What credit cards are you guys using to get the best rewards? We have no consumer debt anymore (cars are paid off, etc) and we're thinking about using a credit card that gives rewards for day-to-day purchases, staying within our budget as we have since first setting one when we got married, and paying it off to $0 balance every month.

We see USAA gives 1.25% for purchases over $17000/year with cash rewards tailing off at different tiers under that. Is there something better out there? Am I misreading USAA's offer?

Suggestions?

Some of the best advice I ever heard Dave Ramsey give: "I've never talked to any millionaires that got rich by racking up reward points using a credit card."

Some of the best advice I ever heard Dave Ramsey give: "I've never talked to any millionaires that got rich by racking up reward points using a credit card."

If your get rich plan is to rack up CC rewards then you have issues, but it's a good way to get free money.

I've had a Chase Rewards card for almost 5 years now. They pay 2.5% on gas and food and 1% on everything else (or something like that, I don't remember). I've gotten over $400 cash from them and never paid a cent of interest. If you pay it off every month, it's free money.

While I wholeheartedly agree with Champ, We have a card for convenience--we use Pentagon Federal Credit Union CASHBACK rewards Visa card: 5% cash-back on gas, 2% on groceries, 1% on everything else. Cashback shows up as a credit on each month's bill.

Pay it off in full every month or don't waste your time with rewards cards.

Penfed.org for details.

it's a good way to get free money.

No way it's "free". Just like the sun will rise in the morning, the credit card companies will get their's!

Pay it off in full every month or don't waste your time with rewards cards.

Exactly.

Ok.

I have two cards that get great rewards.

First and foremost, I have never in my life carried a balance or paid one penny of interest to a credit card company. I treat credit cards the exact same way I treat debit cards...except I get much more money back. If used correctly, there is no reason not to use credit cards. In addition to greater rewards, they are a lot safer from a fraud or theft standpoint.

The two cards I have that I recommend are:

1. Chase Freedom Rewards Card

2. AMEX Blue Sky (the no annual fee version of Blue Sky Preferred...virtually the same card)

The Chase freedom is a mastercard, and is accepted everywhere. As mentioned previously, it is a guaranteed flat 1% cash back on everything, plus 3-5% cash back on rotating categories. I literally pay everything with my credit card, so I average around $3K a month on the card. I generally get about $40 a month back.

The AMEX Blue Sky is great for building airline points. You redeem points towards airline travel, so if you don't travel a lot, this is not the card for you. One dollar equals one point, and 7,500 points equals $100 credit towards travel. This is nice because it is 25% more rewards than most cards, and you buy whatever tickets you want, and then AMEX credits the points towards your statement.

Both of these cards have some additional cool features, like being able to just return something that breaks to the credit card company even if the store wont take it back.

Bottom line, credit is great if you know how to use it to your advantage. The sad thing is that most people cannot control themselves.

Edited March 29, 201114 yr by Gravedigger

I agree with almost everyone here. Cash back cards are not the best way to save up for you kids college fund, but if you don't pay interest, it's free cash. Champ says the CC companies get their cash somewhere and he's right. But they get their cash from the stores. You can argue that the stores then raise their prices to compensate for this but that cost is spreadout over everyone. So, at the end of the day, every customer at that store pays you to buy stuff. I don't see how shopping for a good cashback card is a bad thing if you live within your means and invest wisely elsewhere.

Some of the best advice I ever heard Dave Ramsey give: "I've never talked to any millionaires that got rich by racking up reward points using a credit card."

What Champ said!

However, I DO have a credit card with a zero balance solely because USAA will give me reward points for using my DEBIT card. I've never charged a dime to it!

Both of these cards have some additional cool features, like being able to just return something that breaks to the credit card company even if the store wont take it back.

2

One of the least taken advantage feature of many of the higher-credit-score-cards (which it sounds like most everybody on here would be eligible for) is the price protection feature. If the purchase price of a product you bought on your credit card drops within a certain time period after purchase, the credit card company will credit you the difference.

For example, in 2007 when I bought my original iPhone for $600 on my credit card a few weeks before they dropped the price to $400. While I was outside the window for Apple to reimburse me the difference (Apple paid anybody back who had purchased it within the week prior or something), I still got a $100 apple credit (which anybody who had purchased the iphone got), plus $200 from my Chase MasterCard because it was price protected.

Edit: It was a Citi Platinum Rewards card, not chase MasterCard

Edited April 3, 201114 yr by KingGuy

I agree with almost everyone here. Cash back cards are not the best way to save up for you kids college fund, but if you don't pay interest, it's free cash. Champ says the CC companies get their cash somewhere and he's right. But they get their cash from the stores. You can argue that the stores then raise their prices to compensate for this but that cost is spreadout over everyone. So, at the end of the day, every customer at that store pays you to buy stuff. I don't see how shopping for a good cashback card is a bad thing if you live within your means and invest wisely elsewhere.

BINGO! The fact is that the credit card fees - usually 1-3% of the purchase price - are already built into the price of virtually everything we buy. Therefore, those who are not using credit cards are in essence overpaying for most of their goods.

Champ is right, the credit card companies will get theirs, and they are not "giving" anyone anything for free with these rewards. It is just that the cost of the credit card rewards are indeed spread out over all of those late fees, interest payments, and the 1-3% they charge at the time of sale.

But to answer the question, I use several different cards. I buy a ton of stuff from Amazon (books, music, baby formula, toys for the kids, gifts, etc), so I have a Chase Amazon card that gives back like 5%. I also have a separate card for gas that pays 5% back on gas. In the end, a large portion of my monthly expenses fall into these categories, so I am able to break even on them. Everyone else who does not use a gas card at the gas station and an Amazon card at amazon.com continues to pay 5% higher than they have to. At least that is the way that I look at it (oh, and of course, I have never carried a balance or paid a late fee - I have the website rigged to automatically pay the full balance each month).

I can see both sides. Paying it off every month is of course the ideal method. I have to side with the Dave Ramsey perspective though. I prefer to maintain an emergency fund and not allow for the of potential to run up a line of credit during tight times.

I can see both sides. Paying it off every month is of course the ideal method. I have to side with the Dave Ramsey perspective though. I prefer to maintain an emergency fund and not allow for the of potential to run up a line of credit during tight times.

Exactly. Why even deal with these credit card companies when you can just "borrow" from yourself out of your own savings if you just absolutely need something right now that you do not have time to save for?

2

One of the least taken advantage feature of many of the higher-credit-score-cards (which it sounds like most everybody on here would be eligible for) is the price protection feature. If the purchase price of a product you bought on your credit card drops within a certain time period after purchase, the credit card company will credit you the difference.

For example, in 2007 when I bought my original iPhone for $600 on my credit card a few weeks before they dropped the price to $400. While I was outside the window for Apple to reimburse me the difference (Apple paid anybody back who had purchased it within the week prior or something), I still got a $100 apple credit (which anybody who had purchased the iphone got), plus $200 from my Chase MasterCard because it was price protected.

Hey, that sounds nifty...do you have to pay for that card?

Hey, that sounds nifty...do you have to pay for that card?

I believe the card I used was Citi's Platinum Dividend Rewards or something and there was no fee. They have since taken those terms out of that card (and even renamed the card and issued me a new one), but I just googled it and found that you can still get a card with price protection, although I'm not sure about fees.

I did find this pretty interesting though, maybe good if you buy a lot of stuff impulsively:

https://www.nerdwallet.com/blog/2010/american-express-rolls-premium-return-protection-cards/

My household uses Chase Freedom Rewards Cards also. We put everything we can on there and always pay it off, netting a no-kidding $60-90 straight up refund per month. That's not chump change to me. I'd put my mortgage on there if I could.

I never did the airline card because I heard they were a scam and the tickets were very hard to get. Plus, why pay an annual fee just to get the equivalent of 1%"cash" back in the form of airline miles, when you can buy a decent roundtrip ticket these days for $300-350? Maybe I am missing something, but I would rather pay for my airline tickets, and just get straight cash back from my other cards.

About Dave Ramsey - I could not agree more. Most people don't have math or finance backgrounds, and he does write crap for the dumbest Americans - that is why so many more people read him as opposed to reading, say, the advice on this thread. I used to passively take in what he had to say when a friend would relay it tome, but I lost all respect for him when he told me about Ramsey's plan for getting rid of multiple forms of debt (if you are foolish enough to have stacks of loans and credit cards piling up interest on you):

He said to rack and stack them from smallest to largest balances, and then pay off the balance, as opposed to highest to lowest interest rate. He says it helps build "momentum," or some shit like that. Basically, it is a crappy mind game for people who can't understand simple interest rates. In other words he would prescribe you pay off your debts in this ass-backwards order just to make yourself feel some sense of accomplishment for paying off the small loan:

$1000 (1%) - special Best Buy loan for a TV

$3000( 3%) - good car loan

$4000 (8%) - average rate on student loan

$8000 (20%) - typical credit card

$9000 (22%) - another typical credit card

Of course, while you are dicking around with the $1000 and $3000 loan, your credit card stuff is putting you in a death spiral. Anyone who passed freshman math should be able tosee that you should devote every single penny you have to knock down the 22% first, and then work your way down the list completely opposite of what Ramsey recommends. So you won't feel good about yourself for a while because it will take longer to pay down the $9000 loan, but in the end, you will save a shitload of money and have more dough in your pocket to pay off the piddly 1% and 3% loans down the road.

Edited April 4, 201114 yr by JS

The direction you pay off your debt has a lot to do with the amount you have per month to deal with. By tackling the lowest total to highest you free up more each month as you pay off loans. That in turn helps you pay off each bill quicker. That advice is just one small piece of his overall concept. Not a huge fan but it is a way to get people to pay up instead of going bankrupt and making them responsible for their actions...

I have a Capital One travel card. It has an annual fee of $40, but if you use it right, it gives you 2% cash back on everything. Granted, it takes a little work and Capital One is anything but "no hassles", however the money speaks for itself. I have spent about $480 on annual fees over the last 12 years, but I have been credited roughly $4500. If you think of it as an investment, that is nearly a 10x return on my annual fee. Yes, you will not get rich off a credit card, but if you are going to spend the money regardless (and you pay the full statement balance each month), why not get money back for it? I will not get rich because I am a government employee, but if I use my money wisely I will be comfortable.

I have a Capital One travel card. It has an annual fee of $40, but if you use it right, it gives you 2% cash back on everything. Granted, it takes a little work and Capital One is anything but "no hassles", however the money speaks for itself. I have spent about $480 on annual fees over the last 12 years, but I have been credited roughly $4500. If you think of it as an investment, that is nearly a 10x return on my annual fee. Yes, you will not get rich off a credit card, but if you are going to spend the money regardless (and you pay the full statement balance each month), why not get money back for it? I will not get rich because I am a government employee, but if I use my money wisely I will be comfortable.

Would you still have spent that $225,000 over that period of time if you weren't getting the 2% reward?

My point is that some tend to swipe a little more frequently and spend more money if they feel like there's a reward attached to it.

Would you still have spent that $225,000 over that period of time if you weren't getting the 2% reward?

My point is that some tend to swipe a little more frequently and spend more money if they feel like there's a reward attached to it.

I don't understand some of you guys. Not all of us need a nanny to hold our credit cards so we don't spend too much. Find a rewards card that pays you the most straight-up cash, stay on the same budget, and make a few extra bucks a month. "Burn your credit cards" is a good mantra for the Lowest Common Denominator, which we're not. If you can be trusted to fly a damn airplane you should be able to manage your own personal finances.

Edited for grammarz.

Edited April 5, 201114 yr by Majestik Møøse

Would you still have spent that $225,000 over that period of time if you weren't getting the 2% reward?

My point is that some tend to swipe a little more frequently and spend more money if they feel like there's a reward attached to it.

Double post, so yes and yes. :)

As Moose said, I use my credit cards responsibly and don't spend money that I don't already have in my checking or savings accounts. A quarter million over 12 years sounds like a lot of spending on the card, but I use my card for absolutely everything that I can.

The additional benefit that smart credit card users will have over debit card guys is a better credit score. I had an ROTC scholarship in college so other than my credit cards, I had basically no credit history. But paying my card off on time every month for the last twelve years got me an awesome credit score which saved me a ton of money on my mortgage on the house I just bought.

If you use them responsibly and pick the right cards, credit cards can save you money. If you can't use them responsibly then follow the previous advice and cut them up.

Yeah, I, unlike some I guess, don't see the disconnect between using my credit card and using cash. If I quickly "swipe" away a $100 dinner or a $200 piece of electronics online, I start to think about how many days I have to work to pay that off, or I think about how many $20 bills are coming out of my pocket. I guess not everyone thinks that way, but to me, plastic is the same as cash. But I can easily see how some simple-minded people would spend more using plastic as opposed to if they were counting single dollar bills out for a purchase.

If you can be trusted to fly a damn airplane you should be able to manage your own personal finances.

I know PLENTY of people in my community with a LOT of debt, to include credit cards.

Must just be a Herk thing.....

Revival:

Anyone have an Amex Gold or Platinum card? There are two gold cards...depending on the reward percentages the annual fee is $125 or $175 while the platinum is $450 a year. While the main purpose for me is to go to Costco, they both have advance purchase capabilities for ticketmaster events (ever try logging on to ticketmaster as soon as tickets go on sale to find out you're already in nosebleeds?) and the platinum has several more, to include free access to all the airline lounges at the airports, no matter the class of ticket purchased. My wife and I travel enough on the civil side to get our monies worth...but are the lounges alone worth the annual fee?

The platinum has a concierge, which may be nice, but I'm already used to herding cats and can fend for myself when it comes to planning an evening. The platinum also has free companion tickets....free companion ticket when you buy a business or first class unrestricted ticket...

Both are "Charge" cards...so balance must be paid off at the end of the month...a non-factor for us.