Should I apply for another credit card?

[JM Aggie08]

To somewhat hijack this thread...

I have Amex Gold, and have recently decided that the annual fee is simply not worth the added benefits. Do I have any options, outside of cancelling the account? Obviously, I don't want my decision to impact my score, if possible.

 

[cbrunny]

What. Rewards are cash. How do you not see the logic in this?

Why would I forgo more money over two cards versus less money in one.

You are confusing me. I don't understand.

If you have two cards and both offer rewards and both rewards are cash and both cash rewards are the same %....

Scenario 1:
Card 1: $500 transaction with 5% cash back = $25
Card 2: $500 transaction with 5% cash back = $25
Card 1 reward + Card 2 reward = $50

Scenario 2:
Card 1: 2 x $500 transaction with 5% cash back = $25 x 2
Reward = $50

Why is scenario 1 better than scenario 2?

If the rewards are different, lets say air miles or some other points thing, it only makes sense to use a points card if the dollar value of the points received is greater than the dollar value of the reward received if you were to use a cash back card. If it is true that the points are "worth more" and that you would actually use them, why would you not maximize the number of points you receive in a year by using only the points card? Or vice-versa; if you don't use the points it doesn't make sense to collect them when you can maximize a cash back percentage.

What am I missing?

 

[NoCreativity]

You are confusing me. I don't understand.

snip

What am I missing?

The fact that most cards don't offer 5% on every purchase. Most offer 1% on everything with 5% (or something greater than the base reward) for specific categories (e.g. gas, restaurants, grocery).

My example:
Card1: 1% on every purchase, 3% on gas, restaurants, home improvement, and office supplies.
Card 2: 1% on every purchase, 5% on groceries.

Use card 2 on groceries, card 1 for pretty much everything else to maximize my rewards. If i used card 1 for groceries I would only get 1% cash back. I'd miss out on 4%.

I have yet to see a card that offers more than 1-2% on every purchase all the time.

 

[cbrunny]

The fact that most cards don't offer 5% on every purchase. Most offer 1% on everything with 5% (or something greater than the base reward) for specific categories (e.g. gas, restaurants, grocery).

My example:
Card1: 1% on every purchase, 3% on gas, restaurants, home improvement, and office supplies.
Card 2: 1% on every purchase, 5% on groceries.

Use card 2 on groceries, card 1 for pretty much everything else to maximize my rewards. If i used card 1 for groceries I would only get 1% cash back. I'd miss out on 4%.

I have yet to see a card that offers more than 1-2% on every purchase all the time.

Ahh, ok. That I understand. Thank you for the explanation.

My card provides cash back as follows:

A full 4% on eligible gas station and grocery store purchases
A full 2% on drug store purchases and recurring bills
A full 1% cash back on all other eligible purchases

which is good enough for me (and in Canada is actually pretty good rewards). Almost all of my transactions are gas or groceries.

 

[feralkid]

To somewhat hijack this thread...

I have Amex Gold, and have recently decided that the annual fee is simply not worth the added benefits. Do I have any options, outside of cancelling the account? Obviously, I don't want my decision to impact my score, if possible.

Have you used it much?

If you have, there is a possibility of having the fee waived.

Call CS, ask for retentions dept. Tell them you are planning to cancel card because of annual fee.

Worth a try...Amex has been known to waive annual fees to big spenders.

 

[JM Aggie08]

Have you used it much?

If you have, there is a possibility of having the fee waived.

Call CS, ask for retentions dept. Tell them you are planning to cancel card because of annual fee.

Worth a try...Amex has been known to waive annual fees to big spenders.

Depends....is an average of 800-1200/mo much? 😀

 

[NikolaeVarius]

Depends....is an average of 800-1200/mo much? 😀

That's alot.

 

[feralkid]

Depends....is an average of 800-1200/mo much? 😀

You're good.

 

[JM Aggie08]

That's alot.

It's the only card I use, outside of a dedicated gas card.

 

[IronWing]

So why not just have one card that gives you the best rewards? That's what I do.

I don't see value in credit sitting there empty. I'd rather just not have it in order to discourage stupidity.

I keep two cards. The one with the rewards I use for every purchase I can. The one without rewards I plan to use a couple times a year to keep active. The less used card sits in a drawer at home most of the time. Its purpose is to be a backup card for when the primary card number gets jacked (which has happened three times in the past two years). When I travel, I bring the backup card with me but keep it separate from the primary so I'll still have a card if the primary gets lost/stolen/jacked.

 

[WilliamM2]

I keep two cards as well. One with great rewards, the other is the first card I ever got in 1981. I use it only to pay Netflix every month, just to keep it active. That way I can just leave at home in a drawer. Keeps my average length of credit very long.

Use the card with great rewards for everything else.

 

[AznAnarchy99]

I keep two cards. The one with the rewards I use for every purchase I can. The one without rewards I plan to use a couple times a year to keep active. The less used card sits in a drawer at home most of the time. Its purpose is to be a backup card for when the primary card number gets jacked (which has happened three times in the past two years). When I travel, I bring the backup card with me but keep it separate from the primary so I'll still have a card if the primary gets lost/stolen/jacked.

Similar to me. I use my Amex for 95% of stuff since Amex is amazing. I use my VISA for the 5% of places that don't accept Amex. All of my less used cards are in my drawer but they are all on my Amazon account. Depending which has the greater Amazon cash back at the time, I will use that one. (Chase freedom had 5% CB on Amazon during the holidays.)

 

[mikeymikec]

I have two credit cards: The first I've had since I started living on my own and has racked up a credit limit far higher than I'm ever likely to use. The second is one I was going to change over to at a time when the first charged me a percentage for mandatory "repayments insurance". Then the first credit card supplier caved in and got rid of the "insurance". The second one gives me vouchers that my wife uses at a clothes shop. I use one for business at the other for personal.

 

[Uppsala9496]

Always a good idea to keep a minimum of 2 cards.
My United visa card just got a bunch of fraudulent charges on it the other day. It's the card I use 99% of the time to get miles for things I am spending money on anyway.
So now I am without that card for the next few days. No big deal since I have other cards and my debit card if need be.

This thread did get me thinking if I should open another one. Was looking at the chase sapphire card to get some more points for travel. Then again, I do plan on applying for a mortgage in the next few months. Not sure if getting another credit card right now is a good idea or not...(carry $0 balance on my cards).

 

[HybridSquirrel]

Always a good idea to keep a minimum of 2 cards.
My United visa card just got a bunch of fraudulent charges on it the other day. It's the card I use 99% of the time to get miles for things I am spending money on anyway.
So now I am without that card for the next few days. No big deal since I have other cards and my debit card if need be.

This thread did get me thinking if I should open another one. Was looking at the chase sapphire card to get some more points for travel. Then again, I do plan on applying for a mortgage in the next few months. Not sure if getting another credit card right now is a good idea or not...(carry $0 balance on my cards).

my united card was compromised last week as well...interesting.