Author Topic: New rewards card - miles or cash back?  (Read 6501 times)

Travis

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New rewards card - miles or cash back?
« on: March 15, 2015, 04:26:48 PM »
So I'm in the market for a new credit card because we're moving far enough away from home where we'll fly 2-3 times a year instead of driving. Our family is in CA and we're moving from Tacoma, WA to either Colorado Springs or the D.C. area.  I've looked at MMM's travel card section and a few threads around here, but there are a lot of options.  One of the problems I'm having is if I'm doing the math right, a cash back rewards structure might be more profitable than a card that specializes in airline miles.  I was looking at the American Express Blue Cash Preferred card that does 6% groceries, 3% gas, and 1% everything else.  Doing some rough math I could make $525 the first year on cash back including the signing bonus and with the Capitol One card I could earn $640 worth of airfare with the signing bonus ($3000 in 3 months is our limitation).  If we kept the cards more than a year the AMEX Blue Cash would have no annual fee due to me being in the military, and the Capitol One card would be $59.  During the second year the cash back card seems to win by a fair margin.  We're moving somewhere between May-June so I have a little time to figure this out, but I'm still new to rewards programs. We're not partial to any particular airlines.  Odds are we'll borrow a family vehicle for the days we visit, but we may rent a car somewhere in there too.  Any thoughts?

geekette

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Re: New rewards card - miles or cash back?
« Reply #1 on: March 15, 2015, 05:17:18 PM »
You can churn the credit cards for miles and rarely pay annual fees, since most waive it the first year.  Just go for the sign up bonuses and cancel before the anniversary date.


kpd905

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Re: New rewards card - miles or cash back?
« Reply #2 on: March 15, 2015, 05:45:06 PM »
If you go for cash back, the most you can really get is 6% back with Amex BCP (really 4.75% back after annual fee), or 5% with others for specific categories.

If instead you use your spending to just hit sign up bonuses, you can get anywhere from 10-75% back on all of your spending.

My best so far was the United Mileage Explorer card by Chase.  Spend $1000, get 50,000 United miles.  I used those miles for two roundtrip flights down to Miami, about a $750 value based on other available flights I could find.  So $750 for roughly 20 minutes of work.

daverobev

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Re: New rewards card - miles or cash back?
« Reply #3 on: March 15, 2015, 06:00:14 PM »
Why only one new card?

Get a BCP if you can use it in the grocery store you'll use.

Get something with a good sign up bonus, and other cards for your actual spend.

Get a Sallie Mae Barclays card.

Get a Discover It and Chase Freedom for the 5% rotating categories.

I'm so jealous of all the great cards you have in the US...

Travis

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Re: New rewards card - miles or cash back?
« Reply #4 on: March 25, 2015, 11:11:30 PM »
I think I have this narrowed down, but I'd like a second opinion.  Bearing in mind I'm still researching manufactured spending techniques:

I'm definitely going with the AMEX BCP - 6% groceries, 3% gas - $1000/3 months for $150 bonus

Where I'm stuck is:

Chase United MileagePlus Explorer - 30,000 miles after $1000/3 months, 5,000 miles for adding a user, and double miles when buying United tickets
Barclaycard Arrival Plus World Elite - 40,000 miles after $3000/3 months, 2x miles on all purchases, 10% miles back when using points

I like both of these cards, but I would need to focus all of my spending to get the Barclaycard bonus, and then temporarily redirect to get the Chase card.  I'm not expecting to buy any plane tickets until around Christmas, so I was thinking about getting the AMEX BCP card immediately, getting the Barclaycard after I qualify for the AMEX bonus, then getting the Chase card after I get the Barclay bonus which should be in time to buy tickets on it.  After that my groceries and gas would be on AMEX, all other spending and bills on Barclay, and plane tickets on Chase. Does that makes sense?

johnny847

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Re: New rewards card - miles or cash back?
« Reply #5 on: March 26, 2015, 03:09:54 AM »
Get southwest cards when they have the 50k signup bonus to get the companion pass. There's a thread on this forum about it.

Companion pass means a friend flies for free when you book a ticket (can be booked with cash or miles).

kpd905

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Re: New rewards card - miles or cash back?
« Reply #6 on: March 26, 2015, 05:29:52 AM »
Where I'm stuck is:

Chase United MileagePlus Explorer - 30,000 miles after $1000/3 months, 5,000 miles for adding a user, and double miles when buying United tickets
Barclaycard Arrival Plus World Elite - 40,000 miles after $3000/3 months, 2x miles on all purchases, 10% miles back when using points


Get the Arrival.  Don't get the United card for 30,000, it goes up to 50,000 miles from time to time.  With that and the Chase Sapphire Preferred you can grab 95,000 United miles really easily.

Travis

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Re: New rewards card - miles or cash back?
« Reply #7 on: March 26, 2015, 10:10:17 AM »
Where I'm stuck is:

Chase United MileagePlus Explorer - 30,000 miles after $1000/3 months, 5,000 miles for adding a user, and double miles when buying United tickets
Barclaycard Arrival Plus World Elite - 40,000 miles after $3000/3 months, 2x miles on all purchases, 10% miles back when using points


Get the Arrival.  Don't get the United card for 30,000, it goes up to 50,000 miles from time to time.  With that and the Chase Sapphire Preferred you can grab 95,000 United miles really easily.

My biggest concern with the Sapphire is spending $4000 in 3 months.  Unless I can figure out a manufactured spending plan, my threshold is $3000.  I've been looking through the forum and recommended websites, but it looks like in the last few months companies have been tightening down on some of the suggested techniques.

bzzzt

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Re: New rewards card - miles or cash back?
« Reply #8 on: March 26, 2015, 10:27:48 AM »
My biggest concern with the Sapphire is spending $4000 in 3 months.  Unless I can figure out a manufactured spending plan, my threshold is $3000.  I've been looking through the forum and recommended websites, but it looks like in the last few months companies have been tightening down on some of the suggested techniques.

You eventually get really creative. I've already churned most of the big bonus rewards cards but hadn't gone after the Chase Ink with the $5k MS. So, I adjusted my tax withholding last year and we owe. When you pay your taxes with a credit card, they charge you the processing fee (2.5%), so rewards cards typically don't make sense to use. However, when accompanied by the signup bonus, it makes sense to take the 1.5% hit (1% cash back on all purchases) to earn the bonus.

I'll only have to spend ~$500 on top of my federal and property tax bills to hit the MS on my Chase Ink. So, it'll "cost" me $75 to earn the $500 bonus.

Mississippi Mudstache

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Re: New rewards card - miles or cash back?
« Reply #9 on: March 26, 2015, 11:07:16 AM »
Yep, nothing like a little creativity. I used to sign up for a $3,000 minimum-spend reward card once a quarter, because we only had about $1,000/month in credit card spending. However, I just hit the minimum spend on two cards ($3,000 and $5,000) in two months. I did it mostly with buying and re-selling items on eBay. I turned a small profit (few hundred bucks) and earned >110,000 in points - almost enough for two round-trip tickets to Europe.

mxt0133

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Re: New rewards card - miles or cash back?
« Reply #10 on: March 26, 2015, 11:13:07 AM »
I use the Paypal and Target Redcard strategy and between my wife and I we have a capacity to manufacture spend about 18K a month.  I have only gone up 10K so far.  Look it up or sign up for the MMM Travel hacking course provided by two forum members in this site.  It's what got me starged.  PM me if you want the link to sign up for the course.

milesdividendmd

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Re: New rewards card - miles or cash back?
« Reply #11 on: March 27, 2015, 01:27:54 AM »
There is no question that 2 southwest cards enabling you to get the companion pass is the sweet spot for your specific travel goals.

Here is a nice article on the companion pass.

http://www.richmondsavers.com/why-you-should-earn-the-southwest-companion-pass/



WYOGO

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Re: New rewards card - miles or cash back?
« Reply #12 on: March 27, 2015, 05:58:24 AM »
I personally find zero value in a companion pass, but agree southwest based on your routing would be one of the best values out of Denver on wanna get away fares.

I also endorse the Sapphire Preferred. 45K southwest points go a long way with no annual fee the first year. If the companion pass is of no value to you, I would go this route especially of you already have the Freedom.