Recently, I've gone down the credit rabbit hole but in the back of my mind I've been wondering if optimizing your system is really worth all the time and effort? I can see how the hobby can be enjoyable in itself but I was wondering how big the upgrades really get.
Doing some quick napkin math, maybe the upper end of how much you spend on your credit cards is around 2k/month. Again, I'm a beginner so not really sure what a "good" rate back is but 3% seems like a generous rate to aim for. 3% of 2k -> $60 back a month (or $720 a year).
Now considering most people can just get a 2% cash back card and get $40 (or $480 for the year) with 0 brainpower, I'm wondering if the extra $20 is really worth the effort of managing multiple cards and staying on top of the perks of different cards?
Not trying to diminish the hobby, just genuinely curious about the "upper limit" of how much value you can get out of putting effort into your credit cards. Is my napkin math wrong in some way? Is 3% too conservative of a cashback rate? I'm not super well-versed with travel rewards so totally possible that I'm missing something of value there. I also didn't consider churning/SUBs and I'm not sure how significant a factor those are.
Would love to hear any stories of how optimizing your credit cards has been especially helpful if or if you do think it's just a fun hobby without a lot of intrinsic upside.
I'm pretty young so I only have the Chase Freedom Unlimited and Amazon Prime Visa cards. CFU because it's a solid cash back card + 3% on drug stores and dining and eventually, with a CSR or CSP, I (think) I can transfer the points and get some good travel rewards. I have Amazon Prime Visa because my family/extended family shop at Amazon a ton + I use Amazon Fresh + I'd have Amazon Prime regardless+some of my favorite shows are on Prime Video.
Does optimizing credit cards matter that much?
byu/Cirrus20M inCreditCards
Posted by Cirrus20M
5 Comments
I don’t consider adding an additional card or managing multiple cards to be much effort. It’s fairly easy to remember your card bonus categories and benefits. So for me maximizing return on spend is worth it.
To me it’s just a hobby, or “good to have”. After losing 200k from company granted RSU dropping price in one month, credit card rewards is like nothing to me.
I wish I started sooner
It depends on how hard you want to squeeze for every last drop of juice.
If you have a player 2, can they remember to use one of X cards for some oddly specific category or do they need a catch most card like the Amex BCP and a Citi custom cash where they can at least know custom cash for dining and BCP for everything else.
How bad is another card to chase an extra 1-2% on a category that’s already covered?
Example: BCP is 3% on gas but PNC has a card with 4% on gas or you could custom cash for 5% on gas.
In the end, it’s just some simple math to check spend and savings, but the complexity is building the setup and getting another person to follow it.
For me, chasing SUBs at a healthy rate (1 new cars every 3-4 months, alternating biz and personal) has a much higher ROI than optimizing.
Long term? Amex BBP is free and earns 2x bank points on everything. CFF is free and earns 3-5x bank points on categories. I find those more valuable than cash, especially when I can get stuff over 3cpp.