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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

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  • My experience with PenFed credit cards is that their points are worth less than $0.01 when redeemed for cash back or statement credit. So, the 5x points for gas and 3x points for supermarkets isn’t quite equal to 5% and 3%.
  • I searched for credit cards with good overall cash-back policies and minimal hassles.
    I didn't want to play games with rotating categories, travel rewards, or some other BS.
    Show me the money!

    My experience with PenFed credit cards is that their points are worth less than $0.01 when redeemed for cash back or statement credit. So, the 5x points for gas and 3x points for supermarkets isn’t quite equal to 5% and 3%.

    There are two different matters here - how you earn rewards (flat rate, special fixed categories, rotating categories) and how you redeem them (cash, miles, unrestricted bill credit, restricted bill credit).

    On the earning side, rotating categories are the most nuisance to deal with. Even here, one can get some benefit by using a card for bills you pay automatically, like a gym or a cable/streaming service. When a rotating category card starts giving more rewards for a category, change your autobilling for services in that category to use the card. Change your autobilling back at the end of the three month rotation period. You don't have to think about categories any other time.

    Fixed categories like PenFed's Platinum Rewards card (gas, supermarkets) let you avoid the hassle of dealing with continually changing categories. You can mimic this effect with Citibank Custom Cash by selecting a single category for which to use the card. Though with fixed categories you still need to remember which card you have dedicated for which category.

    Truly minimal hassle means fixed rate bonus, no limit, no expiration.

    On the redemption side, anything other than cash back (cash or statement credit) or actual frequent flier miles reduces redemption value. If you've got $30 in value that you redeem for a gift card (unless at a discounted price) you'll get $30 of purchasing power in the gift card, but you'll lose the opportunity to earn more cash back when you spend that $30. You'll be using the gift card and not your credit card.

    Then there are redemptions that are worth less than a penny per point. This is a problem with PenFed's Platinum Rewards and even with Fidelity's credit card (if not redeemed into a Fidelity account). It is not a problem with Pen Fed's Cash Rewards card (flat 2% if you have a free Penn Fed checking account).

    Some cards let you get statement credits for full value, but restrict how much you can redeem. This is often tied to travel. Capital One Venture miles can be redeemed for credit against past travel expenses (or for cash at a reduced redemption rate); BofA's travel card restricts mile redemptions to credits for past travel. If you do any traveling this is merely a hassle. If you have no travel expenses at all, this is a major impediment.

    Each person's tolerance for pain (hassle) and each person's spending pattern are different. I'm okay with rotating categories, but only for supplemental cards. I keep it relatively simple by using a primary card that credits me with dollars, flat rate rewards, and no redemption restrictions. Secondary is a fixed category card. Tertiary are rotating category cards, if I remember what the categories du jour are.
  • edited May 20
    Really interesting discussion. I’m swayed by a tough experience in the early 90s where I ended up with way too much credit card / revolving debt. ISTM the bottom was reached sometime after I received a CC that had some type of cash-back incentive. Anyhow, I stopped using credit cards, paid off all that debt over a year or two and then tackled paying off motor vehicle loans. Eventually I began to save. I’m sure that’s an often-told tale.

    That’s when I began living on a written budget, updated once a year. Major expenses like travel, health care deductibles, taxes, new furniture, home maintenance, auto maintenance, etc. are pre-funded with monthly deposits into a bank or money market fund. Those lend themselves to being paid by credit card (which I often do), since every purchase is recorded and the “books need to balance” at year’s end. I believe Elan provides cash back for hotels. Not sure what else.

    Where I have a problem using a credit card is for the “incidental / discretionary” items like food, beverage, media subscriptions, motor fuel, and odds & ends. These are paid with what I consider “pocket money”. It’s the balance in the checking account remaining after making the monthly deposit to cover pre-funded (major) expenses. It’s self regulating. Once the checking account falls to near 0, it’s time to stop spending. Since I receive SS mid-month and a pension payment around month’s end, it works well.

    True, the budget process could be reworked, I suppose, to put more of those “pocket” expenses into the pre-funded camp. One problem is that it’s difficult to set up a one year budget with items that are likely to change during the next 12 months (adding or cancelling newspaper subscriptions for example).

    It remains my belief that most of us mere mortals tend to spend more on incidental items (especially food, beverage, attire)) when shopping with a credit card than with cash. So if my total at the checkout is 5% higher due to the cash back incentive I’m trying to garner reap and the credit card gives me back 2% of what I spent there at the end of the month … am I coming out ahead?

    Do Consumers Tend to Spend More With A Credit Card?
  • FWIW, the Amazon Prime/Chase CC gets you 5% in points back on Amazon purchases, and 2% on many other non-Amazon purchases.

    The points are redeemable at Amazon or for cash from Chase. I always take the cash at Chase and never redeem at Amazon because you don't get the 5% back if you use the points on a new Prime purchase.
  • edited May 20
    “you don't get the 5% back if you use the points on a new Prime purchase”

    Huh? What would constitute an “old Prime purchase”?
  • OK, both Amazon and Chase keep track of your points. You can convert to cash at Chase, or use for additional "new" purchases at Amazon. But if you use them at Amazon, you don't get an additional 5% worth of points. Amazon obviously hopes that you'll spend the points there, as they keep reminding you that a new purchase could be "free" if you use those points.

    Since we have a checking account at Chase, it's very easy to transfer the Amazon CC points as cash to the checking account. But if you didn't have a Chase bank account, I guess that you would almost have to spend those points at Amazon. I dunno about that, though.
  • edited May 20
    Thanks for clarifying @Old_Joe!

    Ahh - pretty stingy of Amazon.
  • beebee
    edited May 20
    Wonder if the 5% monthly credit can be applied to one's month payment at Chase. Never dawn on me that Amazon would disqualify a 5% cash back on purchases that applied the 5% earned credit. Sound like a class action suit in the making.

    Thanks for sharing this frugality @Old_Joe.
  • Well, it's a pretty sure thing that Amazon boosts their price by at least 5% to cover the cost of the 5% that they "give" back if you use their card, and keep if you don't use their card. Somebody's got to pay for Jeff Bezos' new yacht, spaceships, and other good stuff!
  • edited May 22
    I was not following this thread. I received an offer for an Apple Card and it says 3% cash back and no fees whatsoever. Anyone with Apple Card please comment why it is not better than the Fidelity card or even the BoA CC that pays 2.62% on all purchases and many here use. There is no sign in bonus with the Apple card
  • As a frequent Amazoner, the 5% is great. Its statement credit more than paid for a high-end Bosch dishwasher that I purchased locally a few years ago. I only use it for Amazon/Whole Foods but it serves as a 'backup' in my wallet since I'm mostly an Amex guy.

    Otherwise I just rack up points and double-points on my 2 AMEX cards.
  • @BaluBalu - I think one has to jump through some hoops to get that 3% cash back. With the offers I've seen for it the 3% only applies on purchases of Apple products from the Apple Store and certain select merchants (e.g. gas from Exxon & Mobil but not others). Just a heads up to study the fine print before getting all giddy.

    One can also get 2% on most everything if you use Apple Pay on either your iPhone or Apple Watch.
  • @BaluBalu, keep an eye on the news.

    Goldman Sachs had huge missteps into retail - Marcus online and Apple Card, both big money losers for Goldman Sachs. The expanding retail pie for Goldman Sachs to make money never happened. The relationship between Apple and Goldman Sachs may soon end and the new partner may be JP Morgan Chase (others considered were Citi, Capital One, Synchrony).

    So, the current deal from Apple Card may soon change. You may not want to jump into something that may be good for a few months only.
  • edited May 22
    Thanks for the replies. I have a BoA card that pays 5.25% for all online purchases and 3.5% for groceries. Costco Citi membership card which I also use for travel pays back 5% on gas and travel. For everything else (tax payment, health insurance, P&C insurance, etc.) have another BoA card that pays 2.62%. They all are Visa. I will not be getting another card (or an Apple card) unless it is better benefits than the 2.62% BoA card and potentially a master card. I do not have a mental bandwidth for more than 3 cards!
  • About a dozen years ago I had heard on the "Clark Howard" radio show that he thought the fidelity card was one of the best as you could have the 2% reward points automatically deposited into you fidelity roth ira. So that is what I have doing since then. Very happy with the results.
  • BaluBalu said:

    I have a BoA card that pays 5.25% for all online purchases and 3.5% for groceries. Costco Citi membership card which I also use for travel pays back 5% on gas and travel. For everything else (tax payment, health insurance, P&C insurance, etc.) have another BoA card that pays 2.62%. They all are Visa. I will not be getting another card (or an Apple card) unless it is better benefits than the 2.62% BoA card and potentially a master card. I do not have a mental bandwidth for more than 3 cards!

    Each person's needs, spending patterns, and mental acuity differ.

    Your Costco card may have been a special offer that lasted for just a short time. Bach when Costco launched its Visa card in 2016 and and also now, it offers only 4% on gas and 3% on travel. The travel category is fairly restrictive: "you will only earn 1%, not 3%, for purchases made at timeshares, campgrounds, bed & breakfasts and for purchases of train and commuter travel." The Costco card also doesn't seem to include travel benefits like CDW (car rental) coverage, let alone travel protection (baggage delay, medvac, etc.) On the plus side, no foreign exchange fee.

    Costco+BofA works for you. For me, paying up ($95) for a "better" BofA card lets me skip the Costco card. It gives me a higher 3.5% back on travel which it defines much more broadly, including '"timeshares, trailer parks, motor home and recreational vehicle rentals, campgrounds, ... real estate agents, operators of passenger trains, buses, taxis, limousines, ferries, boat rentals, parking lots and garages, tolls and bridge fees, tourist attractions and exhibits like art galleries, amusement parks, carnivals, circuses, aquariums, zoos and the like."

    Since I do a fair amount of traveling (greetings from Germany!), use public transit extensively, and pay HOA fees (3.5% back as "travel" charges), this is a nearly perfect card for me. It also provides fairly good travel benefits, including limited cancellation and delay reimbursements and medical coverage. Unlike BofA's basic credit card, this card has no foreign transaction fees, so I get the full benefit of 2.625% (or 3.5%) worldwide.

    Other cards are gravy. If I can remember the categories for the quarter (Discover), that's just a bonus. Driving just 1,000 miles/year, I can live without a card that is good for gas purchases. Figuratively and literally, YMMV.

  • I have multiple cards and am OK with going the extra effort to get the quarterly bonuses. Since I tend to use Apple Pay, I don’t have to worry about carrying an overstuffed wallet.

    On an ongoing basis, I have:

    Citi Double Cash: 2% on everything
    Citi Custom Cash: 5% on groceries
    US Bank Cash +: 5% on Utilities (electricity, water, trash service, sewer) and Internet, Cable, & Streaming Services

    Quarterly Bonuses for Q2:
    Discover: 5% on Gas & Home Improvement stores
    Chase Freedom: 5% on Amazon & Restaurants

  • edited May 24
    @msf, I do not travel or drive much, even when I was working, though my job allowed one to live on planes. I drive so little that I have not changed oil in my car in 5 years. I bought a few plane tickets on the Costco Citi card in the past year. I misspoke about 5%; it was 4%; I have to carry the Costco Citi card as it works as a Costco membership card. I forgot which cards dropped CDW coverage; hopefully I will remember to check next time I need it but my car insurance covers CDW on rentals. I try not to use more than 2 CC of my own in a month as I am asked to manage other family members’ affairs.
  • Change your oil
  • @davidrmoran - +!. Cheapest car insurance there is.
  • edited May 24
    Regardless of mileage, engine oil should probably be changed at least once per year.

    Can I change oil every two years?
    "No. Almost no automaker recommends that oil should be left in the crankcase for more than one year—no matter the mileage."

    "It’s not just about miles: If you don’t drive your car a lot, your oil still needs to be kept fresh. Even if you drive fewer miles each year than your automaker suggests for changing the oil (say, 6,000 miles, with suggested oil-change intervals at 7,500 miles), you should still be getting that oil changed twice a year.
    Why? Oil becomes less effective as it ages, and by not getting the engine warm enough, excess moisture that forms in the engine will not be removed, which can lead to shorter engine life."
  • Why do the newer cars tell one when they need to change oil? My Dad’s car, 12 years newer than mine, has not told him to change oil in the past two years. My car manual does have time bound oil change schedule but I have ignored it when I found out about my Dad’s car manual not having a time bound requirement for oil change. I will think about changing in the next few months.
  • Because it is figuring on miles, not time. When AI advances, it will tell you when your oil turns to jelly, which is about after a year.
  • edited May 25
    Oil change schedules depend on the model of car and type of oil (regular vs synthetic). Many imports/foreign brands have longer oil change schedules and use lighter oil (0W20, not common 10W30). Oil life meters (in newer cars) are estimates based on miles driven, number of starts/stops, etc. If my oil life meter is below 30%, I start to think about oil change (it' s usually time) - I don't let it go to 0%. Low-Oil indicator is a serious warning - just drive to the nearest gas station or call a tow truck.

    Car manuals indicate schedules for normal and severe driving. Many don't realize that low-mile, stop-and-go driving is actually severe driving. Engine doesn't get warmed up enough to burn up the condensation, and moisture accumulates in the oil pan (some start overflowing) - as the saying goes, oil and water don't mix, and in the crankcase, there is lot of stirring/churning. That is why schedules indicate miles or months. Regular oil also degrades with time, less so for synthetic oil.

    Oil changes have other benefits. The shop may alert one to various leaks, rusting emission system, poor tires, etc. Moreover, not following oil change schedule can void car warranty (so, keep receipts so long as the car is under warranty).
  • edited May 25
    I have always used recommended grade synthetic oil, even though my car manual requires regular oil. I just pay more to allow me to be lazy! (My car is 24 years old.)
  • Car manufacturers’ maintenance schedules generally have a specific time or mileage interval for oil changes. My car specifically says to change the oil after every 10k miles or 1 year, whichever comes first, for normal driving (and also requires a specific grade of synthetic oil). It’s cheap insurance, particularly while I’m still under warranty.

    Many oil change and car service places (particularly stealerships) put a lower mileage interval on their next service stickers than what the manufacturer prescribes. It’s unnecessary and a form of service churn.
  • @MrRuffles +1 Arnold proudly proclaimed , " You can pay me now or you can pay me later !"
  • edited June 16
    I used to be fanatical about oil changes. Up until around 2005 I did my own - crawling around under the pickup or driving my small cars up on ramps to work underneath. A couple things changed. Vehicles got lower and lower to the ground making it very difficult to work underneath. And tolerances (the acceptable degree of harmful “slack” or “play” on internal engine components) got narrower and narrower as better tooling / techniques evolved. This led to greatly reduced wear on internal components, reducing the need to change oil as frequently. At the same time, oils improved and synthetics (even better) came into common use. So the manufacturers gradually extended the oil change intervals from a few thousand miles in the 60s to (a guess here) 10K or more today.

    I don’t pay attention to dates or mileage anymore because my 2018 Honda (like most new vehicles today) monitors oil changes and dozens of other service items, alerting me when it’s close to time for service. The system monitors not only miles driven, but things like outdoor temps, total number of days, idling time (hard on engines), speeds driven, number of stops & starts, ad infinitum. Much better ISTM than any prescribed limit based on miles or time. That said - I’ve yet to see a vehicle manual that doesn’t tell you to change the oil at least once a year. That’s in part a nod to the fact that over time compensation condensation (water) can form inside the engine and contaminate the oil.

    One note: For “severe service” conditions - things like driving in mountains, pulling a heavy trailer, or driving extensively in high temperatures - the manufacturers do reduce the allowable time / miles between oil changes.
  • That’s a nod to the fact that over time compensation (water) can form inside the engine and contaminate the oil.

    Do I receive compensation for observing that the risk is water condensation?:-)

    The first time I brought our car in for annual servicing, when I picked up my car they told me they didn't change the oil (even though I had requested it) because it was completely clean. They said they would have felt guilty charging me so much for an unneeded synthetic oil change.

    The purity of the oil was no surprise - I drive around 1,000 miles/year. But since that first servicing I always tell them that I don't care how clean the oil is, change it.

    An even more tangential question - how often do you replace tires? I used to drive 18,000 miles per year, so it was easy - buy tires when the old ones wear out. But now, there's no wear. I've read that the rubber is only supposed to last six years or so. If I replace tires every six years, at 1K miles/year I won't ever have to rotate them!
  • It is the same with shoes. You should wear them at least once in a while; otherwise, the soles will just crumble. I stopped working soon after I bought a couple of pairs of formal, expensive shoes. When I took them out after a few years, the soles did not hold together.

    After 7 years of buying my tires, once a year, I asked the Costco tire center person for his opinion if I need to change the tires. After 10 years of use, the Costco person said I should change because he noticed weak spots developing on the side of the tires.
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