As you all know by now, I prefer cash back credit cards over rewards cards because I get cash, which I can spend on anything, rather than points that I have to jump through hoops to redeem. I'm on the same page with Bankrate when they suggest using a cash back credit card over a rewards card: Their thoughts:
Instead of using an airline credit card that accumulates mileage, use a cash-back rewards card. The miles accrued on a credit card often have blackout dates and deadlines. Instead, earn money from your cash-back card and use the money to invest or buy the ticket after shopping for the lowest price.
My thoughts exactly.
In addition, I don't travel very much, so a travel-based card isn't the greatest option for me. I know it can be for those who travel a good amount of time, but I prefer CASH.
I too prefer cash rewards instead of points or miles. I did a post on my blog last week outlining the pros and cons of my three cashback rewards cards and which one I would use the most.
Posted by: SingleGuyMoney | February 23, 2008 at 08:37 AM
I agree with your comment. We do travel a lot however we were using a Northwest card that cost like $90 a year. Most of the time they would wave the $90. However, when I finally dropped them it was because when I wanted to use the miles for a trip it cost like 50,000 miles. We switched to a cash back card. I use it for both personal and work expenses. We have got like $850 back so far. I would rather have the money.
Posted by: Bob | February 23, 2008 at 08:41 AM
I love my Chase Freedom card for that exact reason. I also like that once I've accumulated $200 cash back, I can get a check for $250!
Posted by: Becky@FamilyandFinances | February 23, 2008 at 11:18 AM
Agreed. I rarely fly, and real money is better than points or miles!
Posted by: Stephanie | February 23, 2008 at 11:24 AM
I also prefer cashback. I do travel, but I don't like the deadlines on miles. I also like to choose when I travel based on the time it is convenient to me.
Posted by: kitty | February 23, 2008 at 10:32 PM
We do the exact same thing... especially with rewards cards (usually) limiting how long you can keep your points.
Posted by: No Debt Plan | February 24, 2008 at 09:29 AM
As a former AMEX account person, I can tell you that the dollar value of points (the points/dollar conversion) is the MOST important aspect of the reward card itself. ALWAYS sit and figure out what 1K spent on the card will add up to as a final reward before you commit to a card. AMEX cards have the strongest points value in the industry from what I remember in terms of competitive research.
Cash cards in general (from all companies) do not give you the most reward for your dollar, but if you require total flexibility in how you want to use your reward, they are the best choice for you.
I do have to say that the most value you'll get for dollars you spend are from travel cards - I can't think of any exception unless you are spending over $100K year on a card. For AMEX, the best points value of ALL their cards is the Starwood card which is hotel rewards only. The 2nd best points/dollar value is from AMEX Blue Sky, which I have, and LOVE. Essentially, every $7500 = $100 statement credit which you can apply toward ANY travel purchase. So you can go on Orbitz, hotels.com, book a cruise, whatever - and swipe that on your Blue Sky - and call them up to redeem your points on that travel purchase. NO expiration on the points. You don't have to deal with blackout dates, limited # of award seats on a plane, etc. because you choose every aspect of the travel reward. Also, it lets you shop for the best deal so that is a factor in the points value as well. As far as I know there is no other card that allows the consumer to have so much choice in the process.
And no-- I haven't drank the KoolAid 100% - I won't get a fee card from AMEX like Gold or Platinum! But after years of having to be 100% informed on the competitive landscape of credit cards and rewards programs, the best no-fee card available at this time is Blue Sky.
Posted by: B | February 24, 2008 at 12:12 PM
With the amount you are spending on credit monthly, it would be worth your while to take Citi Cash Rewards card's promo offer. 5% for ALL purchases for 3 months (which then drops to 1%) and then cancel the card. I know you shouldn't advocate just applying for cards for promo purposes but this seems worth it. So long as you are in a situation where you don't mind having it on your credit report for awhile.
This would easily make you pass your goal of $800 for the year.
Posted by: Katrina W. | February 25, 2008 at 12:43 PM
The 5% offer there is legit--I just finished taking advantage of it myself. There are also additional percentage rewards for shopping at certain retailers (through Citi's website, mostly), with better retailers than average. Since I don't buy gas and spend a relatively small amount on groceries, I'm going to have a hard time getting much benefit above 1% on other cash-back cards, so I'm sticking with it. (They pay out at $50 rather than $25, though.)
Posted by: Sarah | February 25, 2008 at 04:45 PM
It was in the bizz that I loved, it had been a senior position with lots of responsibility and it paid me good enough to point a good life. I presumed at that moment that there had been nothing that might top the sensation of having landed such a position. But I was wrong. As my job concerned making monetary choices for the company and frequent traveling, I was at once given a business Mastercard. And I directly realized what agodsend this was.
Posted by: | April 28, 2010 at 08:07 AM