Strategy(ies) for credit card and other cashback/rewards points

[jeromedawg]

Hey guys,

I have a bunch of cashback that I've accumulated via Discover Card and also my Chase Freedom (per all the 5% CB quarterly bonuses etc) along with cashback and other points programs I've accumulated points through. Do you guys think I should just opt to cash out on everything? For example, with MyPoints I'm debating between getting a $50 Amazon GC for 7900 pts vs a $50 Paypal cashout for 8950 pts. Obviously, the Amazon GC gets you more money per point. Is "Cash is king" still applied in these sorts of contexts? Or is it better just to go with Amazon if you know you are shopping or need something from there and especially if what you're looking for is discounted (or you have coupons/promo codes)? I suppose it's case-by-case but that the general rule of thumb is to always take cash. That's just my own opinion though... that said, I've barely redeemed any of my rewards. I probably have over $1000 worth of rewards in my Discover and Chase rewards accounts. Sometimes they offer purchasing Amazon GCs at discounted point amounts so I think I like to try to save for those sorts of things (except that I rarely ever redeem them even when there are sales!). Not sure why I care so much about accumulating so many points. I think there is a minimum you need to have to cash out though if you wanted to do that. But I have well over that amount.
 
Anybody have thoughts on this?

[Mesmoiselle]

$25 is the minimum on all the cards I've used this far.

I usually do statement credit as I go, don't pile them up. It's not working for me in the CCs pocket.

If the gift card was a good deal for Amazon, well, I do grocery shopping with their subscribe and save program and would buy the Gift card happily. I'll look into it next time I have a statement balance. But if I weren't a regular shopper, I definitely wouldn't bother. I hate gift cards.

Special situation: I have renovations coming up, so if there were a lowes/home depot discounted gift card I would do that too. Also, if I believed in Giving gift cards to family as presents, I might carefully do it then as well.

[ken]

Take the cash back. Generally 5000 points should be $50. Unless you get a better offer, take the cash.

[PMG]

I have both these cards and ponder the same questions.   So far I stick with cash back.  Lowes and Home Depot are the most tempting gift card because of the added value and practic needs but frequently those stores are in the 5% cash back category. (Check out shopping online through discover).   I forget the chase terms, but Discover adds a year to product warrenty if it is purchased on their card.   

So, weighing those factors leads me to get cash back.  The cash always earns me more money.  A gift card can't.

[milesdividendmd]

For discover I would go for the statement credit at 1 cent/point.

If you travel, and have a sapphire prefferred or chase Ink card, then the ultimate rewards points are worth about 2 cents a point, so I would not do cash back in that instance.

[Scandium]

I don't think I've seen gift card sales in my Chase Freedom account. I always cash it in every ~$50-100 or so. Money today is worth more than money tomorrow..

[klystomane]

I would say...

1. How much is one point worth in each scenario?
2. I believe cash is king if cashback comes out ahead or equal to the gift card. If it's valued at less, then you need to decide whether you will use be able to use the giftcard. I consider statement credits to be the same as cashback.
3. I'm ignoring the potential to save and earn interest with the cash, as I believe we are usually talking about a few hundred dollars worth of points at most (in most cases).

In your case:
$50 for 7900 Amazon points: 1 point = $0.0063
$50 for 8950 Paypal points: 1 point = $0.0056

In this case, I would personally choose the Amazon points as I can spend it on household necessities. A better conversion rate is a better conversion rate.

YMMV.

[jeromedawg]

Thanks everyone. I cashed out my Chase Rewards (via Chase Freedom primarily but also points that I combined from a Sapphire account). I also cashed out all but $50 from the Discover account (because I know sometimes on Amazon they offer 'bonuses' if you pay with points using your Discover points - I haven't been able to take advantage of it yet but I do recall seeing this). For Mypoints, I was about to just redeem for Paypal but switched my email to make sure the funds didn't get sent to my business/eBay Paypal account (where it's possible I could get fees taken - that shouldn't be the case for cashouts like this but I was just playing it safe). Thinking about it more though, I may be inclined just to settle for Amazon GCs since I do have a tendency to order a lot of crap on Amazon (haha that doesn't sound very Mustachian). They don't let you opt for a Paypal cash out immediately after changing your email (not sure how long it takes) so I do have some time to think about whether or not I want cash or Amazon GCs from Mypoints (or if I just want to use it for getting GCs for Christmas/Bdays/etc). I have a little over 19k points so I could get about $100 back for Paypal and use the remainder on smaller GCs here and there. Hmmm...

[johnny847]

If you have any aspirations to travel, you should virtually never cash in your Chase Ultimate Rewards points for cash. Why? You can transfer them to the Chase Sapphire Preferred, and then transfer the points 1:1 to airline partners, where you can approach 2 cents per point in value  when redeeming for economy class tickets. Sometimes you can extract a ton more value, and sometimes less.

If you don't want to mess with airline points, you could also redeem them at 1.25 cents per point through the Chase travel portal (just book a ticket through it). But I don't know how close the fares are to fares you'd find on Expedia or directly with airlines.

[jeromedawg]

If you have any aspirations to travel, you should virtually never cash in your Chase Ultimate Rewards points for cash. Why? You can transfer them to the Chase Sapphire Preferred, and then transfer the points 1:1 to airline partners, where you can approach 2 cents per point in value  when redeeming for economy class tickets. Sometimes you can extract a ton more value, and sometimes less.

If you don't want to mess with airline points, you could also redeem them at 1.25 cents per point through the Chase travel portal (just book a ticket through it). But I don't know how close the fares are to fares you'd find on Expedia or directly with airlines.

I completely overlooked this. That's a very good point - in fact, we did travel to Asia and Europe in the past two years but I never thought about doing it that way. I just have the Chase Sapphire [non-preferred] card. I don't think I ever considered the Sapphire because of the annual fee. Of course, I have a Chase IHG rewards card, which has an annual fee of the same amount, and I do try to take advantage of that (however, I don't think I can transfer points between this card and the Ultimate Rewards points - or maybe you can but perhaps the exchange rate isn't as great). EDIT: I take it back, UR points to IHG rewards is 1:1 - http://www.ihg.com/hotels/us/en/global/deals/partner-offers. Maybe I should have done that... except, I don't think we are frequent enough travelers to really get the most for our money. 

I think I looked at the travel portal once and I feel like I recall not seeing much in terms of great deals. Maybe I wasn't looking in the right place or hard enough. The only thing I used the travel portal for, a long time ago, was for a car rental (I got a pretty good rate through that but never again after)

[johnny847]

If you have any aspirations to travel, you should virtually never cash in your Chase Ultimate Rewards points for cash. Why? You can transfer them to the Chase Sapphire Preferred, and then transfer the points 1:1 to airline partners, where you can approach 2 cents per point in value  when redeeming for economy class tickets. Sometimes you can extract a ton more value, and sometimes less.

If you don't want to mess with airline points, you could also redeem them at 1.25 cents per point through the Chase travel portal (just book a ticket through it). But I don't know how close the fares are to fares you'd find on Expedia or directly with airlines.

I completely overlooked this. That's a very good point - in fact, we did travel to Asia and Europe in the past two years but I never thought about doing it that way. I just have the Chase Sapphire [non-preferred] card. I don't think I ever considered the Sapphire because of the annual fee. Of course, I have a Chase IHG rewards card, which has an annual fee of the same amount, and I do try to take advantage of that (however, I don't think I can transfer points between this card and the Ultimate Rewards points - or maybe you can but perhaps the exchange rate isn't as great).

I think I looked at the travel portal once and I feel like I recall not seeing much in terms of great deals. Maybe I wasn't looking in the right place or hard enough. The only thing I used the travel portal for, a long time ago, was for a car rental (I got a pretty good rate through that but never again after)

True, it has an annual fee. But it's waived in the first year. So a good strategy for the CSP, assuming it will still continue to exist and allow transfers from the Freedom and "unPreferred" Sapphire, is to build a bunch of points on them, and then apply for the CSP. Then cancel before the year ends (or downgrade to unPreferred, I guess).
Also, you say we, so I assume you have a SO. Your SO could also do the same with the CSP after you cancel. And I believe Chase points can be transferred between spouses.
And then, after your SO cancels, you can churn the CSP again - Chase is now explicit that you can get the signup bonus again if you haven't received it in the last 24 months. It says received, though, not opened card, so there may be a few months where you wouldn't qualify to sign up for the card for the sake of the bonus.