Question about Frugality and Reward Programs

[disneysteve]

Like many of you, I participate in a variety of reward programs including credit card rewards like Marriott's program, retail programs like Coke Rewards and Pepsi Stuff and online survey programs that earn me credits toward stuff.

What I find, though, is that my frugal mindset sometimes gets in the way of actually using the rewards I accumulate. I browse through all of the options and decide that there isn't anything on the list that I really need at the moment. Of course, I realize that there is nothing wrong with having some Wants in your life, especially if you are essentially getting them for free. The other problem is I find myself analyzing which reward is the best value for the number of points required. Do I get the item worth $10 for 100 points or the item worth $20 for 250 points? The $10 item is the better value but does that really matter in this setting since I'm "paying" with points that I got for free? Does that make sense? Am I the only one who thinks this way?

[Beccagold]

I can definitely see where you're coming from! I'm a big fan of points, too. My problem seems to be that I feel I can get a better deal elsewhere. Example if the widget costs 2000 points that equals about $200. Usually, I can find the widget elsewhere for $150. So, I tend to buy things for less "money" rather than use the points.

[MonkeyMama]

I don't even use rewards for that reason. I don't particularly like them. We stick to cash rewards. Cash is always good.

[disneysteve]

My problem seems to be that I feel I can get a better deal elsewhere. Example if the widget costs 2000 points that equals about $200. Usually, I can find the widget elsewhere for $150. So, I tend to buy things for less "money" rather than use the points.

Yes. I do that one, too. I do surveys for one company that pays me in Amazon gift cards. At any given time, I usually have about $400 in credit at Amazon. And I have trouble spending it. I'll look up something and find that they sell if for $10 but I know Walmart has it for $6, so I buy it at Walmart rather than "wasting" my FREE credit to get it from Amazon. It really doesn't make sense. I should get it from Amazon and pay nothing out of pocket.

MonkeyMama - I see your point, but most of these programs are too good to pass up. The surveys that give me the Amazon credits take about 10 minutes to do and pay me $30. I can do as many of them as I'd like. I usually do 3-4/month and have done as many as 6 in a month. When they're paying me the equivalent of $180/hour, I'm going to take it.

I also get programs called e-details where I basically log in and listen to a marketing program for about 10 minutes and get some type of reward in return. I don't have to do anything. I usually just have them playing while doing paperwork at the office. And Coke and Pepsi points are silly to pass up as they are totally free. We're using the product anyway. Why not take 5 seconds to type the code in. I have redeemed Coke points a few times for free movie passes. That's saved us quite a bit now that regular tickets are $10 each around here.

[feh]

About 4 years ago we switched to a CC that simply offers a percentage on your money back (anywhere from 1% to 5%, depending on the purchase). I much prefer this system, as you can use that cash for whatever you want, as opposed to saving points for a plane ticket or something.

[sweeps]

I prefer cash (or statement credit) also. It's not a big deal, but if you get -- let's say -- a $50 gas card instead of $50 cash, then that is $50 in gas you could have put on your credit card to earn another $2.50 in rewards.

[disneysteve]

I'm okay with the CC rewards. We use Marriott Visa mainly and get a free weeks vacation about every other year. Last year we redeemed for 10 days free when we went to New Hampshire, for example. I'm talking mainly about programs that have a slew of different rewards to pick from. I think when there are endless choices, it is much harder to decide how to use the points.

[Beccagold]

CC Rewards aren't really my problem, either. I switched from cash back when they no longer equalled 10000 points for $100. Instead I use citicard ThankYou points, since I can link directly to Expedia and purchase travel with points. Works out very well for us. The points I have trouble using are a reward system I have through work and MyPoints for the most part.

[disneysteve]

Another problem with the reward points is they are often tiered, so, for example, 1000 points might be worth $10 but 2000 points is worth $25 and 3000 points is worth $40 so I never want to cash in with a lower number of points because I want to hold out for the higher point value.

What I need to start doing is just finding something of use to me and order it no matter what.

[LivingAlmostLarge]

I don't do CC rewards, I mostly do cash back. Only American Express Costco, but it's a check to buy whatever you normally buy at costco.

[disneysteve]

I don't do CC rewards, I mostly do cash back. Only American Express Costco, but it's a check to buy whatever you normally buy at costco.

I know it doesn't exactly make sense, but I find that mentally I attach more value to a reward than to cash. A free hotel stay is "worth" more to me than an equivalent amount of cash. I don't compartmentalize money. If I get $100, it goes into the same account no matter where it came from - my job, my wife's job, a gift, a CC reward, a survey, etc. So I never think, "I paid for this with that $100 that I got from doing a survey." A reward item is different, though. I will think, "We got this clock for free when I did that survey" or "This hotel stay is free with our Marriott points."

Does that make sense?

[Daylily]

I suffer somewhat from this same problem. I'm sitting on $140 of discover cash back money. At one time $20 could be converted to a $40 gift certificate at a restaurant. Now, $20 can be converted only to a $25 gift certificate. I struggle with whether to just apply the $20 to my account or whether to take the $25 gift card knowing that I'll probably end up spending an additional $10 at the restaurant.
This year though, I'm thinking of just ordering all the gift cards and giving those as holiday presents.

[disneysteve]

Discover is one place I don't have a problem. When cash is an option, I take the cash, even though I could get more value by taking a gift card. I hate gift cards and avoid them as much as possible.

[maat55]

I use mine only for mortgage reduction which also saves interest.

[Cassandra]

One of my credit cards has a rewards program that you have to pay for. It cost $19 to join and you have to pay that every year. I can't remember what exactly the rewards are, but I remember thinking that none of it was particularly useful to me when I was debating on whether or not I should join. If it didn't cost anything, I would be taking advantage of it.

My other credit card is from Barnes & Noble. I get 1% back on all purchases and 5% back on any purchase made at B&N (credited to my statement). Plus, every dollar equals 1 pt and once you have 2500 pts you get a $25 gift card to B&N (they automatically send it to you, so I don't have to do anything). I tend to use this one more. I can always use gift cards to B&N plus I like that the "cash back" is automatically credited to my statement.