Credit Card Rewards - Let make money

[7oclock]

and I totally get why some people feel credit is bad - it's because their parents or someone close to them got fukked by credit cards. But this isn't the 1980's anymore, the reward systems make it worthwhile to utilize them.

and let's be honest, a lot of yall peers and parents aren't financially savvy and got THEMSELVES into credit trouble. They weren't disciplined they purchased above their means and ended up owing more than they could pay off. The strategy I'm giving you is a disciplined strategy of purchasing items of need and that you already have money in your account to pay off. Part of this is keeping a strong budget or knowing how much you can spend in your account.

 

[mcdivit85]

That's the gist.

1. Credit is a another investment vehicle. you see how people used credit purchase a house they couldn't afford and when their houses were underwater they walked away from them. It's not different then buying a stock and having it go backwards and cutting your losses.

2. What is cash? Is a handful of cash an investment? In most cases no (unless you're doing forex transaction) - inflation itself will cause cash to devalue - so holding cash is just not a smart thing to do.

3. Now to answer directly your question. You should never use cash for purchases, because the longer you hold your cash the longer you can invest cash.

So lets say you want to buy a 2000 tv. You go in and you pay cash on Jan 1 and that's it. By Jan 31 , you're down for the month 2000 for the purchase.


Me, I pay the tv with credit. I take my 2000 cash and maybe I put it in an investment that got me 1% - so I just made $20 on the cash. Now since I used credit and l'm receiving 2X on my credit card purchase, I jus made 4,000 points on the card (under chases ultimate rewards, that comes out to e $48) so at the end of the month, I made $68 just by not purchasing the tv directly with cash.

Even, if I didn't invest the $2000 cash, I would have still made $48. Now think about your monthly budget/spend and realize that if you're paying cash - you are literally throwing out money you would have earned by using credit.

There's no reason to use cash/debit - when you can do the same thing with credit (with a bit more discipline).

Not to mention, with certain credit cards you will get additional warranties, securities, customer service, concierge services, and other assistance that you would not get with cash/debit.

Say that TV broke down in 8 months - and the TV warrant was only 6 months; I have a credit card that gives me 1 year warranties on all electronic purchases. I can be reimbursed for the tv amount - if you paid Cash/Debit you'd be SOL.

Again - if anyone can make a point to using cash/debit over credit I'd love to hear it.

Thanks for the reply. Now, for your TV example, I would be down $2000, however I am only paying $2000. You may get reward points, but you're also going to have to pay for the same purchase I just made except with interest on top of the $2000. Yes, you may take that $2000 and invest it @ 1% or just hold it and be ahead of the cash buyer at the end of the month. However, I am pretty sure that the credit card interest on that $2000 is more than 1%.

I see the short term benefit for the credit buyer, however I am missing the long term benefit when interest on said purchase is taken into consideration. Please let me know what I'm missing.

Also, are you saying that you never use cash for any monthly budget items? So, only credit for food, gas, utilities, etc?

Peace

 

[7oclock]

Thanks for the reply. Now, for your TV example, I would be down $2000, however I am only paying $2000. You may get reward points, but you're also going to have to pay for the same purchase I just made except with interest on top of the $2000. Yes, you may take that $2000 and invest it @ 1% or just hold it and be ahead of the cash buyer at the end of the month. However, I am pretty sure that the credit card interest on that $2000 is more than 1%.

I see the short term benefit for the credit buyer, however I am missing the long term benefit when interest on said purchase is taken into consideration. Please let me know what I'm missing.

Also, are you saying that you never use cash for any monthly budget items? So, only credit for food, gas, utilities, etc?

Peace

yeah, let me clarify.

What I'm saying is that you ALWAYS pay your credit card bill off full every month. DO NOT carry a balance and get hit with interest - that's the discipline of it. I never pay late charges or APR charges or anything like that. So it's not about being up $2,000 (because it's a sunk cost) it's about what I can do with that $2,000 and credit line during the month. You paying cash is leaving FREE money on the table.

There is no "long term benefit with interest" because that is not part of any equation being discussed. You should not incur interest at all. If you are, then you're totally defeating the purpose of playing the credit card games.

Cash should not be used AT ALL if possible - credit for food, gas, utilities, phone bill, purchase, mortgage (if you can), car not, insurance etc etc.

 

[mcdivit85]

yeah, let me clarify.

What I'm saying is that you ALWAYS pay your credit card bill off full every month. DO NOT carry a balance and get hit with interest - that's the discipline of it. I never pay late charges or APR charges or anything like that. So it's not about being up $2,000 (because it's a sunk cost) it's about what I can do with that $2,000 and credit line during the month. You paying cash is leaving FREE money on the table.

There is no "long term benefit with interest" because that is not part of any equation being discussed. You should not incur interest at all. If you are, then you're totally defeating the purpose of playing the credit card games.

Cash should not be used AT ALL if possible - credit for food, gas, utilities, phone bill, purchase, mortgage (if you can), car not, insurance etc etc.

Ok, so in your example:

- Buy $2000 TV with credit card

- Take $2000 that you would've used for the TV and put in something that earns let's say 1% for that month

- Pay off $2000 charge on credit card before next month's cycle to avoid carrying balance and paying interest on TV

- And still have $20 from the 1% return

- Earn rewards from TV purchase and still have no credit card balance. Rinse, wash, repeat with gas, groceries, cell phone, etc this month.

I get that. But what if you don't invest the $2000 and get the 1%? In your case, you'd still come out ahead due to the rewards that you gained on the purchase and still use that $2000 to pay the credit card off anyway? So, at that point, its about the points being received for a purchase that you would've made anyway.

Peace

 

[Marvel]

Nice thread brehs...looking to open up a business account and I live next to a Chase and will be going with them.

 

[7oclock]

Ok, so in your example:

- Buy $2000 TV with credit card

- Take $2000 that you would've used for the TV and put in something that earns let's say 1% for that month

- Pay off $2000 charge on credit card before next month's cycle to avoid carrying balance and paying interest on TV

- And still have $20 from the 1% return

- Earn rewards from TV purchase and still have no credit card balance. Rinse, wash, repeat with gas, groceries, cell phone, etc this month.

I get that. But what if you don't invest the $2000 and get the 1%? In your case, you'd still come out ahead due to the rewards that you gained on the purchase and still use that $2000 to pay the credit card off anyway? So, at that point, its about the points being received for a purchase that you would've made anyway.

Peace

Collar popped

 

[Tunez]

Good thread. I've been using my Chase Freedom card all year. The 1% back on everything + 5% on revolving categories has been great to me. Plus they give you points if you buy off Amazon. I've got prime so I buy everything on Amazon now so the rewards really do add up. I've probably got back $600-700 this year from the reward points.

 

[Vagina Thief]

Fukk your Credit Card Chase advertising bullshyt and go fukk yourself you stupid fakkit.

 

[7oclock]

for those looking for a good consolidation tool look into the following

1. mint.com - great for budgeting and consolidating your accounts online.
2. personalcapital.com - this is what I use, is great for consolidating but from an investment standpoint. Gives you an easy overview of all your accounts, soo you can properly allocate into asset classes based on your risk tolerance. Imagine having all your 401K, Ira, banking, credit cards, etc etc all in one place. This and mint are life savors to have everything in one spot.

Personalcapital also gives you live free advice (I never used it though so I can't review it).

if you're going to play the credit card Olympics you should definitely look into it - so you can have all your credit cards in one place and see how much you owe and make sure everything is paid off.

 

[7oclock]

here's a good site to match your credit profile with credit cards

https://www.creditcards.com/cardmatch/


although this didn't work for me as it only had me qualifying for Cap 1 cards and I was approved for much better cards

 

[Blackout]

Those b*stards told me that because I have no credit I cant get a card.

Now I gotta get a secured card to build up from scratch.

 

[BlvdBrawler]

Those b*stards told me that because I have no credit I cant get a card.

Now I gotta get a secured card to build up from scratch.

We all had to start somewhere. Just keep it tight and you too will be flying international on reward points before you know it.

 

[Tunez]

Those b*stards told me that because I have no credit I cant get a card.

Now I gotta get a secured card to build up from scratch.

You need credit in order to get a credit card?

 

[Blackout]

You need credit in order to get a credit card?

For the ones I wanted yea. Im not sure about your bank.

 

[theworldismine13]

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