Graduated Learning: Life after College

I got my degree, I got a job…now what?

Credit Card Trickiness May 19, 2009

Filed under: Personal Finance — Stephanie @ 9:00 am
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There’s been a bit of a hubub on the internets regarding the new changes to the Chase Freedom credit card.  The changes, which Chase claims are “benefits”, are really just them cutting back on how much cash-back you can get.  The “improvements” are now that your rewards points don’t expire (apparently they used to), the bonus categories for everyday spending are being eliminated, and being replaced by quarterly bonus categories (likely not the ones you spend the most in), and they are eliminating the bonus $50 that you get when you redeem $200.  Those all sound like downgrades to me.

Some of those changes make the card seem more like the Discover cards, which have revolving bonus categories, though these bonus categories provide a 5% cashback rather than the 3% from Chase.  Then again, many places don’t accept Discover.  So I don’t know if it would be in my best interest to get a Discover card.

In general, I’m pretty much convinced I don’t need any more credit cards.  I got a few after I graduated college to start building my credit.  I got an offer or two for the Chase Freedom card, and accepted it (both for the better rewards program and a nice $100 bonus).  I have a few store credit cards as well. (I know, everyone says they’re the worst thing to have, but I have them for the two stores I shop the most in)

I really would like to cancel one of my earlier cards, which I’m guessing I could do without hurting my credit too much (since both of my first cards were started around the same time).    I just want to eliminate unused cards, but keep my history.

The other thing I’ve thought about is how the cashback from different credit cards probably doesn’t matter that much.  I’ve read about a lot of different people who try very hard to maximize their cashback.  They’ve got multiple cards that they use for different categories.  I suppose that I could start using a card that gets me higher cashback for my most common purchases (groceries, gas, restaurants).

In the end though, does it really matter?  I still pay some bills by online transfer (rather than by credit card), so I’m not chasing after every dollar of cashback money.  Looking back, I don’t spend so much on credit.  If we want to get crazy, we could pretend that I spend $6000 on my credit card every year.  I think that number is way too high, but that’s going on a $500/month assumption.  With a 5% cashback, I’d get $300 back.  While that’s not chump change, it’s not a ton of money.  So going through the hassle of figuring out which card to use at what merchants really doesn’t seem worth it.

I’ll still continue to use credit cards for most of my expenses for the minute amount of cashback I get, and to help me track my expenses.  I know that sometimes I’ll spend more having cash than credit (special thanks to my company dining program now accepting credit cards), but for the most part, my usual purchases aren’t that high (groceries) or are really out of my control, spendingwise (gas…I’m stuck putting gas in my car at whatever price is out there).  I think I’m going to go back to paying cash for lunch at work (or get better at bringing lunch), since I think I’ll be more likely to spend less seeing the money actually leaving my wallet.

How many credit cards do you have?  Do you strive to earn as many points/miles/dollars as possible?  Or do you just see the points etc. as a nice bonus for using a card you’d use anyway?  Do you find yourself spending more when you’re using your credit card?

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5 Responses to “Credit Card Trickiness”

  1. The Weekly Grind Says:

    what are your thoughts on transfering credit cards? I have an ATT&T Universal Card, I got it way back when having a calling card was a practical thing, but now I’m looking for a card where some of my purchase either go towards rewards for myself or towards a good cause..

  2. Lulu Says:

    I have a Discover card that I got before Chase and I make a note to capitalize on the revolving categories.

    I pay all bills and put all shopping on my credit cards anyway to get cash back (I pay the balance in full every month) but since Chase is cutting out the bonus $50 I might stick to using Discover since my cash back always seems to build up faster there.

  3. Jade Says:

    Hi Steph. I have four credit cards, though I’m looking to get rid of I guess my second oldest one since I never use it, and the rewards (iTunes points) just aren’t attractive to me. Another credit card is an Express credit card; not sure if I should keep that one, actually. It’s just kind of risky, imo, to have a bunch of credit cards around.

    As for chasing rewards, as soon as I get my AmEx card, I do intend to use it as much as possible like a charge card and just continue to pay the bill off in full every month. It has a higher percentage cash back than my Citicard, which operates on a point system. I already tried to get Citicard to switch me to a cashback system, but they said no, so I’m afraid I won’t be using it as much anymore, except to accrue points for my grades, since I’ll be going back to school soon. 🙂

  4. I found your blog on google and read a few of your other posts. I just added you to my Google News Reader. Keep up the good work. Look forward to reading more from you in the future. Thanks!


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