RedSun

Steve, you are 100% correct. We move on...

roundtree

I would think for most that it never makes sense to compare the Costco Visa with earning 5x on Freedom, because UR points can be worth so much more than $0.01/point. But your point is an important one to remember in the miles & points game, i.e. anyone wanting to see if it's worthwhile needs to do the cost benefit analysis for themselves.

mroseman13

I opened up my Chase Pay app for the first time in a while and noticed that in addition to using a QR code to pay, there's now a link to Pay with Samsung Pay. If I link to Samsung Pay via the Chase Pay app, any chance that'll come through as the 5% for Chase Pay linking me there? That'd really expand the options infinitely for next quarter.

jeffersun

that's the assumption by most

mia

Every choice has an opportunity cost. I believe Steve in Olympia's point is that converting a $0.04/dollar transaction to a 5 UR point transaction is less rewarding than converting a $0.01/dollar or $0.02/dollar transaction. If anyone disagrees with that I would love to see the reasoning.

RedSun

Here is Steve's original statement. From this and all subsequent posts, I get that: Citi Costco Visa gives 4%, it is just 1% lower than Freedom 5% (or 5X). So the 1% difference is so small. And that Citi's card limit is $7,000/year and Freedom limit is lower at $6,000/year. So he prefers to use his Costco Visa card and the Freedom card is not worth using.

4% CASH BACK ON ELIGIBLE
GAS WORLDWIDE,
INCLUDING GAS AT COSTCO,

for the first $7,000 per year
and then 1% thereafter

If in deed this is what Steve was comparing, I'd be the first to disagree. Converting $0.04/$ reward to 5x UR/$ is hugely rewarding than converting a $0.01/$ or $0.02/$ spending. If you value Chase UR conservatively at $0.015/pt, you pick up $0.035/$ ($0.04 to $0.075). If you value US at $0.02/pt, you would pick up $0.06/$ spending....

It is no-brainer to max out the 5x UR first. I'd be hard working on that, night and day.

mia

Fortunately, that is not what I wrote.

roundtree

Obviously, not everyone values UR points the same way. I certainly value them much more than 1.25 or 2 cpp, so it's a no brainer to me. For me, the math is the reasoning.

mia

This issue is not the value of UR points. It is the value of the rewards you are already earning on gasoline versus the value of the rewards you are already earning in another category.

RedSun

Even if you use Discover to shop at Costco, you still just earn 5%, not 5x UR points, which is worth about 10% on $ spending. Sure, if you can find another card which earns 10% cash on gaseline, definitely use that card. I'd like to find that card too.

Also, this Freedom 5x UR is all about the value of the UR. If UR is worth $0.01/pt, then there is no difference of Freedom vs Discover vs Citi Dividend vs other gasoline CCs.

mia

I have such a card, but it is not important for purposes of this analysis, because we are not discussing you or me or any specific person. We are discussing how to make a decision.

Freedom bonus spending is capped at $1,500. If someone switched $1,500 gasoline spend from earning 4% to 10% they would gain $90. If instead they switched some spend which otherwise earns 2% they would gain $120, -and- they would still earn 4% on their gasoline.

RedSun

I do not recommend your approach on this. You are chasing moving targets since you are chasing relatives. There are too many combinations. This is what my approach is:
1. I get a set (deck) of CCs.
2. I detail the earning % of the lead CCs.
3. I build a set of constrains of the lead CCs. such as Discover $1,500 for Costco, etc.
3. I build a optimizer, or maximizer on my total quarterly reward $$. It is like this
Total = $1,500 x 10% Freedom + $1,500 x 5% Discover + ..... +......
4. The optimizer can be manual, or I can write a computer program to automate it.
5. The goal is to maximize the total $$. I do not care of the relative earning of a single individual CC.

In mathematical term, it is a linear maximization within a set of constrains.

It is not a hard decision to make, if you are not an engineer.

Diplomatico

roundtree

Indeed, very true under most quarters. But who would naturally move $1500 of spending from CVS or Duane Reede to Walgreens for a quarter? Even adding Chase Pay would likely force people to buy gift cards to max out. I certainly do that myself.

Your point is valid in the reverse too, since there's a $7000 yearly cap on gas spending with the Costco Visa.

The other consideration is whether CFU would be a better choice than Costco Visa. No question that depends on how one values UR, but that's off-topic.

RedSun

I get 3 types of 5% (5x) category spending CCs. Citi Dividend, Discover and Chase Freedom. The plan is:

Citi Div: Best Buy and Dept Store. Can't even max it. It occupies those slots.
Discover: Amazon & Wholesale Clubs. Get a couple of CCs. Plan to split between the two and max out.
Freedom: Dept store, wholesale club and Chase Pay. Get several CCs to max. Dept store is out. Wholesale clubs taken by the Discover CCs. Try to max out with Chase Pay, or squeeze in with Costco.

The non-category spending like gasoline would not come into play if I max out both Discover and Freedom. It is only secondary considerations. Then I max the optimal $ and UR points.