Cash back or points for credit card??

amother

Chartreuse

Sat, Aug 26 2017, 9:22 pm

I just read in the other thread about credit cards. I have cash back for 1% so if I spend $8400 I get $84. I basically spend my monthly bills on the credit card just to get money back and then pay it off at the end of the month to avoid the high interest rate.

If I get a few credit cards, it is too much to manage so I have the cash back card. But, someone wrote that the point credit card may be better????

Can anyone pls explain, I will not travel so is it worth it if I spend around $9000 a year on a credit card that gives points ???will I get more money if I get money for the points than for the cash back???

Also, when u say that I can use your points for money do you mean to sell it (like with peyd) or the credit card company will give you money instead of points (As I don't travel)????

I want to do the bettet financial option. Please explain.

Thank you.

amother

Cerulean

Sat, Aug 26 2017, 9:32 pm

You get more for your money with travel than with points. However you dont travel.....if you have chase ultumate rewards points from a saphire reserve cars you have the option of using money for travel or cash. If you cash it out with chase you get 1000. If you sell it you can get around 1300. The card does cost money each year so if you have to factor that in too. I dont think straigt mileage cards like delta or united you have the option of cashing out with them...just thru a broker.

ces

Sat, Aug 26 2017, 9:49 pm

amother wrote:

The best card for you right now is the discover it miles. It gives you back 1.5% in "miles" which is actually can you can deposit directly to your bank acct. At the end of the first year it doubles all the cash back you earned that year, so you effectively get 3% cash back for the first year. After the first year is up get the same card for your spouse, if you can. Otherwise start using a 2% cash back card like Citi double cash back

doctorima

Sat, Aug 26 2017, 10:25 pm

If you don't travel, the marginal benefit of using a travel card isn't worth the effort and headache of selling and converting them (and risking being shut down). But by all means, stop using your 1% cash back card immediately and open up a Citi 2% double cash back card, which will double your rebate from your current arrangement.

frumPA

Sun, Aug 27 2017, 7:24 am

Is citi double cash card better than chase sapphire? I have chase sapphire which is 1% and 2% on some things like dining and travel. But I sell the points for 1.3. IS it worth it for me to rather get citi double cash back or stay with chase and sell points? Just wondering since I saw this thread....

doctorima

Sun, Aug 27 2017, 8:07 am

Which Sapphire do you have? If you have Sapphire Reserve your points are worth more (up to 1.5). You also have to factor in that Sapphire Preferred charges $95 a year, and Reserve charges $450 (though it comes with a $300 travel credit that knocks it down to $150), while Citi Double Cash has no annual fee ever. Also, if Chase catches you selling points, you run the risk of being shut down and banned and forfeiting any remaining points.

In short, on areas where you get 2-3x points, then you're getting 2.5+% back, versus 2% straight cash back with Citi, but for added expense and risk and time, and for areas that are only 1 UR point, then Citi 2% is a no-brainer.

amother

Natural

Sun, Aug 27 2017, 8:49 am

Right now we actually don't have any rewards CC. We have one card and I am wondering if we should switch the bills to a new rewards one. We don't spend a ton on the CC and we pay off every month completely.
Is it worth it? IIRC I should keep the old card slightly active to help our credit rating... Closing cards isn't good for the credit, right?

doctorima

Sun, Aug 27 2017, 9:21 am

Yes, you should definitely switch to a rewards card, if only just the 2% Citi Double Cash Back. This has nothing to do with paying it off or keeping a balance. Using your current card is just leaving free money on the table. Even if you don't spend a lot, 2% of your annual expenditures still adds up to free money that could be used for a nice date night with DH, or a million other things.

In general, you are correct that it's advisable to keep your oldest card open to help with your credit score, though it doesn't make major impact, and if it has an annual fee, it's often not worth keeping around (or you can ask about downgrading it to a no-fee version that will still keep it technically open).