Would you invest CC cashback into market??

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toomuchRE
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Would you invest CC cashback into market??

Post by toomuchRE » Mon Nov 12, 2018 6:27 pm

So I have 6K sitting in my credit card cashback.. I was hoarding it to use it on gift cards which come at 20% discount.
What would you guys do with it?? Should I put it in the market ???

radiowave
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Re: Would you invest CC cashback into market??

Post by radiowave » Mon Nov 12, 2018 6:33 pm

I usually apply the rewards to the monthly balance.
Bogleheads Wiki: https://www.bogleheads.org/wiki/Main_Page

toomuchRE
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Re: Would you invest CC cashback into market??

Post by toomuchRE » Mon Nov 12, 2018 6:35 pm

I pay each month full. So no balance left to pay normally.

Silk McCue
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Re: Would you invest CC cashback into market??

Post by Silk McCue » Mon Nov 12, 2018 6:36 pm

A 20% “return” if you use the gift cards to buy staples and not wants seems like a great approach. While spending only on staples and not wants Invest monthly the same amount you used with the gift cards until the cards are depleted.

Cheers

Jags4186
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Re: Would you invest CC cashback into market??

Post by Jags4186 » Mon Nov 12, 2018 6:38 pm

Money is fungible. $6000 sitting in your cashback account is $6000 in a 0% savings account. If you can redeem for 20% bonus on stuff you would buy anyway, then it’s a no brainer to do that. If you’re going to spend the money on stuff you otherwise wouldn’t normally do, then cashout and invest.

LarryAllen
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Re: Would you invest CC cashback into market??

Post by LarryAllen » Mon Nov 12, 2018 6:40 pm

I'd take the 20% discount.

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C4NT
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Re: Would you invest CC cashback into market??

Post by C4NT » Mon Nov 12, 2018 6:42 pm

toomuchRE wrote:
Mon Nov 12, 2018 6:27 pm
So I have 6K sitting in my credit card cashback.. I was hoarding it to use it on gift cards which come at 20% discount.
What would you guys do with it?? Should I put it in the market ???
If you can get gift cards at 20 % off that you would normally use any way, that is a good deal. If you are trying to figure out ways to use the gift cards that means you don't need them, and are probably wasting the money. If that's the case, I would cash them out and use them as you would if you received 6K from any other source. Investments are a fine option if the money isn't needed elsewhere.

P.S. What credit card gives you 20% off gift cards? What are some of the businesses that the gift cards are offered?

onourway
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Re: Would you invest CC cashback into market??

Post by onourway » Mon Nov 12, 2018 6:43 pm

How often are the gift cards on sale for 20%? I’m thinking perhaps not that often given your balance?

toomuchRE
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Re: Would you invest CC cashback into market??

Post by toomuchRE » Mon Nov 12, 2018 6:47 pm

Just pulled 5K to my bank and left 1K for any possible 20% GC.. Agree, sometimes I spend on unwanted stuff but mostly I use it to buy giftcards for birthdays and gifts and stuff..

Long time ago I had cashed $1k for a $2K shell GC.. Which was the deal of the decade.. I guess it aint coming back

Will send to allybank for now.

stan1
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Re: Would you invest CC cashback into market??

Post by stan1 » Mon Nov 12, 2018 6:47 pm

toomuchRE wrote:
Mon Nov 12, 2018 6:27 pm
I was hoarding it to use it on gift cards which come at 20% discount.
I used to do this but I haven't seen such an offer from my credit card providers on a gift card I would use in many years. I have no use for an Omaha Steaks or 1800Flowers gift card which is just about the only discounted gift card offer I see these days. More than a decade ago I did see some discounted gift cards for Shell Oil which I did use (but not $6,000 worth).

I would not carry a credit of $6,000 anywhere. Apply it to your bills or transfer it to your checking account and invest it. Conveniently it will pay for a 2019 Roth IRA contribution for one person under 50.

toomuchRE
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Re: Would you invest CC cashback into market??

Post by toomuchRE » Mon Nov 12, 2018 6:57 pm

Agreed. Pulled it. left 1K for GC purpose.. They do have staples, sears, Tjmaxx etc for 20 - 25% off all the time.
Cant believe discover paid me 6K for using their CC for 10 years...

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SquawkIdent
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Re: Would you invest CC cashback into market??

Post by SquawkIdent » Mon Nov 12, 2018 7:02 pm

toomuchRE wrote:
Mon Nov 12, 2018 6:57 pm
Agreed. Pulled it. left 1K for GC purpose.. They do have staples, sears, Tjmaxx etc for 20 - 25% off all the time.
Cant believe discover paid me 6K for using their CC for 10 years...
You let it accrue for 10 years? Wow, you have discipline. Enjoy the $$.

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Kenkat
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Re: Would you invest CC cashback into market??

Post by Kenkat » Mon Nov 12, 2018 7:05 pm

toomuchRE wrote:
Mon Nov 12, 2018 6:35 pm
I pay each month full. So no balance left to pay normally.
You can still apply it to your card balance and it comes out of the next month’s purchases.

toomuchRE
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Re: Would you invest CC cashback into market??

Post by toomuchRE » Mon Nov 12, 2018 7:08 pm

I think 50K per year spending.. Ouch.
Cutting it down to 40K since last year..

MRMN
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Re: Would you invest CC cashback into market??

Post by MRMN » Mon Nov 12, 2018 7:09 pm

6k would be an awesome chunk towards the mortgage!

Some will argue the rate vs market return, but free money sitting in a 0% funny account is doing nothing.

Put free money to work since you don’t depend on it anyway....if you’re spending enough to generate that much (assuming average cash back is 1% to 2% or so, so $300,000 to $600,000).

WhiteMaxima
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Re: Would you invest CC cashback into market??

Post by WhiteMaxima » Mon Nov 12, 2018 7:09 pm

Dollar cost average your CC reward every month. Rome is not built in one day.

stan1
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Re: Would you invest CC cashback into market??

Post by stan1 » Mon Nov 12, 2018 7:18 pm

toomuchRE wrote:
Mon Nov 12, 2018 6:57 pm
Agreed. Pulled it. left 1K for GC purpose.. They do have staples, sears, Tjmaxx etc for 20 - 25% off all the time.
Cant believe discover paid me 6K for using their CC for 10 years...
I mostly stopped using my Discover card years ago because the 1% rewards were not competitive. I do try to remember to use it in their 5% gas rotation but I've also gone thin in my wallet so carrying an extra card is not something I want to do.

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whodidntante
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Re: Would you invest CC cashback into market??

Post by whodidntante » Mon Nov 12, 2018 7:20 pm

Gift cards for some businesses can routinely be purchased at substantial discounts and 20% is not uncommon. Plus you get more credit card points that way. Make sure the deal is really a deal.

toomuchRE
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Re: Would you invest CC cashback into market??

Post by toomuchRE » Mon Nov 12, 2018 7:22 pm

MRMN wrote:
Mon Nov 12, 2018 7:09 pm
6k would be an awesome chunk towards the mortgage!

Some will argue the rate vs market return, but free money sitting in a 0% funny account is doing nothing.

Put free money to work since you don’t depend on it anyway....if you’re spending enough to generate that much (assuming average cash back is 1% to 2% or so, so $300,000 to $600,000).
No mortgage.. Still rent... Buying now would increase my monthly housing expense by 1.4K. ( same size house and messed up property tax situation in my state). That is because I pay below market rent for whatever reason and a good landlord who hasn't increased my rent for 10 years.

The CC use is for pretty much everything phone bill, car insu, spending, vacation, bla bla.. (except for Rent and utilities). Since last year I figured how I could spend ~1K less per month by avoiding some unwanted spending.. I think I should start paying cash. :oops: :oops: :oops:

Max out my 401K, HSA and still don't quality for Roth IRA. Need to check backdoor.

TheOscarGuy
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Re: Would you invest CC cashback into market??

Post by TheOscarGuy » Mon Nov 12, 2018 7:22 pm

toomuchRE wrote:
Mon Nov 12, 2018 6:27 pm
So I have 6K sitting in my credit card cashback.. I was hoarding it to use it on gift cards which come at 20% discount.
What would you guys do with it?? Should I put it in the market ???
Do what you want with it. :D
I treat cashback as fun money, and spend it on non-essential stuff.

toomuchRE
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Re: Would you invest CC cashback into market??

Post by toomuchRE » Mon Nov 12, 2018 7:31 pm

Yeah, i figured 30% of it was accrued by using it on fun and non essential stuff all these years..
Now being very disciplined, plan to use it on something that makes sense.. LOL.

I though I had too much cashback until I saw my friend who had 15K cashback.. WTF

Jags4186
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Re: Would you invest CC cashback into market??

Post by Jags4186 » Mon Nov 12, 2018 7:38 pm

C4NT wrote:
Mon Nov 12, 2018 6:42 pm
toomuchRE wrote:
Mon Nov 12, 2018 6:27 pm
So I have 6K sitting in my credit card cashback.. I was hoarding it to use it on gift cards which come at 20% discount.
What would you guys do with it?? Should I put it in the market ???
If you can get gift cards at 20 % off that you would normally use any way, that is a good deal. If you are trying to figure out ways to use the gift cards that means you don't need them, and are probably wasting the money. If that's the case, I would cash them out and use them as you would if you received 6K from any other source. Investments are a fine option if the money isn't needed elsewhere.

P.S. What credit card gives you 20% off gift cards? What are some of the businesses that the gift cards are offered?
Discover does but I can’t see any scenario going forward where I’d ever put spend on a Discover card unless it’s during a double cashback promo.

runner3081
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Re: Would you invest CC cashback into market??

Post by runner3081 » Mon Nov 12, 2018 7:39 pm

I would absolutely not bank anything over a few hundred. Keep in mind that the account could be closed at anytime and if so, you would lose your points.

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cheese_breath
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Re: Would you invest CC cashback into market??

Post by cheese_breath » Mon Nov 12, 2018 7:45 pm

I apply mine to Staples gift cards which I then use to buy ink and paper for my printers. But if I had $6K sitting around I doubt I'd buy that many cards. :happy
The surest way to know the future is when it becomes the past.

arf30
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Re: Would you invest CC cashback into market??

Post by arf30 » Tue Nov 13, 2018 7:04 am

Definitely cash out as soon as possible. Banks love to close accounts of people who have tons of points and cancel them out.

lstone19
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Re: Would you invest CC cashback into market??

Post by lstone19 » Tue Nov 13, 2018 8:49 am

toomuchRE wrote:
Mon Nov 12, 2018 6:57 pm
Agreed. Pulled it. left 1K for GC purpose.. They do have staples, sears, Tjmaxx etc for 20 - 25% off all the time.
Silk McCue said "staples", not "Staples", meaning the essentials you buy regularly to go through life (e.g. bread, toothpaste, etc.). Amazing how many people in their replies thought he meant the store Staples.

As was said earlier, cash is fungible. $100 cash back converted to cash by using it for a statement credit is $100 that stays in your checking account. It's a mistake to think of it as a bonus of some sort that you can use to buy things you wouldn't if you had to pay money out of your checking account.

UpperNwGuy
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Re: Would you invest CC cashback into market??

Post by UpperNwGuy » Tue Nov 13, 2018 9:32 am

I find gift cards to be a pain to manage. I either go for a statement credit or for a deposit to my checking account. I agree with the previous poster who said don't let your cashback accumulate in your credit card rewards account. Get the funds under your direct control as soon as possible.

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Phineas J. Whoopee
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Re: Would you invest CC cashback into market??

Post by Phineas J. Whoopee » Tue Nov 13, 2018 12:57 pm

Anything like that which comes in goes directly into the retirement portfolio and its allocation.

Its path is not important. In the words of some unknown sage, fish is fish.

PJW

AllMostThere
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Re: Would you invest CC cashback into market??

Post by AllMostThere » Tue Nov 13, 2018 6:32 pm

DW & I do it every month with our Fidelity 2% cashback cards. Both go directly into my DD's Fidelity 529. +$30k growth over past 15 years.
:moneybag :sharebeer

inbox788
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Re: Would you invest CC cashback into market??

Post by inbox788 » Tue Nov 13, 2018 6:37 pm

toomuchRE wrote:
Mon Nov 12, 2018 6:57 pm
Agreed. Pulled it. left 1K for GC purpose.. They do have staples, sears, Tjmaxx etc for 20 - 25% off all the time.
Cant believe discover paid me 6K for using their CC for 10 years...
Sears!

Too bad, because Kenmore washer/dryer/refrigerator/stove would be nice home remodeling/upgrading program for yourself or if you know someone who was going to need it anyway.

Staples doesn't have the best deals on computers, but I'm guessing furniture and electronics are higher cost items there.

They don't offer Amazon, Walmart, Target, Home Depot, Lowes or Starbucks?

TruthHurts87
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Re: Would you invest CC cashback into market??

Post by TruthHurts87 » Tue Nov 13, 2018 6:46 pm

WhiteMaxima wrote:
Mon Nov 12, 2018 7:09 pm
Dollar cost average your CC reward every month. Rome is not built in one day.
This is exactly what I do every month. I receive 2% CB from my Cap1 Spark for business purchases and get anywhere from $1000-$1300 per month in CB. Request a check at the beginning of every month, mobile deposit it to my Ally online savings and then transfer to Vanguard on days markets are down.

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CABob
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Re: Would you invest CC cashback into market??

Post by CABob » Tue Nov 13, 2018 7:36 pm

toomuchRE wrote:
Mon Nov 12, 2018 6:35 pm
I pay each month full. So no balance left to pay normally.
Not exactly correct. If you apply the cashback to the statement balance your next statement will be that much lower.
I usually let my cashback grow until it seems appropriate to use it then apply it to an account balance.
The gift cards at a discount is interesting, however. I might consider this if there was a gift card that I would be likely to use in the near future.
Bob

yeahman
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Re: Would you invest CC cashback into market??

Post by yeahman » Tue Nov 13, 2018 7:47 pm

I use Discover cash back for gift cards only. I only buy gift cards when I need them which happens a couple times a year. It gets all used up when I spend it on Hotels.com or Airbnb. It's a 10% discount but you're giving up the cash back you would have earned had you paid with a credit card instead of a gift card. Plus inflation while you held it. So it approaches long-term market returns, granted it's risk free.

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