What's Your Credit Card Rewards Strategy?

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rtr-molar-doc
Posts: 41
Joined: Wed Apr 04, 2018 8:49 am

Re: What's Your Credit Card Rewards Strategy?

Post by rtr-molar-doc » Wed Apr 04, 2018 11:21 am

Mudpuppy wrote:
Wed Apr 04, 2018 11:02 am
rtr-molar-doc wrote:
Wed Apr 04, 2018 9:06 am
Just wondering what kind of money some of you get back from your rewards programs on a yearly basis. $100's, $1000's or more?

I grew up with NOTHING, so I am pretty anal when it comes to using credit(credit cards included). I have simply never met anyone who got financially independent via using credit. It seems to me that people could be using their time much more usefully than 'churning' and using credit cards.
I don't churn in the sense of Reddit's /r/churning. I choose specific sign-up bonuses for specific cards that can play a purpose in my card rotation. So I only sign up for a couple of new cards a year, when the sign-up bonus is worth it and when the card fits in my spending patterns. I don't just sign-up for the bonus and then cancel the card a year down the road. I also don't use manufactured spending to meet the sign-up bonus spend requirements like some other people were discussing. My spend is purely regular monthly expenses. I could meet the Double Cash spend requirement ($500 in 90 days) through pet supplies and veterinary care alone.

Independent of sign-up bonuses, and when I was still using a 1% card for miscellaneous purchases, I'd get about $300 a year in regular rewards based off my normal spending. For sign-up bonuses, I got enough in the last two years to pay for hotel, air fare, rental car, and several activities for an 8-day vacation in Hawaii in January. In cash equivalents, the air fare was about $800, the hotel was about $1700, the rental car was about $300, and the activities were about $300.

I also pay those cards off in full each month and none of my cards carries a balance. I use the cards a cash substitute, not as an excuse to go on a spending spree. You have to have that level of financial discipline for the rewards game to make sense. Another bonus over cash, beyond the sign-up bonuses and rewards, is purchasing on specific credit cards gives extra consumer protections (extended warranty, accidental damage, trip insurance, etc.).
Thanks for your time and getting back to me on this. I honestly had no idea what kind of rewards/money people were talking about or getting. To me that kind of reward/money simply wouldn't be worth my(and my wife's time). We don't consume or spend that much these days. 1-2K per year would simply not be worth our time. I would rather put the time toward my business and earn more money. I can see where it would probably make sense and help for many people, but at my age I have more money than time.

Freefun
Posts: 381
Joined: Sun Jan 14, 2018 3:55 pm

Re: What's Your Credit Card Rewards Strategy?

Post by Freefun » Wed Apr 04, 2018 11:35 am

rtr-molar-doc wrote:
Wed Apr 04, 2018 9:06 am

Just wondering what kind of money some of you get back from your rewards programs on a yearly basis. $100's, $1000's or more?

old CASH DUDE
In some years, 10K-30K per year, easy. It depends on what you define as "money" as I am not referring to cash back from credit cards. I use miles and points primarily for biz and first class international flights. In a year I'll do 1-4 for them, so if you figure $4K-15K per ticket (long haul premium class), then I'm saving that much money.

To be fair, some of my miles are not purely from credit cards- but a lot are. My work is primarily international and I've had a bunch of expat assignments - hence some years of circling the globe many times. But I know I've easily accumulated 7-figure miles and/or points over decades solely from credit card bonus and actual credit card use.

I don't recall ever having a balance on any of my credit cards (meaning everything is paid in full every month). I don't like debt. I've used credit cards for several reasons (1) tons of miles and points - as I said - millions - and (2) spend tracking. Since I almost never pay cash (or check) for anything, everything is on credit cards. I download and categorize everything, which makes it easy to see where all my money is going.
Remember when you wanted what you currently have?

Mudpuppy
Posts: 5889
Joined: Sat Aug 27, 2011 2:26 am
Location: Sunny California

Re: What's Your Credit Card Rewards Strategy?

Post by Mudpuppy » Wed Apr 04, 2018 1:08 pm

rtr-molar-doc wrote:
Wed Apr 04, 2018 11:21 am
Thanks for your time and getting back to me on this. I honestly had no idea what kind of rewards/money people were talking about or getting. To me that kind of reward/money simply wouldn't be worth my(and my wife's time). We don't consume or spend that much these days. 1-2K per year would simply not be worth our time. I would rather put the time toward my business and earn more money. I can see where it would probably make sense and help for many people, but at my age I have more money than time.
That's fair. Just keep in mind that it takes almost no effort or time to find a single card with good consumer protections for those purchases that could use automatic extended warranty protection, accidental damage insurance, or so on. That at least might be worth considering rather than paying cash for certain items.

Da5id
Posts: 2059
Joined: Fri Feb 26, 2016 8:20 am

Re: What's Your Credit Card Rewards Strategy?

Post by Da5id » Wed Apr 04, 2018 1:11 pm

Mudpuppy wrote:
Wed Apr 04, 2018 1:08 pm
rtr-molar-doc wrote:
Wed Apr 04, 2018 11:21 am
Thanks for your time and getting back to me on this. I honestly had no idea what kind of rewards/money people were talking about or getting. To me that kind of reward/money simply wouldn't be worth my(and my wife's time). We don't consume or spend that much these days. 1-2K per year would simply not be worth our time. I would rather put the time toward my business and earn more money. I can see where it would probably make sense and help for many people, but at my age I have more money than time.
That's fair. Just keep in mind that it takes almost no effort or time to find a single card with good consumer protections for those purchases that could use automatic extended warranty protection, accidental damage insurance, or so on. That at least might be worth considering rather than paying cash for certain items.
Also to some of us 1-2K is more than others. molar-doc doesn't feel it is lots of money for the effort, which is a personal judgment. I spend a maybe few hours a year messing with card applications/cancellations for that $1000-$2000 dollars of sign up and spending bonuses. It feels worth my time on an hourly basis.

madbrain
Posts: 5127
Joined: Thu Jun 09, 2011 5:06 pm
Location: San Jose, California

Re: What's Your Credit Card Rewards Strategy?

Post by madbrain » Wed Apr 04, 2018 2:02 pm

rtr-molar-doc wrote:
Wed Apr 04, 2018 9:06 am
I am new to posting at Boglehead, but I have an honest question(I have been reading this site for a long long time though). How much money do those that 'churn' credit card rewards programs end up getting back after ONE year? I am a cash guy who has been debt free since I was 32(now 62). Put myself thru college and dental school on my own(with only HEAL loans while in dental school). I ONLY use a credit card for my internet monthly fee because I live in the far north of Wisconsin and they require it. Have to use credit cards at times though: flying, renting cars, hotels and some others, but I simply pay CASH for everything. I have never looked at or redeemed a credit card 'reward'. It just doesn't seem worth it to me. My time is simply worth more to me than churning for pennies.

I still have a MasterCard(BOA) from my dental practice days, which I rarely use; plus I have an Amazon visa and a BOA visa card. I have never added my credit card purchases up for a year, but I doubt they would be even $5000.00(perhaps more during some years if we travel more). I still pay bills via written checks. I suspect I am an antique!

Just wondering what kind of money some of you get back from your rewards programs on a yearly basis. $100's, $1000's or more?

I grew up with NOTHING, so I am pretty anal when it comes to using credit(credit cards included). I have simply never met anyone who got financially independent via using credit. It seems to me that people could be using their time much more usefully than 'churning' and using credit cards.

old CASH DUDE
I am sure all the merchants love you for using cash instead of credit- it saves them a lot of money in processing fees.
So, I thank you for subsidizing all the people who use credit cards to pay for purchases that cost the merchant more money.

In almost all cases, you don't get a discount for using cash. The only exceptions I have ever seen are some gas stations that have a cash discount, and Ikea which offers 1% discount for using a debit card instead of credit. I don't recall if the discount also applies to cash.

As far as your answer, I used to have a flat Fidelity Amex 2% card and 1.5% Fidelity 1.5% VISA card . These automatically redeemed the cash rewards to a Fidelity cash account (this is basically a bank account, with checks and a debit card) with no action needed on my part at all. The cards were on auto-pay in full each, so there was no really no effort involved either.

Using those cards, I used to collect between $700 and $1500 a year depending on purchase amounts that I would charge.

I started churning a few years ago, in mid 2016. The value of the benefits I have gotten, in terms of cash back or equivalent cash cost for airfare (I only fly coach) or hotel rooms (I mostly stay in 4 and 5 star hotels), or insurance benefits (broken/stolen cell phone, price protection), and signup bonuses, added up as follows :

2016 : $8800.94
2017 : $7248.89
2018 (so far) : $2364.11

This is all from my Quicken data so far.
This is not the net cost as there were costs associated with the payment services as well to meet minimum spending. There was time involved.
All these benefits are tax-free . I have not been able to get any raise at work for the last 4 years, and I would need a raise of about 80% more than the above amounts due to taxes to match these tax-free amounts. To me, the churning has been well worth it, and I intend to continue as long as I'm still able to open new cards with sufficient sign-up bonuses. And I'll continue to charge all my purchases to credit cards whenever possible for the benefits. If cash discounts start becoming more common at merchants, and add up to more than 2-3%, I may start changing my tune.

frugalmama
Posts: 114
Joined: Tue Mar 20, 2018 12:53 pm

Re: What's Your Credit Card Rewards Strategy?

Post by frugalmama » Wed Apr 04, 2018 2:51 pm

BeneIRA wrote:
Tue Apr 03, 2018 11:26 am
frugalmama wrote:
Tue Apr 03, 2018 9:11 am
We use credit cards for absolutely everything that we can. We pay our monthly balances in full.

We have quite a few cards (some we keep open due to longevity or in case something goes wrong with our other cards when out of the country) but we currently use:
Sams Club Credit Card for 5% cash back gas (up to 6,000), 3% cash back dining/travel, 1% everything else - We use for 5% gas and 3% dining/travel
Chase Amazon Prime Visa Rewards - 5% back Amazon, 2% dining/gas/drug stores, 1% everything else - We use for Amazon
Discover Card and Chase Freedom Card - we use for the revolving 5% categories
Citi Double Cash - 2% on everything - everything else that isn't one of the above or a 5% category

I sweep the money monthly (except Sams which gives you a check 1x a year) and deposit it into the kids' college funds...It is a painless way to save for college.

I am intrigued by the AMEX Blue Cash Preferred Card. I need to run the numbers and see how I'd come out...I'm always hunting for higher cash backs.
I had the BCP for a while. I have since downgraded to the Blue Cash Everyday, which has ended up working out for me due to the first two Chase Freedom quarters essentially being grocery stores. In any case. Currently, if you go onto an Incognito browser, there is an offer for $250 back if you spend $1000 in the first three months. Considering the annual fee is only $95, the first year is a no brainer, but here is the math for the breakeven. Keep in mind the Blue Cash Everyday has no fee and is 3% back on grocery stores. This would be ongoing, after year 1:

If you max the $6,000 per year in grocery stores:
BCE: $6000 * .03 - $0 Annual Fee = $180
BCP: $6000 * .06 - $95 annual fee = $265

BCE: $3000 * .03 - $0 Annual Fee = $90
BCP: $3000 * .06 - $95 annual fee = $85

BCE: $3,172 * .03 - $0 Annual Fee = $95.16
BCP: $3,172 * .06 - $95 Annual Fee = $95.32

So, if you spend more than $3,172 per year, you are ahead with the Preferred.
Thank you for taking the time to break that down...I was able to make a quick decision. Thanks also for the note about Incognito...you helped me keep another $50 in my pocket as I didn't know about doing that. Even after taking out my Wal-Mart/Sams purchases, we will still come out ahead with the Blue Cash Preferred, but we are a family of 12 so groceries are a large part of our budget.

ThePrince
Posts: 357
Joined: Sun Aug 20, 2017 9:15 pm
Location: U.S.A.

Re: What's Your Credit Card Rewards Strategy?

Post by ThePrince » Wed Apr 04, 2018 7:35 pm

MotoTrojan wrote:
Wed Apr 04, 2018 11:12 am
Uber/Barclays has a new Visa which is totally free, $100 back after $500 in first 90 days, $50 towards annual online subscription, but best of all... 4% back on dining and 3% back on travel (also 2% online and 1% elsewhere). Redeemable for cash or Uber credits. I added this to go along with my Citi DoubleCash 2% everything card, since I use CC's mostly for food and often for travel.
I have this card too and it’s been an awesome experience thus far.

rtr-molar-doc
Posts: 41
Joined: Wed Apr 04, 2018 8:49 am

Re: What's Your Credit Card Rewards Strategy?

Post by rtr-molar-doc » Wed Apr 04, 2018 7:46 pm

madbrain wrote:
Wed Apr 04, 2018 2:02 pm
rtr-molar-doc wrote:
Wed Apr 04, 2018 9:06 am
I am new to posting at Boglehead, but I have an honest question(I have been reading this site for a long long time though). How much money do those that 'churn' credit card rewards programs end up getting back after ONE year? I am a cash guy who has been debt free since I was 32(now 62). Put myself thru college and dental school on my own(with only HEAL loans while in dental school). I ONLY use a credit card for my internet monthly fee because I live in the far north of Wisconsin and they require it. Have to use credit cards at times though: flying, renting cars, hotels and some others, but I simply pay CASH for everything. I have never looked at or redeemed a credit card 'reward'. It just doesn't seem worth it to me. My time is simply worth more to me than churning for pennies.

I still have a MasterCard(BOA) from my dental practice days, which I rarely use; plus I have an Amazon visa and a BOA visa card. I have never added my credit card purchases up for a year, but I doubt they would be even $5000.00(perhaps more during some years if we travel more). I still pay bills via written checks. I suspect I am an antique!

Just wondering what kind of money some of you get back from your rewards programs on a yearly basis. $100's, $1000's or more?

I grew up with NOTHING, so I am pretty anal when it comes to using credit(credit cards included). I have simply never met anyone who got financially independent via using credit. It seems to me that people could be using their time much more usefully than 'churning' and using credit cards.

old CASH DUDE
I am sure all the merchants love you for using cash instead of credit- it saves them a lot of money in processing fees.
So, I thank you for subsidizing all the people who use credit cards to pay for purchases that cost the merchant more money.

In almost all cases, you don't get a discount for using cash. The only exceptions I have ever seen are some gas stations that have a cash discount, and Ikea which offers 1% discount for using a debit card instead of credit. I don't recall if the discount also applies to cash.

As far as your answer, I used to have a flat Fidelity Amex 2% card and 1.5% Fidelity 1.5% VISA card . These automatically redeemed the cash rewards to a Fidelity cash account (this is basically a bank account, with checks and a debit card) with no action needed on my part at all. The cards were on auto-pay in full each, so there was no really no effort involved either.

Using those cards, I used to collect between $700 and $1500 a year depending on purchase amounts that I would charge.

I started churning a few years ago, in mid 2016. The value of the benefits I have gotten, in terms of cash back or equivalent cash cost for airfare (I only fly coach) or hotel rooms (I mostly stay in 4 and 5 star hotels), or insurance benefits (broken/stolen cell phone, price protection), and signup bonuses, added up as follows :

2016 : $8800.94
2017 : $7248.89
2018 (so far) : $2364.11

This is all from my Quicken data so far.
This is not the net cost as there were costs associated with the payment services as well to meet minimum spending. There was time involved.
All these benefits are tax-free . I have not been able to get any raise at work for the last 4 years, and I would need a raise of about 80% more than the above amounts due to taxes to match these tax-free amounts. To me, the churning has been well worth it, and I intend to continue as long as I'm still able to open new cards with sufficient sign-up bonuses. And I'll continue to charge all my purchases to credit cards whenever possible for the benefits. If cash discounts start becoming more common at merchants, and add up to more than 2-3%, I may start changing my tune.
You would be amazed how much of a discount I get using cash, especially on big item purchases. Not going to argue about it, but going all cash early in my life was absolutely the best thing I ever did. It is so easy to buy things when you use a credit card that you don't need, especially at the grocery store and gas station. If I go in to buy something that goes for $1500 and show them 13 or 14 - $100 bills, I always will get 1 or 2 hundred off right off the bat. To me that is easy money.

Also, those are 'benefits' you get which means you have to do something to get them(the miles especially) - travel, etc. People wont admit that they actually spend more money using credit cards, but it is a fact. Tons of studies prove it. I did take the time to look at my BOA visa credit card and I do have some money coming back to me. I went online and had them send me a check. Not using the credit card that much, it was only a couple 100 bucks. I guess it is worth it, but I am not going to change the way I purchase things and pay for them at this date; just to get a few bucks back from the card co. I will keep an eye on what I do accumulate, but I wont be charging things just to get rewards money/points. I just aint wired that way.
I suspect I have some 'credit benefits' on my Amazon visa as me and my wife by tons of books, CD's and DVD's. I will check it out and perhaps I will get some books, etc for free.

Just remember - "Rationalization is man's(or woman's) strongest instinct" - we all want to verify what we do whether it it right or makes sense. I have made that mistake at times too. You seem to think "I" pay for you getting reward stuff. That is laughable to me. There is NO free lunch in life - been around long enough to know that.

madbrain
Posts: 5127
Joined: Thu Jun 09, 2011 5:06 pm
Location: San Jose, California

Re: What's Your Credit Card Rewards Strategy?

Post by madbrain » Wed Apr 04, 2018 8:09 pm

rtr-molar-doc wrote:
Wed Apr 04, 2018 7:46 pm
You would be amazed how much of a discount I get using cash, especially on big item purchases. Not going to argue about it, but going all cash early in my life was absolutely the best thing I ever did. It is so easy to buy things when you use a credit card that you don't need, especially at the grocery store and gas station. If I go in to buy something that goes for $1500 and show them 13 or 14 - $100 bills, I always will get 1 or 2 hundred off right off the bat. To me that is easy money.
I would certainly be interested in hearing specific examples of this. How much did you save ($ and percentage), and on what items ?
I hardly go to the gas station since we drive EVs and PHEV. I used less than 50 gallons all year long last year in my Volt. IOW, our gasoline spending is so minuscule as not to be something worth thinking about.

75% of our groceries come from Costco, where I don't think any cash discount is available. The rest comes from Safeway, Trader's Joe's and Wal-Mart. Do any of those merchants actually give discounts for using cash ? If so, that is news to me.
I can check all the other retail places that I shop it, but most of them are big chains like Fry's Electronics, Best Buy, my Kaiser HMO providers, etc. None of which are going to offer any kind of cash discount either.

These days, I don't normally carry any cash at all. If a merchant only takes cash and there isn't an ATM nearby within walking distance, I will shop somewhere else rather than buy from them. That seldom happens in the US, maybe once or twice a year. Much more so abroad.
Also, those are 'benefits' you get which means you have to do something to get them(the miles especially) - travel, etc. People wont admit that they actually spend more money using credit cards, but it is a fact. Tons of studies prove it. I did take the time to look at my BOA visa credit card and I do have some money coming back to me. I went online and had them send me a check. Not using the credit card that much, it was only a couple 100 bucks. I guess it is worth it, but I am not going to change the way I purchase things and pay for them at this date; just to get a few bucks back from the card co. I will keep an eye on what I do accumulate, but I wont be charging things just to get rewards money/points. I just aint wired that way.
I suspect I have some 'credit benefits' on my Amazon visa as me and my wife by tons of books, CD's and DVD's. I will check it out and perhaps I will get some books, etc for free.

Just remember - "Rationalization is man's(or woman's) strongest instinct" - we all want to verify what we do whether it it right or makes sense. I have made that mistake at times too. You seem to think "I" pay for you getting reward stuff. That is laughable to me. There is NO free lunch in life - been around long enough to know that.
A very large portion of what I spend is now online transactions, simply because many items I that I buy are no longer available locally at retail stores, or never were. It is not possible to use cash for online purchases at all. You can use debit cards or e-check, but I would never do so due to inferior legal protections. So, the cash vs card argument simply does not apply. The only real question is which card to use. And in that case, churning cards for signup bonuses makes a huge amount of sense.

As far as charging more, it's really basic math. If I can charge my existing bills (from billers that don't take credit cards, like water , electric utility, car loan, mortgage) and pay a 2.5% fee on them, and then get a sign-up bonus that's worth 20 or 30% of that bill, it's a net win of 17.5% to 27.5%. And it's non-taxable. I don't consider the $6000 - $8000 /year we made in signup bonuses in the last few years to be just "a few bucks". This represents coach airfare and 4 star hotels for multiple vacations to Asia and Europe for each of those years, vacations that I would otherwise purchase with my own hard-earned money - and actually did, in the years before I started churning.

As for no free lunch, you might want to read this interesting thread :

https://www.reddit.com/r/churning/comme ... e_rewards/

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VictoriaF
Posts: 18602
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Location: Black Swan Lake

Re: What's Your Credit Card Rewards Strategy?

Post by VictoriaF » Wed Apr 04, 2018 8:19 pm

madbrain wrote:
Wed Apr 04, 2018 8:09 pm
As for no free lunch, you might want to read this interesting thread :

https://www.reddit.com/r/churning/comme ... e_rewards/
I do use credit cards for bonuses and I understand where you are coming from. But "no free lunch" covers more than money. In the information age, the most critical currency is attention, and accumulating bonuses and rewards uses a lot of attention. I went through this process, I learned how to select cards, how to get bonuses, and how to use bonuses. I have saved $1k-$1.5k per year in the past four years. Nevertheless, I spent more time on this than I think I should.

I have to thank Chase's 5/24 for a forced withdrawal. Now, I am maintaining a few cards and applying for new ones once or twice a year. It is easy now, but it took me time to get here. And that time is the price I paid for the free lunch.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

rtr-molar-doc
Posts: 41
Joined: Wed Apr 04, 2018 8:49 am

Re: What's Your Credit Card Rewards Strategy?

Post by rtr-molar-doc » Wed Apr 04, 2018 8:37 pm

madbrain wrote:
Wed Apr 04, 2018 8:09 pm
rtr-molar-doc wrote:
Wed Apr 04, 2018 7:46 pm
You would be amazed how much of a discount I get using cash, especially on big item purchases. Not going to argue about it, but going all cash early in my life was absolutely the best thing I ever did. It is so easy to buy things when you use a credit card that you don't need, especially at the grocery store and gas station. If I go in to buy something that goes for $1500 and show them 13 or 14 - $100 bills, I always will get 1 or 2 hundred off right off the bat. To me that is easy money.
I would certainly be interested in hearing specific examples of this. How much did you save ($ and percentage), and on what items ?
I hardly go to the gas station since we drive EVs and PHEV. I used less than 50 gallons all year long last year in my Volt. IOW, our gasoline spending is so minuscule as not to be something worth thinking about.

75% of our groceries come from Costco, where I don't think any cash discount is available. The rest comes from Safeway, Trader's Joe's and Wal-Mart. Do any of those merchants actually give discounts for using cash ? If so, that is news to me.
I can check all the other retail places that I shop it, but most of them are big chains like Fry's Electronics, Best Buy, my Kaiser HMO providers, etc. None of which are going to offer any kind of cash discount either.

These days, I don't normally carry any cash at all. If a merchant only takes cash and there isn't an ATM nearby within walking distance, I will shop somewhere else rather than buy from them. That seldom happens in the US, maybe once or twice a year. Much more so abroad.
Also, those are 'benefits' you get which means you have to do something to get them(the miles especially) - travel, etc. People wont admit that they actually spend more money using credit cards, but it is a fact. Tons of studies prove it. I did take the time to look at my BOA visa credit card and I do have some money coming back to me. I went online and had them send me a check. Not using the credit card that much, it was only a couple 100 bucks. I guess it is worth it, but I am not going to change the way I purchase things and pay for them at this date; just to get a few bucks back from the card co. I will keep an eye on what I do accumulate, but I wont be charging things just to get rewards money/points. I just aint wired that way.
I suspect I have some 'credit benefits' on my Amazon visa as me and my wife by tons of books, CD's and DVD's. I will check it out and perhaps I will get some books, etc for free.

Just remember - "Rationalization is man's(or woman's) strongest instinct" - we all want to verify what we do whether it it right or makes sense. I have made that mistake at times too. You seem to think "I" pay for you getting reward stuff. That is laughable to me. There is NO free lunch in life - been around long enough to know that.
A very large portion of what I spend is now online transactions, simply because many items I that I buy are no longer available locally at retail stores, or never were. It is not possible to use cash for online purchases at all. You can use debit cards or e-check, but I would never do so due to inferior legal protections. So, the cash vs card argument simply does not apply. The only real question is which card to use. And in that case, churning cards for signup bonuses makes a huge amount of sense.

As far as charging more, it's really basic math. If I can charge my existing bills (from billers that don't take credit cards, like water , electric utility, car loan, mortgage) and pay a 2.5% fee on them, and then get a sign-up bonus that's worth 20 or 30% of that bill, it's a net win of 17.5% to 27.5%. And it's non-taxable. I don't consider the $6000 - $8000 /year we made in signup bonuses in the last few years to be just "a few bucks". This represents coach airfare and 4 star hotels for multiple vacations to Asia and Europe for each of those years, vacations that I would otherwise purchase with my own hard-earned money - and actually did, in the years before I started churning.

As for no free lunch, you might want to read this interesting thread :

https://www.reddit.com/r/churning/comme ... e_rewards/
My most recent example of getting a great discount for cash was last year when my wife wanted a 'side by side' 4-wheeler. I pretty much know the prices of these and the markups. The guy took the specs I wanted and wrote up a contract. It came to nearly $12,000.00; which I knew was very high. I took out a rubber banded pack of 100 - $100 dollar bills($10K). I told him if he wanted a sale today, this was all I was willing to pay. I ended up paying about $10,500.00 that day when all taxes, license and other things were added up. Don't think I would have gotten it for that price without having over $10K in cash with me. Carrying and using cash doesn't scare me at all. I rarely go out without at least $5K in my wallet. I have found and purchased some great great bargains because I had cash on hand. I have done similar things with household appliances - washers, dryers, TV's, refrigerators, etc.

By the way they wouldn't take a credit card for the purchase as I did ask.

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Doom&Gloom
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Re: What's Your Credit Card Rewards Strategy?

Post by Doom&Gloom » Wed Apr 04, 2018 8:41 pm

rtr-molar-doc wrote:
Wed Apr 04, 2018 7:46 pm
madbrain wrote:
Wed Apr 04, 2018 2:02 pm
rtr-molar-doc wrote:
Wed Apr 04, 2018 9:06 am
I am new to posting at Boglehead, but I have an honest question(I have been reading this site for a long long time though). How much money do those that 'churn' credit card rewards programs end up getting back after ONE year? I am a cash guy who has been debt free since I was 32(now 62). Put myself thru college and dental school on my own(with only HEAL loans while in dental school). I ONLY use a credit card for my internet monthly fee because I live in the far north of Wisconsin and they require it. Have to use credit cards at times though: flying, renting cars, hotels and some others, but I simply pay CASH for everything. I have never looked at or redeemed a credit card 'reward'. It just doesn't seem worth it to me. My time is simply worth more to me than churning for pennies.

I still have a MasterCard(BOA) from my dental practice days, which I rarely use; plus I have an Amazon visa and a BOA visa card. I have never added my credit card purchases up for a year, but I doubt they would be even $5000.00(perhaps more during some years if we travel more). I still pay bills via written checks. I suspect I am an antique!

Just wondering what kind of money some of you get back from your rewards programs on a yearly basis. $100's, $1000's or more?

I grew up with NOTHING, so I am pretty anal when it comes to using credit(credit cards included). I have simply never met anyone who got financially independent via using credit. It seems to me that people could be using their time much more usefully than 'churning' and using credit cards.

old CASH DUDE
I am sure all the merchants love you for using cash instead of credit- it saves them a lot of money in processing fees.
So, I thank you for subsidizing all the people who use credit cards to pay for purchases that cost the merchant more money.

In almost all cases, you don't get a discount for using cash. The only exceptions I have ever seen are some gas stations that have a cash discount, and Ikea which offers 1% discount for using a debit card instead of credit. I don't recall if the discount also applies to cash.

As far as your answer, I used to have a flat Fidelity Amex 2% card and 1.5% Fidelity 1.5% VISA card . These automatically redeemed the cash rewards to a Fidelity cash account (this is basically a bank account, with checks and a debit card) with no action needed on my part at all. The cards were on auto-pay in full each, so there was no really no effort involved either.

Using those cards, I used to collect between $700 and $1500 a year depending on purchase amounts that I would charge.

I started churning a few years ago, in mid 2016. The value of the benefits I have gotten, in terms of cash back or equivalent cash cost for airfare (I only fly coach) or hotel rooms (I mostly stay in 4 and 5 star hotels), or insurance benefits (broken/stolen cell phone, price protection), and signup bonuses, added up as follows :

2016 : $8800.94
2017 : $7248.89
2018 (so far) : $2364.11

This is all from my Quicken data so far.
This is not the net cost as there were costs associated with the payment services as well to meet minimum spending. There was time involved.
All these benefits are tax-free . I have not been able to get any raise at work for the last 4 years, and I would need a raise of about 80% more than the above amounts due to taxes to match these tax-free amounts. To me, the churning has been well worth it, and I intend to continue as long as I'm still able to open new cards with sufficient sign-up bonuses. And I'll continue to charge all my purchases to credit cards whenever possible for the benefits. If cash discounts start becoming more common at merchants, and add up to more than 2-3%, I may start changing my tune.
You would be amazed how much of a discount I get using cash, especially on big item purchases. Not going to argue about it, but going all cash early in my life was absolutely the best thing I ever did. It is so easy to buy things when you use a credit card that you don't need, especially at the grocery store and gas station. If I go in to buy something that goes for $1500 and show them 13 or 14 - $100 bills, I always will get 1 or 2 hundred off right off the bat. To me that is easy money.

Also, those are 'benefits' you get which means you have to do something to get them(the miles especially) - travel, etc. People wont admit that they actually spend more money using credit cards, but it is a fact. Tons of studies prove it. I did take the time to look at my BOA visa credit card and I do have some money coming back to me. I went online and had them send me a check. Not using the credit card that much, it was only a couple 100 bucks. I guess it is worth it, but I am not going to change the way I purchase things and pay for them at this date; just to get a few bucks back from the card co. I will keep an eye on what I do accumulate, but I wont be charging things just to get rewards money/points. I just aint wired that way.
I suspect I have some 'credit benefits' on my Amazon visa as me and my wife by tons of books, CD's and DVD's. I will check it out and perhaps I will get some books, etc for free.

Just remember - "Rationalization is man's(or woman's) strongest instinct" - we all want to verify what we do whether it it right or makes sense. I have made that mistake at times too. You seem to think "I" pay for you getting reward stuff. That is laughable to me. There is NO free lunch in life - been around long enough to know that.
It seems that you are more than happy with doing business the way you always have. I do not understand why you would even ask the question about credit cards. Looks like you are doing fine.

madbrain
Posts: 5127
Joined: Thu Jun 09, 2011 5:06 pm
Location: San Jose, California

Re: What's Your Credit Card Rewards Strategy?

Post by madbrain » Wed Apr 04, 2018 8:42 pm

Victoria,
VictoriaF wrote:
Wed Apr 04, 2018 8:19 pm
I do use credit cards for bonuses and I understand where you are coming from. But "no free lunch" covers more than money. In the information age, the most critical currency is attention, and accumulating bonuses and rewards uses a lot of attention. I went through this process, I learned how to select cards, how to get bonuses, and how to use bonuses. I have saved $1k-$1.5k per year in the past four years. Nevertheless, I spent more time on this than I think I should.

I have to thank Chase's 5/24 for a forced withdrawal. Now, I am maintaining a few cards and applying for new ones once or twice a year. It is easy now, but it took me time to get here. And that time is the price I paid for the free lunch.
I completely agree that maximizing rewards takes time, and time is not free. But I haven't found a better marginal return on investment for my spare time.

You are not churning right if Chase 5/24 has stopped you from churning :)

Cards I received and collected bonus in the last 12 months, or waiting to receive very shortly :
- Citi Double cash ($100)
- Citi AAdvantage (50,000 miles)
- Wells Fargo cashwise ($200 , should post on next statement)
- Bank of the West mastercard ($100)
- US Bank VISA ($200)

I guess it's only 5 cards, technically. Not 40 like in our first year.

When it comes to points, I don't assign any value to them until they get redeemed.
The other thousands of dollars I accounted for as attributed to credit cards, are from redemptions.
Ie. when I book a room or ticket with points, I lookup the cash cost for the same, and count that under my "credit card benefits" category in Quicken.

We still have have about a million points in various banks and/or airlines between the two of us. I don't value them at anything until they are actually spent. There is always a risk of devaluation for points. Much more so with airlines & hotels than bank points.
Still have no idea how we will spend our 300,000 Delta miles or my 150,000 AA miles as the amount of domestic travel we do is close to 0. Need to think about it before our next major vacation in November.

rtr-molar-doc
Posts: 41
Joined: Wed Apr 04, 2018 8:49 am

Re: What's Your Credit Card Rewards Strategy?

Post by rtr-molar-doc » Wed Apr 04, 2018 8:43 pm

Da5id wrote:
Wed Apr 04, 2018 1:11 pm
Mudpuppy wrote:
Wed Apr 04, 2018 1:08 pm
rtr-molar-doc wrote:
Wed Apr 04, 2018 11:21 am
Thanks for your time and getting back to me on this. I honestly had no idea what kind of rewards/money people were talking about or getting. To me that kind of reward/money simply wouldn't be worth my(and my wife's time). We don't consume or spend that much these days. 1-2K per year would simply not be worth our time. I would rather put the time toward my business and earn more money. I can see where it would probably make sense and help for many people, but at my age I have more money than time.
That's fair. Just keep in mind that it takes almost no effort or time to find a single card with good consumer protections for those purchases that could use automatic extended warranty protection, accidental damage insurance, or so on. That at least might be worth considering rather than paying cash for certain items.
Also to some of us 1-2K is more than others. molar-doc doesn't feel it is lots of money for the effort, which is a personal judgment. I spend a maybe few hours a year messing with card applications/cancellations for that $1000-$2000 dollars of sign up and spending bonuses. It feels worth my time on an hourly basis.
Just wondering how you invested the nearly $19,000.00 you say you got in 'rewards'? Suspect it is all gone because it was consumed. Everyone always says they would have spent the amount ANYWAY - rationizaion again! If you show me a way to put $19K in my bank account/etc - money that I can invest - I will look into it. If it is only used as more 'consumable stuff', it doesn't interest me.

rtr-molar-doc
Posts: 41
Joined: Wed Apr 04, 2018 8:49 am

Re: What's Your Credit Card Rewards Strategy?

Post by rtr-molar-doc » Wed Apr 04, 2018 8:51 pm

Doom&Gloom wrote:
Wed Apr 04, 2018 8:41 pm
rtr-molar-doc wrote:
Wed Apr 04, 2018 7:46 pm
madbrain wrote:
Wed Apr 04, 2018 2:02 pm
rtr-molar-doc wrote:
Wed Apr 04, 2018 9:06 am
I am new to posting at Boglehead, but I have an honest question(I have been reading this site for a long long time though). How much money do those that 'churn' credit card rewards programs end up getting back after ONE year? I am a cash guy who has been debt free since I was 32(now 62). Put myself thru college and dental school on my own(with only HEAL loans while in dental school). I ONLY use a credit card for my internet monthly fee because I live in the far north of Wisconsin and they require it. Have to use credit cards at times though: flying, renting cars, hotels and some others, but I simply pay CASH for everything. I have never looked at or redeemed a credit card 'reward'. It just doesn't seem worth it to me. My time is simply worth more to me than churning for pennies.

I still have a MasterCard(BOA) from my dental practice days, which I rarely use; plus I have an Amazon visa and a BOA visa card. I have never added my credit card purchases up for a year, but I doubt they would be even $5000.00(perhaps more during some years if we travel more). I still pay bills via written checks. I suspect I am an antique!

Just wondering what kind of money some of you get back from your rewards programs on a yearly basis. $100's, $1000's or more?

I grew up with NOTHING, so I am pretty anal when it comes to using credit(credit cards included). I have simply never met anyone who got financially independent via using credit. It seems to me that people could be using their time much more usefully than 'churning' and using credit cards.

old CASH DUDE
I am sure all the merchants love you for using cash instead of credit- it saves them a lot of money in processing fees.
So, I thank you for subsidizing all the people who use credit cards to pay for purchases that cost the merchant more money.

In almost all cases, you don't get a discount for using cash. The only exceptions I have ever seen are some gas stations that have a cash discount, and Ikea which offers 1% discount for using a debit card instead of credit. I don't recall if the discount also applies to cash.

As far as your answer, I used to have a flat Fidelity Amex 2% card and 1.5% Fidelity 1.5% VISA card . These automatically redeemed the cash rewards to a Fidelity cash account (this is basically a bank account, with checks and a debit card) with no action needed on my part at all. The cards were on auto-pay in full each, so there was no really no effort involved either.

Using those cards, I used to collect between $700 and $1500 a year depending on purchase amounts that I would charge.

I started churning a few years ago, in mid 2016. The value of the benefits I have gotten, in terms of cash back or equivalent cash cost for airfare (I only fly coach) or hotel rooms (I mostly stay in 4 and 5 star hotels), or insurance benefits (broken/stolen cell phone, price protection), and signup bonuses, added up as follows :

2016 : $8800.94
2017 : $7248.89
2018 (so far) : $2364.11

This is all from my Quicken data so far.
This is not the net cost as there were costs associated with the payment services as well to meet minimum spending. There was time involved.
All these benefits are tax-free . I have not been able to get any raise at work for the last 4 years, and I would need a raise of about 80% more than the above amounts due to taxes to match these tax-free amounts. To me, the churning has been well worth it, and I intend to continue as long as I'm still able to open new cards with sufficient sign-up bonuses. And I'll continue to charge all my purchases to credit cards whenever possible for the benefits. If cash discounts start becoming more common at merchants, and add up to more than 2-3%, I may start changing my tune.
You would be amazed how much of a discount I get using cash, especially on big item purchases. Not going to argue about it, but going all cash early in my life was absolutely the best thing I ever did. It is so easy to buy things when you use a credit card that you don't need, especially at the grocery store and gas station. If I go in to buy something that goes for $1500 and show them 13 or 14 - $100 bills, I always will get 1 or 2 hundred off right off the bat. To me that is easy money.

Also, those are 'benefits' you get which means you have to do something to get them(the miles especially) - travel, etc. People wont admit that they actually spend more money using credit cards, but it is a fact. Tons of studies prove it. I did take the time to look at my BOA visa credit card and I do have some money coming back to me. I went online and had them send me a check. Not using the credit card that much, it was only a couple 100 bucks. I guess it is worth it, but I am not going to change the way I purchase things and pay for them at this date; just to get a few bucks back from the card co. I will keep an eye on what I do accumulate, but I wont be charging things just to get rewards money/points. I just aint wired that way.
I suspect I have some 'credit benefits' on my Amazon visa as me and my wife by tons of books, CD's and DVD's. I will check it out and perhaps I will get some books, etc for free.

Just remember - "Rationalization is man's(or woman's) strongest instinct" - we all want to verify what we do whether it it right or makes sense. I have made that mistake at times too. You seem to think "I" pay for you getting reward stuff. That is laughable to me. There is NO free lunch in life - been around long enough to know that.
It seems that you are more than happy with doing business the way you always have. I do not understand why you would even ask the question about credit cards. Looks like you are doing fine.
Trying to understand it because I have a nephew and his wife who 'spin' credit cards for stuff they cant really afford. The always try to justify it by saying they would have spent the same amount of money anyway and by using CC's they think the rewards/points make it more affordable. The obvious truth is they cant afford to be putting purchases on crdit cards. Seems many millenials do the card churning. I don't know of anyone my age that does and my age bracket(62+) probably consumes more 'stuff' and they can actually afford it. My sister had asked me to help them with their finances as they bring in enough money, but by using credit cards they spend more money than they can afford to and much of it is because of card churning for points/rewards. I just see it as a bad thing to offer to young consumers. Most people it has been shown DO carry balances on their credit cards and that is just STUPID!

madbrain
Posts: 5127
Joined: Thu Jun 09, 2011 5:06 pm
Location: San Jose, California

Re: What's Your Credit Card Rewards Strategy?

Post by madbrain » Wed Apr 04, 2018 8:52 pm

rtr-molar-doc wrote:
Wed Apr 04, 2018 8:37 pm
My most recent example of getting a great discount for cash was last year when my wife wanted a 'side by side' 4-wheeler. I pretty much know the prices of these and the markups. The guy took the specs I wanted and wrote up a contract. It came to nearly $12,000.00; which I knew was very high. I took out a rubber banded pack of 100 - $100 dollar bills($10K). I told him if he wanted a sale today, this was all I was willing to pay. I ended up paying about $10,500.00 that day when all taxes, license and other things were added up. Don't think I would have gotten it for that price without having over $10K in cash with me. Carrying and using cash doesn't scare me at all. I rarely go out without at least $5K in my wallet. I have found and purchased some great great bargains because I had cash on hand. I have done similar things with household appliances - washers, dryers, TV's, refrigerators, etc.

By the way they wouldn't take a credit card for the purchase as I did ask.
Yes, the car dealers don't take credit cards, so this is really not a situation where you can compare cash vs credit cards.
Some will accept a partial card payment, but even that does not make sense, except possibly to meet a signup bonus. None of the traditional credit card benefits like extended warranty, price protection or purchase protection apply to cars, anyway.

FYI, I have bought cars before and tried to negotiate a cash price. I didn't show up with thousands of dollars in bills.
I could have done either a personal check or cashier's check to the dealer. I asked if there would be a discount for full payment vs using financing, and the answer was no. The cars I purchased over the years were always new, and none were ever as low as yours. Probably the cheapest one I bought was my first car, a 2001 Prius, which I paid with a check for $20k. Interest rates were higher then so I didn't even think of using financing. And the car was in short supply at the time. I had to be on a 4-months waiting list to get it. No bargaining possible in those situations, obviously.

For our recently acquired cars, Volt and Bolt, I have used very low-interest credit from my credit union. I offered to pay in full, but there just wasn't any discount to be had. In fact, the 2 separate Chevy dealers processed the loan with another institution not of our choice, at a 0.5% higher rate. The credit union gives 0.5% discount on the rate for members, but the dealers wouldn't write the discounted rate into the contract. And they just sold the loan to someone else at the rate in the contract, ie. 0.5% higher than I was expecting to pay with the credit union discount. I made both dealers redo each loan with the credit union (not payoff!). The first dealer complied immediately, the second one only after I threatened to rat them out to GM corporate. The reason they did that is because dealers get kickbacks from some lenders. And in fact, they can give you a better price if you go with their lender due to this rebate. If you go with theirs, and just pay the loan in full immediately, you will end up better off than if you paid the dealer in full. The dealer will likely not receive their lender kickback for an early payoff, but the system is screwed up. This is just a tip. I have also checked tax & license from the county web site and compared them with the numbers on sales contracts. Interesting things can happen in financing ! So many dirty tricks. Anyway, I question the existence of cash discounts that you couldn't get with other methods of payments (financing). And in fact, I have evidence that paying cash will not yield the best price for a car in my cases. However, credit cards have no place in this discussion of car purchases.

For appliances, have you ever asked if those discounts wouldn't have been also available when using a credit card, or within 2 or 3% ? What's the incentive for the appliance dealer to offer a higher discount than the fees they pay to process cards ? Unless they are doing things off the books. In which case, I'm not sure I would want to be a part of it anyway.
Maybe next time you negotiate a cash discount, say you changed your mind and want to pay with a card after all, and see what price they want to charge you then. I would be surprised if it's more than 3% higher.

FYI, I have purchased many appliances on which I negotiated hundreds in discounts also, and I always paid with credit cards.

rtr-molar-doc
Posts: 41
Joined: Wed Apr 04, 2018 8:49 am

Re: What's Your Credit Card Rewards Strategy?

Post by rtr-molar-doc » Wed Apr 04, 2018 9:11 pm

madbrain wrote:
Wed Apr 04, 2018 8:52 pm
rtr-molar-doc wrote:
Wed Apr 04, 2018 8:37 pm
My most recent example of getting a great discount for cash was last year when my wife wanted a 'side by side' 4-wheeler. I pretty much know the prices of these and the markups. The guy took the specs I wanted and wrote up a contract. It came to nearly $12,000.00; which I knew was very high. I took out a rubber banded pack of 100 - $100 dollar bills($10K). I told him if he wanted a sale today, this was all I was willing to pay. I ended up paying about $10,500.00 that day when all taxes, license and other things were added up. Don't think I would have gotten it for that price without having over $10K in cash with me. Carrying and using cash doesn't scare me at all. I rarely go out without at least $5K in my wallet. I have found and purchased some great great bargains because I had cash on hand. I have done similar things with household appliances - washers, dryers, TV's, refrigerators, etc.

By the way they wouldn't take a credit card for the purchase as I did ask.
Yes, the car dealers don't take credit cards, so this is really not a situation where you can compare cash vs credit cards.
Some will accept a partial card payment, but even that does not make sense, except possibly to meet a signup bonus. None of the traditional credit card benefits like extended warranty, price protection or purchase protection apply to cars, anyway.

FYI, I have bought cars before and tried to negotiate a cash price. I didn't show up with thousands of dollars in bills.
I could have done either a personal check or cashier's check to the dealer. I asked if there would be a discount for full payment vs using financing, and the answer was no. The cars I purchased over the years were always new, and none were ever as low as yours. Probably the cheapest one I bought was my first car, a 2001 Prius, which I paid with a check for $20k. Interest rates were higher then so I didn't even think of using financing. And the car was in short supply at the time. I had to be on a 4-months waiting list to get it. No bargaining possible in those situations, obviously.

For our recently acquired cars, Volt and Bolt, I have used very low-interest credit from my credit union. I offered to pay in full, but there just wasn't any discount to be had. In fact, the 2 separate Chevy dealers processed the loan with another institution not of our choice, at a 0.5% higher rate. The credit union gives 0.5% discount on the rate for members, but the dealers wouldn't write the discounted rate into the contract. And they just sold the loan to someone else at the rate in the contract, ie. 0.5% higher than I was expecting to pay with the credit union discount. I made both dealers redo each loan with the credit union (not payoff!). The first dealer complied immediately, the second one only after I threatened to rat them out to GM corporate. The reason they did that is because dealers get kickbacks from some lenders. And in fact, they can give you a better price if you go with their lender due to this rebate. If you go with theirs, and just pay the loan in full immediately, you will end up better off than if you paid the dealer in full. The dealer will likely not receive their lender kickback for an early payoff, but the system is screwed up. But I question the existence of cash discounts that you couldn't get with other methods of payments (financing). And in fact, I have evidence that paying cash will not yield the best price for a car in my cases. However, credit cards have no place in this discussion of car purchases.

For appliances, have you ever asked if those discounts wouldn't have been also available when using a credit card, or within 2 or 3% ? What's the incentive for the appliance dealer to offer a higher discount than the fees they pay to process cards ? Unless they are doing things off the books. In which case, I'm not sure I would want to be a part of it anyway.
Maybe next time you negotiate a cash discount, say you changed your mind and want to pay with a card after all, and see what price they want to charge you then. I would be surprised if it's more than 3% higher.

FYI, I have purchased many appliances on which I negotiated hundreds in discounts also, and I always paid with credit cards.
I havent 'financed' ANYTHING since I got totally out of debt in 1987. When purchasing a vehicle I will take 3-4 $10,000.00 bank checks PLUS a lot of cash. No, I don't carry $40K in cash to buy a new truck, but I carry enough in checks and cash to buy what I want. If they want a sale that day(sometimes it doesn't work I will admit), but if the sales person wants a sale; I will get a huge discount off of what I would 'financing' thru the dealer/etc.

I have honestly found pure cash to be the greatest developer of a great price than anything else. Perhaps it is where I live up here in N.Wisc. I once bought a very nice used tractor for cash that when the guy was asking $6K more than I was willing to pay. I told him if he ever wanted to sell it for the price I offered him, I would pay him in cash. He got ahold of me 2 months later and I got a great tractor. Having cash is an incredible incentive for the buyer and very hard for a seller to turn down. Also bought a 40acre parcel several years back in similar mode.

madbrain
Posts: 5127
Joined: Thu Jun 09, 2011 5:06 pm
Location: San Jose, California

Re: What's Your Credit Card Rewards Strategy?

Post by madbrain » Wed Apr 04, 2018 9:19 pm

rtr-molar-doc wrote:
Wed Apr 04, 2018 9:11 pm
I havent 'financed' ANYTHING since I got totally out of debt in 1987. When purchasing a vehicle I will take 3-4 $10,000.00 bank checks PLUS a lot of cash. No, I don't carry $40K in cash to buy a new truck, but I carry enough in checks and cash to buy what I want. If they want a sale that day(sometimes it doesn't work I will admit), but if the sales person wants a sale; I will get a huge discount off of what I would 'financing' thru the dealer/etc.

I have honestly found pure cash to be the greatest developer of a great price than anything else. Perhaps it is where I live up here in N.Wisc. I once bought a very nice used tractor for cash that when the guy was asking $6K more than I was willing to pay. I told him if he ever wanted to sell it for the price I offered him, I would pay him in cash. He got ahold of me 2 months later and I got a great tractor. Having cash is an incredible incentive for the buyer and very hard for a seller to turn down. Also bought a 40acre parcel several years back in similar mode.
Interesting story about the tractor. Not necessarily all that useful if you have to wait 2 months to get the discount, though. Do you think they wouldn't have made a deal with you if you then told them you wanted to use financing after all ?
Again, I don't see the relevance of credit cards when it comes to vehicle purchases. Those transactions are either going to be closed by cash, check or financing.

Don't see how it applies to real estate purchases, either. Don't you have to get your title recorded for your parcel ? And show proof of payment with a title company still ? A title company around told me an anecdote about a buyer who wanted to make their payment in physical cash (maybe it was a downpayment and there was still a loan involved). Long story short, cash got mysteriously "lost" somehow, and the title company won't allow closings with cash anymore.

Again, don't think credit cards have any relevance for real estate purchases. Though I suppose if we are talking about something that fits within your card limit, you could in theory use a payment service like Plastiq or Paypal for the payment and pay the extra fee (2.5% to 3%) yourself. But there would be no benefit to doing so. Anyway, around here, even empty lots are run in the hundreds of thousands, so it's not really possible to do that. If you have a card limit this high, you can probably have access to much cheaper forms of financing (or cash).

rtr-molar-doc
Posts: 41
Joined: Wed Apr 04, 2018 8:49 am

Re: What's Your Credit Card Rewards Strategy?

Post by rtr-molar-doc » Wed Apr 04, 2018 9:33 pm

madbrain wrote:
Wed Apr 04, 2018 9:19 pm
rtr-molar-doc wrote:
Wed Apr 04, 2018 9:11 pm
I havent 'financed' ANYTHING since I got totally out of debt in 1987. When purchasing a vehicle I will take 3-4 $10,000.00 bank checks PLUS a lot of cash. No, I don't carry $40K in cash to buy a new truck, but I carry enough in checks and cash to buy what I want. If they want a sale that day(sometimes it doesn't work I will admit), but if the sales person wants a sale; I will get a huge discount off of what I would 'financing' thru the dealer/etc.

I have honestly found pure cash to be the greatest developer of a great price than anything else. Perhaps it is where I live up here in N.Wisc. I once bought a very nice used tractor for cash that when the guy was asking $6K more than I was willing to pay. I told him if he ever wanted to sell it for the price I offered him, I would pay him in cash. He got ahold of me 2 months later and I got a great tractor. Having cash is an incredible incentive for the buyer and very hard for a seller to turn down. Also bought a 40acre parcel several years back in similar mode.
Interesting story about the tractor. Not necessarily all that useful if you have to wait 2 months to get the discount, though. Do you think they wouldn't have made a deal with you if you then told them you wanted to use financing after all ?
Again, I don't see the relevance of credit cards when it comes to vehicle purchases. Those transactions are either going to be closed by cash, check or financing.

Don't see how it applies to real estate purchases, either. Don't you have to get your title recorded for your parcel ? And show proof of payment with a title company still ? A title company around told me an anecdote about a buyer who wanted to make their payment in physical cash (maybe it was a downpayment and there was still a loan involved). Long story short, cash got mysteriously "lost" somehow, and the title company won't allow closings with cash anymore.

Again, don't think credit cards have any relevance for real estate purchases. Though I suppose if we are talking about something that fits within your card limit, you could in theory use a payment service like Plastiq or Paypal for the payment and pay the extra fee (2.5% to 3%) yourself. But there would be no benefit to doing so. Anyway, around here, even empty lots are run in the hundreds of thousands, so it's not really possible to do that. If you have a card limit this high, you can probably have access to much cheaper forms of financing (or cash).

The tractor was a private sale used tractor. It was the middle of winter and I wasn't going to use(or NEED to be totally honest) the tractor for months. It was a great tractor, but I was only willing to pay my price. Waiting wasn't a problem at all and not getting it wouldn't have been a problem either. The guy needed the money ASAP for the tractor. As I said several times, I don't finance; so that wouldn't have even been something I would have said to the guy. I am just using my own personal purchases to show how using cash will get a better price than using credit cards/financing/etc. My BOA MasterCard that I still have from my dental practice days has a max of $150k. Used it while practicing because my suppliers wanted the supplies on a credit card prior to delivery of then or they would be sent COD. Did the COD thing till 1985, then got sick of that and got a CC. As far as buying land for real cash - I simply have never had any problems. My attorney takes care of the paperwork/etc. I have done it with at least 5 parcels of land over the years - all legally too. Buying with cash is actually legal, even large amounts of cash! hahaha
Last edited by rtr-molar-doc on Wed Apr 04, 2018 9:35 pm, edited 1 time in total.

Da5id
Posts: 2059
Joined: Fri Feb 26, 2016 8:20 am

Re: What's Your Credit Card Rewards Strategy?

Post by Da5id » Wed Apr 04, 2018 9:34 pm

rtr-molar-doc wrote:
Wed Apr 04, 2018 8:43 pm
Da5id wrote:
Wed Apr 04, 2018 1:11 pm
Also to some of us 1-2K is more than others. molar-doc doesn't feel it is lots of money for the effort, which is a personal judgment. I spend a maybe few hours a year messing with card applications/cancellations for that $1000-$2000 dollars of sign up and spending bonuses. It feels worth my time on an hourly basis.
Just wondering how you invested the nearly $19,000.00 you say you got in 'rewards'? Suspect it is all gone because it was consumed. Everyone always says they would have spent the amount ANYWAY - rationizaion again! If you show me a way to put $19K in my bank account/etc - money that I can invest - I will look into it. If it is only used as more 'consumable stuff', it doesn't interest me.
Where did your $19K come from? I'm baffled. I said I clear $1000-$2000, that is it.

Latest bonus example which I did last week: Got Bank of America card. Requirement: pay $3000 in 3 months to get $500 bill credit. Other rewards more than offset $95 annual fee ($100 bonus pays for global entry for my son, other bonus pays for $100 travel stuff I'll use anyway, $45 from cash back on the $300). I paid off my home/auto/umbrella insurance in advance, which with 2 teens killed the $3000. Money I'd have spent anyway. The $500 bonus + $45 cash back is true cash that offsets the next $545 in spending I do on the card for whatever purpose. I will cancel this card before the next $95 fee is due.

I earned $335 cash (2% cash back) on my main spending card in the past year, Citi Double Cash. Simple card to use, and just gives back cash on spending that I use for statement credits but could be transferred to bank account.

My Costco card gets me about $200 cash per year (2% of Costco purchases, 4% on gas).

Most of my other bonuses aren't used as cash, though I could use some of them as cash if I chose. But Chase Ultimate rewards points are generally worth more to me for travel than for cash as I get more than 1 cent per point out of them. I used them, for example, for 3 roundtrip airline tickets Boston to Oregon for a family event coming up. I consider that close enough to "cash" for my purposes. I don't do funny money accounting like treating the value of miles used for first class (which I don't use) or really expensive hotels (which I don't stay in generally) as if they are worth thousands.

I agree with what you say about rationalization of more spending. And I personally buy into the research that says people tend to spend more on credit cards than using cash (though given that my savings rate is incredibly high can't say I care for myself). But regardless I'm pretty careful not to reach for bonuses that would cause me to spend more. I have recurring big ticket items (insurance, temple membership, club soccer fees, music lessons) that can be bought using credit cards. I tend to try to use those to get credit card bonuses that match roughly the amount I'm spending. I don't believe those big items are influenced in the slightest by my use of credit cards for this purpose.

I understand not wanting to play this game. It is a bit of a hobby. I'm not into hard core churning like some others, I get maybe 2 new cards per year and don't go crazy about it. It doesn't take much time or effort on my part. YMMV.

I'm also not averse to using cash if I can get a discount. Our local Chinese restaurant gives 10% off for cash. I take it. If I were buying a car and there was a good deal for cash, I'd pay cash. If the surcharge for credit cards for gas is > 4%, I'll use cash there too, though haven't seen that.

rtr-molar-doc
Posts: 41
Joined: Wed Apr 04, 2018 8:49 am

Re: What's Your Credit Card Rewards Strategy?

Post by rtr-molar-doc » Wed Apr 04, 2018 9:38 pm

Da5id wrote:
Wed Apr 04, 2018 9:34 pm
rtr-molar-doc wrote:
Wed Apr 04, 2018 8:43 pm
Da5id wrote:
Wed Apr 04, 2018 1:11 pm
Also to some of us 1-2K is more than others. molar-doc doesn't feel it is lots of money for the effort, which is a personal judgment. I spend a maybe few hours a year messing with card applications/cancellations for that $1000-$2000 dollars of sign up and spending bonuses. It feels worth my time on an hourly basis.
Just wondering how you invested the nearly $19,000.00 you say you got in 'rewards'? Suspect it is all gone because it was consumed. Everyone always says they would have spent the amount ANYWAY - rationizaion again! If you show me a way to put $19K in my bank account/etc - money that I can invest - I will look into it. If it is only used as more 'consumable stuff', it doesn't interest me.
Where did your $19K come from? I'm baffled. I said I clear $1000-$2000, that is it.

Latest bonus example which I did last week: Got Bank of America card. Requirement: pay $3000 in 3 months to get $500 bill credit. Other rewards more than offset $95 annual fee ($100 bonus pays for global entry for my son, other bonus pays for $100 travel stuff I'll use anyway, $45 from cash back on the $300). I paid off my home/auto/umbrella insurance in advance, which with 2 teens killed the $3000. Money I'd have spent anyway. The $500 bonus + $45 cash back is true cash that offsets the next $545 in spending I do on the card for whatever purpose. I will cancel this card before the next $95 fee is due.

I earned $335 cash (2% cash back) on my main spending card in the past year, Citi Double Cash. Simple card to use, and just gives back cash on spending that I use for statement credits but could be transferred to bank account.

My Costco card gets me about $200 cash per year (2% of Costco purchases, 4% on gas).

Most of my other bonuses aren't used as cash, though I could use some of them as cash if I chose. But Chase Ultimate rewards points are generally worth more to me for travel than for cash as I get more than 1 cent per point out of them. I used them, for example, for 3 roundtrip airline tickets Boston to Oregon for a family event coming up. I consider that close enough to "cash" for my purposes. I don't do funny money accounting like treating the value of miles used for first class (which I don't use) or really expensive hotels (which I don't stay in generally) as if they are worth thousands.

I agree with what you say about rationalization of more spending. And I personally buy into the research that says people tend to spend more on credit cards than using cash (though given that my savings rate is incredibly high can't say I care for myself). But regardless I'm pretty careful not to reach for bonuses that would cause me to spend more. I have recurring big ticket items (insurance, temple membership, club soccer fees, music lessons) that can be bought using credit cards. I tend to try to use those to get credit card bonuses that match roughly the amount I'm spending. I don't believe those big items are influenced in the slightest by my use of credit cards for this purpose.

I understand not wanting to play this game. It is a bit of a hobby. I'm not into hard core churning like some others, I get maybe 2 new cards per year and don't go crazy about it. It doesn't take much time or effort on my part. YMMV.

I'm also not averse to using cash if I can get a discount. Our local Chinese restaurant gives 10% off for cash. I take it. If I were buying a car and there was a good deal for cash, I'd pay cash. If the surcharge for credit cards for gas is > 4%, I'll use cash there too, though haven't seen that.
That post and the $19K wasn't to you. Madbrain put up numbers for 2016, 2017 and so far in 2018 that he/she got in rewards/benefits/miles/etc. Sorry that it looked to be going to you.

madbrain
Posts: 5127
Joined: Thu Jun 09, 2011 5:06 pm
Location: San Jose, California

Re: What's Your Credit Card Rewards Strategy?

Post by madbrain » Thu Apr 05, 2018 1:46 am

rtr-molar-doc wrote:
Wed Apr 04, 2018 8:43 pm
Just wondering how you invested the nearly $19,000.00 you say you got in 'rewards'? Suspect it is all gone because it was consumed. Everyone always says they would have spent the amount ANYWAY - rationizaion again! If you show me a way to put $19K in my bank account/etc - money that I can invest - I will look into it. If it is only used as more 'consumable stuff', it doesn't interest me.
Even if I gave you my entire Quicken data with 100,000+ transactions and 50+ accounts in it, you would likely still be unconvinced, as you clearly are thinking one way, and I think another way.

That said, I can extract the following data from the report.

First, the $19K was the gross value of benefits received, ie. the top line . I have this all lumped into one "Credit card benefits" category.
While I do have a list of each every transaction that adds to the $19K, I don't subcategorize into 3 so I can't give a breakdown.

- mostly, it paid for travel that I used to pay out of pocket. I counted the rewards in my top line (income) and the travel spending in the bottom line (expenses).
- some was insurance payments (for broken & stolen phone, price matches)
- some was cash back
- some was just credit towards annual fees paid (for example, the CSR has a $450 AF but Chase will refund $300 of that if you travel)

There were some corresponding expenses associated with getting the rewards during the time period :
- $3000 total in annual fees
- $1123 in miscellaneous "manufactured spending" activities, such as fees on Plastiq, fees for prepaid VISA/MCs and money orders

So, the net benefits received from cards are closer to $15K, not $19K.

There is also another $5071 in new account bonuses, simply from moving assets around (new bank accounts, brokerage, etc) over the same time period, which is a separate income category in Quicken. Those don't have corresponding expenses.

If I count the net from churning of cards and other new bank/investment accounts together, the net is about $20K for that period.
That represents only 5% of our total expenses for that time period, as I account for taxes, even withheld, as part of expenses.

I have done a lot of analysis with all my spending and income data. I never really get tired of it. But at the end of the day, I still cannot answer your question exactly.

If the question is, are there things that I would never have purchased if I didn't get the credit card rewards, I don't believe so.
If the question is, whether I might have waited for some of the spending, the answer is absolutely yes.
Is there $20K worth of spending that might have been delayed a few months or even quarters ? Possibly.
But there was no skyrocketing of spending in the total amount. Neither 2016 nor 2017 were our top years for total spending so far, out of the last 10 for which I have Quicken data. Any increases in certain categories of expenses were dictated by circumstances, like large home maintenance costs in 2017, when it came time to replace the dead hot tub, do deck repairs, and replace some furniture the cats had destroyed.

If the question is whether I saved less in the years during I churned more, the data does not bear that at all, in fact, quite the opposite.
Did I save more ? Yes. Actually, much more. How much more ? The total net flow to our bank & investment accounts was $203K for that period (and before you ask, no, this does not include any investment returns). This was more than any other 2.25 year period before except the one during which when my father died and I collected a large inheritance . At the same time, since the savings was $203k, you may or may not consider the $20K to be a significant part of it. Clearly the majority of the amount saved had nothing to do with credit card or other account churning. And yet, I'm thankful for the portion that did, and I will gladly continue to enjoy the benefits of churning.

I had typed a much lengthier post with much more details in terms of spending, but I think it is fairly futile. Your posts show that you are quite set in your ways. I don't need to convince you. Looking at my data over and over again confirms me in my own views. Your anecdotes so far have not convinced me that paying cash was better. This is unlikely to change. You can choose to churn or not, and that is perfectly fine either way. I think most people in this thread are not here to question whether churning is worth it, they are here because they know it is, and just want to maximize the potential savings/return.

Mudpuppy
Posts: 5889
Joined: Sat Aug 27, 2011 2:26 am
Location: Sunny California

Re: What's Your Credit Card Rewards Strategy?

Post by Mudpuppy » Thu Apr 05, 2018 2:53 am

Might I suggest we adopt the attitude of "live and let live" in this cash vs rewards card discussion? Otherwise, the discussion will get derailed and it will risk getting this rather lengthy and useful omnibus thread of rewards cards locked for going off-topic.

ramsfan
Posts: 434
Joined: Mon Mar 19, 2007 3:27 am

Re: What's Your Credit Card Rewards Strategy?

Post by ramsfan » Thu Apr 05, 2018 9:18 am

madbrain and others, I would like to describe what I am currently doing with my credit card rewards. I do try and live as simply as possible, so my objective was to get really good rewards balanced with really low effort. I am OK not maxing out my rewards to keep the effort low. For a long time, the only card I used was an Amex (long ago it was called Platinum rewards), that was 5% on many things, and like 2 o3 % on everything. However, there are obviously people here that know an incredible amount more about this topic, and have been very successful maximizing rewards, so please let me know if there is something I could consider doing that jumps out at you. I pay all my credit card balances in full each month.

The core of my current strategy is the Citi Double Cash MasterCard. Very simple, 2% cash back. Use it for things unless there is a better card I have available.

We are also Costco Members, and I have the Costco Visa card. I use it for Gas everywhere, and get 4%. I also use it for dining and travel, and get 3% on those purchases. Finally, I use it at Costco for 2%, as Costco only takes Visa.

I just recently began to travel more at work, so I signed up for both the Southwest Rewards and Marriott Rewards Visa, mainly to get the sign up bonuses, and other perks that these have for the airline and hotel. Also, the Marriott Visa does not have foreign transaction fees.

Open to ideas, thanks!

Freefun
Posts: 381
Joined: Sun Jan 14, 2018 3:55 pm

Re: What's Your Credit Card Rewards Strategy?

Post by Freefun » Thu Apr 05, 2018 9:31 am

Chase sapphire (either one) is a good overall card.

When redeeming Marriott points , take a look at their flights and hotel packages - best value in their program IMO.
http://www.marriott.com/rewards/usepoints/morepack.mi

Good luck!
Remember when you wanted what you currently have?

CentsandSavvy
Posts: 2
Joined: Wed Feb 14, 2018 10:38 am

Re: What's Your Credit Card Rewards Strategy?

Post by CentsandSavvy » Thu Apr 05, 2018 9:46 am

With three children at home, our credit card strategy is currently for airline miles for travel. After years of using American Airlines and American Express cards for such, we finally made the best credit card decision ever and switched to Southwest Airlines credit cards (from Chase). We have personal cards (50K bonus for signing up and using) and 2 business cards (60K miles apiece in sign-up bonuses). The thing with Southwest is that you can actually find flights that use miles, and not an astronomical number of miles as was the case with American (where it is regularly 35k miles each way for a nonstop domestic flight).

Another bonus: After acquiring 100,000 miles on a card for the year (done with the aforementioned sign-up bonuses), we got to select a registered travel companion who flies FREE even when using miles.

Case in point: Just flew the family to L.A. for spring break to visit Disneyland, etc., and it was just around 80,000 miles total for the five of us, round trip. Can't beat that.

I know a lot of people don't like SW for their boarding priority/open seating, but we got over that real quick when we saw the savings. And you can always spend $15/ticket to get priority seating. We have never had a problem getting seats together as a family.

Highly recommend Southwest's Chase Visa.

TravelGeek
Posts: 2363
Joined: Sat Oct 25, 2014 3:23 pm

Re: What's Your Credit Card Rewards Strategy?

Post by TravelGeek » Thu Apr 05, 2018 10:20 am

rtr-molar-doc wrote:
Wed Apr 04, 2018 7:46 pm
You would be amazed how much of a discount I get using cash, especially on big item purchases. Not going to argue about it, but going all cash early in my life was absolutely the best thing I ever did. It is so easy to buy things when you use a credit card that you don't need, especially at the grocery store and gas station. If I go in to buy something that goes for $1500 and show them 13 or 14 - $100 bills, I always will get 1 or 2 hundred off right off the bat. To me that is easy money.
I very rarely buy stuff worth $1500. And it usually would be stuff where cash isn’t accepted or practical (airplane tickets, hotel, car rental) and wouldn’t give me a discount. I guess my way to not overspend is to not buy a lot of stuff. Certainly not stuff that is expensive.

And I don’t buy more gas because I can put it on my credit card. (If I *were* paying cash, I would have to go into the building and walk by all the snacks, thus potentially buying something I don’t need, but with pay at the pump I be exactly what I need). And I don’t wander down the aisles of the grocery store filling my cart with stuff because I will pay with plastic.
rtr-molar-doc wrote:
Wed Apr 04, 2018 8:37 pm
Carrying and using cash doesn't scare me at all. I rarely go out without at least $5K in my wallet. I have found and purchased some great great bargains because I had cash on hand. I have done similar things with household appliances - washers, dryers, TV's, refrigerators, etc.
If you constantly walk around with $5k in cash in your pocket, I would ask

- how often you actually make large purchases that you wouldn’t do if you didn’t have the cash with you (basically, the same concern you raised regarding studies showing credit cards lead to greater spend)

- how you value the risk of having your cash stolen or losing it. Years of “cash discounts” could be lost right there.

I carry between $5 and $60 when I am out and about. If I travel internationally, a bit more ($200-$300). I don’t use cash much, and certainly not for purchases > $10 if a credit card is accepted. I have never paid interest on credit cards. I wouldn’t call myself an active churner either.

annielouise
Posts: 345
Joined: Wed May 14, 2008 4:11 pm

Re: What's Your Credit Card Rewards Strategy?

Post by annielouise » Thu Apr 05, 2018 10:33 am

CentsandSavvy wrote:
Thu Apr 05, 2018 9:46 am
With three children at home, our credit card strategy is currently for airline miles for travel. After years of using American Airlines and American Express cards for such, we finally made the best credit card decision ever and switched to Southwest Airlines credit cards (from Chase). We have personal cards (50K bonus for signing up and using) and 2 business cards (60K miles apiece in sign-up bonuses). The thing with Southwest is that you can actually find flights that use miles, and not an astronomical number of miles as was the case with American (where it is regularly 35k miles each way for a nonstop domestic flight).

Another bonus: After acquiring 100,000 miles on a card for the year (done with the aforementioned sign-up bonuses), we got to select a registered travel companion who flies FREE even when using miles.

Case in point: Just flew the family to L.A. for spring break to visit Disneyland, etc., and it was just around 80,000 miles total for the five of us, round trip. Can't beat that.

I know a lot of people don't like SW for their boarding priority/open seating, but we got over that real quick when we saw the savings. And you can always spend $15/ticket to get priority seating. We have never had a problem getting seats together as a family.

Highly recommend Southwest's Chase Visa.
I am just finishing up year one on the Southwest Chase card. It is the first fee card I've ever had. Got about $900 value in flights, so that was awesome. But, I can't decide if I should keep it. I feel like going forward, I will get maybe $100 - $150 value after subtracting the fee. Is that worth it? It doesn't provide any other perks that are worthwhile (or not available from our other no fee cards).

What amount over the fee do most folks think makes the fee worth it?

Currently we also have:

Discover, used for 5% categories and online shopping cash back plus the bonus given when converting cash back to gift cards. Also our oldest card (20+ years).

Capital One Visa, used for most travel purchases plus the virtual numbers for lots of online shopping. This is my husband's card for gift buying, too.

We are not churners (too lazy), but will do the occasional deal again once it stops costing money to unfreeze credit. We have about $2k to $3k spending per month that can be put on credit cards.

TravelGeek
Posts: 2363
Joined: Sat Oct 25, 2014 3:23 pm

Re: What's Your Credit Card Rewards Strategy?

Post by TravelGeek » Thu Apr 05, 2018 12:59 pm

annielouise wrote:
Thu Apr 05, 2018 10:33 am
I am just finishing up year one on the Southwest Chase card. It is the first fee card I've ever had. Got about $900 value in flights, so that was awesome. But, I can't decide if I should keep it. I feel like going forward, I will get maybe $100 - $150 value after subtracting the fee. Is that worth it? It doesn't provide any other perks that are worthwhile (or not available from our other no fee cards).

What amount over the fee do most folks think makes the fee worth it?
If those are the only data points, I would keep the card since you get more than you pay.

But what is the opportunity cost? Did you factor in that if you didn’t have the Southwest card, you could earn something on another card (perhaps 2% cashback on a no-fee Card)?

I don’t fly WN due to geography reasons, so I don’t pay attention to the value of their points, but do you earn > 2 cents per dollar on charges put on that card? That is how I would look at this.

(and I assume companion pass is not a consideration)

CMD1
Posts: 35
Joined: Tue Nov 28, 2017 8:10 pm

Re: What's Your Credit Card Rewards Strategy?

Post by CMD1 » Thu Apr 05, 2018 1:13 pm

Use the Fidelity 2% cash back card - Cash is king!!!!

I did sign up for the Southwest card to get the 50,000 points which should net two round trip tickets just about anywhere they fly and they will be flying to Hawaii soon :) But I don't plan on keeping the card beyond the one year. It was worth the $69 fee to get the $800 of airlines tickets free.

02nz
Posts: 528
Joined: Wed Feb 21, 2018 3:17 pm

Re: What's Your Credit Card Rewards Strategy?

Post by 02nz » Thu Apr 05, 2018 1:21 pm

annielouise wrote:
Thu Apr 05, 2018 10:33 am
Discover, used for 5% categories and online shopping cash back plus the bonus given when converting cash back to gift cards. Also our oldest card (20+ years).
The Discover Card is really underrated, IMO, especially for the first year since all cashback is doubled at the one-year mark. So the 5% categories are 10% for the first year. I've gotten great use out of recent categories (Amazon, Target, Costco - buy Costco Cash cards on the site to use in store, since the stores don't accept Discover cards). Getting additional value when redeeming for gift cards is great - e.g., 25% on Crutchfield. With most other card issuers redeeming for gift cards is poor value, so for me this has been a great advantage for the Discover It card. Unfortunately some other card features recently got cut, but on balance it's definitely worth getting even without a signup bonus.

onourway
Posts: 1291
Joined: Thu Dec 08, 2016 3:39 pm

Re: What's Your Credit Card Rewards Strategy?

Post by onourway » Thu Apr 05, 2018 1:26 pm

rtr-molar-doc wrote:
Wed Apr 04, 2018 8:37 pm
My most recent example of getting a great discount for cash was last year when my wife wanted a 'side by side' 4-wheeler. I pretty much know the prices of these and the markups. The guy took the specs I wanted and wrote up a contract. It came to nearly $12,000.00; which I knew was very high. I took out a rubber banded pack of 100 - $100 dollar bills($10K). I told him if he wanted a sale today, this was all I was willing to pay. I ended up paying about $10,500.00 that day when all taxes, license and other things were added up. Don't think I would have gotten it for that price without having over $10K in cash with me. Carrying and using cash doesn't scare me at all. I rarely go out without at least $5K in my wallet. I have found and purchased some great great bargains because I had cash on hand. I have done similar things with household appliances - washers, dryers, TV's, refrigerators, etc.

By the way they wouldn't take a credit card for the purchase as I did ask.
This isn't all that convincing to me. I'd have paid cash for a similar purchase if I was making it (which I wouldn't have - so I'd have an extra $10k in my pocket! :D )

Even still, with the kind of spending money you appear to have, I'm going to bet you spend tens of thousands per year on groceries/gas/travel/household purchases, etc. where cash brings no discount, if it's even an option. With 2-3 strategically chosen credit cards you could net 2-5% cash back on all of those purchases. For stuff you will buy anyhow. That's free money that you are passing up.

I don't put any personal weight on studies that indicate people spend more on credit than in cash. I'm sure most people do. For most people hanging around here, it's likely not a significant issue because we are accustomed to tightly controlling our spending. In my case my budget dictates what I spend. Not what payment form I use.

WhiteMaxima
Posts: 1455
Joined: Thu May 19, 2016 5:04 pm

Re: What's Your Credit Card Rewards Strategy?

Post by WhiteMaxima » Thu Apr 05, 2018 1:29 pm

Fidelity 529 Visa. For every dollar I spend, my kids get 2 cent educational money tax free.

BeneIRA
Posts: 497
Joined: Sat Nov 29, 2014 8:43 pm

Re: What's Your Credit Card Rewards Strategy?

Post by BeneIRA » Thu Apr 05, 2018 4:04 pm

annielouise wrote:
Thu Apr 05, 2018 10:33 am
CentsandSavvy wrote:
Thu Apr 05, 2018 9:46 am
With three children at home, our credit card strategy is currently for airline miles for travel. After years of using American Airlines and American Express cards for such, we finally made the best credit card decision ever and switched to Southwest Airlines credit cards (from Chase). We have personal cards (50K bonus for signing up and using) and 2 business cards (60K miles apiece in sign-up bonuses). The thing with Southwest is that you can actually find flights that use miles, and not an astronomical number of miles as was the case with American (where it is regularly 35k miles each way for a nonstop domestic flight).

Another bonus: After acquiring 100,000 miles on a card for the year (done with the aforementioned sign-up bonuses), we got to select a registered travel companion who flies FREE even when using miles.

Case in point: Just flew the family to L.A. for spring break to visit Disneyland, etc., and it was just around 80,000 miles total for the five of us, round trip. Can't beat that.

I know a lot of people don't like SW for their boarding priority/open seating, but we got over that real quick when we saw the savings. And you can always spend $15/ticket to get priority seating. We have never had a problem getting seats together as a family.

Highly recommend Southwest's Chase Visa.
I am just finishing up year one on the Southwest Chase card. It is the first fee card I've ever had. Got about $900 value in flights, so that was awesome. But, I can't decide if I should keep it. I feel like going forward, I will get maybe $100 - $150 value after subtracting the fee. Is that worth it? It doesn't provide any other perks that are worthwhile (or not available from our other no fee cards).

What amount over the fee do most folks think makes the fee worth it?

Currently we also have:

Discover, used for 5% categories and online shopping cash back plus the bonus given when converting cash back to gift cards. Also our oldest card (20+ years).

Capital One Visa, used for most travel purchases plus the virtual numbers for lots of online shopping. This is my husband's card for gift buying, too.

We are not churners (too lazy), but will do the occasional deal again once it stops costing money to unfreeze credit. We have about $2k to $3k spending per month that can be put on credit cards.
Call the number on the back of your card and ask if there is a credit of some sort to get you not to cancel. Currently the Premier is offering a full $100 credit and the Plus a $35 credit. You may do better or worse, but any annual fee credit should move the needle.

rtr-molar-doc
Posts: 41
Joined: Wed Apr 04, 2018 8:49 am

Re: What's Your Credit Card Rewards Strategy?

Post by rtr-molar-doc » Thu Apr 05, 2018 6:31 pm

TravelGeek wrote:
Thu Apr 05, 2018 10:20 am
rtr-molar-doc wrote:
Wed Apr 04, 2018 7:46 pm
You would be amazed how much of a discount I get using cash, especially on big item purchases. Not going to argue about it, but going all cash early in my life was absolutely the best thing I ever did. It is so easy to buy things when you use a credit card that you don't need, especially at the grocery store and gas station. If I go in to buy something that goes for $1500 and show them 13 or 14 - $100 bills, I always will get 1 or 2 hundred off right off the bat. To me that is easy money.
I very rarely buy stuff worth $1500. And it usually would be stuff where cash isn’t accepted or practical (airplane tickets, hotel, car rental) and wouldn’t give me a discount. I guess my way to not overspend is to not buy a lot of stuff. Certainly not stuff that is expensive.

And I don’t buy more gas because I can put it on my credit card. (If I *were* paying cash, I would have to go into the building and walk by all the snacks, thus potentially buying something I don’t need, but with pay at the pump I be exactly what I need). And I don’t wander down the aisles of the grocery store filling my cart with stuff because I will pay with plastic.
rtr-molar-doc wrote:
Wed Apr 04, 2018 8:37 pm
Carrying and using cash doesn't scare me at all. I rarely go out without at least $5K in my wallet. I have found and purchased some great great bargains because I had cash on hand. I have done similar things with household appliances - washers, dryers, TV's, refrigerators, etc.
If you constantly walk around with $5k in cash in your pocket, I would ask

- how often you actually make large purchases that you wouldn’t do if you didn’t have the cash with you (basically, the same concern you raised regarding studies showing credit cards lead to greater spend)

- how you value the risk of having your cash stolen or losing it. Years of “cash discounts” could be lost right there.

I carry between $5 and $60 when I am out and about. If I travel internationally, a bit more ($200-$300). I don’t use cash much, and certainly not for purchases > $10 if a credit card is accepted. I have never paid interest on credit cards. I wouldn’t call myself an active churner either.
Funny stuff! and I would ask you why you carry around a bunch of CC's. Been carrying large amounts of cash for over 30 years now and NEVER EVER have been concerned with my safety, losing money, getting held up, etc. I very often make large purchases for my present business: Logging, Excavation and Gravel. You would be amazed how expensive parts are for big equipment! I simply have never lost or misplaced money because I value it so much. I still remember the days of having NOTHING.

If it makes you feel any better, both my wife and my daughter think I am 'insane'; but my son does very similar things that I do. We are all a product of our past. My dad didn't have tons of money, but he paid with cash back in the day too. He hated credit and my parents never borrowed a cent in their entire lives. Bought their cars/trucks for cash. Bought the farm for 100% cash. Unfortunately, my dad suffered with Chron's disease since the early 1950's and spent a lot of time in hospitals for surgery's/etc. He is still alive at 95 and lives with me and my wife. He loves to carry cash, but he rarely spends it. We find it very funny that now that he has money, he wont really spend any.

1/2 the cash is in my actual wallet - the rest is rolled up with a rubberband and kept in a zippered pocket - many many in my present line of work do similar things with money. Many farmers(I also do some farming) do the same. I grew up a farmer and we are a different 'breed'. We were poor farmers when I was a kid because my dad was ill most of the time. I still remember as a kid of about 8 going into the feed mill and seeing a farmer pull out a roll of $100 bills to pay off his account. It was awe inspiring even for an 8 year old. I never forgot that feeling and money simply doesn't spook or bring fear to me when I carry it. It is like a person carrying a gun(concealed carry). No one has any idea what anyone is carrying and that extends to money. No, I don't carry a concealed gun. If I ever think about going anywhere that I would need a gun to be safe, I rethink and don't go.
I only carry a handgun when on my wooded property - bears and wolves would be the reason.

2015
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Re: What's Your Credit Card Rewards Strategy?

Post by 2015 » Thu Apr 05, 2018 6:47 pm

VictoriaF wrote:
Wed Apr 04, 2018 8:19 pm
madbrain wrote:
Wed Apr 04, 2018 8:09 pm
As for no free lunch, you might want to read this interesting thread :

https://www.reddit.com/r/churning/comme ... e_rewards/
I do use credit cards for bonuses and I understand where you are coming from. But "no free lunch" covers more than money. In the information age, the most critical currency is attention, and accumulating bonuses and rewards uses a lot of attention. I went through this process, I learned how to select cards, how to get bonuses, and how to use bonuses. I have saved $1k-$1.5k per year in the past four years. Nevertheless, I spent more time on this than I think I should.

I have to thank Chase's 5/24 for a forced withdrawal. Now, I am maintaining a few cards and applying for new ones once or twice a year. It is easy now, but it took me time to get here. And that time is the price I paid for the free lunch.

Victoria
Very well said. I came to the same conclusion regarding what I now regard as a misuse of my attention in juggling bonuses only earlier this year. I decided I want to spend my precious time and life only on those activities that energize me most. A highly personal decision, I've learned credit card bonuses don't do that.

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Re: What's Your Credit Card Rewards Strategy?

Post by dbr » Thu Apr 05, 2018 7:04 pm

2015 wrote:
Thu Apr 05, 2018 6:47 pm
VictoriaF wrote:
Wed Apr 04, 2018 8:19 pm
madbrain wrote:
Wed Apr 04, 2018 8:09 pm
As for no free lunch, you might want to read this interesting thread :

https://www.reddit.com/r/churning/comme ... e_rewards/
I do use credit cards for bonuses and I understand where you are coming from. But "no free lunch" covers more than money. In the information age, the most critical currency is attention, and accumulating bonuses and rewards uses a lot of attention. I went through this process, I learned how to select cards, how to get bonuses, and how to use bonuses. I have saved $1k-$1.5k per year in the past four years. Nevertheless, I spent more time on this than I think I should.

I have to thank Chase's 5/24 for a forced withdrawal. Now, I am maintaining a few cards and applying for new ones once or twice a year. It is easy now, but it took me time to get here. And that time is the price I paid for the free lunch.

Victoria
Very well said. I came to the same conclusion regarding what I now regard as a misuse of my attention in juggling bonuses only earlier this year. I decided I want to spend my precious time and life only on those activities that energize me most. A highly personal decision, I've learned credit card bonuses don't do that.
Credit card bonuses make an interesting hobby, especially for travel enthusiasts. I agree there isn't a serious economic opportunity here if one applies value to time and energy involved. Another interesting statistic might be to cite what fraction of total spending on travel can be underwritten by these bonuses, all in. It might be a fairly small fraction of the total.

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Re: What's Your Credit Card Rewards Strategy?

Post by madbrain » Thu Apr 05, 2018 7:23 pm

dbr wrote:
Thu Apr 05, 2018 7:04 pm
Credit card bonuses make an interesting hobby, especially for travel enthusiasts. I agree there isn't a serious economic opportunity here if one applies value to time and energy involved. Another interesting statistic might be to cite what fraction of total spending on travel can be underwritten by these bonuses, all in. It might be a fairly small fraction of the total.
The credit card bonuses are definitely not a significant percentage of our total spending. They do represent a very high percentage of our travel spending, though. That spending varies hugely from one year to the next, but has not gone up.
To me, this just means we have more money available for other things (be it savings, home repairs, or any other expense). Or we don't have to compromise and stay home if big home repairs/maintenance cost come up, as they did last year.

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Re: What's Your Credit Card Rewards Strategy?

Post by madbrain » Thu Apr 05, 2018 7:30 pm

rtr-molar-doc wrote:
Thu Apr 05, 2018 6:31 pm
Funny stuff! and I would ask you why you carry around a bunch of CC's
No need to do that, especially when a lot of spending is done from the comfort of one's home nowadays, not at retail.
But even for retail use, one can carry a single smartphone with a mobile wallet and store up to 10 credit cards in it. The smartphone is protected by encryption and fingerprint authentication, and if stolen, the cards wouldn't normally be compromised.
I carry 1 debit/ATM card and 2 credit cards. Probably really only need one credit. The physical card is mostly for restaurants where paying with mobile wallet isn't very convenient, and the few places were Samsung Pay does not work - but it works almost anywhere you can swipe a magnetic card. The physical cards are becoming less and less necessary.
Even the ATM card isn't really needed in my wallet, unless I'm traveling abroad. I can count on one hand the number of local merchants I patronize that won't accept credit, and I very rarely shop there.

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Re: What's Your Credit Card Rewards Strategy?

Post by ramsfan » Thu Apr 05, 2018 10:27 pm

Freefun wrote:
Thu Apr 05, 2018 9:31 am
Chase sapphire (either one) is a good overall card.

When redeeming Marriott points , take a look at their flights and hotel packages - best value in their program IMO.
http://www.marriott.com/rewards/usepoints/morepack.mi

Good luck!
Excellent advice, thank you!

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Re: What's Your Credit Card Rewards Strategy?

Post by TravelGeek » Thu Apr 05, 2018 10:32 pm

madbrain wrote:
Thu Apr 05, 2018 7:30 pm
I carry 1 debit/ATM card and 2 credit cards. Probably really only need one credit. The physical card is mostly for restaurants where paying with mobile wallet isn't very convenient, and the few places were Samsung Pay does not work - but it works almost anywhere you can swipe a magnetic card. The physical cards are becoming less and less necessary.
Even the ATM card isn't really needed in my wallet, unless I'm traveling abroad. I can count on one hand the number of local merchants I patronize that won't accept credit, and I very rarely shop there.
I currently carry

- one card for restaurants/dining/travel/transportation (CSR, 3X UR)
- one card for gas, groceries, home improvement stores (Chase UA Select, 2X UA miles)
- one card for everything else (Chase Freedom, 1.5 UR)

I carry additional/different cards when I travel: I take my Amex Plat for lounge access and I may take a specific airline or hotel card out of the safe for bonused spend or inflight food discounts. When I travel for work (rare) the corporate Amex makes an appearance in my wallet.

I may temporarily carry additional cards when I get a new one and need to meet a spend threshold or when a card has a special temporary bonus promo.

My password manager gives me access to other cards wherever I am, should the need arise. I have not really bothered with mobile payment apps because I am not convinced that fiddling with the phone is significantly easier than pulling one of my three cards out of my wallet.

I also carry my Ally checking ATM card, but should probably take that out right now because I use it maybe once a quarter to get some cash from the ATM. I never use it as a debit card. Could refill cash from safe instead and reduce wallet thickness :)

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Re: What's Your Credit Card Rewards Strategy?

Post by TravelGeek » Thu Apr 05, 2018 10:41 pm

2015 wrote:
Thu Apr 05, 2018 6:47 pm

Very well said. I came to the same conclusion regarding what I now regard as a misuse of my attention in juggling bonuses only earlier this year. I decided I want to spend my precious time and life only on those activities that energize me most. A highly personal decision, I've learned credit card bonuses don't do that.
My rule is, everything in moderation. I have zero interest in obsessing with MS. I read some threads in the FT forums several years ago and it was amusing.

I don’t try to go after every possible credit card signup bonus. If a new card comes along that offers interesting features and bonuses, I might sign up (CSR, or more recently the Hilton Amex Aspire). But otherwise I have a “fleet” of cards I like that meet my needs, and a “reserve fleet” in the safe that mostly earns its keep with status benefits, free bags/nights or annual bonus points.

KISS ... while I focus on planning vacations... or my retirement withdrawing/tax strategy.

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Re: What's Your Credit Card Rewards Strategy?

Post by JBTX » Thu Apr 05, 2018 10:47 pm

I probably save $1000 to $1500 per year on just straight cash back purchases, and over the past year I’ve probably brought in $2500-$3000 in up front bonuses since I started doing this. I’ve mostly only focused on the bigger bonuses. I can’t do any chase due to 5/24, so I’ve probably exhausted all the easy pickings. I’ve had some extra time not working a lot the past 9 months. I’d doubt I’d do as much if working full time.

Was it worth the opportunity cost of attention expended? Who knows. You could argue that either way. There are things I could have done that were more productive (career networking, etc, exercising), but there were other things that I did that earned zero and were arguably frivolously wasted time.

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Re: What's Your Credit Card Rewards Strategy?

Post by onourway » Fri Apr 06, 2018 5:35 am

While I wholeheartedly agree that focusing too heavily on credit card bonuses and cash back are detrimental to other things we need to focus on, I've personally found what feels like a good balance of having a handful of the right cards simply from the time I've spent here on Bogleheads where the information is largely aggregated and presented for me. I don't have to think all that hard about it because most everything I need to know is laid out here where I choose to spend some of my free time anyhow. The benefits I've gained from these cards per hour spent is certainly a better return than some of the tax-minimization threads I've waded through where it turns out people were saving a few tens of dollars for all their trouble! :)

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Re: What's Your Credit Card Rewards Strategy?

Post by MikeG62 » Fri Apr 06, 2018 6:34 am

2015 wrote:
Thu Apr 05, 2018 6:47 pm
VictoriaF wrote:
Wed Apr 04, 2018 8:19 pm
madbrain wrote:
Wed Apr 04, 2018 8:09 pm
As for no free lunch, you might want to read this interesting thread :

https://www.reddit.com/r/churning/comme ... e_rewards/
I do use credit cards for bonuses and I understand where you are coming from. But "no free lunch" covers more than money. In the information age, the most critical currency is attention, and accumulating bonuses and rewards uses a lot of attention. I went through this process, I learned how to select cards, how to get bonuses, and how to use bonuses. I have saved $1k-$1.5k per year in the past four years. Nevertheless, I spent more time on this than I think I should.

I have to thank Chase's 5/24 for a forced withdrawal. Now, I am maintaining a few cards and applying for new ones once or twice a year. It is easy now, but it took me time to get here. And that time is the price I paid for the free lunch.

Victoria
Very well said. I came to the same conclusion regarding what I now regard as a misuse of my attention in juggling bonuses only earlier this year. I decided I want to spend my precious time and life only on those activities that energize me most. A highly personal decision, I've learned credit card bonuses don't do that.
I tend to agree with this sentiment. While I used to sign up for cards just to get the bonus (and cancel them before renewal and the annual fees kicked in), I stopped doing that about a 6-8 years ago. I found I had better ways to spend my time and did not like all that activity on my credit report.

Having said all this, DW and I do have over a dozen CC's that we keep open. They are all for specific purposes, and it takes almost zero share of my mind to manage them (I know which cards to use in which circumstances and all are set to autopay the statement balance in full). We have signed up for a few cards in the last year, but they were all airline cards. Yes, we got sign up bonus miles, but took the cards out for the other benefits (free checked bags and priority seating).

Main cards we use are:

Fidelity VISA - 2% cash back (everything not going on another card get charged here - it's our general purpose CC)
CSR - all travel and restaurants get charged here (unless Chase Freedom or Discover are offering bonus in restaurant spend in a particular quarter)
Amazon Prime Store Card - 5% cash back on Amazon purchases
Pen Fed Cash Rewards - 5% cash back on gas
AMEX Blue Preferred - 6% cash back on groceries
Discover/Chase Freedom - for 5% bonus categories

On top of these, we have several airline credit cards and my DW has a bunch of retail store credit cards.
Last edited by MikeG62 on Fri Apr 06, 2018 3:44 pm, edited 1 time in total.
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kaneohe
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Re: What's Your Credit Card Rewards Strategy?

Post by kaneohe » Fri Apr 06, 2018 10:37 am

arsenalfan wrote:
Wed May 25, 2016 12:07 pm
Anyone using Amazon regularly should consider the Amazon Store Card - basically a line of credit you can only use at Amazon, and get 5% back.

viewtopic.php?t=181150

Don't know why Amazon doesn't advertise more. Like OP, I was using the Amazon Visa for 3% back until I found this card.

Pretty great, given how much one can buy from Amazon.
My impression is that you need to be a Prime member to get 5% on either the Amazon Prime Visa or the Amazon Store Prime Card. If you are not a Prime member, you get 3% on those.

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Re: What's Your Credit Card Rewards Strategy?

Post by Da5id » Fri Apr 06, 2018 5:05 pm

[Quoted post removed by admin LadyGeek]

Rather than insulting folks and belittling their choices, why not just ignore the thread? To many of us, a thousand or two per year (easily achieved with CC bonuses/cash back) is a noticeable amount of money and the time investment, for us, makes it worth it. If it isn't much money for you, or doesn't make the time/money value proposition, fine. But why the insults?

Seems like your approach here is like going on the Rolex thread and advocating Timex watches, or the Porsche thread and extolling the virtues of the Civic. I'm not a believer in Rolexes or Porsches, but wouldn't go on those threads, where people are discussing the virtues of different models, to tell them their purchases aren't reasonable. And heck, I think those ARE reasonable for those who value them and are saving at an adequate rate for their goals.

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Re: What's Your Credit Card Rewards Strategy?

Post by LadyGeek » Fri Apr 06, 2018 6:16 pm

The thread is getting derailed on smartphones and debit cards. The points have been made, let's move on. Please stay on-topic, which is:
guitarguy wrote:
Wed May 25, 2016 10:15 am
There are lots of threads that talk about what the best credit card deals are, ones specific to travel rewards, best cash back cards, etc. I thought it might be helpful to have everyone post their strategy they have for earning/redeeming/maximizing credit card rewards. This would be good info, and wouldn't be specific to any one type of card or type of reward. It also wouldn't really take into account signup bonuses...rather than churning for bonuses I think it's interesting to know what cards we keep for the long haul and continually use. It could also help those of us who might try to go for both cash back and other perks at the same time because the thread won't be confined to discussing one or the other.

Some good areas to address are:

Goal. Are you out to earn cash back, travel points, hotels, or other perks, airline miles, etc? Anything else you're out to achieve by using rewards credit cards?

Cards. Your cards, their rewards (i.e. what % back on what types of purchases) and other perks, fees, limits, and how you use them strategically (i.e. use this card for that, etc)

Rewards. How you redeem. For cash back it's pretty cut and dry, but could also include when you redeem. Save up all for holiday spending or get it monthly? For points/miles/etc it could be good to know how you transfer them, what specifically you spend them on, etc, to get the most out of them.

Final Thoughs. Any other details we might find interesting. Get your Jerry Springer on.
...
Update 4/7/2018: The off-topic posts and replies have been removed.
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Re: What's Your Credit Card Rewards Strategy?

Post by rixer » Sat Apr 07, 2018 6:51 am

My strategy is simple. We shop at Costco first for the things we want and use their reward card. We put everything on it we can. Trips really add up so we use it for cruises, flights, lodging and restaurants. Then once a year we get a nice fat check in the mail for our reward. :beer

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Re: What's Your Credit Card Rewards Strategy?

Post by Veiled » Sat Apr 07, 2018 7:25 am

Goal. Require no use of my own money for domestic flights by earning travel miles on minimum spends and ordinary purchases. I'm about 80% of this goal right now.

Cards. Currently: CSP, Business Ink, British Airways, Southwest Plus, Amex Gold Premier. I actually use the Ink for my sole prop, but the rest I use relatively indiscriminately for personal expenses to meet minimum spends. (British Airways is the one I'm going to be working on for a while while I'm 5/24, since it has a minimum spend that spans an entire year).

Rewards. I often use points for business travel, so flights are frequently booked later than the typical flyertalker who wants a nearly-free vacation to a faraway land. Later booking requires more points per flight, meaning I have to be more creative with rewards. I use Amex points on VirginAtlantic and Delta, I use British Airways for AA, and I use Chase ultimate rewards points and Southwest largely for Southwest because I'm at a SW hub.

Final Thoughts. I was delighted to learn that I could pay some of my student debt with credit cards and thus generate points by paying debt. It felt like the ultimate personal finance hack. That only represented a single lender, and I've since learned about Plastiq and other alternatives.... I'm not too excited about paying a fee so that I can travel for "free," although I haven't done all the math yet. I'm considering using Kiva, since that would allow the charitable use of my money (not an investment, there is no interest paid to the lender) and then the free use of Paypal to get it into a debit account.
Pardon me as I read these one hundred and fifty-seven SP vs LLC vs Scorp threads...

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