

So, I'm getting there!

MotoTrojan
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Re: Understanding the World of Credit Card "Points"

Post by MotoTrojan » Mon Dec 04, 2017 2:19 pm

lthenderson wrote:
Mon Dec 04, 2017 11:17 am
I've never been interested in points. But I do have the Citibank DoubleCash card that gives me 2% back on all purchases. Other than one other credit card that I keep for emergencies should my primary get hacked or I need additional balance room for a bigger purchase, I don't have any others and don't "churn" them. I like it because it is extremely simple and other than requesting an occasional refund, there is nothing required of my time.
2% cash back is nice with the simplicity, I use this too.

If you shop with Amazon a lot, might as well get one and leave it in a drawer with the card info plugged into your Amazon account. 5% is nice.

UpperNwGuy
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Re: Understanding the World of Credit Card "Points"

Post by UpperNwGuy » Mon Dec 04, 2017 2:52 pm

There are three main types of rewards credit cards: points, miles, and cash back.

If you travel often, the points cards offered by Chase (Sapphire Reserve, Sapphire Preferred) and American Express (Platinum, Premier Rewards Gold) are nice. They have large signup bonuses, points earning through regular use of the card, and opportunities to transfer the points to airlines for award tickets. But, if you don't travel, the points can be difficult to redeem for full value.

Airline miles cards are not a good deal for most people because you only earn one mile per dollar spent, whereas you can earn points faster with the Chase and American Express cards and then convert those points to airline miles.

If you don't travel often, cash back cards are best. The signup bonuses on these cards are relatively small, but the earnings from using these cards for regular spending can easily amount to $500 or more per year. The best approach is to get a 2% cash back card as a default card and add one or more additional cards that offer 3% (or more) for such categories as gas, groceries, or restaurants. If you have an account with Fidelity, they offer a nice 2% cash back card.

Some rewards cards have annual fees, and others don't. As you might expect, the cards with annual fees have larger signup bonuses and let you earn points faster. Those who travel often and use their cards often will quickly earn back the annual fee. This depends upon the spending habits of each person.

Beware of the "points and miles" bloggers. Many of them receive compensation from the banks that issue the credit cards, so they have an inherent conflict of interest.
Retiree with a pension and a 60/40 taxable portfolio: Total Stock + Total Int'l + Total Bond + Interm Term Tax Exempt.

Small Law Survivor
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Re: Understanding the World of Credit Card "Points"

Post by Small Law Survivor » Mon Dec 04, 2017 3:08 pm

UpperNwGuy wrote:
Mon Dec 04, 2017 2:52 pm
If you have an account with Fidelity, they offer a nice 2% cash back card.
Take it Vanguard has not jumped into this business :)

Jags4186
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Re: Understanding the World of Credit Card "Points"

Post by Jags4186 » Mon Dec 04, 2017 3:22 pm

Small Law Survivor wrote:
Mon Dec 04, 2017 10:35 am
I've recently become aware that there is a whole world of credit card points out there. Yes, I was vaguely aware of this, but I ignored it completely - just didn't have time to deal with it.

However, now I've listened to a few financial podcasts where "experts" in this area of commerce are interviewed, and it's very confusing to me. I like to keep things simple, and some of these people carry a lot of cards, move points from one place to another, and so forth ... It seems like a full-time (ok, part-time) job, which I don't need. And, I'm not sure how much money they are making/saving from all of this. On the other hand, I'm suffering from a mild case of FOMO.

That said, my family does a lot of business with Amazon, and I'm wondering if that isn't the one credit facility we should have? Any others, but keeping it simple?

Any thoughts or advice would be appreciated. I would like to just continue to ignore this area of personal finance, but, yes, FOMO ...
If you have big spend or are willing to churn bonuses, the right CC points can get you great value. If you are a normal person who say puts $2000-$3000/mo on your credit card and you really only want 1 card, you’re likely better getting a cashback card.

Everyone should have a Citi Double Cash IMO.

curmudgeon
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Re: Understanding the World of Credit Card "Points"

Post by curmudgeon » Mon Dec 04, 2017 3:28 pm

Small Law Survivor wrote:
Mon Dec 04, 2017 2:15 pm
OK - I have the COSTO "executive membership" card that gives 2% annual cash back (!) Since I bought hearing aids at Costco this year, that's $50 right there! That will cover (almost) the additional cost of the card :happy

And, I just applied for the Amazon card.

So, I'm getting there!
I think the Costco card is 2% only on Costco purchases; it's 1% elsewhere (but more for gas/travel). Still not a bad default card. I occasionally will do a new card for a good signup bonus, but don't generally keep anything with an annual fee for more than the initial year. I think picking a good baseline card is definitely worthwhile, beyond that is open to question (more value if you like to travel).

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Pajamas
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Re: Understanding the World of Credit Card "Points"

Post by Pajamas » Mon Dec 04, 2017 3:38 pm

Small Law Survivor wrote:
Mon Dec 04, 2017 10:35 am

That said, my family does a lot of business with Amazon, and I'm wondering if that isn't the one credit facility we should have? Any others, but keeping it simple?
I prefer to keep my finances simple and minimize the number of credit cards I hold but finally got the Amazon Visa for the $70 sign-on bonus and 5% ongoing bonus on Amazon purchases. It's a Chase Visa just like my primary credit card, so it is basically just a different sub-account on Chase's website, not too much trouble to deal with as all the log-in and contact information is the same and in the same place. The card just came today and I stuck it in my filing cabinet as I don't plan to use it for anything else.

If you have a lock or alert on your credit or other issues, it won't be approved instantly, but you can call Chase at (888) 270-2127 to get it approved. They approved it immediately when I called, presumably because I already had a Chase Visa.

Don't get confused by the other cards Amazon offers. They offer an Amazon Prime Rewards Signature Card with a $70/5% bonus, an Amazon Rewards Signature Card with lesser bonuses, which are both from Chase, plus an Amazon.com Store Card from Synchrony that I believe is just for use on Amazon.
Last edited by Pajamas on Mon Dec 04, 2017 3:47 pm, edited 6 times in total.

CMD1
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Re: Understanding the World of Credit Card "Points"

Post by CMD1 » Mon Dec 04, 2017 3:41 pm

Fidelity's simple 2% cash back on everything is a good solution if you want to keep it simple.

ZinCO
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Re: Understanding the World of Credit Card "Points"

Post by ZinCO » Mon Dec 04, 2017 3:58 pm

DrGoogle2017 wrote:
Mon Dec 04, 2017 12:32 pm
I did play the credit card games once I retired because I finally had the time to keep track of them. But the minute I harvested the bonus points, I closed the card and I also use the points. Right now I only have points on British Airways. But I must say, it has been profitable. My kids and their friends got some benefits out of it as well.
But since the Equifax hack, I’m done playing this game.
Don't let the Equifax hack stop you. Only difference is now somebody else will be playing the credit card game with your SSN instead of you.

JBTX
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Re: Understanding the World of Credit Card "Points"

Post by JBTX » Mon Dec 04, 2017 3:58 pm

Small Law Survivor wrote:
Mon Dec 04, 2017 10:35 am
I've recently become aware that there is a whole world of credit card points out there. Yes, I was vaguely aware of this, but I ignored it completely - just didn't have time to deal with it.

However, now I've listened to a few financial podcasts where "experts" in this area of commerce are interviewed, and it's very confusing to me. I like to keep things simple, and some of these people carry a lot of cards, move points from one place to another, and so forth ... It seems like a full-time (ok, part-time) job, which I don't need. And, I'm not sure how much money they are making/saving from all of this. On the other hand, I'm suffering from a mild case of FOMO.

That said, my family does a lot of business with Amazon, and I'm wondering if that isn't the one credit facility we should have? Any others, but keeping it simple?

Any thoughts or advice would be appreciated. I would like to just continue to ignore this area of personal finance, but, yes, FOMO ...
This is my take and my take only. I've played around with rewards cards for years, but after coming here 6 months ago and reading up on it I'm playing a little more. I'm not working at the moment, so that does give me some more time to do some of these things.

As to Amazon card, getting the 5% cash back card is a no brainer if you do any significant amount of business on it. Plus there may be an modest up front bonus. Same with Target.

In the last 6 months I've have been getting cards that have a $500 up front bonus or more. That is my arbitrary cutoff point of what is worth the time, hassle, and very modest and temporary credit score hit you may incur doing this. In about 6-7 months, I will have earned about $2500 in up front bonuses. Going forward I doubt there will be as many opportunities because I have hit most of the main ones. I suspect I will target 2-4 per year, if they are available. I'm not chasing after $200 bonuses.

If you do go the route of chasing large up front bonuses, do the Chase cards first, because of their "5/24" rule.

Outside of that, for everything else, I have a 2% cash back Fidelity credit card.

Coinsinthefountain
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Re: Understanding the World of Credit Card "Points"

Post by Coinsinthefountain » Mon Dec 04, 2017 4:03 pm

We’re heading to Israel thanks to these signup bonuses. We got free trips to Finland and the Baltics last year and Greece the previous year. Over the past three years we’ve tallied up enough air miles for eight individual trips overseas and four trips in the U.S. Bank signup offers netted us about $10,000 in spending money. Credit score is still above 800. True, it’s a bit of a PIA but well worth my time. Everybody is different. I’ve offered to help friends take advantage of these offers but they’ve shown no interest other than driving us to the airport.

BW1985
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Re: Understanding the World of Credit Card "Points"

Post by BW1985 » Mon Dec 04, 2017 4:21 pm

Coinsinthefountain wrote:
Mon Dec 04, 2017 4:03 pm
We’re heading to Israel thanks to these signup bonuses. We got free trips to Finland and the Baltics last year and Greece the previous year. Over the past three years we’ve tallied up enough air miles for eight individual trips overseas and four trips in the U.S. Bank signup offers netted us about $10,000 in spending money. Credit score is still above 800. True, it’s a bit of a PIA but well worth my time. Everybody is different. I’ve offered to help friends take advantage of these offers but they’ve shown no interest other than driving us to the airport.
Same here. Totally worth it to me, I actually enjoy it. Went to Brazil last year with my wife for free, just got my 80K points from Ink bonus so I'm eager to plan our next trip.

If anyone wants to exchange referral links PM me. Those are nice bonuses on top of the regular bonus. I prefer Chase cards for their travel partners.
"Squirrels figured out how to save eons ago. They buried acorns. Some, they dug up, for food. Others, they let to sprout, in new oak trees. We could learn from squirrels." -john94549

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flamesabers
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Re: Understanding the World of Credit Card "Points"

Post by flamesabers » Mon Dec 04, 2017 4:31 pm

I prefer to take advantage of cashback rewards instead of reward points. It's simpler I think and I don't have to worry about the risk of point devaluation.

dbr
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Re: Understanding the World of Credit Card "Points"

Post by dbr » Mon Dec 04, 2017 5:23 pm

While credit card points can definitely pay off, in my opinion the whole thing is really a hobby more than anything else. Generally using the points takes more knowledge and expertise than getting them.

Jack FFR1846
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Re: Understanding the World of Credit Card "Points"

Post by Jack FFR1846 » Mon Dec 04, 2017 5:33 pm

dbr wrote:
Mon Dec 04, 2017 5:23 pm
While credit card points can definitely pay off, in my opinion the whole thing is really a hobby more than anything else. Generally using the points takes more knowledge and expertise than getting them.
It's not just a hobby......it's a passion. Live to churn. Churn to live.
Bogle: Smart Beta is stupid

dbr
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Re: Understanding the World of Credit Card "Points"

Post by dbr » Mon Dec 04, 2017 5:34 pm

Jack FFR1846 wrote:
Mon Dec 04, 2017 5:33 pm
dbr wrote:
Mon Dec 04, 2017 5:23 pm
While credit card points can definitely pay off, in my opinion the whole thing is really a hobby more than anything else. Generally using the points takes more knowledge and expertise than getting them.
It's not just a hobby......it's a passion. Live to churn. Churn to live.
:D

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rocket354
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Re: Understanding the World of Credit Card "Points"

Post by rocket354 » Mon Dec 04, 2017 5:34 pm

I agree with a lot that's been written here. For a newbie, I would go with these steps:

1) Chase cards. Freedom gives $150 back after $500 in spending. Once you've done that first one, you'll see it isn't so hard. Then you can try the Sapphire Preferred, which, at least when I did it about a year ago, gave points that could be redeemed for either $500 in cash or $625 towards travel. I believe the spend on that was $4000. Of course, with any of these cards, don't spend more to hit the limit, just put your normal spending on them or else you're costing yourself money.

2) Other cash bonus cards. There are dozens and dozens of cards that will give you $100/$150/$200 for $500 or $1000 in spending in the first three months. You can just periodically go through these and always be working off a bonus. Think of it as getting 20%+ off everything you normally buy.

3) Points cards. These often have higher spending requirements ($2000+) but you can often net $500+ in value for each card. If you travel a lot, these can be beneficial. I go see family or friends on a regular basis and never actually pay for a flight. American Express also has other redemption options for their points, but at varying levels: some are better than others. I align these higher-spend cards with larger purchases I have to make.

4) Manufactured spending? Points transfers at beneficial rates? There's lots of stuff out there that I don't participate in, but if you get into it far enough there are a lot of options to maximize your return.

I calculated my rate of return. I spend on average 15 mins per card: 5 mins application, 5 mins verifying it and setting up automatic payments, 5 mins ensuring the bonus went through and, if there's an annual fee, closing out the account. Each card nets me an average of over $150. Add in additional time spent researching cards in general (usually not much, but I'll swing by and search lists like at doctorofcredit every month or so for 15 mins just to see if there's anything glaring I've missed) and to manage the rewards (in the case of miles or points), and these credit cards give me an average of over $400/hr in benefits.

deltaneutral83
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Re: Understanding the World of Credit Card "Points"

Post by deltaneutral83 » Mon Dec 04, 2017 5:41 pm

I would assume most BH have a portfolio of 3-4 cards. It's really leaving crumbs on the table not to, particularly if you own your own small business or if your company let's you use your card for work travel. I do a bit of hacking and I'd say my hourly value is in the neighborhood of $60-$70 per hour (which is after taxes, so probably equates to a $175k job hourly rate). Plenty of people on here with incomes where it wouldn't even register and to just use some 2% cash back card but for the 5-10% of the people who are both responsible with credit cards/don't crush it with their incomes, it can be a very nice deal. Also plenty of recourse for fraud that are much less of a headache than debit.

I admit I had to chuckle at the post about equifax hack and applying for credit cards. The two events certainly are exclusive from one another.

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Earl Lemongrab
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Re: Understanding the World of Credit Card "Points"

Post by Earl Lemongrab » Mon Dec 04, 2017 5:48 pm

I don't travel, so points with travel bonus don't do me much good. I prefer just regular cash-back cards. The one I use the most is the BOA card that gets a boost from Preferred Rewards, so it's 5.25% gas, 3.5% grocery, 1.75% other. I will use Discover or Chase rotating categories when useful and I remember. Discover is 5% at Amazon this quarter.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

Small Law Survivor
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Re: Understanding the World of Credit Card "Points"

Post by Small Law Survivor » Mon Dec 04, 2017 6:10 pm

Earl Lemongrab wrote:
Mon Dec 04, 2017 5:48 pm
The one I use the most is the BOA card that gets a boost from Preferred Rewards, so it's 5.25% gas, 3.5% grocery, 1.75% other.
Oh oh - I have a BOA Preferred Debit Card (the red card). Should I be getting these rewards somewhere, or is this a different card from what you use?

I'm so confused. Maybe I should have had a different BOA card all these years :)

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Earl Lemongrab
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Re: Understanding the World of Credit Card "Points"

Post by Earl Lemongrab » Mon Dec 04, 2017 6:28 pm

Small Law Survivor wrote:
Mon Dec 04, 2017 6:10 pm
Earl Lemongrab wrote:
Mon Dec 04, 2017 5:48 pm
The one I use the most is the BOA card that gets a boost from Preferred Rewards, so it's 5.25% gas, 3.5% grocery, 1.75% other.
Oh oh - I have a BOA Preferred Debit Card (the red card). Should I be getting these rewards somewhere, or is this a different card from what you use?

I'm so confused. Maybe I should have had a different BOA card all these years :)
I don't use debit cards. This is the BOA cash-back credit card.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

ZinCO
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Re: Understanding the World of Credit Card "Points"

Post by ZinCO » Mon Dec 04, 2017 6:29 pm

Probably. If you have Preferred Rewards at BOA, you should definitely be using either the Cash Rewards or Travel Rewards CC, and NOT a debit card. You'll get no rewards at all from the debit card as far as I know.

RRAAYY3
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Re: Understanding the World of Credit Card "Points"

Post by RRAAYY3 » Mon Dec 04, 2017 6:47 pm

i put literally everything but gas on my card (cash is cheaper)

meals, groceries, drinks, whatever - if i'm spending the money, might as well as something back for it (the points add up over a year or so ... it's nice when you randomly get 1,000 back simply for using your card and paying it off as you should anyway)

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sunny_socal
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Re: Understanding the World of Credit Card "Points"

Post by sunny_socal » Mon Dec 04, 2017 7:06 pm

I don't use the 'points' type cards although I'm aware that even my cards probably use some kind of point system internally.

2% Fidelity Card:
- I have it set up to automatically deposit rewards into a Fidelity cash account
- I get almost $1k/year with this approach
- There is no need to track anything, call anyone, convert points. I just get free money :wink:

Costco Visa Card:
- Costco keeps the reward until the end of their annual cycle (March?)
- The rewards are higher than my Fidelity card on a couple categories, so I use this card for all Restaurant and Gas purchases
- I also use it for many Costco purchases
- I get about $400-500/year on this card
- Costco hands over a wad of cash when I redeem the annual coupon
- The only work involved is waiting for the voucher to arrive in March and then walking it to a CS counter next time I shop at Costco :beer

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Re: Understanding the World of Credit Card "Points"

Post by technovelist » Mon Dec 04, 2017 11:35 pm

sunny_socal wrote:
Mon Dec 04, 2017 7:06 pm
I don't use the 'points' type cards although I'm aware that even my cards probably use some kind of point system internally.

2% Fidelity Card:
- I have it set up to automatically deposit rewards into a Fidelity cash account
- I get almost $1k/year with this approach
- There is no need to track anything, call anyone, convert points. I just get free money :wink:

Costco Visa Card:
- Costco keeps the reward until the end of their annual cycle (March?)
- The rewards are higher than my Fidelity card on a couple categories, so I use this card for all Restaurant and Gas purchases
- I also use it for many Costco purchases
- I get about $400-500/year on this card
- Costco hands over a wad of cash when I redeem the annual coupon
- The only work involved is waiting for the voucher to arrive in March and then walking it to a CS counter next time I shop at Costco :beer
Yes, the Costco Visa card is pretty good. I use it for all Costco purchases and usually for gas at other places as well, since it has a 4% return on gas at most stations.
In theory, theory and practice are identical. In practice, they often differ.

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Re: Understanding the World of Credit Card "Points"

Post by sperry8 » Tue Dec 05, 2017 12:22 am

Halicar wrote:
Mon Dec 04, 2017 11:37 am
It's a continuum. On one end, you can effortlessly get 2% to 5% cash back on all your purchases, and if you don't do this you're just leaving money on the table. On the other end is the world of "churning" where you can make a lot of money with signup bonuses and "manufactured spending" but it's a fair amount of work. I suggest at the minimum to get a card that pays 2% cash back and a few retailer-specific cards (for places you already shop) that pay 5% cash back.
Exactly. You should do the minimum described above. It's free money and I'm always amazed at all the people who "don't bother with it". Especially Bogleheads!!! You switch ERs for small amounts but won't spend some time to ensure you have and use the right credit cards. :shock:
Humbling BH contest results: 2017: #516 of 647 | 2016: #121 of 610 | 2015: #18 of 552 | 2014: #225 of 503 | 2013: #383 of 433 | 2012: #366 of 410 | 2011: #113 of 369 | 2010: #53 of 282

mega317
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Re: Understanding the World of Credit Card "Points"

Post by mega317 » Tue Dec 05, 2017 1:05 am

viewtopic.php?t=192008

Here is a 2k+ post thread on this topic. Should cover your free time for the month.

DrGoogle2017
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Re: Understanding the World of Credit Card "Points"

Post by DrGoogle2017 » Tue Dec 05, 2017 1:17 am

deltaneutral83 wrote:
Mon Dec 04, 2017 5:41 pm
I admit I had to chuckle at the post about equifax hack and applying for credit cards. The two events certainly are exclusive from one another.
Hey at least that’s the excuse I gave American Express to close my last card. Beside I’ve opened everything under American Express. Chase has rejected my application because I have opened more than 5. So that’s why I’m not playing anymore. I’ve milked the system for all it’s worth.

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