r/personalfinance • u/cop-disliker69 • Oct 18 '18

Just discovered my credit card's "Cash Back" program. Is it really just free money? I find it too good to be true. Credit

I was paying my credit card bill online and I found a link on the Bank of America website said I had unredeemed cash rewards, several hundred dollars. I had never noticed this before. It gave me a few options for how to redeem it, it said they could send me a personal check in the mail or I could deposit this money directly into my savings account with the bank. It says I get 1% cash back for every purchase I make, and 2-3% for certain purchases.

Is this really how it works? I get paid a small bonus every time I spend money using my credit card? And it's just free money no strings attached?

I was always taught if it sounds too good to be true, it is too good to be true. I suppose it's not that much money, because I think these hundreds of dollars were earned over like five years since I first got this credit card. Still, what's the angle here?

EDIT: Disclaimer. This is not native advertising. Bank of America is a racist, redlining, predatory-lending, family-evicting pack of jackals. This was a genuine question I asked in good faith and did not expect to get huge like this.

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u/[deleted] Oct 18 '18

[deleted]

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u/mrhindustan ​ Oct 18 '18

Consultants travel a lot but often don't have huge expense accounts. The top sales guys, fuck they pretty much have a bottomless pit of expensing so long as it is productive.

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u/Hold_onto_yer_butts ​ Oct 18 '18

Consultants travel a lot but often don't have huge expense accounts

Bruh. I just looked at my statement from 2013, which was 2 years out of college for me. I was entry level in consulting.

My credit card expenses exceeded my take-home income, and we didn't even pay for flights on our own credit cards.

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u/[deleted] Oct 18 '18

Currently do consulting work. Flew every week from January to early June. Switched clients in July and have been driving (car rentals or personal, no flights) ever since. Closing in on $50k in expenses for 2018 alone. Would definitely be higher if I needed to fly to my current client.

Not exceeding my take-home, but that's a good chunk for rewards.

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u/Zormm ​ Oct 18 '18

What exactly does consulting entail ?

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u/no1lurkslikegaston Oct 18 '18

Telling clients things they already likely knew about themselves, but now that it’s from an actual outside expert they will hopefully take it seriously

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u/Hold_onto_yer_butts ​ Oct 18 '18

This is certainly an element of it, but that's a pretty overblown meme at this point.

Consulting is frequently "smart folks in a room for rent," often combined with deep industry knowledge and analysis performed partially outside the internal politics of the client organization.

I've been on both sides of the consulting equation at this point, and there are absolutely areas where they provide value.

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u/no1lurkslikegaston Oct 18 '18

Yup, I probably should have made it clearer that I was being semi facetious lol

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u/So_Much_Bullshit ​ Oct 19 '18

I could tell.

Many people just do not have that ability to understand different types of humor, other than, "What's big, red, and eats rocks" or slap-stick pratfall humor.

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u/ILikeBigBeards Oct 19 '18

Employees aren't likely to tell their employer that they could do their job in a few hours a week, or that there are parts of it that aren't their forte. A consultant who is good at assessing people's strengths and can reorg efficiently can really trim a bottom line.

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u/aaaaleon Oct 18 '18

What kind of industry does this count as and what kind of requirement is needed for work in it??

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u/[deleted] Oct 18 '18

I got in through finance, but to be honest anything works as long as you have some ultra basic business skills on your resume. Analytics, maybe a language like SQL, basic knowledge of accounting, math, and to be honest the rest you learn more on the job.

Being fluent in multiple languages helps too, and fluency in Chinese might be a requirement for some areas. But there are a lot of avenues towards getting intoj consulting.

Flying everywhere is honestly overrated though. You spend way too much time at airports and sometimes you might get stuck with a place like Yokohama where there really isn't much to do.

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u/KillerPlatinum ​ Oct 18 '18

Not OP but I work in software as a consultant. My actual job is database conversions but there are multiple kinds of consultants here including more technical ones (myself) and functional ones (trainings, onboarding, etc.).

Lots of enterprise software companies have technical/solutions consultants.

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u/bruinhoo ​ Oct 18 '18

Earn good grades and a BA from a top college and/or 'earn' a BA from Harvard/Yale/Stanford/fancy pants traditional northeastern US college with a bunch of old wealthy alumni, or an MBA from a good business school. If outside the US, substitute your nation's equivalent universities where the elite/wealthy send their children off to.

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u/[deleted] Oct 18 '18

Lots of tech consulting. Lots of tax and advisory consulting. A Master's degree in Information Systems is a great way to get in the door for Big 4 tech consulting

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u/[deleted] Oct 19 '18

Best explanation I’ve heard

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u/atlas-85 ​ Oct 19 '18

Client hires a consultant to figure out what time it is. Consultant asks to see clients watch. The client then gives the consultant the watch as payment.

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u/glockops ​ Oct 19 '18

I work at a Fortune 200 and completely agree with this statement.

We like to bring in consultants to tell leadership we already know what we're doing. It's actually a quite effective, yet insanely expensive sanity check.

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u/Zormm ​ Oct 18 '18

Basically telling rich people how brilliant they are then

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u/no1lurkslikegaston Oct 18 '18

I was being somewhat facetious, but I meant more along the lines of being hired to investigate/solve a problem, except there are plenty of times they could have probably solved it themselves internally.

Of course, there is a whole range of consultancy fields, ranging from highly technical engineering to management.

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u/[deleted] Oct 18 '18

It's more the opposite. I always tell my friends that my job was a mix between learning how to sit in an airplane for 10+ hours and telling people that they're stupid.

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u/Gboard2 ​ Oct 18 '18

Provide"objective" opinion on any given subject that client often already knows but needs a 3rd party to confirm so that required action is justified

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u/[deleted] Oct 18 '18

Compared to sales though... My expense account is $60,000 a month for sales.

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u/BaconIsntThatGood ​ Oct 18 '18

Wait.

Your company pays more in expenses for you to be able to do your job than they pay you for... Doing your job?

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u/[deleted] Oct 18 '18

How the hell does one become a consultant? What is it a consultant even does? Fly in, take a look around, explain what people are fucking up at and how to improve, fly out? I've always heard about these "consulting" firms and it all just strikes me as managerial bs, but I must be totally misinformed.

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u/Hold_onto_yer_butts ​ Oct 19 '18

Our firm was like 90% mathematicians, engineers, and hard scientists, doing management consulting. Our clients hired us knowing we would burn 70-100 hour weeks, building brand-new models from the ground up to solve whatever problem it was they had. We could package up our answer and tell a cohesive story outside of whatever internal bullshit politics they were dealing with.

I’ve been on both sides of the equation, and there’s absolutely value in consultants. Many are bullshit, but many are not. A good project is scoped so they can’t bullshit you.

As for becoming a consultant - go to a top-tier school, get good grades, and network like hell. At least for regular old management consulting. For industry-specific consulting, time working in the industry can help.

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u/[deleted] Oct 19 '18

Sounds interesting. I always kinda figured that was pretty much it--smart people come in and explain that the stuff that's bad is bad, etc., from an outside perspective so that all the internal politics can be cast aside in pursuit of actually fixing shit. Was just always blown away by how much people make, but wasn't familiar with the hard sci/math side of it.

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u/I_eat_insects ​ Oct 19 '18

Well, it takes a certain caliber and mix of people to be able to ID what's wrong and how to fix it. It's not as simple as: "let's try changing this... oh that didn't work? How about changing that?"

Clients often pay our firms millions per month for these services and they expect you to deliver amazing insights promptly.

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u/[deleted] Oct 19 '18

Right, makes sense. I guess I'm assuming that a certain part of that value is your objectivity and ability to call a spade a spade without having to navigate the existing political and social structures that are likely perpetuating wasteful and/or impractical practices, policies, procedures, and so on.

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u/I_eat_insects ​ Oct 19 '18

Yes, definitely that as well.

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u/[deleted] Oct 19 '18

For the low, low price of $500,000, I would be happy to evaluate your consulting firm objectively. You know how to reach me!

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u/WayneKrane ​ Oct 18 '18

That’s the truth about sales reps. I worked in accounts payable at a marketing agency and the CFO told me to just automatically approve all of one sale’s reps expenses. He stayed at $700 a night hotels, frequently spent $1k on dinners and drinks, always flew first class and even expensed his clothes. He brought in many millions though so upper management didn’t care. Other sales reps would get chastised for spending slightly too much on food.

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u/Aamoth Oct 18 '18

This is why great sales guys stay in sales.

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u/WayneKrane ​ Oct 18 '18

Yeah it seems to me that only 1 out of a 100 sales guys are cut out for sales but man is that 1 out of 100 guy amazing at his job. Our best sales guy brings in 10 times what the next best sales guy brings in. He has a corner office that he never uses because he travels pretty much 24/7. I don’t know how he does it but man the guy can sell.

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u/Cimexus ​ Oct 18 '18

It actually might be cheaper now - a big part of that cost is the airfares, and those are substantially cheaper now than the 90s.

I’m a consultant doing mostly domestic US trips and I usually end up around $1400-$1500/week. Typically about $700 of that is the airfare (higher bucket economy, though not full Y most times), the rest hotel/rental car/meals. Some routes are highly seasonal though (there’s a place in Michigan I fly to semi regularly where the return airfare is pushing $800 in summer, but only $300 in winter).

Having said all that, we use a corporate credit card for travel, not a personal one, so no freebie points for me unfortunately.

1

u/Orome2 ​ Oct 18 '18

Can confirm. I travel lot and it ends up being between $1,200-$2,000 a week. I float everything through my credit cards and get reimbursed for it.

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u/Gwenavere ​ Oct 18 '18

If your corporate card is Amex, you may be able to earn personal points on the spend. If your company allows it, you can contact Amex and offer to pay an annual fee on the card to receive the membership rewards points that your spend would earn.

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u/[deleted] Oct 18 '18

Unfortunately I have to use my company card which does not have cash back

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u/[deleted] Oct 18 '18

[deleted]

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u/[deleted] Oct 18 '18

Ours is points. I knew a director who traveled enough to get a nice home audio system but yeah you have to use the points to redeem for the crap on diners club website

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u/[deleted] Oct 18 '18

Same, points add up pretty quickly though and not everything is crap. Helps a lot for when you want to go on vacations, at least.

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u/Not_as_witty_as_u ​ Oct 18 '18

FWIW the best usage of points is air travel. When you do the math, you pay a ton more points for anything else.

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u/[deleted] Oct 18 '18

Right but it’s not an option. We have a limited list of physical items we can use our points on

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u/BobHogan Oct 18 '18

At a rate of 3% cash back, to earn $500 as cash back in a month you would have to spend more than $16,600 just on that card. This is not only far above what the average person can afford to spend (this is already significantly higher than the average pre-tax income for the US), but at that point its still just a crumb of what you are spending, despite what /u/TradinPieces seems to think