I use credit cards a lot, for everything. I don't do anything like chase rewards but I do try to maximize the rewards I can gain through the cards I have. I've contemplated getting an airlines rewards card or chasing bonuses, but right now it's difficult to find the time to pay bills or keep on top of our spending with two small kids. Plus I know we're moving so rather than opening cards I'm keeping our credit scores high since each inquiry is a hit.
Last year in 2013 we earned $954 in rewards and trading some in to discover closer to $1000 in credit card cash rewards. We spent approximately $25k on the credit cards giving me a return rate of 4%. Plus another $108 Costco rewards. That's extremely high. It'll be higher this year.
Because of my high return rate I've definitely maximized our spending over using a mileage credit card. Why? Most times it's only worth using miles on an airlines ticket if you can get 2 cents/mile. Why? Because miles aren't that valuable. Meaning a ticket costing 25k miles, costing less than $500, most rabid mile collector (go to flyertalk to learn) say it's not worth it.
Personally I always try to maximize our mileage as well typically getting close to 3-4 cents/mile. My most recent trip to Hawaii I spent 17.5k miles on a one way ticket costing $800 = 4.5 cent/mile. Like I said maximize miles. People use miles when they don't want to pay, but true mileage collectors (and I'm best friends with one) helps me calculate the true cost of using the miles.
But back to credit card rewards. How did we get so much? Well we only use 4 cards discover it with it's 5% rotating categories and 1% back on everything else. I use this for most things since I can redeem it for gift cards that are also discounted for further rewards! Like a $45 for $50 Panera gift card or $45 for $50 starbucks (hello teacher gifts). I also ALWAYS use shopdiscover, because it gives 10% back right now on groupon and living social. It also gives great rebates on other sites too for extra savings and you can still use coupon codes on other sites.
We have a Citibank Simplicity cash rewards. Probably never heard of it. We got it 10 years ago and it gives us 5% back on gas, 5% pharmacy stores like cvs/walgreens, and 1% back on everything else. I use this for gas and most everywhere I can't use my discover since it's a mastercard.
Finally my DH and I each have a Costco Amex. We love costco and my rebate check since we have an executive membership for $110 was $108. We are getting close to getting over that hump. We get 3% dining out, 2% travel, great for international travel since it covers the exchange fee, and 1% everything else.
So that's it in CC. I should consider maximizing our CC rewards, but right now I think we're doing relatively well. Except for people who open cards for rewards I don't know that many people get a better value using their CC.
I have considered switching to a mileage or hotel (starwood) CC. My biggest issue is that I would never spend more than $100 on a hotel room between priceline and deals, so it's hard to get a card and use it on a room that cost $300. But perhaps if people sell me on it.
Do you have a favorite card? What's your redemption rate? Do you get great rewards.
I will end with if you overspend on CC or can't pay in full don't use them.
Money Saving Tip #3
June 6th, 2014 at 01:23 pm
June 6th, 2014 at 03:24 pm 1402068261
June 9th, 2014 at 02:27 pm 1402324075
I've gotten 24c per mile and 13.6 cents per mile tickets this summer.
$16,207 flight in first class to Asia for 67,500 miles, and $7,486 business class flights for 55,000 each.
And mostly staying in very nice hotel rooms (some $600-$800 euros per night, with the most expensive one being over $2,000USD per night). Getting best value does not mean paying the cheapest price. It means getting something really nice for a fraction of the cost.
June 11th, 2014 at 02:22 am 1402453324
June 11th, 2014 at 04:21 pm 1402503699
Hotels are mostly Ritz Carltons with some high category Marriotts (like JWs and equivalent). For hotels though, most points were earned on DH's business travel.
June 21st, 2014 at 11:16 pm 1403392604
I usually wait because we have flexibility in our travel dates. I also prefer buying tickets than using miles because if you use miles for emergency travel, ie buying at the airport then you seriously save.
A friend booked his parents from turjikistan back to canada when his mother broke her arm routing through hyderabad. And used 25k miles for one way ticket that was $6k+ otherwise. He booked it as they were racing to the airport. So I am trying to save my miles for a last minute crazy rush flight back to hawaii or canada if needed.