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Friction in using CC points
Old 09-25-2019, 09:40 PM   #1
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Friction in using CC points

As a relative novice in the credit card points game, I'm coming to realize there are often obstacles to using points efficiently, and the way around those are not always discussed or highlighted on the sites describing the card features. Instead, they focus on the percentage of spending recovered as points, but not the pitfalls of efficiently using the points and ways you might get tripped up.


What I've realized lately is for the cards I've grabbed to get big sign up bonuses, it's often hard to use all the points because they give you points when you redeem points, and combine that with a large redemption minimum. For instance, I did the 90 day spend, got the bonus, applied it to the card, charged more to get the card balance in normal territory, then I had $50 worth of points but the minimum chunk is $100. So at 2%, I need another 2,500 in spending. No problem on the long term card, as it will happen eventually, but this card has an annual fee (waived the first year, but due next year). I don't plan on keeping the card, so the clock is ticking.


Another trick that I fell for (well, almost fell for), is to use points in an inefficient way. I guess I was spoiled by how easy it is to use Discover points on Amazon purchases...any amount is legit, so no chunk size minimum, and full point value. So I saw I could use American Express card points on Amazon and didn't see the fine print...they deducted 43% more points than expected! I thought it was an error, but realized it's buried a few levels in their agreement. I switched the payment on my Amazon order to another card, so I'm on the way to not getting what I consider a raw deal, but my points have yet to be restored, and I'll probably end up having to call.


Another common friction is applying points to individual historical purchases. I've been doing that for a few years, but it's annoying because to use your points at full value, you must have recent purchases, and in my case, they must be considered 'travel' (luckily, dining is included, and I never have a shortage of that expense!)


Yes, then I have the Fidelity card that's 2% on everything, no annual fee, and so no deadline. And automatically credits my Fidelity cash account. So large chunk size there isn't a problem. But I've had the card quite some time and only now got my first transfer. Of course I've been playing the sign up bonus game, so using other cards.


Anyway, I wanted to rant share some of the 'gotchas' I've learned about, and see how others navigate this space, and how they feel about it.
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Old 09-25-2019, 10:16 PM   #2
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I/we play the points game and it causes pain to waste points - like Barclay with its 10% point back reward on redemption. I've found that on some cards I can donate the points I'd otherwise waste to this or that charity. That feels better. Mostly though I go for the cash card bonus rather than travel points. We're sitting on 470,000 Chase ultimate reward points, which we do use a bit, but if need be that is $4,700 and easy to cash in. Just had $545 in WF bonus and spending points hit my Wells Fargo business checking account, so that's a dead card to me now and the Fidelity card is back in play till the next new card. Fidelity is just so brain dead simple to collect the points on that if bonus amounts weren't such a good return I'd use only it.
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Old 09-26-2019, 01:47 AM   #3
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Stopped the game when reached using 5 cards all from BOA. Now the goal is just to maximize the rewards % more efficiently over time.
Examples are purchasing gas cards/Barnes & Noble at the drug store to maximize the 5.25% reward, etc.
Composite rewards % is at 3.33%.
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Old 09-26-2019, 05:05 AM   #4
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I just use the 2% Fido. I get $200 or so a month in cash into my account. I long ago gave up on using/getting air miles. They always move the carrot.
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Old 09-26-2019, 05:05 AM   #5
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I've found that the most efficient plan for me uses three specific cards. Hhonor Amex for Hilton hotels, Delta Amex for airfare and Fido Visa for everything else. I'm also very careful how i use the two Amex points cards. There are big discrepancies between various hotels regarding points vs paying cash. Likewise with the airline miles.
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Old 09-26-2019, 06:37 AM   #6
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Fido cash-only Visa. EVERYTHING goes on that single card. $0.69 cup of coffee from the gas station goes on that card. I average about $100-200/month cash from it.

I can spend the cash on whatever air/hotel travel needs I want --- or not. The incremental advantages of all the other travel-specific points cards are definitely not worth the hassles to me.

We keep two other cards from different companies only as a backup, using them once every few months.
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Old 09-26-2019, 07:39 AM   #7
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Yep, that's why I stick to cash back rewards. Easier to compare, and zero friction/overhead when redeeming.
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Old 09-26-2019, 07:50 AM   #8
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Fido cash back fan. Played the game a bit earlier but find life much simpler to use one card everywhere and let the cash automatically roll back. Thought about going back to a Delta associated card for free baggage but just can't get motivated.
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Old 09-26-2019, 07:58 AM   #9
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Quote:
Originally Posted by The Cosmic Avenger View Post
Yep, that's why I stick to cash back rewards. Easier to compare, and zero friction/overhead when redeeming.
Far too many points that can be used for things like Hotel Rooms, airline tickets, etc. based the value of the points on a full-price ticket.

Being a Veteran, I get 20% off many hotel rooms already. I fly on off days, if I even fly. I can save money just by being cost conscious, I do not need to use the companies dedicated points.

I get over $5,000 each year in credit card rewards. Factor in discounts/rebates I get, and you can probably add in another $2,000.
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Old 09-26-2019, 08:40 AM   #10
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+1 I feel the OP's pain.

The ability of airlines and hotels to wipe out the value of my points overnight in a huge inflationary price increase, has turned me off to their cards. Add in the fact that one is restricted to a particular airline or hotel and it's even worse. (There are places I go that don't have a Holiday Inn. Imagine that!).

I use the Fidelity 2% card for most purchases. The main exception is my Costco Visa card for restaurants (3%) and gasoline (4%). Two cards are easy to use. Occasionally I will use my Discover card when their rotating 5% is something I can take advantage of such as at the grocery store.

Oh, I also use my Amazon card for 3% back on Amazon purchases. (But, I have fewer of these as I have realized Amazon is not always as good a deal as it used to be.) The Amazon card stays in my sock drawer otherwise. The exception to using the Amazon card will be the last quarter of this year when Discover offers 5% back on Amazon, WalMart and Target. Note: The Discover 5% at Amazon over the Christmas quarter made it easier to drop Prime, a few more dollars in old Chuckanut's pocket. Thanks Discover.
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Old 09-26-2019, 08:44 AM   #11
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In the past I've used 3 -4 cards and switch between them based on rewards categories then decided it's not worth my time. I now use the Fido 2% on everything and periodically use the other 3 cards to keep them active.
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Old 09-26-2019, 09:00 AM   #12
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In 2006, I pulled the plug on the “points game” and went the rebate route. 2% minimum cash back (in some cases, more) on every cent that I spend. Annual rebate ranges from $2k to $4k.
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Old 09-26-2019, 09:00 AM   #13
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I often use my cash back amounts to pay for travel expenses. Yes, I know money is fungible. But, when somebody brags about using his points for a business class ticket to Lower Slobovia, I tell them I used my cash back on a recent trip where they paid for an upgrade to Premium Economy, and water front hotel rooms for a week. It's fun to have some bragging rights.
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Old 09-26-2019, 09:22 AM   #14
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I prefer cash back and low threshold for redemption for statement credit or cash in bank account. I haven’t gotten a new card for a bonus in a long while. Already have plenty of cards and keep the ones I really use.
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Old 09-26-2019, 10:07 AM   #15
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Lots of Fidelity 2% customers here! Certainly a low friction card WRT point utilization. Ooh, that sounded like a "plug", so let me add that it's only my choice if I'm not "working the system", with some other sign up bonus card.
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Old 09-26-2019, 11:41 AM   #16
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Opposite of friction on my Fido 2% Visa. I set up autopay but typo’d the account # on the account. I realized my mistake too late to fix it so I called Customer Service. They couldn’t fix it either but said no problem as long as I had scheduled the payment the account would reflect paid in full until the credit was reversed (rejected by the bank). I managed to pay the full balance after the statement closing date expecting a penalty or interest charge in the following statement period but there was none. Love this card.
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Old 09-26-2019, 11:55 AM   #17
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If one has 100k invested with Merrill, then the BOA cash rewards cards combined with the Premier card is a better value than the Fidelity or Citi 2% cards.
If one doesn't have investments with Merrill, then no.
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Old 09-26-2019, 12:13 PM   #18
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Two 2% back cards + Amex Blue for 6% on grocery stores which thus includes alcohol + Amazon 5% purchases Visa. Carry first three around. Leave Amazon at home.
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Old 09-26-2019, 12:46 PM   #19
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Cash back only for me too. I don't work the system. Can't even get another card because I froze the credit reports.
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Old 09-26-2019, 03:39 PM   #20
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Sorry kids but as a points pro I've scored some huge deals by working the system. While Fido cash back is well over 90% of my skim others have proven themselves. For example DW scored the Doubletree Times Square for New Years Eve at 80k points. 42nd floor with a view, A week later it was over 3 grand cash . Hilton Grand Vacations as well as some quirky 10k Hamptons have far exceeded any cash back deals. I will admit that airlines aren't quite as lucrative as they were back in the day. Probably the biggest example of miles/points inflation.
However it is a simple math problem that can be solved for your personal situation
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