Credit Card Benefits

[AllyStreelman]

[Posted on behalf of a friend]

I've always been a little conservative wrt credit card spending. Given the high interest and previous financial struggles, I used to find them a little risky. But now I'm slowly starting to see potential in credit card benefits and utilizing them to my advantage and getting out of that headspace.



I recently read this article: https://www.credello.com/financial-r...ng-whole-time/ and it made me curious if I'm missing any major perks... What's the best benefit you've received from a credit card? How do you compare, vet them, etc?



Looking to hear from people who preferably have good experience with credit cards.

[kork13]

I mostly just do basic cash-back credit cards, for simplicity. However, as a military member, I can get Amex cards for free (they waive annual fees). So I have the Amex Platinum card, which has some pretty outstanding benefits, especially if you travel often.
- Free access to a litany of airport lounges (comfortable places to relax, plus offers free food/drink)
- Automatic gold status with Hilton, Marriott, and Hertz
- $200/yr rebates on any airline fees (baggage, inflight food, etc)
- Free TSA Pre check, Global Entry, and Clear
- $15/mo Uber/Uber Eats credits
- Free Disney+/Hulu subscription

.... Among others. It might be hard to totally justify if it wasn't free to me, but it's incredibly useful.

[disneysteve]

I couldn’t read the article but I’m a firm believer in taking advantage of the credit card game. As long as you can control your spending and pay your bills in full every month it’s free money.

our main card is a Marriott Visa. $95/yr gets us one “free” night (which is worth more than $95 itself) plus lots of reward points toward free stays, club access, credit toward higher reward status, etc.

we also use Discover and Chase Freedom cards to take advantage of the quarterly 5% cash back bonus categories.

[LivingAlmostLarge]

I have the amex platinum as well, two alaska cards, business ink and chase preferred $95 each

[AllyStreelman]

I mostly just do basic cash-back credit cards, for simplicity. However, as a military member, I can get Amex cards for free (they waive annual fees). So I have the Amex Platinum card, which has some pretty outstanding benefits, especially if you travel often.
- Free access to a litany of airport lounges (comfortable places to relax, plus offers free food/drink)
- Automatic gold status with Hilton, Marriott, and Hertz
- $200/yr rebates on any airline fees (baggage, inflight food, etc)
- Free TSA Pre check, Global Entry, and Clear
- $15/mo Uber/Uber Eats credits
- Free Disney+/Hulu subscription

.... Among others. It might be hard to totally justify if it wasn't free to me, but it's incredibly useful.

These seem like great benefits for someone who travels frequently! Is there are a minimum purchase target that you have to achieve to get these benefits?

[AllyStreelman]

I couldn’t read the article but I’m a firm believer in taking advantage of the credit card game. As long as you can control your spending and pay your bills in full every month it’s free money.

our main card is a Marriott Visa. $95/yr gets us one “free” night (which is worth more than $95 itself) plus lots of reward points toward free stays, club access, credit toward higher reward status, etc.

we also use Discover and Chase Freedom cards to take advantage of the quarterly 5% cash back bonus categories.

That's a nice way to look at it - "free money" !

[AJSimon]

That's a nice way to look at it - "free money" !

Except it's not really free. It is, generally speaking, partially refunded money that you were deliberately overcharged in the first place.

Merchants/Retailers are charged interchange, processor, and assessment fees by the credit card company and the payment processors in order for them to accept credit cards as payment for their goods and services. Generally speaking, merchants and retailers are charged a percentage of the amount being paid with credit cards. Enterprising capitalists that they are, they are passing those fees onto us, their customers - just like they do with sales tax. These costs come baked into the price of the items being purchased. Depending on the card you're using and whether it's being swiped or the numbers keyed in, those fees can come out to between 1.3% to almost 3.5% of the amount being paid via credit card.

Now, to be fair, cash-paying customers are paying the same deliberate overcharges and not getting the cash back or airline points/miles, and you can say, "Well, as long as I'm being overcharged, I'd rather get the cash back and airline miles in return." But that doesn't make them free. You still paid for them.

Ultimately, the problem is, the "buy now, pay later" foundation of the credit card incentivizes overspending, and these cash-back/rewards programs make that incentive explicit. Now, approximately 100% of credit card users who tout their rewards insist that they never, ever overspend, and/or they would be spending the exact same amount in cash if they didn't have the card. Maybe some of them are even telling the truth. But what they are effectively saying is that they are immune to the everyday human psychological blindspots that credit card companies spend billions of dollars studying and exploiting.

The only advice I would give someone in this area is to keep it real when it comes to credit card rewards. Casinos and credit card companies have engineered it so that the fun you experience in pursuing your rewards feels like part of the reward itself. Whether the objective math ever actually shakes out in your favor, it always "feels" like you made out better than you did.

[AllyStreelman]

Except it's not really free. It is, generally speaking, partially refunded money that you were deliberately overcharged in the first place.

Merchants/Retailers are charged interchange, processor, and assessment fees by the credit card company and the payment processors in order for them to accept credit cards as payment for their goods and services. Generally speaking, merchants and retailers are charged a percentage of the amount being paid with credit cards. Enterprising capitalists that they are, they are passing those fees onto us, their customers - just like they do with sales tax. These costs come baked into the price of the items being purchased. Depending on the card you're using and whether it's being swiped or the numbers keyed in, those fees can come out to between 1.3% to almost 3.5% of the amount being paid via credit card.

Now, to be fair, cash-paying customers are paying the same deliberate overcharges and not getting the cash back or airline points/miles, and you can say, "Well, as long as I'm being overcharged, I'd rather get the cash back and airline miles in return." But that doesn't make them free. You still paid for them.

Ultimately, the problem is, the "buy now, pay later" foundation of the credit card incentivizes overspending, and these cash-back/rewards programs make that incentive explicit. Now, approximately 100% of credit card users who tout their rewards insist that they never, ever overspend, and/or they would be spending the exact same amount in cash if they didn't have the card. Maybe some of them are even telling the truth. But what they are effectively saying is that they are immune to the everyday human psychological blindspots that credit card companies spend billions of dollars studying and exploiting.

The only advice I would give someone in this area is to keep it real when it comes to credit card rewards. Casinos and credit card companies have engineered it so that the fun you experience in pursuing your rewards feels like part of the reward itself. Whether the objective math ever actually shakes out in your favor, it always "feels" like you made out better than you did.

Interesting! Regarding the last point you mentioned, I recently read about the concept called spaving (spending and spaving). Credit economy has resulted in inflated prices and overspending it seems.

[Drake3287]

Yep, if you can discipline yourself there's a ton of money to made with credit card purchases. I use a BofA cash reward Visa card and easily get back $2k to $3k each year simply by charging EVERYTHING and paying it off in full each month. Haven't paid a cent in finance charges in years. Many people would be surprised at how many purchases/bills can be put on credit cards.

[Jluke]

Reviving this one.

Sitting at my Honda dealer for service and as soon as I walked through the door there were signs everywhere how they are now charging 3.5% fee if you use a credit card.

cash, check or debit is preferred.

I can’t say I’m surprised as just this morning I was thinking I need to carry more cash because our pizza places charge that fee too for credit cards.

feels like I need to budget differently now or pay 3.5% fee (cc reward is only 1% cash back)

I was looking at $9 - it’s going to start adding up soon

so I used my debit card

[disneysteve]

Reviving this one.

Sitting at my Honda dealer for service and as soon as I walked through the door there were signs everywhere how they are now charging 3.5% fee if you use a credit card.

cash, check or debit is preferred.

I can’t say I’m surprised as just this morning I was thinking I need to carry more cash because our pizza places charge that fee too for credit cards.

feels like I need to budget differently now or pay 3.5% fee (cc reward is only 1% cash back)

I was looking at $9 - it’s going to start adding up soon

so I used my debit card

I'm seeing more of this, too. It's really annoying and there's no excuse for it. The merchants are acting like the CC fees are new when we all know they've always been that way. Only lately have they decided to start charging them directly to the customer. I really don't want to start paying cash for everything for a variety of reasons.

[kork13]

Yeah, I'm seeing it more & more as well. Annoying, though not surprising. It's a drag on their profits, so when they're struggling, it's an easy lever to pull for improving the bottom line.

Of course, now that I'm living in Japan, I'm getting more used to having cash everywhere again -- many of the small shops/restaurants out here don't do anything but cash. However at the same time, Japan is also proliferating the use of various stored-value transit cards that can be used all over the place. I've got a "Suica" RFID/NFC transit card (meant for paying train fares) that lives on my phone, but they became so popular & easy that many stores, restaurants, and even vending machines are accepting them for purchases too. There's no direct rewards associated, though when I reload the Suica card, I can do it via credit card for those rewards... But it's just so stinking easy! Purchases are faster (same as waving your phone over the barrier at the train station), and it allows me to not carry around a literal pocketful of change (Japanese Yen use coins until you hit ￥1000, about $7).

[ua_guy]

It's just as rage-inducing as line-item charging for employee wellness on a dinner tab. Convenience fees for card transactions are starting to pop up in a lot of places where they didn't exist before, where it's fairly standard to pay with a card transaction. Like at a car dealership...repairs are expensive and I'm not going to walk in with $1,000 cash to pay a repair bill, although, I might now!. Using a CC for the rewards has probably reached a zenith. Visa/MC and the others have raised processing fees, and rewards are getting more extravagant, and that money has to come from somewhere. It seems like it used to be contained and paid for out of all the interest and fees people pay. Maybe there are too many of us deadbeats these days who reap the rewards but don't pay interest or fees...

Debit might be a better option as fees are lower or sometimes merchants don't charge to use debit. Might have to also consider that in the future.

[AJSimon]

I'm pretty sure merchants who take credit/debit cards have always been baking the interchange and processing fees into the cost of what they sell - just without letting consumers know it.

[LivingAlmostLarge]

I read recently it's Toast that is making TIPPING obnoxious. They make 3% and give away tablets for free to the merchant. And they start tipping at 20%, 22%, and 25%. Ridiculous you are supposed to tip for buying clothes? I am really doing a lot more no tipping because it's getting stupid.