Credit Card with rewards?

[zoiks]

Originally posted by: JEDI

Originally posted by: zoiks

Originally posted by: JEDI

Originally posted by: Maverick2002
Does anyone use a credit card with rewards? I've only ever had 1 card, and always with my bank, but never had any sort of rewards. I use it for most of my purchases, so it definitely sees a lot of activity. I have 2 questions:


1) If I get a credit card not through my bank, can I still manage it online via my bank's system?

2) Are credit card rewards worth it? Does anyone use one with rewards? What are the typical rewards (like cashback, or discounts, or what)?

best general credit card is 2% rewards on EVERYTHING:
<a target=_blank class=ftalternatingbarlinklarge href="https://www.hsbcapply.com/s......bankfoxtrot?media="><a target=_blank class=ftalternatingbarlinklarge href="https://www.hsbcapply.com/star...hardbankfoxtrot?media="><a target=_blank class=ftalternatingbarlinklarge href="https://www.hsbcapply.com/start/orchardbankfoxtrot?media=">https://www.hsbcapply............rot?media=</a></a></a>

then u need a 2nd credit card that gives 5% cashback on gas:
Penfed

The hsbc card would be good but it has a reward cap of $400/yr.

that's $20000 :Q

my biggest expense by far is my mortgage. and they dont take credit cards

I think I charge over 20k every year on my credit card. My average miles that I accrue (1 $ to 1 mile) is about 2500/month.

 

[dullard]

Originally posted by: JEDI
does Chase Freedom work for Walmart?

ie:
if walmart is the ONLY store you use this credit card with, do you get the 3%?

Each store decides what category that the store fits best. It would be too much work for Chase to determine a category for every single business in the world. Walmart thus gets to choose what category to use for the purchase.

Most stores that I've seen just use one category. So while my local gas station sells both gas and groceries, it usually just puts all purchases in the gas category.

It is conceivable that Walmart could (1) put in-store purchases in either the grocery category or department store category (2) put at-the-pump purchases in the gas category, and (3) car repairs into the beauty supply category (hey, they don't have to be accurate). But, I bet that Walmart wouldn't take the time to be that exact and would just dump them into one category.

You get 3% in your top 3 of 15 categories, so you'd probably get 3% even if the store called the purchases different categories.

NOTE: Just like virtually all other reward cards, Chase has a special deal with the biggest retailers (places like SAM's Walmart and Costco). Chase (and Discover and others) charge these superstores less fees. But, you get less rewards. All credit card applications that I've seen say that purchases at these locations receive less than the full reward. With Chase, you only get 1.25% at Walmart.

 

[mchammer187]

Everyone that has a car should get a Penfed credit card 5% back on gas and I even get it at Sam's Club gas which is was $.70 cheaper (for premuim) than a gas station down the road. AFAIK there is no limit.

Not only that it is credited to you immediately they just take it off what you owe that month.

I know Amex disqualifies gas purchases from supermarkets and club stores (like costco/ sam's)

 

[dullard]

Originally posted by: zoiks
I think I charge over 20k every year on my credit card. My average miles that I accrue (1 $ to 1 mile) is about 2500/month.

Like several have said above, big spenders do better with other cards. I know that American Express Blue offers more rewards (5%) but only if you are a big spender. Eventually, you can look into the black card if you are a really, really big spender.

 

[LS21]

Originally posted by: zoiks


I researched all the credit cards that offer rewards but almost all of them couldn't provide a good miles redemption rate for the rewards.
For example, my citibank professional card offers 1 mile for each dollar spent (outside of the few places you get double or triple miles). I checked and found that in the summer if I wanted to go to Europe from SFO, I needed 131000 points.

There are many travel cards.

If you choose an airline card, you are locked into an airline, and their redemption system

If you use a "points" system, and redeem points for travel, the redemption rate might be high

If you are targeting flights, you want a points system that transfers favorably to any airline. One example is using a Starwood card that accumulates Starwood points, or use an Amex card that accumulates Membership Rewards points.

This gives you flexibility needed each time you want to reserve a flight. For example, one airline might charge 80,000 to go to Europe, while another charge 60,000. You simply take your Starwood or MR points and transfer 60,000 to the other airline.

You really neednt spend 130,000 points for a Europe trip..that is terrible...

 

[zoiks]

Originally posted by: dullard

Originally posted by: zoiks
I think I charge over 20k every year on my credit card. My average miles that I accrue (1 $ to 1 mile) is about 2500/month.

Like several have said above, big spenders do better with other cards. I know that American Express Blue offers more rewards (5%) but only if you are a big spender. Eventually, you can look into the black card if you are a really, really big spender.

Heh. I don't make that much money for the big black card.
I'll look into Blue. They sent me something in the mail on it.

 

[Special K]

Originally posted by: JEDI

Originally posted by: dullard
1) Yes, they are worth it. For example, I got my Chase Freedom card about 1.5 years ago and I have already received $500 in cold hard cash from them. Absolutely free. I didn't spend much either to get that, nothing that I wouldn't have already spent. If ~$250/year for doing nothing sounds good to you, then you should consider a reward card.

2) As noted above, credit cards with rewards come with high interest rates. Thus, NEVER ever use this for anything that you don't intend to purchase anyways and that you have cash to pay off when you get the bill. If you really must keep a balance, have another credit card with a low interest rate for your balances (but really, you should avoid that as well).

3) Yes, you can pay it through your bank online. Or, just like almost any other bill you can pay it through the other company's website. This latter option is a little bit more work (you have to actually sign in at least once in your lifetime to a website), but you never have to worry about your bank changing their fee structure for their website like banks love to do. Heck, I refuse to use my bank's bill pay to make certain that I never have any bank fees. It is just as convenient to pay from the other end.

4) For most people, the best reward card out there is Chase Freedom. Click me! You earn 3% cash back on your biggest categories each month and 1% back in all other categories. On top of that, if you let the reward accumulate to $200 they give you a bonus $50 (effectively making it a 3.75%/1.25% cash back card). Also, right now they give you $50 for your first purchase. So, if you get the card now then spend $5000 over the next few months/years, you'll get $250 in cash back ($50 signup + $5000*3% + $50 bonus = $250).

5) Yes, if you are a big spender, there are better reward cards. But those don't work well for most people.

does Chase Freedom work for Walmart?

ie:
if walmart is the ONLY store you use this credit card with, do you get the 3%?

WalMart doesn't qualify for the 3% rewards. In the future, try checking this thread at Fatwallet that keeps an ongoing list of which merchants qualify for which level of rewards:

link

You can also contact a Chase CSR through the secure message center and they can tell you if a particular transaction number qualifies for the higher level of rewards or not.

 

[LS21]

Originally posted by: zoiks
I think I charge over 20k every year on my credit card. My average miles that I accrue (1 $ to 1 mile) is about 2500/month.

Lets say you spend 25k a year. And due to 1/2/3/5% promotions, you accumulate extra "units" for spending, and ultimately earn 35,000 "rewards units"

You could either get 350$ in cash back, or if you transfer to Continental airlines, you could go New York - Peru roundtrip. THat is a hell of a lot more than 350$

 

[zoiks]

Originally posted by: LS21

Originally posted by: zoiks


I researched all the credit cards that offer rewards but almost all of them couldn't provide a good miles redemption rate for the rewards.
For example, my citibank professional card offers 1 mile for each dollar spent (outside of the few places you get double or triple miles). I checked and found that in the summer if I wanted to go to Europe from SFO, I needed 131000 points.

There are many travel cards.

If you choose an airline card, you are locked into an airline, and their redemption system

If you use a "points" system, and redeem points for travel, the redemption rate might be high

If you are targeting flights, you want a points system that transfers favorably to any airline. One example is using a Starwood card that accumulates Starwood points, or use an Amex card that accumulates Membership Rewards points.

This gives you flexibility needed each time you want to reserve a flight. For example, one airline might charge 80,000 to go to Europe, while another charge 60,000. You simply take your Starwood or MR points and transfer 60,000 to the other airline.

You really neednt spend 130,000 points for a Europe trip..that is terrible...

Yeah 130k pts is a lot. While the BofA card I use is an AlaskaAir card, I get to use it on partner airlines each of which has their own miles redemption rate. I think Continental was the lowest which I used to travel to Spain with. American Air (another partner) charges 60k miles for the same trip.

 

[jonnyGURU]

Originally posted by: dullard

NOTE: Just like virtually all other reward cards, Chase has a special deal with the biggest retailers (places like SAM's Walmart and Costco). Chase (and Discover and others) charge these superstores less fees. But, you get less rewards. All credit card applications that I've seen say that purchases at these locations receive less than the full reward. With Chase, you only get 1.25% at Walmart.

I used to own a retail store and here's my 2 cents...

The fees charged to a retailer are actually assessed by a processing company. Sometimes it's something like 2% + 15¢, for example. The 2% will go to the card-issuing bank while the 15¢ goes to the processing company. Those processing companies don't know the difference between a Chase Visa or a MBNA Visa really. It's just a Visa, vs. a MasterCard, vs. an Amex, etc.

Now, if Chase actually has their own processing division, this is where Chase can really cash in. And maybe they do. I don't know.

I know Discover does this and they charge less for people using Discover and more for people using non-Discover. They then redistribute the higher fees back to the Discover customers in the form of "cash back". Redistribution of wealth. Hmmm... I've heard that somewhere before. At the same time they're depending on the business to encourage customers to use the Discover card since the fees come out of the business's profit. Naturally, when you don't pay your bill at the end of the month, Disocver makes more money off of the interest than they did on the fees they got out of the retailer. They win no matter what.

 

[Maverick2002]

This is all making my head spin a little bit. While miles wouldn't be bad, I'd rather have % cash back if it's even a remotely similar amount.

What qualifies as a big spender? I use my credit card for probably over 95% of my purchases. I charge between $1500-2000/month on it, with my balance either paid off in full every month (sans ~$50 or whatever charges come through while it's being paid off) or have ~$500 on it.

I use it for everything - food, gas, rent, bills, fun money. So, based on this scenario, what kind of card could/should I get?

And with regards to paying it off through a bank, my bank doesn't charge me any fees to pay off the card I have with them (it's not a "billpay" option .. it's just a transfer of funds from a checking to a cc account) ... will this change if a I get a card through someone else?

 

[jonnyGURU]

Originally posted by: Maverick2002
This is all making my head spin a little bit. While miles wouldn't be bad, I'd rather have % cash back if it's even a remotely similar amount.

What qualifies as a big spender? I use my credit card for probably over 95% of my purchases. I charge between $1500-2000/month on it, with my balance either paid off in full every month (sans ~$50 or whatever charges come through while it's being paid off) or have ~$500 on it.

I use it for everything - food, gas, rent, bills, fun money. So, based on this scenario, what kind of card could/should I get?

Sounds a lot like me and I get about $20 to $25 per month. I then turn that into $30 to $40 by cashing that into gift cards (got a huge stack I'm saving up for a new TV).

Originally posted by: Maverick2002
And with regards to paying it off through a bank, my bank doesn't charge me any fees to pay off the card I have with them (it's not a "billpay" option .. it's just a transfer of funds from a checking to a cc account) ... will this change if a I get a card through someone else?

Most bill pay services ARE free. I even pay for my kid's daycare online and that's free. The only company I deal with that charges a fee for online bill pay is ComEd, but they waive that if you sign up for automatic bill pay.

I've never known any credit card company to charge for paying online and I have several myself: Discover, Amex, Chase, MBNA, Citi.... none of them charge a fee.

 

[Maverick2002]

which card to you use?

I'm also vary of having more than 1 credit card. I've only ever had one and don't really feel like messing with several - knowing me that's just asking for trouble.

 

[dullard]

Originally posted by: jonnyGURU
Naturally, when you don't pay your bill at the end of the month, Disocver makes more money off of the interest than they did on the fees they got out of the retailer. They win no matter what.

I have no comments on the rest of your post. But I do have a comment on this post. Discover is nice for this discussion in the fact that it has been a public company for many years. Thus, we have many years of financial statements to look at. Conclusions from those statements:

1) On average Discover just about breaks even on the interest. It is a money maker in some years and a money loser in other years.
2) Thus, just about all of Discover's profit comes from the percentage fee from the retailers.

Shocking isn't it. Until you look at the details. Yes, there is a lot of interest to be obtained from the people who keep a balance on their credit card. But, Discover isn't large enough to own all that debt (Discover pays the retailers BEFORE they collect the money from the customers, so Discover has lots of on-going debt). Discover has to move that debt to other investors. It is these investors who loan money to Discover who ultimately earn the interest - not Discover. However, Discover is still on the hook for people who charge up on their credit cards and never pay the bills (bankruptcy, death, deadbeat, etc). In the end, Discover's loss from non-payers + Discover's interest paid to investors just about equals the interest they collect from customers.

In good economic times, there are fewer non-payers and there is less interest paid to the investors. Thus in those years Discover makes a profit from interest portion of the business. In bad economic times, Discover loses money on the interest portion of the business. On average, they just about cancel each other.

 

[Elganja]

Originally posted by: dullard

Originally posted by: zoiks
I think I charge over 20k every year on my credit card. My average miles that I accrue (1 $ to 1 mile) is about 2500/month.

Like several have said above, big spenders do better with other cards. I know that American Express Blue offers more rewards (5%) but only if you are a big spender. Eventually, you can look into the black card if you are a really, really big spender.

The Blue Cash card has no cap on the cash back limits (got 610 back last year) and the rules are:
$0.00 - $6,500.00----1.0% (Bonus Cash Back Purchases)----0.5% (General Purchases)
$6,500.01 - or more----5.0% (Bonus Cash Back Purchases)----1.5% (General Purchases)

where bonus is grocery, drugstore and gas

the only downside of amex is that it isn't accepted everywhere... I wish there was an equivlent VISA/MC (I know chase freedom comes close).

 

[Maverick2002]

$6500/month or /year? o_0

 

[kranky]

Originally posted by: Maverick2002
This is all making my head spin a little bit. While miles wouldn't be bad, I'd rather have % cash back if it's even a remotely similar amount.

What qualifies as a big spender? I use my credit card for probably over 95% of my purchases. I charge between $1500-2000/month on it, with my balance either paid off in full every month (sans ~$50 or whatever charges come through while it's being paid off) or have ~$500 on it.

I use it for everything - food, gas, rent, bills, fun money. So, based on this scenario, what kind of card could/should I get?

And with regards to paying it off through a bank, my bank doesn't charge me any fees to pay off the card I have with them (it's not a "billpay" option .. it's just a transfer of funds from a checking to a cc account) ... will this change if a I get a card through someone else?

If the places you charge things take AmEx, you're a candidate for the AmEx Blue Cash card.

 

[Tremulant]

I have an Amex Business card that gets me 5% cash back on gas at the end of each billing statement and I think 3% or 1% on everything else. However, I only use it for gas (I spend like $300-$350/month on gas).

 

[Trey22]

While not for everyone, if you spend quite a bit, put everything on the card and pay it off at the end of every month, the American Express Blue card rocks. No annual fee. After $6500 you get:

1. 5% cash back at gas stations, supermarkets and pharmacy stores.

2. 1.5% cash back on all other purchases.

So far I have $558 in cash back earned this year.

 

[Vehemence]

Amazon's has been nice, I've already gotten 2 reward certificates. I use Amazon all the time because of Prime, and only use the Amazon card there, though.

 

[Maverick2002]

Originally posted by: Trey22
While not for everyone, if you spend quite a bit, put everything on the card and pay it off at the end of every month, the American Express Blue card rocks. No annual fee. After $6500 you get:

- 5% cash back at gas stations, supermarkets and pharmacy stores. 1.5% cash back on all other purchases.

So far I have $558 in cash back earned this year.

By paying it off at the end of every month, do you mean down to $0 or just close to it? For instance it's almost impossible for me to get to $0 on my current card because I make purchases daily and by the time I pay off what's showing up on my bank's website, I have a few new charges already racked up. Can you elaborate on this?

 

[Elganja]

Originally posted by: Maverick2002

Originally posted by: Trey22
While not for everyone, if you spend quite a bit, put everything on the card and pay it off at the end of every month, the American Express Blue card rocks. No annual fee. After $6500 you get:

- 5% cash back at gas stations, supermarkets and pharmacy stores. 1.5% cash back on all other purchases.

So far I have $558 in cash back earned this year.

By paying it off at the end of every month, do you mean down to $0 or just close to it? For instance it's almost impossible for me to get to $0 on my current card because I make purchases daily and by the time I pay off what's showing up on my bank's website, I have a few new charges already racked up. Can you elaborate on this?

are you kidding me? how old are you?

you get statements every month with a balance due and an optional minimum payment. When people say you pay it off right away you pay the balance due.

 

[Suspicious-Teach8788]

Originally posted by: zoiks

Originally posted by: dullard

Originally posted by: zoiks
I think I charge over 20k every year on my credit card. My average miles that I accrue (1 $ to 1 mile) is about 2500/month.

Like several have said above, big spenders do better with other cards. I know that American Express Blue offers more rewards (5%) but only if you are a big spender. Eventually, you can look into the black card if you are a really, really big spender.

Heh. I don't make that much money for the big black card.
I'll look into Blue. They sent me something in the mail on it.

Blue is not that good. You only get like what 1% on the first 1500? 20k a year isnt enough to really make a killer from that card. I'd rather get a card like Citi Dividend and/or AMEX TrueEarnings from Costco.

Plus even with Blue (wait isnt it Blue Cash where you get the cashback?), you only get the 5% on the amount over 1500 or something right? I remember digging through the terms and conditions and its tiered. 0.5% then 1% then 5%? All I remember was arguing with a friend who claimed to spend a lot (come on we were college students, how much can you freaking put on a card each month?) and he kept running around yelling 5% but I KNEW that I was beating his cashback by combining my Citi card with my AMEX TrueEarnings... although he wouldnt admit it.

 

[Elganja]

Originally posted by: DLeRium
Blue is not that good. You only get like what 1% on the first 1500? 20k a year isnt enough to really make a killer from that card. I'd rather get a card like Citi Dividend and/or AMEX TrueEarnings from Costco.

Plus even with Blue (wait isnt it Blue Cash where you get the cashback?), you only get the 5% on the amount over 1500 or something right? I remember digging through the terms and conditions and its tiered. 0.5% then 1% then 5%? All I remember was arguing with a friend who claimed to spend a lot (come on we were college students, how much can you freaking put on a card each month?) and he kept running around yelling 5% but I KNEW that I was beating his cashback by combining my Citi card with my AMEX TrueEarnings... although he wouldnt admit it.

Originally posted by: Elganja
The Blue Cash card has no cap on the cash back limits (got 610 back last year) and the rules are:
$0.00 - $6,500.00----1.0% (Bonus Cash Back Purchases)----0.5% (General Purchases)
$6,500.01 - or more----5.0% (Bonus Cash Back Purchases)----1.5% (General Purchases)

where bonus is grocery, drugstore and gas

the only downside of amex is that it isn't accepted everywhere... I wish there was an equivlent VISA/MC (I know chase freedom comes close).

 

[Maverick2002]

Originally posted by: Elganja

are you kidding me? how old are you?

you get statements every month with a balance due and an optional minimum payment. When people say you pay it off right away you pay the balance due.

Old enough. And I don't get paper statements. Balance due /= balance, which was my original question regarding what people meant by "paying it off".