- Joined
- Oct 13, 2010
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- 10,787
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.
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.