Are complicated credit card cash back strategies worth it?

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Jags4186
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Re: Are complicated credit card cash back strategies worth it?

Post by Jags4186 » Thu Nov 14, 2019 8:09 am

Only you can decide if the monetary benefit is worth it to you. Something to keep in mind — people who really maximize credit card rewards generally get entertainment out of doing so. That’s why it’s often referred to as “the hobby”. If you think of it as a game, and it is a game to some extent, then it’s at least a game which pays you to play vs on you pay to play.

Another thing to think about — I’m sure most people here are exempt salaried employees. If I work 50 hours this week vs 40 hours this week I gained $0 in my pocket. If I spend 10 hours deal hunting/reselling/etc. I can put real money in my pocket, or at least significantly reducing the cost of my lifestyle.

For example, I was able to get a brand new pair of AirPod Pros for ~$160 this week. They retail for $249. That is a $90 discount on something I wanted to buy by using various CC strategies and deals.
Last edited by Jags4186 on Thu Nov 14, 2019 8:12 am, edited 1 time in total.

Caduceus
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Re: Are complicated credit card cash back strategies worth it?

Post by Caduceus » Thu Nov 14, 2019 8:11 am

I think they are only worth it if you were genuinely going to spend on the things anyway. I suspect a lot of people end up spending more than saving in order to hit the minimum spend required to get those fat bonuses.

There might only be a few months every few years that I can hit $5,000 in spend every three months (which is what something like Chase requires to get their bonuses). I paid for an air ticket, bought an expensive scanner, put as much food and groceries on the card, bought some nice decorative items ... and still did not hit $5,000 over 3 months.

Jags4186
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Re: Are complicated credit card cash back strategies worth it?

Post by Jags4186 » Thu Nov 14, 2019 8:18 am

Caduceus wrote:
Thu Nov 14, 2019 8:11 am
I think they are only worth it if you were genuinely going to spend on the things anyway. I suspect a lot of people end up spending more than saving in order to hit the minimum spend required to get those fat bonuses.

There might only be a few months every few years that I can hit $5,000 in spend every three months (which is what something like Chase requires to get their bonuses). I paid for an air ticket, bought an expensive scanner, put as much food and groceries on the card, bought some nice decorative items ... and still did not hit $5,000 over 3 months.
If you can float it, overpaying bills is a good way to help meet minimum spend. For example, pay 6 months ahead on your internet, gas, electric, tv, and cell phone. Another thing to do is buy gift cards (especially when on a discount) to various retailers you would normally spend on. For example, I just bought $600 of gas gift cards from Best Buy to earn $60 + points back on the purchase. When all is said and done, that is a ~15% discount on gas — I received ~2% back at purchase, $60 in rebates, and then when I go to the gas station I receive the cash price (another 3% discount) by using a branded gift card. $600 will get us through April next year.

michaeljc70
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Re: Are complicated credit card cash back strategies worth it?

Post by michaeljc70 » Thu Nov 14, 2019 8:35 am

Jags4186 wrote:
Thu Nov 14, 2019 8:18 am
Caduceus wrote:
Thu Nov 14, 2019 8:11 am
I think they are only worth it if you were genuinely going to spend on the things anyway. I suspect a lot of people end up spending more than saving in order to hit the minimum spend required to get those fat bonuses.

There might only be a few months every few years that I can hit $5,000 in spend every three months (which is what something like Chase requires to get their bonuses). I paid for an air ticket, bought an expensive scanner, put as much food and groceries on the card, bought some nice decorative items ... and still did not hit $5,000 over 3 months.
If you can float it, overpaying bills is a good way to help meet minimum spend. For example, pay 6 months ahead on your internet, gas, electric, tv, and cell phone. Another thing to do is buy gift cards (especially when on a discount) to various retailers you would normally spend on. For example, I just bought $600 of gas gift cards from Best Buy to earn $60 + points back on the purchase. When all is said and done, that is a ~15% discount on gas — I received ~2% back at purchase, $60 in rebates, and then when I go to the gas station I receive the cash price (another 3% discount) by using a branded gift card. $600 will get us through April next year.
That works as far as satisfying the spend, but a lot of companies will send you a check back if they owe you money for more than one or two billing statements. That me be good or bad depending on how you look at it.

If you search these forums (or the internet) you will find gift card spend nightmares (cards that didn't work and they couldn't get the money back). I might buy gift cards for a 5% bonus at somewhere like Costco where I know I'd use them pretty fast. I've also done that if I came up short on a spend for a bonus. I have come to not trust that gift cards are 100% safe. There are data breaches daily (along with other scams) and not every company even knows about them let alone makes good on damages.
Last edited by michaeljc70 on Thu Nov 14, 2019 8:36 am, edited 1 time in total.

z3r0c00l
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Re: Are complicated credit card cash back strategies worth it?

Post by z3r0c00l » Thu Nov 14, 2019 8:36 am

danielc wrote:
Thu Nov 14, 2019 4:35 am
z3r0c00l wrote:
Wed Nov 13, 2019 6:49 am
It is worth opening a few cards with bonuses, and then strategically using a few cards for their high % items. An extra 1% back on food, a big budget item for me which I will spend no matter what, amounts to $70 per year. Is it worth holding an extra few grams of plastic in my wallet for $70 per year? I'd say so.
Is $70/year worth possibly altering your purchasing choices? $70 is nothing compared to your yearly expenses. It is very easy to make two $35 purchases a year that you otherwise would not have made. Also, a year from now I'm not going to notice if I have an extra $70 in the bank.
It is worth picking the purple credit card when I buy food and the blue card when I buy everything else. Yes I will work for 90 seconds a year to get $70 dollars. I don't treat that amount ($700 over 10 years, a few thousand in retirement if invested) as insignificant. That may be the kind of discipline that also allows me not to spend more when using credit card too. Anyway, the card bonuses cost me more time and gain much more, about $500 this year alone. Also significant imho! : )

hoffse
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Re: Are complicated credit card cash back strategies worth it?

Post by hoffse » Thu Nov 14, 2019 9:08 am

It only takes a couple hours a year to assess your credit card strategy vs the available credit card landscape and either decide to make changes or not.

If you want cash, aim for cash. Figuring that out is relatively simple, and once the plan is in place it’s literally just choosing card A vs B from your wallet. If you want travel, this takes more work, but lots of people view travel hacking as a hobby and the value of the time spent doing this is higher than pure cash back.

We tend to plan our family travel out 8-12 months in advance. Once we decide what we want to do I spend a couple hours figuring out what points we need vs what we have, and I either shift spending to travel cards to top up points for the trip or I open a new card with a sign up bonus (or both). My husband and I probably open 1-2 cards per year between us. It’s not a huge deal to do.

Once the next family vacation is “funded” with the points we need, we shift to cash back for the rest of the year because I like to keep my earn and burn rate pretty equal with travel points. I do keep a reserve of about 100,000 UR points for emergency travel (funerals, etc) that I can use to defray the cost of a last minute flight. Otherwise, I don’t collect travel points we can’t or won’t spend.

So yeah, I look at this about once a year when planning the family vacation, and then I implement the plan and don’t really think about it again until the following year. I have spent more time with it this year than normal because I’m about to be in a situation where our non-bonus spend is going to double in 2020, and that is worth doing some extra research. But most years it’s a couple hours, and then I’m done. I don’t view this as spending a lot of time or mental energy in order to maximize.

Jags4186
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Re: Are complicated credit card cash back strategies worth it?

Post by Jags4186 » Thu Nov 14, 2019 9:11 am

michaeljc70 wrote:
Thu Nov 14, 2019 8:35 am
Jags4186 wrote:
Thu Nov 14, 2019 8:18 am
Caduceus wrote:
Thu Nov 14, 2019 8:11 am
I think they are only worth it if you were genuinely going to spend on the things anyway. I suspect a lot of people end up spending more than saving in order to hit the minimum spend required to get those fat bonuses.

There might only be a few months every few years that I can hit $5,000 in spend every three months (which is what something like Chase requires to get their bonuses). I paid for an air ticket, bought an expensive scanner, put as much food and groceries on the card, bought some nice decorative items ... and still did not hit $5,000 over 3 months.
If you can float it, overpaying bills is a good way to help meet minimum spend. For example, pay 6 months ahead on your internet, gas, electric, tv, and cell phone. Another thing to do is buy gift cards (especially when on a discount) to various retailers you would normally spend on. For example, I just bought $600 of gas gift cards from Best Buy to earn $60 + points back on the purchase. When all is said and done, that is a ~15% discount on gas — I received ~2% back at purchase, $60 in rebates, and then when I go to the gas station I receive the cash price (another 3% discount) by using a branded gift card. $600 will get us through April next year.
That works as far as satisfying the spend, but a lot of companies will send you a check back if they owe you money for more than one or two billing statements. That me be good or bad depending on how you look at it.

If you search these forums (or the internet) you will find gift card spend nightmares (cards that didn't work and they couldn't get the money back). I might buy gift cards for a 5% bonus at somewhere like Costco where I know I'd use them pretty fast. I've also done that if I came up short on a spend for a bonus. I have come to not trust that gift cards are 100% safe. There are data breaches daily (along with other scams) and not every company even knows about them let alone makes good on damages.
Getting a check sent back is the ultimate win! I have never been so lucky, unfortunately.

Re: gift cards, as with most things in life, nothing is 100% full proof. You can search the internet and find countless people who have Toyota Camrys and all they’ve had were problems. You can search the internet and read countless people who’ve had credit cards ruin their lives. You can read the 100s of threads and posts on this very website of people decrying how awful Vanguard is, yet, last I checked, they were good enough to manage $5 trillion. Just because some people have had a bad experience doesn’t mean it’s a bad idea.

My wife and I are up, by my count, over $60,000 virtue of various credit card and bank offers. Have maybe I spent more than I would have otherwise? Most definitely. I’ve gone on fabulous vacations I would never have paid for out of pocket (just booked a wonderful vacation to Aruba—my total costs? Uber fair to and from the airport, and food and entertainment while on the island). I’ve bought gizmos and gadgets I would never have bought had I not “covered the expense” with a bonus or rewards. But at the end of the day, had I just “stayed simple” and just used the local credit union and made all my purchases on a 2% cashback card, I’d be roughly $54,000 lighter in cash, stuff, and experiences. If I have trouble every now and then—and I have but it’s always worked out in the end—so be it.

michaeljc70
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Re: Are complicated credit card cash back strategies worth it?

Post by michaeljc70 » Thu Nov 14, 2019 9:25 am

Jags4186 wrote:
Thu Nov 14, 2019 9:11 am
michaeljc70 wrote:
Thu Nov 14, 2019 8:35 am
Jags4186 wrote:
Thu Nov 14, 2019 8:18 am
Caduceus wrote:
Thu Nov 14, 2019 8:11 am
I think they are only worth it if you were genuinely going to spend on the things anyway. I suspect a lot of people end up spending more than saving in order to hit the minimum spend required to get those fat bonuses.

There might only be a few months every few years that I can hit $5,000 in spend every three months (which is what something like Chase requires to get their bonuses). I paid for an air ticket, bought an expensive scanner, put as much food and groceries on the card, bought some nice decorative items ... and still did not hit $5,000 over 3 months.
If you can float it, overpaying bills is a good way to help meet minimum spend. For example, pay 6 months ahead on your internet, gas, electric, tv, and cell phone. Another thing to do is buy gift cards (especially when on a discount) to various retailers you would normally spend on. For example, I just bought $600 of gas gift cards from Best Buy to earn $60 + points back on the purchase. When all is said and done, that is a ~15% discount on gas — I received ~2% back at purchase, $60 in rebates, and then when I go to the gas station I receive the cash price (another 3% discount) by using a branded gift card. $600 will get us through April next year.
That works as far as satisfying the spend, but a lot of companies will send you a check back if they owe you money for more than one or two billing statements. That me be good or bad depending on how you look at it.

If you search these forums (or the internet) you will find gift card spend nightmares (cards that didn't work and they couldn't get the money back). I might buy gift cards for a 5% bonus at somewhere like Costco where I know I'd use them pretty fast. I've also done that if I came up short on a spend for a bonus. I have come to not trust that gift cards are 100% safe. There are data breaches daily (along with other scams) and not every company even knows about them let alone makes good on damages.
Getting a check sent back is the ultimate win! I have never been so lucky, unfortunately.

Re: gift cards, as with most things in life, nothing is 100% full proof. You can search the internet and find countless people who have Toyota Camrys and all they’ve had were problems. You can search the internet and read countless people who’ve had credit cards ruin their lives. You can read the 100s of threads and posts on this very website of people decrying how awful Vanguard is, yet, last I checked, they were good enough to manage $5 trillion. Just because some people have had a bad experience doesn’t mean it’s a bad idea.

My wife and I are up, by my count, over $60,000 virtue of various credit card and bank offers. Have maybe I spent more than I would have otherwise? Most definitely. I’ve gone on fabulous vacations I would never have paid for out of pocket (just booked a wonderful vacation to Aruba—my total costs? Uber fair to and from the airport, and food and entertainment while on the island). I’ve bought gizmos and gadgets I would never have bought had I not “covered the expense” with a bonus or rewards. But at the end of the day, had I just “stayed simple” and just used the local credit union and made all my purchases on a 2% cashback card, I’d be roughly $54,000 lighter in cash, stuff, and experiences. If I have trouble every now and then—and I have but it’s always worked out in the end—so be it.
Yes, the bonuses/rewards can add up. I started tracking them in Quicken and this year I got over $3k and that is cash only and doesn't count miles which I typically use for flying. I can't tell you how many times I've gone to South America, Europe and Asia using credit card bonus miles. I just find the sign up bonuses to be much more lucrative (I don't do ones worth less than $500) than juggling categories. And if I can transfer a brokerage account and get $1200 vs be juggling credit cards by category for much less money....

The sign up bonuses are being tightened up and will continue to be. I was turned down for the AA card with excellent credit (820) even though I had it maybe 4 times previously. They obviously know the game. Websites everywhere has turned it from a niche thing to a lot more common and the credit card companies have taken notice. And if you get declined that is a hit to your credit report.

stoptothink
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Re: Are complicated credit card cash back strategies worth it?

Post by stoptothink » Thu Nov 14, 2019 10:03 am

Jags4186 wrote:
Thu Nov 14, 2019 8:18 am
Caduceus wrote:
Thu Nov 14, 2019 8:11 am
I think they are only worth it if you were genuinely going to spend on the things anyway. I suspect a lot of people end up spending more than saving in order to hit the minimum spend required to get those fat bonuses.

There might only be a few months every few years that I can hit $5,000 in spend every three months (which is what something like Chase requires to get their bonuses). I paid for an air ticket, bought an expensive scanner, put as much food and groceries on the card, bought some nice decorative items ... and still did not hit $5,000 over 3 months.
Another thing to do is buy gift cards (especially when on a discount) to various retailers you would normally spend on. For example, I just bought $600 of gas gift cards from Best Buy to earn $60 + points back on the purchase. When all is said and done, that is a ~15% discount on gas — I received ~2% back at purchase, $60 in rebates, and then when I go to the gas station I receive the cash price (another 3% discount) by using a branded gift card. $600 will get us through April next year.
That's all the "manufactured spending that we do". Whenever Chase Freedom has 5% on groceries, I buy $1500 in winco gift cards online and that last us 4-5 months. Last time it changed to gas, I bought $1500 in gas cards which will last us ~1.5yrs. I also hit the spending limits paying for wife's tuition. I can say with almost 100% certainty that "playing the game" hasn't increased our spending a penny, but it's an easy $1k+/yr cash back.

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danielc
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Re: Are complicated credit card cash back strategies worth it?

Post by danielc » Thu Nov 14, 2019 2:06 pm

z3r0c00l wrote:
Thu Nov 14, 2019 8:36 am
danielc wrote:
Thu Nov 14, 2019 4:35 am
z3r0c00l wrote:
Wed Nov 13, 2019 6:49 am
It is worth opening a few cards with bonuses, and then strategically using a few cards for their high % items. An extra 1% back on food, a big budget item for me which I will spend no matter what, amounts to $70 per year. Is it worth holding an extra few grams of plastic in my wallet for $70 per year? I'd say so.
Is $70/year worth possibly altering your purchasing choices? $70 is nothing compared to your yearly expenses. It is very easy to make two $35 purchases a year that you otherwise would not have made. Also, a year from now I'm not going to notice if I have an extra $70 in the bank.
It is worth picking the purple credit card when I buy food and the blue card when I buy everything else. Yes I will work for 90 seconds a year to get $70 dollars. I don't treat that amount ($700 over 10 years, a few thousand in retirement if invested) as insignificant. That may be the kind of discipline that also allows me not to spend more when using credit card too. Anyway, the card bonuses cost me more time and gain much more, about $500 this year alone. Also significant imho! : )
I *really* do not think that that is discipline. It sounds more like a rationalization. Look, if optimizing credit card rewards makes you happy, you should do it. But it is a hobby that is just as likely to cost you a small amount of money (by altering your buying choices) as it is to make you a small amount of money. If you think that $70/year is significant and you have discipline, there are probably better places in your budget where you can make or save more than $70/year.

randomguy
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Re: Are complicated credit card cash back strategies worth it?

Post by randomguy » Thu Nov 14, 2019 2:36 pm

JBTX wrote:
Thu Nov 14, 2019 4:32 am

As to the on going rewards, once you get a system set up it doesn't take that much more work. Is that worth an additional $1k per year?
How many people spend 50k/yr (4%) or 100k/yr (3%) more in these specialized categories than just using the 2% card? Does you really want to carry around 20 cards so you can get 5% at every place you spend 200-500 bucks/year?

EnjoyIt
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Re: Are complicated credit card cash back strategies worth it?

Post by EnjoyIt » Thu Nov 14, 2019 3:25 pm

randomguy wrote:
Thu Nov 14, 2019 2:36 pm
JBTX wrote:
Thu Nov 14, 2019 4:32 am

As to the on going rewards, once you get a system set up it doesn't take that much more work. Is that worth an additional $1k per year?
How many people spend 50k/yr (4%) or 100k/yr (3%) more in these specialized categories than just using the 2% card? Does you really want to carry around 20 cards so you can get 5% at every place you spend 200-500 bucks/year?
Random guy,
Those 5% categories with chase are actually 5 points and are worth 7.5% in value when redeemed for travel as a floor. About 4 years ago I was able to redeem some of those points at 3 cents per point making it worth 15% but I always use 1.5 cents per point in my calculations.

Also, you don’t necessary have to carry so many cards. I carry my phone and use Apple Pay with those cards. I personally hate carrying around a bulky wallet and only use a money clip.
danielc wrote:
Thu Nov 14, 2019 2:06 pm

I *really* do not think that that is discipline. It sounds more like a rationalization. Look, if optimizing credit card rewards makes you happy, you should do it. But it is a hobby that is just as likely to cost you a small amount of money (by altering your buying choices) as it is to make you a small amount of money. If you think that $70/year is significant and you have discipline, there are probably better places in your budget where you can make or save more than $70/year.
You may or may not believe me, but we do not buy a bunch of useless crap just because we have a credit card. Plus for us, as per my calculations in a previous post it is worth well over $70/yr difference. So I think it is worth it. Plus as others have said, it is fun and I enjoy the game.

On a similar note, this year we transferred our emergency fund and home remodel fund from a bank to a money market account. This optimization has a positive rate of return of about $750 which was well worth the effort in trying to optimize. Next month I will move some of that money to another account and ideally get another $1k bonus for doing so. More optimization with a solid benefit.

It’s not for everyone as it does require some keeping track of things, but if one enjoys the process then why not?

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Re: Are complicated credit card cash back strategies worth it?

Post by PhoebeCoco » Thu Nov 14, 2019 3:39 pm

I see that I am a low spender compared to many people on this board.

I have the simple combo mentioned by many: Citi Double Cash (2% back) and Chase Amazon Prime (5% back).

Using those 2 cards for most of my spending, I will get about $400 back from Citi and $65 back from Chase for this year (2019).

I don't spend enough to have a complicated credit card cash back strategy.

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Ice-9
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Re: Are complicated credit card cash back strategies worth it?

Post by Ice-9 » Thu Nov 14, 2019 4:33 pm

I will admit my own cashback strategy has gotten a bit complicated. I think the worst part is keeping track of two cards that have seasonal 5% cashback categories that change. If someone starting their own strategy from scratch asked me what I recommend, I'd probably say avoid the quarterly category cards.

The following 3-card cashback strategy would be simple to implement and, to answer the OP's question, would be worth it for a large segment of the population:

(1) Chase Amazon Prime 5% - assuming one uses Amazon regularly, just set it up once on Amazon's website and all your Amazon purchases earn 5% thereafter

(2) AMEX Bluecash Preferred - 6% on streaming services (similarly set up just once on the services' respective websites), 6% at grocery stores, 3% for transit/parking/gas/ride-sharing (in some cases, such as Uber or a parking app, also set up just once on the app's website).

(3) Citi Doublecash or other 2% card for everything else

Then use Apple/Google/Samsung Pay to switch between cards when optimal, and you only really need to carry the 2% card in your wallet for places that don't take contactless payments. Is that really so hard?

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danielc
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Re: Are complicated credit card cash back strategies worth it?

Post by danielc » Thu Nov 14, 2019 7:07 pm

EnjoyIt wrote:
Thu Nov 14, 2019 3:25 pm
danielc wrote:
Thu Nov 14, 2019 2:06 pm
I *really* do not think that that is discipline. It sounds more like a rationalization. Look, if optimizing credit card rewards makes you happy, you should do it. But it is a hobby that is just as likely to cost you a small amount of money (by altering your buying choices) as it is to make you a small amount of money. If you think that $70/year is significant and you have discipline, there are probably better places in your budget where you can make or save more than $70/year.
You may or may not believe me, but we do not buy a bunch of useless crap just because we have a credit card. Plus for us, as per my calculations in a previous post it is worth well over $70/yr difference. So I think it is worth it. Plus as others have said, it is fun and I enjoy the game.
1) If you enjoy it, you should do it. It's a very inexpensive hobby (probably).

2) If you make a lot more than $70/yr then clearly you are not comparable to the person I was addressing in my comment.

3) Having said all that, sticking to the $70/yr that were the subject of my post, I think it would be difficult to prove that your family did not spend $70 more over then course of an entire year. You don't need to "buy a bunch of useless crap" to add up to $70. Because we are talking about a very small percentage of your yearly expenses, it is very easy to imagine that the feeling that you are getting a reward, or that you are beating the system, could make you just a little bit more loose with money, or otherwise alter your purchasing choices by a couple of percentage points. For example, you might decide to shop more often at the supermarket that gives you rewards, and there could be a difference in the price of groceries, or mileage on your car, that could easily offset the rewards without you ever feeling like you bought "a bunch of useless crap". Consider for a second that the people who created those rewards cards know more than you about average purchasing habits and they decided that the reward was worth it to them. Of course, it is perfectly possible that *you* are beating the system. But you are starting with the deck stacked against you and, as I said, it takes very little to offset the very small reward that these cards give you.

EnjoyIt wrote:
Thu Nov 14, 2019 3:25 pm
It’s not for everyone as it does require some keeping track of things, but if one enjoys the process then why not?
I would never ask you to not partake in your hobbies. I'm glad you are enjoying your hobby.

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Re: Are complicated credit card cash back strategies worth it?

Post by michaeljc70 » Thu Nov 14, 2019 7:20 pm

I should probably open a Costco credit card given what I spend there plus the other reward amounts. One thing I haven't seen mentioned is if you don't have all these cards to start with, opening them may affect your ability to open some bonus cards (due to things like Chase 5/24).

My Chase Freedom and Discover offer 5% on Paypal one quarter. That can cover a lot of online purchases (but not Amazon). Discover offers 5% off Amazon for the holidays (4th quarter).

As I said above, I mostly use my Citi Double Cash back and occasionally partake in 5% revolving categories (generally only Paypal+Amazon). I might open a Costco card if it won't affect me getting bonuses. Then I would do the Citi Double/Costco as my two cards used for everything.

I did a report in Amazon on my purchase this year. 50 purchases totaling $1700. The difference between 2% and 5% was ~$50. That doesn't account for any 5% purchases I made during bonus quarters. So, not really worth getting a Prime card especially since I even question the value of Prime and whether I will continue it.

SrGrumpy
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Re: Are complicated credit card cash back strategies worth it?

Post by SrGrumpy » Thu Nov 14, 2019 7:32 pm

Jags4186 wrote:
Thu Nov 14, 2019 9:11 am

Getting a check sent back is the ultimate win! I have never been so lucky, unfortunately.
I was an accidental winner, recently. I prepaid my Spectrum Internet bill by 6 months, and a little later did my annual cancellation so that I could get the new customer rate (after a loooong month going cold turkey). It took them a while, but I got a gift card for the balance that I could easily convert into cash.

michaeljc70
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Re: Are complicated credit card cash back strategies worth it?

Post by michaeljc70 » Thu Nov 14, 2019 7:45 pm

SrGrumpy wrote:
Thu Nov 14, 2019 7:32 pm
Jags4186 wrote:
Thu Nov 14, 2019 9:11 am

Getting a check sent back is the ultimate win! I have never been so lucky, unfortunately.
I was an accidental winner, recently. I prepaid my Spectrum Internet bill by 6 months, and a little later did my annual cancellation so that I could get the new customer rate (after a loooong month going cold turkey). It took them a while, but I got a gift card for the balance that I could easily convert into cash.
Many companies don't want to show what they owe you on their balance sheet (it is a liability). Policies vary, but I have received checks from a huge bank (credit card) after just 2 months (I paid the balance, had a return and made no more purchases). Most companies don't want to show more debt than they need to. This is also the reason for escheatment which is where they hand over property to the state after a certain amount of time and get the liability off their books.

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Re: Are complicated credit card cash back strategies worth it?

Post by z3r0c00l » Thu Nov 14, 2019 7:59 pm

danielc wrote:
Thu Nov 14, 2019 2:06 pm

I *really* do not think that that is discipline. It sounds more like a rationalization. Look, if optimizing credit card rewards makes you happy, you should do it. But it is a hobby that is just as likely to cost you a small amount of money (by altering your buying choices) as it is to make you a small amount of money. If you think that $70/year is significant and you have discipline, there are probably better places in your budget where you can make or save more than $70/year.
I save thousands a year doing this and many other things. But each choice is "only" $50 or $100. In the event, most of the money I get back from cards is from food and I was going to eat anyway. The only difference is I use the purple credit card for food and the blue one for everything else.

Bobby206
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Re: Are complicated credit card cash back strategies worth it?

Post by Bobby206 » Thu Nov 14, 2019 8:01 pm

One card.
2%.
Pay it off each month.
Simple.

Is it maxing out my possibility? No but I like the simplicity.

Caduceus
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Re: Are complicated credit card cash back strategies worth it?

Post by Caduceus » Thu Nov 14, 2019 8:29 pm

Jags4186 wrote:
Thu Nov 14, 2019 8:18 am
Caduceus wrote:
Thu Nov 14, 2019 8:11 am
I think they are only worth it if you were genuinely going to spend on the things anyway. I suspect a lot of people end up spending more than saving in order to hit the minimum spend required to get those fat bonuses.

There might only be a few months every few years that I can hit $5,000 in spend every three months (which is what something like Chase requires to get their bonuses). I paid for an air ticket, bought an expensive scanner, put as much food and groceries on the card, bought some nice decorative items ... and still did not hit $5,000 over 3 months.
If you can float it, overpaying bills is a good way to help meet minimum spend. For example, pay 6 months ahead on your internet, gas, electric, tv, and cell phone. Another thing to do is buy gift cards (especially when on a discount) to various retailers you would normally spend on. For example, I just bought $600 of gas gift cards from Best Buy to earn $60 + points back on the purchase. When all is said and done, that is a ~15% discount on gas — I received ~2% back at purchase, $60 in rebates, and then when I go to the gas station I receive the cash price (another 3% discount) by using a branded gift card. $600 will get us through April next year.
That would not work for me. Our utilities are like $150 a month. We don't own a TV, and my cellphone plan costs about $6 a month. I don't own a car, so gas gift cards don't work for me. I could spent $2,000 on Amazon gift cards if that was allowed to hit the spend, but I spent a grand total of I think $300 on Amazon in the last 12 months, so it would take me 7 years to finish using the cards!

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Re: Are complicated credit card cash back strategies worth it?

Post by EnjoyIt » Thu Nov 14, 2019 10:05 pm

Caduceus wrote:
Thu Nov 14, 2019 8:29 pm
Jags4186 wrote:
Thu Nov 14, 2019 8:18 am
Caduceus wrote:
Thu Nov 14, 2019 8:11 am
I think they are only worth it if you were genuinely going to spend on the things anyway. I suspect a lot of people end up spending more than saving in order to hit the minimum spend required to get those fat bonuses.

There might only be a few months every few years that I can hit $5,000 in spend every three months (which is what something like Chase requires to get their bonuses). I paid for an air ticket, bought an expensive scanner, put as much food and groceries on the card, bought some nice decorative items ... and still did not hit $5,000 over 3 months.
If you can float it, overpaying bills is a good way to help meet minimum spend. For example, pay 6 months ahead on your internet, gas, electric, tv, and cell phone. Another thing to do is buy gift cards (especially when on a discount) to various retailers you would normally spend on. For example, I just bought $600 of gas gift cards from Best Buy to earn $60 + points back on the purchase. When all is said and done, that is a ~15% discount on gas — I received ~2% back at purchase, $60 in rebates, and then when I go to the gas station I receive the cash price (another 3% discount) by using a branded gift card. $600 will get us through April next year.
That would not work for me. Our utilities are like $150 a month. We don't own a TV, and my cellphone plan costs about $6 a month. I don't own a car, so gas gift cards don't work for me. I could spent $2,000 on Amazon gift cards if that was allowed to hit the spend, but I spent a grand total of I think $300 on Amazon in the last 12 months, so it would take me 7 years to finish using the cards!
Obviously you don’t spend a lot which means any percent back would be small reflecting the smaller spending.
Some things that people do to help meet their credit card spending so as to acquire a bonus is paying their rent or mortgage with a credit card using a website such as platiq. They charge you 2.5% I believe (I don’t use them,) but it may be worth it for a good bonus if one was so inclined.

Then there are others who manufacture spend by purchasing and then liquidating gift cards. That is way too much effort for me, but seems worthwhile for others.

Personally I like the limited amount that I do for what I get in return. Takes a small amount of effort, just enough fun for me to enjoy the process and the return is worthwhile. For me, I would not bother for under $100/yr

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Re: Are complicated credit card cash back strategies worth it?

Post by JBTX » Fri Nov 15, 2019 10:38 am

randomguy wrote:
Thu Nov 14, 2019 2:36 pm
JBTX wrote:
Thu Nov 14, 2019 4:32 am

As to the on going rewards, once you get a system set up it doesn't take that much more work. Is that worth an additional $1k per year?
How many people spend 50k/yr (4%) or 100k/yr (3%) more in these specialized categories than just using the 2% card? Does you really want to carry around 20 cards so you can get 5% at every place you spend 200-500 bucks/year?
We spend way too much on dining. $10k times an extra 2% is $200 per year. We spend more than $10k.

Probably about $10k for gas and convenience stores. 1.5% extra times $10k is $150.

Those are the only two extra we need to carry, although I do carry quite a few more. Also carry 6% grocery but may not keep it.

Amazon credit card 5% is saved in browser. Walmart 5% is saved in walmart app. Pay att and utilities online with chase business with 5% discount. None of those cards needs to be carried.

Add all this up and you are getting approx an additional $1000 or more over and above the 2%. So I carry a few more cards in my wallet. It is a very minor inconvenience.

I understand it's not for everybody. A lot of people here put a lot of efforts into things like tax loss harvesting or stocks in taxable with lot tracking to save probably not much more on an annual basis. Some people here poo poo target date funds that may have an additional 0.1% fees, which would be $1000 on an annual basis on $ 1 million.

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Re: Are complicated credit card cash back strategies worth it?

Post by BigMoneyNoWhammies » Wed Nov 20, 2019 2:58 pm

randomguy wrote:
Wed Nov 13, 2019 3:39 pm
BigMoneyNoWhammies wrote:
Wed Nov 13, 2019 3:17 pm

Assuming you're spending within your means, you obtain cards with rewards towards items you already spend $ on, and you're paying the balance off monthly, it can certainly be worth it. Why not go for a CC bonus strategy under those circumstances? For example, if I can get one card with 1.5% cash back, one with 3% off groceries and 2% off gas, and one with 3% off restaurant and entertainment, I'm effectively getting a discount of the value of those percentages when I'm paying my balance off monthly. I'll take that every time.
The question is the complexity worth the added savings? As a baseline you can get a card that pays 2% everywhere. Is it worth an extra 10 dollars/thousand spend to have a card that you just use for eating out? Is an extra chipotle buritto or two a year worth having to carry around a piece of plastic you only use at restaurants? Now there is obviously a crossover point. If you buy 100k/year from amazon for your business, you should really get the card that gives 5% cash back. Where that line is depends on how much you value simplicity versus optimizations.
It certainly is highly dependent upon finding cards that give bonuses to spending categories you'll actually utilize. If you as a consumer don't ever eat out, it obviously isn't worth the effort to get a card that gives a bonus above the standard 1.5% or 2% cash back on restaurants for example. But there are cards out there that give bonuses above the normal cashback options on things people almost universally spend $ on, like gas and groceries. I don't think it's an excessive amount of effort to spend a few mins filling out a CC app for bonuses like that. Cards that give a solid bonus at specific stores might be worth it as well if you're a regular shopper there, especially if they sell a variety of goods (target, wal mart, etc,).

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Re: Are complicated credit card cash back strategies worth it?

Post by Ivygirl » Thu Nov 21, 2019 10:48 am

I wouldn't be too quick to pooh-pooh the psychological effects of cash-back strategies (credit card or otherwise), or assume that only the foolish, weak, or extravagant can be swayed to spend too much. There is also the effect of legitimate pent-up desire. Which people of modest incomes have and people with high incomes do not.

The credit card companies want to catch everybody. That includes those who are generally frugal, careful, and wise, people who would not normally be a resource for extraction. A "reward" looks like a way to get things without being foolish or extravagant, but it has a hidden hook for the poor or those who have to be very careful with money. We have spent a lot of time saying "no" to ourselves, about a lot of things that we see others enjoying freely - harmless things, happy things, like vacations or picking up a friend's breakfast tab or buying the good cheese - and the power of desire against the dam of prudence is very great. It only takes a little hole. A small derangement. The credit card company would like to introduce that derangement into the discipline that was very hard gained, because otherwise they have no way of catching the frugal and careful. They have to introduce a temptation, even if it means they pay a few pennies to do that.

Simplicity leads to better decisions. A person with a modest income can be as frugal, careful, and wise as you please, but still cannot afford to hang out socially with a credit card company.

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Re: Are complicated credit card cash back strategies worth it?

Post by EnjoyIt » Thu Nov 21, 2019 10:54 am

Ivygirl wrote:
Thu Nov 21, 2019 10:48 am
I wouldn't be too quick to pooh-pooh the psychological effects of cash-back strategies (credit card or otherwise), or assume that only the foolish, weak, or extravagant can be swayed to spend too much. There is also the effect of legitimate pent-up desire. Which people of modest incomes have and people with high incomes do not.

The credit card companies want to catch everybody. That includes those who are generally frugal, careful, and wise, people who would not normally be a resource for extraction. A "reward" looks like a way to get things without being foolish or extravagant, but it has a hidden hook for the poor or those who have to be very careful with money. We have spent a lot of time saying "no" to ourselves, about a lot of things that we see others enjoying freely - harmless things, happy things, like vacations or picking up a friend's breakfast tab or buying the good cheese - and the power of desire against the dam of prudence is very great. It only takes a little hole. A small derangement. The credit card company would like to introduce that derangement into the discipline that was very hard gained, because otherwise they have no way of catching the frugal and careful. They have to introduce a temptation, even if it means they pay a few pennies to do that.

Simplicity leads to better decisions. A person with a modest income can be as frugal, careful, and wise as you please, but still cannot afford to hang out socially with a credit card company.
Do we spend more because we have a septic credit card strategy? Maybe, I don't know. We have a yearly budget and stick with it. I think even if we do spend a bit more than expected, I would suspect it is far less than the thousands we get in rewards.

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Re: Are complicated credit card cash back strategies worth it?

Post by Ivygirl » Thu Nov 21, 2019 11:04 am

EnjoyIt wrote:
Thu Nov 21, 2019 10:54 am
Ivygirl wrote:
Thu Nov 21, 2019 10:48 am
I wouldn't be too quick to pooh-pooh the psychological effects of cash-back strategies (credit card or otherwise), or assume that only the foolish, weak, or extravagant can be swayed to spend too much. There is also the effect of legitimate pent-up desire. Which people of modest incomes have and people with high incomes do not.

The credit card companies want to catch everybody. That includes those who are generally frugal, careful, and wise, people who would not normally be a resource for extraction. A "reward" looks like a way to get things without being foolish or extravagant, but it has a hidden hook for the poor or those who have to be very careful with money. We have spent a lot of time saying "no" to ourselves, about a lot of things that we see others enjoying freely - harmless things, happy things, like vacations or picking up a friend's breakfast tab or buying the good cheese - and the power of desire against the dam of prudence is very great. It only takes a little hole. A small derangement. The credit card company would like to introduce that derangement into the discipline that was very hard gained, because otherwise they have no way of catching the frugal and careful. They have to introduce a temptation, even if it means they pay a few pennies to do that.

Simplicity leads to better decisions. A person with a modest income can be as frugal, careful, and wise as you please, but still cannot afford to hang out socially with a credit card company.
Do we spend more because we have a septic credit card strategy? Maybe, I don't know. We have a yearly budget and stick with it. I think even if we do spend a bit more than expected, I would suspect it is far less than the thousands we get in rewards.
If you are getting thousands in "rewards," you are spending hundreds of thousands. Yes?

You have a very high income. You are not in the category of person whose discipline needs to be like a Roman military square, so to speak, invulnerable on all sides and depending that all are doing their duty. It is very boring to be always making grocery lists. It is depressing to be always turning away from the display with the good cheese. Credit card companies know this.

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Re: Are complicated credit card cash back strategies worth it?

Post by Jack FFR1846 » Thu Nov 21, 2019 11:23 am

I wrote a long description of a typical transaction where I documented getting back 32% for a purchase. I realized I was giving away too much information, so pulled it down.

To get thousands back, you absolutely do not need to spend hundreds of thousands. I pull in well over $10k a year on these shenanigans and spend less than $100k a year on my credit cards. You need to be organized and find the strategies. That's all. There are no current Red Birds out there, but there are other ways to go about it. It's not sitting back and simply using a 2% card on all your purchases. It takes more than that.

Happy hunting!
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Re: Are complicated credit card cash back strategies worth it?

Post by FrugalProfessor » Thu Nov 21, 2019 11:44 am

Ivygirl wrote:
Thu Nov 21, 2019 11:04 am
If you are getting thousands in "rewards," you are spending hundreds of thousands. Yes?

You have a very high income. You are not in the category of person whose discipline needs to be like a Roman military square, so to speak, invulnerable on all sides and depending that all are doing their duty. It is very boring to be always making grocery lists. It is depressing to be always turning away from the display with the good cheese. Credit card companies know this.
I agree entirely that, in the hands of the weak-willed, that credit cards facilitate poor life choices. I believe that the BH community is certainly the exception here.

At 5.25% cash back, one would have to spend $38,095 to get $2k cash back (and thus meet the thousands claim), not hundreds of thousands. With 5 kids, we're close to this level of credit spend (and thus close to $2k tax-free cash-back) every year. We pass 100% of our credit-card-able purchases through high cash back cards. I don't believe we spend a penny more due to swiping with a credit card vs a debit card (or cash). Though you'll have to take my word on that.

https://frugalprofessor.com/best-credit ... 9-edition/

Couldn't one also make the same argument that money saved in the piggy bank is just as tempting as access to a credit card? For those in the BH community, we stuff our piggy banks full and, over time, learn to not let that large pile of cash tempt us to recklessly spend. Building wealth requires discipline to not spend down assets. Paradoxically, credit cards are a useful tool in building these discipline muscles. They teach us to spend money on what we value, even though credit cards (or sufficient assets) could easily allow us to spend more than that.

I often take my kids into retail stores like Costco. I encourage them to look at the toys. If they want something, they put it on "their Christmas/birthday/will-purchase-on-their-own-someday list." 99% of the time, they forget about the item the next day. 99.9% of the time, we leave the store without purchasing anything. Over time, my kids are building up an immunity to purchase things they want by simply walking away. It's a great life skill, something most of us adults could work on.

An added benefit of credit cards is the float & cash flow management. After getting paid on the last of the month, I autopay credit cards on the 1st of the month and dump any residual cash to investments on the 2nd, leaving a paltry $500 or so in my 2% checking account (https://frugalprofessor.com/cash-management/) for the rest of the month (plus my mortgage amount until it auto-pays on the 15th). At >$30k of annual credit-card-able spend, the 45 days of float provides our family another $100-$250 of interest benefits (depending on the interest rate assumptions) each year.
I blog. Taxes are the lowest hanging source of alpha. I eat tax alpha for breakfast.

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Re: Are complicated credit card cash back strategies worth it?

Post by stoptothink » Thu Nov 21, 2019 12:25 pm

Ivygirl wrote:
Thu Nov 21, 2019 11:04 am
EnjoyIt wrote:
Thu Nov 21, 2019 10:54 am
Ivygirl wrote:
Thu Nov 21, 2019 10:48 am
I wouldn't be too quick to pooh-pooh the psychological effects of cash-back strategies (credit card or otherwise), or assume that only the foolish, weak, or extravagant can be swayed to spend too much. There is also the effect of legitimate pent-up desire. Which people of modest incomes have and people with high incomes do not.

The credit card companies want to catch everybody. That includes those who are generally frugal, careful, and wise, people who would not normally be a resource for extraction. A "reward" looks like a way to get things without being foolish or extravagant, but it has a hidden hook for the poor or those who have to be very careful with money. We have spent a lot of time saying "no" to ourselves, about a lot of things that we see others enjoying freely - harmless things, happy things, like vacations or picking up a friend's breakfast tab or buying the good cheese - and the power of desire against the dam of prudence is very great. It only takes a little hole. A small derangement. The credit card company would like to introduce that derangement into the discipline that was very hard gained, because otherwise they have no way of catching the frugal and careful. They have to introduce a temptation, even if it means they pay a few pennies to do that.

Simplicity leads to better decisions. A person with a modest income can be as frugal, careful, and wise as you please, but still cannot afford to hang out socially with a credit card company.
Do we spend more because we have a septic credit card strategy? Maybe, I don't know. We have a yearly budget and stick with it. I think even if we do spend a bit more than expected, I would suspect it is far less than the thousands we get in rewards.
If you are getting thousands in "rewards," you are spending hundreds of thousands. Yes?
I made about $2k in CC sign-up bonuses alone this year, not even counting the cash back (ranging from 1-6%), and we spent <$20k on CC this year. That actually represents pretty much all our expenditures minus housing and daycare. We live on a very defined budget (HH expenditures <$45k/yr for a family of 4, including daycare for 1 and full-time college tuition for my wife). I'd love for someone to go through our annual expenditures and try to find an instance where we spent more because of the use of credit cards; I realize that is not the norm, but it is the case in our situation. I don't understand how this is a hassle, I might have spent an hour "thinking" about and organizing our CC expenditures for the year.

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Re: Are complicated credit card cash back strategies worth it?

Post by Ivygirl » Thu Nov 21, 2019 12:35 pm

FrugalProfessor wrote:
Thu Nov 21, 2019 11:44 am
Ivygirl wrote:
Thu Nov 21, 2019 11:04 am
If you are getting thousands in "rewards," you are spending hundreds of thousands. Yes?

You have a very high income. You are not in the category of person whose discipline needs to be like a Roman military square, so to speak, invulnerable on all sides and depending that all are doing their duty. It is very boring to be always making grocery lists. It is depressing to be always turning away from the display with the good cheese. Credit card companies know this.
I agree entirely that, in the hands of the weak-willed, that credit cards facilitate poor life choices. I believe that the BH community is certainly the exception here.

At 5.25% cash back, one would have to spend $38,095 to get $2k cash back (and thus meet the thousands claim), not hundreds of thousands. With 5 kids, we're close to this level of credit spend (and thus close to $2k tax-free cash-back) every year. We pass 100% of our credit-card-able purchases through high cash back cards. I don't believe we spend a penny more due to swiping with a credit card vs a debit card (or cash). Though you'll have to take my word on that.

https://frugalprofessor.com/best-credit ... 9-edition/

Couldn't one also make the same argument that money saved in the piggy bank is just as tempting as access to a credit card? For those in the BH community, we stuff our piggy banks full and, over time, learn to not let that large pile of cash tempt us to recklessly spend. Building wealth requires discipline to not spend down assets. Paradoxically, credit cards are a useful tool in building these discipline muscles. They teach us to spend money on what we value, even though credit cards (or sufficient assets) could easily allow us to spend more than that.

I often take my kids into retail stores like Costco. I encourage them to look at the toys. If they want something, they put it on "their Christmas/birthday/will-purchase-on-their-own-someday list." 99% of the time, they forget about the item the next day. 99.9% of the time, we leave the store without purchasing anything. Over time, my kids are building up an immunity to purchase things they want by simply walking away. It's a great life skill, something most of us adults could work on.

An added benefit of credit cards is the float & cash flow management. After getting paid on the last of the month, I autopay credit cards on the 1st of the month and dump any residual cash to investments on the 2nd, leaving a paltry $500 or so in my 2% checking account (https://frugalprofessor.com/cash-management/) for the rest of the month (plus my mortgage amount until it auto-pays on the 15th). At >$30k of annual credit-card-able spend, the 45 days of float provides our family another $100-$250 of interest benefits (depending on the interest rate assumptions) each year.
Whoever you are entirely agreeing with, it is not with me. My main point was that credit card "rewards" are dangerous to those who are not "weak-willed." And the BH community is a special group in some ways, but not an exception to human nature. Everyone here puts on their pants one leg at a time.

I'll take your word that you only spent $38,095 to get $2k cash back. You know your own spending best and did not spend hundreds of thousands. Conceded.

No, money saved in a piggy bank is not just as tempting as a credit card. If you take money out of your piggy bank, that's because you first put it there. A piggy bank does not have a credit limit. It's hard to get in much trouble with your own money. If you are using someone else's, you are already in trouble. Someone else now owns your debt.

I can assure you that teasing oneself with a much-desired purchase and practicing walking away does not build discipline. It exhausts. Like deliberately walking into a bakery at all hours to practice being on a diet. What could possibly go wrong? Or it does something even worse: it trains the mind that the desire itself is bad, that the "game" of winning at saying no is better than an actual vacation or finally getting the good cheese. Then we get threads about "Spending makes me so anxious, I no longer enjoy it, is fifty million enough to retire?".

Simplicity is better. Pay for what you use. Earn before you spend. Don't believe in free money, but give value for what you get. This is how poor people and people of modest means get through to some wealth. Not by accepting the invitation from the city slicker to play poker back in the smoking car.

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Re: Are complicated credit card cash back strategies worth it?

Post by stoptothink » Thu Nov 21, 2019 12:41 pm

Ivygirl wrote:
Thu Nov 21, 2019 12:35 pm


Simplicity is better. Pay for what you use. Earn before you spend. Don't believe in free money, but give value for what you get. This is how poor people and people of modest means get through to some wealth. Not by accepting the invitation from the city slicker to play poker back in the smoking car.
What's with the generalized definitive statements? Clearly, for several people in this thread alone, "simplicity" is not better.

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Re: Are complicated credit card cash back strategies worth it?

Post by Ivygirl » Thu Nov 21, 2019 1:05 pm

stoptothink wrote:
Thu Nov 21, 2019 12:41 pm
Ivygirl wrote:
Thu Nov 21, 2019 12:35 pm


Simplicity is better. Pay for what you use. Earn before you spend. Don't believe in free money, but give value for what you get. This is how poor people and people of modest means get through to some wealth. Not by accepting the invitation from the city slicker to play poker back in the smoking car.
What's with the generalized definitive statements? Clearly, for several people in this thread alone, "simplicity" is not better.
I like this question.

Is simplicity in all things, not just money, a superior rule for living? I think it is. Because we were not made to accumulate money. Money would like us to think that is our purpose, so that we will serve it, but we are so much bigger than money.

It would be difficult to remember that, though, while poring over the ultra fine print in a cardmember agreement.

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Re: Are complicated credit card cash back strategies worth it?

Post by Jack FFR1846 » Thu Nov 21, 2019 1:10 pm

Yet it is far simpler to sit home in retirement and look out the window than it is to plan airplane flights, how to get to the airport, what hotel to stay in, what things to see, how to get around the vacation destination. For some people, that window is what they want. For others, it's not.

There's no one size fits all here. For some of us, the complication is really fun and rewarding.
Bogle: Smart Beta is stupid

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Re: Are complicated credit card cash back strategies worth it?

Post by stoptothink » Thu Nov 21, 2019 1:15 pm

Ivygirl wrote:
Thu Nov 21, 2019 1:05 pm
stoptothink wrote:
Thu Nov 21, 2019 12:41 pm
Ivygirl wrote:
Thu Nov 21, 2019 12:35 pm


Simplicity is better. Pay for what you use. Earn before you spend. Don't believe in free money, but give value for what you get. This is how poor people and people of modest means get through to some wealth. Not by accepting the invitation from the city slicker to play poker back in the smoking car.
What's with the generalized definitive statements? Clearly, for several people in this thread alone, "simplicity" is not better.
I like this question.

Is simplicity in all things, not just money, a superior rule for living? I think it is. Because we were not made to accumulate money. Money would like us to think that is our purpose, so that we will serve it, but we are so much bigger than money.

It would be difficult to remember that, though, while poring over the ultra fine print in a cardmember agreement.
Huh, what relevance does this have in regards to this topic? If you don't think it is worth the hassle, great, that makes it even more worth it to those of us willing to jump through the hoops.

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Re: Are complicated credit card cash back strategies worth it?

Post by Ivygirl » Thu Nov 21, 2019 1:27 pm

stoptothink wrote:
Thu Nov 21, 2019 1:15 pm
Ivygirl wrote:
Thu Nov 21, 2019 1:05 pm
stoptothink wrote:
Thu Nov 21, 2019 12:41 pm
Ivygirl wrote:
Thu Nov 21, 2019 12:35 pm


Simplicity is better. Pay for what you use. Earn before you spend. Don't believe in free money, but give value for what you get. This is how poor people and people of modest means get through to some wealth. Not by accepting the invitation from the city slicker to play poker back in the smoking car.
What's with the generalized definitive statements? Clearly, for several people in this thread alone, "simplicity" is not better.
I like this question.

Is simplicity in all things, not just money, a superior rule for living? I think it is. Because we were not made to accumulate money. Money would like us to think that is our purpose, so that we will serve it, but we are so much bigger than money.

It would be difficult to remember that, though, while poring over the ultra fine print in a cardmember agreement.
Huh, what relevance does this have in regards to this topic? If you don't think it is worth the hassle, great, that makes it even more worth it to those of us willing to jump through the hoops.
You are right, what I said does not directly answer the OP's topic question. It does answer the question you asked though. Which is a better policy overall, simplicity or complexity?

The Bogleheads philosophy is simple. I like it. With it I can build wealth in a way that does not require constant unremitting attention to the tiny details of a system that was in fact designed to extract wealth from me. The financial system can stay complex longer than I can stay solvent.

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Re: Are complicated credit card cash back strategies worth it?

Post by stoptothink » Thu Nov 21, 2019 2:20 pm

Ivygirl wrote:
Thu Nov 21, 2019 1:27 pm
stoptothink wrote:
Thu Nov 21, 2019 1:15 pm
Ivygirl wrote:
Thu Nov 21, 2019 1:05 pm
stoptothink wrote:
Thu Nov 21, 2019 12:41 pm
Ivygirl wrote:
Thu Nov 21, 2019 12:35 pm


Simplicity is better. Pay for what you use. Earn before you spend. Don't believe in free money, but give value for what you get. This is how poor people and people of modest means get through to some wealth. Not by accepting the invitation from the city slicker to play poker back in the smoking car.
What's with the generalized definitive statements? Clearly, for several people in this thread alone, "simplicity" is not better.
I like this question.

Is simplicity in all things, not just money, a superior rule for living? I think it is. Because we were not made to accumulate money. Money would like us to think that is our purpose, so that we will serve it, but we are so much bigger than money.

It would be difficult to remember that, though, while poring over the ultra fine print in a cardmember agreement.
Huh, what relevance does this have in regards to this topic? If you don't think it is worth the hassle, great, that makes it even more worth it to those of us willing to jump through the hoops.
You are right, what I said does not directly answer the OP's topic question. It does answer the question you asked though. Which is a better policy overall, simplicity or complexity?

The Bogleheads philosophy is simple. I like it. With it I can build wealth in a way that does not require constant unremitting attention to the tiny details of a system that was in fact designed to extract wealth from me. The financial system can stay complex longer than I can stay solvent.
My question had nothing to do with whether "simplicity" in general (as a whole life philosophy) is "better", it was whether simplicity in the context of maximizing credit card cash rewards is superior (ie. the topic question of the OP). Clearly for some of us, it isn't complex at all and it is absolutely worth it.

Ivygirl
Posts: 196
Joined: Sun Apr 06, 2014 1:36 pm

Re: Are complicated credit card cash back strategies worth it?

Post by Ivygirl » Thu Nov 21, 2019 2:31 pm

stoptothink wrote:
Thu Nov 21, 2019 2:20 pm
Ivygirl wrote:
Thu Nov 21, 2019 1:27 pm
stoptothink wrote:
Thu Nov 21, 2019 1:15 pm
Ivygirl wrote:
Thu Nov 21, 2019 1:05 pm
stoptothink wrote:
Thu Nov 21, 2019 12:41 pm


What's with the generalized definitive statements? Clearly, for several people in this thread alone, "simplicity" is not better.
I like this question.

Is simplicity in all things, not just money, a superior rule for living? I think it is. Because we were not made to accumulate money. Money would like us to think that is our purpose, so that we will serve it, but we are so much bigger than money.

It would be difficult to remember that, though, while poring over the ultra fine print in a cardmember agreement.
Huh, what relevance does this have in regards to this topic? If you don't think it is worth the hassle, great, that makes it even more worth it to those of us willing to jump through the hoops.
You are right, what I said does not directly answer the OP's topic question. It does answer the question you asked though. Which is a better policy overall, simplicity or complexity?

The Bogleheads philosophy is simple. I like it. With it I can build wealth in a way that does not require constant unremitting attention to the tiny details of a system that was in fact designed to extract wealth from me. The financial system can stay complex longer than I can stay solvent.
My question had nothing to do with whether "simplicity" in general (as a whole life philosophy) is "better", it was whether simplicity in the context of maximizing credit card cash rewards is superior (ie. the topic question of the OP). Clearly for some of us, it isn't complex at all and it is absolutely worth it.
Have you considered in your calculus that the credit card companies are getting smarter and smarter all the time, using data that you and others are giving them, and will eventually devise a trap that will catch even you?

I'm not trying to be quarrelsome, or put you specifically on the spot. I am wondering if the "winners" at the cash back credit card game are playing as long a game as the credit card companies are.

stoptothink
Posts: 6549
Joined: Fri Dec 31, 2010 9:53 am

Re: Are complicated credit card cash back strategies worth it?

Post by stoptothink » Thu Nov 21, 2019 3:58 pm

Ivygirl wrote:
Thu Nov 21, 2019 2:31 pm
stoptothink wrote:
Thu Nov 21, 2019 2:20 pm
Ivygirl wrote:
Thu Nov 21, 2019 1:27 pm
stoptothink wrote:
Thu Nov 21, 2019 1:15 pm
Ivygirl wrote:
Thu Nov 21, 2019 1:05 pm

I like this question.

Is simplicity in all things, not just money, a superior rule for living? I think it is. Because we were not made to accumulate money. Money would like us to think that is our purpose, so that we will serve it, but we are so much bigger than money.

It would be difficult to remember that, though, while poring over the ultra fine print in a cardmember agreement.
Huh, what relevance does this have in regards to this topic? If you don't think it is worth the hassle, great, that makes it even more worth it to those of us willing to jump through the hoops.
You are right, what I said does not directly answer the OP's topic question. It does answer the question you asked though. Which is a better policy overall, simplicity or complexity?

The Bogleheads philosophy is simple. I like it. With it I can build wealth in a way that does not require constant unremitting attention to the tiny details of a system that was in fact designed to extract wealth from me. The financial system can stay complex longer than I can stay solvent.
My question had nothing to do with whether "simplicity" in general (as a whole life philosophy) is "better", it was whether simplicity in the context of maximizing credit card cash rewards is superior (ie. the topic question of the OP). Clearly for some of us, it isn't complex at all and it is absolutely worth it.
Have you considered in your calculus that the credit card companies are getting smarter and smarter all the time, using data that you and others are giving them, and will eventually devise a trap that will catch even you?

I'm not trying to be quarrelsome, or put you specifically on the spot. I am wondering if the "winners" at the cash back credit card game are playing as long a game as the credit card companies are.
Yes, you very clearly are trying to be quarrelsome as you keep going off on totally pointless tangents. Really, it is OK for you to think that CCs are the devil while many of us may be greatly benefiting from the use of them. Doesn't make anybody wrong.

H-Town
Posts: 2126
Joined: Sun Feb 26, 2017 2:08 pm

Re: Are complicated credit card cash back strategies worth it?

Post by H-Town » Thu Nov 21, 2019 4:00 pm

Ivygirl wrote:
Thu Nov 21, 2019 10:48 am
I wouldn't be too quick to pooh-pooh the psychological effects of cash-back strategies (credit card or otherwise), or assume that only the foolish, weak, or extravagant can be swayed to spend too much. There is also the effect of legitimate pent-up desire. Which people of modest incomes have and people with high incomes do not.

The credit card companies want to catch everybody. That includes those who are generally frugal, careful, and wise, people who would not normally be a resource for extraction. A "reward" looks like a way to get things without being foolish or extravagant, but it has a hidden hook for the poor or those who have to be very careful with money. We have spent a lot of time saying "no" to ourselves, about a lot of things that we see others enjoying freely - harmless things, happy things, like vacations or picking up a friend's breakfast tab or buying the good cheese - and the power of desire against the dam of prudence is very great. It only takes a little hole. A small derangement. The credit card company would like to introduce that derangement into the discipline that was very hard gained, because otherwise they have no way of catching the frugal and careful. They have to introduce a temptation, even if it means they pay a few pennies to do that.

Simplicity leads to better decisions. A person with a modest income can be as frugal, careful, and wise as you please, but still cannot afford to hang out socially with a credit card company.
It's foolish for people have zero financial disciplines to use credit cards and their reward programs.

On the other hand, it's also foolish if you don't take the free bonus and rewards if you are discipline with your finance. I keep track of my spending religiously for the past 10 years and I haven't seen my spending habit affected by credit card bonus program. If anything, I have a nice tax free cash back & bonus that I can use some of it towards charitable donations.

So I see your point of view when you keep fighting against credit card companies. As long as those credit card companies offer me good bonus and reward program, I continue using their products.

EnjoyIt
Posts: 2889
Joined: Sun Dec 29, 2013 8:06 pm

Re: Are complicated credit card cash back strategies worth it?

Post by EnjoyIt » Thu Nov 21, 2019 4:11 pm

Ivygirl wrote:
Thu Nov 21, 2019 11:04 am
EnjoyIt wrote:
Thu Nov 21, 2019 10:54 am
Ivygirl wrote:
Thu Nov 21, 2019 10:48 am
I wouldn't be too quick to pooh-pooh the psychological effects of cash-back strategies (credit card or otherwise), or assume that only the foolish, weak, or extravagant can be swayed to spend too much. There is also the effect of legitimate pent-up desire. Which people of modest incomes have and people with high incomes do not.

The credit card companies want to catch everybody. That includes those who are generally frugal, careful, and wise, people who would not normally be a resource for extraction. A "reward" looks like a way to get things without being foolish or extravagant, but it has a hidden hook for the poor or those who have to be very careful with money. We have spent a lot of time saying "no" to ourselves, about a lot of things that we see others enjoying freely - harmless things, happy things, like vacations or picking up a friend's breakfast tab or buying the good cheese - and the power of desire against the dam of prudence is very great. It only takes a little hole. A small derangement. The credit card company would like to introduce that derangement into the discipline that was very hard gained, because otherwise they have no way of catching the frugal and careful. They have to introduce a temptation, even if it means they pay a few pennies to do that.

Simplicity leads to better decisions. A person with a modest income can be as frugal, careful, and wise as you please, but still cannot afford to hang out socially with a credit card company.
Do we spend more because we have a septic credit card strategy? Maybe, I don't know. We have a yearly budget and stick with it. I think even if we do spend a bit more than expected, I would suspect it is far less than the thousands we get in rewards.
If you are getting thousands in "rewards," you are spending hundreds of thousands. Yes?

You have a very high income. You are not in the category of person whose discipline needs to be like a Roman military square, so to speak, invulnerable on all sides and depending that all are doing their duty. It is very boring to be always making grocery lists. It is depressing to be always turning away from the display with the good cheese. Credit card companies know this.
We spend many thousands a month but no where near spending hundreds of thousands. So yes, we are not turning away from the good cheese, but we do buy it at 7.5% off due to some credit card optimizing.

I used to be that guy that turned away from anything gourmet. There was a short time in my life I often ate boxed Mac and cheese using powder milk for the milk. That was dinner for a week for under $2.50. I only wish I knew about credit card churning and optimizing back then.

DiMAn0684
Posts: 131
Joined: Fri Oct 28, 2011 10:27 am

Re: Are complicated credit card cash back strategies worth it?

Post by DiMAn0684 » Thu Nov 21, 2019 4:23 pm

As a person with two dozen credit cards I'd say they complicated strategies are generally not worth it unless you're a high spender. I actively use maybe 2-3 cards, everything else is there either because the value I get out of the card is more than the annual fee (hotel / airline cards) or the ones that offer 5% cashback categories, which, depending on the category, I max out in 1 shopping trip, pay them off, and put them back into the drawer.

Pu239
Posts: 155
Joined: Mon Dec 17, 2018 6:24 pm

Re: Are complicated credit card cash back strategies worth it?

Post by Pu239 » Fri Nov 22, 2019 5:43 pm

Ivygirl wrote:
Thu Nov 21, 2019 2:31 pm

Have you considered in your calculus that the credit card companies are getting smarter and smarter all the time, using data that you and others are giving them, and will eventually devise a trap that will catch even you?

I'm not trying to be quarrelsome, or put you specifically on the spot. I am wondering if the "winners" at the cash back credit card game are playing as long a game as the credit card companies are.
If you have specific information about how cc companies could devise such a trap, please share. What alternatives would you recommend? Is paying and tracking, say 20 or more, individual bills/transactions per month by cash simpler than making one cc payment? Remember that banks also have access to this same payment data if using non-cash methods such as debit cards, checks and electronic transfers. Cash back strategies are a way to extract money out of the financial system; it is better to receive then give, no?

afan
Posts: 4408
Joined: Sun Jul 25, 2010 4:01 pm

Re: Are complicated credit card cash back strategies worth it?

Post by afan » Fri Nov 22, 2019 5:48 pm

I view every new account opened as a chance for identity theft and credit fraud.
I view every new credit account opened as a hit on my credit score.
The dollar amounts are not enough to make it worth these downsides to pursuing these deals.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

stoptothink
Posts: 6549
Joined: Fri Dec 31, 2010 9:53 am

Re: Are complicated credit card cash back strategies worth it?

Post by stoptothink » Fri Nov 22, 2019 5:59 pm

afan wrote:
Fri Nov 22, 2019 5:48 pm
I view every new account opened as a chance for identity theft and credit fraud.
I view every new credit account opened as a hit on my credit score.
The dollar amounts are not enough to make it worth these downsides to pursuing these deals.
My credit score has actually gone up since I started churning 2yrs ago. Not that low-800's to near mid-800's changes anything.

Ivygirl
Posts: 196
Joined: Sun Apr 06, 2014 1:36 pm

Re: Are complicated credit card cash back strategies worth it?

Post by Ivygirl » Fri Nov 22, 2019 9:39 pm

Pu239 wrote:
Fri Nov 22, 2019 5:43 pm
Ivygirl wrote:
Thu Nov 21, 2019 2:31 pm

Have you considered in your calculus that the credit card companies are getting smarter and smarter all the time, using data that you and others are giving them, and will eventually devise a trap that will catch even you?

I'm not trying to be quarrelsome, or put you specifically on the spot. I am wondering if the "winners" at the cash back credit card game are playing as long a game as the credit card companies are.
If you have specific information about how cc companies could devise such a trap, please share. What alternatives would you recommend? Is paying and tracking, say 20 or more, individual bills/transactions per month by cash simpler than making one cc payment? Remember that banks also have access to this same payment data if using non-cash methods such as debit cards, checks and electronic transfers. Cash back strategies are a way to extract money out of the financial system; it is better to receive then give, no?
Cash back strategies are certainly a way of extracting money, but not from the financial system. Or do you think they are paying you out of their own pocket? Surely not.

Fifty percent of American households have revolving (not paid off monthly) credit card debt in the amount of $6,849 each. Each such household will pay $1,141 in interest in a year. This is the first source I found.

https://www.nerdwallet.com/blog/average ... hold/#foot

I believe the correct adage is actually, "It is better to give than to receive." Do you sincerely believe the opposite? That these debtors should buy your meals and subsidize your vacations? Do you mean to return the favor any time soon?

Can you tell me why you should be paid for spending money? Does this seem natural to you?

Is 2% cash enough to turn off your desire to see the form of this thing?

JJ577472
Posts: 3
Joined: Fri Aug 16, 2019 10:38 am

Re: Are complicated credit card cash back strategies worth it?

Post by JJ577472 » Sat Nov 23, 2019 5:59 am

Ivygirl wrote:
Fri Nov 22, 2019 9:39 pm
Pu239 wrote:
Fri Nov 22, 2019 5:43 pm
Ivygirl wrote:
Thu Nov 21, 2019 2:31 pm

Have you considered in your calculus that the credit card companies are getting smarter and smarter all the time, using data that you and others are giving them, and will eventually devise a trap that will catch even you?

I'm not trying to be quarrelsome, or put you specifically on the spot. I am wondering if the "winners" at the cash back credit card game are playing as long a game as the credit card companies are.
If you have specific information about how cc companies could devise such a trap, please share. What alternatives would you recommend? Is paying and tracking, say 20 or more, individual bills/transactions per month by cash simpler than making one cc payment? Remember that banks also have access to this same payment data if using non-cash methods such as debit cards, checks and electronic transfers. Cash back strategies are a way to extract money out of the financial system; it is better to receive then give, no?
Cash back strategies are certainly a way of extracting money, but not from the financial system. Or do you think they are paying you out of their own pocket? Surely not.

Fifty percent of American households have revolving (not paid off monthly) credit card debt in the amount of $6,849 each. Each such household will pay $1,141 in interest in a year. This is the first source I found.

https://www.nerdwallet.com/blog/average ... hold/#foot

I believe the correct adage is actually, "It is better to give than to receive." Do you sincerely believe the opposite? That these debtors should buy your meals and subsidize your vacations? Do you mean to return the favor any time soon?

Can you tell me why you should be paid for spending money? Does this seem natural to you?

Is 2% cash enough to turn off your desire to see the form of this thing?
Words of Wisdom, Well put. :)

Lastrun
Posts: 170
Joined: Wed May 03, 2017 6:46 pm

Re: Are complicated credit card cash back strategies worth it?

Post by Lastrun » Sat Nov 23, 2019 6:23 am

Ivygirl wrote:
Fri Nov 22, 2019 9:39 pm

I believe the correct adage is actually, "It is better to give than to receive." Do you sincerely believe the opposite? That these debtors should buy your meals and subsidize your vacations? Do you mean to return the favor any time soon?

Can you tell me why you should be paid for spending money? Does this seem natural to you?
Yes, since these rewards plans are considered purchase price reductions, (at least by the IRS), it seems natural to me. To me this is no different than any consumer sale or business payment reduction terms (e.g. 2/10 net 30), each of which are ubiquitous in all areas of the US economy. I am also curious why one would find it OK to be paid not to consume, (interest), but not OK to be paid to consume. I am sympathetic to the overall concern. Credit card interest rates today are unconscionable.

and yes, I think these programs are worth it to a degree. I think everyone should at least have a basic card from Fidelity, BofA or Citi.

Tallis
Posts: 81
Joined: Tue Mar 29, 2016 7:23 pm

Re: Are complicated credit card cash back strategies worth it?

Post by Tallis » Sat Nov 23, 2019 12:09 pm

Ivygirl wrote:
Fri Nov 22, 2019 9:39 pm
I believe the correct adage is actually, "It is better to give than to receive." Do you sincerely believe the opposite? That these debtors should buy your meals and subsidize your vacations? Do you mean to return the favor any time soon?

Can you tell me why you should be paid for spending money? Does this seem natural to you?

Is 2% cash enough to turn off your desire to see the form of this thing?
I'd agree with you if it were the case that my forgoing credit card rebates would help debtors. I can't see the connection though. If I paid cash for everything that wouldn't lower the interest rate on one account. I'd just be out that money.

That goes against another useful adage: "Don't leave money on the table."

I agree that anyone who can should at least get a 2% rebate card. Anything past that is more a hobby than a remunerative investment of time.

Pu239
Posts: 155
Joined: Mon Dec 17, 2018 6:24 pm

Re: Are complicated credit card cash back strategies worth it?

Post by Pu239 » Sat Nov 23, 2019 1:18 pm

Ivygirl wrote:
Fri Nov 22, 2019 9:39 pm
Pu239 wrote:
Fri Nov 22, 2019 5:43 pm
Ivygirl wrote:
Thu Nov 21, 2019 2:31 pm

Have you considered in your calculus that the credit card companies are getting smarter and smarter all the time, using data that you and others are giving them, and will eventually devise a trap that will catch even you?

I'm not trying to be quarrelsome, or put you specifically on the spot. I am wondering if the "winners" at the cash back credit card game are playing as long a game as the credit card companies are.
If you have specific information about how cc companies could devise such a trap, please share. What alternatives would you recommend? Is paying and tracking, say 20 or more, individual bills/transactions per month by cash simpler than making one cc payment? Remember that banks also have access to this same payment data if using non-cash methods such as debit cards, checks and electronic transfers. Cash back strategies are a way to extract money out of the financial system; it is better to receive then give, no?
Cash back strategies are certainly a way of extracting money, but not from the financial system. Or do you think they are paying you out of their own pocket? Surely not.

Fifty percent of American households have revolving (not paid off monthly) credit card debt in the amount of $6,849 each. Each such household will pay $1,141 in interest in a year. This is the first source I found.

https://www.nerdwallet.com/blog/average ... hold/#foot

I believe the correct adage is actually, "It is better to give than to receive." Do you sincerely believe the opposite? That these debtors should buy your meals and subsidize your vacations? Do you mean to return the favor any time soon?

Can you tell me why you should be paid for spending money? Does this seem natural to you?

Is 2% cash enough to turn off your desire to see the form of this thing?
If the cash back percentage (2% in your example) is less than what the credit card companies charge merchants, then no money is coming from card holders who pay interest; it is a purchase price reduction, as pointed out by Lastrun. Owning low-cost stock index mutual funds is a bedrock philosophy for many, if not most, bogleheads. These funds contain the stocks of cc companies and the banks that issue them. Should we shun any mutual funds containing cc and bank stocks so we won't profit from them because half of cardholders can't pay off their bill every month? Money not paid out as cash rewards is retained by the cc company making them more profitable. This situation is better than paying out the rewards to responsible cardholders? In this regard, I think it is better to receive than give. If anything, I am subsidized by stockholders, not debtors.

With regard to being paid for spending money using cc's, I'm being paid because I take on additional risk using this payment method. If I don't pay on time or for a number of other reasons, I will pay out interest and lose money. With greater risk comes the potential for greater return so it is appropriate for cardholders to receive payment and, I believe, quite natural.

I'm still curious how avoiding cc's can simplify my financial life and look forward to learning about ways I can do this. I hope you will take the time to answer my previous questions asking how this is done without banks collecting data about my spending habits.

Locked