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 Post subject: CC rewards or cash back cards do GRS people do this?
PostPosted: Wed Jul 16, 2008 10:57 am 

Joined: Wed Feb 06, 2008 3:38 pm
Posts: 34
I'm considering getting some CC's with cash back rewards and paying as much as I can with them while keeping within the boundries of our current budget. I know DR would be totally against this that the risk is to great versus the reward. I would be paying off the cards before incurring interest. I found a site that finds the best cards and returns based off expenses. It calculated $55 each month in cash back based off the following expenses.

So the basics are:

HOA $117
UTILITIES $215
PHONE $95
GROCERIES $350
RESTAURANTS $80
GAS $450
INSURANCE $165
MISC $75
GIFTS $70
ENTERTAINMENT $75

So that's 1,692 bucks worth bills gas food eat out misc everything that I should be able to use a card for.

The rest of the money goes to mortgage, the truck payment, and extra to the truck principal. None of which accept cards as forms of payment.

I checked out mr credit card a website and it shows that with three different cards the most I could save would be $55 a month based off those amounts.

$660.00 a year seems worth it.


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PostPosted: Wed Jul 16, 2008 11:23 am 

Joined: Wed Jul 16, 2008 6:51 am
Posts: 52
I have the value card, which offers the lowest rate. If you don't plan to carry a balance then go with the best rewards offer.


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PostPosted: Wed Jul 16, 2008 11:23 am 

Joined: Tue May 06, 2008 12:30 am
Posts: 19
Location: Cali, of course!
We use a credit card with rewards\cash back too. It seems worth it to me since we pay off the balance every month. And we don't go out of our way to purchase extra things that we ordinarily wouldn't buy just for the cash back, so it's fine for us.

IMO if having such a card makes you spend more than you would otherwise, then it's not worth it. If you can keep your spending at the usual level, then by all means, get some money back while you're at it. It's better than not getting any money back. Just note that some of those rewards cards do have an annual fee.

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PostPosted: Wed Jul 16, 2008 11:50 am 

Joined: Tue Sep 18, 2007 12:27 pm
Posts: 354
$450 GAS - Wow, that is a lot of driving each month. Even at $4.50 a gallon, that seems to me at least 2000 miles each month.


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PostPosted: Wed Jul 16, 2008 12:13 pm 

Joined: Fri Nov 02, 2007 9:38 am
Posts: 280
For the last few years I have used my rewards card for most purchases. I save the points and use them for holiday gifts. (With Amex rewards, I get the most for my money by purchasing store gift cards.)

However, I found a story in this month's Money (maybe?) about how people tend to do better with budgeting if they use cash instead of a credit card paid in full at the end of themonth. Dh & I are going to try paying in cash for a few months so that we can test their theory.


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PostPosted: Wed Jul 16, 2008 12:21 pm 

Joined: Fri May 18, 2007 8:25 am
Posts: 520
Location: Santa Barbara
I think it's definitely worth getting a card with rewards. I like my Chase Freedom. But I'd only really consider getting 3 cards to optimize your rewards if it's really easy to do and you're responsible. For instance, you can pay most utilities automatically online, so you can set this up for the most rewarding credit card. But going out to a restaurant and fumbling through your cards to try to figure out which one is best might be asking too much.

I only have one card, but I've considered adding the Costco Amex for Costco purchases, 3% at restaurants, and 2% on travel. (It also gives 3% for gas, but my Chase already have that covered.)

Ryan


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PostPosted: Wed Jul 16, 2008 12:46 pm 

Joined: Tue Jul 01, 2008 10:19 am
Posts: 49
Location: New Jersey
I have a Citi card with rewards that I only use for big purchase. So once the end of the year comes, I "treat" myself to one of the rewards.

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PostPosted: Wed Jul 16, 2008 1:28 pm 
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Joined: Thu Apr 05, 2007 5:20 am
Posts: 515
Location: Birmingham, AL
We've earned $430+ over the past 12 months using http://www.nodebtplan.net/2008/06/25/434-86-in-absolutely-free-money/.

Not half bad if you ask me! It's going towards our emergency fund when we get it...

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PostPosted: Wed Jul 16, 2008 2:08 pm 

Joined: Fri Jul 20, 2007 3:53 pm
Posts: 38
Location: Jackson Heights, NY
It's a good strategy and it worked well for me in the past. Unfortunately, most of my payments have been drifting toward EFT as opposed to CC. I am definitely missing out on a lot of reward money.

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PostPosted: Wed Jul 16, 2008 2:23 pm 

Joined: Wed Feb 06, 2008 3:38 pm
Posts: 34
kmull wrote:
We've earned $430+ over the past 12 months using http://www.nodebtplan.net/2008/06/25/434-86-in-absolutely-free-money/.

Not half bad if you ask me! It's going towards our emergency fund when we get it...


Sounds awesome! So can you shop at walmart and have that count towards your "groceries" portion of the 6,500 a year tier?

marsman57
450 GAS - Wow, that is a lot of driving each month. Even at $4.50 a gallon, that seems to me at least 2000 miles each month.

We use $350.00 worth for our daily commutes to work two vehicles. One car gets 28 average mpg the truck gets like 15mpg. The other 100 bucks goes towards usually one montly trip out of town to go visit family. I think our gas budget is quite low compared to most?


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PostPosted: Wed Jul 16, 2008 2:26 pm 

Joined: Sun Apr 15, 2007 3:56 pm
Posts: 322
Location: left coast
i just upgraded to a world mastercard from my bank (travel and rewards points).. linked directly to my checking so i can make payments whenever i want to


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PostPosted: Thu Jul 17, 2008 5:41 pm 
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Joined: Thu Jun 05, 2008 9:46 am
Posts: 176
I find that I spend a lot less when I pay cash instead of using a card. It's worth considering whether you could trim more than $55 from your monthly discretionary spending by using cash. One nice compromise is to put non-discretionary, recurring expenses (such as utilities and insurance) on a credit card for the rewards, and paying cash for everything else.


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PostPosted: Thu Jul 17, 2008 6:14 pm 

Joined: Tue Apr 24, 2007 9:08 am
Posts: 22
Location: State Prison
johnny:

depending on your credit history and worthiness, it may not be a good idea to apply for three brand new credit cards so you can juggle different reward cards. if it won't hurt your credit and you won't be applying for any large loan soon, than you can try the separate CC route, provided you can properly juggle the different transactions.

I recommend finding a one size fit all card, the Blue Cash back card from amex is actually a decent fit for you (w/ the new, simpler tier rate), as after about 4 months, you'll hit the 5% category for gas and groceries (thats $40 back each month for you) and another $13 for other charges (so $53 total each month, after you break the $6,500 in spending tier limit). finally, the card has no limits on cashback.

check the thread at fatwallet for a list of rewards/cashback cards (split into different spending categories):

http://www.fatwallet.com/forums/finance/711457/

I have two chase freedom card that I juggle, although I think I may convert my blue from amex to blue cash and just use that solely as my cashback card.

finally, a few tidbits on using reward/cashback cards:

    1. reward/cash back CCs will usually have much higher APR than ones w/o
    2. if you don't pay off you bill fully, any reward/cash back you've accumulated will quickly be a moot point
    3. many cards have limits on their rewards, especially their higher % back bonuses (like those 5% backs). check carefully.

hope this helps some. if you need more info, leave a response here, PM me, or try sending a note to cap at stopbuyingcrap dot com


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PostPosted: Thu Jul 17, 2008 8:45 pm 

Joined: Fri Mar 14, 2008 12:44 am
Posts: 216
Using a card for rewards isn't risky at all if you don't have a spending problem, in my experience anyway. We have Chase with Amazon rewards points and it's awesome. I just used a rewards certificate to buy a couple gifts for family, free shipping, only a couple dollars cost to me. So I get to purchase things I'd have had to buy anyway and then use the rewards to either gets things I want, or to get things (like gifts) that I'd get anyway also.

(Btw, our gas bill each month is <80. So I think "low" is totally relative here . And yes, we both have cars and drive, we just limit it as much as possible). :lol:


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PostPosted: Fri Jul 18, 2008 5:43 am 

Joined: Sun Feb 24, 2008 3:32 pm
Posts: 205
I use my rewards/cash back card for everything I can, and then trade in the cash back for gift cards that are worth more than the face value, even up to double, so I've been able to buy clothes and other necessities with them.

The only thing, one of the credit bureaus dinged me a little on my score because they said I had too high of a balance on my card every month (even though I pay it off every month). The other two bureaus didn't mention that (and their scores were higher).

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