Talk to me about rewards cards

[riverwed070707]

I use my debit card to my high-interest checking for everything. I have a CC but don't use it. Any time I've opened a CC it's always been to take advantage of 0% interest. Am I missing out on significant rewards? I got thinking about it becuase I travel a lot for work (1-2 times a month) and am constantly doing expense reports for several hundred dollars and it occured to me that I'm missing out on the interest for these purchases in my checking so maybe i should use a CC to pay off each month...then I thought if I were going to do that I should look at something with rewards but I don't know the first thing about them. Where do I start?

[Robert742]

You can start here:

http://www.bankrate.com/finance/cred...rvey-2011.aspx

I use Chase Freedom rewards. Which rewards/cash back program depends on how much you spend, and what you value most, i.e., cash back, airline points, etc.

They say you spend about 25% more when you use credit instead of cash, but if you are a disciplined spender, and use the card for the same purchases you would make with cash, you can benefit from a good rewards program.

You can use your previous expense reports to make sure you are not spending more than you were when you were paying cash.

[disneysteve]

If you travel a lot, look at travel rewards cards. Do you tend to stay in one company's hotels like Marriott or Hilton? Do you always fly with the same airline?

We have a Marriott card and earn lots of free travel using that. It gets us a free trip at least every other year and usually every year for at least a couple of days and sometimes a week or so. We've redeemed as many as 10 free nights in a year earned with our Marriott card.

[riverwed070707]

Originally Posted by disneysteve

If you travel a lot, look at travel rewards cards. Do you tend to stay in one company's hotels like Marriott or Hilton? Do you always fly with the same airline?

We have a Marriott card and earn lots of free travel using that. It gets us a free trip at least every other year and usually every year for at least a couple of days and sometimes a week or so. We've redeemed as many as 10 free nights in a year earned with our Marriott card.

I do use the same company a lot. I'm a platinum Marriott member so I don't ever have to pay for hotel rooms when we travel for personal and I've looked at their card but I hate that there is an annual fee. I think I'd rather do a cash back card since I already get so many free room nights. I mostly fly with Delta but only 3-4 times a year -- I drive a lot more than I fly.

[disneysteve]

Originally Posted by riverwed070707

I do use the same company a lot. I'm a platinum Marriott member so I don't ever have to pay for hotel rooms when we travel for personal and I've looked at their card but I hate that there is an annual fee.

That makes sense. If you already get all the free Marriott nights you can use, you don't need more.

Regarding annual fees, the general advice is to avoid them, but I always like to qualify that advice. Find out if the annual fee is worth paying for. Sometimes it is. For example, we pay $65/year for our Marriott card but we automatically get one free night in a category 1-5 room on our account anniversary each year. A category 5 room may be $250 so for $65, we get a luxury weekend getaway.

Chase has a good cashback program and they offer a variety of rewards besides cash. We have a Chase Freedom card.

[KennySoward]

I think the key phrase here is "disciplined spender" While I've come a long way to control my spending, I still do not like or trust myself with credit cards. It is too easy to get in one of those moods where you make a big purchase with the intent to pay it off...but then never do.

However, for disciplined spenders, I'm sure they are awesome ideas. Like the other posters say, it just depends on what kind of rewards do you want. Vacations...shopping...?

[MonkeyMama]

I personally like cash rewards. Just, easier. Of course, if you would utilize miles and travel rewards, they may be worth figuring out. Cash back just seems to be pretty simple, in comparison. With any card, read the fine print and make sure it will be advantageous to your spending habits.

1% cash back is just kind of the standard cash back that I have always been able to get for the last 2 decades. It always seems to be available, at the minimum.

I personally tend to chase rewards a little more. Chase Freedom was pretty nice for 3-ish years (about $750 cash back per year), but they are changing their rewards program, and no longer is better than the 1% I get from my CU and my other Chase card. For my spending patterns.

There are some really good credit card sign up bonuses at the moment. Google is your friend. I am fine with opening/closing 1-2 cards a year to chase rewards. My 800-ish FICO doesn't seem to suffer. As long as I pay all my credit on time - seems to be more important than anything else. Guess I keep my utilization very low, too. Likewise, being granted any credit card isn't very hard with a high FICO, so I am used to my pick of just about any card. (I share because people are overly scared of these kind of things, in my opinion. People with good scores, anyway. I personally close every single credit card when the rewards run their course).

Though chasing rewards is a little more work after a nice quiet few years with Chase Freedom, I may be able to earn about $1300 cash this year with pretty minimal effort. My dh and I will get $750 in sign-up bonuses (for merely opening 2 cards), and I have a 2% cash back card as well. 2011 has been a good year for rewards. Last year we might have gotten $1000 cash + a kindle (Using the Chase, plus only one easy sign-up bonus).

[tan fish]

I agree with what has already been said above. If you are disciplined and pay off your CC every month and never carry a balance, you can definitely make money off of these companies through their rewards programs. I use a Chase Freedom, a Fidelity Visa, a Discover Card, and a Citi Dividends card.

You may want to try the relatively new Google Advisor for easy information on rewards programs for credit cards.

[MaxPowers]

hmm. I may have to look into this. I use my debit card and have to make 10 transactions a month to get my 1.5% interest on my checking account.
I have been looking and some cards are offering 1% on all purchases and like 2% on gas and groceries such as the capital one cash rewards card. That is where most of my money goes so I will need to check that out.
Not to sure if it will be worth it though. I am single and don't spend/make that much so I don't see myself spending more than $1000 a month which would only be $10 cash back. So maybe I will chase the sign up bonuses

[tan fish]

Originally Posted by MaxPowers

hmm. I may have to look into this. I use my debit card and have to make 10 transactions a month to get my 1.5% interest on my checking account.
I have been looking and some cards are offering 1% on all purchases and like 2% on gas and groceries such as the capital one cash rewards card. That is where most of my money goes so I will need to check that out.
Not to sure if it will be worth it though. I am single and don't spend/make that much so I don't see myself spending more than $1000 a month which would only be $10 cash back. So maybe I will chase the sign up bonuses

I am currently single (though getting married soon) and do not spend much money at all. But I use my reward credit cards as much as I can, and never carry a balance. Although the rewards points add up slowly, the point is that they still add up. If you can make a net gain in revenue, even if its a small one, its still worth it.

[jteezie]

Here's how I see Credit Card use in general and the additional benefit of rewards.

Everyone pays the same price for items regardless if they pay cash or CC, however the CC purchase costs the company more money because they have to pay a fee (thus they earn less). To balance that out, they raise the price overall for everyone including the cash payers. In a way, if you use credit card, you are getting a discount because it would cost you much more if the company could put the cost of the credit card use solely on you.

On top of that discount, CC's take the money they earn from fees and give you rewards, which in a way is another discount because you end up paying less than the retail price after the rewards.

So, using any rewards CC is free money. The question now is, do you want to try to maximize your rewards? That depends if you think the additional (marginal) rewards you get from a special rewards card can offset the annual subscription fee. Unless you travel a lot, you probably will not.

[maat55]

I use Chase freedom for the 1%, but they offer 5% on certain purchase promotions fairly regularly.

[JoshuaHeckathorn]

If you're a Costco member, check out the Amex True Earnings card. 3% cash back on gas/restaurants and 2% on travel. Your Costo membership fee covers the annual fee. My wife and I use this card and love it.

[Slug]

Originally Posted by riverwed070707

I use my debit card to my high-interest checking for everything. I have a CC but don't use it. Any time I've opened a CC it's always been to take advantage of 0% interest. Am I missing out on significant rewards? I got thinking about it becuase I travel a lot for work (1-2 times a month) and am constantly doing expense reports for several hundred dollars and it occured to me that I'm missing out on the interest for these purchases in my checking so maybe i should use a CC to pay off each month...then I thought if I were going to do that I should look at something with rewards but I don't know the first thing about them. Where do I start?

For credit cards, you can get 2% back on everything using the Fidelity AMEX, but there are ways to maximize credit cards for even more if you're willing to carry multiple cards.

For debit cards, you can get 2% back on everything using PerkStreet (if you keep at least $5k in checking). I don't use debit cards, but if I did, I would probably use theirs.

[tan fish]

Originally Posted by JoshuaHeckathorn

If you're a Costco member, check out the Amex True Earnings card. 3% cash back on gas/restaurants and 2% on travel. Your Costo membership fee covers the annual fee. My wife and I use this card and love it.

Thanks for the tip on this. I am a Costco member already, so I think I will get this card for the good rewards, plus I can use it at Costco too.

[SeanH]

The Fidelity/Amex 2% card and the New Blue Cash Variations (6% groceries with a fee or 3% groceries without) are the 2 most interesting to me. I like the idea of being rewarded for an essential (groceries) as opposed to being rewarded for a luxury (eating out) though I suppose being rewarded for everything is nice too.

Perkstreet only provides the 2% for signed transactions - not PIN transactions. I don't know if you can opt to sign at say.. grocery stores and other places that ask for a PIN.

The credit card sites tend to push the same cards over and over again, and if you ask me most aren't very impressive. Discover is sung far and wide, but offers less than 1% until you spend 3k (that's not an incredible amount of money, but its one of those finer point complications that you don't think about). The Discover 5% rewards are capped so even if you spend in their target categories you still will only earn ...~$100 or so in interest.

[Slug]

Originally Posted by SeanH

The credit card sites tend to push the same cards over and over again, and if you ask me most aren't very impressive. Discover is sung far and wide, but offers less than 1% until you spend 3k (that's not an incredible amount of money, but its one of those finer point complications that you don't think about). The Discover 5% rewards are capped so even if you spend in their target categories you still will only earn ...~$100 or so in interest.

That's absolutely fair criticism of Discover. I only use Discover in 5% reward categories which means for the most part, it just sits in my wallet doing nothing. And, it does take a bit to build up rewards this way. However, I take solace in the knowledge that eventually I'll be getting that $ out of Discover and that I'm only paying 95% of the price of anything I buy with it. Same thing with Chase Freedom.

[MonkeyMama]

I just had to jump back in to say the rewards are phenomenal this year.

In addition to our 2% back card (it is the Fidelity AmEx), + 1% on visa (since AmEx is not taken as widely), we are well on the way to earning:

$1000 cash from Chase

+

$500 gift certificates from Citi.

Just for opening a card and charging a bit. I applied for the Chase; my spouse applied with Citi. We will close these cards once rewards are in hand.

& the year is young...

[MaxPowers]

so what is the current best rewards card for someone who is single, perfect credit, and only spends money on stuff like gas, walmart, amazon, and occasionally eats out. I was looking at chase freedom but it looks like it only offers 1%.

[krantcents]

If you are getting credit cards with zero interest, it sounds like you have debt. You may want to work on that because rewards cards are more beneficial when you pay the entire balance off each month. I like the Marriott and airline cards. Since you travel a lot, see if you can use just one airline and get that card. Both cards can generate enough miles or rewards for a trip fairly quickly. Generally when you apply there is a bonus just for the application.