Author Topic: Credit cards - which would be best in my situation?  (Read 4929 times)

cross3700

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Credit cards - which would be best in my situation?
« on: March 25, 2015, 08:49:49 AM »
I know there are a lot of credit card threads here and I've read through quite a few.  I'm not interested in churning, just looking to maximize my rewards without a lot of hassle.  Here's what I'm currently thinking:

Blue Cash Preferred Amex - use only for groceries (6% reward) and gas (3% reward).

Citi Double Cash Card - use for all other purchases (2% reward)

I would consider the Sallie Mae card if we purchased more gas, but it is such a small amount for us. I don't think its worth adding another card only for gas.  Also, I travel fairly often for work and earn plenty of frequent flyer miles on Delta and Southwest so I almost never have to pay for flights for myself or my family.  So I don't think I need a travel rewards card. Groceries and our monthly utility bills are the bulk of our credit card charges every month.

How does this plan sound?  Any other cards I should consider adding?

JonasNC

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Re: Credit cards - which would be best in my situation?
« Reply #1 on: March 25, 2015, 09:16:26 AM »
I also travel a lot for work, so I found that the Sam's Club MasterCard was the best bet for me.  5% on gas, 3% on travel and restaurants, and 1% on everything else.  It depends on how much you travel/spend on whether this is a good option or not.  There is an annual fee, but it serves as your membership to Sam's Club.  We would have a membership anyway, so I consider it a no-fee card.

cross3700

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Re: Credit cards - which would be best in my situation?
« Reply #2 on: March 25, 2015, 09:24:13 AM »
Thanks.  I forgot to mention that I have to charge all of my work expenses, including travel, to my company issued card.  Otherwise I don't get reimbursed for it.  So I don't have any chance to earn CC rewards on those $.

Bob W

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Re: Credit cards - which would be best in my situation?
« Reply #3 on: March 25, 2015, 09:37:06 AM »
If your trying to save money IMHO cards will not help.   Best to use good old cash.   Apparently the psychological draw of a card is such that nearly every person on earth who has one spends more than they would have if they used cash.    Most people are just fooling themselves with the X% cash back deal.   

So my vote is put your grocery budget in envelopes at the beginning of each month.

There are some rather interesting studies about the denomination of bill sizes to use as well.   It can make a huge difference in the amount of cash spent based on one's personal perception of how much money they have based on the denomination.

McDonalds knows that card users spend on average 33% more than cash buyers. 

So if your "situation" is to keep it simple and save money --- I vote cash.


cross3700

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Re: Credit cards - which would be best in my situation?
« Reply #4 on: March 25, 2015, 09:43:59 AM »
If your trying to save money IMHO cards will not help.   Best to use good old cash.   Apparently the psychological draw of a card is such that nearly every person on earth who has one spends more than they would have if they used cash.    Most people are just fooling themselves with the X% cash back deal.   

So my vote is put your grocery budget in envelopes at the beginning of each month.

There are some rather interesting studies about the denomination of bill sizes to use as well.   It can make a huge difference in the amount of cash spent based on one's personal perception of how much money they have based on the denomination.

McDonalds knows that card users spend on average 33% more than cash buyers. 

So if your "situation" is to keep it simple and save money --- I vote cash.

It's not a budgeting or savings issue.  We do very well in those regards.  Simply looking to maximize rewards on what we do spend.

GizmoTX

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Re: Credit cards - which would be best in my situation?
« Reply #5 on: March 25, 2015, 10:34:59 AM »
The Citi Double Cash offers the highest rewards without an annual fee or having to track spending in different quarters that I know of.
However, if you ever do foreign travel, you should take a card that won't charge foreign transaction fees -- Citi does charge them. We use the Barclay Arrival Plus, which earns 2x, waives the annual fee of $89 the first year, & is currently offering 40k miles for spending $3K in the first 3 months.

slugline

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Re: Credit cards - which would be best in my situation?
« Reply #6 on: March 25, 2015, 10:36:36 AM »
If your trying to save money IMHO cards will not help.   Best to use good old cash.   Apparently the psychological draw of a card is such that nearly every person on earth who has one spends more than they would have if they used cash.    Most people are just fooling themselves with the X% cash back deal.

I think the outcome is highly dependent on how "digital" your behavior is. Some of us have grown up with computers and are used to treating numbers on a screen as representing valuable resources. Now if you just see numbers on a screen like the flickering in some kid's video game, I can see your point of view.

However, at this point in my Gen-X life, physical cash strongly resembles clutter and I am actually more tempted to "de-clutter" my wallet/envelopes versus credit-card swiping that results in a reduction in the net worth number on my computer screen. :)
« Last Edit: March 25, 2015, 10:38:07 AM by slugline »

Retired To Win

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Re: Credit cards - which would be best in my situation?
« Reply #7 on: March 25, 2015, 12:52:37 PM »
... just looking to maximize my rewards without a lot of hassle.  Here's what I'm currently thinking:

Blue Cash Preferred Amex - use only for groceries (6% reward) and gas (3% reward).

Citi Double Cash Card - use for all other purchases (2% reward)

...Any other cards I should consider adding?

My "base" cash back rewards card is a Bank of America Privileges Mastercard.  It gives me 2% on groceries, 3% on gasoline, 2% on Walmart,  and 1% on everything else.  When I redeem into my Bank of America checking account, I get a 50% bonus so multiply all the previous percentages by 1.5x.

A lot of the time, my Discover card ends up in my wallet as one of the three I carry at any given time.  That's because Discover runs frequent quarterly 5% cash back promotions on gasoline.  When I redeem there, I do so for particular store/service gift cards that give me a 25% bonus on the amount of earned credit I am redeeming.

The third card in my wallet depends on what is being offered by whom at any given time.  Right now, it's a Chase Freedom Visa for 5% on groceries.  Starting April 1, it will be the Discover Card (again) for 5% on restaurants.

cross3700

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Re: Credit cards - which would be best in my situation?
« Reply #8 on: March 25, 2015, 02:17:23 PM »
Thanks. 

I've been thinking about it more and I think my wife and I will both open a Blue Cash Preferred account.  The 6% on groceries is limited to $6,000 a year.  So getting 2 cards would give us $12,000 at 6%.  A yearly savings of $720. 

We spend about $6,000 a year on groceries at Kroger ($500/month, family of 5) so that would use up 1 card.

We then could use the other card to buy gift cards from Kroger to Amazon, Target, etc. to use or give as gifts and get 6% back. I don't know that we'd use the whole $6,000, but saving 6% on whatever gift cards we would buy and use would be great.

The other bonus (pun intended) is you earn fuel points at Kroger ($1 = 1 fuel point, 100 fuel points = $0.10/gallon of gas) and they often run specials where you get 4x the fuel points for buying gift cards.

Also, you get $150 for opening the CC and spending $1K in the first 3 months. 

WYOGO

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Re: Credit cards - which would be best in my situation?
« Reply #9 on: March 25, 2015, 10:01:44 PM »
...When I redeem there, I do so for particular store/service gift cards that give me a 25% bonus on the amount of earned credit I am redeeming.

Right now, it's a Chase Freedom Visa for 5% on groceries.  Starting April 1, it will be the Discover Card (again) for 5% on restaurants.

Can you give an example of the higher redemption for the gift cards purchased while gas is one of the categories? Are these bonuses merchant based?

Also why the Discover over the Freedom for Q2? Do you value cash higher than UR points?

Retired To Win

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Re: Credit cards - which would be best in my situation?
« Reply #10 on: March 26, 2015, 06:11:45 PM »
...When I redeem there, I do so for particular store/service gift cards that give me a 25% bonus on the amount of earned credit I am redeeming.

Right now, it's a Chase Freedom Visa for 5% on groceries.  Starting April 1, it will be the Discover Card (again) for 5% on restaurants.

Can you give an example of the higher redemption for the gift cards purchased while gas is one of the categories? Are these bonuses merchant based?

Also why the Discover over the Freedom for Q2? Do you value cash higher than UR points?

Higher redemption examples: 20 Discover Card bucks gets me a $25 Bed Bath & Beyond gift card (which I use coupled with BBBY discount coupons to enjoy free gourmet Keurig coffee)... 20 Discover Card Bucks gets me a $40 certificate for Enterprise Rent a Car (and from time to time, if I'm renting a van or something, this works out).  There are many more.

YES.  I do value cash higher because I have more flexibility in how to use the reward.  And, in this particular case, Discover is the card that has the higher/boosted redemptions so that's a second reason to choose it over the Chase Freedom.

kpd905

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Re: Credit cards - which would be best in my situation?
« Reply #11 on: March 26, 2015, 06:18:19 PM »
Thanks. 

I've been thinking about it more and I think my wife and I will both open a Blue Cash Preferred account.  The 6% on groceries is limited to $6,000 a year.  So getting 2 cards would give us $12,000 at 6%.  A yearly savings of $720. 

We spend about $6,000 a year on groceries at Kroger ($500/month, family of 5) so that would use up 1 card.

We then could use the other card to buy gift cards from Kroger to Amazon, Target, etc. to use or give as gifts and get 6% back. I don't know that we'd use the whole $6,000, but saving 6% on whatever gift cards we would buy and use would be great.

The other bonus (pun intended) is you earn fuel points at Kroger ($1 = 1 fuel point, 100 fuel points = $0.10/gallon of gas) and they often run specials where you get 4x the fuel points for buying gift cards.

Also, you get $150 for opening the CC and spending $1K in the first 3 months.

Keep in mind that after the first year the BCP gets you 4.8% back after factoring in the annual fee.  So at that point it might not be best to buy all the gift cards if you have a card getting you 5% back on those categories.

WYOGO

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Re: Credit cards - which would be best in my situation?
« Reply #12 on: March 26, 2015, 09:04:08 PM »
Quote from: Retired To Win

Higher redemption examples: 20 Discover Card bucks gets me a $25 Bed Bath & Beyond gift card (which I use coupled with BBBY discount coupons to enjoy free gourmet Keurig coffee)... 20 Discover Card Bucks gets me a $40 certificate for Enterprise Rent a Car (and from time to time, if I'm renting a van or something, this works out).  There are many more.

Got it. I do similar and just redeemed a $40 certificate for National which I prefer since I am an executive club member. I value UR points rather highly because of the flexibility of transfer partners so prioritize UR points over the Discover cash back at times. Depends on what is going on at any given time. Thanks for your thoughts...