r/personalfinance • u/EmojiOfAKeyboard ​ • Nov 13 '22

Putting $4k on credit card for furniture and immediately paying off? Credit

New house so we need new furniture. And we have money saved.

Last time the store didn’t even ask us how we wanted to pay. It was just “okay this is the monthly financing, sign here”

I immediately paid it the next day.

…. But I don’t want to do that.

Instead of swiping my debit card (because I don’t normally have $4k just sitting in the checking account) is it a bad idea to put it on my credit card?

1) my card says I have $7k available in credit.

2) I will pay it off tomorrow

3) I get 2% cash back in rewards

this seems like a no brainer but I wanna know if this is dumb before the sales people hound me into not doing this

2.4k Upvotes

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9.4k

u/[deleted] Nov 13 '22

I charge everything on my cc and pay it off monthly

3.9k

u/MrPreviz ​ Nov 13 '22

CC’s are money makers (points)/credit builders for fiscally responsible people

753

u/skynetempire ​ Nov 13 '22 edited Nov 14 '22

Yup, I put my everyday expenses on my cc. I have traveled for "free" for the last 3 years. It's awesome. Just make sure you pay it off before month end

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u/starraven ​ Nov 14 '22

Which card gives you free travel?

282

u/coolcootermcgee ​ Nov 14 '22

There’s an Amex card we have that’s 6% back on groceries with no limit or annual fee. I recommend it!

203

u/Tecumseh13 ​ Nov 14 '22

It’s 6% back up to $6000 in spending in a calendar year, so the most you’ll get is $360 back before it reverts to, I believe, 1%. Still a good deal, but the 6% is not unlimited.

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u/coolcootermcgee ​ Nov 14 '22

Oh yes that’s right.

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u/naiq6236 ​ Nov 14 '22

I haven't been able to find anything better than Fidelity's 2% cash back visa (unlimited, on everything). I know there's similar ones but anyone know of anything better than 2% on everything with no cap?

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u/[deleted] Nov 14 '22 edited Aug 31 '23

[deleted]

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u/Quin1617 ​ Nov 14 '22

Yep. And you get 3% at a few places.

Personally, I’d just use it along with an Amex and be happy.

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u/liimonadaa ​ Nov 14 '22

Really? I think the Amex Blue Cash Preferred is the only one with 6% on groceries but it's $95/year after the first year.

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u/Maximilian156 ​ Nov 14 '22

Yeah it’s $95, but unless you spend less than $130/month on groceries you make it back just from that, not even considering the rest of your spending and card perks

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u/Kevs442 ​ Nov 14 '22

$131.92 to be exact.

$131.92 x 6%=$7.92/mo back.

$7.92 x 12=$95.04.

Think I need to apply for the AmEx Blue. I've only been getting 1.5% w/no annual fee. Thanks for the discussion!

18

u/desolation0 ​ Nov 14 '22

I'll note that you would have to consider this against the alternatives. This comparison is relative to cash/debit card/check with no fees. Compared to a no-fee, 2% back on groceries credit card (like the one I currently use), you would have to spend about $2375 on groceries annually to break even. This is frankly still fairly reasonable at $200 per month. Break even compared to 3% or 4% on groceries with no fee (not sure of example cards) work out a bit higher at ~$3200 or $4750 annually respectively.

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u/WhiteClifford ​ Nov 14 '22

Also, if you're going the fee route, be sure that the stores you use are actually in the grocery category. A lot of cards exclude superstores like Target, Walmart, etc.

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u/turtle_mummy ​ Nov 14 '22

Thank you for pointing this out.

I have a Chase Freedom card that offers quarterly bonus categories to earn 5% cash back. Except it's limited to $1500 in purchases per category per quarter, so the most you could possibly make back on the bonus is $75. And compared to another card that would give 2% back everyday (for $30 on that $1500) it's often not worth the hassle to juggle the different cards for different categories. On top of that, the Chase card reverts to 1% back after the cap, so at some level of spending it would have made sense to stick with the 2% card the whole time--unless after $1,500 you switch from Chase back to the other card, and now I spend how many hours of my time to save $45 in three months?

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u/likeSnozberries ​ Nov 14 '22

I recomend wells fargo cash rewards (2%) or discover cash something (1.5% everything I believe then a 5% rotating calendar of good stuff, right now it's digital wallets....so everything that accepts digital pay!) My rewards balance is like $480 on one and $300 on the other after a year

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u/jaydog022 ​ Nov 14 '22

Yep. It also recently gave me 50 back for an HBO Max Deal. And it saves me about 90 per year on Disney plus. I pay 1000 for food a month so I max that out easily (family of 4). Its a great card. worth the 95 for me.

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u/[deleted] Nov 14 '22

Yeah, and 4% on gas and streaming services as well. It is an extremely worthwhile credit card.

15

u/loltheinternetz ​ Nov 14 '22

FYI for anyone reading it’s 3% for gas and 6% for streaming services for Blue Cash Preferred. Unless you got a different deal somehow lol.

3

u/[deleted] Nov 14 '22

Ah thanks for that, I probably just mis.remembered.

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u/AccomplishedClub6 ​ Nov 14 '22

If you only spend $130 a month it’s much better to get the regular Amex blue (3% cash back on groceries with NO annual fee). Or better yet, get the Citi 5% cash back card with NO annual fee and use it exclusively on the grocery category.

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u/StrikerSashi ​ Nov 14 '22

Even if you live alone and barely cook, it’s really hard to only spend $130 on groceries in a month.

2

u/bigbolman ​ Nov 14 '22

So, with Citi 5% card, I could use it on my typical largest category and the use my 2% cash back card on everything else?

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u/Maneve ​ Nov 14 '22

Still not too bad if you spend a decent amount. I'd say $80/wk is pretty standard for us which works out to about 250 cashback. Minus the 95 that's still 155ish which is two weeks of free groceries a year, basically. Not bad

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u/ShellSide ​ Nov 14 '22

Yep that's the one. I'm pretty opposed to paying to use a card but my partner and I sat down and looked at the numbers. Compared to the next best card (3-4% back on groceries with no fee) we still came out ahead even after taking into account the $95/yr

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u/MonsieurRuffles ​ Nov 14 '22

Which Amex card is this?

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u/-BINK2014- ​ Nov 14 '22

cries in Wal-Mart as main grocery store

Grocery is such a great % on a lot of cards, but the overwhelming majority exclude stores like Wal-Mart, Target, etc.

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u/NEU_Throwaway1 ​ Nov 14 '22 edited Nov 14 '22

FYI if you have a Bank of America cash rewards card and use Walmart pay, it gets coded as "online purchases." Not sure if it works for other credit cards. My supercenter gets coded as a grocery store and non-supercenter gets coded as a regular discount store if you use your physical credit card, but I think Amex doesn't code supercenters that way.

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u/[deleted] Nov 14 '22

[deleted]

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u/selinakyle45 ​ Nov 14 '22 edited Nov 14 '22

The Blue Cash Preferred Amex card has 6% back on groceries but $95 annual fee after the first year.

The Blue Cash Everyday Amex card has no annual fee but 3% back on groceries.

Chase Freedom and Discover IT both have 5% cash back on groceries one quarter per year and no annual fee.

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u/bdm105 ​ Nov 14 '22

Or get the one with a fee and get effectively 8% back in points on groceries and restaurants, 6% on flights, plus other perks

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u/OlDurtMcGurt ​ Nov 14 '22

Amex Hilton Aspire has 7X points on Dining and Travel and 14X back on hotels. Plus you get a free weekend day a year and credits on stays and air travel.

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u/skynetempire ​ Nov 14 '22 edited Nov 14 '22

Well I should have used "free". It's more leveraging the money you spend to get points to get "free" tickets. I use the sapphire reserve by chase.

What I do is run my every day spending and bills through it. Pay it off before interest hits. Example, I was able fly from phx to Boston two rd trip tickets and stay in a Marriott in seaport district for free for 5 days. So I just had to pay for my food and entertainment. Saved like 3k

Also went to LA a bunch of times, Seattle, San Francisco, Dallas, Miami, and Honolulu on free flight tickets

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u/afuckinsaskatchewan ​ Nov 14 '22

They also give you 80k-100k points for signing up, which can be worth as much as $1500 on travel. I keep everyday spending on a Citi Double Cash and put all travel and restaurants on the CSR, and it's paid for random vacation flights all year this year.

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u/cheesebroly ​ Nov 14 '22

I use CSR but have never redeemed for travel. Do you get decent prices when buying with points?

7

u/klsklsklsklsklskls ​ Nov 14 '22

If you have a chase sapphire reserve, the best bang for your buck is usually to create accounts with either hyatt or southwest airlines. You can then log into the ultimate rewards portal and transfer the points from your csr to hyatt or southwest and book direct with them.

Southwest usually are about 1.5-1.6 cents per point. Hyatt can be anywhere from 1.2 to like 5 cpp depending on hotel and room you get. There are other partners you can book with but in my experience southwest/hyatt are the best value. You can also book through the chase portal just about anywhere at 1.5cpp but they sub out the bookings to a third party service and the customer service is terrible. With hotel/flight bookings its always a better idea to book direct if you can.

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u/afuckinsaskatchewan ​ Nov 14 '22

So far, yes. Whenever I've looked it up on Google flights first and the airline's website, the chase portal has always matched that. I'm definitely going to look into what that other person posted about transferring points, though

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u/grokfinance ​ Nov 14 '22

FYI - 80,000 points can be worth a lot more than $1500. I just used 100k points for 3 nights at a hotel in Paris that costs $1600/night. That = $4800 in value and I will pay exactly $0. Don't even have to pay the silly $40/night resort fee.

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u/maverick4002 ​ Nov 14 '22

CSR isn't the best everyday spend card. It's great for dining out and food and travel but not everyday (like going to the grocery for example).

You couple it with some other cards and you can maximize even more.

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u/grokfinance ​ Nov 14 '22

Many. Chase Sapphire Reserve ($300/annual travel credit); AMEX Platinum (just saved $3600 on airfare); etc. I receive anywhere from 10-30k/year in hotel/airline/travel free/upgrades per year by using credit card points and airline miles. There is an entire sub-culture dedicated to this. Blogs, YouTube channels, etc.

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u/[deleted] Nov 14 '22 edited Nov 15 '22

We have a Chase Bank Visa that rewards us in Southwest Air miles.

2

u/-No_Im_Neo_Matrix_4- ​ Nov 14 '22

There are many different options that may earn you travel vouchers, discounted rates, or help you accrue enough cash back from purchases that you can build a tidily budget vacation that you essentially already paid yourself for by buying stuff.

Chase Flex Freedom (and other freedom cards)

Wells Fargo Hotels.com card and some cards through brand-name hotels.

Goldman Sachs Apple card or another card with 2% or better cashback rate on everything.

Various bank cards with 3% anytime rates on travel, or rotating 5% back categories that include travel.

Various airline can be good, but most of them are annual fee cards.

In my experience, sometimes the travel portals where you book through the credit card website can be limited in offerings and better deals can often be had elsewhere.

2

u/notquitepro15 ​ Nov 14 '22

Southwest card gives you miles, plus usually like 60,000 miles if you sign up and spend so much in the first 3 months

2

u/theblaggard ​ Nov 14 '22

there are plenty of CCs that offer decent travel rewards. Chase Sapphire Reserve is one that I have - it has a yearly fee but if you use it properly it basically pays for itself. The points you accrue can be redeemed for travel rewards (flights, hotels, car rentals) at 3x the nominal value, so if you use a credit cards a lot anyway it can really pay off.

usual disclaimers about 'pay it off each month' etc etc apply

[edit - just seen that /u/skynetempire was talking about CSR]

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u/[deleted] Nov 14 '22 edited Nov 14 '22

How time consuming is this? Everyone I know who have points/coupons really dialed in have no hobbies.

*For the record, I wasn’t suggesting it was time consuming. The ppl I know that are really into that stuff happen to have no hobbies. It was an honest question and I appreciate the replies.

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u/thomas849 ​ Nov 14 '22

It doesn’t take any more time than paying with debit. You buy stuff, points & rewards are added at the end of each statement period, and you redeem them on whatever platform you use to pay off your cc bill.

The hardest part is finding the right card for you and that takes an hour or two of research.

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u/skynetempire ​ Nov 14 '22

No time consuming. It's just making your everyday purchases. I pay all my bills via credit card. Get the points then use them to buy airline tickets.

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u/regissss ​ Nov 14 '22

I think you’re confusing really intense points churning with what most people do, which is just to have one card that they use normally while the points accumulate in the background.

I’ve known a few churners, and I agree that it can be a little consuming. It’s like extreme couponing.

I’ve been using the Southwest Rewards card for a few years, and I have something like 150,000 Southwest points built up at this point.

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u/[deleted] Nov 14 '22

It’s not time consuming in the slightest. I’m lazy as fuck and I take advantage of it. Been doing it for a few years now and I’ve gotten thousands in cash back/rewards across my cards.

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u/idkalan ​ Nov 14 '22

As long as you keep your finances in check, it's not time consuming like at all.

Some credit card offer extra cash back offers in the form of statement credits for local and online shopping but most companies just send an email that said stores are available that month.

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u/chickenlittle53 ​ Nov 14 '22

I don't get how it's time consuming. You just use a credit card to pay for something and pay your bills on time. I recommend autopay.

Then, when you want to take a trip again use your credit card. I imagine it your friends are using this to travel they have hobbies of at least traveling as people that do nothing don't really travel. Super easy and simple. I think the first big one I did was a cruise years back. Chase paid for everything. Hell, now they don't even require you to use the points on travel for the 1.5x bonus. Yeah, I just let my shit build up by using it normal and when I have a trip biok with my cc. Easy Peasy.

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u/[deleted] Nov 14 '22 edited Nov 14 '22

Pretty much zero. I keep it simple and I have this:

  1. card for Costco - I use Costco Visa so it doubles as my membership card
  2. card for groceries - 3% or better (currently use Amex Bluecash)
  3. card for everything else - 2% card like DoubleCash or Fidelity Rewards Visa
  4. optional - whatever card I'm working on for sign-up bonus

"Juggling" 3-4 cards really isn't an issue. You can certainly go further if you want, but it's going to be 1-2% better for a lot more cognitive overhead. I make sure I have a Visa and a Mastercard in that lineup in case a vendor doesn't accept one or the other (e.g. Costco is Visa only, my local grocery store stopped accepting Visa for a few months), and make sure most of my expenses have a good rewards rate, but other than that, I just accept that I'll suboptimally use my credit cards on something like $50/month in purchases (so $1-2 in rewards). That really doesn't keep me up at night.

That said, I have about 15 open cards, but I only carry three with me and those three rarely change.

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u/timsstuff ​ Nov 13 '22

$4864 so far this year!

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u/monsieur_bear ​ Nov 13 '22

Very cool, Tim!

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u/m3phil ​ Nov 13 '22

He had to buy some stuff.

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u/DubitON ​ Nov 13 '22

Don't we all?

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u/Abigballs ​ Nov 14 '22

His wife shops at amazon. I've seen the boxes on his doorstep.

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u/dylanlms ​ Nov 14 '22

rofl I don't know why this lone statement is so fucking funny, all props to Tim however where props are due!

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u/CombOverDownThere ​ Nov 14 '22

And very legal!

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u/intertubeluber ​ Nov 13 '22

So at 2% cash back that means you have spent nearly $250k this year on your credit card.

What am I missing?

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u/Mike_R_5 ​ Nov 14 '22

Expenses. I get a crap ton of points by putting all my travel on my card and then paying it off. Company reimburses me.

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u/TheIowan ​ Nov 13 '22

Also, if you travel for work you can get reimbursed for things like client dinners,airfare etc. So if you churn that through a personal card you can rack up a lot of cash back.

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u/Narsick ​ Nov 14 '22

I used to do this ALL the time for my previous employer. They were super good about reimbursement checks if you came out of pocket for any materials/tools needed on behalf of the company.

It was very common for me to front 2-3k/week for materials on a personal card just to get reimbursement (+interest) the next week.

I actually opened up a CapitolOne rewards cards specifically for this.

Edit: Spelling

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u/ForeverInaDaze ​ Nov 14 '22

Yeah my old company would do this with lunches for employees. There was a person above my boss that would frequently treat employees in the area to lunch, and he was very open about the Discover card he opened with an absurd cash back reward on dining. Would rack up thousands over the year in rewards and then used it to buy us gift cards as a part of EOY bonus.

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u/MikeGundy ​ Nov 13 '22

Bonus categories or signup bonuses. If they’re churning, $4500 would be very doable with probably less than $30k spend.

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u/matzoh_ball ​ Nov 14 '22

Also, a lot of cards have more than 2% cash back on certain categories.

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u/sFino ​ Nov 14 '22

I alternate between the Discover It card and Amazon Prime card. Minimum of 5% back on pretty much everything I buy.

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u/matzoh_ball ​ Nov 14 '22

What Discover card do you have?

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u/sFino ​ Nov 14 '22

The Discover it. It alternates 5% categories every few months. Currently it's 5% back on any Google/Apple/Samsung Pay payment, so I just use my phone to buy everything.

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u/chickenlittle53 ​ Nov 14 '22

Chase Freedom/Flex (regular not unlimited version) offers 5% categories as well. It typically comes with an easy $200-$300 bonus for spending like $500 in 3 months on literally anything you want. Discover it usually just doubles whatever cash back you earn for a year on all purchases. So you have to weigh each to figure which you want as they tend to share same categories at same time, but Chase in Mt experience is more generous on credit limits.

Discover is more generous if you have lower credit scores.

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u/psykick32 ​ Nov 14 '22

My card is 5% on Amazon, so I buy all the Amazon stuff and my wife's card is a higher % for stuff like eating out, it sometimes confuses the waitresses when my wife whips out her card but idc.

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u/Lakario ​ Nov 14 '22

Fun tip for Amazon card. Rather than use the 5% credit for future Amazon purchases, convert your Amazon credit from the card into cash (and payoff the card). You get no points back from purchases with Amazon credit.

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u/psykick32 ​ Nov 14 '22

I haven't actually used any of the points yet! Thanks for the tip

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u/cubbiesnextyr ​ Nov 14 '22

I have them automatically credit my balance with my points each month for this exact reason.

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u/HereToFixDeineCable ​ Nov 14 '22

Similar with Citi Double cash card. Don't put your rewards towards statement credit. Half the 2% is earned when you make a payment and afaik putting bonus towards the balance does not count. Might be negligible but you're better off putting the money in the bank and paying off the card from there.

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u/RockAndNoWater ​ Nov 14 '22

Whoa… I was going to say that’s just silly, it’s just 5% of 5% of your original spending… but you’re right, it’s 5% of your points!

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u/matzoh_ball ​ Nov 14 '22

Haha yeah we’ve gotten looks or half-jokey comments before when my wife pulled out the credit card to pay for dinner. For one, what the fuck does anyone care, it’s 2022. Second, we’re sharing most credit cards so it makes zero difference whether we use the one with my name on it or the one with hers.

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u/[deleted] Nov 14 '22

People even notice who pays? My wife and I have always had the understanding that whoever is closest to the server with the machine is the one that pays. In 15 years I’ve never even so much as caught a hint that the server even noticed who was using the machine.

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u/matzoh_ball ​ Nov 14 '22

It happens rarely, but we go out to dinner a lot and have been together for 12 years so in absolute numbers is has happened quite a bit.

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u/Flitonious ​ Nov 14 '22

my wife and i have a joint card, so basically the same account, and I get a kick out of making her pay for dinner

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u/chickenlittle53 ​ Nov 14 '22

I'm confused? Why would you get ANY looks in 2022 for either party pulling out their card? Is this 1952? That said, maybe I shouldn't be surprised. I told someone I had a brokerage account with the name of a very common brokerage firm and they didn't know what a brokerage was.

This is someone that was verifying income on something I was purchasing. Crazy, because this is a person that should know wtf a brokerage is if you're verifying someone's finances. Even when explained she thought it meant a crypto wallet exclusively or some shit. I have no crypto and never mentioned it. Most folks have NO CLUE about anything financial (even some that should) so on second thought, maybe I shouldn't be shocked at all..

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u/[deleted] Nov 14 '22

Do waiters/waitresses actually care who pulls out the wallet? My wife and I switch who pays for things, and it really doesn't matter since the credit card payment all comes out of the same account anyway (and we are AUs on eachothers cards, so it's literally the same account making the purchases).

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u/psykick32 ​ Nov 14 '22

Care enough that they say something? Never had that happen.

Give a weird look when they hand me the check and I directly hand it to her? Totally has happened.

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u/[deleted] Nov 14 '22

Weird, I've never had that experience. Maybe it's regional, or maybe me having kids with me (I usually have one on my lap) is the difference.

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u/ibeecrazy ​ Nov 14 '22

It might not just be personal charges.

I use my card for person and work expenses. Many people do. I can cover a client cost, get reimbursed and get the cash back points.

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u/No_Policy_146 ​ Nov 14 '22

I’m at $1500 back on my Costco card right now by doing the exact same thing. Like being paid to spend as late nag as you pay it back monthly. I once bought a $12000 minivan on my credit card then paid it off that month to get the extra $120.

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u/[deleted] Nov 14 '22

What dealership was willing to eat the 2% credit card charge to buy a vehicle?

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u/highknees69 ​ Nov 14 '22

Most will accept a card, but only up to a certain amount. Tried to buy a car like this and they only allowed up 6 or 8k on the card. Still got me some cash back.

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u/bct7 ​ Nov 14 '22

Same, limited to 6k on mine.

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u/huskerblack ​ Nov 14 '22

Yeah this is insane

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u/timsstuff ​ Nov 14 '22

Check my other comment for details. I got some huge intro bonuses from the Capital One Spark card ($700 twice) and I run about $10k a month through for business. I've only had that card since July, previously that would go on the Amex for a measly 1% cash back.

I also get about $100/mo back on my Savor card (dining, entertainment, groceries).

Last year I made $3668 cash back so minus the intro bonuses and the extra percent on Spark I should be able to hit $4k cash back next year.

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u/lshaw52 ​ Nov 13 '22

My goodness! What all do you put on your credit card?! Makes me feel like I’m missing something lol.

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u/timsstuff ​ Nov 13 '22

4% cash back on Capital One Savor card for dining & entertainment plus 3% on groceries, 1% everything else. That card gets me a little over $100/mo. $1200 so far this year.

3% on gas, 6% on streaming, 1% everything else on Amex Blue. $1214 so far on that one. That was my main business card until I got the Spark.

1.5% on everything else on Capital One Quicksilver, $200 so far.

2% cash back on everything on a new Capital One Spark for business, plus they gave me an extra $700 twice already for spending a certain amount, I run about $10k a month through that card on Microsoft licensing and some other computer hardware/software for my clients. $2100 so far.

5% cash back on Amazon Prime card, $150 so far on that one.

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u/AppropriateCinnamon ​ Nov 14 '22

Do they charge your prime membership to the prime card?

I somehow fell through a loophole when they first started offering prime and now I basically have it for free. I don't want to rock the boat and have to start paying for it if I sign up for that sweet 5% cashback xD

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u/timsstuff ​ Nov 14 '22

Unfortunately no, although I haven't checked to see if that's an option.

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u/beyphy ​ Nov 14 '22

I was looking into Amex cards recently and saw that Amex Blue also offers 6% on groceries FYI. I also have the Savor One card. I use it for groceries but forget about dining. So I'll try to remember it for that.

Any reason you have the Quicksilver instead of one of the 2% cards? There's at least three 2% cards out there that I know of: Citi Doublecash, Wells Fargo Active Cash, and Fidelity Rewards. I have the first two. Citi is great but I wouldn't recommend WF (likely canceling mine next year for the Fidelity one.)

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u/knightblue4 ​ Nov 14 '22

Active Cash provides cell phone protection while the double cash does not, just FYI.

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u/timsstuff ​ Nov 14 '22

Yeah I know it's just that I allocated the Amex Blue card to my business so it's a hassle to put owner's draws for groceries in QB then add another fake line item in Quicken for groceries (I'm super anal about tracking expenses), I only spend maybe $250 on groceries a month which would only be a $7.50 difference in cash back vs the 3% I get on my Savor card. I may move the Amex to my personal now that I have the Spark card.

As for the Quicksilver 1.5%, I have 2% on my Spark for business and most of my other expenses go on the Savor card. The Quicksilver is just for some Target shopping and whatnot, it's the least used card and has a rather high limit so it's not really worth the effort for an extra half a percent at this time. But maybe I'll look into it, thanks for the recommendations!

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u/beyphy ​ Nov 14 '22

That all makes sense. You seem like you know what you're doing. So I figured you probably have reasons for doing things the way you did.

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u/Cedosg ​ Nov 13 '22

everything possible.

and you are.

you can start with a fidelity 2% card or any of the 2% cards

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u/lshaw52 ​ Nov 13 '22

I guess I need to research what’s “possible” because clearly I’m missing it. We do groceries, gas, etc, but that’s about it.

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u/[deleted] Nov 13 '22

For an example of a larger expense, my second-highest expense after my mortgage is daycare, over $35k a year, and I put that on a credit card where it gets 2% cash back.

I'd pay my mortgage this way if they'd let me :)

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u/ecohen2010 ​ Nov 13 '22

One year I was able to pay wind and flood insurance for property I managed with my credit card. I spread it over a few weeks but was like $45k in total. Best part was the property association then reimbursed me for the payment so it was just free reward money.

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u/krissyface ​ Nov 13 '22

I put daycare and everything else I can (without an up charge for using credit) on my cards and make about $150 a month. I pay it off monthly and never charge more than I can afford. I haven’t paid a service fee in more than a decade but I’ve made a lot off the credit card companies.

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u/[deleted] Nov 13 '22

They make money off you too, they charge the merchant a higher percentage fee to process your transaction

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u/[deleted] Nov 13 '22

[deleted]

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u/[deleted] Nov 14 '22

They charge the merchant that fee either way. It is better for me to keep more of the money, some of which can then be spent at that same local merchant in the future, than for it to go to wherever the Visa executives and shareholders live.

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u/trampanzee ​ Nov 14 '22

I just put a $10k down payment on a car using my credit card. I brought my check book planning to write a check, but when they asked me how I’d like to pay, I asked “how can I pay?”. As soon as they said credit card, I whipped that baby out so fast.

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u/last_rights ​ Nov 13 '22

My daycare charges a 3% fee for using a card.

So I use a Dependent care FSA which saves me 12.5% on taxes and pay the 3% on that card. It's super annoying.

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u/EliminateThePenny ​ Nov 14 '22

Yep. I can't use CC for -

  • Mortgage
  • Daycare
  • Water bill
  • Electric bill

Well, I could, but with the transaction fees, it's not worth it.

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u/JasonDJ ​ Nov 14 '22

Yeah you gotta just float the cash (or from a checking account) and true up at the end of the month/year.

Same is true for healthcare if you can.

I’ve heard of some people that store health expense receipts for several years before they reimburse from HSA. Since you can invest your balance in HSA, if you can float the cash, it makes sense to hold the receipts and reimburse yourself years or decades later, after the market did it’s work.

One of the many ways in which it’s more expensive to be poor.

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u/[deleted] Nov 14 '22

I don't work too hard to keep my receipts for HSA because the nursing home is gonna eat all that up anyway :)

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u/JoinedReddit ​ Nov 14 '22

I would manually file the FSA. I haven't run into a tax-deferred SA that truly required the card. But obviously they encourage it.

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u/LunDeus ​ Nov 14 '22

Go one step further ans get FSA childcare at 5k annual max pre-tax. Most reimburse your original payments so we just double dip :)

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u/ensui67 ​ Nov 14 '22

If you are fiscally responsible, in America, you should be putting everything on your credit card and paying the statement balance in full per month. You are essentially discounting your life’s expenditure by 2-5%. Those who are not, are pretty much paying more for their goods in their lifetimes. Trick is, to not to count on the $ rebated and do not spend more thinking about the money back.

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u/[deleted] Nov 13 '22

I put my Invisalign treatment on it, $4,000. When we froze eggs via IVF I put every single related expense including medication. Than I used my HSA to reimburse myself so we got the tax benefits plus credit card points. My HOA fees go on our card. If the business will let me charge it, I absolutely will charge it and then pay it off immediately.

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u/thatguy425 ​ Nov 13 '22

Isn’t it better to wait to reimburse yourself from the HSA after the funds have been invested awhile?

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u/[deleted] Nov 13 '22

If you have the funds to pay off 10,000+ worth of IVF costs right away without dipping into your HSA then probably but at the time I did not as I had just put a down payment for the purchase of my condo.

For my Invisalign I have not yet reimbursed myself and won’t need to maybe until we purchase our second home and rent this one out. But if my husbands overemployed thing works out we hopefully won’t need to do it then either.

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u/kaykakis ​ Nov 13 '22

Everything I pay for goes on a credit card except my rent, since there is a surcharge for paying rent with a credit card at my (and most) buildings.

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u/[deleted] Nov 13 '22

Use plastiq. They charge your card.
They send a cheque to landlord.
You pay off card. You earn points.

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u/sweetnsaltyanxiety ​ Nov 13 '22

Some cards give 4-5% back on gas. If you drive often it can add up.

My boyfriend has a large truck that he uses for work and his credit card is 4% back for gas and 3% back for restaurants so between driving to and from work and eating breakfast and lunch 5-6 days a week he gets quiet a lot back just from those two categories alone.

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u/LAHTIDAHTI ​ Nov 14 '22

I'm all in the points game, so have a card for every category. No matter what, earning at least 1.5% on every dollar spent.

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u/[deleted] Nov 14 '22

Utilities, daycare, insurance, etc.

The ONLY thing that isn’t coming off my credit card is my mortgage. And that’s because the bank won’t let me.

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u/[deleted] Nov 13 '22

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u/lshaw52 ​ Nov 13 '22

Yeah. I’ve not paid credit card interest in several years, I guess I just need to research what all I pay monthly that accepts it.

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u/last_rights ​ Nov 13 '22

I get enough 0% interest card offers that I just charge a large purchase and pay it off slowly.

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u/MeeMeeSong ​ Nov 14 '22

I pay my credit card online weekly or every other week to avoid anything like this happening. Just about every single thing I pay for outside of mortgage goes on credit card, so it adds up fast. It's easier to course-correct when expenses end up being higher than expected. Also, the bills are way less scary this way. lol

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u/SaltyShawarma ​ Nov 13 '22

Literally everything that accepts it. Extra layer of protection. Why not?

Since getting my father to switch to using only a credit card and not his debit card, the amount of scams that targeted him have decreased dramatically.

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u/lshaw52 ​ Nov 13 '22

No. I use my credit card for groceries, gas, etc. but 4K seems like a ton. My main card is 1.5 back.

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u/PatientWorry ​ Nov 13 '22

There are many cards that have 5% cash back in certain categories. AMEX blue preferred has 5% for groceries, discover it cash back had a rotating calendar with 5%, you can stack rewards with new cards, some cards have 10x points on hotels or flights. It’s a bit complicated but I personally use different cards for different things to maximize cash back.

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u/lshaw52 ​ Nov 13 '22

Yes. I use the heck out of my Discover for rotating categories. Lol. Maybe I need to find something that’ll give me more than 1.5.

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u/ensui67 ​ Nov 14 '22

Groceries can be 6%, gas can be 3% with a premium card. Depends on your spend but could be worth it.

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u/Dayofsloths ​ Nov 13 '22

Probably business spending, like construction material. I saw an account where a guy was making about 50k a year in cash back because he ran large company and put an enormous amount through his card each month.

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u/lshaw52 ​ Nov 13 '22

We had our garage redone and the GC put all the materials on a credit card and pays them off when I paid my balance. He travels so much for basically free because of that.

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u/Mechakoopa ​ Nov 13 '22

My Canadian Tire card let's me pay anything I could put as a bill payment from my bank as a charge to my card for 1-2% back, including all my bills and my student loans. I get Canadian Tire money back, not real money, but I can use it for gas and stuff. Unfortunately I can't use it for my mortgage, but the rest of my monthly bills nets me $25/month just on its own.

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u/bgi123 ​ Nov 13 '22

On some cards you can get 5% cash back on gas and sometimes there are rewards for certain payment providers or sectors of the economy like dining and supermarkets. I pay my off all the time costco card saves me money and I basically make an extra 50-100 bucks off their executive membership since I shop there so much.

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u/OPA73 ​ Nov 13 '22

I rebuilt my house after a flood, 145,000 in about 18 months charged to my card and paid off by insurance. Huge cash back.

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u/pawnman99 ​ Nov 14 '22

Tim, you've bought a lot of stuff if you got $5K back this year.

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u/micheal213 ​ Nov 14 '22

Nice. I’m at 300

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u/jlo1982 ​ Nov 13 '22

What card do you use? I put everything on my Costco card but only have about $1k in cash back for the year. 4k is awesome

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u/x925 ​ Nov 13 '22

And for those that aren't responsible, they are life destroyers.

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u/MrPreviz ​ Nov 14 '22

I would say that’s true in all areas, not just finance. If you arent a responsible driver, it can be a life destroyer. I’m not saying people cant fall into a debt trap. But I’d put good money on most people in that situation did it to themselves. Consequences arent unfair if they’re earned

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u/x925 ​ Nov 14 '22

It's definitely not unfair, but some people put themselves in so much debt without realizing it, trying to pay for a lifestyle that they could never truly afford.

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u/nimble7126 ​ Nov 14 '22

Or mental illness in my case, because bipolar started around 6 years ago in full force. Between losing my job, depressive laziness, and manic spending I destroyed my credit.

Completely stable now and able to pay my debts off 3x over, but even that may not really help that much. Once the history is there, it's there.

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u/marqui4me ​ Nov 14 '22

Definitely, but I've met people who can't even manage a debit card.

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u/x925 ​ Nov 14 '22

I've seen those type of people, in fact I'm related to one.

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u/ensui67 ​ Nov 14 '22

Their losses have funded my lavish vacations. These awesome point deals are never free. The costs came from somewhere

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u/MrPreviz ​ Nov 14 '22

It comes from the 5% the CC companies charge the retailers more than fees or interest charges

2

u/ensui67 ​ Nov 14 '22

It’s both! But mostly interest from people who hold a balance on their credit cards. 43% of revenue was from interest in 2020 and 29% was from interchange income. So, most of r/churning is getting a little kickback from credit card companies when they win big on landing some poor credit card interest paying folk.

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u/SafetyMan35 ​ Nov 14 '22

Yep. I am using credit card points to fly my family of 5 to the Dominican Republic and stay at an all inclusive resort for a week. My out of pocket expenses $200 in resort fees.

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u/slgray16 ​ Nov 13 '22

They are great for fiscally responsible people.

The danger is that they obfuscate purchases and how much money you have remaining. When I used debit or cash for everything I was more aware of what I had left for the month.

As long as the bill isn't a surprise your system is working.

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u/MrPreviz ​ Nov 13 '22

Agreed. I would say though, if you can’t track your spending for a month it would disqualify you as fiscally responsible

14

u/KyivComrade ​ Nov 14 '22

And they're life ruiners for people who are impulsive, fiscally less then responsible or those who have plain bad luck. Shit happens...and if it end up on your CC it'll cost you, long time.

Never put on CC one red cent you don't have accessible in cash, boring but extremely financially sound in troubling times.

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u/HoweHaTrick ​ Nov 14 '22

an it's tax free. you can't say that often.

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u/Opening_Cartoonist53 ​ Nov 13 '22

Technically they raise the prices of every every thing cuz the companies don’t just eat the 5% charge. We just excited about the 2% back not realizing this is a way for CC companies to take 3% of all sales

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u/und3cid3dv0t3r ​ Nov 13 '22

So it's even dumber to pay with anything else other than premium CCs because you're essentially subsidizing those who do.

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u/PM_Me_1_Funny_Thing ​ Nov 13 '22 edited Nov 14 '22

I mean unless you're going to pay in all cash it doesn't matter.

They're getting 3% whether using a debit card or a credit card.

2

u/hardolaf ​ Nov 14 '22

I mean unless you're going to pay in all cash it doesn't matter.

Cash handling can run as high as 5-8% depending on what level of service you're using. When I was treasurer for a non-profit, we were paying over 2% on cash handling transactions because of flat fees and percentage fees. The cost for for-profit companies would have been between 4-6% depending on how much and how often you were depositing. If you deposited daily, you'd be around 6%, if you did weekly or biweekly, around 4%. If you wanted an armored car service, you would be paying another 2-4% on top of that.

Sure, for some companies like Walmart or Target, their fees will be lower. But if you're just a mom-n-pop store doing $5-15K/day in cash transactions (a very reasonable amount), you're going to be paying a lot for cash handling. But the same is true for credit card processing. If you're a small business, you're probably paying around $0.25 + 2.7% per transaction (this is what most of the small business processors charge). Then you're paying for charge backs $15-50/ea depending on the processor. So you're probably paying around 3% max. If you start doing a lot of business (a few million per year), you can start getting better deals lowering fees to around 2% or so. If you start doing a few tens of millions per year, fees can go even lower to around 1.5% give or take.

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u/127-0-0-1_1 ​ Nov 13 '22

Nope, debit interchange is significantly cheaper than CC interchange. Especially in Europe but also in the US.

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u/PM_Me_1_Funny_Thing ​ Nov 14 '22

As a business owner, If you pay with plastic I pay a fee for you to do so. I pay that fee regardless of the category of that plastic (CC vs debit).

Edit: clarified words

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u/idkalan ​ Nov 14 '22

I was able to get a month of AT&T internet because I paid 2 months with my Chase CC.

There was also when I got half off in the form of a statement credit, on my monthly phone bill by using my Amex.

My Wells Fargo card gives me 1% cash back for paying my rent with it, even though my online rent portal charges me $3 for using a card but I get around $15 in cash back.

It may not be alot per month, but still that's money I'm saving by being responsible.

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u/General_Esdeath ​ Nov 14 '22

Not really... Credit card companies charge retailers to offer their payment option. So retailers increase the price of everything by 2-5% to cover the increased costs when most people are using credit cards. Credit card users are basically driving up prices by doing this.

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u/nails_for_breakfast ​ Nov 14 '22

Yep! I love being a leech on the system

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u/11B4OF7 ​ Nov 13 '22

Same. I want that warranty my credit card offers on everything I purchase.

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u/scubasteve567 ​ Nov 13 '22

What are the details in this generally? How long?

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u/11B4OF7 ​ Nov 13 '22

Depends on the bank that issues the card. Some are a year. Some double whatever the initial warranty is. Some will even protect you from theft etc.

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u/ecohen2010 ​ Nov 13 '22

I save my rewards all year and then cash in for Christmas... has been my gift account for years.

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u/[deleted] Nov 13 '22

Yup same here except for electric bill and car payment since they don't accept credit cards

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u/Ill_Psychology_7966 ​ Nov 13 '22

Surprised your utility company won’t accept credit cards. Mine is set up on auto pay with a credit card.

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u/gojumboman ​ Nov 13 '22

Mine accepts it but adds 5%, with 2% cash back it doesn’t make sense

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u/frostycakes ​ Nov 14 '22

Do they take debit without a fee? I've been using the Discover debit for my rent and utility bills since they do 1% cash back, and both of those payments take debit without an additional fee for me.

Hell, I used to buy money orders at the grocery store with it to pay my rent when we had the prior management company (whose portal charged for debit the same as credit) as well. It's better than nothing for those few payments that can't be done via credit card.

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u/gojumboman ​ Nov 14 '22

Not debit, I linked my checking account directly and there’s no extra charge

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u/[deleted] Nov 13 '22

It's really frustrating especially since I have had the same one for 8 years

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u/tacosandsunscreen ​ Nov 13 '22

My electric company just recently started accepting cc’s. Keep an eye on it, they may catch up someday.

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u/[deleted] Nov 13 '22 edited Nov 14 '22

They make up for the cost with higher on-time payments... They need to get with the times.

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u/Hirsute_Kong ​ Nov 13 '22

I feel your frustration. I moved recently and was very surprised the new utility allows autopay with CC. Some utilities just don't want you to reap the benefits unfortunately.

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u/itsdan159 ​ Nov 13 '22

They’re the ones paying for them since they pay the transaction fees.

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u/Ill_Psychology_7966 ​ Nov 13 '22

I have no illusions that they don’t somehow build the cc costs into their cost structure, but I appreciate the convenience of not having to write a check every month and the credit card points.

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u/SJHillman ​ Nov 13 '22 edited Nov 14 '22

My kid's daycare only allows automatic payments on debit card, but allows "one-time" payments on credit card. So every week I log in and make a one-time payment. Two kids at $17,000/kid/year... That's $680 a year I get back at the expense of spending ~1 minute a week doing it manually - fields are automatically populated by the browser... I just open a bookmark and click two buttons, done. Then the card is paid in part from an FSA, so the first $5000 is from pre-tax money.

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u/[deleted] Nov 14 '22

Holy Jesus. 17k a year for daycare is more than my yearly rent

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u/hardolaf ​ Nov 14 '22

$2K/mo is the going rate in Chicago for bog-standard daycare. Infant care is about $1K/mo more due to limits on the number of infants per adult.

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u/wkrick ​ Nov 13 '22

Same here. I have two cards for household expenses. I put everything possible on my cards (including insurance and utilities) and then pay them off in full at the end of every month.

  • Capital One "Walmart Rewards" which gives 5% cash back on Walmart.com. I order all my groceries online (for pickup) and have other bulky household items (detergent, paper towels, etc...) delivered (free over $35)
  • Citi "Double Cash" which gives 1% cash back on purchases and another 1% cash back when you pay it off.

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u/DrGrabAss ​ Nov 13 '22

including insurance

Recommendation: I would set this up as a direct bank transfer. I had mine on a card for 17 years (USAA, the best!). Then, my card expired without me realizing it, the payment didn't go through and my rates went up by 50% a month. I begged and pleaded and they didn't care. One miss I thought would be automatic. I had to move to progressive. I have them, but I don't trust them. I always trusted USAA, and now I can't really forgive them for not weighing 17 years of loyalty.

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u/wkrick ​ Nov 13 '22

A valid concern. However, I always manually pay my insurance policies in full at the start of the policy using my credit card.

I don't do monthly billing because many (most?) insurance companies charge a monthly "installment fee" if you pay monthly.

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u/metompkin ​ Nov 14 '22

USAA is a train wreck of what it used to be; I started with them in '93 This started when they wanted to be a big bank.

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u/[deleted] Nov 14 '22

My mother had USAA bank accounts and insurance for over 50 years. My brother convinced her to get insurance elsewhere, cheaper, and transfer bank accounts to a local bank. Her feelings were hurt when they didn't say "thank you" or anything at all to her when she called them to make the switch. She would have appreciated a little, "We're sorry to see you go after all those years."

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u/Dantheman1285 ​ Nov 14 '22

USAA isn’t the paragon of customer service/loyalty everyone makes them out to be. Check out GEICO

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u/Ultra_Lobster ​ Nov 14 '22

People keep saying "pay it off monthly". I just want to clarify that a bit.

You do not need to pay it off at the end of the month. Your credit card has a billing period say Jan 6th to Feb 6th. After Feb 6th your credit card bill gets cut and mailed to you (or you get an email saying your statement is ready). On the statement it will say you have to make a minimum payment. So if you spent $100, it will say your bill is $100, pay at least $5 be Feb 26th. As long as you pay the bill in full ($100), you won't get any interest charges.

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u/ThaneOfCawdorrr ​ Nov 13 '22

Same. I have an American Airlines card and built up enough points to book two round trip business class trips (lie flat beds, folks! and truly nice service) LAX to Paris! there are websites like The Points Guy that talk about how to maximize this. The key is 100% to ALWAYS pay it off immediately.

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u/raxitron ​ Nov 13 '22

Same, my company lets me use my own credit card for travel/business expenses too. I used to hit 2-3 cities per week and flights, hotels, transportation, food racked up enough points for the wife and I to take a couple free vacations each year.

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u/OGShrimpPatrol ​ Nov 14 '22

Same. I’ll put thousands on it and just pay in full every month. Simple as that and gave an 800+ score. Nothing fancy.

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u/[deleted] Nov 13 '22 edited Nov 14 '22

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u/[deleted] Nov 13 '22

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u/flashlightgiggles ​ Nov 13 '22

I would guess that points accrue with every purchase, but only post to catramity’s account when each statement closes.
If they only get points for balances that “exist” when the statement closes, that’s an unbelievably crap cc.

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u/ILikeLegz ​ Nov 14 '22

Well I'll be damned. You are correct. Been living a lie all this time. I falsely assumed the disbursement of points would have been calculated from the statement balance and not the purchase totals.

I guess the only advantage to paying off post-statement is it makes accounting simpler, and keeps your utilization higher if you're trying to be mindful of your credit score.

I've definitely had really high utilization months, not realizing I could have gamed that better by cutting the balance down before the statement date.

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u/Jayjay4535 ​ Nov 13 '22

I charge everything over $20 on my credit card and pay it back in seconds - immediately after swipe, hope on app and transfer money.

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