Question of the Day: Rewards Cards

I was just reading Jennifer Oppenshaw’s piece on gas rewards cards and it brought this question of the day to mind:

Do you use a rewards credit card? If so, which one(s)?

I don’t use a rewards card because it seems like it would be too much of a hassle. I like the simplicity of my Visa check card, that pulls money directly out of my checking account. No hassles and I don’t have to worry about paying another bill each month.

That’s my opinion. What about you?

22 thoughts on “Question of the Day: Rewards Cards”

  1. I use the AMEX Business Rewards card through Costco. 5% cash back on gas is looking pretty sweet right now. That, and I put all my travel expenses on that card as well, along with groceries. These are things that I would buy anyway, and last year I got 400 bucks back without paying a cent on interest.

  2. I use the Amex 2% Cashback card everywhere that takes it, and I have a Visa 1% Cashback card for the places that don’t. I pay them both off every month, and once a year I get a nice amount of cash back. Expenses have been higher than normal ever since I bought them (MBA tuition, new house purchases) so it may not always be the case, but I’ve been averaging $500-$750 back per year without changing my spending patterns.

  3. I am kind of on the fence with this now. I do use a Chase Freedom Visa, however I am wondering if I really want to deal with the hassle of it. It is nice to see how much I can get back, but at the risk of having a credit card charge of some sort.

    I am starting to lean towards trying to reduce total accounts that I have/use.

  4. My family has been using the Citi Dividend card for several years. It pays between 1 – 5% back depending on the type of purchase. We pay it in full every month. Citi has paid our family $500 for the past three years. Claiming the dividend is easy. All you have to do is call them, let them know how much you want, and they deliver a check in the mail within a week.

  5. After listening to Clark Howard call debit cards “piece of trash visa/master cards” because they do not provide the same consumer protection as a credit card I decided to finally look into getting one for my husband and me. We have it through our credit union. I pay it off in full several times a month because it is linked to our checking account. We get 2% cash back. Last year we got enough back to equal the amount I put over every month into our emergency fund. Not to bad when I would have used it on my debit card anyways.

    Have I had an problems with vendors and my debit card? No, not yet. With skimming scams going on at restaurants, I think about all the times I would hand over my debit card not seeing it scanned it. It would only take once and my account could be drained from one scammer. The hassels to finally get in back by filling out paper work with my credit union is something I don’t want to deal with. I like the added protection, and we do control our spending.

    Like Steve we are considering switching to the Costco Amex.

  6. I was using 5% citibank cards up until last year when they changed their policy to 1 or 2%, can’t remember the percentage. Couldn’t find another 5% card out there, so I switched to frequent flier miles cards as fuel prices where going up it seemed like the better way to go. Plus I got 40,000 bonus miles for signing up with that card.

  7. I use the costco amex. It is nice because I get the money back and I don’t have to carry my costco card around anymore. Previously I had used hilton rewards cards when I was travelling for work to get the extra hilton points. I haven’t paid for a hotel room for four years. As long as your disciplined enough to pay off your credit card balance each month, it would be foolish to not take advantage of at least one of these rewards programs

  8. I use a Chase Visa (1%, and 3% at Amazon, rewards in the form of gift certificates). I also use a Discover card, but only for the categories that are 5% cashback for that quarter.

    Never carry a balance, and have had no trouble with either card.

  9. I use a combo of Costco Business Amex and Citi Premier Pass – Elite. The Citi card gives points for each mile you fly, in addition to points for buying the ticket. I put everything except gas and restaurants on that card. Gas (5% cash back) and Restaurants (3%) go on the costco Amex.

    NOTE: Everyone looking to switch to Costco Amex should apply for the business card. Anyone can sign up, if you don’t have a business tax ID, you use your SSN, which means you are a sole-proprietorship.

  10. I use a combination of several cards, including my 2% on everything Orchard Bank card. I probably get ~5% on all purchases if you combine it, although that will drop once my Driver’s Edge card ends its first promotional year (now I get 6-12% on grocery/gas purchases, depending on how much I drive).

    My credit card rewards finance almost all my entertainment purchases (I paid for half of my TV’s cost with gift cards, and I haven’t paid cash for a video game in a long time), so I think it’s totally worth it.

  11. I use CitiBank Diamond Preferred Rewards…they give you “Thank you Points”. It used to be 5% but now I only get 1%. What I don’t get is my mother still gets 5% on groceries and other items, and when I called they said it expired for me…but she’s had the card longer, so it doesn’t add up.

    I’m tempted to threaten to cancel the card to see if they put me back on the 5% on certain items.

  12. I’ve been getting around 2% cash rebate (equivalent to a 3% after-tax return).

    My setup: 2 Chase Freedom and 1 Chase Business Cash Rebate

    That works great for my top 6 spending categories (grocery stores, telecommunications, cable/satellite/ISP, utilities, and 2 others) + gas + restaurant + hardware/home improvement + office supplites.

    All my credit cards are automatically paid at the due date, so there’s no hassle whatsoever.

  13. If you are using a rewards card, do not use one that the rewards are gift cards. The value of the gift cards are almost always less than 1% of your spending.

    It is better to get a cash back rewards credit card. You will get at least 1% cash back of your spending. Use the cash back to make those purchases from Sharper Image or whatever.

  14. I know Wachovia’s check card had a rewards program attached to it but you had to sign up for it. So you might check with you bank to see if you can setup one with your check card.

  15. We use the Starwood Preferred Guest American Express. We’ve had it for over a year now and have earned enough points to take a vacation that includes two airline tickets and hotel stay for 5 nights. We spend A LOT of money at Costco, so the American Express was an easy choice for us.

  16. Things happen. You might need that credit card someday.

    *More secure (search debit vs credit)
    *Costs the same as debit (free) if you spend just as much as before and pay off the bill every month in full
    *If someone steals your debit card and uses it, your money is gone, tied up. With credit, if you lose it, at least you still have money in your checking
    *Build up credit to achieve cheaper loans for houses, cars, etc.

  17. I prefer to use a credit card (it’s basically an interest free loan!), and I really like my rewards program. I get from 1 to 5% back on every purchase, and if I wait until I accumulate $200 in rewards, they give me $250!!

    Free money — what’s not to like?!

  18. I will have to say Thanks Everyone, I had not been considering the safety included in simply using a credit card to prevent some fraud. For that reason I will not change back, as well as keep the few dollars in rewards coming.

  19. I have several different cards, all of which pay rewards, but my two gas cards are the Discover Open Road (5% on up to $100 a month of gas/auto purchases) and Pentagon FCU Platinum (5% on gas with no maximum).

  20. I’m the Accounting Manager for a family-owned (not mine) business. About three years ago I asked the owner if he cared if I paid company bills with my credit card and he said no. I called up all my vendors and asked if they accept credit cards and made myself a list. Then I applied for every affinity credit card that interested me until I came up with the following: Hilton for hotel stays, AMEX Blue Sky for travel, Southwest Airlines for travel, MGM for travel to Las Vegas and Amazon for everything Amazon sells. Since I started this little operation, I’ve been able to run over $5,000,000 through my cards. At an average 1% return, you can do the math. It takes a massive Excel spreadsheet and daily monitoring to make sure I don’t screw this up, but it has paid off in every way possible for my wife and I that have no kids and love to travel. We lovingly refer to this as “The Scam” at my house, though there is absolutely nothing illegal about it. All my vendors have to do is say no, and a lot of them do.

  21. I think reward cards have a lot to offer. That being said, you need to be careful of the one that you choose. Some have an annual fee, and others offer rewards that may not suit your lifestyle.

    I like them, just watch what you are getting.

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