NA Credit cards

[Let'sgoflying!]

Which credit card issuer provides the best return?
I spent 30K on my Amex and got $450 in 'rewards'.
I suppose I benefit in other ways (easy disputes, rental car insurance, etc) - but it's time to review.
Airline points are not much use to me. Like that cash.

 

[Shawn]

As a frequent business traveler I have become a points whore...I found that the "cash back" cards are not as of much value compared to a brand company specific card.

Find what you would benefit most from and who you would want accumulate points with and get that card...such as Southwest Airlines, Marriott Hotels, Disney Card, REI...etc. Typically much better return per dollar spent than a generic rewards card.

Other key is to focus all your spending to that one card. I was spending a few grand a month on a generic Wells Fargo card getting nada. Switched all of that spending to my Marriott card as well as set up every auto pay bill I could charge to that card and the points are racking up for free rooms when I travel on vacation.

If you are spending money anyway, better to be getting something in return for that money spent.

 

[denverpilot]

There's a couple of calculators for this online. You put in real world numbers for your spending and they recommend a card.

As Shawn has said, some travel points cards do way better on specifics if you always use a particular hotel ( not so much with airlines ) and what not.

I played with various calculators recently and figured out that with our not-very-specific spending patterns, and a desire to max out the benefit from whatever single card was the best, the best deal for *us* was the citi 2% flat cash back card on everything. 1% when you buy, 1% when you pay.

It even beat out our Southwest Airlines card for total value, since we can easily find cheap SWA tickets to our most common domestic destinations whe we absolutely must fly cattle class and not in the 182.

One minor nitpick with the Citi card... They have three ways to redeem the cash back award. One, they give you a credit into your card account. Astute observers will note that this will knock off a tiny bit of your bill and since you're given 1% for paying the bill, you lose tiny amount. Two, they'll issue a check. It takes weeks. Annoying. Three, they'll direct deposit. Except that: The direct deposit signup page on their website has said that it is "unavailable" for months now. I suspect it will never be "available".

I just make the pricks mail me a paper check which costs them money and staff, and then deposit it via a photo app straight into my credit union (****es banks off even more) without ever walking a step away from opening their envelope.

Click. Photo. "Your deposit has been accepted." Screw Citi and their tease of direct deposit.

Oh, almost forgot. Even the direct deposit isn't automated. They make you go to the website monthly and request the cash. Which again, is just another ploy to get people to forget about it. A reminder in my calendar beeps and takes care of that. Jerks.

Up until recently the Costco Amex was our best deal. They hadn't figured out that Avgas wasn't the same as car gas. We hit the 3% cash back limo on that one every year for years plus whatever we ran through it in the other categories. When we first got it we would go shopping at Costco for crap with the annual rebate check, but for many years we've just been waking in and cashing it and walking out. Amazon Prime replaced Costco as useful around here long long ago.

Have had a Barclays / Frontier Airlines card for a long time also. Most useless and annoying card ever. Barclays would send us a new card almost every month for a while there claiming the same gas station in California was running an exactly $100 charge on our cards every month. Now if you think about it, they're changing our card numbers every time it happens and it happened five times at least. This means, the idiots have a very significant security problem, and I started watching transactions even more hawkishly on that card than I always do anyway. Which is to say, every transaction on every card ever, sends me a text or an email. And I feel the need to watch Barclays' garbage card even closer.

So there you go. Pick a card that matches what you do to max it out. We run *everything* through the cash back card(s) and pay off monthly. There's almost no cash utilized around here for anything. I'll buy a $1 soda with the stupid thing, I don't care. We'll get enough cash back in a year to make the whole thing quite worthwhile.

Here's hoping an avionics shop will take a credit card and not charge extra for it! Heh. 2% back on panel work isn't anything to sneeze at.

 

[Let'sgoflying!]

No airline points, no hotels! Not interested.
I guess cash rewards is best for me.

 

[FastEddieB]

We use a Gander Mountain credit card that gives coupons (1%+) for use in their store or site.

Cash would certainly be more flexible, but we kinda like being forced to spend it in their store - great for hiking boots, Keen's, gifts or even firearms and ammo!

 

[JCranford]

Here's great reward: run that credit card thru a shredder and stop supporting the banks. Pay cash for stuff and use your debit card for things you need a card for or for convenience (gas purchases etc).

But JC, I need a credit card for 'emergencies'. JC: would you rather have a CC with a $10k limit for emergencies or would you rather have $10k in a savings account? I'd rather just have the $10k.

But JC, I need a CC to rent a car! JC: use your debit card. Keep enough in the account so when they tie up a couple hundred as a deposit, you can still run. Or put up a cash deposit.

But JC, having a CC is (insert whiny voice here) eeeeasier! JC: Big deal. Not supporting big banking is very satisfying.

Sorry I couldn't answer your actual question.

 

[FastEddieB]

Here's great reward: run that credit card thru a shredder and stop supporting the banks. Pay cash for stuff and use your debit card for things you need a card for or for convenience (gas purchases etc).

Individual choice.

But we've "earned" over $4,000 of "stuff" over the years - as I said, everything from clothing to critter cams to gifts to dog toys to guns & ammo.

Since we pay off the credit card balance each month, it really costs us nothing. Would not want to give that up.

In any case, choice is good.

 

[mulligan]

Only use Amex. Can transfer those points to any airline, hotel, car or store. Can also use points to pay for purchases. Some deals are better then others so apply accordingly. Plus with Amex, we pay balance in full every month and that keeps us to buying only what we can afford and not only what we want

 

[Everskyward]

Individual choice.

But we've "earned" over $4,000 of "stuff" over the years - as I said, everything from clothing to critter cams to gifts to dog toys to guns & ammo.

Since we pay off the credit card balance each month, it really costs us nothing. Would not want to give that up.

In any case, choice is good.

I also like using credit card for this reason. I don't care that I am "supporting banks". They are providing a service for me. But as you say, choice is good.

My normal credit card is a Capital One World card which gives 1.5% cashback on all purchases. It also has no international transaction fee. I also have a Chase Freedom card which gives 5% cashback on various categories of purchases each quarter. This quarter is is gas and ground transportation (rental cars). I have others, which I use for various purposes.

 

[Luvrv8]

We use Discover due to the card giving out monthly promotions and average 3% cash back. I just got a American Express Blue, they offered me 6% cash back on groceries and after 2K of spending in 6 months we get a extra $400 back. The cash back works for us, we have only had to pay interest one month on one card in the last 15 years.

 

[NoHeat]

Besides the American Express Blue card mentioned already for 6% on groceries, here are the two best cards I've found, if you've got a decent-size IRA or brokerage account at a discount broker that you can transfer:

• the no-fee Bank of America Travel Rewards Visa, which pays 2.625% on every purchase (that's 1.5% multiplied by a 1.75X bonus for the $100k account at Merill).
• the no-fee BoA Cash Back Visa, which pays 5.25% on gas (that's 3% with the 1.75 X multiplier for the $100k account).

Also, sign up for the one-time $600 transfer credit. To do all this, you'll need to transfer an IRA or brokerage account worth $100k to Merrill Edge (it's a good discount broker run by Merrill Lynch, which will give you free trades), and then open a no-fee interest checking account at Bank of America.

 

[N747JB]

I don't disagree with your premise on not using credit cards, but I would 10X's rather use a credit card than a debit card. The banks are getting paid either way. I tear up debit cards when the bank forces me to have one, I'm not sold on their security. When I had fraud on my credit card it didn't affect my bank balance for the 6 weeks it took to straighten it out.

Here's great reward: run that credit card thru a shredder and stop supporting the banks. Pay cash for stuff and use your debit card for things you need a card for or for convenience (gas purchases etc).

But JC, I need a credit card for 'emergencies'. JC: would you rather have a CC with a $10k limit for emergencies or would you rather have $10k in a savings account? I'd rather just have the $10k.

But JC, I need a CC to rent a car! JC: use your debit card. Keep enough in the account so when they tie up a couple hundred as a deposit, you can still run. Or put up a cash deposit.

But JC, having a CC is (insert whiny voice here) eeeeasier! JC: Big deal. Not supporting big banking is very satisfying.

Sorry I couldn't answer your actual question.

 

[PaulS]

You have to watch the rebate deals on these cards, many limit the amount you can get back. The worst I had was a Citizens bank card that promised 2 or 3% back on purchases, what I didn't realize was that it capped a $50 refund per month, which sucked for me.

 

[Luvrv8]

Not sure how I am supporting the banks when I pay my cards every month. When I added on to my house I maxed out my Discover Card a few times, over 10K each time. We bought all the lumbar with it one time, then all new appliances another and forget what else. We also bought a new car, they let us put 10K on the card. We paid it off each time. When all was said and done we took a 2 week vacation cruise on the cash back on the card we used for 6 or 7 months. Sounds to me like I got the best of the banks.

 

[denverpilot]

Besides the American Express Blue card mentioned already for 6% on groceries, here are the two best cards I've found, if you've got a decent-size IRA or brokerage account at a discount broker that you can transfer:

• the no-fee Bank of America Travel Rewards Visa, which pays 2.625% on every purchase (that's 1.5% multiplied by a 1.75X bonus for the $100k account at Merill).
• the no-fee BoA Cash Back Visa, which pays 5.25% on gas (that's 3% with the 1.75 X multiplier for the $100k account).

Also, sign up for the one-time $600 transfer credit. To do all this, you'll need to transfer an IRA or brokerage account worth $100k to Merrill Edge (it's a good discount broker run by Merrill Lynch, which will give you free trades), and then open a no-fee interest checking account at Bank of America.

I'd never ever EVER send a single dime anywhere near BoA. But that's me. Plus they're really not prevalent here anyway so that makes it easy.

Not sure how I am supporting the banks when I pay my cards every month. When I added on to my house I maxed out my Discover Card a few times, over 10K each time. We bought all the lumbar with it one time, then all new appliances another and forget what else. We also bought a new car, they let us put 10K on the card. We paid it off each time. When all was said and done we took a 2 week vacation cruise on the cash back on the card we used for 6 or 7 months. Sounds to me like I got the best of the banks.

You did. Well kinda. You got the better of the sellers of the products. The bank didn't pay for all that stuff, they passed that along to the seller.

What's interesting however is that the advent of bigger and bigger cash back and points cards actually busted up the old rule from the card issuers that a business could not charge more for a credit purchase. Now the consumer can see the difference and know exactly how they're paying for a portion of things. Or the merchant can simply raise all prices equally like they always did. Doesn't really matter.

Point is, the illusion that buying with a card and buying with cash was the same price, is no longer there for many products. Gas stations especially have embraced this as of late.

Everyone knows they're just paying more for the card transaction than if they paid cash, and that's actually a minor but useful thing when it comes to wanting to keep cash alive and not be a "cashless society".

So, folks taking advantage of these perks while not running balances are actually helping highlight that electronic banking really isn't free.

 

[JGoodish]

Banks make way more in interest and fees from borrowers than they do from merchants. The "rewards" for rewards cards are largely funded by fellow card users who carry a balance and therefore pay boatloads of interest.

Fees that merchants encounter are (usually discreetly) passed on to consumers. I keep hearing about discounts for cash, but haven't encountered many merchants offering such discounts in my area. Local merchants will volunteer that they'd rather have cash, but usually refuse any discount in return, which means that I will gladly use my card and collect the rewards.

I have a debit card, but use it sparingly for the reasons that John B. mentioned above.


JKG

 

[ejensen]

Capital One World card. 2% back and no foreign conversion fees.

 

[PaulS]

Not sure how I am supporting the banks when I pay my cards every month. When I added on to my house I maxed out my Discover Card a few times, over 10K each time. We bought all the lumbar with it one time, then all new appliances another and forget what else. We also bought a new car, they let us put 10K on the card. We paid it off each time. When all was said and done we took a 2 week vacation cruise on the cash back on the card we used for 6 or 7 months. Sounds to me like I got the best of the banks.

You support them with higher prices than if credit cards never existed. The merchant pays a percentage of the charged amount as a fee to the banks. Anywhere from 1 to 3 more percent of the total. Those costs are built into the prices you pay.

 

[Everskyward]

You support them with higher prices than if credit cards never existed. The merchant pays a percentage of the charged amount as a fee to the banks. Anywhere from 1 to 3 more percent of the total. Those costs are built into the prices you pay.

But, except for a few gas stations, the price is the same whether you pay with a credit card or not.

 

[denverpilot]

Banks make way more in interest and fees from borrowers than they do from merchants. The "rewards" for rewards cards are largely funded by fellow card users who carry a balance and therefore pay boatloads of interest.

That would be called "their mistake". I can empathize. We made those mistakes 20 years ago and it took 7-8 years to correct them. Running any sort of a balance that draws an interest payment to a credit card company is simply that, a mistake.

Only person I ever saw play that game and win, was a friend who remodeled his house on a card and sold the house three month later in a very up market. He returned way more value than he paid interest on. He'd just been through a messy divorce and could t qualify to do it with a traditional home equity loan. He was also a realtor and knew exactly what his timeline and prices were going to be.

But I can't say I'm not thankful for everyone still making that mistake who's paying me thousands back every year. Rough. I know. I paid for somebody else's once.

If there's one piece of advice for anyone just starting out that I always give, it's that if you can't figure out compound interest, and how much money it will cost you, life is going to be very very hard for you.

You support them with higher prices than if credit cards never existed. The merchant pays a percentage of the charged amount as a fee to the banks. Anywhere from 1 to 3 more percent of the total. Those costs are built into the prices you pay.

Yup.

But, except for a few gas stations, the price is the same whether you pay with a credit card or not.

Becoming way more common than you think. All of the grocery stores are doing it here now along with their "points" thing for cheaper gas prices. Watch the price numbers on the pump carefully compared to what's on the sign next to the road.

Also seen it at two other national brand stations recently here. The pump flips the price depending on which type of card you insert.

Debit gets cash price, lowest. Credit is higher. Watch for it.

Apps like GasBuddy had to add fields for cash vs credit prices into their backend database and their apps for reporting fuel prices.

I rarely use the app, it's almost never worth driving extra miles out of your way for two or three pennies on a gallon, unless I'm filling the diesel, and even then it's not going to usually amount to much more than a buck with a 35 gallon tank.

But the stations are scraping additional pennies these days for credit purchase.

Usually where I use the app is on road trips. Often stations located right at the freeway exit are $.20-$.30 higher than ones a mile off the highway. If the truck and the fifth wheel will fit under their awning, saving $10 is worth a half a mile.

At one highway exit along I-80 we saw a $.50 difference between the truck stop and the in town station only three blocks up by looking on the app. "Highway robbery" is real.

 

[JoseCuervo]

You support them with higher prices than if credit cards never existed. The merchant pays a percentage of the charged amount as a fee to the banks. Anywhere from 1 to 3 more percent of the total. Those costs are built into the prices you pay.

I know a guy that owns 2 retail stores in local shopping malls.

He much prefers customers pay with credit or debit cards instead of paying in cash. He is tempted to charge a premium for the handling nonsense that cash requires.

Plastic is preferred by the retailer.

 

[denverpilot]

I know a guy that owns 2 retail stores in local shopping malls.

He much prefers customers pay with credit or debit cards instead of paying in cash. He is tempted to charge a premium for the handling nonsense that cash requires.

Plastic is preferred by the retailer.

Depends on the biz.

We don't do cash but we did start passing along credit card fees when we saw an uptick in customers paying $70,000+ monthly bills with credit cards.

The fees eat a significant chunk of a payment that big.

Some balked because they were just billing their companies and wanted the points or cash back on personal cards, others said "no problem" and continue paying on cards.

The Controller at first was very grumpy about the fees until he was told to simply pass them along.

We're seeing a pretty big rise in customers who don't want to mail checks. Most seem to not only want automated payments but want them on a card. It's impressive when they tell us to set up auto-pay on their cards for $50-$80K a month.

Not that $50-$80K a month is all that large in our biz, as monthly cash flow goes, but that they just don't care at all about invoicing or getting their usual Net 30 type terms for typical billed things and mailing a check back. I bet they barely look at the emailed invoice.

As long as we make the same amount as billed, by passing along the fees in whatever fashion, we don't mind. Just an interesting trend. It appears the new way to give an exec a little bonus is to let them run massive company bills through their credit cards. Especially at smaller companies.

 

[Everskyward]

Becoming way more common than you think. All of the grocery stores are doing it here now along with their "points" thing for cheaper gas prices. Watch the price numbers on the pump carefully compared to what's on the sign next to the road.

It might be "becoming" more common here in CO, but it has been pretty common in CA and Las Vegas for a long time. I remember being surprised in Las Vegas after pulling into a gas station and being unable to use the company AMEX. That was at least 10 years ago.

 

[FastEddieB]

When we signed up to accept credit cards, part of the agreement was that we could not charge more when a credit card was used, nor impose a minimum charge.

I guess they get around the first by just discounting the cash price, which is close to a distinction with a difference.

Anyway, if those rules are still in effect, they seem to be ignored a lot.

 

[RJM62]

But, except for a few gas stations, the price is the same whether you pay with a credit card or not.

I find that that depends a lot on the area. Around here, the gas price when using plastic other than the oil company's own is usually $0.05 to $0.10 / gallon higher. But downstate, especially in high-crime areas, the price tends to be the same. That makes sense to me. I didn't like carrying cash in high-crime areas, either.

The exception, around here, used to be stations that were open but unattended at night. You either paid at the pump or you didn't buy gas because there was no one minding the store. But I think the government and/or insurance companies have started cracking down on those stations because of the fire hazard of a gas station being completely unattended.

Rich

 

[DJTorrente]

I know a guy that owns 2 retail stores in local shopping malls.

He much prefers customers pay with credit or debit cards instead of paying in cash. He is tempted to charge a premium for the handling nonsense that cash requires.

Plastic is preferred by the retailer.

Credit card receipts don't grow legs like cash does. The ~2% he pays to a CC company is probably comparable to what he'd have to pay for retail labor that wouldn't (try to) rob him blind.

I know a small handful of businesses that are all cash -- namely restaurants. Every one of them has a private label ATM on premises that they get a piece of the $3 transaction fee. Instead of customers' propensity to avoid carrying cash costing them money, it makes them more money.

 

[RJM62]

Credit card receipts don't grow legs like cash does. The ~2% he pays to a CC company is probably comparable to what he'd have to pay for retail labor that wouldn't (try to) rob him blind.

I know a small handful of businesses that are all cash -- namely restaurants. Every one of them has a private label ATM on premises that they get a piece of the $3 transaction fee. Instead of customers' propensity to avoid carrying cash costing them money, it makes them more money.

As does evading income taxes, more than likely.

Rich

 

[Bill]

You support them with higher prices than if credit cards never existed. The merchant pays a percentage of the charged amount as a fee to the banks. Anywhere from 1 to 3 more percent of the total. Those costs are built into the prices you pay.

Yeah, but that genie is out of the bottle...

 

[PaulS]

Yeah, but that genie is out of the bottle...

Tell me about it, when buying larger items with merchants I know I generally offer to pay with a check or a credit card. They always pick the check, but in all fairness, they know it won't bounce.

 

[SCCutler]

As does evading income taxes, more than likely.

Rich

I was amazed when I visited NYC a few years back - none of the smaller restaurants I went to accepted plastic, and the cash register drawer rarely closed. It must have been *hell* remembering all those transactions! ;-)

 

[ejensen]

It might be "becoming" more common here in CO, but it has been pretty common in CA and Las Vegas for a long time. I remember being surprised in Las Vegas after pulling into a gas station and being unable to use the company AMEX. That was at least 10 years ago.

In Tucson several economy stations don't accept CC only debit and cash.

Northern Europe seems to prefer chip/pin cards.

 

[Austingt350]

Here's great reward: run that credit card thru a shredder and stop supporting the banks. Pay cash for stuff and use your debit card for things you need a card for or for convenience (gas purchases etc).

But JC, I need a credit card for 'emergencies'. JC: would you rather have a CC with a $10k limit for emergencies or would you rather have $10k in a savings account? I'd rather just have the $10k.

But JC, I need a CC to rent a car! JC: use your debit card. Keep enough in the account so when they tie up a couple hundred as a deposit, you can still run. Or put up a cash deposit.

But JC, having a CC is (insert whiny voice here) eeeeasier! JC: Big deal. Not supporting big banking is very satisfying.

Sorry I couldn't answer your actual question.

I used to agree with this thinking, but one day I realized I was missing out on a lot of free stuff because I was swiping an orange card vs a blue card.

The blue card gives me 1% cash back on everything, and 5% quarterly on things like groceries, fuel, restaurants and amazon. Actually, last quarter they bumped rewards up to 10% which saved me quite a bit of money.

The other thing I like is that if my CC gets stolen (even though it would be reversed), they don't have access to my money directly. Not to mention it did give my credit a slight boost.

I pay it off every month and every 3 months or so I used the cash back option to help pay it down.

 

[RJM62]

I was amazed when I visited NYC a few years back - none of the smaller restaurants I went to accepted plastic, and the cash register drawer rarely closed. It must have been *hell* remembering all those transactions! ;-)

Very, very few small restaurants in New York City accept plastic. I knew of one in Queens, and it really wasn't all that small. Most of the medium-sized and larger ones do, but very few of the mom and pop places.

One of the nice things about restaurants in New York City is the Health Department grading system. They have to post a letter grade at the entrance or in the front window. The overall cleanliness of commercial kitchens in The City skyrocketed when that law went into effect.

As for credit cards (not to stray too far off-topic), after numerous compromises of my card numbers, I've taken a liking to store-specific, non-logo cards. If those numbers are stolen, it's not as big a deal as if a Visa, MC, or Amex card is stolen. Also, they usually have no fee, offer interest-free financing for major purchases, and sometimes have generous rewards. Amazon's store card, for example, offers 5 percent back as a statement credit if you also have Prime. The key is to always pay them off in full to avoid the Shylock interest rates.

I have cards for Wally World, Amazon, Husqvarna, Sam's Club, Discount Tire, and Micro Center. I don't think any of them have ever made a dime in interest from me.

Rich