Author Topic: credit card points  (Read 6580 times)

sol

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credit card points
« on: March 17, 2012, 05:37:46 PM »
We use cash back credit cards for most of our daily expenses, then clear the balance every two weeks after payday.  After doing this for a while, we've built up a substantial amount of reward points, and I'm not sure what to do with them.

Looking at the redemption website, they clearly want you to spend the points to buy a gadget of some sort that you don't need.  This feels less like saving money, and more like adding crap to my life.

I can apply the points directly to my credit card balance, but it seems there should be a more efficient way to use them.

For example, many retailers offer discounted gift cards, like pay $100 and get a $125 card to spend in their store.  This feels nominally better than buying crap directly, but only if the store is somewhere I was going to spend anyway.

I've also considered looking into their airfare deals.  Does anyone with more experience know if those deals are any better than just spending the points on paying my credit card bill directly?

Any other suggestions on how to maximize the utility of my reward points?

kolorado

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Re: credit card points
« Reply #1 on: March 17, 2012, 07:24:35 PM »
I was just wondering the same thing. I'd just cashed in my points in January for a statement credit(a new option on my Chase Freedom card)and now they're offering sale Amazon gift cards this month. $25 gift cards for $22.50, $50 card for $45, etc. We buy from Amazon fairly often so that seems like the better deal to me. I should have enough points by the end of this cycle to get one $25 card on sale but I wish I could have gotten a higher value card.

James

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Re: credit card points
« Reply #2 on: March 17, 2012, 08:39:58 PM »
My experience is that credit card points and deals are not worth my time and effort.  Your opinion may very, but I just use a Discover card with actual cash back.  Cash I can use, points I'm not interested in, it's not worth my time for a few extra dollars.  I'm absolutely sure that with enough work I could find a card with points that would benefit me slightly more.  But it's not worth it to me.

MMM

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Re: credit card points
« Reply #3 on: March 17, 2012, 10:42:24 PM »
Wait a minute - isn't a credit on your statement exactly the same as cash back?

I agree with the points and merchandise and even gift cards not being efficient, since then you have to find something that you otherwise would have already bought, and then use the points for those things. If the points induce you to get some sort of "treat" for yourself, you lose the little game.

But a statement credit is just less cash that you fork out at the end of your month for your regular spending. It's cash, just as good as dollar bills placed directly into your hand - right?

That's what I always go for with these reward cards - statement credit. Occasionally they'll insist on sending a check, which is my second choice.

Chris

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Re: credit card points
« Reply #4 on: March 17, 2012, 11:08:59 PM »
Cash/statement credit is of course the most beneficial for you, and least beneficial for your credit card company; that's why you take a haircut when redeeming for cash.  On my cards, it's a value difference of 25-50%.  I agree with you on skipping the crap; besides, once you figure that you wouldn't pay full-price for that stuff anyway, the real value gained is diminished.

Your strategy depends on your card. I tend to redeem for airfare, which is results in about 2 cents per point. Gift cards are next best, sometimes twice as good as opting for cash. There's a whole lot of regular household stuff you can get at places like Home Depot, Staples, and Target.

But it all depends on your card's rewards program.

jd

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Re: credit card points
« Reply #5 on: March 17, 2012, 11:35:44 PM »
Strangely enough, I have a credit card that offers a better redemption rate for cash back than for gift cards.  I'm not sure why anyone would bother redeeming for gift cards...

Parizade

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Re: credit card points
« Reply #6 on: March 18, 2012, 05:40:45 AM »
For me it's all about the airline tickets. If I can get a free flight every few months I'm good.

kudy

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Re: credit card points
« Reply #7 on: March 18, 2012, 12:54:52 PM »
I signed up for and used a card a few years back in order to get 2 free flights on southwest - as it turns out, I don't fly very often, and this isn't the best way for me to use the credit card system.

Since then, I've switched to one of the "double miles" travel cards, which doesn't actually give miles, but points, which equates to 2% of spend.  I have the 5% freedom card (cash back), which I use for the currently "active" 5% categories, and everything else goes on the 2% travel card.  I can then use the points from the 2% card towards hotels and other travel expenses, or on amazon.com purchases.  As it turns out, amazon is where I am spending all of my points, and you can get things like laundry detergent on amazon.  The only thing I am not sure about is using all of the packaging and shipping resources to buy detergent online, when I could just as easily grab it during a routine store trip and save the world all the trouble of single-packaging it to my doorstep.

kolorado

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Re: credit card points
« Reply #8 on: March 18, 2012, 06:08:45 PM »
Amazon gift cards can also be used for e-books. No shipping impact there. ;)

kudy

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Re: credit card points
« Reply #9 on: March 18, 2012, 07:24:52 PM »
I generally hate buying books unless they are one of my favorites; e-books are even less tangible to me, and I've found that my local library district actually has an e-book lending program.  Combined with the real-world book lending, I try to borrow any book I'm interested in first... but I get what you're saying, not everything on Amazon has to be shipped or use a lot of packing/shipping resources :)

nondualie

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Re: credit card points
« Reply #10 on: March 19, 2012, 06:38:46 PM »
I just switched to AMEX Blue Cash: 6% back on groceries, 3% on gas and department stores, 1% on all else; w/ a $150 signing bonus and 0% APR for 12 months (not that I carry a balance of course).

I was using a United Mileage Plus card since I have to travel for work on occasion; but since i have 165K miles on there now and not a lot of time/desire to fly anywhere, I decided to make the switch to cash-back.  I'm hoping to get time to go to Thailand again in the next year, and 165K is enough for round-trip for the wife and I.

Anyway, to the OP...I'll second that most "stuff" you can get with points is generally over-priced; so I'd say go for the gift-cards and see if you can maybe split them out in smaller denominations to use for gifts...or at least so you can spread the love around and only use them for stuff you need.

sol

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Re: credit card points
« Reply #11 on: March 19, 2012, 08:23:52 PM »
Wait a minute - isn't a credit on your statement exactly the same as cash back?

Yes it is, and that would be my default choice.  I was just wondering if there was a better way to redeem them. 

If I could get a 50% discounted gift card to somewhere I normally spend money, for example, then my 5% cash back card is suddenly a 10% cash back card. 

Kriegsspiel

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Re: credit card points
« Reply #12 on: March 28, 2012, 05:46:26 AM »
I just switched to AMEX Blue Cash: 6% back on groceries, 3% on gas and department stores, 1% on all else; w/ a $150 signing bonus and 0% APR for 12 months (not that I carry a balance of course).



Nice, thanks for writing that, how can a credit card be better than that?

nondualie

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Re: credit card points
« Reply #13 on: March 28, 2012, 10:46:11 AM »
I just switched to AMEX Blue Cash: 6% back on groceries, 3% on gas and department stores, 1% on all else; w/ a $150 signing bonus and 0% APR for 12 months (not that I carry a balance of course).



Nice, thanks for writing that, how can a credit card be better than that?

AMEX hoses businesses, so it can afford to give more cash back, but works for me.  I pay cash when I'm shopping at any local small business; AMEX is for Whole Foods/grocers, Gas, and anything from Amazon.

menorman

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Re: credit card points
« Reply #14 on: March 28, 2012, 07:13:08 PM »
I was just wondering the same thing. I'd just cashed in my points in January for a statement credit(a new option on my Chase Freedom card)and now they're offering sale Amazon gift cards this month. $25 gift cards for $22.50, $50 card for $45, etc. We buy from Amazon fairly often so that seems like the better deal to me. I should have enough points by the end of this cycle to get one $25 card on sale but I wish I could have gotten a higher value card.
Hmmm, those gift cards do look tempting, especially since I do spend a decent amount of money on Amazom time to time. The real question is if the savings I get there will be greater than the interest my balance will earn if I don't do a statement credit.

travelbug

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Re: credit card points
« Reply #15 on: March 28, 2012, 09:16:21 PM »
We normally use ours for flying, either a whoe flight or an upgrade to business or first class on an existing booking.