Comments on: Your Take: Credit Card Cashback or Reward Programs?

By: BrewCrewFan

BrewCrewFan — Wed, 04 Mar 2009 04:33:20 +0000

I have a Visa Rewards Card from Associated Bank. It pays 5% on gas, groceries and drug store purchases starting with dollar one (no tiers). The only down side is a $300 annual rewards cap.

By: George

George — Sun, 15 Jun 2008 16:52:59 +0000

I do both as well. I stay with my Chase Freedom card for the 3.75/1.25% cash back and I do the gift cards with my Discover. I just wait until Discover has 5% back on whichever category (it changes) and redeem a gift card for an extra $5 to $10 more. It has worked out pretty well for me so far. The only thing I would consider changing to is American Express Blue Cash but I’m not sure if the $6500 I would have to spend before getting 5% cash back is worth it.

By: Andrew Choi

Andrew Choi — Sun, 15 Jun 2008 14:47:38 +0000

cash back vs points is usually somewhat comparable in benefits to customer. I think the difference is the headache in trying to predict future purchasing decisions. Usually, it takes some time before ur rewards add up to a useful amount. Also, I’ve never been able to figure out how frequent flyer miles work. Thus I tend to favor the most liquid asset, cash.

But it’s also important to note that even cash back cards can be complicated. Amex blue for example, requires u to spend 6500 before u can get the 5% on so-called everyday purchases. (it only gives a paltry .5% on all purchases before that) and chase freedom i believe has a limit on how much you can get ur 3% cash back rate on. so it makes it difficult to compare different products because even here u have to project what type of purchases and what amounts you would spend in a given period.

Points cards take the complication an extra step. As a rule of thumb, 1point = 1$ spent for most cards but i’ve seen cards where they give their rewards in a more arbitrary rate like 2000pt = 15$ gift cards (1$ spent =.75cent), 5000 pt = 40$ (1$ =.8cents) and so on. so it makes it difficult to compare apples to apples.

And this all goes w/o taking into account the other factors that may go into a card such as customer service level, customer protection, EAR rate, Credit Limit, and whether or not you can brag to you friends about the design of the card ^_^

By: JoeTaxpayer

JoeTaxpayer — Sat, 14 Jun 2008 07:18:34 +0000

About a year ago, we had a CitiBank card that was 5% for gas, supermarket, drug store. I used to buy HomeDepot gift cards at the drugstore (CVS) and the next day go make my large HD purchase.

Joe

By: jim

jim — Fri, 13 Jun 2008 22:22:12 +0000

Citi’s CashReturns card was 5% on anything for three months… it was unreal, we got effectively a 5% discount on our wedding.

By: JoeTaxpayer

JoeTaxpayer — Fri, 13 Jun 2008 22:05:33 +0000

My Amen Open card just dropped the gas rebate from 5% to 3%. I’ll take the 2% or 3% cash over most merchandise offers, but when the offer is high (say 5%) it can be worth it. Gm used to have a card that gave 5% back toward a car purchase. I’ve heard good things about that if one wants to make that purchase. Citibank once had a card offering 5% back toward an Apple computer. I was sad when they discontinued that offer.
Joe

By: tom

tom — Fri, 13 Jun 2008 19:53:55 +0000

Both! I get travel points through Citi (for purchases and miles I fly!) and cash back through AmEx… yeah having 2 cards can be cumbersome, but I think i’m maximizing my rewards potential!

By: Posco

Posco — Fri, 13 Jun 2008 19:29:05 +0000

Steal my money? Ha!

I go for the cash back, but my wife likes at least one retailer’s rewards program. I’m of the thought that the rewards just cause us to spend more, but she says she’d be spending money there anyway, which I’m not so convinced of. Bank of America is dropping that retailer’s program, so if we want to continue, we’ll have to apply for the retailer’s new credit card… we’ll see when we get the details on the new program. The problem is that the existing credit line goes to Bank of America and its WorldPoints reward program, and since it’s a large credit limit with a long history, I’m reluctant to close it, and doubly reluctant to open a new credit line just for a few percent of rewards.

By: Geoff

Geoff — Fri, 13 Jun 2008 19:18:33 +0000

Since some cards won’t give you the full 1%+ conversion of points to money/giftcard/etc, I just go for cash. Plus I’ve seen some companies change the conversion, and that’s frustrating.

For cash, I have a separate savings account for cash back from the credit card and that is used for travel, which is what I would have wanted points for anyway, except with cash I get more flexibility.

By: Credit cards are scams

Credit cards are scams — Fri, 13 Jun 2008 19:01:22 +0000

Are points or cash worth it? Credit companeis are just legal scams designed to steal your money link

By: Doug

Doug — Fri, 13 Jun 2008 18:55:02 +0000

I like points because it feels like I’m getting something back. Getting money is fine and all but it feels better to get a gift certificate or something tangible.

By: Dave

Dave — Fri, 13 Jun 2008 17:38:32 +0000

When I used to drive 110 miles a day commuting, the Amex Blue Cash Back card was a no-brainer (after $6.5k of spend you get 5% cash back on gas, grocery and drug, 1.5% on most everything else — and no annual fees) … but now that I commute by train, its a little blurred.

Overall, a decent cash back card still wins b/c it doesn’t require incremental spend.. any points based card ultimately ends in gift cards or meals, flights, etc. I have half a dozen gift cards sitting at my desk since mid-2007 unspent b/c I haven’t figured something I actually *need* to buy.. I’d rather have cash in my pocket.

For Jim and potentially other small business owners… I recently heard about the Amex Plum card, which provides flexible payment options and also cash back/discount options. http://www.plumcard.com/. May be worth a look…

-Dave