Comments on: I Have No Idea about Credit Card Rewards

By: ParisGirl111

ParisGirl111 — Thu, 11 Feb 2010 20:05:12 +0000

I would recommend setting up some bills that you pay each month on automatic charge to the credit cards and continue using cash for groceries and eating out. It is much easier to go over your budget for food when using a credit card. This way, you can pay all your bills on time every month the the credit card, pay the credit card bill once a month, and still reap rewards from using it on something you were going to pay for anyway. I used an American Express Card for this and receive points which I can cash in for restuarant gift certificates and store gift certificates. I have gotten several. I like it. Amex is one of the easiest credit card companies to work with too.

By: Chad

Chad — Sun, 10 Jan 2010 17:41:41 +0000

Although your wife and your decision is “an opinion” on travel rewards vs cash rewards. With the new CARD act of 2009 going into effect, there is a much higher chance that travel rewards are worth less, (ie a 25,000 miles ticket might cost 30,000 miles) this can change at any time, including restrictions and blackouts.

Cash rewards is king, the value of the dollar remains unchanged, and there aren’t restrictions on cash, so I am in agreement with you on the Cash rewards card. The downfall here would be cards reducing rewards from 3% to 1% on purchases, which will probably happen as well.

By: Joel

Joel — Thu, 07 Jan 2010 23:09:42 +0000

Your spending habits should not change based on what your method of spending is (credit, debit, cash, etc.) because the real issue is to make sure that one lives within their means and sticks to their budget.

You may not think that 1% to 5% back is a lot at first but I would encourage you to play around with a cash back credit card calculator to see the long term benefits of getting cash back

For many people the cash back could end up being quite significant after 25 years. Just imagine if you start using the card after the birth of your first child and then just save the money from all of those cash back checks – when it comes time for your child to go to college it is not unlikely that you could have enough to pay for the first year of college just from those cash back checks – and that is not even taking into account if you decide to take those checks and put them into an interest bearing or investment account!

(Of course to make it worthwhile one has to pay off the card every month but there is no reason why someone that can stay within budget using a debit card couldn’t do the same with a credit card)

By: Evan

Evan — Wed, 06 Jan 2010 19:11:19 +0000

Ken,

You are 1000% correct, but I am not looking to spend to earn points. I am simply trying to efficiently use money. Either way I am going (well The Wife is going) grocery shopping – and just today she used the debit card for $93 and change.

If she used Discover that may have been $4 bucks back in my pocket – or 93 points towards a flight, etc.

Like I said I would only use it for expenses that I would pay off right away anyway.

By: Ken

Ken — Wed, 06 Jan 2010 18:24:28 +0000

It appears to me that you spend a whole lot of money for very little rewards. Secondly, if you don’t pay if off each month guess who really gets the reward…the CC company. Their interest is your interest!

By: FFB

FFB — Wed, 06 Jan 2010 18:00:47 +0000

You know, it could be that I send $10K for $100 but I’m not trying to spend to get the reward. Any reward is a bonus and doesn’t affect my spending habits. It wasn’t worth it for us to open up another card because of their reward system and we were already satisfied with AMEX. If you are looking for a rewards card then by all means you should shop around.

By: Evan

Evan — Wed, 06 Jan 2010 15:17:20 +0000

FFB,

But are you spending $30,000 to get $100 in gift cards? That is what is making all this a daunting task.

I literally had 10,000 points from my Juniper Carnival card, and they offered me $75 off a cruise. A $75 COUPON! COME ON

By: Evan

Evan — Wed, 06 Jan 2010 15:13:14 +0000

The kind words were my pleasure you really helped out, even if it was to get the discussion rolling with The Wife about the subject.

By: FFB

FFB — Wed, 06 Jan 2010 05:58:07 +0000

I had applied to an AMEX Blue card years back when they offered me 0% interest for a year. They also have a rewards program and we’ve been using that as our main card for the rewards points. I’ve cashed them in a few times already, mostly for gift cards.

By: Joel

Joel — Tue, 05 Jan 2010 19:45:56 +0000

Thanks for the nice words Evan and glad that the post was hopefully a little bit of a help. I am similar to you in that I feel more comfortable with the cold hard cash and black and white numbers with cash back percentages rather than sometimes confusing rewards programs but rewards credit cards are definitely very useful and some may end up being even better than cash back cards depending upon if one actually travels a lot.