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Thread: Americans: Rewards credit card recommendations?

  1. #31
    All Worship Ragnarök Loki's Avatar
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    Quote Originally Posted by Flixy View Post
    The opposite would make more sense, for a lot of stores cash is more expensive and risky for them (robbery, cashiers who keep money, and it costs money to deposit cash or to get change, and more difficult administration). The only thing that can go wrong with a credit card is that the buyer claims the money back, I think? So unless the transaction fees are that high, a discount for using a card would make more sense.
    Stores lose some money for every credit card transaction. The sheer scale of the "savings" offered by some businesses when using cash, however, strongly suggests that they can only do that if they don't pay taxes on the transaction.
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  2. #32
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    Quote Originally Posted by Loki View Post
    Stores lose some money for every credit card transaction. The sheer scale of the "savings" offered by some businesses when using cash, however, strongly suggests that they can only do that if they don't pay taxes on the transaction.
    And inventories wouldn't show that ?
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  3. #33
    Quote Originally Posted by Flixy View Post
    I think it's mostly because only people who really need a credit card for something have one, so there's no need for the banks to make pretty deals.
    I don't think that makes sense; CCs have far better market penetration in the US, but the rewards programs are probably the best you can get. I'm guessing it either has to do with regulation or something cultural.

    The opposite would make more sense, for a lot of stores cash is more expensive and risky for them (robbery, cashiers who keep money, and it costs money to deposit cash or to get change, and more difficult administration). The only thing that can go wrong with a credit card is that the buyer claims the money back, I think? So unless the transaction fees are that high, a discount for using a card would make more sense.
    I think there are costs for both sorts of transactions, but for small purchases the interchange fees take a bigger chunk of the total, meaning business owners would probably prefer cash in such situations. Not always so clear, though.

    Quote Originally Posted by Hazir View Post
    I was told that it cost a ecological foodstore in LA $3.00 per transaction every time somebody paid with a credit card. To me that seems like a good incentive to get people to pay cash.
    No way that's normal. CC interchange fees are much lower than that.

    Quote Originally Posted by RandBlade View Post
    Not American but after only banking with Barclays/Barclaycard for 12 years now, yesterday I signed up for a new Credit Card to get better rewards - partially inspired by this thread.

    Gone for a Tesco clubcard CC. Clubcard is a rewards program by Tesco's whenever you shop there (given its my local supermarket, that's every week). This'll give points for all expenditures, but more with them (I shop there anyway) and even more for fuel there (I fill up there as its the cheapest and already get some points).
    Happy (I guess?) to have provided some inspiration. I've looked at store-specific programs, but in the US they generally don't offer much rewards outside of the store itself (and I'm afraid that grocery stores, where I spend most of my money in stores, generally don't have CC deals either). Some of them can give pretty attractive deals, though - Target as OG mentioned is a good one. Some department stores are pretty decent too. I just don't spend enough at one place to make the imbalance worth it, and I'm not willing to have too many cards. Happy you got a good deal, though!

    There is a deal through Costco where you get a free card with the membership fee that gives pretty decent overall rewards - 3% on gas and restaurants, 2% on travel, 1% on everything else. Only issue is that I don't really use the warehouse clubs - I don't buy enough or have enough storage space to be worth it; maybe once I have kids. Otherwise I'd totally jump on that.


    Hazir: re: inventories, the government doesn't have anywhere near as good sense of store inventories since we don't have VAT reporting. Loki's probably right in some cases (esp. small non-chain businesses), though I'd prefer to imagine that it's because they've done the math for their average transaction size and found out that the costs of CC interchange fees is higher than cash management for their particular case.

  4. #34
    Senior Member RandBlade's Avatar
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    Even with VAT cash in hand is a major issue here in some industries. I've been spat at because I wouldn't give a cash in hand job, was the only business in that industry in that town at the time to be legitimate.

    We had to charge at one time almost double to the competition because of being legit:
    VAT on the sales
    Corporation Tax on the profits
    Payroll taxes on the wages
    They'd pay below minimum wage and their employees would be better off as they'd keep al welfare as well as the cash.

  5. #35
    Senior Member GGT's Avatar
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    Quote Originally Posted by wiggin View Post
    That's why I hate points programs. I prefer cold, hard cash.




    I know you have a mortgage already so don't need to worry about it,

    but I need a credit card to improve my credit score

    - longer history, a mix of loan types (otherwise I'd just have student loans and some car loan history), larger credit lines, lower utilization, etc. If I buy in my current area I'm likely going to need a mortgage of $500k or larger, and banks don't just hand those out to people in their 20s even with a 20% downpayment. Having a credit card and using it at least a little is absolutely necessary for me; while I'm at it, I pick up a little extra cash on the side at little cost or inconvenience.
    If your (3) credit scores are already good, and you charge everything but rent, and pay the balance each month....then you don't really need more credit cards, or a mix of loan types to qualify for a mortgage. The ratio that's important is your credit limit (which should be going up steadily, as you charge and pay off) compared to average daily balance. You get a more favorable credit ratings by charging one large item and paying it down immediately, than you get for buying groceries or gas.

    Having more cards that you don't routinely use can actually "look" bad on a credit report, especially for in-store cards (like Target) that give initial 10% discounts, then sit in your wallet. I had a ding a few years ago when my Target credit card was cancelled "for lack of use", but Experian only saw "cancelled" and lowered my rating. Applying for one of my home mortgages turned up an ancient "unpaid charge" under $10, to a defunct drug store (Hook's) that hadn't kept very good bookkeeping for in-store credits when they went through bankruptcy. Both a real hassle that took time in phone calls and letters. Crazy shit.

    wiggin, if you're thinking of ways to improve chances of getting that mortgage, credit card history won't be as important as your savings and employment history. Plus finding a bank whose own history of fiduciary responsibility is just as good as yours! ie, a community bank or credit union that holds and services the loans they originate, doesn't sell 90% of their loans to other banks, etc. If you're associated with a university or medical center, those almost always have "preferred" relationships with certain lenders.

    Since you and your wife are both highly educated and gainfully employed in specialized hot fields, you're any mortgage lender's wet dream. You actually have the upper hand in this market (where housing and lending is all FUBAR), and the Banks need you more than you need them. Especially if you have 20% cash down.

    I'd avoid "jumbo loans", though. Not sure how they're defined currently, but it used to a single loan for over $400,000 or thereabouts. (That's when lenders would 'bundle' first and second mortgages, or add in pre-purchase equity loans, in order to squeak by jumbo loan requirements.)

  6. #36
    All Worship Ragnarök Loki's Avatar
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    Quote Originally Posted by Hazir View Post
    And inventories wouldn't show that ?
    The government is going to look at inventories? It's well-known that most small and medium-sized businesses keep one set of books for the government and another for themselves.

    Quote Originally Posted by wiggin View Post
    Hazir: re: inventories, the government doesn't have anywhere near as good sense of store inventories since we don't have VAT reporting. Loki's probably right in some cases (esp. small non-chain businesses), though I'd prefer to imagine that it's because they've done the math for their average transaction size and found out that the costs of CC interchange fees is higher than cash management for their particular case.
    The transaction fee for using a credit is 3% at best. Meanwhile, "cash discounts" seem to be eerily similar to the prevailing sales tax. Of course the store makes even more money because it not only doesn't pay the sales tax but also the tax on income.
    Quote Originally Posted by GGT View Post
    wiggin, if you're thinking of ways to improve chances of getting that mortgage, credit card history won't be as important as your savings and employment history. Plus finding a bank whose own history of fiduciary responsibility is just as good as yours! ie, a community bank or credit union that holds and services the loans they originate, doesn't sell 90% of their loans to other banks, etc. If you're associated with a university or medical center, those almost always have "preferred" relationships with certain lenders.

    Since you and your wife are both highly educated and gainfully employed in specialized hot fields, you're any mortgage lender's wet dream. You actually have the upper hand in this market (where housing and lending is all FUBAR), and the Banks need you more than you need them. Especially if you have 20% cash down.
    The issue isn't being able to get the loan but rather the interest rate on that loan, and for that, credit scores matter...a lot.
    Hope is the denial of reality

  7. #37
    Quote Originally Posted by GGT View Post
    If your (3) credit scores are already good, and you charge everything but rent, and pay the balance each month....then you don't really need more credit cards, or a mix of loan types to qualify for a mortgage. The ratio that's important is your credit limit (which should be going up steadily, as you charge and pay off) compared to average daily balance. You get a more favorable credit ratings by charging one large item and paying it down immediately, than you get for buying groceries or gas.

    Having more cards that you don't routinely use can actually "look" bad on a credit report, especially for in-store cards (like Target) that give initial 10% discounts, then sit in your wallet. I had a ding a few years ago when my Target credit card was cancelled "for lack of use", but Experian only saw "cancelled" and lowered my rating. Applying for one of my home mortgages turned up an ancient "unpaid charge" under $10, to a defunct drug store (Hook's) that hadn't kept very good bookkeeping for in-store credits when they went through bankruptcy. Both a real hassle that took time in phone calls and letters. Crazy shit.
    I'm well aware of how credit scores work. I was referring to Dread using debit for everything, not the counterfactual of my current situation. I'm perfectly happy with 1-2 credit cards, I'm just not happy with these two credit cards. My credit's fine, the main way to improve it is time.

    wiggin, if you're thinking of ways to improve chances of getting that mortgage, credit card history won't be as important as your savings and employment history. Plus finding a bank whose own history of fiduciary responsibility is just as good as yours! ie, a community bank or credit union that holds and services the loans they originate, doesn't sell 90% of their loans to other banks, etc. If you're associated with a university or medical center, those almost always have "preferred" relationships with certain lenders.

    Since you and your wife are both highly educated and gainfully employed in specialized hot fields, you're any mortgage lender's wet dream. You actually have the upper hand in this market (where housing and lending is all FUBAR), and the Banks need you more than you need them. Especially if you have 20% cash down.

    I'd avoid "jumbo loans", though. Not sure how they're defined currently, but it used to a single loan for over $400,000 or thereabouts. (That's when lenders would 'bundle' first and second mortgages, or add in pre-purchase equity loans, in order to squeak by jumbo loan requirements.)
    I appreciate your attempt at advice, but we'll have to see. I don't think credit scores are as unimportant as you suggest, though obviously there are other factors. As an engineer, I try to optimize my outcomes, which in this case means having as ironclad a mortgage application as possible. The better everything is, the lower rate I can get. Having such a relatively short and limited credit history (even an impeccably clean one) is a serious disadvantage compared to a middle aged buyer who already has decades of loan history from mortgages.

    So-called 'jumbo' loans may be necessary to buy anything in my area, I'm afraid. There's one other location I'm considering that would be far cheaper but would require a much larger downpayment; we'll have to see what happens with my life.

  8. #38
    Senior Member GGT's Avatar
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    Quote Originally Posted by Loki View Post

    The issue isn't being able to get the loan but rather the interest rate on that loan, and for that, credit scores matter...a lot.
    Interest rates on mortgages are historically low, even though consumers have low savings rates, high debt and high unemployment. We used to be able to buy down rates by paying lenders points, traditionally 1% of the loan amount, but not sure how often that's done when rates are below 5%.

    wiggin has everything a lender wants---savings, good income, advanced education and employment in the "right" field. If his credit scores don't reflect that, the fault lies in the credit rating agencies. If a mortgage company won't give him a low fixed rate, fixed term loan, with no prepayment penalty and low closing costs, the fault lies in the bank.

  9. #39
    Quote Originally Posted by GGT View Post
    Interest rates on mortgages are historically low, even though consumers have low savings rates, high debt and high unemployment. We used to be able to buy down rates by paying lenders points, traditionally 1% of the loan amount, but not sure how often that's done when rates are below 5%.

    wiggin has everything a lender wants---savings, good income, advanced education and employment in the "right" field. If his credit scores don't reflect that, the fault lies in the credit rating agencies. If a mortgage company won't give him a low fixed rate, fixed term loan, with no prepayment penalty and low closing costs, the fault lies in the bank.
    It's irrelevant if credit scores should work like that - they don't. They don't include income or savings, they just look at repayment behavior etc. Yes, banks can exercise some leeway based on a person's other situation, but it's largely irrelevant to getting a good loan, I'm afraid.

    Also, I'm hardly looking for a mortgage right now, and rates are going to be far higher soon when I'm likely to actually be in the market for a house. Saving on rates could save me tens of thousands of dollars.

  10. #40
    Senior Member GGT's Avatar
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    Your mortgage lender won't just look at your credit scores, or your credit history. They will look at your income and savings, your education and your potential earnings. That's what I'm trying to tell you, wiggin. You're worrying about something you shouldn't really worry about. You have more negotiating power than the banks. Let me repeat that:

    You have more negotiating power than the banks.





    If you don't believe me, try it out. Find a bank and apply for a (no charge) loan pre-qualification, even before you find a house you'd like to buy a couple of years from now. Look at their time limit offer. It might be 60 or 90 days. Right before the time limit expires, they'll call you to "negotiate" lower rates, or offer special perks. You'll find realtors and brokers sending you e-mails and mailers. They will court your business, and you'll realize YOU have the upper hand.

  11. #41
    I just discovered that I can use my Discover cashback at Amazon, no minimum. So much for waiting till I hit $50 to cash out....
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  12. #42
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    Can't you get like your "walmart credit card" and your whatever credit card ,and get like 5% off like all their stuff? is that not an option you want?

  13. #43
    Quote Originally Posted by Lebanese Dragon View Post
    Can't you get like your "walmart credit card" and your whatever credit card ,and get like 5% off like all their stuff? is that not an option you want?
    I'm not sure how many stores does the direct 5% off like Target does. Most stores do a points reward system, even Amazon's cards, where you have to build up purchases and points before you can redeem.

    Opening to many of these types of cards is also bad for your credit, not to mention harder to manage in relation to ID theft and such.
    "In a field where an overlooked bug could cost millions, you want people who will speak their minds, even if they’re sometimes obnoxious about it."

  14. #44
    A bigger issue is that I don't shop at Walmart. If one doesn't do the bulk of one's shopping at a single store (or a small group thereof), store credit cards are pretty useless - the ding to your credit score and the hassle of so many cards easily outweighs any savings.

    I'm pretty sure I'll go with the Blue Cash Preferred for my purchases - yes, it has an annual fee, but the 6% on groceries is just too enticing to pass up. I figure that's easily an extra $180/year over the best free option, without even taking into account the other rewards levels. Not ideal, but the best I can figure given the current options out there. Thanks all for your suggestions!

  15. #45
    Administrator Dreadnaught's Avatar
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    Quote Originally Posted by Loki View Post
    Not that I think this is a big moral issue, but you guys do realize that the reason you guys get discounts when using cash is because the store in question isn't going to pay taxes on your purchases, right? If enough people did that (which you seem to want to happen), we'll end up like Greece.
    If we raise taxes so high everyone wants things in cash, we'll end up like Greece.

  16. #46
    All Worship Ragnarök Loki's Avatar
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    And yet you're suggesting people use cash to dodge a 9% tax.
    Hope is the denial of reality

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    Not that I think this is a big moral issue, but you guys do realize that the reason you guys get discounts when using cash is because the store in question isn't going to pay taxes on your purchases, right? If enough people did that (which you seem to want to happen), we'll end up like Greece.
    I'm pretty sure the reason is because the store gets charged a fee whenever they use a credit card. As in they pay the credit card company money. So actually using cash saves them money, and they are willing to create an incentive for you to use cash or their own stores personal credit card (same thing) so that they save money as well. They pass a % of savings on to you so that you will actually have a reason to do it over using your credit card (which gives you little perks).

  18. #48
    All Worship Ragnarök Loki's Avatar
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    Quote Originally Posted by Lebanese Dragon View Post
    I'm pretty sure the reason is because the store gets charged a fee whenever they use a credit card. As in they pay the credit card company money. So actually using cash saves them money, and they are willing to create an incentive for you to use cash or their own stores personal credit card (same thing) so that they save money as well. They pass a % of savings on to you so that you will actually have a reason to do it over using your credit card (which gives you little perks).
    That's not the reason. They only save a few percent from getting cash instead of credit, a point I already made in this thread.
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  19. #49
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    Are you saying Credit Card's do not charge the stores a fee when used? I'm pretty sure, and I intend to look it up. If they do then obviously any company is willing to reduce the amount they charge you by some amount. I've never heard of it as the companies doing shady stuff... I will look it up.

    Edit: Did a quick search and a bunch of sites are saying what i'm saying. I already know for a fact that credit cards charges the company every time a customer pays with one, because and aquintance refuses to accept credit cards at his business for that reason. I think he's foolish as it turns away more customers than anything, but that's his deal.

  20. #50
    All Worship Ragnarök Loki's Avatar
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    Can you read? At all?
    Hope is the denial of reality

  21. #51
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    Not that I think this is a big moral issue, but you guys do realize that the reason you guys get discounts when using cash is because the store in question isn't going to pay taxes on your purchases, right? If enough people did that (which you seem to want to happen), we'll end up like Greece.
    Maybe some stores do that but not all, because there is incentive outside of that shadyness to encourage the use of cash. That's all i'm saying, you seem to agree with that.

  22. #52
    Senior Member GGT's Avatar
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    Quote Originally Posted by wiggin View Post
    A bigger issue is that I don't shop at Walmart. If one doesn't do the bulk of one's shopping at a single store (or a small group thereof), store credit cards are pretty useless - the ding to your credit score and the hassle of so many cards easily outweighs any savings.

    I'm pretty sure I'll go with the Blue Cash Preferred for my purchases - yes, it has an annual fee, but the 6% on groceries is just too enticing to pass up. I figure that's easily an extra $180/year over the best free option, without even taking into account the other rewards levels. Not ideal, but the best I can figure given the current options out there. Thanks all for your suggestions!
    Sorry if this brings up another "issue", but you may want to check if store discounts are voided by using the Blue Cash Preferred card. 6% off groceries does sound like a great deal....but not if you trade it for in-store deals (BOGO free=half off one) or building up Gas Points. I've found the gas discounts to be more valuable than clipping coupons, and those "points" don't accrue when using manufacturer coupons. I suppose it depends on the stores you use, and what cards they honor. Most won't honor more than one "discount" scheme at a time.

  23. #53
    Uncolonizable Wraith's Avatar
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    Cash back is offered by the credit card company. Grocery store deals are offered by the grocery store. Neither of them know or care about what the other is doing. They are independent of each other. If the grocery store accepts AMEX at all, he will get both.

  24. #54
    Indeed.

    (Also, GGT, even if what you say were true, which it isn't, gas rewards through grocery stores aren't anywhere near enough to beat a cash back card. Unless you've got a gas-guzzler with a big tank, your rebate will top out at 1%, max. Even with a big fill-up on a larger car, you'll be lucky to get 2%. Regardless, I have never had method of payment affect in-store deals or rewards programs. It just doesn't happen.)
    Last edited by wiggin; 01-31-2012 at 12:30 AM.

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    I think the confusion is coming from the fact... the store is not the one paying the 6% back to you, it's the credit card company. It's their promotion to get you to use their credit card. The grocery stores doesn't care what the credit card is giving you, all the same to them.

  26. #56
    Quote Originally Posted by Lebanese Dragon View Post
    I think the confusion is coming from the fact... the store is not the one paying the 6% back to you, it's the credit card company. It's their promotion to get you to use their credit card. The grocery stores doesn't care what the credit card is giving you, all the same to them.
    There are stores that refuse Discover and/or AMEX still because that extra %back come from the fees the cards charge the store for being able to take that form of payment. So I wouldn't claim that they don't care or that its all the same to them.
    Last edited by Ominous Gamer; 01-31-2012 at 06:11 PM.
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  27. #57
    Interchange fees are higher for discover and Amex, rewards cards or not, but yes. They care, but to my knowledge they do not distinguish between rewards and non-rewards cards, and if they accept the method of payment at all, they will not distinguish between methods of payment wrt their own incentive programs.

  28. #58
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    Right, I was assuming they already accept that card as a form of payment. At that point then what I said follows.

  29. #59
    Administrator Dreadnaught's Avatar
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    Quote Originally Posted by Loki View Post
    And yet you're suggesting people use cash to dodge a 9% tax.
    I'm simply given a discount for cash, any tax-related explanations for that discount is mere innuendo. The discount is higher than the sales tax.

    However, one can't help but see how the piling-on of taxation at every corner gives people ample inclination to dodge taxes at every corner. Hence, Greece, Italy and other economic/tax fixtures of southern Europe. It gets insulting when I'm asked to pay sales tax on a 40 year old used car in addition to state registration fees, insurance taxes, garage taxes and gas taxes. The state certainly has a role in registration, insurance, road maintenance. The fact that it also has to tax the purchase of something so old is where people inevitably wish they could find ways to cut corner.

  30. #60
    All Worship Ragnarök Loki's Avatar
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    Why does it matter how old the car is? The point of the tax is to collect revenue, not to create some ideal tax that's fair in every way imaginable.
    Hope is the denial of reality

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