Who uses credit cards for cash?

[gerntz]

Even the food bank asks me to add on the cc fee to my donation so they don't have to pay it.

I'd decline to pay that fee. It's already included in the donation. QCD from RMD is a much better deal for you if you've reached that status.

 

[gwraigty]

Originally Posted by gwraigty View Post
..
Citi Mastercard - 2% as long as you don't redeem for a statement credit
************************************************************

If you select statement credit ,then aren't you earning only 1% back?
(losing half of your potential rewards)

I don't have the card, but had considered it. It's my understanding that you get 1% on purchases and 1% on payments. If you choose a statement credit, you're getting less than the full secondary 1% on your purchase amounts. For a crude example, if you spent $1,000 in a billing cycle, had redeemed $25.00 as a statement credit, consequently were billed $975, and paid the bill in full, you wound up with 1% on the $1,000 in purchases, and 1% on the $975 payment. That would be $10 plus $9.75 for $19.75 in cash back. That's 1.975%, not 2%. Don't redeem as a statement credit, and you get $10 plus $10 for $20 in cash back, which is the full 2% on purchases.

Because the card splits the cash back between purchases and payments, unlike most cards, choosing a statement credit is not a no brainer with this card, as it can be with most other cards.

 

[kaneohe]

I don't have the card, but had considered it. It's my understanding that you get 1% on purchases and 1% on payments. If you choose a statement credit, you're getting less than the full secondary 1% on your purchase amounts. For a crude example, if you spent $1,000 in a billing cycle, had redeemed $25.00 as a statement credit, consequently were billed $975, and paid the bill in full, you wound up with 1% on the $1,000 in purchases, and 1% on the $975 payment. That would be $10 plus $9.75 for $19.75 in cash back. That's 1.975%, not 2%. Don't redeem as a statement credit, and you get $10 plus $10 for $20 in cash back, which is the full 2% on purchases.

Because the card splits the cash back between purchases and payments, unlike most cards, choosing a statement credit is not a no brainer with this card, as it can be with most other cards.

g...........thanks for that detailed example. Shows that my quick intuition is just quick and not right..........so just a small haircut on the final rewards kind of like applying rewards directly to purchases instead of a statement credit at AMZN.

The Fidelity card is worse if you don't deposit in Fidelity acct.......then you just get 1% instead of 2%.

 

[kgtest]

For me it's about getting as much of my spending into a credit card as possible. I try hard to manage/plan spending based on quarterly categories...especially big purchases since that is the quickest/easiest way to EARN cash back.

Chase Freedom - Gas Stations, Tolls, Drug Stores, Grocery Stores, Home Improvement Stores, Streaming Svc, Department Stores, ChasePAY Purchases and PayPal.
Chase Ink Bold - keep this for Cellphone protection. T mobile charges $15/month I get it for $95 on this card plus some other good benefits.
Chase Ink Cash - 5% back on internet/cable/phone + office supply
DiscoverIT - Grocery stores, gas station, uber, lyft, restaurants and paypal, Target, Amazon.com and Walmart.com

That's 21 different categories (22 if you add Travel) of spending that MOST people do anyways, with a little planning you can save thousands, I have and continue to. If your spouse gets the card and you are already big spenders, its even more savings!

Then let's talk about lost opportunity cost...money on my cash inflation pushed my +2% more than a year ago, while my investments are at +25% so basically for a 0% loan I can put my cash into the market, pay the bills on a 0% loan from the CC company and get essentially a 10-20% return while beating out inflation on Chase's dime...or whoever's. This only works if you can pay your balance in full. Juicing my returns!

 

[jazz4cash]

g...........thanks



The Fidelity card is worse if you don't deposit in Fidelity acct.......then you just get 1% instead of 2%.

That’s news to me! I can’t think of a reason NOT to deposit to a Fido account. Mine auto-deposits to a MM account that earns ~1.75% whenever the Cashback value hits $50.

 

[gwraigty]

g...........thanks for that detailed example. Shows that my quick intuition is just quick and not right..........so just a small haircut on the final rewards kind of like applying rewards directly to purchases instead of a statement credit at AMZN.

The Fidelity card is worse if you don't deposit in Fidelity acct.......then you just get 1% instead of 2%.

You're welcome.

Yeah, I'd never recommend the Fidelity card to anyone who didn't want to open a Fidelity account to get the full 2% cash back.

 

[COcheesehead]

Another hack I’ve started using is to alternate bretween 2 Cashback cards every 2 weeks. That gets me an extra 14 days of float for a total of 42 days. That money stays invested in a high yield account and set to autopay on the due date.

Trying to wrap my head around this. Doesn't it get you an extra 14 days one time?

 

[Drake3287]

These cash back card's which I already commented about are great for people like myself and others on this forum that can discipline themselves to pay it off each month but unfortunately many can't.

I've had more than a few conversations with friends and family about this topic and it's clear it's not meant for everyone. These types of people are also generally the one's with financial issues or a life long battle's with saving money.

Although I find this an easy way of making "free" money, the fact is, for me I get this huge Visa bill each month with dozens and dozens of charges which I go over carefully to make sure of no mistakes or unaccounted charges. Surprising how often I find a mistake on the part of the business I charged at, either a wrong dollar amount or a charge that never went through.

Certainly takes a certain amount of organizational skills to keep up with it all.

 

[COcheesehead]

These cash back card's which I already commented about are great for people like myself and others on this forum that can discipline themselves to pay it off each month but unfortunately many can't.

I've had more than a few conversations with friends and family about this topic and it's clear it's not meant for everyone. These types of people are also generally the one's with financial issues or a life long battle's with saving money.

Although I find this an easy way of making "free" money, the fact is, for me I get this huge Visa bill each month with dozens and dozens of charges which I go over carefully to make sure of no mistakes or unaccounted charges. Surprising how often I find a mistake on the part of the business I charged at, either a wrong dollar amount or a charge that never went through.

Certainly takes a certain amount of organizational skills to keep up with it all.

I have credit card email alerts. That way I see the charges as they appear or fraud, which has happened a couple times as well.

 

[ivinsfan]

I have recently decided to transition all of my automatic bill payments, monthly spending, etc. to my credit card and then pay the balance off each month. Excluding my mortgage (which won't let me pay with a card), this will come out to about $80,000 per year, which will net me about $1000 cash back, or more if I use it for travel.

My mortgage costs me $26400 per year, which would add an extra $300 cash back to my yearly CC total. Since I can't pay with a card, I could withdrawal cash from my CC and then deposit that into my bank to pay the mortgage, and then just pay off the entire balance each month... And with this in mind, why not max out my cash allowance every month, put it into my bank, and use this to pay the balance, and really rack up CC points for travel?

Anyone else do this? Any issues? I'm assuming this is perfectly legal? I can't see why not.

It's certainly legal to pay cash advance fees and such to your CC holder. But do you really want too? Read the T and C with your card issuer.

 

[rayvt]

Trying to wrap my head around this. Doesn't it get you an extra 14 days one time?

Yes. It's just a one-time thing.

I am surprised nobody mentioned the Bank America red card. If you also have a Merrill Lynch with a certain balance you get 3.5% cash back at grocery stores and 5.23% at gas stations and Sams & Costco.

We use the BAC for those and Fido/Elan for everything else.

 

[Raygun99]

I charge my utilities Car and Home insurance all food entertainment. to my Costco card then draft from checking easier to keep track of one draft event..

 

[PoorOldCountryBoy]

Read the fine print

Awe crap! I figured it was too good to be true. I didn't realize there were fees. I've never used cash advances on CC before. I thought it was just like swiping for a purchase. Well, scrap that idea!

There is only one bill of mine that charges extra for a credit card, and for that one I'll continue having it taken from my bank account.

And, COcheesehead, we're currently looking at different bonus point cards to find one with the best points. Right now we've got Chase Sapphire, which is okay, but there are better ones out there. Oh, and I only want Visa or Mastercard. I'm not interested in American Express. I had one in the past, and it seemed there were too many places that don't take it.

Trigger warning - OP, not being harsh here just trying to protect you!

TBH, I'm pretty concerned with your lackadaisical approach to this. If you want to play the CC game you need to read and understand all the fine print. The fact you didn't know about the fees and never bothered to check yourself is pretty scary if you plan to do this going forward.

It sounds so easy-ask the experts here and they'll save you all that work--oh, if that were only true - the CC issuers are always changing the deal and you need to keep up on the original agreement and all the other changes going forward. If you haven't read your CC notices or statements in years, don't get too deep in this game, you won't make much. (Yeah, nothing is really free, right?)

If you want to keep it as mindless and lazy as possible (not a bad thing, BTW), just get a high percent cash back card and call it a day.

 

[jazz4cash]

Trying to wrap my head around this. Doesn't it get you an extra 14 days one time?

No. If the statement closes on the 30th, I stop using that card on the 16th and switch to the other card which closes 2 wks later. I am basically only using each card for the 1st half of the billing period. The 2nd half of each billing period is extra float.

 

[Perryinva]

I guess it also depends on what you spend your money on. We are traveling overseas a considerable number of times these next couple of years, (once or twice a year min) and we travel business or first. So for us, the British Airways cards work great. We each have one, and 30k in a calendar year gets a free companion ticket when a points ticket is redeemed, for the price of taxes & fuel surcharge, about $1000 to $1200 per ticket. When paid for with the BA card, there is a $200 credit applied against those charges. So two Business or First tickets for about $1k each is for us worth way more than cash back. It’s all fungible. Plus, of course, no taxes paid for income from cash back, when used as such. Considering the tickets would cost 6-10k a pair, that adds up.

 

[Sojourner]

1. AMEX Blue Cash: 5% on groceries, gasoline, and drug stores
2. Amazon/Chase VISA: 5% on all Amazon purchases
3. Fidelity/Elan VISA: 2% on everything else

We pay no annual fees and no one charges extra fees for CC use.

According to nerdwallet.com, the AmEx Blue Cash card (no annual fee) pays only 3% cash back on groceries, 2% on gasoline, and 1% at drug stores. I checked because getting 5% cash back on groceries and gasoline is, to my knowledge, unheard of these days for a no-annual-fee CC.

Also, although it may be true in your specific situation, it's not quite accurate to say "no one charges extra fees for CC use". I've never heard of being able to pay taxes (property, income, vehicle, etc.) using a CC without a substantial fee. In fact, in my experience, all service providers and agencies with a monopoly (e.g., city utilities) usually charge fees for payment via CC. Only private companies in competitive industries, like auto insurance or cable/satellite TV, waive CC payment fees. Not saying this is true for everyone, but since it's the case for me here in metro Atlanta, I suspect it's probably true in many other areas, as well.

 

[Cobra9777]

According to nerdwallet.com, the AmEx Blue Cash card (no annual fee) pays only 3% cash back on groceries, 2% on gasoline, and 1% at drug stores. I checked because getting 5% cash back on groceries and gasoline is, to my knowledge, unheard of these days for a no-annual-fee CC.

Also, although it may be true in your specific situation, it's not quite accurate to say "no one charges extra fees for CC use". I've never heard of being able to pay taxes (property, income, vehicle, etc.) using a CC without a substantial fee. In fact, in my experience, all service providers and agencies with a monopoly (e.g., city utilities) usually charge fees for payment via CC. Only private companies in competitive industries, like auto insurance or cable/satellite TV, waive CC payment fees. Not saying this is true for everyone, but since it's the case for me here in metro Atlanta, I suspect it's probably true in many other areas, as well.

I'm on a grandfathered version of the AMEX Blue Cash, which has no annual fee and pays 5% on groceries, gasoline, and drug stores. There are no spending limits. The only catch with this card is you don't earn 5% until after you spend $6500 each reward year at 1%. So we usually use that card for some large expense (like booking travel) at the start of each reward year so that we maximize the time at 5%.

Obviously, I can only speak for myself. But none of our utility providers charge an extra fee to pay the bill with a CC, including our city-owned (monopoly) electric and water utility. As I mentioned before, I don't pay property tax or federal income tax with a CC because the fees are too high. Everything else goes on a CC, including all monthly bills, and there are no extra fees for using the card.

 

[COcheesehead]

No. If the statement closes on the 30th, I stop using that card on the 16th and switch to the other card which closes 2 wks later. I am basically only using each card for the 1st half of the billing period. The 2nd half of each billing period is extra float.

Which puts how much in your pocket?

 

[RetiredGypsy]

Supposedly, sites like Plastiq, Venmo, etc. offer you the chance to pay with a credit card where you otherwise couldn't, but I think even then the 2.5-3% fee might wipe out any savings.

 

[Sojourner]

I'm on a grandfathered version of the AMEX Blue Cash, which has no annual fee and pays 5% on groceries, gasoline, and drug stores. There are no spending limits. The only catch with this card is you don't earn 5% until after you spend $6500 each reward year at 1%. So we usually use that card for some large expense (like booking travel) at the start of each reward year so that we maximize the time at 5%.

Ahh, OK I wondered if it was some sort of grandfathered card. Having to spend $6,500 before you start earning the 5% does seem like a pretty major catch, though.

Obviously, I can only speak for myself. But none of our utility providers charge an extra fee to pay the bill with a CC, including our city-owned (monopoly) electric and water utility. As I mentioned before, I don't pay property tax or federal income tax with a CC because the fees are too high. Everything else goes on a CC, including all monthly bills, and there are no extra fees for using the card.

That's great... I only wish my utility providers were as generous as yours. My water/sewer provider even charges a fee to pay by e-check(!), so I pay that using my bank's free bill-pay service. I suspect the general trend over time will be for more and more providers of all kinds to impose fees or surcharges for CC payments, kind of like gas stations started doing in recent years. It's fairly rare to see a gas station nowadays that doesn't charge something like 5-10¢ less per gallon for cash customers.

 

[gwraigty]

It's fairly rare to see a gas station nowadays that doesn't charge something like 5-10¢ less per gallon for cash customers.

In my area, I've never seen a gas station that charges less for cash than credit. I've lived in the same general area my whole life. A few decades ago, while on vacation in a different state, I did see this and thought it quite strange.

 

[Cobra9777]

...It's fairly rare to see a gas station nowadays that doesn't charge something like 5-10¢ less per gallon for cash customers.

In my area, I've never seen a gas station that charges less for cash than credit. I've lived in the same general area my whole life. A few decades ago, while on vacation in a different state, I did see this and thought it quite strange.

To this day, I've never seen a gas station that gives a discount for cash customers or adds a surcharge for CC use. It's my understanding that until recently, Texas had a law prohibiting surcharges for CC users. That was overturned late last year. So I guess we'll start seeing this soon. But as I said, I haven't seen it yet.

 

[Cobra9777]

...Having to spend $6,500 before you start earning the 5% does seem like a pretty major catch, though...

It's actually not too bad. As I said, I always book some travel or other large expense the first month to get past the $6,500 as quickly as possible. The "cost" to me is $65 ($6,500 * 1%). The 1% is the difference between actual cash back and what I could have earned putting the $6,500 on our regular Fidelity 2% card. The "benefit" is that I then earn 5% on grocery/gas/drug spend of about $1000/mo over the next 11 months. This generates cash back of $550, less the "cost" of $65, equals a net benefit of $485. If that same spend was on the 2% Fidelity card, the cash back would only be $220.

So yeah, it's a bit of a hassle for a few hundred bucks, but we've been doing this since we got the card in 2008. So I have the routine down and it adds up over time to a meaningful amount. At some point, I expect AMEX to pull this card and issue us one of the new ones. But so far, we've been grandfathered for about 3-4 years.

 

[rayvt]

In my area, I've never seen a gas station that charges less for cash than credit.

There's a couple of gas stations here that do it. The big one is Dodges. https://dodgessouthernstyle.com/ Their electronic price sign alternates between cash & credit, and cash is generally 3-4 cents less than credit.

We have always wondered, though, if we should call it a gas station that also sells fried chicken (and beer) or a fried chicken store that also sells gas (& beer). Oh, and all soda & icee's are $0.79 any size.

 

[Drake3287]

Many Gas Stations here in California (with the highest gas costs I might add) also typically offer 10 cents a gallon off for cash, or should I say they charge 10 cents more for a credit or ATM card.

With an F150 with a 34 gallon tank that's an extra $3. or so per fill up. Most of my fill up's tend to be at Costco because of it.