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Cash back or points?
Old 10-21-2016, 09:10 AM   #1
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Cash back or points?

We have a Fidelity 2% cash back card and typically get back around $1,500-$2,000 per year. Is this a better deal than points or is there a points rewards card you think is better? We are not willing to use different cards for different spend categories as we like the simplicity of one card for all purchases.


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Old 10-21-2016, 09:17 AM   #2
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Cash for me. Much more flexible. The additional difference in restricted purchases available using points might be 0.05% - not worth it to me, and also goes towards your simplicity goal.
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Old 10-21-2016, 09:37 AM   #3
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+1 cash for me.

Prior to a few months ago, our primary card was a grandfathered Escape by Discover card which is no longer offered and gives 2 points/$1 on everything but had a $65 annual fee. When we got it many years ago, it was the best thing going at the time. We could apply points to travel expenses (1 penny per point) so in effect it was 2% on everything.

We now use the Citi Double Cash card that you may see advertised... 1% when charged and 1% when paid, but since we pay every month via auto-pay it is like getting 2% on everything but has no annual fee.

I gave Discover the opportunity to waive the annual fee but they refused to do so, so out they go.
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Old 10-21-2016, 09:43 AM   #4
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Definitely cash back. I have already earned over $1,000 this year. If I fly Spirit air, on off-travel days, that is a lot or airline tickets.

I use the Fidelity Visa 2% cash back card too.
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Old 10-21-2016, 10:25 AM   #5
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We play the "points" game and, although it might take a bit more work, I think we come out ahead. For example, using an example spend from above ($2k cash back = $100k spend); for this spend, we'd get at least 100k miles, good for $3k +/- worth of air fare. The free checked bag & lounge passes more than makes up for the annual fee.
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Old 10-21-2016, 10:41 AM   #6
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Mostly, I use the Amex Cash Preferred. It has a $75 annual fee, but does 6% cashback on groceries, 3% back on gas and 1% on all others. I also use the Chase Freedom that has rotating categories for 5%.

I did make an exception for a while and got the Chase Sapphire Reserve for the points ($450 annual fee, but will be able to get $600 in travel credits and 100,000 points ($1500 towards travel on the Ultimate Rewards page)...so a net "profit" of $1650)). I don't "churn" as much as I did, but that's just because our spending is pretty low.
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Old 10-21-2016, 11:13 AM   #7
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We stopped using most credit cards when DH retired because he wanted to use cash for local spending. It's worked out nicely. We still use a PenFed cash reward card for gas only.

Then my BIL told us about the Southwest Airline reward card. We were planning a trip to Denver for a family wedding in September. I looked into it and we decided to do it. We needed $2000 in spending in 3 months so we paid for our flights and our 1 week Airbnb with the card and got our 50,000 points right away. Then we used most of those points for flights to Marco Island, FL for a vacation in March 2017 with my sister and BIL.

There was a $99 fee for the card which I hated to pay but overall I know we came out ahead. We have some points left but it costs $69/year to keep the card after the first year. We really don't travel much so will evaluate this as we go.

BTW, the wedding was canceled in August but we went anyways to see DHs family southeast of Denver. His mom is 87 so it was important. Our Airbnb was in Evergreen, in the mountains west of Denver and was WONDERFUL. We had lots of driving but we were all glad we stayed in Evergreen instead of close to DHs mom.

The engaged couple eloped a few weeks later. In Colorado you can get a marriage license and "self solemnize" and it's a legal marriage. The cancellation was due to MIL drama/manipulation on the bride's side. We were glad the couple survived the drama and we had a nice visit despite the change in plans.
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Old 10-21-2016, 11:30 AM   #8
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The engaged couple eloped a few weeks later. In Colorado you can get a marriage license and "self solemnize" and it's a legal marriage. The cancellation was due to MIL drama/manipulation on the bride's side. We were glad the couple survived the drama and we had a nice visit despite the change in plans.
After going through the effort of getting married, wouldn't they want to "CO-solemnize"?
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Old 10-21-2016, 11:30 AM   #9
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There was a $99 fee for the card which I hated to pay but overall I know we came out ahead. We have some points left but it costs $69/year to keep the card after the first year. We really don't travel much so will evaluate this as we go.
On my SW Air card the points transfer each month, so you have them in you SW air account. You can buy gift cards with the points, so use your card to get up to 5000 points and get a $50 Amazon or Walmart gift card. Worked for me.Yes, the points are worth more on flights, but if they are going to expire in 2 years without activity, that lets you "cash" out. HTH
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Old 10-21-2016, 11:35 AM   #10
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2% is hard to beat consistently by using points in my experience. I would definitely take cash too since I have about 2M points, do not need any more.
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Old 10-21-2016, 11:57 AM   #11
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On my SW Air card the points transfer each month, so you have them in you SW air account. You can buy gift cards with the points, so use your card to get up to 5000 points and get a $50 Amazon or Walmart gift card. Worked for me.Yes, the points are worth more on flights, but if they are going to expire in 2 years without activity, that lets you "cash" out. HTH
We also have a son who likes to travel more than we do. We can transfer the points to his account if we don't want to renew the card.
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Old 10-21-2016, 01:22 PM   #12
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Originally Posted by Scuba View Post
We have a Fidelity 2% cash back card and typically get back around $1,500-$2,000 per year. Is this a better deal than points or is there a points rewards card you think is better? We are not willing to use different cards for different spend categories as we like the simplicity of one card for all purchases.


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I take the 2% cash back for the same reason you do - simplicity. You can do better than 2% for some purchases, but I'm not willing to do the credit card shuffle.
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Old 10-21-2016, 01:22 PM   #13
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We had a Chase British Airways card with which we got companion certificates along with miles. We used them to fly Business Class for the miles the 2 of us would use in coach.
Since we are not traveling overseas any more, I switched to a Chase Freedom card and get cash back.
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Old 10-21-2016, 01:41 PM   #14
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Originally Posted by ExFlyBoy5 View Post
Mostly, I use the Amex Cash Preferred. It has a $75 annual fee, but does 6% cashback on groceries, 3% back on gas and 1% on all others. I also use the Chase Freedom that has rotating categories for 5%.

I did make an exception for a while and got the Chase Sapphire Reserve for the points ($450 annual fee, but will be able to get $600 in travel credits and 100,000 points ($1500 towards travel on the Ultimate Rewards page)...so a net "profit" of $1650)). I don't "churn" as much as I did, but that's just because our spending is pretty low.
How did you get $600 in travel credit? I know it is $300 in credits per year (unless you are counting this year as $300 and next year as $300 and cancel before the annual fee is charged next year?). But I agree, the Chase Reserve card is great. $450 fee but subtract out $1000 sign-up bonus if taking it as cash back ($1,500 when booking as a reward). $300 in travel credit per year, $100 every 4-5 years on Global Entry cost. Free Priority Pass Lounge Access is not necessary but nice. 3x points earned on travel and dining. The 1.5x bonus on booking travel through rewards is great, especially since I had piled up 150,000 in points on my non-fee Freedom card. So between my now 250K points now and my wife's 100K and our general spending (points can be transferred to this card for free), I don't think we will have to pay for a flight and/or hotel for many many years. If you like simplicity, go with cash back but if you like fun, play around with points. ThePointsGuy website and app is great with that.
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Old 10-21-2016, 02:15 PM   #15
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Everyone is unique and for us we just need too many cards these days. For our business we try and use our Alaska Visa for anything we can including Costco. We rack up about 500,000 miles per year which gives us first class trips for 2 on British, Emerits or Delta just about anywhere in the world twice a year. Alaska miles seem to be the best for partner airlines. These tickets are worth 6K to 10K a trip or even more. We just got back from Spain where we flew 1st class, and took a cruise. I bought the suite on our Costco Card for 3% cash back on travel, and booking through Costco they rebate you the commission on a cash card.

But its hard to use just one card for personal, as we travel and we like the no foreign fees provided by Alaska and BofA Travel cards. But for day to day, we use our Citi Costco Visa with cash back or our Chase Freedom for the extra 5% back categories. The only card we pay an annual fee on is the Alaska Visa for Business. We could be getting cash back of 1 to 2% on other cards for our business, but that $$$ would come back to the business and we get to pay tax on it.

We had Sapphire Preferred and DELTA Gold Amex cards as well as others, but the Delta miles are near worthless so we drop them when Costco went to Visa.

Bottom line is airline points on the right mile plan are worth much more than cash for international travel, not so much of a deal for domestic travel. The Costco Citi Visa is a very good no fee day to day cash back card.
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Old 10-21-2016, 04:46 PM   #16
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My rule with points is to spend them when I can. I don't hoard them. Devaluations can happen at any time. Bonuses are get bigger, churning is common and devaluing a reserve of points is any easy win for airlines and lenders

The point (pun intended) is that if I'm going to earn points, I don't save them for a rainy day. If you're too much of a saver, or if you don't do much international travel, just earn cash. The value of cash is easy to track :-)
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Old 10-21-2016, 05:32 PM   #17
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We stopped using most credit cards when DH retired because he wanted to use cash for local spending.
Why? A CC works just as well & fewer trips to ATM - unless using debit card as cash.
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Old 10-21-2016, 05:39 PM   #18
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How did you get $600 in travel credit? I know it is $300 in credits per year (unless you are counting this year as $300 and next year as $300 and cancel before the annual fee is charged next year?). But I agree, the Chase Reserve card is great. $450 fee but subtract out $1000 sign-up bonus if taking it as cash back ($1,500 when booking as a reward). $300 in travel credit per year, $100 every 4-5 years on Global Entry cost. Free Priority Pass Lounge Access is not necessary but nice. 3x points earned on travel and dining. The 1.5x bonus on booking travel through rewards is great, especially since I had piled up 150,000 in points on my non-fee Freedom card. So between my now 250K points now and my wife's 100K and our general spending (points can be transferred to this card for free), I don't think we will have to pay for a flight and/or hotel for many many years. If you like simplicity, go with cash back but if you like fun, play around with points. ThePointsGuy website and app is great with that.
Re: $600 travel credits...

Basically, you get up to $300 the first year of having the card (must be applied before December statement closes) and then another $300 the following calendar year. I got the card in September and will close it after our paid-for-by-Chase vacation in May.
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Old 10-21-2016, 06:09 PM   #19
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We travel overseas several times a year and have found the best use of credit card points is to upgrade from economy to business class. Each of the major cards ( chase and Amex ) have various airline partners. To do this, you sign up as frequent flier on airline , hold the flight you want, make sure upgrade is available then transfer points from credit card to airline. The savings has amounted to 4-10 cents per point and saved us thousands.
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Cash back or points?
Old 10-21-2016, 06:39 PM   #20
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Cash back or points?

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Why? A CC works just as well & fewer trips to ATM - unless using debit card as cash.

Because DH does the grocery shopping and his favorite store only takes Discover (not very good points value), checks and cash. Groceries is our largest spending category. We don't use the ATM, we get a months worth of cash from the bank once a month.

DH always avoided any involvement in anything having to do with numbers, especially money. Credit card rewards and rebates made his head spin, although I used to enjoy working the points games.

When he retired I wanted him to have some participation in our financial life. Moving to cash was his idea and he finally is participating in the household financial activity. It's still not his favorite thing (OMG INTEGERS) but he participates with the cash.




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