Author Topic: Should I start putting everything on my credit card?  (Read 1635 times)

deek

• Bristles
• Posts: 430
Should I start putting everything on my credit card?
« on: October 19, 2018, 05:30:45 PM »
Currently I pay off my balance every month and will probably put anywhere from \$2400-2700 on my credit card per year. I'd like to put everything on a card and build up rewards, but at the same time, I have a checking account with a CU that requires a certain amount of transactions per month. Has anyone found it beneficial to ditch a checking account that requires minimums and/or put almost all your expenses on your credit card? Thanks!

• Handlebar Stache
• Posts: 1924
• One Does Not Simply Work Into Mordor
Re: Should I start putting everything on my credit card?
« Reply #1 on: October 19, 2018, 07:44:50 PM »
It's a math problem which only you can answer. First estimate your average checking account balance over the year and multiply it by the account's interest rate, then estiamte the amount of spending that you could put on a credit card over the year and multiply it by the credit card return rate. Go with whichever gives you more money in a year.

Lets say you have \$10k average in checking at 3% and \$20k average spend which could be at 2% on a credit card. You would get \$10k*.03=\$300 from checking and \$20k*.02=\$400 from the card in this example, so the credit card would be the better choice. You should not accept less than 2% return on a credit card, and probably higher.

Consider Alliant Credit Union (no personal experience, have just seen them online). They have an 0.65% checking account with no other requirements, and offer a 2.5% cash back credit card with \$59 annual fee, possibly the best single-stop cash back credit card and no-hassle checking combination. With the above numbers you get \$10k*0.0065 + \$20k*.025-\$59 = \$506. So if you are not getting a better result with your independent checking and CC, you should consider changing to Alliant. You might also find a better credit card to pair with Schwab's popular 0.35% checking account.

AccidentalMiser

• Pencil Stache
• Posts: 703
• Age: 53
• Location: SE Tenn
Re: Should I start putting everything on my credit card?
« Reply #2 on: October 19, 2018, 08:41:30 PM »
We put nearly everything on a 2% back Citi card and pay it off every week.  It's just more convenient and we get money back.  If using plastic causes you to spend more, DON'T do this!  If you have discipline, go for it.

Catbert

• Handlebar Stache
• Posts: 2138
• Location: Southern California
Re: Should I start putting everything on my credit card?
« Reply #3 on: October 20, 2018, 09:31:22 AM »
I gave up on debit cards when hacking became so common.  Better credit card charges I can dispute than disputing money already out of my account.

kpd905

• Handlebar Stache
• Posts: 1928
Re: Should I start putting everything on my credit card?
« Reply #4 on: October 20, 2018, 11:57:01 AM »
I put all my spending on credit cards to hit sign up bonuses.  I get anywhere from 10-40% back on all of my spending.

• Pencil Stache
• Posts: 812
Re: Should I start putting everything on my credit card?
« Reply #5 on: October 20, 2018, 12:07:59 PM »
I put 90%+ of my expenses on credit cards and pay off balances every month. It's hard to get 40% back though unless it's a rare case, like last year I spent 2K on Amex gold and got back almost 1K between signup bonus, extra bonuses and credit for gift cards. Normally, anything above 5% back is decent and 10%+ is great.

kpd905

• Handlebar Stache
• Posts: 1928
Re: Should I start putting everything on my credit card?
« Reply #6 on: October 20, 2018, 12:12:08 PM »
40% is with the "Spend \$500, get \$200" cards.  Bank of America has a few that I churned through.  The business ones don't count toward 5/24 status.

remizidae

• Bristles
• Posts: 269
Re: Should I start putting everything on my credit card?
« Reply #7 on: October 22, 2018, 02:36:56 PM »
Currently I pay off my balance every month and will probably put anywhere from \$2400-2700 on my credit card per year. I'd like to put everything on a card and build up rewards, but at the same time, I have a checking account with a CU that requires a certain amount of transactions per month. Has anyone found it beneficial to ditch a checking account that requires minimums and/or put almost all your expenses on your credit card? Thanks!

If you're really only spending \$2400-2700 per year, it's unlikely you would get significant rewards. Or maybe that amount would go up if you started putting more on the card?

I personally would find it an annoying mental burden to have to hit a certain number of checking account transactions. Have you looked into checking accounts without that restrictions? Or could you automate a few transactions and not have to think about it?

ketchup

• Magnum Stache
• Posts: 4328
• Age: 30
Re: Should I start putting everything on my credit card?
« Reply #8 on: October 22, 2018, 02:38:41 PM »
Absolutely. I don't ever use my debit card unless I'm depositing cash at an ATM.

wenchsenior

• Magnum Stache
• Posts: 3077
Re: Should I start putting everything on my credit card?
« Reply #9 on: October 22, 2018, 02:53:57 PM »
We put everything we buy, and also some of our monthly bills, on credit cards, for which we get frequent flier miles.  We usually get the equivalent of several free flights per year, which we use for unexpected stuff (funerals, weddings, emergencies) or to get me free flights occasionally to accompany my husband if he has to travel somewhere cool for work and work is covering the hotel.  Makes for very cheap 'short vacations' once or twice per year.

ETA: We pay the balance off every month.  I wouldn't find it worth it to do if we had to pay interest.