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"FU^%ING" Credit-Cards!!!

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SilverSolder:

--- Quote from: DrG on June 29, 2020, 06:27:57 pm ---
--- Quote from: SilverSolder on June 29, 2020, 04:45:05 pm ---
--- Quote from: DrG on June 29, 2020, 01:05:41 am ---
--- Quote from: Halcyon on June 28, 2020, 10:40:32 pm ---
--- Quote from: SilverSolder on June 28, 2020, 07:51:05 pm ---Here's a good tip for you:   Go into the gas station and buy gift cards for that brand of gas station, using your credit card (and getting 2% or 3% back on that, depending on your credit card).   Then, you use the gift card at the pump -  which gives you the cash price!   Now you are almost 10% better off.  Do that over a year, and it adds up to a nice bit of tech gear off eBay, or a dinner, or whatever,  with almost zero effort.

--- End quote ---

I use a fuel card issued by Caltex (Chevron). That automatically gives me 4c per litre off fuel every time I fill up. Yes, that locks me into using their service stations, but I find it convenient as the routes I frequently travel all have Caltex service stations anyway. Plus I use the Australian Governnment's FuelCheck application on my phone which gives me live pricing for any service station in the state, so I can go to the cheapest one in the area I'm in (or plan ahead if I know I'm going to be somewhere in the coming day or two) in order to get the cheapest price. I generally fill up once then take reaches 50% so I have a buffer if fuel pricing is at its high point.

--- End quote ---

You know, that is really the key...balancing what is convenient with what is the best deal. A CC that I use gives me only a 1% rebate, but on everything. Every couple of months they offer a higher rebate on some merchandise class, but it is painless to activate - no doubt they are keeping email lists updated and so on. My point is that I am comfortable with it and I don't want to go chase a 2% rebate and go through any headaches.

I don't bother with those gas deals but I understand doing so if it is convenient.

I guess what I am saying is that I really do not enjoy all this financial crap, it is necessary and I try to do a reasonable job of due diligence and then make a decision, only occasionally revisiting the topic. No doubt I have missed out on some deals, but financial stuff is somewhat aggravating because nobody is giving anything away and we all know that.

--- End quote ---

Last year, I generated almost $2,000 cash back by using the right credit card at the right time - shamelessly maximizing the use of those "special offer" categories, paying everything I can with a credit card (including utilities, taxes, you name it).  Once you've thought out the strategy, it really doesn't take any extra time - and the money you get, is totally tax free so actually worth a lot more than if you had earned the same amount at your job! 

It is a mistake to ignore the small but completely risk free returns of 1% - 5% that you can get by just bothering to bend down and pick the money up!  :D

--- End quote ---

Terrific that you can do that. I participate, but not to that extent and, yes, you are right about "bothering to bend down and pick the money up!", but I am not as dedicated as you.


You are making me feel a little guilty  that I'm not doing more, but I think I have the right balance for me. :-[ and that balance includes listening to how other people do it so I might pick up something new and helpful for me.

When I look at a CC card, there is a ton of crap to consider. All of them have privacy (or lack of privacy) policies that are updated continually and no normal human being should take the amount of time and study to understand them to the point of deciding which is better - the assumption is that they all suck on that because they make money selling your details.

Then there is an annual fee - that is a deal breaker right there, because I am not paying an annual fee to use a CC. Historically, there was a time when certain cards were status symbols in the days of upward mobility and yuppies (Gen Z, millenials and Gen X, please consult a Wiki) and all that crap. It never interested me and I was fine to use a no annual fee card even if the type suggested that I was not at all upwardly mobile :). Now days, they are the rule but there was a time when they were an exception.

But even then, there could be some incentive connected to the card which might make it worthwhile..e.g., ....If I KNOW that I am going to be engaged in air travel for the year and they are offering a big-ass miles bonus for getting the card, plus miles per dollar....now, I have to calculate the expected price of the tickets and so on - blackout dates - special crap that you don't find out until you spend 20 hours reading the fine print and it's all fine print - it's a headache.

Same with the Gas cards - what I am gaining depends on how many gallons I buy and is balanced out with the inconvenience of getting gas at a certain chain - that *might* be worthwhile or it might be a headache - especially if I find myself going out of my way to get gas.

It's the same principle with coupons. Sure, I take advantage of Microchip free shipping along with a sale price, WHEN I decided to replace my PICkit 3 with a PICkit 4...and I know that game and will answer a short questionnaire or whatever is needed to get the codes to get the discount - if I have already decided on the purchase.

I struggled deciding which first scope to get (well second after a toy scope).  Months of reading all the comparisons and inputs on forums and so on. What finally did it was learning, from an EEVBLOG thread, that an OWONHDS1022M-N was nearly 1/2 price from a certain vendor - I pulled the trigger and am happy with the purchase as it fits my level quite well.

So, I am not saying you are wrong, I am saying that I strive for a comfortable, non-compulsive, balance that I am happy with. I am also not saying that you are compulsive - that, I would reserve for the coupon nuts who impressively manage to get a week's worth of groceries for $1.48 or something like that. See, I am not going to five different grocery stores to get five different loss leaders - if I had to feed 16 people, maybe I would set up a system for that, but I don't, so I am not.

BTW: I don't think the money on a 1% rebate from a CC is tax free. You spend $100, they give you $1, but you already paid the taxes on the $100 (when you earned it) that you spent. They are simply giving you $1 of your money back on which you already paid taxes. Otherwise, it should be declared as income and subject to taxes - no?.

--- End quote ---

You have a very sensible approach;  I am also very loathe to jump through hoops for little reward, but let me give some easy examples:   PayPal offers a credit card that gives 2% back on everything.  That is hard to beat, and when you add up all your eBay and other online activities over a year - or 5 years, or 10 years -  it becomes real money.

For example - if your annual spend is $20K, and you can get 2% on that, it is $400 of "free money" every year with zero effort other than opening the account in the first place. 

Even some cards that have an annual fee can be worth it - for example, a card that gets you access to the airport lounge and free luggage on the flights will pay for itself very quickly and start becoming a net gain (at least pre-Covid19, when it was actually possible to fly, LOL!)

I kind of see it as a fun game to get the most out of these things.  But I am super disciplined and trust myself never to carry a balance and pay interest - that, and taking a long term view (10 years...  20 years of good habits add up!!) is the key!

Also, you are right, the cash back is probably considered "after tax money" all along - maybe better to think of these things as loss avoidance, rather than financial gains!  :D

Bassman59:

--- Quote from: SilverSolder on June 29, 2020, 04:45:05 pm ---Last year, I generated almost $2,000 cash back by using the right credit card at the right time - shamelessly maximizing the use of those "special offer" categories, paying everything I can with a credit card (including utilities, taxes, you name it).  Once you've thought out the strategy, it really doesn't take any extra time - and the money you get, is totally tax free so actually worth a lot more than if you had earned the same amount at your job! 

It is a mistake to ignore the small but completely risk free returns of 1% - 5% that you can get by just bothering to bend down and pick the money up!  :D

--- End quote ---

I completely agree!

Target and Lowe's give a 5% discount on every purchase if you use their house card, so why the hell not?

Most of the credit card issuers -- notably not American Express -- have moved away from "points" that you can use to buy stuff to "cash back." Even the standard 1% cash back is better than nothing. And when they have offers "5% cash back for select streaming services" or "hardware stores," it's easy enough to just use their card for that. Oh, Bank XYZ is doing the 5%-streaming thing for three months? Let me spend five minutes every three months changing the billing accounts for the services to that card. Gas station charges are 5% back on this other card? I use that card for gas.

One thing to watch out for: some cards won't give you the cash back rebate until there's $50 to give back. That means spending $5,000 on the card for 1% cash back. So those cards don't get used.

It should be obvious where this 1% or 5% cash back comes from -- it comes from the fees charged to the merchant by the card issuers and processors. The cost of the fees is built into the retail price. So not taking advantage of the cash back offers is leaving money on the table because you are paying the higher retail price anyway.

Obviously each card balance gets paid in full every month. That's easy but if you don't do it the rebates are irrelevant.

One more thing. Since retail prices include the card transaction fees, you might as well use the cards instead of cash. But! If you want to help out your local merchants, like the indie coffee shop or restaurant, pay cash. They don't have to pay the 3% transaction fee and that little bit helps. But for the big chains and big box retailers, fuck 'em, Amex all the way! (OK, not Amex because their rewards suck.)

(There's an argument that says that the time a merchant spends dealing with cash, and managing theft by employees (!) and going to the bank and all of that "costs more" than the credit card fees. So I asked my friend who co-owns a coffee roasting business that has a retail outlet, and he said, "I'm going to the bank all the time anyway with the checks from the wholesale customers.")

DrG:

--- Quote from: SilverSolder on June 29, 2020, 06:49:36 pm ---
--- Quote from: DrG on June 29, 2020, 06:27:57 pm ---
--- Quote from: SilverSolder on June 29, 2020, 04:45:05 pm ---
--- Quote from: DrG on June 29, 2020, 01:05:41 am ---
--- Quote from: Halcyon on June 28, 2020, 10:40:32 pm ---
--- Quote from: SilverSolder on June 28, 2020, 07:51:05 pm ---Here's a good tip for you:   Go into the gas station and buy gift cards for that brand of gas station, using your credit card (and getting 2% or 3% back on that, depending on your credit card).   Then, you use the gift card at the pump -  which gives you the cash price!   Now you are almost 10% better off.  Do that over a year, and it adds up to a nice bit of tech gear off eBay, or a dinner, or whatever,  with almost zero effort.

--- End quote ---

I use a fuel card issued by Caltex (Chevron). That automatically gives me 4c per litre off fuel every time I fill up. Yes, that locks me into using their service stations, but I find it convenient as the routes I frequently travel all have Caltex service stations anyway. Plus I use the Australian Governnment's FuelCheck application on my phone which gives me live pricing for any service station in the state, so I can go to the cheapest one in the area I'm in (or plan ahead if I know I'm going to be somewhere in the coming day or two) in order to get the cheapest price. I generally fill up once then take reaches 50% so I have a buffer if fuel pricing is at its high point.

--- End quote ---

You know, that is really the key...balancing what is convenient with what is the best deal. A CC that I use gives me only a 1% rebate, but on everything. Every couple of months they offer a higher rebate on some merchandise class, but it is painless to activate - no doubt they are keeping email lists updated and so on. My point is that I am comfortable with it and I don't want to go chase a 2% rebate and go through any headaches.

I don't bother with those gas deals but I understand doing so if it is convenient.

I guess what I am saying is that I really do not enjoy all this financial crap, it is necessary and I try to do a reasonable job of due diligence and then make a decision, only occasionally revisiting the topic. No doubt I have missed out on some deals, but financial stuff is somewhat aggravating because nobody is giving anything away and we all know that.

--- End quote ---

Last year, I generated almost $2,000 cash back by using the right credit card at the right time - shamelessly maximizing the use of those "special offer" categories, paying everything I can with a credit card (including utilities, taxes, you name it).  Once you've thought out the strategy, it really doesn't take any extra time - and the money you get, is totally tax free so actually worth a lot more than if you had earned the same amount at your job! 

It is a mistake to ignore the small but completely risk free returns of 1% - 5% that you can get by just bothering to bend down and pick the money up!  :D

--- End quote ---

Terrific that you can do that. I participate, but not to that extent and, yes, you are right about "bothering to bend down and pick the money up!", but I am not as dedicated as you.


You are making me feel a little guilty  that I'm not doing more, but I think I have the right balance for me. :-[ and that balance includes listening to how other people do it so I might pick up something new and helpful for me.

When I look at a CC card, there is a ton of crap to consider. All of them have privacy (or lack of privacy) policies that are updated continually and no normal human being should take the amount of time and study to understand them to the point of deciding which is better - the assumption is that they all suck on that because they make money selling your details.

Then there is an annual fee - that is a deal breaker right there, because I am not paying an annual fee to use a CC. Historically, there was a time when certain cards were status symbols in the days of upward mobility and yuppies (Gen Z, millenials and Gen X, please consult a Wiki) and all that crap. It never interested me and I was fine to use a no annual fee card even if the type suggested that I was not at all upwardly mobile :). Now days, they are the rule but there was a time when they were an exception.

But even then, there could be some incentive connected to the card which might make it worthwhile..e.g., ....If I KNOW that I am going to be engaged in air travel for the year and they are offering a big-ass miles bonus for getting the card, plus miles per dollar....now, I have to calculate the expected price of the tickets and so on - blackout dates - special crap that you don't find out until you spend 20 hours reading the fine print and it's all fine print - it's a headache.

Same with the Gas cards - what I am gaining depends on how many gallons I buy and is balanced out with the inconvenience of getting gas at a certain chain - that *might* be worthwhile or it might be a headache - especially if I find myself going out of my way to get gas.

It's the same principle with coupons. Sure, I take advantage of Microchip free shipping along with a sale price, WHEN I decided to replace my PICkit 3 with a PICkit 4...and I know that game and will answer a short questionnaire or whatever is needed to get the codes to get the discount - if I have already decided on the purchase.

I struggled deciding which first scope to get (well second after a toy scope).  Months of reading all the comparisons and inputs on forums and so on. What finally did it was learning, from an EEVBLOG thread, that an OWONHDS1022M-N was nearly 1/2 price from a certain vendor - I pulled the trigger and am happy with the purchase as it fits my level quite well.

So, I am not saying you are wrong, I am saying that I strive for a comfortable, non-compulsive, balance that I am happy with. I am also not saying that you are compulsive - that, I would reserve for the coupon nuts who impressively manage to get a week's worth of groceries for $1.48 or something like that. See, I am not going to five different grocery stores to get five different loss leaders - if I had to feed 16 people, maybe I would set up a system for that, but I don't, so I am not.

BTW: I don't think the money on a 1% rebate from a CC is tax free. You spend $100, they give you $1, but you already paid the taxes on the $100 (when you earned it) that you spent. They are simply giving you $1 of your money back on which you already paid taxes. Otherwise, it should be declared as income and subject to taxes - no?.

--- End quote ---

You have a very sensible approach;  I am also very loathe to jump through hoops for little reward, but let me give some easy examples:   PayPal offers a credit card that gives 2% back on everything.  That is hard to beat, and when you add up all your eBay and other online activities over a year - or 5 years, or 10 years -  it becomes real money.

For example - if your annual spend is $20K, and you can get 2% on that, it is $400 of "free money" every year with zero effort other than opening the account in the first place. 

Even some cards that have an annual fee can be worth it - for example, a card that gets you access to the airport lounge and free luggage on the flights will pay for itself very quickly and start becoming a net gain (at least pre-Covid19, when it was actually possible to fly, LOL!)

I kind of see it as a fun game to get the most out of these things.  But I am super disciplined and trust myself never to carry a balance and pay interest - that, and taking a long term view (10 years...  20 years of good habits add up!!) is the key!

Also, you are right, the cash back is probably considered "after tax money" all along - maybe better to think of these things as loss avoidance, rather than financial gains!  :D

--- End quote ---

Yeah, some great deals are definitely out there and I did not know about the PP card - I wonder how long it will stay that way (another consideration)?

The big point is not carrying a balance - *damn* I don't know why some kind of basic financial strategy is not taught in grade school on up.

Approaching it as a fun challenge is worthwhile, but there have been instances when I have really been pissed off about some situations. Case in point is taking change to a bank or counting machine.

Once, some years ago, I dutifully wrapped a bunch of change that had been collecting for I don't know how long - in those days, come home, empty your pocket change in a big container and when it is too heavy to carry, or you are too poor to eat, cash in. Now the little sociopath clerk says that "we" [note the royal 'we'] can't take those rolls unless you write your name, address and account number on each one.  I hit the roof, I have some 40 rolls of coins here - are you out of your &!@$ing mind?!

When I asked why, the response was this gobbldygoop crap mixed with classic weasel words - I could have slugs in there [breaks some/all open and look - it's not like I have 10K of coins here and I do have an account at this bank]..."we" would be violating Federal Reserve regulations if we took them without that required information [what regulation is that, you lying sack of ^%@#]. OK, I am embellishing a bit...

Next stop was the next up "manager" who supported the sociopath's positions and invited me to use the coin counting machine located in the adjacent grocery store (I already had checked that out which is why I had wrapped the rolls and waited in line at the bank, you dufus). I ask if the bank owned that machine...no real answer...I asked if he knew how much that machine charged to count money...he said he did not (it was 8.9% I remember it clearly and I told him)...I asked how much interest a CD from this bank paid (something like 5.25% at that time). I then asked him, with a concerned look on my face, if he had ever taking any courses on financial management - at that point, the way forward was clear and I left with my rolls of coins and closed the account - with extreme prejudice, but remaining civil - barely.

I found a machine at a grocery store that charged almost as much, but there was no charge if you got your money in gift$$ at the grocery store. I was fine with that.

Later, I found a bank that had coin counting machines in all of their branches, for free, to their customers and that was where I opened up an account.

I was probably not entirely rational, but I just did not care what it cost to purchase and maintain a counting machine because you are a *&^ing bank!  and the idea that a bank would borrow my money at 5% for a year but charge me 9% to count it once, or require me to provide a ridiculous amount of information, time and trouble, to punish me for inconveniencing them, was just not acceptable and I was not about to do that.

To this day, whenever I see someone pouring bottles of change into a machine, I think back at that incident and chuckle.

Rick Law:

--- Quote from: DrG on June 29, 2020, 06:27:57 pm ---...
...
BTW: I don't think the money on a 1% rebate from a CC is tax free. You spend $100, they give you $1, but you already paid the taxes on the $100 (when you earned it) that you spent. They are simply giving you $1 of your money back on which you already paid taxes. Otherwise, it should be declared as income and subject to taxes - no?.

--- End quote ---

Good point - yeah, in the USA, that would not be entirely "free".  You are getting money that you paid a tax on already.

In the USA, that would depend on what State you reside and what you buy.
- Every State has the own State sales tax rate that you must pay.
- In some locales, you have to pay both State and Local tax with your purchases.
- In some States/Locales, you have to pay the State/Local tax even if you purchased from out of State on-line.
- Federal and certain State has additional excise tax on certain items (such as liquor, gasoline and cigarettes for example)

Take New York City for example (State 4%, City 4.875%).  So if your card's spending is all in NYC, you really are getting back only about $91 for the $100 you "got back - but if you purchase in Pennsylvania, they have a rate of 6% (state wide except two counties), so you are getting $94 back.

On the other hand, discount is always applied before sales tax.  So, if it is a $100 discount, you not only "get back" the $100 immediately (by price reduction), there is also another $8.89 tax (if in NYC) that you didn't have to pay.

Duty free shopping, anyone?  Airport Duty Free shops requires a boarding pass for an international flight for duty free shopping.  But if you are not flying, you may still be able to do it!  In the USA's American Native Reserved lands, you don't have to pay federal tax (on item such as cigarettes, that is way more than half the cost of item).  A former coworker of mine drives to a near by American Native Reserve to purchase her cigarettes regularly.

I don't mind paying tax if the money is put to good use.  But you can count on government waste like you can count on the earth spinning.  It will happen at least for another few million years.

SilverSolder:

--- Quote from: Rick Law on June 29, 2020, 09:47:58 pm ---
--- Quote from: DrG on June 29, 2020, 06:27:57 pm ---...
...
BTW: I don't think the money on a 1% rebate from a CC is tax free. You spend $100, they give you $1, but you already paid the taxes on the $100 (when you earned it) that you spent. They are simply giving you $1 of your money back on which you already paid taxes. Otherwise, it should be declared as income and subject to taxes - no?.

--- End quote ---

Good point - yeah, in the USA, that would not be entirely "free".  You are getting money that you paid a tax on already.

In the USA, that would depend on what State you reside and what you buy.
- Every State has the own State sales tax rate that you must pay.
- In some locales, you have to pay both State and Local tax with your purchases.
- In some States/Locales, you have to pay the State/Local tax even if you purchased from out of State on-line.
- Federal and certain State has additional excise tax on certain items (such as liquor, gasoline and cigarettes for example)

Take New York City for example (State 4%, City 4.875%).  So if your card's spending is all in NYC, you really are getting back only about $91 for the $100 you "got back - but if you purchase in Pennsylvania, they have a rate of 6% (state wide except two counties), so you are getting $94 back.

On the other hand, discount is always applied before sales tax.  So, if it is a $100 discount, you not only "get back" the $100 immediately (by price reduction), there is also another $8.89 tax (if in NYC) that you didn't have to pay.

Duty free shopping, anyone?  Airport Duty Free shops requires a boarding pass for an international flight for duty free shopping.  But if you are not flying, you may still be able to do it!  In the USA's American Native Reserved lands, you don't have to pay federal tax (on item such as cigarettes, that is way more than half the cost of item).  A former coworker of mine drives to a near by American Native Reserve to purchase her cigarettes regularly.

I don't mind paying tax if the money is put to good use.  But you can count on government waste like you can count on the earth spinning.  It will happen at least for another few million years.


--- End quote ---

Hmmm it is an interesting question.   

Let's say you buy something in a state that has 6% sales tax that cost $100,  so the total charge to your credit card is $106.

You will "get back" 1% of that $106 on your next statement. 

But the state received the full tax owed, and the store received the full $100.

So your 1% cash back is essentially paid for by the store, in the form of credit card transaction fees.... which they are deducting from their tax return as a business expense!

So, the 1% (or whatever) "cash back" is actually tax free to you, and also to the business that gives it to you.  Awesome, right?  Printing money right in front of us!




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