Graduated Learning: Life after College

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

Do you chase credit card rewards? June 12, 2011

Filed under: Personal Finance — Stephanie @ 8:45 pm
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I got my first credit card after I graduated college.  Applied for some that my bank offered, and got two, a Visa and an American Express.  I only applied for cards with cashback or other rewards that could be translated into money back.  Later I applied for the Chase Freedom credit card when I got an offer that came with a  $100 bonus.  I think I also signed up again to get a $50 bonus, but soon cancelled that account when I realized how stupid it was to have two identical credit cards.

I also have signed up for store credit cards.  I know, those are the ones that personal finance people tell you to stay away from.  You’re usually tempted at the checkout by the inciting 15% off your purchases.  Which only benefits you if you pay off the credit card.  Otherwise, those few dollars you saved are erased by the ridiculous interest rates that most store cards have.  My store cards that I have (for the top 3 stores I shop at) all have interest rates above 20%.  Of course, if you pay the cards off every month, the cards do tend to have decent benefits (sales, extra coupons, or “cashback” in the form of coupons off future purchases based on how much you’ve spent).

I’ve never signed up for a train or airlines card; I don’t stick to one airline, and don’t fly very often (except apparently this year).

I read a lot of articles on Free Money Finance explaining how to take advantage of the different rewards programs that credit card companies offer.  FMF is very adamant about using cashback cards to your advantage.  Some cards give higher rewards than others, and some will reward certain categories of expenses.  I don’t think I come out with as much rewards money as FMF does…I don’t spend nearly as much.

My theory on the matter is that your technique to maximize rewards shouldn’t be too insane.  What do I do?

*Most of my day-to-day transactions are put on my credit card.  As I’ve mentioned before, I’m all about the points.  I guess I feel a little more free to spend money if I’m getting 1% off…not really the best mental game to be playing.  I do spend cash when I go out to eat with friends if it makes the paying of the bill easier.  And most cabs don’t take credit.  But I just don’t like keeping a lot of cash on me.  Plus using credit makes keeping track of my expenses a lot easier.

*When I shop at stores I have store cards for (Kohl’s, Gap, and LOFT), I’ll use them.  You are sometimes required to use those cards to get discounts, plus I can earn future spending money or added benefits by using my cards.

*I use my Chase Freedom card almost exclusively (except for at those stores I mentioned above).  It has rewards that are simple to understand, and tend to have bonus categories that I actually use.

*Every once in a while, I’ll get an offer from my bank telling me I’ll get bonus points for using their card for specific purchases.  If those categories aren’t currently the bonus categories on the Chase Freedom card, I’ll go ahead and use those cards to take advantage of the bonus points.  But those offers only come every once in a while (when I haven’t used my card in a while!)

*I recently had to buy a bunch of plane tickets for the two weddings I’m attending this year, as well as for a family reunion.  I’ve found that if you go through your credit card’s shopping site/rewards site, you can earn additional “points”.  For my Chase Freedom card, I went through their Ultimate Rewards program.   It’s like following an affiliate link; they know you came from their site, and then will reward you with additional points, either a flat amount or a certain percentage of your purchase.  So when I discovered that going directly through JetBlue‘s website or through a flight search site (like Travelocity) would cost me the same, I chose to go through Travelocity through the Ultimate Rewards site, and will be getting additional cashback for doing so.  Easy Peasy.

There are similar programs if you have a card that is part of the WorldPoints program.  You can shop through their WorldPointsMall.  If you have a Bank of America credit card, you can shop through their Add It Up program.

To be honest, since I don’t buy a lot of things online, I’ve only ever used these sites for buying plane tickets.  And maybe once when I ordered flowers for my mom.

As a note, I’m not getting paid or any other benefits for reviewing this.  Just going over what I do.

So, how intense is your credit card rewards optimization?  Do you juggle lots of cards, each for a specific purchase, to maximize your rewards returns?  Do you find any of this worth the time and effort?  Do you use other card types?

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7 Responses to “Do you chase credit card rewards?”

  1. Adrienne Says:

    Interesting post! I have & love Chase’s Amazon VISA – 3% back on Amazon purchases, 2% back on dining and gasoline purchases and 1% back on everything else. I gave up store credit cards a long time ago; I don’t shop enough at one place to make them worth it. I didn’t know about the Chase Ultimate Rewards. I will look into that!

  2. I got a target card which give me 5% off every time I use it, which is great, but then I immediately forgot to pay it. I think I started the transaction online but didn’t complete it or something like that. Anyway, I was nearly 15 days late when I finally realized I hadn’t paid, and that was only because they froze the card so it wouldn’t run at the store…yikes

    Anyway, this makes me afraid to open any more store cards. They don’t have as many options for automatic payments as real bank cards either.

    My favorite rewards card is my discover. I use it for business only and don’t really try to worry about rewards for personal use. Basically, you rack up 10,000 (2 or so points/ spent $) points and they give you a 100$ travel bonus (also many other things, but this has the best exchange rate), which works like this: You select some travel charge on your card in the past few months (usually a plane ticket or hotel), and it just deposits 100$ in your account. easy as that.

  3. I have two cards, an HSBC with literally NO rewards whatsoever (the bill goes to my mother and is only used for very uncommon and specific expenses). My primary credit card is a Chase Sapphire, which also uses the Ultimate Rewards mall. I’ve also booked a flight through Ultimate Rewards, which gave me double points. I used to be inclined to use my card more for the points, but since I sat down and did the math, the idea of earning points is no longer incentive to use the card. Most rewards cards in general either use a cashback system (most commonly 1%) or points. In most cases, point systems add up to almost exactly 1% as well (for example with my Sapphire, 100 points = $1 in the rewards “mall”). So essentially, they are the same, except that you must ensure you use points to take advantage of them, whereas cashback is typically credited to your balance (more practical in the end). I have yet to sign up for a cashback card, but it will certainly be my next one.

  4. I do chase rewards, but in the interest of preserving my credit score, I do tons and tons of research on the “best” card for matching my spending habits, and then get only that card. (Well, only two — one AmEx, and a backup Visa/MC in cases where AmEx isn’t accepted.)

    Airline miles are usually better rewards than cashback, in my experience, and cards with annual fees often pay for themselves if you’re the “right” kind of user.

  5. Jeff Says:

    I only have one credit card and it doesn’t earn me points. I guess I feel pretty naïve.

  6. Midnight Snack Says:

    Been putting off getting that Chase Freedom card for months now. I have one all purpose card from Wells Fargo that gives me cash back and a couple Store cards that I used to get a discount and haven’t used since. I want to be one of those people that games the reward system for hundreds of dollars.

  7. We have a bank of america world points card that we really like, you only need about 2,500 points for a 25 dollar gift card to a restaurant. I use cc for everything. I’ve had fraud and don’t like it when actual money is taken from my checking account and isn’t replaced right away. I also like American Express blue, I also got a 100 credit on that account when I opened it. That was great. We recently opened up a home depot cc, surprisingly i got an 8,000 credit limit (although I only needed about 250, go figure right). I enjoy opening new cards and tossing them after the zero percent introductory offer is over. The only reward you get by paying cash is knowing something is fully paid for.


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