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Getting the most from Rewards Cards
My wife and I have only 2 credit cards. Both offer rewards. One offers 3% cash back on groceries and 2% cash back on department stores. The other offers 4% on gasoline, 3% on restaurants and travel, 2% at the co-branded (sponsoring) merchant store and 1% cash back everywhere else. We use these credit cards in lieu of checks or debit card, not only for the rewards but for security. We ran $31,000 through the cards in 2015 and earned approximately $2,000. That's like putting an extra $2K in untaxable income in your pocket! Do not overlook rewards cards. Combined with in-store membership credits it has a compounding effect. So if you shop at a particular store then take all you can get. It adds up!
"..... I use a single credit card for all medical expenses. All the other expenses go on a different card...".
Nothing wrong with that idea. In the interest of the OP, your goal then is to make sure you have a rewards card that pays the most in rewards for your medical expenses. Most cards would have a standard 1% rebate. But some cards would give you 2%. Doesn't sound like much, but it all adds up.
Of course, it makes a difference if you're carrying a balance....................
"...Why is everyone a victim? Take personal responsibility for your life..."
Like the original poster, DW and I maintain two cards only. I could, as some do, get more cards and increase cash rewards by picking the card that would give me the most back. But, it's too easy to be hacked, too many accounts to check. One card is used for travel overseas as it does not charge foreign transaction fees.
I have used credit cards for 40+ years, and have 10's of thousands of dollars back over that time in cash back or another equivalent.
I've never had a debit card. As has been discussed many times in the past, they are not protected as credit cards are. In 40+ years, I have never paid a single cent in interest. That's another bonus to cc's. If you use them, pay them off, your credit score goes up and allows you better loan rates such as new car purchase. You again, save money for being a good credit risk.
"...Why is everyone a victim? Take personal responsibility for your life..."
I finally caved and went with a rewards card. It was simply because I felt like I was paying for everyone else to own one. The cost of goods everywhere continues to increase and I feel these rewards cards, coupons, etc are a good part of the reason why. I've not been dissapointed in the results. There are some caveats I learned in my research, some things to read in the fine print. Most cards do not consider WalMart or Target or Sams, etc a grocery store, so look for exclusions in the card terms. They also do not consider Sams or BJs gas stations. We do a lot of shopping at warehouse clubs and almost exclusively gas up at them. I found cards that offered a little less in percentage rewards but where the rewards were good for everything to be better for us than the cards offering higer rates on specifics like groceries, gas, travel, etc. I got rid of my debit card, dangerous to carry!
TALK ABOUT GETTING REWARDS? MAYBE the focus might be better placed on earning a bonus for taking out new credit cards? You have to meet the spending requirements - - but with dental expenses, travel, etc, it's pretty easy! Since March of this year I have collected almost $1700 in bonuses!
- 112.18 Chase Promo 4/1 (StatementCredit)
- 108.33 CapOne 3/18 (Rcvd check)
- 207.50 CapOne Quicksilver 7/22 (Rcvd check)
- 217.52 CapOne Quicksilver 7/1 (Rcvd check)
- 106.40 CapOne Venture 8/4 (Rcvd check)
- 106.00 BofA Cash Rewards 3/8 (StatementCredit)
- 105.69 BofA Susan Komen 6/26 (Rcvd check)
- 130.00 BofA AmTrak 2/25 (Transfered to my AmTrak acct)
- 109.00 Barclay Cash Forward 3/5 (StatementCredit)
- 106.52 Barclay NFL 49ers 4/19 (Rcvd check)
- 150.00 AMEX Blue 3/10 (StatementCredit)
- 117.50 TD Ameritrade 6/4 (Rcvd check)
- 110.00 Santander 8/26 (StatementCredit)
AND...to top it all off - - I transferred all of this debt to my new Chase Slate card. The transfers cost me NOTHING! And there is no interest being charged on this debt until after July 2017! Of course, you have to have pretty good FICO scores just to get them to issue you their cards.
CAN YOU TOP THIS??
FYI, your points or rewards are not given to you by the credit card companies. The stores or services where you use these cards are charged MORE in percantages than non-reward cards. Why do you think some gas stations charge a higher price if you do not pay with cash? Or why Walmart took so long to take credit cards? Yes, trips or points may be nice, but you force the retailers to charge more for their goods, probably wiping out your real savings on that trip/car/cashbacks.
It is worth remembering the subject of this conversation was "Getting the most from Rewards Cards". In most cases when one wants to buy something the choice given for payment is "Do you want to pay in cash or with a credit card?" Not, "Do you want to pay with a credit card or pay less in cash?" (Some gas stations are the rare exceptions.) In my experience, stores that only accept cash have some reasons for doing that other than to offer a lower price (e.g. they are the only game in town). So, given the choice between paying cash or the same price on a credit card, it only makes sense to get the best kickback you can by using the credit card. Given the competitive nature of the credit card business, that is often more than the card company is charging the merchant due to promotions of one sort or another and this thread is about maximizing that return.
Hmm, do you know any top notch cruise lines that charge less if you pay cash? Maybe Amazon (or Walmart) charges you less for paying cash? Hotels? So, if you do not get a break for paying cash at most places, and you do get rewards, why would anyone pay cash?
Do merchants that accept cards pay fees? Certainly. Do they incorporate those fees into the cost of doing business and extract it from all of their customers? Most certainly, regardless of how they pay. So one can run around looking for places that give a discount for cash, but in this day and age, they are few and far between.
I find it advantgeous to have many cards. We travel. One card gives me gold status at one hotel chain. Another gives gold status at another chain. Two give 2% cashback on everything. Several give 5% in various categories and for various merchants that change each quarter. Airline cards let you fly business or first class for a little tax (if you are willing to plan ahead and work at it). One gives 3% cashback for travel (including cruises). One gives 3 points per $ for chaitable contributions. Several have no foreign transaction fees. Most of them come with benefits like extended warranties, travel insurance, etc. with some significant differences between cards.
For most of the cards, either they have no annual fee or you can call and say you are thinking of cancelling and they will offer to waive the annual fee. You have to be willing to follow through and cancel, but if you have several cards you will not have a problem with that.
Obvously you have to pay all card balances every month so you don't have interest charges.
Anyone who does not use reward cards to the maximum is just plain crazy. It's a competitive business, so take full advantage of it. I don't like cards that give points for travel, etc. Cash impresses me a whole lot more. It may take some research to determine which cards give the most value, but it's well worth a few minutes to decide what works best. If you travel, be sure to use only cards that don't charge a currency exchange fee. Also look for cards that have a rental car insurance program that saves money. Remember, your regular auto insurance probably doesn't cover you outside the U.S. Two or three credit cards should be enough for just about anybody, so make sure they each have something to add value to carrying them. Never, never, never own a debit card; that's the biggest ripoff ever. Always, always, always pay off your credit cards in full before the due date each month. Keep in mind that different credit card companies have very different policies when it comes to dispute resolutions (AMEX seems to be by far the most consumer friendly; VISA is very merchant friendly.) Watch for warranty automatic extensions where available. Be smart, save money. Most people would be astounded at how much it all adds up to.
Can we have the name of the credit cards mentioned and their respective annual fees (if any) indicated as well. Thnx
The one I mentioned is Blue Cash Preferred from American Express. They do charge a $75 annual fee, but the increase in grocery store cash back from 3% on their free card to 6% on this card more than makes up for it. The card also gives 3% cash back at gas stations and "select department stores" and 1% on everything else.
You have to be careful and do your homework to get the most from these cards. Traveling? Taking a cruise, perhaps? It turns out that most credit card rewards programs do not include cruises in the travel expense category. They are not just giving examples of travel expenses in the fine print, they are listing the only expenses that will qualify! One of the two cards mentioned (the one that gives 3% on travel) does include cruises in the travel category. However, you should not stop there. The travel insurance offered by different cards varies greatly. The above mentioned card has a limit of $3000 per person for trip insurance coverage and only covers you to the amount spent on that card (in case you split the cost on multiple cards) other cards have higher limits and/or cover the whole cost if the charges for the trip are split. The bottom line is, read the fine print before deciding which card to use for charges.
If you book a program through the popular Road Scholar company and pay with your Chase Sapphire Reward Card, you will not receive double reward points because Road Scholar is considered to be "educational travel" even though if you booked the same trip on your own it would be considered to be travel for getting the double reward points. Paying $95.00 a year for this Chase card is not worth it to me because of this policy.
We have a card that gives 6% back on up to $6,000 spent in grocery stores per year; so I buy gift cards for places like Target, Amazon, and Shell gas at the grocery store, which is the same as saving 6% at those stores too. Plus, my grocery store gives points to use towards gas purchases at Shell and often runs 4X points promotions on gift cards. So a $100 Shell gift card can earn me $0.40 off per gallon of gas using the fuel points, plus I get $6.00 back on my credit card. The savings really add up.
Just to give an example of the compounding effect without naming the merchant's name. I've a grocery store membership, as I'm sure most of you do. My store gives 10 cents off gasoline for every $100 purchased. It's not uncommon for my wife and I to rack up 40 cents in gasoline credits in a typical month. We each have a car so we use them. And when we pay for gasoline we use the card having the 4% cash back on gas feature. It's a double whammy!
Another example involves car rental. We travel a bit since we retired. Whenever we rent a car we rent it through our car insurance website. All major car rental agencies are listed, and when you rent a car they offer a promotional code. I've yet to find anyone who can beat my car insurance company on price. And when we go to pay for the rental we use the credit card which offers 3% cash back on travel. Again, it's the compounding effect. It all adds up.