How to Get the Most Out of a Cash Rewards Credit Card
Author: Wallin
Posted: Sat Jul 15, 2006 1:53 am
Post subject: Ideas for getting most out of cash rewards credit cards
For the past 4 years, I've been using a crappy Wells Fargo visa card tied to my checking account. No cash back, no rewards, no thank you points. It gives me a decent credit line, but I'm more interested in getting something back now, instead of having all the spent money do nothing.
I'm now trying to find out what scheme of cards would work best. My current thoughts are:
For "everyday purchases" (gas, grocery, pharmacy), go with one of the 5% cards like Citibank Dividend Platinum Select or Chase Cash Plus Rewards. (since it looks like Chase Rewards Plus isn't around anymore). Both these are 300 max back per year.
For restaurants (probably the second largest portion of my expense) the Citibank Professional card with 3% back (as well as at office supply and auto rentals). This has a max of 500 per year.
For changing expenses that depend on the current quarterly deal I'm thinking about the Discover Platinum. Currently, till Sept 2006, they have a deal to get 5% back on tuition, my largest expense by far, as well as several other stores: https://www.discovercard.com/discover/data/cashback/getmore.shtml. This is only good for $2000 in purchases per quarter, so $400 back total, but hey, it's an easy 100 for me (and if I split the payments and they keep the tuition offer, maybe more).
For everything else I was thinking about one of Fidelity's investment cards (for 1.5% with the Investment Rewards, or 2% with the 529 one, although I'm not altogether clear on how legit it is to go about doing xerocool's scheme on that).
Now, I realize this is probably more cards than I ought to have. How many cards is too much? If I got one for each category, it would be a total of 4 cards (I'd close my wells fargo). Would you say it is going to be too difficult to handle using 4 cards during the year, one for each different kind of expense? Would it affect my credit score poorly to have so many? (or for that matter, to apply for so many)
Also, does anyone have any negative experience with any of these cards, or any other advice?
Thanks, any help is appreciated.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: tonygoldston
Posted: Sat Jul 15, 2006 4:46 am
Post subject:
Wallin,
No # of cards is too many as long as you PIF every month and use them correctly. It depends on your specific financial situation.
I would also say to look at the Citi MTV Student card (you say tuition is an expense) It give 5% back on restaurants.
Also I wouldn't close the WF card. Length of history is really important for your credit score so if that's your oldest card I would keep it open forever (using it at least once every 6 months to keep active.) (Exception: if there is a fee to have the card.)
Your credit score will take a hit if you apply for multiple cards at once, but there has been sucess in doing a bunch of applications at once. Especially if you spread over multiple companies.
Author: Ira
Posted: Sat Jul 15, 2006 6:05 am
Post subject: How to Get the Most Out of a Cash Rewards Credit Card
Its not a numbers game, it's a purpose game, and your plan is spot on. Apply for the cards that give you the most bang for the buck in specific situations. Having multiple cards should not of and by itself increase your spending. Having multiple cards is a tiny bit more difficult to administer, but if you use Quicken, Microsoft Money, or some similar financial software to keep track of everything you shoul be fine. Just remember to always pay in full every month. If you don't, the rebates will be overwhelmed by finance charges.
Do NOT worry about what this will do to your credit score. Your cedit score tends to operate like the reciprocal of your pulse. In periods of activity your pulse tends to go up, but when the activity is over it comes right back down again. Your credit score will go DOWN in periods of activity (applying for new credit cards), but when the activity is over it comes right back up again.
Author: eastbaykitten
Posted: Sat Jul 15, 2006 12:50 pm
Post subject: How to Get the Most Out of a Cash Rewards Credit Card
[quote="Ira"]Do NOT worry about what this will do to your credit score. Your cedit score tends to operate like the reciprocal of your pulse. In periods of activity your pulse tends to go up, but when the activity is over it comes right back down again. Your credit score will go DOWN in periods of activity (applying for new credit cards), but when the activity is over it comes right back up again.[/quote]
That's the best description I've ever heard of credit scores.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Posted: Sat Jul 15, 2006 1:53 am
Post subject: Ideas for getting most out of cash rewards credit cards
For the past 4 years, I've been using a crappy Wells Fargo visa card tied to my checking account. No cash back, no rewards, no thank you points. It gives me a decent credit line, but I'm more interested in getting something back now, instead of having all the spent money do nothing.
I'm now trying to find out what scheme of cards would work best. My current thoughts are:
For "everyday purchases" (gas, grocery, pharmacy), go with one of the 5% cards like Citibank Dividend Platinum Select or Chase Cash Plus Rewards. (since it looks like Chase Rewards Plus isn't around anymore). Both these are 300 max back per year.
For restaurants (probably the second largest portion of my expense) the Citibank Professional card with 3% back (as well as at office supply and auto rentals). This has a max of 500 per year.
For changing expenses that depend on the current quarterly deal I'm thinking about the Discover Platinum. Currently, till Sept 2006, they have a deal to get 5% back on tuition, my largest expense by far, as well as several other stores: https://www.discovercard.com/discover/data/cashback/getmore.shtml. This is only good for $2000 in purchases per quarter, so $400 back total, but hey, it's an easy 100 for me (and if I split the payments and they keep the tuition offer, maybe more).
For everything else I was thinking about one of Fidelity's investment cards (for 1.5% with the Investment Rewards, or 2% with the 529 one, although I'm not altogether clear on how legit it is to go about doing xerocool's scheme on that).
Now, I realize this is probably more cards than I ought to have. How many cards is too much? If I got one for each category, it would be a total of 4 cards (I'd close my wells fargo). Would you say it is going to be too difficult to handle using 4 cards during the year, one for each different kind of expense? Would it affect my credit score poorly to have so many? (or for that matter, to apply for so many)
Also, does anyone have any negative experience with any of these cards, or any other advice?
Thanks, any help is appreciated.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: tonygoldston
Posted: Sat Jul 15, 2006 4:46 am
Post subject:
Wallin,
No # of cards is too many as long as you PIF every month and use them correctly. It depends on your specific financial situation.
I would also say to look at the Citi MTV Student card (you say tuition is an expense) It give 5% back on restaurants.
Also I wouldn't close the WF card. Length of history is really important for your credit score so if that's your oldest card I would keep it open forever (using it at least once every 6 months to keep active.) (Exception: if there is a fee to have the card.)
Your credit score will take a hit if you apply for multiple cards at once, but there has been sucess in doing a bunch of applications at once. Especially if you spread over multiple companies.
Author: Ira
Posted: Sat Jul 15, 2006 6:05 am
Post subject: How to Get the Most Out of a Cash Rewards Credit Card
Its not a numbers game, it's a purpose game, and your plan is spot on. Apply for the cards that give you the most bang for the buck in specific situations. Having multiple cards should not of and by itself increase your spending. Having multiple cards is a tiny bit more difficult to administer, but if you use Quicken, Microsoft Money, or some similar financial software to keep track of everything you shoul be fine. Just remember to always pay in full every month. If you don't, the rebates will be overwhelmed by finance charges.
Do NOT worry about what this will do to your credit score. Your cedit score tends to operate like the reciprocal of your pulse. In periods of activity your pulse tends to go up, but when the activity is over it comes right back down again. Your credit score will go DOWN in periods of activity (applying for new credit cards), but when the activity is over it comes right back up again.
Author: eastbaykitten
Posted: Sat Jul 15, 2006 12:50 pm
Post subject: How to Get the Most Out of a Cash Rewards Credit Card
[quote="Ira"]Do NOT worry about what this will do to your credit score. Your cedit score tends to operate like the reciprocal of your pulse. In periods of activity your pulse tends to go up, but when the activity is over it comes right back down again. Your credit score will go DOWN in periods of activity (applying for new credit cards), but when the activity is over it comes right back up again.[/quote]
That's the best description I've ever heard of credit scores.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
posted by CardRatings.com at 12:36 PM
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