What's Your Credit Card Rewards Strategy?

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giesen5
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Location: Bellingham, WA

Re: What's Your Credit Card Rewards Strategy?

Postby giesen5 » Thu May 26, 2016 1:58 pm

guitarguy wrote:
giesen5 wrote:Just started playing the credit card game in January. Goal was to subsidize tickets for 4 to Italy summer 2017.

Wow, I did not realize that by "subsidize" I really meant "free". By the end of June I will have earned enough points for 4 free tickets to Europe. By the end of summer I will have earned over $1700 to pay for air bnb stays in Italy.

There are two of us playing the game, but my wife has no interest in doing the work, so I am doing it for her.

Cards now:
2 Chase Sapphire (120,000 UR)
1 Chase Freedom (18,000 UR)
1 Chase Freedom Unlimited (18,000 UR)
2 Chase United Explorer (100,000, maybe soon to be 140,000 United miles)
1 Barclay Arrival + ($460 travel spend)
1 AmEx Hilton (75,000 pts)

Next round:
2 Chase IHG (2-4 free hotel nights)
1 Barclay Arrival + (another $460)
2 Capital One Venture ($920 travel spend)

Later:
2 Alaska Airlines (50-60,000 miles)


This is fascinating to me.

How do you plan on combining all these points from all these different carriers to formulate it into ACTUAL booking for flights and hotels and stuff? I assume you'll be flying Alaskan airlines round trip and just building up all of the Ult Reward Points in the meantime to transfer to that to get your tickets?

And then staying at a mix of IHG and Hilton hotels on your trip?

How does Air BnB factor into this?

This type of strategy of getting cards and saving points for one ultimate vacation seems like something you could alternate and do repeatedly.

First plan a trip with Chase cards and transfer to Southwest and combine. Then the following year apply for some Amex travel cards and Delta and take a trip using those points. Etc.


All the UR points can be transferred to United. So the Chase Sapphire, Freedom, Freedom Unlimited and United (total of 6 cards) all combine into one large account where I can purchase airfare. The Barclay Arrival + and Capital One Venture (4 cards) will be used when I book 4 different air bnb stays. The $460 each will not cover the full cost of each stay, but will still be completely used. Both of these cards allow rewards to be used for travel and air bnb are coded as travel for these cards - I understand it is not for other cards.

The hotel card I may or may not use for Europe, but can use the few times that the family travels. Many will say this is not the best use of the card, it needs to be used on the most expensive hotel possible. I get this, but I am comfortable using it for mid-level hotels and not "maximizing" its value.

I agree, I hope that I can use this same strategy for another trip a couple of years after Europe in summer 2017.

guitarguy
Posts: 1520
Joined: Mon Dec 20, 2010 4:10 pm

Re: What's Your Credit Card Rewards Strategy?

Postby guitarguy » Thu May 26, 2016 2:05 pm

giesen5 wrote:
guitarguy wrote:
giesen5 wrote:Just started playing the credit card game in January. Goal was to subsidize tickets for 4 to Italy summer 2017.

Wow, I did not realize that by "subsidize" I really meant "free". By the end of June I will have earned enough points for 4 free tickets to Europe. By the end of summer I will have earned over $1700 to pay for air bnb stays in Italy.

There are two of us playing the game, but my wife has no interest in doing the work, so I am doing it for her.

Cards now:
2 Chase Sapphire (120,000 UR)
1 Chase Freedom (18,000 UR)
1 Chase Freedom Unlimited (18,000 UR)
2 Chase United Explorer (100,000, maybe soon to be 140,000 United miles)
1 Barclay Arrival + ($460 travel spend)
1 AmEx Hilton (75,000 pts)

Next round:
2 Chase IHG (2-4 free hotel nights)
1 Barclay Arrival + (another $460)
2 Capital One Venture ($920 travel spend)

Later:
2 Alaska Airlines (50-60,000 miles)


This is fascinating to me.

How do you plan on combining all these points from all these different carriers to formulate it into ACTUAL booking for flights and hotels and stuff? I assume you'll be flying Alaskan airlines round trip and just building up all of the Ult Reward Points in the meantime to transfer to that to get your tickets?

And then staying at a mix of IHG and Hilton hotels on your trip?

How does Air BnB factor into this?

This type of strategy of getting cards and saving points for one ultimate vacation seems like something you could alternate and do repeatedly.

First plan a trip with Chase cards and transfer to Southwest and combine. Then the following year apply for some Amex travel cards and Delta and take a trip using those points. Etc.


All the UR points can be transferred to United. So the Chase Sapphire, Freedom, Freedom Unlimited and United (total of 6 cards) all combine into one large account where I can purchase airfare. The Barclay Arrival + and Capital One Venture (4 cards) will be used when I book 4 different air bnb stays. The $460 each will not cover the full cost of each stay, but will still be completely used. Both of these cards allow rewards to be used for travel and air bnb are coded as travel for these cards - I understand it is not for other cards.

The hotel card I may or may not use for Europe, but can use the few times that the family travels. Many will say this is not the best use of the card, it needs to be used on the most expensive hotel possible. I get this, but I am comfortable using it for mid-level hotels and not "maximizing" its value.

I agree, I hope that I can use this same strategy for another trip a couple of years after Europe in summer 2017.


Alaska Airlines would be used for a different vacation then?

Very informative. I could see myself putting together a plan like this in the future...if the huge signup bonuses stay around long enough.

What's your method for signing up for the cards? Do you do a bunch at one time, or...?

Bfwolf
Posts: 1471
Joined: Thu Oct 14, 2010 11:19 am

Re: What's Your Credit Card Rewards Strategy?

Postby Bfwolf » Thu May 26, 2016 3:03 pm

I churn. I've opened 23 new credit cards in the last 2 years. 14 are still open. Problem is there are really not a lot of cards left that I'm interested in now that the Chase 5/24 rule is in place.

When not trying to hit an intro bonus, I've been spending on my Club Carlson card to get to the extra bonus you get once you spend $10,000. I'm just about there though so I'll probably start putting everyday spending on my Starwood or Southwest cards. I don't have one of those 2% cash back no annual fee cards (they don't have sign up bonuses worth pursuing) or else I'd use though. I chase category bonuses occasionally but the money there is pretty small potatoes. All the real money is in the intro bonuses unless you're manufacturing spending.

harikaried
Posts: 1172
Joined: Fri Mar 09, 2012 3:47 pm

Re: What's Your Credit Card Rewards Strategy?

Postby harikaried » Thu May 26, 2016 3:29 pm

simmias wrote:Priceline Visa (2% everything): Redeem for statement credit against existing charge whenever I have $25+
If you ever have travel purchases, it's better to redeem against those as you get 10% of the used points back resulting in effectively 2.2% cashback.

Even better is if you make purchases on Priceline.com, e.g., name-your-own-price car rental. The points redeemed are worth 50% more when used towards Priceline.com purchases, and they additionally count as travel for the 10% points-back. So redeeming points only against Priceline.com purchases effectively gives you 3.3% cashback.

We'll be switching to the Priceline Visa for almost everything now as 1) Citi Forward/Premier 6.25% cashback for restaurants is going away in June and 2) no need for Fidelity AmEx after Costco switches to Visa. The only special case is using Sallie Mae for 5% cashback on amazon/gas/groceries, but right now we're directing all spending to 2x AmEx Platinum cards for the 100k MR bonus.

BW1985
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Re: What's Your Credit Card Rewards Strategy?

Postby BW1985 » Thu May 26, 2016 3:43 pm

Bfwolf wrote:I churn. I've opened 23 new credit cards in the last 2 years. 14 are still open. Problem is there are really not a lot of cards left that I'm interested in now that the Chase 5/24 rule is in place.

When not trying to hit an intro bonus, I've been spending on my Club Carlson card to get to the extra bonus you get once you spend $10,000. I'm just about there though so I'll probably start putting everyday spending on my Starwood or Southwest cards. I don't have one of those 2% cash back no annual fee cards (they don't have sign up bonuses worth pursuing) or else I'd use though. I chase category bonuses occasionally but the money there is pretty small potatoes. All the real money is in the intro bonuses unless you're manufacturing spending.


23 cards in two years! :o
"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

travellight
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Location: San Diego

Re: What's Your Credit Card Rewards Strategy?

Postby travellight » Thu May 26, 2016 5:39 pm

^In my best year I generated 385,000 points but I don't know how many cards that involved. It was probably only about 7 to 8 cards if each card gave 50,000 points.

Bfwolf
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Re: What's Your Credit Card Rewards Strategy?

Postby Bfwolf » Thu May 26, 2016 6:18 pm

BW1985 wrote:
Bfwolf wrote:I churn. I've opened 23 new credit cards in the last 2 years. 14 are still open. Problem is there are really not a lot of cards left that I'm interested in now that the Chase 5/24 rule is in place.

When not trying to hit an intro bonus, I've been spending on my Club Carlson card to get to the extra bonus you get once you spend $10,000. I'm just about there though so I'll probably start putting everyday spending on my Starwood or Southwest cards. I don't have one of those 2% cash back no annual fee cards (they don't have sign up bonuses worth pursuing) or else I'd use though. I chase category bonuses occasionally but the money there is pretty small potatoes. All the real money is in the intro bonuses unless you're manufacturing spending.


23 cards in two years! :o


I opened 14 of them between April and November last year. With the held of Redbird and Serve, I was able to manufacture enough spending to go through lots of intro bonuses in a short amount of time.

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pennstater2005
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Re: What's Your Credit Card Rewards Strategy?

Postby pennstater2005 » Thu May 26, 2016 6:47 pm

Bfwolf wrote:
BW1985 wrote:
Bfwolf wrote:I churn. I've opened 23 new credit cards in the last 2 years. 14 are still open. Problem is there are really not a lot of cards left that I'm interested in now that the Chase 5/24 rule is in place.

When not trying to hit an intro bonus, I've been spending on my Club Carlson card to get to the extra bonus you get once you spend $10,000. I'm just about there though so I'll probably start putting everyday spending on my Starwood or Southwest cards. I don't have one of those 2% cash back no annual fee cards (they don't have sign up bonuses worth pursuing) or else I'd use though. I chase category bonuses occasionally but the money there is pretty small potatoes. All the real money is in the intro bonuses unless you're manufacturing spending.


23 cards in two years! :o


I opened 14 of them between April and November last year. With the held of Redbird and Serve, I was able to manufacture enough spending to go through lots of intro bonuses in a short amount of time.


Would you care to elaborate? That sounds interesting.
“Life is short, Break the Rules, Forgive quickly, Kiss slowly, Love truly, Laugh uncontrollably, And never regret anything that made you smile" - Unknown

giesen5
Posts: 236
Joined: Wed Jan 27, 2016 1:44 pm
Location: Bellingham, WA

Re: What's Your Credit Card Rewards Strategy?

Postby giesen5 » Thu May 26, 2016 6:55 pm

guitarguy wrote:
giesen5 wrote:
guitarguy wrote:
giesen5 wrote:Just started playing the credit card game in January. Goal was to subsidize tickets for 4 to Italy summer 2017.

Wow, I did not realize that by "subsidize" I really meant "free". By the end of June I will have earned enough points for 4 free tickets to Europe. By the end of summer I will have earned over $1700 to pay for air bnb stays in Italy.

There are two of us playing the game, but my wife has no interest in doing the work, so I am doing it for her.

Cards now:
2 Chase Sapphire (120,000 UR)
1 Chase Freedom (18,000 UR)
1 Chase Freedom Unlimited (18,000 UR)
2 Chase United Explorer (100,000, maybe soon to be 140,000 United miles)
1 Barclay Arrival + ($460 travel spend)
1 AmEx Hilton (75,000 pts)

Next round:
2 Chase IHG (2-4 free hotel nights)
1 Barclay Arrival + (another $460)
2 Capital One Venture ($920 travel spend)

Later:
2 Alaska Airlines (50-60,000 miles)


This is fascinating to me.

How do you plan on combining all these points from all these different carriers to formulate it into ACTUAL booking for flights and hotels and stuff? I assume you'll be flying Alaskan airlines round trip and just building up all of the Ult Reward Points in the meantime to transfer to that to get your tickets?

And then staying at a mix of IHG and Hilton hotels on your trip?

How does Air BnB factor into this?

This type of strategy of getting cards and saving points for one ultimate vacation seems like something you could alternate and do repeatedly.

First plan a trip with Chase cards and transfer to Southwest and combine. Then the following year apply for some Amex travel cards and Delta and take a trip using those points. Etc.


All the UR points can be transferred to United. So the Chase Sapphire, Freedom, Freedom Unlimited and United (total of 6 cards) all combine into one large account where I can purchase airfare. The Barclay Arrival + and Capital One Venture (4 cards) will be used when I book 4 different air bnb stays. The $460 each will not cover the full cost of each stay, but will still be completely used. Both of these cards allow rewards to be used for travel and air bnb are coded as travel for these cards - I understand it is not for other cards.

The hotel card I may or may not use for Europe, but can use the few times that the family travels. Many will say this is not the best use of the card, it needs to be used on the most expensive hotel possible. I get this, but I am comfortable using it for mid-level hotels and not "maximizing" its value.

I agree, I hope that I can use this same strategy for another trip a couple of years after Europe in summer 2017.


Alaska Airlines would be used for a different vacation then?

Very informative. I could see myself putting together a plan like this in the future...if the huge signup bonuses stay around long enough.

What's your method for signing up for the cards? Do you do a bunch at one time, or...?


Yes, AA would be for domestic flights that we could take. I figure that might only be one every year for the family. Could also use the hotel nights for that type of trip.

I focused on the high Chase bonus cards first, also decided that I would probably use United as my airline of choice. We spend about $3k/month on credit cards, so figured I could hit most bonuses in the 3 month timeline that they needed to be spent.

1. January 2016: Opened the Chase Sapphire (1). Didn't really know what I was doing at the time, so just did that one for me.
2. March 2016: Chase Sapphire (1) - had my wife open one.
3. April 2016: Chase Freedom: for the 5% quarterly rewards
4. May 2016: Barclay Arrival, Hilton, Freedom Unlimited, United Explorer (2): Decided to fully enter the game and got these next 5 cards. NOTE: if you want to get the United card the rumor is it will be 70,000 miles on June 1. I got it for 30,000 - Chase is usually good about honoring new mileage if it has been less than 90 days since you got the card. My United card was 30,000 miles for $1,000 spend in 3 months. Sounds like the 70,000 mile will be $3,000 in 3 months, I will ask for that deal.

So that is 8 cards in 5 months. I've read that you should wait at least 30 days, if not 91 days, to wait until applying for a bunch more. I figure I will have all the bonuses by the middle of the summer and will go after the next round in August.

Bfwolf
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Re: What's Your Credit Card Rewards Strategy?

Postby Bfwolf » Thu May 26, 2016 7:03 pm

pennstater2005 wrote:
Bfwolf wrote:
BW1985 wrote:
Bfwolf wrote:I churn. I've opened 23 new credit cards in the last 2 years. 14 are still open. Problem is there are really not a lot of cards left that I'm interested in now that the Chase 5/24 rule is in place.

When not trying to hit an intro bonus, I've been spending on my Club Carlson card to get to the extra bonus you get once you spend $10,000. I'm just about there though so I'll probably start putting everyday spending on my Starwood or Southwest cards. I don't have one of those 2% cash back no annual fee cards (they don't have sign up bonuses worth pursuing) or else I'd use though. I chase category bonuses occasionally but the money there is pretty small potatoes. All the real money is in the intro bonuses unless you're manufacturing spending.


23 cards in two years! :o


I opened 14 of them between April and November last year. With the held of Redbird and Serve, I was able to manufacture enough spending to go through lots of intro bonuses in a short amount of time.


Would you care to elaborate? That sounds interesting.


It's no longer a viable strategy since Amex killed the ability to manufacture spending with Redbird and Serve.

TOJ
Posts: 325
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Re: What's Your Credit Card Rewards Strategy?

Postby TOJ » Thu May 26, 2016 7:42 pm

Simplicity, like my investments. The single card that offers the most cash back for all purchases, year round. In my case, it's the fidelity 2% visa.

Blender
Posts: 127
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Re: What's Your Credit Card Rewards Strategy?

Postby Blender » Thu May 26, 2016 7:59 pm

guitarguy wrote:
rai wrote:had the Amex blue reward but didn't want the $75 fee. I thought it ate up a lot of the great rewards. So I dropped that, they have a different (free) reward card that gives 3% at grocery stores.

I don't pay a single fee to use a card.


To each their own. We hover right around $6k per year on groceries (and other stuff we buy from the grocery stores).

$6000 x 0.03 = $180 back
$6000 x 0.06 = $360 back - $75 fee = $285 back

Just sayin. It depends on how much you spend as to which is the better choice.


As long as you spend $2500+ you come out ahead w/ the 6%. That's only $208/mo of groceries.

Blender
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Re: What's Your Credit Card Rewards Strategy?

Postby Blender » Thu May 26, 2016 8:06 pm

guitarguy wrote:
Gideont wrote:I'm thinking of not using the Pen Fed gas card anymore, after I accumulate the next $25 reward. It takes so long to accumulate since I only use it for 6 months a year.


Are you thinking of a different card? PenFed credits the cash back on each statement automatically, no minimums.


Do tell. I don't see a cash back option available on mine, and I've searched everywhere. Maybe they are slightly different cards, we've had ours for a long time back when the 5% was truly 5%, they later converted that to a point system and now it's really something like 4.25% via the prepaid Visa reward option. The card we have: PenFed Platinum Rewards Visa Signature

Scotttheking
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Re: What's Your Credit Card Rewards Strategy?

Postby Scotttheking » Thu May 26, 2016 8:10 pm

A mix of points and cash.
We hold enough points for our plans, then cash as wanted.

Cards:
Regular use:
Citi Prestige - airfare & hotels
Chase Ink - Phone, Internet, office stores
AMEX Everyday Preferred - Grocery
Chase Freedom - rotating categories
Discover It - rotating categories
BofA Cash rewards - gas
Barclays Upromise - 5% offers
BofA Travel rewards - 2.6% fallback card
Barclays AA Aviator - Chip + PIN card

Perks:
Chase IHG
Chase Marriott
Chase Hyatt
Usbank Club Carlson
Citi AA platinum

Retiring soon:
Citi Forward - restaurants
Citi Premier - Other travel

Plenty that we churn also

DTSC
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Location: Illinois

Re: What's Your Credit Card Rewards Strategy?

Postby DTSC » Thu May 26, 2016 8:12 pm

Bfwolf wrote:I churn. I've opened 23 new credit cards in the last 2 years. 14 are still open. Problem is there are really not a lot of cards left that I'm interested in now that the Chase 5/24 rule is in place.

When not trying to hit an intro bonus, I've been spending on my Club Carlson card to get to the extra bonus you get once you spend $10,000. I'm just about there though so I'll probably start putting everyday spending on my Starwood or Southwest cards. I don't have one of those 2% cash back no annual fee cards (they don't have sign up bonuses worth pursuing) or else I'd use though. I chase category bonuses occasionally but the money there is pretty small potatoes. All the real money is in the intro bonuses unless you're manufacturing spending.


I like Starwood the best because the points transfer to almost every airline, so you can keep your points from expiring.

DTSC
Posts: 1153
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Location: Illinois

Re: What's Your Credit Card Rewards Strategy?

Postby DTSC » Thu May 26, 2016 8:20 pm

guitarguy wrote:
BW1985 wrote:
guitarguy wrote:
This brings up 2 questions for me.

1. For those of you that rock out the miles and travel rewards, do you find that you're also traveling a lot for work as well? It seems to me that a lot of people that do the miles thing also travel for work and they capitalize on earning extra points that way and then combining for personal use. I wonder if just traveling once or twice a year like my wife and I do, along with just moderate household spending and virtually zero work travel, would still be worthwhile to pursue the mileage thing.

2. I'm not sure why but I have always had the notion in my mind about blackout dates and other similar nonsense when trying to redeem miles. Is it just a bad rep? I just picture myself racking up a lot of miles and then only being able to fly to Podunkville Nowhere on a Tuesday at 1am to have the chance to redeem them. :|

Do they really restrict things that much? Or can you really use the miles to fly when and where you want with pretty minimal interference these days?



I can speak to Southwest, there are no blackout dates or the like.


And while we're on that...without assigned seats is it like a madhouse trying to board a plane!!?? :shock:

(I've actually never flown Southwest, not specifically for that reason.)



Boarding on SW is not nearly as chaotic as you might think. There are 3 boarding groups, A, B and C. There's a number up to 60 (I think) with each group, such as B23. When it's time to board, they call group A and everyone lines up according to their number A1, A2, A3, etc. Passenger A1 gets on the plane and sits down wherever he wants, etc. So basically, most C passengers will be stuck in a middle seat as A and B passengers will most likely have filled all the window and aisle seats. It's actually quite orderly.

Bfwolf
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Re: What's Your Credit Card Rewards Strategy?

Postby Bfwolf » Fri May 27, 2016 12:52 am

DTSC wrote:Boarding on SW is not nearly as chaotic as you might think. There are 3 boarding groups, A, B and C. There's a number up to 60 (I think) with each group, such as B23. When it's time to board, they call group A and everyone lines up according to their number A1, A2, A3, etc. Passenger A1 gets on the plane and sits down wherever he wants, etc. So basically, most C passengers will be stuck in a middle seat as A and B passengers will most likely have filled all the window and aisle seats. It's actually quite orderly.


It's fast, too, which is why Southwest does it that way. One of their traditional competitive advantages has been the ability to turn planes over faster than their competition.

http://flightclub.jalopnik.com/mythbust ... 1636981904

cookiez
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Re: What's Your Credit Card Rewards Strategy?

Postby cookiez » Fri May 27, 2016 1:25 am

Churn, baby, churn!

So I'm always on that initial spending state (x thousands in 3 months). Exceptions are the 10% cash back for Discover Apple Pay last year or 5UR/$ office expense on my Ink+.

TomCat96
Posts: 360
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Re: What's Your Credit Card Rewards Strategy?

Postby TomCat96 » Fri May 27, 2016 2:09 am

To OP, I appreciate you broaching this topic. I think everyone can learn from everyone else here.

My strategy is premised off the following assumptions:

1. that a dollar in saved travel expenses = a dollar in cash back. (cash back is not a privileged form of rewards)
2. that one should be able to extract approximately 2 cents on every Chase ultimate reward (UR) point, and about 2.3 cents on every starwood point.

That said, I have the following cards:

Chase Freedom, Chase Ultimate Rewards, and Starwood.
I could apply for more cards to get sign on bonuses, but I am buying a house within the year and want to avoid hard credit inquiries. Thus, the focus of my strategy will be on rewards and not the totality of rewards and bonuses.

In my opinion, if we allow ourselves the above assumptions, travel rewards are superior to cash back. (with caveats below)

The Chase Freedom offers 5x points on rotating categories. You can exchange UR points for cash directly at the rate of 1 dollar for every 100 points. This means that the 5x points has a LOWER BOUND of 5% cash back. The upper bound of the 5x points though, is however much value you can extract from your travel rewards by using your points effectively. Generally speaking, that number appears to be 2 cents per point.

What that means however is that the LOWER BOUND for chase UR points on the chase freedom, is

5% cash back rotating, 1% everything else.

The likely total rewards back however, based on the 2 cents per point is
10% cash back in travel expenses, 2% everything else.

Now moving to the Chase Sapphire, that means you get
4% cash in travel & dining, 2% everything else.

With regards to the Starwood points, you are looking at
2.3% cash back.

Thus, based on those numbers, there are few other cards which beat those cards.
AMEX 6% cash back, beats those numbers mathematically during the non-shopping quarter.

The Penfed 5% back on gas similarly beats the above numbers during the non-gas quarters--but not by much. The Chase Sapphire offers an effective 4% rewards on travel, including gas.


What this means, after I have reviewed other people's strategies here in an attempt to optimize my own, is that my strategy still appears to be superior in most cases. The AMEX 6% cash back is the most decisive improvement that can be made to my strat, and I should probably pick up that card.

However, by and large, because miles and points can be used at a rate that exceeds 1 cent per point, that means mathematically,

1 chase ultimate reward point is superior to 1% cash back.
In fact, 1 chase ultimate reward point is slightly better than 2% cash back.
And most decisively, 5 chase ultimate reward points is significantly better than 5% cash back.

guitarguy
Posts: 1520
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Re: What's Your Credit Card Rewards Strategy?

Postby guitarguy » Fri May 27, 2016 6:14 am

Blender wrote:
guitarguy wrote:
Gideont wrote:I'm thinking of not using the Pen Fed gas card anymore, after I accumulate the next $25 reward. It takes so long to accumulate since I only use it for 6 months a year.


Are you thinking of a different card? PenFed credits the cash back on each statement automatically, no minimums.


Do tell. I don't see a cash back option available on mine, and I've searched everywhere. Maybe they are slightly different cards, we've had ours for a long time back when the 5% was truly 5%, they later converted that to a point system and now it's really something like 4.25% via the prepaid Visa reward option. The card we have: PenFed Platinum Rewards Visa Signature


We have the Platinum Cash Rewards Visa. They must be slightly different. This card doesn't use points...just applies the 5% back on gas automatically with a statement credit each month.

Maybe you can convert?

Sometime back, they changed the card and lowered everyone that didn't have another qualifying PenFed product down to 3% back or something. We have a PenFed mortgage so we were OK to keep the 5%.

guitarguy
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Re: What's Your Credit Card Rewards Strategy?

Postby guitarguy » Fri May 27, 2016 6:24 am

TomCat96 wrote:To OP, I appreciate you broaching this topic. I think everyone can learn from everyone else here.


Thanks. That way my thought.

At first I wasn't really interested in discussing churning or just chasing signup bonuses. However after reading this thread I've kinda become fascinated by it over the past few days. So I'm glad people have brought this to the table.

Having just finished my M.S. program...I guess I was subconsciously looking for another new hobby. :shock: :mrgreen:

TomCat96 wrote:My strategy is premised off the following assumptions:

1. that a dollar in saved travel expenses = a dollar in cash back. (cash back is not a privileged form of rewards)
2. that one should be able to extract approximately 2 cents on every Chase ultimate reward (UR) point, and about 2.3 cents on every starwood point.

That said, I have the following cards:

Chase Freedom, Chase Ultimate Rewards, and Starwood.
I could apply for more cards to get sign on bonuses, but I am buying a house within the year and want to avoid hard credit inquiries. Thus, the focus of my strategy will be on rewards and not the totality of rewards and bonuses.

In my opinion, if we allow ourselves the above assumptions, travel rewards are superior to cash back. (with caveats below)

The Chase Freedom offers 5x points on rotating categories. You can exchange UR points for cash directly at the rate of 1 dollar for every 100 points. This means that the 5x points has a LOWER BOUND of 5% cash back. The upper bound of the 5x points though, is however much value you can extract from your travel rewards by using your points effectively. Generally speaking, that number appears to be 2 cents per point.

What that means however is that the LOWER BOUND for chase UR points on the chase freedom, is

5% cash back rotating, 1% everything else.

The likely total rewards back however, based on the 2 cents per point is
10% cash back in travel expenses, 2% everything else.

Now moving to the Chase Sapphire, that means you get
4% cash in travel & dining, 2% everything else.

With regards to the Starwood points, you are looking at
2.3% cash back.

Thus, based on those numbers, there are few other cards which beat those cards.
AMEX 6% cash back, beats those numbers mathematically during the non-shopping quarter.

The Penfed 5% back on gas similarly beats the above numbers during the non-gas quarters--but not by much. The Chase Sapphire offers an effective 4% rewards on travel, including gas.


What this means, after I have reviewed other people's strategies here in an attempt to optimize my own, is that my strategy still appears to be superior in most cases. The AMEX 6% cash back is the most decisive improvement that can be made to my strat, and I should probably pick up that card.

However, by and large, because miles and points can be used at a rate that exceeds 1 cent per point, that means mathematically,

1 chase ultimate reward point is superior to 1% cash back.
In fact, 1 chase ultimate reward point is slightly better than 2% cash back.
And most decisively, 5 chase ultimate reward points is significantly better than 5% cash back.


This is interesting. Most of what I read values Ultimate Rewards Points at < 2 cents per point. Although that value can apparently be had if you transfer the points to other partners.

I also read that Sapphire 2% doesn't apply to gas. Can anyone confirm?

guitarguy
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Re: What's Your Credit Card Rewards Strategy?

Postby guitarguy » Fri May 27, 2016 6:39 am

Scotttheking wrote:Chase Ink [Plus] - Phone, Internet, office stores


This one has peaked my interest.

Even with the $95 AF, if I use the card to simply pay our cable/phone/internet bill monthly, the card will more than pay for itself. So I would probably just keep it, set it up to autopay that bill, and occasionally use it whenever we need to shop for any kind of office supply stuff. You can buy gift cards at Staples and get 5% back on those too. On top of that, the 60k point signup bonus is pretty awesome.

But...my question is...how strict is Chase about approving this card? Being a business card, is that different than applying for other regular/normal/personal cards? Will they look at my records for proof of using this card for business purposes?

For the record, I am a musician and I do run all of the business side of my band. I file a schedule C annually and show about $50k of self employment income on it. So getting a business card wouldn't really be fraudulent for me or anything like that as I do actually run a business. However, paying the cable/internet/phone bill and so forth would be using it for personal use as it has nothing to do with my business.

Anyone have any experience with this?

EDIT: Additionally, the no foreign transaction fee will be nice for our trip to Toronto in July. Between that, and paying my wife's tuition bill with it in Aug, we'll have little problem meeting the signup bonus $5k spending minimum just by spending on things we would pay for anyway.

ANOTHER EDIT: Another good thing about keeping this Ink Plus card around is that it would grant us the permanent capability to be able to transfer Ult Reward Points or redeem them for the 20% travel discount. Granted the annual fee eats significantly into those 5% rewards, but it would still pay for itself plus put an extra $75+ in our pocket annually. Then, we could eventually churn (meaning nab the signup bonus and then cancel before the annual fee hits) the Sapphire cards. Sapphire doesn't seem as good to keep around due to the annual fee and lack of a 5% reward category.
Last edited by guitarguy on Fri May 27, 2016 8:01 am, edited 1 time in total.

jossceluch
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Re: What's Your Credit Card Rewards Strategy?

Postby jossceluch » Fri May 27, 2016 7:09 am

TOJ wrote:Simplicity, like my investments. The single card that offers the most cash back for all purchases, year round. In my case, it's the fidelity 2% visa.

+1

awval999
Posts: 1010
Joined: Fri Apr 08, 2011 10:17 pm

Re: What's Your Credit Card Rewards Strategy?

Postby awval999 » Fri May 27, 2016 7:11 am

guitarguy wrote:
Scotttheking wrote:Chase Ink [Plus] - Phone, Internet, office stores


This one has peaked my interest.

Even with the $95 AF, if I use the card to simply pay our cable/phone/internet bill monthly, the card will more than pay for itself. So I would probably just keep it, set it up to autopay that bill, and occasionally use it whenever we need to shop for any kind of office supply stuff. You can buy gift cards at Staples and get 5% back on those too. On top of that, the 60k point signup bonus is pretty awesome.

But...my question is...how strict is Chase about approving this card? Being a business card, is that different than applying for other regular/normal/personal cards? Will they look at my records for proof of using this card for business purposes?

For the record, I am a musician and I do run all of the business side of my band. I file a schedule C annually and show about $50k of self employment income on it. So getting a business card wouldn't really be fraudulent for me or anything like that as I do actually run a business. However, paying the cable/internet/phone bill and so forth would be using it for personal use as it has nothing to do with my business.

Anyone have any experience with this?

EDIT: Additionally, the no foreign transaction fee will be nice for our trip to Toronto in July. Between that, and paying my wife's tuition bill with it in Aug, we'll have little problem meeting the signup bonus $5k spending minimum just by spending on things we would pay for anyway.


It will be fine.

giesen5
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Re: What's Your Credit Card Rewards Strategy?

Postby giesen5 » Fri May 27, 2016 2:07 pm

TomCat96 wrote:To OP, I appreciate you broaching this topic. I think everyone can learn from everyone else here.

My strategy is premised off the following assumptions:

1. that a dollar in saved travel expenses = a dollar in cash back. (cash back is not a privileged form of rewards)
2. that one should be able to extract approximately 2 cents on every Chase ultimate reward (UR) point, and about 2.3 cents on every starwood point.

That said, I have the following cards:

Chase Freedom, Chase Ultimate Rewards, and Starwood.
I could apply for more cards to get sign on bonuses, but I am buying a house within the year and want to avoid hard credit inquiries. Thus, the focus of my strategy will be on rewards and not the totality of rewards and bonuses.

In my opinion, if we allow ourselves the above assumptions, travel rewards are superior to cash back. (with caveats below)

The Chase Freedom offers 5x points on rotating categories. You can exchange UR points for cash directly at the rate of 1 dollar for every 100 points. This means that the 5x points has a LOWER BOUND of 5% cash back. The upper bound of the 5x points though, is however much value you can extract from your travel rewards by using your points effectively. Generally speaking, that number appears to be 2 cents per point.

What that means however is that the LOWER BOUND for chase UR points on the chase freedom, is

5% cash back rotating, 1% everything else.

The likely total rewards back however, based on the 2 cents per point is
10% cash back in travel expenses, 2% everything else.

Now moving to the Chase Sapphire, that means you get
4% cash in travel & dining, 2% everything else.

With regards to the Starwood points, you are looking at
2.3% cash back.

Thus, based on those numbers, there are few other cards which beat those cards.
AMEX 6% cash back, beats those numbers mathematically during the non-shopping quarter.

The Penfed 5% back on gas similarly beats the above numbers during the non-gas quarters--but not by much. The Chase Sapphire offers an effective 4% rewards on travel, including gas.


What this means, after I have reviewed other people's strategies here in an attempt to optimize my own, is that my strategy still appears to be superior in most cases. The AMEX 6% cash back is the most decisive improvement that can be made to my strat, and I should probably pick up that card.

However, by and large, because miles and points can be used at a rate that exceeds 1 cent per point, that means mathematically,

1 chase ultimate reward point is superior to 1% cash back.
In fact, 1 chase ultimate reward point is slightly better than 2% cash back.
And most decisively, 5 chase ultimate reward points is significantly better than 5% cash back.


Chase Ultimate Rewards are far and away the best choice. I also agree with the travel dollars do equal real dollars. I value my credit card gaming at about $7000 for my trip next year. Did not take much work and I have enjoyed the process.

Elemental
Posts: 128
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Re: What's Your Credit Card Rewards Strategy?

Postby Elemental » Fri May 27, 2016 2:50 pm

Can someone help me understand how 1 chase Ultimate Reward point could be seen as worth 2 cents. I'm a novice at this stuff.

BW1985
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Re: What's Your Credit Card Rewards Strategy?

Postby BW1985 » Fri May 27, 2016 4:32 pm

Elemental wrote:Can someone help me understand how 1 chase Ultimate Reward point could be seen as worth 2 cents. I'm a novice at this stuff.


UR can be transferred to travel partners like United, Southwest, ect at 1 to 1 exchange. So if you book a flight for 25k miles that would've cost you $500 in cash you got 2 cents per point. Hope I explained that right!
"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

guitarguy
Posts: 1520
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Re: What's Your Credit Card Rewards Strategy?

Postby guitarguy » Fri May 27, 2016 5:22 pm

BW1985 wrote:
Elemental wrote:Can someone help me understand how 1 chase Ultimate Reward point could be seen as worth 2 cents. I'm a novice at this stuff.


UR can be transferred to travel partners like United, Southwest, ect at 1 to 1 exchange. So if you book a flight for 25k miles that would've cost you $500 in cash you got 2 cents per point. Hope I explained that right!


And from what I've read in the last few days...which has been a LOT...even higher reward percentages can be had for more extravagant flights. For example using miles for a business class ticket to Europe will (??) usually yield a better return than using it to fly from Detroit to Houston.

One other general question for the mileage people...do these airlines ever allow you to combine points and cash for ticket purchases?

giesen5
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Location: Bellingham, WA

Re: What's Your Credit Card Rewards Strategy?

Postby giesen5 » Fri May 27, 2016 5:24 pm

Yes, since it is a 1:1 exchange you try to get the most bang for your buck - and Europe in business class is a great way to go. I will be using it for coach, but I need miles for 4 people and business is just too much.

Pharmacist
Posts: 239
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Re: What's Your Credit Card Rewards Strategy?

Postby Pharmacist » Fri May 27, 2016 5:35 pm

Goal:
Cash back without having any annual fees

Cards:
BoA: 3% on gas
AmEx: 3% on groceries (excluding Wal-mart)
Discover: 5% Rotating
Chase Freedom: 5% Rotating
Capital One Quicksilver: 1.5% on everything else

Rewards:
Statement credit

Final Thoughts:
Too much of a hassle in my opinion, will cut down to 1 card after I buy a house and my credit score isn't as important to me. All the cards have different due dates to keep track of and I don't really trust the auto-pay even though I have it set up so I check them all online every week to make sure they are all paid. In addition have to enroll the rotating cards and remember where to use them. Plus all my cash back is split up between the 5 cards which is just annoying and it'd be nice to see all my transactions and cash back in one place on one card. Just more of a hassle than it's worth in my opinion.

raddoc101
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Re: What's Your Credit Card Rewards Strategy?

Postby raddoc101 » Fri May 27, 2016 8:45 pm

A year ago, I had two cards, the old Amex Blue Cash (5 groceries/ gas/ pharmacy after 6500 in a year) and Best Buy (~6% on BB purchases, can go up to 10%).

Since then, I got in order:

1. Sam's Club (5% gas/ 3% travel and dining), which I am now thinking about cancelling because the redemption and website is a little bit of a pain (wait till Feb and have to go into the store) and the other cards can offer better value.

2. Chase Sapphire Preferred. To the user wondering how you get 2 cents/ pt, you can often get better than that. I just booked a stay with Hyatt at 8+ cents/ pt , although I wouldn't have paid quite that much myself. This stay is probably worth closer to 5 cents/ pt to me. The primary auto rental coverage is also nice.

3. Chase Freedom - Pairs well with CSP to boost it to 10% back if you use the 2c/ pt value

4. Citi Prestige - I am in love with this card. The 4th night free will probably save me ~1000/ yr given conferences and vacations. The other benefits are gravy.

Thinking about adding one more chase card given the 5/24 rule. Would love to add chase ink, but don't think I can qualify for it. Wonder if I get my wife to start selling baked goods if this would qualify? Will probably go with IHG or freedom unlimited. Perhaps the united card if they do offer 70k miles as I've seen as a possibility in a few days.

aqan
Posts: 151
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Re: What's Your Credit Card Rewards Strategy?

Postby aqan » Fri May 27, 2016 8:51 pm

How do you guys use AMEX Points?
I have 300K reward points in AMEX but I see really lousy deals on travel.. haven't looked into transferring points to airline miles.. any help?

traveltoomuch
Posts: 513
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Re: What's Your Credit Card Rewards Strategy?

Postby traveltoomuch » Fri May 27, 2016 8:53 pm

Goals
I'm very happy getting miles, hotel points, or cash. I will chase bonused spending categories figuring that I will ultimately get good value from any of miles, points or cash. I'm generally very fond of transferrable points (e.g. Chase Ultimate Rewards), even though I've been hoarding them more than spending them.

I still make extensive use of my Amex Everyday card, though, because I value Amex's Return Protection.

The only annual fee I'm paying primarily for points is the Chase Sapphire Preferred. I have some other annual fee cards (e.g. Citi American Advantage and Chase Hyatt), but I keep those mostly for perks, not points.

Cards
Amex Everyday: for anything that I imagine i might want to return or charges I might want to dispute - any durable goods.
Chase Freedom: for 5% categories only.
Chase Sapphire: for all dining and all travel (2x) other than Priceline and Hyatt.
Barclay Priceline 2% Visa (acts as a 3.33% cash back card!): for pretty much everything else, but it turns out there isn't that much that isn't a durable good (Amex), dining (CSP), or travel (CSP). Gas and medical bills fall to this card. Priceline charges definitely go on this card (5% base, cashes out at 8.33%). I'll start using this at Costco after they start taking Visa.
Chase Hyatt: some Hyatt charges only; I keep it for the annual "free" night.
Costco Amex-->Visa: I haven't been spending on this one, but I might move gas to it after the switch to Visa. I'll use the Barclay Priceline card at Costco, though, since 3.33% beats 2%.
Amex Hilton (the no-annual-fee one): another card with Return Protection. A fall-back in case I might use up my annual $1000 on the Everyday card.

Rewards
I redeem the Priceline Visa points towards Priceline charges only, which makes this a 3.33% cash back card (8.33% on Priceline charges). That's phenomenal, and I should use it more.

Points from the Chase Freedom get transferred to Sapphire Preferred rather than redeemed for cash. I have mostly transferred these only as needed (e.g. when I didn't have enough points for a specific award). If I had to clean these out all at once, I'd transfer them to Hyatt or United. I do the same with Amex Membership Rewards, though I have also been known to transfer points out from them when they had a bonus.

My favorite points programs are BA Avios (which I replenish from both Amex MR and Chase UR), United (where I have a hoard), and Hyatt (which I will soon need to replenish from Chase UR). I love Hyatt's points+cash awards.

Answering aqan's question re: Amex points: consider transferring them to Singapore's program to redeem for domestic first class on UA, but only transfer when you're sure the space is there - Singapore expires points after three years.

Final Thoughts
Unless someone is committed to playing the points games, I'll steer them to a cash-back card like the 2% FIA Fidelity Amex (and soon Visa).

I'm eyeing adding the Alaska card (companion cert) and Citi Prestige.

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Chris001122
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Re: What's Your Credit Card Rewards Strategy?

Postby Chris001122 » Fri May 27, 2016 8:59 pm

I don't fool with credit cards anymore. It's a drag on the economy as the credit companies get a huge fee like 3% of the transaction. I did get a free ticket once but it was a big hassle.
"It's always been a mistake to bet against the United States since 1776." - Warren Buffett

Grogs
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Re: What's Your Credit Card Rewards Strategy?

Postby Grogs » Fri May 27, 2016 9:09 pm

I focus on cash rewards. I only travel 3-4 times a year, and it's all business travel paid by the company. Usually my personal vacations involve a drive and a tent in the woods somewhere, so airline/hotel rewards don't hold much interest for me right now. My main two cards are:

- AmEx Blue Cash Preferred for the 6% on groceries. My annual grocery budget is in the $5-6k range, so this easily covers the $75 annual fee, and still nets somewhere around 5%. Amex also has some pretty good offers sometimes, like $15 off a $60 purchase at Amazon.

- Sallie Mae MasterCard: 5% of gas and Amazon purchases.

- Most other stuff I just put on one of those 2 cards at 1%. I thought about getting a 2% card for everything else, but with my spending levels, that would only amount to ~$80/year. It just didn't seem worth it for the hassle of carrying another card and remembering when to use it.

- I also have a couple of semi-retired cards: a no-rewards Visa from USAA, and the old 3% Chase Amazon card. They both get a couple of small purchases per year to keep them active since I've had them for 25 and 12 years, respectively.

I also looked at one of the 5% rotating categories cards, but it seems like most of the categories overlap with one of my existing cards (e.g., 5% at gas stations) or they're for things I don't use (e.g., 5% at movie theaters).

acura301
Posts: 241
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Re: What's Your Credit Card Rewards Strategy?

Postby acura301 » Fri May 27, 2016 10:31 pm

Gideont wrote:My usage is vey similar to yours, Guitarguy.

I use all the same cards you use, except Amazon Visa.

I also use Discover It for the rotating rewards. They also offer a 5% gas reward every year and credit the rewards immediately.

I'm thinking of not using the Pen Fed gas card anymore, after I accumulate the next $25 reward. It takes so long to accumulate since I only use it for 6 months a year.

I also activate rewards on the AMEX card. This month I received $30 for paying my cable bill and $30 for paying my cell bill, in advance using the card. It was the best reward this month.

Gideon


Gideon, can you tell me more about how you "activate" rewards on the Amex card for your cable bill and your cell bill?

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Sunny Sarkar
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Re: What's Your Credit Card Rewards Strategy?

Postby Sunny Sarkar » Fri May 27, 2016 10:44 pm

TOJ wrote:Simplicity, like my investments. The single card that offers the most cash back for all purchases, year round. In my case, it's the fidelity 2% visa.

+1

Another under-appreciated feature of this card is auto-redemption... every month the cashback gets auto-deposited/invested to my daughter's 529 account like clockwork... zero action items.
"Cost matters". "Stay the course". "Press on, regardless". ― John C. Bogle

Bfwolf
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Re: What's Your Credit Card Rewards Strategy?

Postby Bfwolf » Sat May 28, 2016 11:26 am

aqan wrote:How do you guys use AMEX Points?
I have 300K reward points in AMEX but I see really lousy deals on travel.. haven't looked into transferring points to airline miles.. any help?


If you have interest in going to Europe on business class, consider transferring to Air Canada's Aeroplan program. You can get business class to Western Europe for 55K each way. Air Canada is part of the Star Alliance. It's a little tricky because some of their airline partners have significant fuel surcharges and some don't. I'm using Aeroplan miles to fly back from Europe this Fall in business class on SAS' new business class product which is supposed to be excellent.
Last edited by Bfwolf on Sat May 28, 2016 11:50 am, edited 1 time in total.

QuietProsperity
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Re: What's Your Credit Card Rewards Strategy?

Postby QuietProsperity » Sat May 28, 2016 11:28 am

TOJ wrote:Simplicity, like my investments. The single card that offers the most cash back for all purchases, year round. In my case, it's the fidelity 2% visa.


+1

Gideont
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Re: What's Your Credit Card Rewards Strategy?

Postby Gideont » Sat May 28, 2016 2:52 pm

acura301 wrote:
Gideont wrote:
I also activate rewards on the AMEX card. This month I received $30 for paying my cable bill and $30 for paying my cell bill, in advance using the card. It was the best reward this month.

Gideon


Gideon, can you tell me more about how you "activate" rewards on the Amex card for your cable bill and your cell bill?



Acura, when logged in the account scroll to the bottom of the page and you will see a list of "deals" that you can add to your card. (I use an iPad and have a Preferred AmEx card.). Here are the details for the Cell phone 10%. Cash back:
"Get 10% of your online payment back as a statement credit each time you use your enrolled Card to pay your cell phone bill online @ these accepting major US carriers (AT&T, Sprint, T-Mobile, US Cellular, Verizon) by 6/30/16. Limit $30 in total credits."

To activate the deal, I added clicked "Add to card", and then went onto my cellphone's website and prepaid my cell phone for $300. I then received instant verification from AMEX that my account would be credited for $30. The $30 credit appeared on my AMEX account about a week later.

It's a really simple process once you get started. I must have had the card for a few months before even noticing the deals on the account page.

Gideon

j0nnyg1984
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Re: What's Your Credit Card Rewards Strategy?

Postby j0nnyg1984 » Sat May 28, 2016 3:23 pm

I've churned through almost every worthwhile card. Only Amex is left.

I switched to BoA at the beginning of the year, moved my tIRA to Merrill Edge, and am using the Travel Rewards card to earn 2.625% on all purchases. The other card i use is the BoA Cash Rewards card at gas stations and supermarkets, but i travel so much that I don't buy gas or groceries often.

I still have the citi prestige card for lounge access and occasionally use it for the 4th night free hotel deal. Debating canceling this at the end of the year and either switching back to the citi executive or going to the Amex platinum, but I'm probably going to stay. Admirals club access plus the priority pass membership is bonkers.

TheGipper
Posts: 262
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Re: What's Your Credit Card Rewards Strategy?

Postby TheGipper » Sat May 28, 2016 3:58 pm

GOALS: Cash back with minimal hastle. This means for us no churning, and prefer automatic statement credit redemptions. Don't travel much, so stick to cash back for now.

CARDS:
1) BoA Travel Rewards VISA. Our workhouse card. 2.625% cash back unlimited as Platinum preferred bonus. Quick 1 click (though not automatic) statement credit on broadly defined travel spending.
2) BoA Cash rewards VISA: 5.25% on gas, 3.5% groceries up to $1500 quarterly. We blow by this two months into quarter which is annoying, have to realize and stop using until next quarter.
3) Amazon Prime Store Card: 5% on all Amazon Spend. Auto statement credit.
4) Amex Simply Cash Business: 3% on chosen category (for us restaurants) and 5% on Cell phone and office supply stores (we spend quite a bit on local Staples including 5% off gift cards towards other big purchases).
5) Fidelity FIA Amex soon to be Elon Fidelity VISA: No longer used, replaced by BoA Travel Rewards as general workhorse card.

FUTURE/QUESTIONS:
1) May add Amex BlueCash Preferred for 6% groceries. If I do, we'll just use BoA Cash for gas only. We spend about $5000/yr on groceries, so hopefully this will work well, and we won't go over.
2) Not sure if should cancel Elon Fidelity Visa. Hate just keeping a card in the drawer and not using. Occasionally fraud happens, and don't want to monitor the statement. Credit is excellent, but this is my 2nd longest held card with large credit limit. If we cancel, I would be tempted to add the AmexBlue to keep my and spouse's utilization rate below 30%.
3) In future, when we start to travel, I will look more heavily into travel cards rather than cash back.

TomCat96
Posts: 360
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Re: What's Your Credit Card Rewards Strategy?

Postby TomCat96 » Sat May 28, 2016 4:41 pm

guitarguy wrote:
TomCat96 wrote:To OP, I appreciate you broaching this topic. I think everyone can learn from everyone else here.


Thanks. That way my thought.

At first I wasn't really interested in discussing churning or just chasing signup bonuses. However after reading this thread I've kinda become fascinated by it over the past few days. So I'm glad people have brought this to the table.

Having just finished my M.S. program...I guess I was subconsciously looking for another new hobby. :shock: :mrgreen:

TomCat96 wrote:My strategy is premised off the following assumptions:

1. that a dollar in saved travel expenses = a dollar in cash back. (cash back is not a privileged form of rewards)
2. that one should be able to extract approximately 2 cents on every Chase ultimate reward (UR) point, and about 2.3 cents on every starwood point.

That said, I have the following cards:

Chase Freedom, Chase Ultimate Rewards, and Starwood.
I could apply for more cards to get sign on bonuses, but I am buying a house within the year and want to avoid hard credit inquiries. Thus, the focus of my strategy will be on rewards and not the totality of rewards and bonuses.

In my opinion, if we allow ourselves the above assumptions, travel rewards are superior to cash back. (with caveats below)

The Chase Freedom offers 5x points on rotating categories. You can exchange UR points for cash directly at the rate of 1 dollar for every 100 points. This means that the 5x points has a LOWER BOUND of 5% cash back. The upper bound of the 5x points though, is however much value you can extract from your travel rewards by using your points effectively. Generally speaking, that number appears to be 2 cents per point.

What that means however is that the LOWER BOUND for chase UR points on the chase freedom, is

5% cash back rotating, 1% everything else.

The likely total rewards back however, based on the 2 cents per point is
10% cash back in travel expenses, 2% everything else.

Now moving to the Chase Sapphire, that means you get
4% cash in travel & dining, 2% everything else.

With regards to the Starwood points, you are looking at
2.3% cash back.

Thus, based on those numbers, there are few other cards which beat those cards.
AMEX 6% cash back, beats those numbers mathematically during the non-shopping quarter.

The Penfed 5% back on gas similarly beats the above numbers during the non-gas quarters--but not by much. The Chase Sapphire offers an effective 4% rewards on travel, including gas.


What this means, after I have reviewed other people's strategies here in an attempt to optimize my own, is that my strategy still appears to be superior in most cases. The AMEX 6% cash back is the most decisive improvement that can be made to my strat, and I should probably pick up that card.

However, by and large, because miles and points can be used at a rate that exceeds 1 cent per point, that means mathematically,

1 chase ultimate reward point is superior to 1% cash back.
In fact, 1 chase ultimate reward point is slightly better than 2% cash back.
And most decisively, 5 chase ultimate reward points is significantly better than 5% cash back.


This is interesting. Most of what I read values Ultimate Rewards Points at < 2 cents per point. Although that value can apparently be had if you transfer the points to other partners.

I also read that Sapphire 2% doesn't apply to gas. Can anyone confirm?



Thanks for responding back. I want to say, to those inquiring about how chase UR points convert to 2 cents a point,
this single issue is crucial as to why travel rewards are generally better than 2% cash back.

For some reason, this issue is always glossed over. But it must be emphasized!

You get 1 chase UR point per dollar spent. You can convert chase UR points directly to cash back off your statement. So if you have 100 Chase UR points, you basically get a dollar off your credit card bill. This is the worst way to use your chase UR points. But I set this out there because it means that chase UR points cannot be worth any less than 1 cent. If you find a worse deal, simply convert your points to cash.

Now as to how to you can get MORE than 1 cent per chase UR point, that depends on you. 2 cents is a VERY rough average based on likelihoods.

What do I mean? Well you can convert chase UR points to any number of airline miles.
You can use them for hotels as well...One person mentioned hyatt hotel points. You can use them to deduct against first class.

So why is the 2 cents thing so variable? Because it depends on a ridiculous number of personal factors.

According to some blogs, some people have gotten as high as a whopping 19 cents of value per Chase UR point when they applied the points towards first class. If coach costs $100, and if first class cost $1000, then this would be like saying the coach flight costs 5000 UR points, but the first class costs 5263 points. This is unlikely, but possible. Who know what kind of oddball deals the airlines might put in place that day.

But the point is that these oddball deals can and do occasionally happen. I get 2x points on dining, which includes starbucks. If I were to apply my points towards that particular first class upgrade deal, then I'm getting a whopping 38% cash back on my cup of coffee.

Let's say however that I dont care about first class at all though. I just want to get from point A to B. In this case, I am only capable of getting 2% cash back per point in the example I gave, because I would never in a million years spend for first class. I can only save on the money I would otherwise spend.

Same thing applies towards destinations. I might get a 6 cents a point if I want to fly out to detroit. But if I never see myself going there, I can never take advantage of the 6 cents per point valuation.

your cash back in the form of travel expenses offset comes entirely in the form of looking at destinations you are likely to travel to and comparing the costs of all the carriers.

The bottom line is that getting the most out of your chase UR points is completely dependent on your personal preference. But for me, I have faith that I can get at least 2 cents per point. the points guy cites a 2.3 cent valuation per chase UR point. But one poster claimed to get 8 cents per point. It's completely dependent on your travel needs, and we can really only speak in generalities.

I will say this though. Generally speaking some of the highest savings from UR points have come from offsetting first class upgrades. As a single male, this is useless to me when I travel alone. But when I travel with female company, I might opt for the first class upgrades. I can certainly see that happening down the line. So for purposes of computation, I retain the 2.3 cent per Chase UR point valuation. In fact, it is likely I might be able to extract more than that per point.

Under my travel habits then, chase travel rewards are worth significantly more to me than 2% cash back. In fact, with some mild vigilance, getting between 4-10% cash back in the form of travel expenses(2x for dining + coffee, 5x rotating categories) offset is fairly routine.

Nevertheless, for some people, doing the research to optimize point redemptions is taxing and a huge chore. For those people, 2% cash back across the board is probably the best option.

For me, I take odd pleasure in doing this kind of research, and therefore extracting more than 2% cash back is not a difficult matter at all

HIinvestor
Posts: 1102
Joined: Tue Apr 08, 2014 3:23 am

Re: What's Your Credit Card Rewards Strategy?

Postby HIinvestor » Sat May 28, 2016 5:12 pm

The thing we gave found most valuable for UR points is to allow D to make flight reservations at the last minute, depending on her health as there is NO penalty for last minute booking using UR points, if there is space on the plane. In that sense, it has been better for us than cash.

Stormbringer
Posts: 256
Joined: Sun Jun 14, 2015 7:07 am

Re: What's Your Credit Card Rewards Strategy?

Postby Stormbringer » Sat May 28, 2016 7:00 pm

guitarguy wrote:6% back on groceries

I'm curious if anyone knows how the credit card companies pull this off. My understanding is that merchants pay about 2% when a customer uses a card, which is obviously not enough to fund 6% cash back. Are grocers and gas stations paying higher rates?

HIinvestor
Posts: 1102
Joined: Tue Apr 08, 2014 3:23 am

Re: What's Your Credit Card Rewards Strategy?

Postby HIinvestor » Sat May 28, 2016 7:32 pm

With Barclay MCard, we get 5% on groceries. My understanding is markets operate on very thin margins, so no idea how they do this and stay in business!

randomguy
Posts: 4523
Joined: Wed Sep 17, 2014 9:00 am

Re: What's Your Credit Card Rewards Strategy?

Postby randomguy » Sat May 28, 2016 8:24 pm

Stormbringer wrote:
guitarguy wrote:6% back on groceries

I'm curious if anyone knows how the credit card companies pull this off. My understanding is that merchants pay about 2% when a customer uses a card, which is obviously not enough to fund 6% cash back. Are grocers and gas stations paying higher rates?


I assume it is a loss leader. The count on making it up on the other purchases you make. Through in a bit of interest and late fees and they do ok.

Gemini
Posts: 869
Joined: Sun May 20, 2012 8:10 am

Re: What's Your Credit Card Rewards Strategy?

Postby Gemini » Sat May 28, 2016 8:53 pm

This is a great read. Do you guys use points when you go on business trips as well? Are you able to deduct cash value if you go on a business trip paid with points?

ze233
Posts: 29
Joined: Fri Jul 03, 2015 4:41 pm

Re: What's Your Credit Card Rewards Strategy?

Postby ze233 » Sun May 29, 2016 6:20 am

Count me as another using Chase Ultimate Rewards. Wife and I use it exclusively for the great value in travel redemptions.

My cards:
Chase Freedom - Spend on 5% rotating categories
Chase Sapphire Preferred - 2% dining and travel purchases
Chase Freedom Unlimited - 1.5% spend on everything else
Chase Hyatt Card - 3% when used as Hyatt. Free Hyatt Platinum status. Free 1-4 Category night each year.

All UR points are combined to the Sapphire Preferred then transferred to the travel program I intend to use.
I've found redeeming for Hyatt for hotel and Southwest for air is the best deal. This is especially true when Southwest has their $70 fare sales. Even if you've already booked at a higher rate with reward points, their no change fees make it very simple to rebook and get a refund in points.
Since we stay at Hyatt often, the Chase Hyatt card made sense for us to get the status and it pays for the annual fee itself with the free night each year.

When I travel for business, I usually try to book Hyatt for hotel and air on Southwest as well.

Using UR points, we haven't paid out of pocket for hotel or air fare on leisure travel in a few years.

ze233
Posts: 29
Joined: Fri Jul 03, 2015 4:41 pm

Re: What's Your Credit Card Rewards Strategy?

Postby ze233 » Sun May 29, 2016 6:29 am

Gemini wrote:This is a great read. Do you guys use points when you go on business trips as well? Are you able to deduct cash value if you go on a business trip paid with points?


On business trips I use my personal credit cards to accumulate points and then expense the charges to the company.


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