Miles, Points or Cashback ?
 

Hello All,
I am new to this site and just paid off my credit cards. I would now like to start paying them off in full each month and earning rewards.
I have read a few posts here about what people use for everyday spending cards, for example.
There are a lot of cards out there offering a lot of things - however I am not sure when it comes to travel which is best - the miles, points or cashback - or just mix them up and whatever ?
I have talked to people who only go for hotel points for example, and then end up with free places to stay all over the place.
Maybe hotel points are best ? And just pay for the air ?
Anyway, I was wondering what everyone thought, miles, points, or cashback programs.
Not sure which cards to start with !
Thanks !

Also - I have been told it is best to select one airline and hotel chain and stick with those to get max miles/points. Any thoughts on that ?
Thanks !

Hi, I think it largely depends, on what your goals are. Overall best bet with good signup bonus: Chase Sapphire preferred. The signup bonus (after minimum spend) can become :
1)43000 United miles (roundtrip to Hawaii in coach),
2)43000 Hyatt points ( almost enough for 2 nights at their top properties)
3)430 dollars in cash
4)540 dollars for cruise , airfare or hotels.
Only you can decide, which option suits you best. Regardless, unless you
spend a ton on credit cards, your best bet is to regularly sign up for new cards with large
bonuses,which give at least 400 dollars in value upfront. Use your purchasing power toward minimum spend, if your credit score allows it and if you don't plan on getting a mortgage soon. This site and some others will have more info on this.

The best strategy is to sign up for new credit cards, meet the minimum spend requirement to get the signup bonus, then cancel them before the end of the fee-free year.

Consider that a typical card (Chase Sapphire Preferred, noted in earlier post) might give you 40,000 points for signing up, the same as spending $25-$30,000 with a lot of the spend in bonus categories.

In order to do that, you have to (a) have a good enough credit rating to handle it; (b) be willing to do the paperwork and recordkeeping, and (c) be able to spend (or manufacture the spend) to meet the minimum requirements.

If you do that, you can accrue fairly large amounts of all types of points and miles - although I'm not going to say if it's "hundreds of thousands" or "millions."

If the choice is cashback or points, then I'd say:

a) The best cashback card give 2%
b) 2 cents per point is more than most miles or hotel points will be worth, unless you redeem for international business-class travel or very high-end hotels.
c) You are usually not going to get big "signup bonuses." You may get decent quasi-cash point bonuses with some Capital One cards, but no "2% cashback" card is going to give you 40,000 points, worth $800, for signing up.

I've personally earned between 1 and 1.5 million points/miles in the past 18 months. But I have a wife who lets me use her name and doesn't interfere, we both have great credit scores, I don't mind keeping track of this stuff, and we spend enough (real and "manufactured") to make it all work. Some of the "manufactured spend" tricks require working capital - like you might have $5000 or $10000 floating around between accounts.

Not knowing your actual situation, I can't make a recommendation.

Ahhh that sounds amazing !! Ok so a few more details.
We do have the ability to float money around as you detail. We also can spend free and clear 2+k per month on the cards on normal spending (gas, food, whatever else). Currently we do this on our Discover card. I figure we could do better after reading a lot of these forums ! I suppose I could also sign up to pay some bills with the cards ? Or do you guys not bother with that ?
I am not sure I understand the "manufactured spend" but would be glad to read up on it. I am guessing you are talking about for example how I read that you can buy dollar coins with your credit card and then just go deposit them in the bank or spend them ? I am not familiar with other examples.

My only concern is how you mention opening a card, then closing it. Doesn't this activity look bad on your credit report ?

Thanks so much ! I am very excited !!

For more detail on manufactured spend, look at the Manufactured Spend sub forum. Big, easily accessible opportunities are Bluebird and Amazon Payments. Those alone should allow you to hit any sign up spend requirements.

As for points vs miles vs cash, you have to come up with your own valuation for points and miles, which could vary by airline/chain. I generally value miles at 1.5cents across the board, which is conservative. Some people say they redeem for biz/first international flights so they divide the cost of that flight by the # of miles an come up with much higher cpm valuation. For me, I know I would only book economy when paying for a ticket, hence the lower valuation. Once you've decided how much various points and miles are worth to you, you can answer any value proposition yourself. I.e., what's the best card for everyday spend? For me it's one of the 2% cashback cards. If you value, say, United miles above 1.9cpm, the Sapphire Preferred would be better than a 2% cashback card.

If you are just starting out, you probably don't want to apply for a bunch of cards, that
require manufactured spend anyway, at this point. IMO apply for one or 2, sign up for www.creditkarma.com and see what happens to your score. Go slow , its easy to get greedy in this hobby! I suggest , you have a clear plan , on what you want to do with points. I also would recommend, you stay away from hotel points earning cards, unless
you have specific goal for an upcoming stay. Your best bet are flexible points, that can be converted, or just straight cash. Barclay's Arrival card with 40000 points bonus is a great card , that is not hyped enough , for some reason.I suggest , you check Creditkarma.com and if your score there is around 750, apply for 2 cards in this order:
1)Barclay's arrival
2)Chase sapphire preferred
Your minimum spend is 4000 dollars in 3 months, easily done with your normal expenses.

My [unorthodox, LOL] opinion is that the best card is the one that gives you more in sign up bonuses. What kind of card is irrelevant, IMHO.

I agree about starting slow. This is what I would suggest.

1. Don't bother with manufactured spend yet except Amazon Payments because it's a supereasy way to add $1K a month to your spend capabilities.

2. Sign up for Credit Karma and Credit Sesame first to monitor your credit score. Credit Karma monitors Transunion while Sesame monitors Experian.

3. Apply for a couple of cards first to get your feet wet. I liked the suggestion about Arrival and CSP.

4. Watch how your credit score plunges 5-10 points then recovers 3 months later. Get a feel of how it works.

6. Meet spend requirement.

7. Enjoy your bonus. Even if you choose the most primitive redemption in cash (you shouldn't), you have just earned $840 at a minimum. Try that with cashback!

8. Read, read, read and do not be afraid to ask questions. Yes, there are folks here who love nothing better than snap at newbies. Don't mind them.

9. Repeat 4-6 months later with more cards.

I agree completely about picking the card with the best sign up bonus, thats
all we do. Our spending is around 1600 per month, and very rarely I don't have some spending threshold to meet on a new card. As far as Credit Sesame, at least in my case , it paints much rosier picture, than reality.I
just bought my actual Experian score for comparison, and it was 50 points lower than Sesame. Still 760, but gave a me a pause for sure.I found
Credit Karma tracks Transunion more closely. I think its important to remember , that the score will be affected more, if the credit file is thin
and history is short. I don't know the OP situation, but its just more prudent to start slow, regardless.Also, try to charge everything you can on the cards:
power bill and so on. It may even be worth it to pay a fee occasionally, if
you can meet the spend easier.

Thank you so much everyone for the information !! I have been reading about the bluebird thing. One thing that confuses me is all the acronyms - I don't know what a VR is or UA MS or a few others. Is there a list on the site somewhere ? :)

So is it fair to say that in general, you guys have like two cards you are running with at any one time ? Get the intro package points, then move on ?

The tough one is the rotating 5% points - they have long periods (like right now) of spending at Home Depot for example, which I just don't need to do. But gas and groceries are a good one for sure. That is like 1k a month for me alone.

I assume once you collect a sign up bonus and cancel the card, that you cannot then apply for that one again. You need to always be applying for cards you have never had before ?

I personally do try to go out of my way for 5 percent bonus categories, but not my husband. I just put the new card in his wallet, that requires minimum spend to get bonus.
Thats the extent , to which he is willing to deal with my little hobby. In exchange I get to use his excellent credit! Some spouses are into it, mine is not, but thats OK. Just heads up on not
annoying your significant other too much. As far as to cancel the card or not, that depends. If it has no annual fee, I usually keep it to add history. Also, some cards, like
Chase Priority card, gives an annual hotel night anywhere in exchange for 49 dollar annual fee. No brainer:keep the card.Some are tougher to make the call. I am actually
debating whether to keep my Chase Sapphire preferred, when 95 annual fee hits soon. Sure,
it provides great transfer opportunities, with my favorite being Southwest rapid rewards.But, as I mentioned , we switch the cards around to collect new bonuses, so
I probably will cancel this card. Generally, I will only pay the annual fee, when it gives
me something in return upfront, like free hotel night. As far as repeat bonuses, some you can get again. Example:CITI American Airlines card . Their T and C say, the bonus
is for new accounts. I interpret it to mean , its OK to close a card and than get another,
generally 2 years apart. And indeed, thats what people report.Chase generally gives
1 bonus per card, but they have a LOT of rewards cards, which would take awhile to go
through. Chase has the best offers, which is why I recommend you start building history with them. And you can always double dip, by signing up your spouse for her own card
later on, once you collect the bonus. In fact, I recommend, you alternate applications
between the two of you, if both credit scores are high.

I agree that every person has differnet needs/goals....but I'll jump in and generically recommend:

1) Get a 2% cash back card (Fidelity Amex?). You can use this for all 'non-bonus" spend to know you're getting at least 2% cash.

(2 and 3 are in no particular order)

2) Crush the Chase "swing through" of the Sapphire preferred, Marriott, and all the "Inks", hopefully with the ability to legitimize a business to get the business cards as desired. (The chase points are nice in that you can combine you and your wife's account. This could easily net 200,000 UR points between you and your wife, + the Marriott points

3) Continue crushing by moving on to AMEX. Do the Starwoods, Golds, and Deltas, and, if at all possible, hit the business versions of each. This can net about 100,000 SW points, and a couple hundred thousand Delta points easily (between you and your wife, with business cards too).

4) If you're at all a fan of Hilton, you and wife can easily take them for 300,000 points combined by hitting the Citi and AMEX Hiltons (Don't forget to repeatedly signup/cancel the citi hilton to keep getting 40,000 points/hit, and, again, do the business cards if possible).


Based on 2-3K spend/month, the above will keep you entertained for quite a while, and will net a bunch of gravy...

If you are spending $1000 out of $2000 on groceries, you are either buying for a family or a small zoo. Either way, you should look at the AMEX Blue Cash preferred. $75 annual fee not waived, $250 cash for spending $1000 in 3 months, 6% cash back at grocery stores up to $6000 per calendar year. If you get it soon and put 6000 on it this year and 6000 next year before the annual fee hits, that's an easy $895 cash. I would (if you're comfortable juggling 3 cards) apply for the Barclays Arrival, Chase Sapphire preferred OR United Explorer with 55K bonus, and AMEX Blue Cash Preferred, in that order, all in one day.

6% of 6,000 is $360. How does that equal $895 in 2 years? Also, the fee is not waived, so the upside (long run) of the $360/year is really $285 after the annual fee.

What am I missing? It seems like with the $6,000 limit, this is basically peanuts, and you could do much better crushing the bonuses...

But, again, I imagine I'm missing something...

never mind