I could probably find items that I bought in that $100,000 at a bigger discount than 1.7%. Is it worth it to take time and see if you could get the same item at 20% off and pay with a debit card?
Credit Card Cash Back
- Thread starter Hawkman98
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I could probably find items that I bought in that $100,000 at a bigger discount than 1.7%. Is it worth it to take time and see if you could get the same item at 20% off and pay with a debit card?
That's great that it's worked for you, but the vast majority of people, including plenty on this board I'm sure, don't end with that result. They don't calculate the risk of putting everything on a credit card to get 2% back, only to have a couple of rough months or lose a job and then the credit card debt spiral goes out of control.
I use the Apple Card and there are no fees. Earns anywhere from 1-5% on all purchases, with the minimum being 2% any time you use touchless pay on your phone instead of swiping the physical card. All of the cash back automatically rolls into a Goldman savings account set up with Apple which then earns another 4.25%.
I don't look at it as a discount...I literally don't even think about it. I look for the best possible deal and buy it if I need/want it. Why would I not look for that before buying just because I'm using a credit card? Are there sellers offering a huge discount for cash transactions? And - yes - there are those that will knock a few % points off for cash. So I have a debit card, too.
The big issue with credit cards is they increase prices because businesses kick back to the companies and then they have to recover that cost. Unless a significant percentage...a really significant percentage...switch back to "cash", all a debit card user is doing is funding my rebate.
My veridian visa pays me 2% cash back, and since I use it instead of a debit card, I keep money in my checking account which also pays me interest.
Put EVERYTHING on a credit card.
Not just for points but also for more interest income.
Using a debit card instantly takes the money out which lowers my bank balance. With a high paying checking account it all adds up.
I try to make as much money on my money as possible.
Not just for points but also for more interest income.
Using a debit card instantly takes the money out which lowers my bank balance. With a high paying checking account it all adds up.
I try to make as much money on my money as possible.
If your credit cards are set to pay off at the end of the billing cycle - as mine are - you're essentially paying cash. If I go through a couple of rough months, I'll just have to cut back like a cash customer would. And they help with a stellar credit rating.
Are there people who mismanage their credit? You bet...lots of them. And they are preyed upon by the card companies. How about we go after the card companies for ridiculous, usurious interest rates exceeding 25%?
We have two cards we generally use. First choice is a mastercard for American Airlines points. This gets us free flights, status upgrades, and access to lounges when we travel. There is an annual fee, however. I am sure there are better deals but at this phase of our life, travel is a thing and I like the status for seats, boarding, and the lounges. Our fallback is the costco card, which is probably a better card if travel isn't a thing in your life, assuming you have a costco around you.
You're trying way too hard.
After years of dealing with people, I'm sure that's what lead him to hate them.
I’m not trying to get rich. I’m trying to have experiences I normally wouldn’t.
My family of 5 has flown to Hawaii twice in the last 5 years and we’ve spent 0.00 on plane tickets and not spent any money we normally wouldn’t have.
I feel that. I get better people than the OP, but man is it hard to deal with the small percent.
Not only that, but a credit card is a buffer in the event of identify theft or a compromised card, which is happening more and more frequently. You dispute the charge and off you go.
Think how much money you spent to fly to Hawaii when you could have just saved for the trip and got it for a fraction of what you spent to earn your "free trip"
Do people spend more with a card than counting out dollar bills? Probably. Do people spend more with a credit card rather than a debit card? Doubtful, unless they are idiots. As a rational person with a rewards card who pays the balance off at the end of the month, it is a no brainer for many reasons, including, but not limited to:
- The points/cash.
- Fraud protection.
- Status/seat upgrades when traveling
- Access to lounges when traveling
- Payment option available at Costco
That presupposes he spent money solely for the perks. If the money is going to be spent in any event, whether it is with a pile of dollar bills, a debit card, or a rewards card, you would be a fool to not take the rewards, unless you are an undisciplined idiot spending money you don't have.
I can't think of one time I've spent just to get cash back. I also get 6% back for streaming services from AMEX, so have them on autopay for that. It all adds up. $2000 of free money seems like a good deal to me.
I also just opened a Southwest VISA for the 85,000 points for spending 3K in 3 months. Used that to buy an oven and will cancel that one at some point.
You apparently can't read. I said I didn't spend any money we normally wouldn't have.
If you really want to know the very easy way to do it, find out where you want to stay/do for a big trip. For example, we stayed at Aulani, the Disney Resort, on Oahu. We would have stayed here whether we paid in cash or via card.
You and your wife sign up for two credit cards that give you 50,000 miles bonus when you spend 3,000 in the first 3 months.
You use those two cards to book all of the hotel stays and excursions you're doing on the trip. You're probably most of the way there already, and again, this would have been all money you were going to spend anyway. You have budgeted and saved that 6,000 for the trip so you pay the cards off immediately.
Now you have 100,000 miles to book the flights with which will probably get you and your whole family there and back. You probably just saved yourself 5,000. Then you cancel the cards, and you do the whole thing again in a year or two.
This isn't hard to understand, but some people make it hard to understand and I don't know why.
What I find interesting about this debate is that people "living in the margins" or pay check to pay check are the people who could most benefit from having the rewards and cash back, if they didn't spend money they don't have. With just a little discipline, you can squeeze and extra couple of grand out of the system and into your life. It adds up to a substantial sum after a period of years.
This is pretty good trolling, getting lots of bites arguing that 0% is better than 2%.
I have Discover's Fat Toad Platinum Club card.
Every time I spend 700 dollars I get one African Clawed Toad OR if I spend 1200 dollars I get one African Giant Toad.
Although they just added an option to exchange your toad for a Long Dong Silvers voucher.
Every time I spend 700 dollars I get one African Clawed Toad OR if I spend 1200 dollars I get one African Giant Toad.
Although they just added an option to exchange your toad for a Long Dong Silvers voucher.
This is being overlooked in this thread. I only use the Amazon card for Amazon purchases and we effectively paid for Xmas gifts for our kids through points/cash back.
That's the rub, and that's the situation I think Dave Ramsey and those like him are correct. If you spend money you don't have on frivolous things, then you probably are living paycheck to paycheck and that's just no way to go through life. In those cases they absolutely should be doing envelopes of cash to avoid over spending.
To be honest I just don't spend money on a lot of things. My hobbies are basically free. Unless my wife and I are going on a big trip I don't spend a lot of money so it makes sense to leverage any benefit you can have to maximize those trips which you only get so many of in life.
I will add that I do listen to Ramsey's podcast from time to time while driving for a variety of reasons (namely, it is interesting to hear people's tales of woe and prosperity), despite him being a Trump supporter and having some dubious financial advice.
The one that I find bonkers is his advice to "debt snowball" and knock out the smallest debts first regardless of interest rate. So if you have a $100K debt at 20% interest, and a $5K debt with 2.5% interest, he would tell you to pay the $5K debt first. Asinine. The other major one I shake my head at is when he tells people not to go into debt to get a medical degree or some other high paying degree. While it is a poor economic choice to go $150K into debt for a poetry degree, for high paying careers with barriers to entry, you have to spend money to make money. And the payoff comes big time in the long run. As it pertains to this discussion in this thread, saying no one got wealthy on rewards/points and the banks are offering them for a reason is immaterial. No shit. Banks make money on each transaction, regardless of whether you don't pay your balance, and then they make even more money on interest on the balance if you don't pay off your balance. Assuming a vendor does not give you a cash discount for not using a credit card, you are leaving money on the table not using a rewards card. Add in the layer of fraud protection a credit card offers, you are nuts to not use one, so long as you pay off your balance at the end of the month. Which you absolutely must do.
With all that being said, his advice on the whole is good: live within your means; invest in the market as a whole over the long term; get a bigger shovel (better paying job) to make more money to live on and invest; and chose your pain or the pain will chose you. His one-size-fits-all approach helps the lowest common denominators from destroying themselves. You just need to be smart enough to parse through what applies to you, while keeping his base fundamentals in mind.
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I'm going to look into this and most likely will do it.
I've been wanting to set up another non-qualified account for early retirement only and this might be a perfect way to start.
We've used a Discover Card since day one of our marriage but only get 1%.
They run specials from time to time, for example if you shop at Target now it's 5%. But I don't pay attention to all that and don't want to.
Nice. I don't go chasing all the CARDS out there like Target with specific store perks. I started with Fidelity a few years ago to "play" with some side investing of my own... Outside of my usual financial advisor and employer 401k.
Then stumbled into sticking some cash in money markets since interest rates were raised and could earn 5% relatively risk free and accessible at any time...
Then I jumped on the Credit Card for the 2%.
With the fed lowering rates a bit, the money markets have dropped back to 4.5% with Fidelity, but beats keeping your emergency cash in a savings account earning sh*t for interest!
Read up on the small risks with a brokers money market FUNDS at Fidelity vs. a bank money market ACCOUNT. There's risk, but super low.
I can't imagine paying money to a credit card company just to obtain a card.
I'm sure there are perks, it's just something I wouldn't even consider.
I'm sure there are perks, it's just something I wouldn't even consider.
I have one such card. It the american airlines card. It provides access to their lounges in airports, which provide a benefit, and it also provides for building priority for boarding (useful for securing overhead space for carry on so you don't need to pack bags), free baggage for when you do need bags, flight upgrades, etc. In particular, I used it building up to our trip to italy. If you don't travel, it would have no application and it would be a waste of money. Now that our trip to italy is over, I might consider giving it up and going back to boarding group 7, but it is nice to have visiting my parents in NC which is a direct flight with american airlines.
The simplest summary is that it costs money for banks to provide these rewards, it's worth it to them to attract cardholders, and they recuperate their costs through transaction fees, annual fees, late payment fees, and high interest rates on balances. As a cardholder you don't pay the transaction fee, you can choose a card without an annual fee, and if you're responsible you won't pay a cent of interest or late payment fees.
The reality is that the people paying interest and late fees essentially subsidize these rewards programs for those who don't, which is why people keep referring to them as 'free money' or 'free' whatever.
The reality is that the people paying interest and late fees essentially subsidize these rewards programs for those who don't, which is why people keep referring to them as 'free money' or 'free' whatever.
595 per year (most of that is for lounge access). it's a lot and difficult to justify other than we got 90,000 miles for signing up, we both just turned 50 and are doing well financially, we used it on our big trip this year, and I will be flying more frequently into Charlotte now as my parents are in their 80s. We probably got 1/2 the value of the fee eating at the airport lounges for free on the long international trip, and then there is a value which is hard to attach to it on having good seats and peace of mind my carry on will always be carry on and not checked. If we weren't financially comfortable we wouldn't have it.
This. I’ll never understand the people that don’t get this - they must just be in a different place financially than me is all I can attribute it to. I am going to spend the money. It doesn’t matter if it’s on a credit card, dollar bills, or gold bars. It’s getting spent. Everything else regarding money is taken care of so my annual spend is going to be what it’s going to be and it will always be paid off as soon as the monthly bill comes due. A change in situation may make me spend less (or more) each month, but it will not break me…at all. Why on earth would I not use a credit card that gives me some benefit?
You lost me at 595. LOL
I guess if you travel a bunch.
At the end of the day it's whatever makes you happy.
Exactly,.. Simply being a consumer forces you to subsidize the credit card game,.. If you're already paying towards the game you might as well reap a portion of the benefit..
Again I give Dave credit for what he does. If you follow Dave's plan directly you will 100% not screw up your life around money. If you are financially irresponsible I would suggest doing it because it's worked for a lot of people.
You also won't maximize every dollar you make, which some of people really really into. I'll admit I'm not one of those people with most things, especially retirement. I'm kind of bare bones dumbed down stuff there. I save 16% of my income after a company match in my 401k and have a targeted fund. If 16-20% of my income saved over a lifetime isn't enough we've just gone completely off the rails as a society and my own personal retirement will probably be the least of my concerns.
I usually use a Bank of America card with one and a half percent cash back. No limits, no categories.
The good news is that 15% of your income will ultimately be way more than 15% of your income due to compounding. I max out my 401k every year and at this stage of the game, in an average year for the market, my contributions are a relatively small percentage of the overall growth of the fund. Not a humble brag or not-humble brag, it is just a function of saving for a long ass time.
I use my airline miles card for everything and have used it to fly to Mexico, the Caribbean, Alaska, and Europe on miles. It may not be building up my retirement account but I certainly feel richer for having had these experiences for next to nothing. I have a $99 annual fee, pay it off monthly, and it certainly has paid me back far more than my debit card ever did.
The miles and points thing used to be a bit of a hobby of mine. Back in 2015 I signed up for a AA credit card that had a 100K bonus if you spent $10K in the first 3 months. I was 25 at the time, and didn't organically spend that much. I sent $1,000 to a buddy via Amazon pay, which at the time did not charge a fee, and he gave it back to me. I also bought about $8,000 worth of gift cards from CVS, which had activation fees of about $5 a piece, I then loaded those cards into a AMEX sort of checking account and used that to pay off the card.
Used those miles to to fly to Vietnam in first class on Cathay Pacific and back in business class. It was a treat. The retail cost was approximately $13K, an experience I'll probably never afford.
Plenty of other similarly funded adventures, but nothing quite like that one.
Used those miles to to fly to Vietnam in first class on Cathay Pacific and back in business class. It was a treat. The retail cost was approximately $13K, an experience I'll probably never afford.
Plenty of other similarly funded adventures, but nothing quite like that one.
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