M$ in relation to your income.

Old Mar 18, 15, 8:36 pm
  #1  
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Question M$ in relation to your income.

Some backround:

I have been involved in MS for a couple months now. I had a Serve and now I have a RedBird. If I want I can get a second RedBird. In less than a month, due to my credit FINALLY being 100% clean I am going to get 1 Amex card and a few Chase cards to start really churning.

I only make $33,000 per year, but I have a VERY large amount of money in my savings account. I do not over spend when doing MS and I am still able to live normally if, say, $10,000 gets held up in an investigation.

Now with all that being said, If I am spending over $60k per year wouldn't the CC companies think that seems odd? What about if I got another RedBird and I run over $120k? The Amex can add even more at grocery stores.

I suppose the one main question I have is, in your opinions, what is a reasonable amount of MS for someone who makes $33k per year?
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Old Mar 18, 15, 8:54 pm
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Originally Posted by pwd847 View Post
Some backround:

I have been involved in MS for a couple months now. I had a Serve and now I have a RedBird. If I want I can get a second RedBird. In less than a month, due to my credit FINALLY being 100% clean I am going to get 1 Amex card and a few Chase cards to start really churning.

I only make $33,000 per year, but I have a VERY large amount of money in my savings account. I do not over spend when doing MS and I am still able to live normally if, say, $10,000 gets held up in an investigation.

Now with all that being said, If I am spending over $60k per year wouldn't the CC companies think that seems odd? What about if I got another RedBird and I run over $120k? The Amex can add even more at grocery stores.

I suppose the one main question I have is, in your opinions, what is a reasonable amount of MS for someone who makes $33k per year?
In my opinion, they do not care unless if you are abusing bonus categories.

If you get a card that is 2% on everything, they obviously want you to use the card. That is how they make money. They don't care what you buy with it. The more you spend the happier they are, as long as you pay them back. They don't care whether you make $33k or $330k or $3.3M. All they care about is that you use the card (the more the better) and pay them back. There are trust fund kids who make $0 and put hundreds of thousands, or even millions on their CCs. The lenders probably like them better than anyone else.

On the other hand if you get a card that is 1% back on some things and 5% back on others, and you put several times your income on the 5% category, and close to nothing in the 1% category, they will probably shut you down. Not because they really care what you are spending it on (although that might be what they claim) but because they are losing money on you as a customer, and why would they want customers who cost them money? The 5% categories are loss leaders. They are hoping that you will carry the card and use it for everything, and they will make money off you in the aggregate. If that doesn't happen, they have no reason to keep you around (especially if they are losing a significant amount to you).
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Old Mar 18, 15, 9:09 pm
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Trust fund babies. OK that makes perfect sense. Now, what about the IRS? They don't have access to the amount you spend do they? I'll assume not. But what about depositing all the MO's?
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Old Mar 18, 15, 9:11 pm
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Originally Posted by VegasGambler View Post
If you get a card that is 2% on everything, they obviously want you to use the card.
This is so wrong lol.
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Old Mar 18, 15, 9:46 pm
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Originally Posted by hti5t45 View Post
This is so wrong lol.
Hold up - if they offer the card at all, they want you to use it.

If they don't want you to use it, they don't have to offer it or approve you.
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Old Mar 18, 15, 11:47 pm
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Originally Posted by hti5t45 View Post
This is so wrong lol.
So you think that if you make $10M per year and have good credit they will turn you down for an Arrival+ or a Double Cash card? Or do you think that they close your account if you use it for everything (say, $1M per year)?

Of course not. They don't care. They are making money off your spend. The more you spend, the happier they are.
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Old Mar 19, 15, 12:19 am
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Originally Posted by VegasGambler View Post
So you think that if you make $10M per year and have good credit they will turn you down for an Arrival+ or a Double Cash card? Or do you think that they close your account if you use it for everything (say, $1M per year)?

Of course not. They don't care. They are making money off your spend. The more you spend, the happier they are.
You do realize that different merchant categories have different fee percentages right? Putting an outsized portion of spending at a grocery store, typically the merchant category with the lowest fee, on a 2% card is going to actually cost the issuer money. Someone that spends, say, $300k a year at a grocery store and little to nothing else on a 2% card is going to cost the issuer thousands of dollars.

Here is MasterCard's, the payment network of both the cards you listed, fee category breakdown: http://www.mastercard.us/merchants/_...rand.Level.pdf
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Old Mar 19, 15, 12:57 am
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Looks like money laundering? The Treasury Department will want to know.
Doesn't anyone remember what happened in the 80'2 when United cracked down on mile abuse. There were thousands of people that lost thousands in $$$ and miles.
Don't profess to know what companies are trying to do with merchant fees. you can justify everything until the boom gets lowered.
BE CAREFUL
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Old Mar 19, 15, 1:51 am
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Woah, woah, woah. Kinda crazy and off base stuff here. This is a common question and there are dozens (hundreds?) of threads on this same issue.

The credit card companies do want you to use their card...and a lot...but only to the point where they think there is no risk. You start spending more than the average spender and they get scared. It's the outliers that cost the banks money so they are on high guard for that. Of course there is no magic number....it's a very complex formula and each bank has it's own philosophies on how they manage risk. I wouldn't be the guy to best explain that part.

The point in relation to this thread---You want to look as normal as possible---while increasing the spend as high as you might want for MS. My only hard and fast rule is always pay your bill and pay on time. Beyond that everyone has their own theory and strategy a little bit.

I will tell you that your spending activity has no bearing to how much money you actually have (they don't know) and mostly no bearing to how much money you make. But even making $33k per year you can mimic the spending amount of someone making 2-3x your income and raise no red flags. Whereas the banks don't have a good handle on everyone's income or assets---they have all of your spending habits on lock down. Tons of money was spent to develop credit reports and credit scores and banks rely heavily on this data. So when it comes to credit--make sure you manage your credit properly.

I hope this helps. It's late so it's not my most well written reply but it should be of some use.
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Old Mar 19, 15, 4:44 am
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I did search for threads on this topic. Maybe I worded it wrong. All very interesting points. I had planned on maximizing my spend on Chase cards but maybe I should mix it up a little with Citi and Amex as well. That way I can still churn $100k while only putting a fraction of that through each issuer.
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Old Mar 19, 15, 5:42 am
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Income poor and cash rich suggests credit card initial bank deposits, KIVA funding, Citi Gold accounts (to lower card cost) and debit card plays. Diversify your cards across banks and your MS by activities.

As to what is a reasonable amount of MS for someone who makes $33k per year, it depends only on your effort and craftiness.

Originally Posted by pwd847 View Post
Some backround:

I have been involved in MS for a couple months now. I had a Serve and now I have a RedBird. If I want I can get a second RedBird. In less than a month, due to my credit FINALLY being 100% clean I am going to get 1 Amex card and a few Chase cards to start really churning.

I only make $33,000 per year, but I have a VERY large amount of money in my savings account. I do not over spend when doing MS and I am still able to live normally if, say, $10,000 gets held up in an investigation.

Now with all that being said, If I am spending over $60k per year wouldn't the CC companies think that seems odd? What about if I got another RedBird and I run over $120k? The Amex can add even more at grocery stores.

I suppose the one main question I have is, in your opinions, what is a reasonable amount of MS for someone who makes $33k per year?
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Old Mar 19, 15, 6:31 am
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I don't understand why KIVA even exists if there is a 1.5% chance that the loan will not be paid back??

I already have 4 savings accounts and 2 checking. I don't want to add anymore. My main savings is already earning 0.99% in an Ally Bank account. I doubt Citi can even come close to that.

As far as debit card plays, do you mean buying VGC's from grocery stores and Staples? I also have been crunching numbers for buying Amex GC's through TopCashBack and turning those into VGC's.
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Old Mar 19, 15, 7:23 am
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I ran a business on CCs for many years, spent over a million a year, for over 20 years,

Never had a problem.

As long as the CC bills are paid no problem.

Gross income, and net income are 2 different things.
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Old Mar 19, 15, 7:54 am
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Originally Posted by pwd847 View Post
I don't understand why KIVA even exists if there is a 1.5% chance that the loan will not be paid back??

I already have 4 savings accounts and 2 checking. I don't want to add anymore. My main savings is already earning 0.99% in an Ally Bank account. I doubt Citi can even come close to that.

As far as debit card plays, do you mean buying VGC's from grocery stores and Staples? I also have been crunching numbers for buying Amex GC's through TopCashBack and turning those into VGC's.
You are wrong about Citi. The have decent opening bonuses and let you fund by credit card when opening. If you have 2% cash back, thats an instant 2% for money that s locked up for 4 months (if you dont want to pay a fee). Forget that the rate is .01%, you can just keep opening accounts. I believe the credit funiding is up to your limit, just keep in mind that you will probably have to call teh bank and explain, to get it aproved, if large "purchases" are unusaul. I hate Citi and I love them. They give you all these unusaul benefits but pay nothing in interest. ANd runour has it, if you have a citi gold account, they let you pay you citi credit card with a debit card.
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Old Mar 19, 15, 7:55 am
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Originally Posted by pwd847 View Post
But what about depositing all the MO's ?
there is already a thread covering such
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