THGL

With more and more cash rewards credit cards being offered, I started thinking, "why not get one and pay every bill and make every purchase with one then get a nice little check at the end of the year?"

Through a small local bank, I was given an interest-bearing checking account with no fees or minimums (my main account is at a different bank). I could close my main account and start using this checking account and earn a little interest. Then, once a month, write one check and pay off the balance on the credit card.

So I'll get interest paid on my money sitting in the checking account and get paid 1% for all my purchases/bills I make on the card.

Is this a win/win situation or am I missing something?

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Dilbert1234567

you will be paying interest on the card that will most likely cancel all the benefits and probably leave you deeper in debt.

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pornclerk

As long as you pay the balance each month it won't collect interest.

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wraithhibn

Which bank are you going through? (just wondering from someone in the area)

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THGL

Dilbert, the balance would be paid off every month.

Wraithhibn, check out Stock Yards Bank. (www.syb.com)

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Cynthetiq

caveat that.. so long as the card you use allows you to pay it off at the billing cycle without charging interest. Some cards charge interest that moment you "borrow" the money, so you're paying interest until the bill arrives guaranteed.

I buy everything on the credit card if the vendor takes the card, from groceries to candy, doctor visits to dinners. Heck even when we go dutch dining with friends, I try to pick up the whole check and take their cash. I also try to pay the cellphone bill, cable bill, any monthly bill I could pay with the card. If the mortgage company would take the card I would pay that via the card.

What did that net me?

1 free round trip business class ticket from NYC to Manila, Philippines, Manila to New Delhi, New Delhi to London, London to NYC.

Done with American Airlines Citibank card

2 free round trip tickets from NYC to Helsinki, Finland to Munich, Germany, Munich to Malaga, Spain, Malaga to NYC

The Eurpoean trip was all done via Delta American Express cards, which doubles miles for paying cellphone, grocery, and various other "everyday" things.

The key is to do ALL of your purchases in one direction, so using several cards, like Sony, American Airlines, Shell, is well and good and you'll get your benefits at some point. But it's best to figure out what the goal is and figure out which value is higher for the loyalty. Keeping the loyalty in one card gets you rewards much faster.

Discover card pays back as does a couple other new cards. Discover pays the most, but isn't accepted at as many places, same goes for American Express. In fact Amex isn't worldwide in comparison to MC/Visa.

IMO the value of the plane tickets far exceeded the 1% cash back that I would have received from the total dollars pushed through the loyalty rewards system.

YMMV

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abaya

Damn, Cyn. You sold me... here I am gathering up FF miles the old fashioned way, by buying tickets and flying. I need to get me one o' them cards.

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THGL

Thanks for the input, Cyn. I'm not concerned with flyer miles (since I never fly anywhere) that's why I'm leaning toward just a cash back card.

So as long as I get a card with a 30-day grace period I should be okay interest-wise?

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Cynthetiq

It's not me, honest. It's Skogafoss. I was very skeptical of this stuff and sometimes I still am, but when we upgrade our seats from Coach to Business Class, woah happy guy!!!! We did that for our recent trip JFK to San Francisco, we didn't bother to try to upgrade on the way back because the flight wasn't sold out.

yeah, we also sign up for any of the extra promotional stuff they have, like recently had an AA checkin online get 10,000 bonus miles... signed right up for both of use, extra 20,000 miles.

Hotel partners, stay with a partner get miles ON TOP of the what is purchased with the card, so not only do you get $ to miles, but also stay rewards to miles. Rental car companies do that as well.

To think that we originally started with a Chase Shell card so that we could just get a few tanks of free gas...

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snowy

My dad pays for most things with a credit card and then just writes a check at the end of the month. He is planning on using the miles he's earned to take my mom to Australia once he retires. Also, his Costco Amex with its cash-back pays for our Costco membership and then some every year. He prefers the cash-back cards because otherwise he never gets around to using the benefits. Now he's got 2 cash-back cards (Visa/Amex) and one miles Mastercard.

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Cynthetiq

Double check the fine print, and of course, if there is an annual fee after the first year you have to weigh that into the equation, especially if you are going for the cash back. You may wind up not getting as much cash back as you thought once you deduct fees.

EDIT: Capital One and Discover both are 25 day grace periods. A quick search didn't reveal any cash back rewards that did use a 30 day grace period.

One of the reasons we left Amex was due to them offering us a free business class ticket each year, but one had to buy a full fare business class ticket which we didn't read the fine print. We used up our mileage for Amex to go to a funeral in Pittsburgh, forgot to include that as part of my freebie trips.

Again, because of the way that miles works it's much more beneficial for me, the cost of me puchasing the ticket far exceeds the annual fee.

So look at all the loyalty programs, because maybe you'll be in the market to buy a TV/home theater in the future, a Sony card would be a better value than the cash back award. Maybe you will be in the market to purchase a new car, GM has a card offering. Tivo has a card if you've ever wanted one of those things. The idea is that you can get free things that you'd either pay for outright or never buy at all.

The best thing is that you don't have to be married to these cards for very long, you just have to plan your spending (paying it all back of course) to target the rewards before they either expire or change value.

Generally from what I've found the best value for dollar is airline miles, the least is cash back and hotel stays.

Actually sorry the LEAST value is POINTS. If they say you acrue point sfor your purchases, then you have to make that the X factor because miles = $ is easy. 1 for 1.

$ = points, points to be traded in for whatever, then that means that the points can be adjusted easier miles making it that much harder to redeem.

A good example of this are cards that allow you to accrue points that you can convert to miles. Generally you'll spend more $$ for the mile than if you were to outright accrue it via a direct airlines program.

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Tamerlain

I do the exact thing that Cynthetiq posted about. Everything I buy goes on my credit card so I can accumulate air miles.

Another good program to look for is one that allows you to convert points from one program into points from another program. For example, my dad works for a company which supplies him with a gas card for Petro Canada. My dad has a Petro Points card. So everytime he fills up, he swipes his Petro Points card. Petro Canada and Sears have an arrangement where you can switch Petro Points for Sears dollars. My dad does this once a year and gets from $500-$600 in Sears money.

-Tamerlain

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Baraka_Guru

It's more win/win than many realize.

Check these out:
http://www.efc.ca/pages/media/2001/2...spectator.html
http://www.cbc.ca/news/background/tech/rfid.html

It's win/win because the more you use credit cards, the more companies know about you and will be able to better serve you by offering exactly what you desire and more. Gotta love technology.

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thingstodo

Gotta agree with most here.

I've been a Marriott card holder for years now. I haven't paid for a hotel room since I don't know when. The best thing about a Marriott card is that there is rarely a time when I'm unable to get a room due to a blackout. In my experience, it's a little better than airlines that do have a few more limitations.

The biggest benefit is that your points convert much better with the airlines, hotel or whatever company you use over a cash back situation. For example, I can stay five nights at a Marriott resort hotel which easily compares at $1,500-2,000 yet the points are worth less than half that if I use them for merchandise, etc.

It can certainly be a win/win if you do your research and get the card that's right for you.

One other thing: I pay my bill on time every monthand also do so on-line the day prior to the due date. That way I know it's there and never run the chance of a late fee or interest.

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pocon1

nothing to say