Cash Back Credit Cards?

[35nothing]

Quote:

Originally Posted by mountainsoft We have a simple Visa credit card through our local US Bank. No bonuses, no cash back, but we've had it for most of our adult life. We always pay our balance off every month (usually every week or two). I recently started looking at cash back credit cards. They sound like free money, earning some cash back for things we're buying anyway. But when things sound too good to be true I start to get nervous. Most of the cards I've seen sound too complicated, with annual fees, or having to pick categories (or have them chosen automatically), or caps on earnings. That sounds like too much work for my liking. I'm currently looking at the Citi Double Cash credit card. Supposedly 2% on all purchases (1% when buying, 1% when paying off), no caps, no annual fees. Sounds good, but again, that makes me nervous. One of the things that concerns me is the logistics of managing the card. My current Visa card is at the same bank I have my checking account, so it's easy to log on and transfer money to pay off the card. I'm not sure how I would handle this with a credit card at a different bank than I use for my checking account (I want to keep my current checking account so we have access to the safe deposit box at my local branch). My local US Bank does offer a cash back card, but it has all of those categories and caps and stuff that I would rather avoid. Anyway, I'm curious who uses these cash back credit cards and how they work for you. Any down sides the reviews and promotional information fail to mention?

I used Chase freedom unlimited, amex blue, citi double and one from my credit union. I would have got upto 500$ in cash back from all of them combied. ( All were great untill I couldnt pay in full).

[rodi]

Quote:

Originally Posted by audreyh1 We get the most off our Costco VISA with 3% travel hotels and dining with no foreign transaction fee, and our Amazon Store Card with 5% back. After that our 2% Fidelity. It really adds up. This year I expect our Costco VISA Cash Rewards check to exceed $700.

This except we have a CapOne Venture instead of fidelity. It's easy to keep track of on daily purchases - Costco card for gas, dining, costco groceries. Amazon for amazon. And Cap one for everything else. DH only has the costco card - which is ok. So the rewards are only 1% on his non dining/travel/gas purchases - he's still getting money back

[sheehs1]

Quote:

Originally Posted by Drake3287 Charging a vehicle. Not sure if this is true or not but once when I tried to put the vehicle down payment on a credit card the finance guy told me I couldn't use a loan (credit card) as the means of a cash down payment. I think in reality paying for a new car with a credit card is up to the dealer and how much they'll willing to payout for credit card charges. With most new car's having a slim margin these day's that credit card fee takes a big bite out of a sale. In most of my recent purchases they've only allowed a few thousand on the card because of "dealer" limits.

Not sure if you are questioning what I wrote about my recent car purchase experience or just relaying your own experiences with the dealerships you have used. Charging half of the negotiated price of the vehicle on my Cash Rewards card is true.
I wrote a personal check for the other half.

I am sure not all dealerships will do this but this one did. They already had my financial income info and credit score from a loan application (when I wasn't sure how I wanted to pay), knew I was inclined to pay "cash". They wanted the sale and I wanted the vehicle. It actually was not even a topic of conversation with the finance director. He simply said, "Yes, you can do that. We have people do it all the time. Some put their entire purchase price on their card".

[Drake3287]

Just saying my experience. You obviously have better luck then me!

[Sconie]

The Citi Double Cash card @ 2% is good to go.

Another----if you qualify-----is PenFed CU's Power Cash Rewards Card which pays 1.5% with an additional .5% for members of PenFed's honors advantage program.

[a60dan]

I don't redeem the rewards often, but we booked round trip air for our Alaska cruise from Toronto using AARP Visa (you don't have to be a member, 3% on gas & restaurants) and Capital One Quicksilver 1.5% on everything). No annual fees.

The high stake cards (Chase Sapphire Reserve, AmEx Propel, AAdvantage) have yielded us over $1500). As long as they waive the 1st year annual fee:

- put reminder to cancel in calendar
- immediately set up auto-pay to avoid forgotten bills & resulting interest

You have to use the right card for the right purchase, and stay on top of those cards with fees.

I marvel at how they make money, because it sure isn't from me :-)

[sheehs1]

Quote:

Originally Posted by Drake3287 Just saying my experience. You obviously have better luck then me!

Perhaps with the dealership. Honestly, I had no clue they would let me put half of the purchase price on my card. That, with other purchases basically maxed out my card since i had not requested a limit increase.

I was prepared to do whatever they would allow. It wasn't until I was sitting in the finance directors office that I found out they basically allow the entire purchase price.

Wishing you better luck or terms in the future!

[Oakster]

Too much work and effort for little to no benefit. Studies show that spending money on plastic entices people to buy something like 15% - 20% more than they normally would spend, which outweighs all the benefits of cash back. Credit Card companies are an awesome machine at understanding spending habits and knowing how to make money. If you were getting ahead with the cash back, they wouldn't offer it. I would be willing to bet that the person who spent mostly with cash would come ahead in the end.

I have to use a credit card for work expenses, so I have one with points back on stuff I like to buy for myself... but I would not chase those points if I didn't need to have the card.

[ychuck46]

I average between $1-2000 per year in cash back on my credit cards, and never purchase more than I normally would have without them. The only long-term card I pay an annual fee for is the AmEx Blue for the 6% back on groceries. I will occasionally add a card for a sign up bonus which will goose any year over my $1-2K back and then cancel it before the annual fee kicks in, but that is not all the time. Paying the bills from my bank (also US Bank like you) is extremely easy. You are definitely leaving money on the table and subsidizing those who are not.

[sengsational]

Our credit score took a hit to the point of our home owners insurance not giving us the best rate, but we opened two cards and flew to Alaska for free. 25 years ago, but some things are too good to pass up

[SoReadyToRetire]

I've also been using the Citi Double Cash Back (on everything!) card for a few years. It's awesome for all the reasons others have said: I pay balance in full every month so get paid to buy things I would have bought anyway; alerts on the account are really good; I don't have to pay attention to what "category" is paying each month, as it pays on everything I spend; etc.

I even find myself charging things I normally wouldn't like groceries and gas just to get that 2% "discount" as long as I'm spending the money and paying it off every month.

Well worth it and no tricks that I can discern!

[sengsational]

The idea that people spend more if they put it on a credit card has to die.


I'm about 99.9% indifferent to whether it's paid the moment of the transaction or within 30 days (balance paid off in full).

[Chuckanut]

Quote:

Originally Posted by Oakster Credit Card companies are an awesome machine at understanding spending habits and knowing how to make money. If you were getting ahead with the cash back, they wouldn't offer it. I would be willing to bet that the person who spent mostly with cash would come ahead in the end. .

You make some good points.

However, what you forget is the interest the CC companies collect when people can't pay the full balance. They collect double digits from these folks and pay low single digits to others. So the folks paying interest charges are the ones funding my 'cash back'.

One has to have self-control, otherwise it is a trap.

[audreyh1]

Quote:

Originally Posted by Oakster Too much work and effort for little to no benefit. Studies show that spending money on plastic entices people to buy something like 15% - 20% more than they normally would spend, which outweighs all the benefits of cash back. Credit Card companies are an awesome machine at understanding spending habits and knowing how to make money. If you were getting ahead with the cash back, they wouldn't offer it. I would be willing to bet that the person who spent mostly with cash would come ahead in the end. I have to use a credit card for work expenses, so I have one with points back on stuff I like to buy for myself... but I would not chase those points if I didn't need to have the card.

This may apply across a population as shown by studies, but varies depending on the individual. Folks who frequent this forum and have successfully saved enough to retire early, are also most likely to have already developed sensible spending habits, pay off their credit cards monthly, and don't necessarily buy more because they are using credit. In fact, they are more likely taking advantage of the credit card cash back discount as well as a free month's worth of credit float, as well as the convenience of being able to download transactions into their banking/household finance management software rather than dealing with the inconvenience of checks and cash.

There are plenty of us who pay off our cards monthly, and the credit card companies still love us, because they still make money off the transactions even if we're not paying interest. The folks who pay with cash and checks are the ones actually getting the worse deal because in most cases they don't get any cash discount.

[Drake3287]

Quote:

Originally Posted by audreyh1 This may apply across a population as shown by studies, but varies depending on the individual. Folks who frequent this forum and have successfully saved enough to retire early, are also most likely to have already developed sensible spending habits, pay off their credit cards monthly, and don't necessarily buy more because they are using credit. In fact, they are more likely taking advantage of the credit card cash back discount as well as a free month's worth of credit float, as well as the convenience of being able to download transactions into their banking/household finance management software rather than dealing with the inconvenience of checks and cash. There are plenty of us who pay off our cards monthly, and the credit card companies still love us, because they still make money off the transactions even if we're not paying interest. The folks who pay with cash and checks are the ones actually getting the worse deal because in most cases they don't get any cash discount.

Totally agree.

[leftcoastjayhawk]

Scanning this forum, I have not seen a mention of the recent Chase Southwest Airlines credit card deal. A fabulous deal for anyone who flys at all domestically and does not have an existing Chase Southwest credit card.

Get a new Chase Rapid Rewards Southwest Priority Credit Card, pay an upfront $69 annual fee, charge $4,000 to the card within the first three months and then get a Companion Pass for the rest of 2019.You must have a Southwest Rapid Rewards number, and have NOT received any bonus points on a Southwest card in the last 24 months (such as renewal points from an existing card.) Deal ends Feb 11th.

I recommend checking the details carefully, and searching on some of the travel and credit card websites/blogs that discuss the best credit card deals for details.

A Companion Pass is worth a LOT more than $69. A single minimum fare one way trip for the cardholder and the Companion pays for that. We take three or four roundtrips a year on Southwest, so that Companion Pass makes this the best bonus deal around for us. Easily worth more than $1000. for us. And you also get 30,000 Rapid Reward points, which certainly helps with the first flights.

Of course, if this causes you to carry credit card debt and not pay off the balance every month, that makes this a no deal. Or if you start taking flights that you otherwise would not, that negates the benefit also.

After getting the Companion Pass, I'd frankly recommend cancelling the card before renewal so you do not get bonus points and become eligible for any similar promotions in a couple of years. (Chase did this promo in November of 2017, but only for California residents as I recall).

There are other ways to get a Southwest Companion Pass, but none as simple as this.

[meleana]

We use American Express Blue for almost everything, mainly because we get 6% cash back on groceries and 3% back on gas and 1% on everything else. There is an annual fee but the cash back is so good on the groceries and gas- of which we spend a lot- that it is still worth it. We also use Discover More and Capital One World Mastercard for their revolving cash back offers every quarter


For example- for the next 3 months the Mastercard is offering 5% cash back on gas up to like $1200 I think it is. So now we are using it for gas for thee next 3 months instead of our American Express. It is also offering 5% back on Home Depot for these next 3 months.


We put all our bills on American Express as well. And we always pay our credit card bills in full.


Last year we got over $900 cash back and we use that as spending money when we go on our vacations.

[REWahoo]

PenFed Cash Rewards Visa for gas - 5%
Amazon Prime for Amazon purchases - 5%
USAA Limitless Cashback Visa for all other - 2.5%

No annual fees on any of the above.

[gooddog]

I was with US Bank for 22 years, had USB credit cards and they had cash back - but had to choose categories every three months. It was a hassle. Moved credit cards over to Chase, no every three month hassle. You are right, it is like free money. If you are a big Costco user, get their card, it gives you quite a bit back. If you buy a lot of stuff from Amazon, they have a great card too.

[pb4uski]

Quote:

Originally Posted by Oakster Too much work and effort for little to no benefit. Studies show that spending money on plastic entices people to buy something like 15% - 20% more than they normally would spend, which outweighs all the benefits of cash back. Credit Card companies are an awesome machine at understanding spending habits and knowing how to make money. If you were getting ahead with the cash back, they wouldn't offer it. I would be willing to bet that the person who spent mostly with cash would come ahead in the end. ...

In general perhaps yes... but not with this group here.... most are LBYM and only spend when they need to and pay their CC bills in full every month... commonly on autopay. So for us the cash back card is just in lieu of carrying cash... its not like some people who might buy because they carry a balance. Other bennies are extended warranty coverage (2 years extension of the mfg warranty)... plus 2%. Life is good.