How to get cash-back on credit cards, and other sweet deals?
August 10, 2009 6:00 PM Subscribe
My first credit card..looking for cash-back (and other sweet deals)
I have never had a credit card before, and have basically no credit. I recently got a well-paying job, and am seeking recommendations for cards that offer cash back perks. I don't want to pay more than a few bucks in yearly fees, and plan on paying back everything I purchase immediately. I am just a penny-pincer, looking to make the most of my money =)
It seems most banks these days aren't offering any savings interest (a few tenths of a percent), so I figure this is one way to make some money (by saving on purchases). As a sub-question, I would appreciate any other ways to make my money work for me; I can put a few grand away for a year, but a few tenths of a percent interest doesn't really appeal to me...
I recently found out about Bing cashback, so am looking for other sweet deals like that as well.
I have never had a credit card before, and have basically no credit. I recently got a well-paying job, and am seeking recommendations for cards that offer cash back perks. I don't want to pay more than a few bucks in yearly fees, and plan on paying back everything I purchase immediately. I am just a penny-pincer, looking to make the most of my money =)
It seems most banks these days aren't offering any savings interest (a few tenths of a percent), so I figure this is one way to make some money (by saving on purchases). As a sub-question, I would appreciate any other ways to make my money work for me; I can put a few grand away for a year, but a few tenths of a percent interest doesn't really appeal to me...
I recently found out about Bing cashback, so am looking for other sweet deals like that as well.
I just switched from the Chase Freedom card to the Schwab 2% cash back. Reasons are mainly there are no total rewards to reach before getting money back - they just slide the money back into your account every month. Also Chase started to charge an annual fee as well as starting to mess with bonus 3% categories.
posted by jourman2 at 6:38 PM on August 10, 2009
posted by jourman2 at 6:38 PM on August 10, 2009
I did the research myself a few years ago and the Amex Blue Cash card was the best overall. You might also check out the FatWallet forums for some more current research in addition to what
The best deal would really be to have multiple cards and be willing to remember which one to use for gas, which to use for airfare and so on, because its common for a card to offer better rebates for one type of purchase than another. I don't need the hassle for what probably amounts for $20 per years, so for the sake of simplicity, Amex Blue Cash was the way to go for me.
I'll conclude by saying that you have to have discipline for this to be profitable. One overdue payment and your rebate will disappear. If you don't pay in full, the interest will probably negate the cash you'd earn anyway. It's been great for me, but people without a lot of discipline might find themselves paying more than they earn.
posted by tomwheeler at 6:43 PM on August 10, 2009
jdroth listed.The best deal would really be to have multiple cards and be willing to remember which one to use for gas, which to use for airfare and so on, because its common for a card to offer better rebates for one type of purchase than another. I don't need the hassle for what probably amounts for $20 per years, so for the sake of simplicity, Amex Blue Cash was the way to go for me.
I'll conclude by saying that you have to have discipline for this to be profitable. One overdue payment and your rebate will disappear. If you don't pay in full, the interest will probably negate the cash you'd earn anyway. It's been great for me, but people without a lot of discipline might find themselves paying more than they earn.
posted by tomwheeler at 6:43 PM on August 10, 2009
Best answer: I have never had a credit card before, and have basically no credit.
It's unlikely that you're going to get a great cash-back rate until you have an established credit line. In the meantime, I'd take a card with other rewards that you can use.
- CapitalOne's No Hassle cards are decent. Using their card lab, you can trade off interest rate for more rewards. Since you'll be paying it off every month, you can usually get 2 points per dollar, such that $7500 dollars spent = $150 plane ticket. (effective rate 2.0%).
- Southwest offers a Visa where you get a free round trip for signing up, plus 1 RR credit for every 1200 dollars spent. The catch is there's a 59 dollar fee per year, so it probably doesn't make sense to keep it open for more than a year. That said, it's a good rate of return. Assuming you put $19,200 per year on it (so that you earn a free flight in a year) and that a flight is worth 400 bucks to you: $400 free round trip at signup + $400 round trip after a year - 59 fee = ~3.8% return rate. (http://www.southwest.com/bonus/)
posted by chrisamiller at 7:08 PM on August 10, 2009
It's unlikely that you're going to get a great cash-back rate until you have an established credit line. In the meantime, I'd take a card with other rewards that you can use.
- CapitalOne's No Hassle cards are decent. Using their card lab, you can trade off interest rate for more rewards. Since you'll be paying it off every month, you can usually get 2 points per dollar, such that $7500 dollars spent = $150 plane ticket. (effective rate 2.0%).
- Southwest offers a Visa where you get a free round trip for signing up, plus 1 RR credit for every 1200 dollars spent. The catch is there's a 59 dollar fee per year, so it probably doesn't make sense to keep it open for more than a year. That said, it's a good rate of return. Assuming you put $19,200 per year on it (so that you earn a free flight in a year) and that a flight is worth 400 bucks to you: $400 free round trip at signup + $400 round trip after a year - 59 fee = ~3.8% return rate. (http://www.southwest.com/bonus/)
posted by chrisamiller at 7:08 PM on August 10, 2009
Seconding looking at cards that offer tangible benefits. Cash back cards only give you chump change in return. Other cards can get you free flights and such that are worth a lot more. A good starting point for personal finance is the book and website "I Will Teach You To Be Rich". Check out the link below, the second post down is a free chapter from his book.
http://www.iwillteachyoutoberich.com/blog/category/credit-cards/
You can buy the book on Amazon. It's a great intro to handling your personal finances, be it bank accounts, credit cards, retirement, etc. I wish he had written it 10 years ago (when I was in my early 20s and should have started saving for retirement...)
posted by bengarland at 7:27 PM on August 10, 2009
http://www.iwillteachyoutoberich.com/blog/category/credit-cards/
You can buy the book on Amazon. It's a great intro to handling your personal finances, be it bank accounts, credit cards, retirement, etc. I wish he had written it 10 years ago (when I was in my early 20s and should have started saving for retirement...)
posted by bengarland at 7:27 PM on August 10, 2009
American Express offers a Blue Cash card which gives you 0.5%-1.5% back on purchases for the first $6.5k, then a whopping 1.5%-5% from then on.
Basically, the higher % cash back on groceries, gas, drugstores and the like. No annual fee.
Works out well if you're charging a lot. I pay mine in full every month.
posted by herrdoktor at 8:40 PM on August 10, 2009
Basically, the higher % cash back on groceries, gas, drugstores and the like. No annual fee.
Works out well if you're charging a lot. I pay mine in full every month.
posted by herrdoktor at 8:40 PM on August 10, 2009
Best answer: I'd go with the Discover More card. It has 5% cashback in certain categories which change 4 times a year and 1% cashback for everything else. You can also get double rewards if you use your rewards on certain things, so $20 cashback could become $40 if you are shopping at certain places. When I signed up, there was also a $10 cashback reward if you spent $100 within the first month.
My only negative experience with them was that they tricked me into signing up for several services without telling me about any monthly fees when I called to activate the card, and it took about 10 phone calls to completely cancel everything and get a full refund. So make sure you don't sign up for any extra services unless you ask how much they cost first. Otherwise, there's no annual fee or anything like that. Make sure to pay your bills early too.
If you have a specific category that you spend most of your money on, you should think about getting a more specific card. Also, Discover is not accepted everywhere so you might have trouble using it at certain smaller stores.
posted by 4n0nym0u5 at 9:05 PM on August 10, 2009
My only negative experience with them was that they tricked me into signing up for several services without telling me about any monthly fees when I called to activate the card, and it took about 10 phone calls to completely cancel everything and get a full refund. So make sure you don't sign up for any extra services unless you ask how much they cost first. Otherwise, there's no annual fee or anything like that. Make sure to pay your bills early too.
If you have a specific category that you spend most of your money on, you should think about getting a more specific card. Also, Discover is not accepted everywhere so you might have trouble using it at certain smaller stores.
posted by 4n0nym0u5 at 9:05 PM on August 10, 2009
If you get a card with an annual fee, make sure that you're going to earn more in cashback than your annual fee is going to cost you. If you get a 1% card, and your annual fee is $5, you're going to have to put $500 on the card just to break even. That might or might not be a problem for you, but I figured I'd mention it.
If I had $1000 to spare, I'd be inclined to sink it into a 5 year fund based on the stock market. The market is so bad that the only way it can go is up. I'm not a financial expert, though, so this could be really bad advice.
It's UK-centric, but you could try checking out MoneySavingExpert for some tips. The shops/brands will obviously be different, but the basic tips and ideas will be the same.
posted by Solomon at 1:51 AM on August 11, 2009
If I had $1000 to spare, I'd be inclined to sink it into a 5 year fund based on the stock market. The market is so bad that the only way it can go is up. I'm not a financial expert, though, so this could be really bad advice.
It's UK-centric, but you could try checking out MoneySavingExpert for some tips. The shops/brands will obviously be different, but the basic tips and ideas will be the same.
posted by Solomon at 1:51 AM on August 11, 2009
Best answer: I like the Discover More, Chase Rewards and Capital One NoHassle cards.
Seconding what chrisamiller said though, that you will probably not be able to get a great rewards card with little to no credit. In fact, having no credit is worse than having bad credit when it comes to getting a credit card, in my experience. I ended up having to go with a secured card through Orchard Bank, and then had to threaten them with small claims court years later to get my deposit back, after I'd demonstrated excellent use of the card (paid in full every single month, never went over the limit or paid late, etc). It was a pain, but I have regular credit cards now and a good score.
I'd do some research on CardWeb and apply for ONE regular credit card. If you are denied, start looking for secured cards. It's not the ideal way to go, but sometimes it's the only option if you wait too long to start establishing credit.
I'd also recommend the blogs Get Rich Slowly, I Will Teach You To Be Rich, The Simple Dollar, Five Cent Nickel and WiseBread for answers to the rest of your questions.
posted by peanut_mcgillicuty at 6:28 AM on August 11, 2009 [1 favorite]
Seconding what chrisamiller said though, that you will probably not be able to get a great rewards card with little to no credit. In fact, having no credit is worse than having bad credit when it comes to getting a credit card, in my experience. I ended up having to go with a secured card through Orchard Bank, and then had to threaten them with small claims court years later to get my deposit back, after I'd demonstrated excellent use of the card (paid in full every single month, never went over the limit or paid late, etc). It was a pain, but I have regular credit cards now and a good score.
I'd do some research on CardWeb and apply for ONE regular credit card. If you are denied, start looking for secured cards. It's not the ideal way to go, but sometimes it's the only option if you wait too long to start establishing credit.
I'd also recommend the blogs Get Rich Slowly, I Will Teach You To Be Rich, The Simple Dollar, Five Cent Nickel and WiseBread for answers to the rest of your questions.
posted by peanut_mcgillicuty at 6:28 AM on August 11, 2009 [1 favorite]
The REI visa offers no annual fee and 1% cash back. It also gets you bigger REI dividends (an additional 5% off on top of their existing 10% off for members), and they throw in a free $30 gift certificate for their stores.
posted by mullingitover at 8:18 AM on August 11, 2009
posted by mullingitover at 8:18 AM on August 11, 2009
Slight correction: Amex dropped the 1.5% rate to 1.25% recently on the Blue Cash card. (I have one.) It's still one of the better programs out there, but don't expect them to give you a high enough credit limit for everything right away. They're a bit stingy lately.
posted by Citrus at 8:53 AM on August 11, 2009
posted by Citrus at 8:53 AM on August 11, 2009
Amazon.com offers a credit card with rewards points, which are tripled for Amazon.com purchases (essentially 0.03% cash back on Amazon.com purchases, since 5000 rewards points can be used to purchase a $50 cash check). They also offer $30 off your first Amazon.com order paid with the card, which is reason enough to get one IMO.
posted by Vorteks at 8:13 AM on August 19, 2009
posted by Vorteks at 8:13 AM on August 19, 2009
This thread is closed to new comments.
I've never used this site myself, but I would if I were looking for a new card. (I'm happy to have an Amex/Costco for business and a Capital One Visa cash-back thingie for personal.)
posted by jdroth at 6:06 PM on August 10, 2009 [2 favorites]