Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Credit Card "Rewards"
Old 05-14-2008, 10:03 AM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
TromboneAl's Avatar
 
Join Date: Jun 2006
Posts: 12,880
Credit Card "Rewards"

I'm looking at the WorldPoints catalog that came in the mail. With our Mastercard, we get one point for every dollar we spend. When we get 25,000 points, we can trade them in for a check for $250. That is, 100 points equals $1.

From the catalog, a $25 iTunes gift card costs 6,250 points. IOW, $62.50 for a $25 gift card.

I guess people go for this, because they are too impatient to accumulate 25,000 points, they see it all as free money, and/or they just haven't thought it through.

Similarly an 8GB iPod Nano goes for 32,000 points ($320) but only costs $179 on Amazon.com. Big "stupid" tax.

The 1% back must cost Mastercard a lot less than 1% to provide.
__________________
Al
TromboneAl is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-14-2008, 10:06 AM   #2
Thinks s/he gets paid by the post
 
Join Date: Jan 2004
Posts: 2,049
The points system is genius. They can change the conversion rate at any time.
eridanus is offline   Reply With Quote
Old 05-14-2008, 10:09 AM   #3
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,004
Al, your examples are the reason the only CC rewards program that make sense to me is cash back - like PenFed's Visa card.
__________________
Numbers is hard
REWahoo is offline   Reply With Quote
Old 05-14-2008, 10:15 AM   #4
Thinks s/he gets paid by the post
OAG's Avatar
 
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,635
Never understood these point systems. Although, I do have a card or two that do that. I usually just use a "current month cash back card" like the PENFED VISA card. USAA has a Master Card that is point based and every once in a while they will come out with a "make three charges within a certain period of time for a certain minimum dollar amount" and we will give you a $50 credit. They did that recently so I dig the card out go put the charges to qualify and then "retire" the card again.
__________________
Vietnam Veteran, CW4 USA, Retired 1979
OAG is offline   Reply With Quote
Old 05-14-2008, 10:16 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
calmloki's Avatar
 
Join Date: Jan 2007
Location: Independence
Posts: 7,281
Quote:
Originally Posted by REWahoo View Post
Al, your examples are the reason the only CC rewards program that make sense to me is cash back - like PenFed's Visa card.
And still better, cash back awarded monthly - like Penfed's Visa card.
calmloki is offline   Reply With Quote
Old 05-14-2008, 10:31 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Mar 2003
Posts: 18,085
There is a whole field of study that focuses on how consumers make financial decisions in different circumstances. No doubt the perception of the points as "free money" influences many to make questionable decisions in redeeming points.
__________________
"All animals are equal, but some animals are more equal than others."

- George Orwell

Ezekiel 23:20
brewer12345 is offline   Reply With Quote
Old 05-14-2008, 10:55 AM   #7
Thinks s/he gets paid by the post
maddythebeagle's Avatar
 
Join Date: Jun 2005
Posts: 2,450
Yeah, I think most of them devalue your points if you buy gift cards...Citibank's is even worse and does not give an easy option to turn thank you points into cash...
__________________
- Hurry! to the cliffs of insanity!
maddythebeagle is offline   Reply With Quote
Old 05-14-2008, 01:11 PM   #8
Thinks s/he gets paid by the post
saluki9's Avatar
 
Join Date: Feb 2005
Posts: 2,032
Still managing a 2.4% benefit ratio by using my points to buy tickets to Hawaii on AA. I've never even looked at the cash back offers, what % do you usually get back.
saluki9 is offline   Reply With Quote
Old 05-14-2008, 01:32 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
TromboneAl's Avatar
 
Join Date: Jun 2006
Posts: 12,880
It's definitely alluring. You just click on "iPod," and it appears in your mailbox.

The one mistake I made was using the $400 airline credit for $25,000 points ($250). Turned out you had to go through their travel agent, and the flight I got for $400 could have been purchased for < $250 on priceline.com.

For ours we get back 1%.
__________________
Al
TromboneAl is offline   Reply With Quote
Old 05-14-2008, 01:42 PM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 7,866
Quote:
Originally Posted by saluki9 View Post
Still managing a 2.4% benefit ratio by using my points to buy tickets to Hawaii on AA. I've never even looked at the cash back offers, what % do you usually get back.
1% is typical to good. If you search you can find cards that offer higher percentages on certain types of purchases. The two I have and like are my PenFed Visa which is 5% gas, 2% supermarket, 1% everything else, and my Costco AMEX card, which is 3% travel, 2% eating out, and 1% everything else (I think -- I don't actually use my AMEX much.) Also I believe the Costco card just added a cash back percentage on gas purchases. I like the PenFed card better too because it is an automatic cash back credit on every monthly statement; the Costco card sends you a check attached to your statement once a year in February.

Right now I just use the PenFed card for gas; for everything else I have just started cycling through a number of cards that are offering 0% on purchases for a while; in the meantime my money is earning 4% at Alliant and IndyMac.

2Cor521
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is offline   Reply With Quote
Old 05-14-2008, 01:58 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 14,183
The Costco/Amex rebate for gas is now 3%.
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Old 05-14-2008, 02:14 PM   #12
Full time employment: Posting here.
CCdaCE's Avatar
 
Join Date: Apr 2006
Posts: 897
Penfed is 1.25% on everything else, not 1% if you're talking about the Platinum card.

Charge a brazillion dollars, and we're talking about some real money, here.

-CC
__________________
"There's those thinkin' more or less, less is more, but if less is more, how you keepin' score?
It means for every point you make, your level drops. Kinda like you're startin' from the top..." "Society" - Eddie Vedder
CCdaCE is offline   Reply With Quote
Old 05-14-2008, 02:26 PM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,733
I always take the Cash back option. The one exception is the Discover card (who I think pretty much pioneered the cash back concept) use to allow you to trade you reward points on a 2:1 or 3:2 basis for selected merchants gift cards.

In contrast Worldpoint rewards are almost almost always a rip off, take the cash.
clifp is offline   Reply With Quote
Old 05-14-2008, 02:49 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 7,866
Quote:
Originally Posted by CCdaCE View Post
Penfed is 1.25% on everything else, not 1% if you're talking about the Platinum card.

Charge a brazillion dollars, and we're talking about some real money, here.

-CC
Yes, that's the card I have; thanks for the correction.

2Cor521
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is offline   Reply With Quote
Old 05-14-2008, 05:00 PM   #15
Thinks s/he gets paid by the post
 
Join Date: Dec 2007
Posts: 4,764
Too bad I don't qualify for the pen fed card. Damn maybe I should join the army.
Notmuchlonger is offline   Reply With Quote
Old 05-14-2008, 05:03 PM   #16
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,004
Quote:
Originally Posted by Notmuchlonger View Post
Too bad I don't qualify for the pen fed card. Damn maybe I should join the army.
You do qualify (not kidding). See the penfed.org website on how to become a member.
__________________
Numbers is hard
REWahoo is offline   Reply With Quote
Old 05-14-2008, 05:08 PM   #17
Thinks s/he gets paid by the post
 
Join Date: Dec 2007
Posts: 4,764
Oh I see 300$ for a lifetime membership or 20 a year

Thanks
Notmuchlonger is offline   Reply With Quote
Old 05-14-2008, 05:13 PM   #18
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,004
Not $20 per year or $$300. You pay a one time $20 fee to join and don't renew your membership after the first year. Once you are a member of the CU, it doesn't matter if you are no longer a member of the other organization.
__________________
Numbers is hard
REWahoo is offline   Reply With Quote
Old 05-14-2008, 05:19 PM   #19
Thinks s/he gets paid by the post
 
Join Date: Dec 2007
Posts: 4,764
Oh well hell thanks a lot going to do that now.
Notmuchlonger is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Luskin: "the worst risks of the credit crisis have been averted" W2R FIRE and Money 10 03-21-2008 01:45 PM
Best cash rewards credit card for someone with no credit history? summer2007 FIRE and Money 11 10-16-2007 02:23 AM
Credit Card Travel Rewards yakers FIRE and Money 1 01-17-2006 11:10 AM
Best Credit Card for rewards tednvon FIRE and Money 14 09-09-2005 09:31 PM
Credit Card rewards Arin38 FIRE and Money 33 06-10-2005 04:26 AM

» Quick Links

 
All times are GMT -6. The time now is 04:14 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.