Playing the Credit Card Game

[myrdale]

Dave is sitting on my shoulder right now shaking his head.

Any of you actively play the credit card game for the purposes of points / travel / cash back?

For the last 20 years, 99% of all of my purchases are debt / cash. I have kept a HomeDepot and Lowe's store card specifically for the purpose of maintaining a credit score and anytime I make a purchase from either of those stores they go on that card.

After a recent trip to Chicago for work I thought having a backup card in my wallet might not be a bad idea. Looking into it, I see how people can get sold into it.

I'm considering Chase, there are many others though. I can hear Dave saying "No millionaire ever told me they go rich based off their points". And to a certain extent it seems like a complication I don't need in my life.

Whats your thoughts?

[Jluke]

I’ve heard Dave talk about credit cards and what he says makes sense - it’s more painful seeing dollar bills disappearing than swiping a card. I tried to re-evaluate how I use them but maybe I’m too stubborn to change.

I have always used a rewards card. I have 3 right now. I don’t chase the points but figured I may as well get something back for items I’m going to purchase anyways. I’m strictly cash back applied each month to reduce the credit card balance.

all of my credit card purchases are budgeted in quicken. When I go to the grocery store or wholesale club I stick to the list that I made ahead of time. Very rarely do I exceed the budgeted amount at these stores.

when the Chase card has their quarterly categories I use that card. For instance the current quarter was gas so all gas purchases went on that card instead.

I’m sure there are things I could do better but I really believe I have a strong level of self control when it comes to spending and not buying things I don’t need.

[disneysteve]

We have always charged every penny we possibly could on our rewards cards.

As for playing the game, not so much anymore. However, I did recently get the Marriott Amex Business card because it gave us the push we needed to get our Lifetime Platinum Elite status. The annual fee is $125 but we got 3 free night certificates which are worth way more than $125 so that was actually quite a good bargain. I don't know if I will keep the card after this year, though I might since I'll still get one night stay annually which is worth more than the annual fee so having the card actually represents a savings.

[disneysteve]

We do take advantage of the rotating 5% cash back categories each quarter with our Chase Freedom card and Discover card.

[ua_guy]

I've always carried cash back cards. Amex has had the best returns, 3% gas/groceries (6% groceries, on some cards), 3% at online retailers, 1% everything else. There are a couple of straight-up 2% on everything cards out there, and those can be good as well. I've always taken the cash as a statement credit when it accrues.

Nobody gets rich using "reward" credit cards, but if you're going to use cash or a card to pay for something anyway (debit), why not take a percentage of the merchant fees?

[Drake3287]

As I've written about several times before on this forum I'm also a big fan of using a credit card for cash rewards. I gave up the airline credit card game years ago because it just didn't pay off anymore. I switched to using BofA's Travel Reward Visa card which earns me cash back. I literally charge everything possible and I mean everything. My monthly bill is at least two pages long of purchases each month and I've paying it in full every month since starting all this. I haven't spent a cent on credit card finance charges in probably 15 or 20 years. With my BofA card the reward points I earn are based on my combined balances of all my accounts including IRA's with Merrill Lynch so I'm at a higher level then some people.

At this point I'm earning about $2,500. to $3,000. in cash back each year and in turn just put that money in my travel fund. If you can discipline yourself to paying it off in full each month, it's literally free money. Not sure why more people don't do it.

[kork13]

I'm my view, it comes down to responsible use of your credit cards. If you're doing so, even if or knowing that it might cost you marginally more over time via impulse spending & low transactional friction, the simplicity & ease of use are worth it for me. Besides, as others have stated, most of my spending is planned & gonna happen anyway regardless of how I pay for it, so getting the cash back (which is mostly what I use, vs points) is gravy.

The card churning game is no longer for me. I'll take advantage when I'm in need of a new card or if it's convenient & reasonably likely that I'll get a continuing benefit going forward. But for one-time purchases or just churning cards for the bonus offers .... I'll pass.

That said, I do have & carry & use 5 different cards on a regular basis, each for specific purposes & to optimize the cash-back I receive.

[disneysteve]

If you can discipline yourself to paying it off in full each month, it's literally free money. Not sure why more people don't do it.

That's exactly why more people don't do it. They can't discipline themselves.

Who do you think pays for all of those rewards that we get? It isn't the credit card company. It is all of the folks who pay 20-30% interest on their cards each month. That's what allows the company to pay us smart folks 1-5% in rewards.

[disneysteve]

most of my spending is planned & gonna happen anyway regardless of how I pay for it, so getting the cash back (which is mostly what I use, vs points) is gravy.

Exactly. I've never bought into the argument that we spend more with credit. That's BS. We spend what we spend regardless of how we pay. And today more than ever I often don't know how I'm paying until I'm standing at the register. If they have a 3% fee for credit, I use cash. If they don't, I use my card.

A lot of our CC spending is automated from bills that charge it monthly, like health insurance, car insurance, cell phone, internet, and more. We have to pay those bills no matter what. Why not get the cash back or points?

[LivingAlmostLarge]

CC gamer here. It's a hobby. One i love and have loved for decades. I've had a CC addiction for decades. I love my rebates. Recently i've changed the calculus. Before it was about maximizing points for travel. But now I'm switching it up and going after stuff I like better like airline status and overall upgrades. I don't think it's for people who have trouble with spending. Most of my churn comes from IRS tax payments. I owe a lot and well there is nothing that can be done. Yes I can not pay the fee but I don't mind paying the fee. I have the cap one venture X card for 2% that covers that fee, but now I prefer something else i do pay a little fee but it's worth it.

We have a lot of cards and a lot of fees. But it's well worth it for me. For us personally we just got the alaska summit cards $395 each x 2 and 2 regular ascent alaska cards $95. I've had the ascent cards for 10 years and for $95 i get a companion fare I usually can get $1000 free economy class fare out of. So yes I pay $95 but i get a very valuable coupon. I'm not sure about the summit but the point transfer and the 25k companion discount fare and the couple of lounge passes and 10k EQM might make it a keeper. worth 2x? Meh maybe maybe not. That's a maybe.

Our amex platinum, is also so-so. Except DH likes the lounges so it might be a keeper. We get enough value from everything on it that we do well but it's not an absolutely necessary card. Although as a charles schwab branded we can transfer points at 1.1x to our brokerage account.

Our most recent card the brilliant Amex marriott is very expensive and one I'm on the fence on. But the $300 dining credit and the free night we'll see. I also recently got the chase sapphire business reserve and it's very expensive $795. But the sign up bonus makes it worth 200k pt and only a one year card. Then it's a dump. But i've already earned $50 gift card, $200 google workspace, $150 dining and $300 travel credit so I can't complain in 2 weeks. I likely will out earn the $795 as well before the 200k bonus. But it's still a card only worth holding for one year.

The cap one venture x is an interesting card. $300 travel credit and 10k points offsets the $395 fee. The 2x makes it nice and i could earn more transferring I find that erasing credit is easier. I erased $3k in spending on the venture X. I'll wait and see where we stand after this year.

[disneysteve]

LAL's post really highlights why the standard advice to never get a CC that has an annual fee is wrong. Lots of cards have annual fees but give you something in return that is worth at least as much if not more than that fee.

We pay $95/yr for our Marriott VISA and get one "free" night per year that is worth more than that.
We pay $125/yr for our Mariott AMEX and get one "free" night per year that is worth more than that.

So before we've charged a penny or earned a single reward point, we've already come out ahead just by having the cards.

[LivingAlmostLarge]

i have a friend with every hotel card because they like using the free nights and for $95 they can easily turn in hyatt, hilton, ihg, marriot into free nights worth more. Of course the trip is more than that but they would have gone anyway.

[myrdale]

I just noticed this post by jonelvinnaorbe, it's an excellent write up.

https://www.savingadvice.com/forums/forum/financial-faq-s/753739-best-credit-cards-for-travel

For an update, it's been a little over a week since I applied on the Chase website. They immediately sent an email saying they were reviewing the application and would be in touch. From what I've read on line, this can actually take a couple of weeks. For someone with a 20 year credit history across a couple of store credit cards, and an 800 score I would have thought I was a shoe-in.

Yesterday I received a letter from Chase indicating they think I am a victim of identity fraud. The letter was funny in that they gave a list of number to call if the application was fraudulent, but no indication of who to call if the application was legit.

They do have a local branch so I should think I could discuss it there.

I find it interesting they take it serious enough to presumably have a person review all applications (assuming that is why they don't immediately rubber stamp approve the application).

[LivingAlmostLarge]

sometimes when you haven't applied in a long time they want to be sure it's you

[myrdale]

I followed up with Chase and the resubmitted the application. One of the questions was "Mother's Maiden Name". I am curious if they were looking for the full name or last name only. That was the only other reason I would think they would have kicked it.

I have read that with out having a banking account with them, they can be difficult also.