Credit Card Question

Of course its a good idea. Most people do it, to take advantage of rewards/miles. I have all my utilities on auto pay with a card.

Best card would be have to be researched for what you want out of it. Try nerdwallet.com. If youre traveling look at mileage cards, I think theres a thread somewhere on here for the Chase Sapphire Preferred. It comes with a hefty annual fee but a great card. Im mostly about the cash rewards.

 

I highly recommend using a credit card in this manner for the reasons previously stated in this thread if you have the discipline. Fraud protection and the fringe benefits most cards have to offer is the first and foremost reason. I consider rewards as a bonus on top and use it as the last consideration.

Personally, I really like my Capital One card. Great fraud detection. They tend to lead in security features in the card. I can have every transaction texted to my phone. I dont have to reconcile my balance every month and make sure the transactions are correct. That peace of mind is more important to me than trying to squeeze out an extra 1% in rewards.

Additionally, be careful with the 'paying it off once a month'. Interest starts accruing 30 days from the transaction. If you get caught holding that debt for 31 days, you are now paying interest, thus whittling away the benefit of your rewards. I reconcile my credit card balance twice a month. One reason is in ensure I don't pick up an interest charge for some BS technical reason, and secondly, I dont accidentally forget to pay. Again, another great thing about Capital One is they start spamming with warnings if I come within a couple days of being past due.

Personally, I like my cash back card. They never expire. I can use my rewards in various methods, including actual cash back, or rewards applied to the balance,or I can donate them to a charity or get gift certificates. Additionally with cash back, $1 = $1. I dont have to convert points or research which is the best way to redeem my points.

When it comes to travel rewards, it gets more complicated. Many more factors come into play. If you spend a lot (like several thousand a month) and travel often (you fly one airline, are a preferred customer and get bonus points for using them) and you enjoy playing the system, they can really pay off. If you only travel a couple times a year, then you have to consider your points in your travel plans. And are you utilizing the points in the best manner? Unless you're a preferred customer with some airlines, they will downgrade you to the budget category for using points, thus higher risk of getting bumped from a flight. Can you use your points on any ticket or are you forced into certain categories where you'd end up getting better rates if you paid cash?

Personally for me, I travel so little ( a couple times a year) that I do much better finding bargain deals than to worry about annual fees on credit cards or finding the right deal to use my points. Again, keep in mind how much you are really getting back. If you spend $20,000 on a card, that amounts to $200 per 1%. There are tons of ways to nickel and dime your way into saving $200 annually. Don't over think it.

Here is an article summarizing the reward system: https://www.businessinsider.com/travel-credit-cards-annual-value-2018-3

 

Probably not the best for everyone, but Costco card's 4% on gas is nice to me. 3% on hotels and restaurants, 2% at Costco, and 1% elsewhere. Only get cash once a year and have to have a Costco membership are the drawbacks.

 

How goes it?
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