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Thread: "Rewards" credit cards

  1. #11
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    If you have a budget and come in under budget each month, then a rewards card can make extra money each year. I don't spend less because I have no spend days. I don't spend more because I use a credit card. I track every expense from bridge tolls, to $1 used books at the library sales, to the occasional frozen yogurt stop. I follow that budget very closely and usually come in under budget each month.

    You have to do what works for you, but the aspect that manages our spending in our family is a closely followed budget, not what days I spend the money on or whether or not I pay cash or use a credit card. If you can get a discount for paying cash greater that your credit cards rewards then that can be a good deal, but I doubt you can get discount for paying cash for 100% of your expenses, especially at places like Costco, Kmart, Safeway or Verizon.

    If you make an extra $400 a year in rewards points that can be the equivalent to earning an extra $600 or so in taxable income depending on your marginal SS, state and federal tax brackets. If you can get $400 a year in rewards points that would otherwise take $600 of taxable income to equal, then over 30 years that could be equal to earning 18K.

    If you don't track expenses and don't pay your cards off each month, then having the rewards cards might cost you more in extra purchases and interest than you would save in rewards.
    Last edited by try2bfrugal; 10-6-12 at 6:22pm. Reason: fixed typo

  2. #12
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    I think it's more subtle than that, in that if you have rewards for spending it might lead you to spend more even with a budget, because since you are rewarded for spending you may not have as much incentive to come in UNDER budget. But with a budget is definitely better than without. Maybe I idealize some far less psychologically complex form of capitalism (ie a marketplace *without* the marketing) where if you buy the shiny it's because you really want shiny, and not because marketers are subtly influencing. I know the line isn't hard and fast, I just steer clear of what I think are traps.

    Anyway I really don't care whether or not anyone else uses rewards cards and even my opinion on the matter for me isn't absolutely fixed, just my thinking as of today.
    Trees don't grow on money

  3. #13
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    We have a rewards card. This month we are using our miles to fly round trip from Houston to Boston for $10 each.

  4. #14
    Senior Member Greg44's Avatar
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    We have the Costco Amex card that pays cash back.

    We also signed up for the Chase United Visa to keep our miles current - seems we haven't flown much in the last few years. My dw used her "free miles" this summer to fly to Washington DC. Tickets from our town would have been nearly $ 900.00 so I guess the free miles paid for itself -- even with the $ 60.00 per card fee. I am not sure if I am going to renew this year because of the yearly fee.

  5. #15
    Senior Member rosarugosa's Avatar
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    We have a Chase Priority Visa which does have an annual fee - waived the first year. But we walked into it with our eyes open and here is our rationale: we get one "free" night per year at a Holiday Inn hotel. I know that translates to one $50 night per year at a HI hotel, but that's a good deal in our book. We redeemed our freebie this year at Holiday Inn by the Bay in Portland, ME, and that runs $99 - $199 per night depending on season. This place has rooms half the size of our house, with huge window-walls overlooking Casco Bay. It's a very cool place (Merski would understand). They also wooed us for some years, and we succumbed when they gave us five free nights worth of points for joining. We use our points that we acquire through purchases to get rooms for $60. per night, because that actually works out better with the point redemption scale than redeeming for free nights. We mostly use the card for gas & groceries, and the occasional big bad car repair while on vacation
    We have a new rewards card through a local bank that gives us 1% cash back - or we could redeem for gifts. We signed up because they offered us $150 cash if we used the card once. They made good on that offer, and there is no annual fee on that card.

  6. #16
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    I have a no-fee rewards card where I get points towards a list of various vendors. I deliberately went through my regional bank because more of my spending gets awarded towards those points, and I made sure that the offered vendors were one(s) I would use. And then I use those points to get gift card(s) from Barnes & Noble, and that's how I get my e-books . This allows me to get e-books I want and keeps that spending in check. I rarely buy e-books when I don't have a gift card on file (I haven't done so in over 2 years).

    Mind you, I have frequently already read the book from the library and have decided that this is a book that I want on hand, or I like the author well enough that I know I will continue to read the series (I get the first book in a series from the library or PaperBack Swap, as I've been disappointed with series starts in the past, even with authors I like a lot).
    Last edited by herisf; 10-7-12 at 9:06am. Reason: edited for clarity

  7. #17
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    I have been cutting back on spending because of (see my name), so in most cases, I don't know how rewards, would be. I am still thinking about an ereader (less wear on the body then sitting at an angle, in bed, with the netbook), but don't want to spend the money yet (would prefer the price come down some more). As for cash back, if my estimate is right, 1% back would bring me about $20 a year, so I doubt I would really see much benefit to one.

    Thanks all.

  8. #18
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    None of the 5 CC's I have have an annual fee, and if they cahrged one I would get rid of the card rather then pay it. All have some kind of reward program but since I use cash almost exclusively, I have no idea what they are. I keep the CCs for travel as it's more convienent then cash and pay them off in full when the bill is due so never pay interest either. No annual fees plus no interest paid ever makes me a "deadbeat" in the eyes of the credit card companies :-)!

    ETA: For those of you, like me, who have no-annual-fee cards and use then rarely - if ever - be aware that often times ther CC companies will drop you and cancel your card (often without any notice) due to lack of use. This happened to several people I know. So I now use my cards each a few times a year (but still continue to pay them off in full without interest each time I use them) to keep that from happening.

  9. #19
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    My bank is pushing me to 'upgrade' my credit card to a reward card. I'm just not interested in using my life energy to track "points" for "rewards" I probably don't even want. The few dollars it might save me just isn't worth it.

    However, if I had a big spending spree coming up - house repairs, new furniture, fancy vacations, etc. - I could see where it might make sense.

  10. #20
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    We dont track anything as it is just not worth it. We use the points to get discounts for things or companies we already use. What is there is there and it is just a nice benefit.

    I would not chase points for flying because I dont want to be limited to one airline for a flight. I had a freind once who landed four times to just use her Southwest points. I could get there with one stop.

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