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I manage my parents’ finances, and by charging everything possible to their credit card, they rack up enough points to buy really nice gift cards for their kids and grandkids every Christmas without paying a cent. It’s a nice annual savings.
I haven't checked the mileage ones. Most of mine get 1 to 5% cash back on all purchases. Is it easier to get free air miles with those cards than to save the cash back and pay for them?
The advantage of miles is that they have a variable "exchange rate" vis-a-vis money. There are times when the miles are priceless (such as getting stuck in an airport where you need to fly somewhere NOW and the cash fare is exorbitant) and times when they're not (such as when there are cheap airfares in the market and you can plan ahead). I can't count the number of times I got where I was going because I had the miles to spare and not the money.
Credit card companies must be really sticking it to others with their high lending rates to be able to give away these freebies. There must be a lot of consumer debt out there - guess they know what they're doing. Sounds kind of like what casinos do to bring in gamblers. I'm probably way wrong w/ the analogy, but I always learned that there's no such thing as a free lunch.
some cards are at 29.99% interest ... chase lost a ton of money first year with their sapphire cards ..even though they have fees of 450 a year or so the perks in the first year can be 3 to 4x that ...we got over 2k in points first year we had it
Credit card companies must be really sticking it to others with their high lending rates to be able to give away these freebies. There must be a lot of consumer debt out there - guess they know what they're doing. Sounds kind of like what casinos do to bring in gamblers. I'm probably way wrong w/ the analogy, but I always learned that there's no such thing as a free lunch.
I think you're right about that. It's how I felt when we took a cruise--cheap price and the gamblers in the casino were probably paying for it, along with the people who had to buy the alcohol package or the soda deal. Even the people who paid extra to be able to eat in their pizza restaurant. We only used what was included in the initial price--no extra add ons, so I figured those people who paid for add ons, including the losing gamblers, helped keep the price down for us.
For credit card deals I like to go to Nerd Wallet. I don't fly that much so mileage wouldn't help me but when I do take a trip, I get a cc that will give me something like $100 cash back if I spend $1000 in the first 3 months. That cc will also have no international fee and it will give me one year to pay it back with zero interest. If you're going to spend $3000 in the first three months, I think they give you $300 back! But I am so frugal that we go internationally and it's under $3000 for us. We travel on the cheap and hang out with the ordinary people, not the tourist trap places.
For a regular cc, I get 2 points for gas and 3 points for groceries, 1 point for everything else. So every few months I redeem it for a $50 gift card. I make sure to pay the cc off completely every month, of course.
If you are higher income, you can make a lot off credit cards. Those of us who are not rich, can still get some benefits though.
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