Credit Rewards: How and When to Best Use Them?

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Credit Rewards: How and When to Best Use Them?

Postby Ikarus » Mon Aug 18, 2014 11:26 pm

I have roughly $750 in combined cashback rewards with my cards.

I've been saving them for a rainy day for that ultimate purchase or two -- but is that wise?

Is it better to use the rewards (before somehow losing them), or is it better to let them accumulate?

At what point is it too risky to leave the rewards untapped?

What's the best way to redeem?


credit statement?

check in the mail?

purchase gift cards?

(I don't consider using points to buy items from a catalog at all beneficial.)

Merrick Bank (Hooters) 4100
Cap One Quicksilver 4800
Discover it 2500
Citi Forward 8000
Chase Freedom 1000
AMEX Blue Cash Everyday 5500
Citi Dividend 7000
Cap One Visa Platinum 750 (CLOSED)

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Postby onion » Mon Aug 18, 2014 11:38 pm

I cash them out to my bank account or as a check or as a statement credit and then transfer the amount of rewards to my savings account. The money is readily accessible but it collects nearly 1% in APY. Same with points, I use them for travel and then put the point value in my savings.

That's the "smart" thing to do. I did that for a bit and then went the dumb route and bought a motorcycle.
FICO TU - 728 - 8/14
FICO EX - 716 - 7/14
FICO EQ - 740 - 7/14

Bank of America Cash Rewards - $2,400
Best Buy - $3,000
American Express Blue Cash Everyday - $8,000
American Express Everyday - $10,000
Discover It Chrome - $500 (AU on fiancée's card, helping her build credit)
American Express Platinum - NPSL
Barclaycard Arrival+ - $3,000
Capital One Yamacard - $11,000

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Postby CarefulBuilder14 » Mon Aug 18, 2014 11:43 pm

Getting a statement credit is simple. With some banks you can also get a deposit into a checking account.

I personally think gift cards are too much of a hassle unless you can get them at a fair discount (at least 10%). I know you can buy gift cards on the open market for less, but I'm too worried about someone selling me a card and then electronically moving the funds to a different card (stealing my money in the process). I sometimes get Starbucks gift cards on Discover and consolidate the funds to one account.

Discover is good for gift cards - everything that I can see is at a discount. With Chase, you can get some travel deals, but cash back may be better. Chase has very few gift cards at a discount. I would never buy a gift card at face value - you can always make a purchase at that retailer on a rewards card and earn something.

The big question is really about whether you want to try to get a plane ticket somewhere through Chase - if you have enough points accrued on your Freedom.

MR points are definitely complicated and can be worth accruing en masse, but BCE has a different system.

I'd go for cash where you can get it, unless you find a gift card you like at a good discount.
Warranties and sketchy merchants: Schwab Platinum
Price rewind: Costco
Travel insurance: Prestige, CSP
Perks: IHG, Hyatt
Rewards/Offers: Discover, Freedom, ED, BCE
Taxes/Misc: SPG

Limited value, might close: Arrival

Might add: First Tech, proper business card

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Postby takeshi » Tue Aug 19, 2014 8:32 am

Really all your call to make. Your rewards balance probably doesn't earn interest so it's really not doing you much good just sitting there. Carefully look at redemptions for your specific rewards program to see if you get better value with one redemption method over another. Rewards programs aren't all identical so there isn't just a one-size-fits-all answer to your question.

I generally get a statement credit as soon as I have enough for one but your preference in this matter also plays a role in the approach you'll want to use. There is always a risk that the creditor will nerf the rewards program.

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Postby popamode72 » Tue Aug 19, 2014 8:50 am

I had like 15 dollars in Discover rewards and just used most of it to buy something on Amazon. Darn.
Macy's TLs (21k), Lowes (17k), CSP (10k), Sam's Club (10k), Nordstrom (5k), AARP (4.2k), Freedom (3k), Discover (1.5k), Quicksilver (2k), BoA (3k), Barclaycard Arrival (2.5k), Amazon Store (6k), Paypal (4.9k), Sam's Club MC (3.6k), Walmart MC (1.2k)

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