Credit Card, etc cashback rewards cash-out strategies?

[jeromedawg]

Hey all,

Just wondering what you guys do as far as cashback is concerned and if you cash-out immediately or as soon as you hit the minimum amount required to deposit to your bank account etc.

I know sometimes they'll offer discounts where you can purchase gift cards at for 10%+ less or whatever (e.g. through Ultimate Rewards).

I'm assuming cash is king and to cash-out ASAP?

[ZiziPB]

I use Fidelity Amex which gives me 2% cash back.  I have it set so that the cash transfers automatically to my Fidelity brokerage account as soon as I hit $50 in rewards.

[BarkyardBQ]

Amex, Discover, Chase Freedom all redeemed for statement credit. Discover and Chase only used for periodic quarterly spending categories, redeemed at the end of each quarter they are used. Amex, usually leave this alone until its up to a few hundred bucks, then redeemed to shovel a similar amount into taxable accounts.

[jeromedawg]

I primarily use Chase and Discover and try to align purchases according to their quarterly CB schedules. I've just been letting it all add up and then will cash it out maybe every 3-4 quarters but I'm thinking I should just apply it as statement credits as soon as I can.
I have a Costco Amex that we'll primarily just use for shopping at Costco (duh) and Costco Gas... we get the cashback on that annually I think around the February time-frame. It comes back as a check that we can cash-out at Costco.

Otherwise, my wife tends to prefer using her Gap card to rack up points for anything that falls outside of the quarterly CB schedules (this is most commonly with grocery-shopping at the local Korean and Middle Eastern markets)

[Disposaleer]

We've got a Visa through Navy Federal that gives 1-1.5% cash back. We let it build all year and deposit it into checking every October. We then use that to do our Christmas shopping for the year. Right now we are at ~$450 and plan to hit $600 by October. It may not be the most mathematically sound approach, but it was a way for me to introduce my wife to planning for large expenses and saving for them throughout the year.

[newton]

I use Amex Blue.  I tend to leave it there until I know I have purchased something extra.  For us this is usually vacations.  On the way home I make the call to have whatever my balance is deducted on the next statement so I don't feel the vacation bill as bad.

[johnny847]

There are only a couple scenarios that come to mind where I wouldn't cash out at the minimum redemption amount:

1) You can redeem for a higher value (ie, with a gift card for less than face value). But, the gift card scenario only makes sense if it is cheaper than buy a discounted gift card from the likes of cardpool.
2) You get some kind of bonus if you redeem for a large amount. I think US Bank does this? Redeem $100 worth in one go and get another $25?

Otherwise, I would redeem at the minimum redemption amount every time.


I will say that you should considering redeeming all but one point, because every so often, you will see deals on Amazon for use at least 1 point of your cashback earned on a cc (varies which cc, but in the past they have included Discover, Chase, and Amex) and receives a $X discount.

Here's an example: http://www.doctorofcredit.com/10-off-10-on-amazon-with-discover-card-first-time-points-users-ymmv/
Use at least one Discover point and receive a $10 discount.

[milesdividendmd]

If you are talking ultimate rewards and you travel, then cash is NOT king.  You can easily get 3+ cents per point value.  (EG a couple weeks ago I flew my mom up to portland from SF for 9000 BA points.  Lowest retail price at time of booking was $350.  ( so almopst 4X!)

[jeromedawg]

If you are talking ultimate rewards and you travel, then cash is NOT king.  You can easily get 3+ cents per point value.  (EG a couple weeks ago I flew my mom up to portland from SF for 9000 BA points.  Lowest retail price at time of booking was $350.  ( so almopst 4X!)

So what would you recommend then? Just letting the points accumulate and using them for air travel? What if we don't travel (or intend to travel) often?

[I'm a red panda]

We typically use our points for things that get us a "better than cash" rate.


One hint- if you have an amazon card, don't use points to shop on amazon.  It is better to get a statement credit. Then, if you do use the money to shop on amazon, you still earn points on the new things you bought.

[nobody123]

I just have the rewards direct deposited into my checking account when I've earned the minimum payout.  I've been burned by rewards programs suddenly changing / being discontinued, so I figure I'd rather have the cash in hand and start working for me. 

For example, Discover seems to keep randomly changing the minimum amount of rewards you need to cash out.  I've seen it be $20, then $50, then to whatever, then $25, and now it's back to whatever.

As far as airline miles, I know the airline will always take my cash to pay for a ticket, so I see little value in trying to build up miles hoping I can use them for a specific flight I want.

I just switched a couple of months ago to the Citi 2% card and it's been good so far.  Still use the Chase Freedom and Discover for the 5% categories, though.  Ended up with $96.42 in cash back last month.  I lucked out last year when Discover offered me an extra $100 bonus if I spent $500 on the card per month for 5 consecutive months.  I just switched my utilities to bill against that card and voila, free $100!

[frugaliknowit]

Capital One Quicksilver is my primary card.  Whenever I buy an airline ticket (say $250), I drain the accumulated rewards (say $39) as a statement credit to effectively reduce the cost of travel.

[milesdividendmd]

If you are talking ultimate rewards and you travel, then cash is NOT king.  You can easily get 3+ cents per point value.  (EG a couple weeks ago I flew my mom up to portland from SF for 9000 BA points.  Lowest retail price at time of booking was $350.  ( so almopst 4X!)

So what would you recommend then? Just letting the points accumulate and using them for air travel? What if we don't travel (or intend to travel) often?

If you don't travel, then cashback is the way to go. But if you do travel you can simply get much more value for transferring points to airlines in the case of ultimate rewards.

If you're interested in maximizing the cashback game here is an article I wrote a while back specifically on that.

http://www.milesdividendmd.com/cash-backing-an-alternative-to-travel-hacking/

[thingamabobs]

I redeem the statement credit as soon as they are available, then I go to my online banking and make an extra payment in the same amount to my student loan. I figure all my purchases should be planned and accounted for so the cash back is extra that I put to work paying off my debts.

[jeromedawg]

If you are talking ultimate rewards and you travel, then cash is NOT king.  You can easily get 3+ cents per point value.  (EG a couple weeks ago I flew my mom up to portland from SF for 9000 BA points.  Lowest retail price at time of booking was $350.  ( so almopst 4X!)

So what would you recommend then? Just letting the points accumulate and using them for air travel? What if we don't travel (or intend to travel) often?

If you don't travel, then cashback is the way to go. But if you do travel you can simply get much more value for transferring points to airlines in the case of ultimate rewards.

If you're interested in maximizing the cashback game here is an article I wrote a while back specifically on that.

http://www.milesdividendmd.com/cash-backing-an-alternative-to-travel-hacking/

Yea, this might have been way more useful when we traveled to Europe, Asia, South Pacific in the past 5 years... wish I had known about MMM and put more thought into all this before. With the current outlook, and us expecting our first baby, we don't anticipate much room for travel... although, my parents did book us for a family cruise next July so I suppose the points would have been helpful. Ah well...

[johnny847]

If you are talking ultimate rewards and you travel, then cash is NOT king.  You can easily get 3+ cents per point value.  (EG a couple weeks ago I flew my mom up to portland from SF for 9000 BA points.  Lowest retail price at time of booking was $350.  ( so almopst 4X!)

So what would you recommend then? Just letting the points accumulate and using them for air travel? What if we don't travel (or intend to travel) often?

Yea, this might have been way more useful when we traveled to Europe, Asia, South Pacific in the past 5 years... wish I had known about MMM and put more thought into all this before. With the current outlook, and us expecting our first baby, we don't anticipate much room for travel... although, my parents did book us for a family cruise next July so I suppose the points would have been helpful. Ah well...
If you don't travel, then cashback is the way to go. But if you do travel you can simply get much more value for transferring points to airlines in the case of ultimate rewards.

If you're interested in maximizing the cashback game here is an article I wrote a while back specifically on that.

http://www.milesdividendmd.com/cash-backing-an-alternative-to-travel-hacking/

Your method of quoting is confusing.

[jeromedawg]

If you are talking ultimate rewards and you travel, then cash is NOT king.  You can easily get 3+ cents per point value.  (EG a couple weeks ago I flew my mom up to portland from SF for 9000 BA points.  Lowest retail price at time of booking was $350.  ( so almopst 4X!)

So what would you recommend then? Just letting the points accumulate and using them for air travel? What if we don't travel (or intend to travel) often?

Yea, this might have been way more useful when we traveled to Europe, Asia, South Pacific in the past 5 years... wish I had known about MMM and put more thought into all this before. With the current outlook, and us expecting our first baby, we don't anticipate much room for travel... although, my parents did book us for a family cruise next July so I suppose the points would have been helpful. Ah well...
If you don't travel, then cashback is the way to go. But if you do travel you can simply get much more value for transferring points to airlines in the case of ultimate rewards.

If you're interested in maximizing the cashback game here is an article I wrote a while back specifically on that.

http://www.milesdividendmd.com/cash-backing-an-alternative-to-travel-hacking/

Your method of quoting is confusing.

Ugh, sorry...fixed. I keep missing the end quote :T