Cash back and/or reward credit cards?

bry84June 29, 2007

They were quickly mentioned in another thread, but I felt they deserved their own.

They look good, but I'm wondering if anyone is using them and how well it's working out. Any surprises? I'm just wondering if it might be that they end up costing more somehow.

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I am very happy with my Disney Visa. You earn $1 for every $100 you spend. The dollars you earn can go towards anything Disney at Disney. You can use them for tickets, food, clothing, or anything in the park. They also dont expire for several years so there is no need to go every year but we do. It has a bit higher APR(15.9). When ever i make a large purchase that i know that i cant pay off right away, i will then tranfer it to my low APR card. This way i still earn the Disney Dollars.

    Bookmark   June 30, 2007 at 9:10AM
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That's a good tip ninos to transfer to a lower card and still collect points.

As far as any 'surprises' bry84, the only one that I do not care for is that when you sig up for these points programs they make their money by selling your buying patterns to marketers. Some people feel that this infringes on their privacy and/or they end up getting more junk mail and telemarketers.

    Bookmark   June 30, 2007 at 8:34PM
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We recently got a Citicorp Drivers Edge card. It has an interesting wrinkle: It pays more than most other rewards cards, but you can use the payments only for buying or repairing an automobile. As we have two older cars, we don't think we have to worry about rewards expiring any time soon :-)

    Bookmark   July 1, 2007 at 12:32PM
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My husband and I use our Discover card whenever we can. We pay our cable/internet with it, grocries etc. After we have accumulated points (usually 1% bust they often run special for 5%) I go online to redeem my points. On their website you can redeem 20 points for a $25 gift card and things such as that or different points/gift cards from different stores. ANYWAY.....I use our points to buy gift certificates for xmas gifts for neices and nephews. In March I had 6 $25 gift certificates and 2 $30 gift certificates to resrtaunts for us! So in the 3 months since Christams I accumulated that much! Good I think. I tried points for airlines before on a different card but got frusterated with the limitations and fine print and all.

    Bookmark   July 3, 2007 at 1:19PM
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We got a Kroger Mastercard this time last year and we've already gotten over $300 in free groceries from our points on it. Not bad for a 2 person household. =)

Here is a link that might be useful: Details of Kroger Mastercard

    Bookmark   July 7, 2007 at 11:06AM
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I've seen some interesting articles about how in the end, reward cards end up costing us all more money (consumers use cards more --> retailers have to pay for CC transactions --> they pass that cost back to consumers via higher prices, etc) so in a way, yes, they do end up costing more. But there's not much an individual consumer can do about any of that, so you may as well be getting the rewards.

More to your actual question, the only way that rewards cards end up costing you more is if you carry a balance. Generally, they all have higher interest rates than cards that don't offer rewards. So if you carry a balance, you are probably better off just shopping for a lower interest rate.

If you don't, then get all the free stuff you can!

    Bookmark   July 9, 2007 at 10:26AM
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My Chase CC offers points: one point for each dollar spent. You can then redeem points for various gift certificates or cash, all in $25 increments, but each $25 gift certificate uses 2500 points. Not great, but if you're using the CC to begin with, it's better than nothing.

    Bookmark   July 11, 2007 at 4:11PM
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Thank you all for your suggestions.

However, it unfortunately seems that here in Europe these cards are limited. I only found two cash back cards that pay money, one I'm not eligible for as you need a very large monthly spend for it to pay out (no point spending more to save), and the other is from a company I simply don't like. Other cards were linked to expensive or non-local shops I don't shop at. However, I discovered that the supermarket I almost always shop at offers a card that allows you to collect club card points anywhere you use it, which relate to 1% off everything, and double points in the store that issues it. I already spend around £1200 a year in this shop for many food and household items, so I will be able to indirectly turn all the points I collect in to real money savings.

You can also turn the points in to vouchers of higher value, but they're for various products I wouldn't normally buy, so I'll just use them to save on things I do buy.

If anyone is considering one of these cards, I'd suggest checking out your usual shops to see if any of them offer credit cards with rewards. Being able to use the rewards in shops you can easily get to and consider good value for money is worth far more than collecting seemingly huge rewards for shops you don't like, can't easily get to, and potentially are more expensive, thus reducing the value of the rewards.

    Bookmark   July 27, 2007 at 8:38AM
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I use my Discovers for everything I can. I have one that gets used for gas only (most of the time unless there's a special promo) and about every 2-3 months I get essentially a free tank of gas, just from gas purchases I have to make anyway.

By putting things on the card, it's easier to track and estimate budget when needed.

One nice thing is there usually is a promo going for motels and restaurants during the time of year when I take my sort of vacation. So that gives an extra 5% off the cost of the room. And often savings at the restaurants too. And you need a card to reserve a room anyway. I don't want too many credit cards so I'm happy this way.

    Bookmark   July 9, 2011 at 3:08AM
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I LOVE my cash back B of A card. We put everything on there-gas, ALL of our bills that allow us to pay by credit card--I'd put my mortgage on there if I could! We pay it ALL end of month and basically have a savings account with that rewards money. No clue what we'll end up spending it on, but I like that we get to choose and it isn't limited to Disney or a certain store chain or whatever.

    Bookmark   September 23, 2011 at 3:26PM
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You guys with your reward cards burn my tail, as almost entirely a cash customer, even more than the users of regular cards.

I understand that a number of the issuers tell the merchants that if they are going to use their cards, they must accept each kind, and that the ones offering rewards and cash-back charge the merchant a higher fee.

It seems to me that I should ask the check-out lady, after my purchases are rung up, how much of a discount that I get for cash ...

... and when she says that there is none, tell her that I want to speak to the manager. On refusal, to say that, fine, then - there's no sale. And walk out.

When I ask the checkout people whether they'd rather be paid from my cash sale or from the credit card sale of the person just ahead of me, they say that it makes no difference to them.

I tell them that if they were paid from the proceeds of the credit card sale, that if their employer owed them $100., they'd get about $96 - 98.00 ...

... and they'd wait at least a month, more likely six weeks to two months (possibly even more) before they saw any dollars at all.

But we all help pay for those extra costs.

ole joyful

    Bookmark   January 23, 2012 at 3:03PM
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Many if not most gas stations in my area offer a pretty good discount for cash.

Merchants wait only a couple days to be paid for credit card transactions, never weeks. Merchants like the cards because it eliminates the loss from bad checks. We all pay more for everything we buy to make up for the cost the various CC fees merchants must pay.

    Bookmark   January 31, 2012 at 3:21PM
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It's a little off topic, but there's another way to cash back when you buy things online. If you sign up at a cash back website (I use, you can get rebates when you shop at different stores. I think they have about 500 stores. I sent some flowers for easter through FTD and got 10% back. A little while ago I ordered a pair of boots for DH and got 20%. And I used my B of A card and earned cash back through that too!

    Bookmark   April 11, 2012 at 5:08PM
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I have an Amazon card that gives points. For anything sold by Anazon I get 3 points, for gas, pharmacy, and a few others I get 2 points, and 1 point for everything else. Since I shop a decent amount on Amazon it works out well. Plus we pay it off every month. I even upgraded to Prime membership for $80 for free unlimited 2 day shipping since I have saved so much redeeming points. The best part is you can apply points to your purchases to save right during checkout.

    Bookmark   May 18, 2012 at 6:35PM
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I am a small merchant who accepts credit cards.

Here's how it works on our end:

We get three types of Visa/MasterCards.

A "qualified" card, which is your run of the mill credit card. We have to pay our processor anywhere from 1.6% to 5% of the sale for your convience.
Next up is a "mid qualified" card. Those are the reward cards. We get charged MORE to process those cards. Discover, Slate, Ink, etc fall into this catagory. The rate usually jumps another 1 or 2 percentage points.
Then are the "non qualified" cards. Business cards or card numbers manually put into the system. Another 1 or 2 percentage points. That's over and above the 25-50 cents we pay Visa/Mastercard for each sale.

So if you do business with a small merchant, please don't whip out your "rewards" card as WE are the ones who are giving you the money out of our pockets. The card issuers are not gonna part with ANY money, they just pass the bill along to us.

    Bookmark   May 25, 2012 at 8:15PM
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The small merchant ... gets the shaft.

And must increase prices ... to be paid by everyone.

Discount for cash purchase, please - or no sale.

ole joyful

    Bookmark   June 30, 2012 at 3:28PM
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"***The small merchant ... gets the shaft.
And must increase prices ... to be paid by everyone.

Discount for cash purchase, please - or no sale.***"

Joyfulguy, again we, the small merchant would get shafted. Today, with the economy being what it is, most small merchants no longer operate on a 100% markup. In many cases it's down to about 30%. And they must meet all their bills on that margin. Believe me, many are sinking. And you still want a discount.

Does McDonalds give you a discount for cash? Or if you buy 2 hamburgers?

    Bookmark   July 10, 2012 at 6:51AM
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