For Those of You Interested in a 2% Card...

All about maximizing your rewards!
Members share tips and tricks for getting the most miles, & points.
37 posts
Sevenfeet
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Location: United States

Postby Sevenfeet » Wed Feb 06, 2013 9:24 pm

cashback wrote:For example.

- Use Chase Freedom at the drug store (5% cash back)

- Buy $500 Visa gift card ($4.95 fee)

- 504.95 * 5% = $25.25

- 25.25 - 4.95 = $20.30

- 20.30/500 = 4.06%

So anything you spend that gift card on is getting 4%. Dealing with spending caps is a different story(but is very doable).


I get it. Problem is that the Chase Freedom @ Walgreens 5% is only through March and I don't see it being offered any other part of the year. So even if we went out and bought $2000 worth of gift cards a month and paid them off from cash flow, then come April and we're back to the normal payment method. Am I missing something?
Cards:
American Express Platinum (NPSL)
Penfed Platinum Reward Visa ($28K)
Chase Freedom Visa ($25K)
Fidelity American Express ($20K)
American Express Blue Cash Preferred ($20K)
Bank of America Cash Rewards MasterCard ($20K)
Citi Thank You Preferred Visa ($9.5K)
Chase Sapphire Preferred ($7.5K)
US Bank Cash + Visa Signature ($7K)
Discover IT ($4K)


cashback
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Location: NY

Postby cashback » Wed Feb 06, 2013 9:29 pm

Now you're getting into the spending cap management. You can do this with other cards too. BCP at grocery stores, Dividend at drug stores, maybe IT if they offer a category where you can buy gift cards. There are quite a few options available.

Dividend is often scoffed at on these forums but is one of my fav's for this. Unlike the other rotating cards, it is capped at 6K per year, not 1.5K per quarter. I just bought 6k worth of gift cards with it at the drug store to use for the next 6 or 7 months.

You only want to use these for purchases you can't get 5% on. I go through about 1K a month.
Credit Cards
Amex BCE 25K ---- PenFed Platinum Rewards 15.5K --- US Bank Cash+ 12K --- Discover IT 6K --- Citi Dividend 5K --- Chase Freedom 12.5K --- Amex SPG 6K --- Citi Thank You Preferred 15K

Not Used
Citi Simplicity - 5K, Sam's Club Discover - 10K

Future Cards
Sallie Mae World Mastercard

FICOs
Exp 772 - TU 781 - Equ 781

Sevenfeet
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Location: United States

Postby Sevenfeet » Wed Feb 06, 2013 9:36 pm

Yes, I suppose you can, but even with my income, I don't have $6K to drop on prepaid gift cards to be using for the next six months. Unless you can just pay that out of cash flow now, you have to contend with interest payments on whatever card you just used to purchase the cards with...and that's never a good swap for money. Heck, I could probably take $6K and do better in the stock market versus the money I'd save on gift cards.

Don't get me wrong...I see the cleverness in all this and I get why some of the companies have been curtailing this (like Ink cards at Office Depot). But at some point I have to have a system that I can put into cruise control that don't require that much thinking on my part. I'm just getting used to the concept of picking the right credit card for the right cash back award when I shop. 2% at NASA is forced savings and that has merit especially if you planned on saving the money anyway (like dumping the money into my kids college fund). The same holds true with the Fidelity Amex card, which is designed to dump savings into a Fidelity investment account of some kind (which I already have, so that may be worth investigating).
Cards:

American Express Platinum (NPSL)

Penfed Platinum Reward Visa ($28K)

Chase Freedom Visa ($25K)

Fidelity American Express ($20K)

American Express Blue Cash Preferred ($20K)

Bank of America Cash Rewards MasterCard ($20K)

Citi Thank You Preferred Visa ($9.5K)

Chase Sapphire Preferred ($7.5K)

US Bank Cash + Visa Signature ($7K)

Discover IT ($4K)

Frank512
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Joined: Fri Feb 01, 2013 8:58 pm
Location: Toms River, NJ

Postby Frank512 » Wed Feb 06, 2013 10:17 pm

I've considered picking up a gift card or two at a drugstore with my Freedom while it's still a 5% category but I don't really have much I would spend them on since I have cards for 5% in my highest spending areas. The reason I've personally been seeking a 2% card is mainly for my bill payment instead of just using one of the now 5 cards I have that provide 1% on all purchases. It's not a huge difference, but for someone like me who doesn't spend all that much, the 1% extra is welcome.

You can't pay your Cable/Car Insurance/Cell Phone with a Visa gift card, can you? If I could, then I wouldn't really need a 2% card. This would be a bit of a nuisance to manage since it's nice to have automatic payments set up on a specific card and not have to deal with manually paying each bill. How does everyone handle bill pay? If you currently use the US Bank Cash+ BillPay category, what will you do when it's over?

I know the Chase Ink Cash Business card does 5% on landline/cell, internet and cable services so I might consider that in the future. Still leaves the car insurance/electric (over 3k/yr in spending) at 1%. Any other cards with this type of cashback?
Amex Blue Cash Everyday - $12,000
Capitol One Quicksilver - $10,000
Discover IT - $7,500
Chase Freedom - $6,900
Chase Amazon - $5,000
Sallie Mae - $5,000
Barclay NFL - $3,000
Sears - $2,001
Kohl's - $900

FICO - 798 (4/29/14)

Bksuper
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Joined: Sun Oct 14, 2012 10:22 pm
Location: California

Postby Bksuper » Wed Feb 06, 2013 10:42 pm

Sevenfeet wrote:Which cards would those be? Please don't assume that everyone knows what you are talking about.

EDIT: Are you talking about this blog post? (below) If so, there's only one real option on this page (i.e. Fidelity).
Current 2% Cash Back Credit Card Offers 2013

There is one more catch with the Nasa card. The cash back reward is annual, meaning that you get money in your account after every 12 months. If you like the idea of forced savings, this isn't a bad thing. Most of do a version of this every year around tax time since we usually don't do enough exemptions with guarantees us some kind of tax refund at year's end.

1st Financial Bank Platinum Visa from http://www.1fbusa.com (they don't list products online, so call for an invite)
Priceline Visa
Fidelity Amex

About Gift Cards: I can see the theory in getting 4% back this way. I would do it if I spent more money outside of what I could find a 5% card for, but its a lot less hassle (with the card on autopay and paperless statements, esp. when you're already carrying around 4+ CCs to hit all the possible 5% categories and maximize rewards) to have one extra card than it is to constantly sink $500 intervals into less than liquid gift cards (that have some risk for merchant gift cards and I know some of the cash equivalents can be withdrawn at face value, but not all and it requires greater distribution of money than keeping it in a savings to earn interest and pay the bills when they're due from the same source), require split payments when the balance gets low in order to clean it off, or to make big ticket purchases, travel to the store that sells the gift card you want and is also coded in a way that gets you the 5%+ reward in order to make up for the service fee at $500 + net 4%, etc. If you didn't have the excess cash, it could be a problem to need to load $500 in advance in order to get the proper rate (not the case with many people, but also is the case for some) for whatever sized purchase.

Also, Cashback, not all merchants have gift cards, let alone at large denominations that happen to be sold at a place where you can get 5+% back.
Sole Ownership Cards:
1st Financial Bank Platinum Student Visa, $500 CL, Open Since 3/2012
Citi Forward Student Visa, $6k CL, Open Since 10/2012
Costco TrueEarnings Amex, $6k CL, Backdates to 1/2012
SallieMae Rewards Barclay Mastercard, $2.5k CL, Open Since 4/2013
Jointly Owned Cards (co-owner with mom, not AU, used and paid only by me):
Chase Amazon Rewards Visa Signature, $2k CL, Open Since 8/2012
US Bank Cash+ Visa Signature, $13.5k CL, Open Since 10/2012
Authorized User (Parents Pay/Use)
Costco TrueEarnings Amex $29.4k CL, AU since 11/2012

cashback
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Posts: 793
Joined: Mon Oct 22, 2012 7:11 pm
Location: NY

Postby cashback » Thu Feb 07, 2013 6:50 am

Frank512 wrote:You can't pay your Cable/Car Insurance/Cell Phone with a Visa gift card, can you?


Yes you can... You can pay pretty much anything with them...
Credit Cards
Amex BCE 25K ---- PenFed Platinum Rewards 15.5K --- US Bank Cash+ 12K --- Discover IT 6K --- Citi Dividend 5K --- Chase Freedom 12.5K --- Amex SPG 6K --- Citi Thank You Preferred 15K

Not Used
Citi Simplicity - 5K, Sam's Club Discover - 10K

Future Cards
Sallie Mae World Mastercard

FICOs
Exp 772 - TU 781 - Equ 781

Frank512
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Joined: Fri Feb 01, 2013 8:58 pm
Location: Toms River, NJ

Postby Frank512 » Thu Feb 07, 2013 8:14 am

cashback wrote:Yes you can... You can pay pretty much anything with them...


Good to know. I always thought the site would have required fields for "Name on card" etc. when using a Visa.
Amex Blue Cash Everyday - $12,000

Capitol One Quicksilver - $10,000

Discover IT - $7,500

Chase Freedom - $6,900

Chase Amazon - $5,000

Sallie Mae - $5,000

Barclay NFL - $3,000

Sears - $2,001

Kohl's - $900



FICO - 798 (4/29/14)

Bksuper
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Location: California

Postby Bksuper » Thu Feb 07, 2013 8:46 am

You can register those gift cards online, to have a name on card in the visa/mc/amex database. They're usable anywhere that payment network is accepted, except unlike a bank account you're loading a fixed $500 in advance (to get 4% off face value after cash back and the $6 fee) and your purchases may not add up to exactly that or may cost more than that, necessitating split payments, which not all merchants do. They are less liquid. You have to be able to have the money on hand to prepay $500 increments of purchases no matter how long it takes to spend it...and not earn a penny of interest. Your money is more spread out, which makes it more of a hassle to manage. Few stores carry the $500 denomination ones and you have to find one whose merchant code matches your 5%+ category for the chosen rewards credit card you buy it with. Even if such a store is around your area, you still have to plan ahead when making the purchases, to make sure you've always got sufficient balance paid for and on you.
Sole Ownership Cards:
1st Financial Bank Platinum Student Visa, $500 CL, Open Since 3/2012
Citi Forward Student Visa, $6k CL, Open Since 10/2012
Costco TrueEarnings Amex, $6k CL, Backdates to 1/2012
SallieMae Rewards Barclay Mastercard, $2.5k CL, Open Since 4/2013
Jointly Owned Cards (co-owner with mom, not AU, used and paid only by me):
Chase Amazon Rewards Visa Signature, $2k CL, Open Since 8/2012
US Bank Cash+ Visa Signature, $13.5k CL, Open Since 10/2012
Authorized User (Parents Pay/Use)
Costco TrueEarnings Amex $29.4k CL, AU since 11/2012

cashback
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Location: NY

Postby cashback » Thu Feb 07, 2013 9:00 am

Bksuper wrote:You can register those gift cards online, to have a name on card in the visa/mc/amex database. They're usable anywhere that payment network is accepted, except unlike a bank account you're loading a fixed $500 in advance (to get 4% off face value after cash back and the $6 fee) and your purchases may not add up to exactly that or may cost more than that, necessitating split payments, which not all merchants do. They are less liquid. You have to be able to have the money on hand to prepay $500 increments of purchases no matter how long it takes to spend it...and not earn a penny of interest. Your money is more spread out, which makes it more of a hassle to manage. Few stores carry the $500 denomination ones and you have to find one whose merchant code matches your 5%+ category for the chosen rewards credit card you buy it with. Even if such a store is around your area, you still have to plan ahead when making the purchases, to make sure you've always got sufficient balance paid for and on you.


You can make anything sound hard if you want to. Its really not a big hassle. But obviously you can do whatever you like. I'll take the 3k+ check every year for a little bit more effort.
Credit Cards
Amex BCE 25K ---- PenFed Platinum Rewards 15.5K --- US Bank Cash+ 12K --- Discover IT 6K --- Citi Dividend 5K --- Chase Freedom 12.5K --- Amex SPG 6K --- Citi Thank You Preferred 15K

Not Used
Citi Simplicity - 5K, Sam's Club Discover - 10K

Future Cards
Sallie Mae World Mastercard

FICOs
Exp 772 - TU 781 - Equ 781

DavidNY
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Joined: Tue Jul 05, 2011 12:28 pm
Location: New York

Postby DavidNY » Thu Feb 07, 2013 9:37 am

cashback wrote:I'll take the 3k+ check every year


In order to get a bonus of $3k/year at 4% (allowing 1% for card fees) you need to buy $75k of cards, or 150 $500 cards annually.

How do you do this without hitting bonus spending caps?



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