Cash Back vs. Rewards Credit Cards

elchrist · Posted: 26 Mar 2004 05:01 PM Post subject: Cash Back vs. Rewards Credit Cards

I have a credit card, you probably do too, so what kind of benefits does your credit card give you?

I own two* credit cards in fact. One is a Visa and the other is an American Express Blue. The Visa doesn't have any type of rewarding system, but my Blue card has Membership Rewards. I really never cared much about what they did for me, just that I had them available in case I needed to make a big purchase.

It wasn't until a few months ago that I looked into my Membership Rewards account that I realized how much I had purchased over time using my American Express Blue. It was a bit frightening, but it's all paid for now, so it wasn't really that bad.

I don't use my Visa much, only when American Express is not accepted.

Back to the incentive systems, the newer kid on the block is "Cash Back." Some credit card companies offer up to 5% in return, but with certain requirements. You normally have to carry a balance (i.e. - pay interest). Although usually it's 1% to 2% on most purchases. American Express' Membership Rewards averages out to about 1%, but you can usually only redeem them at their retail shop.

So is cash back worth it?

I don't apply to credit cards as I've had these two for a few years now, but there is now an American Express Blue Cash. I'm thinking about it.

* Don't even think about pick-pocketing me, since I don't carry my credit cards with me.

verbal · Posted: 29 Mar 2004 03:13 PM Post subject:

Several years ago the father of one of my friends bought her a car with his credit card. Of course, he just charged it and then paid it off by the end of the month. At first I was surprised at this move, but then I got it. This father got tons of frequent flyer miles and got a round trip (first-class) for free.

It pays to be rich.

verbal · Posted: 29 Mar 2004 03:14 PM Post subject:

On a personal note, I do not own a credit card. I learned my lesson many years ago.