bankr63
DIS Veteran
- Joined
- Aug 3, 2010
Take it from someone who worked years in the credit card industry (in Customer Marketing no less, which is actually sales; marketing wasn't called that, but I digress).
A true cash reward is always the best option in a credit card plan. With points based systems, the redemption rates are astonishingly low (we love to save points, not spend them), and when you do cash in points, it usually comes with additional costs that will increase card usage. For instance you may have enough points to book a couple of free nights at a Marriott, but you need to pay $$ for the 5 other nights for the week (and airfare etc). And perhaps staying at a Wyndham property for the week would have been cheaper for the week than your 5 nights, but you have to use Marriott. Or perhaps you don't want to take a vacation so your points are "stranded" or worse, forfeited.
With a cash card, redemption is generally near 100% since they pay out on a regular trigger. A good redemption is one that you can actually use.
My personal strategy for for regular purchases is PC Mastercard (which is points based yes, but near to cash). Why? Because I will always buy groceries, and with careful use of the specials, you can double and sometimes triple dip in this program - we generally accumulate enough points per year to cover about a month's groceries or roughly 8% of our food budget. The points earned are for something essential that I am always going to buy (food), so to me it is a cash like benefit. We tend to use our points at major holidays so that entertaining family isn't painful; just an added benefit that the Christmas dinner shop for $250 is effectively payment free when checking out. And if I put the grocery money saved into the travel fund, I have enough in a year to pay for a full week at that Wyndham property IF I choose to take a vacation. I don't have to take a vacation to use the points, the money can be spent elsewhere.
This long ramble is just to point out that the banks and card issuers have whole departments of people dedicated to figuring out how to retain as much of YOUR money as possible. Having worked inside the system, I have spent a lot of time thinking about how to use THEIR programs to maximize MY benefit. I see many posts on here that make me cringe because I see that my former colleagues are still very successful at creating a perception of value.
Here endeth the rant (with all respect to you Sean).
A true cash reward is always the best option in a credit card plan. With points based systems, the redemption rates are astonishingly low (we love to save points, not spend them), and when you do cash in points, it usually comes with additional costs that will increase card usage. For instance you may have enough points to book a couple of free nights at a Marriott, but you need to pay $$ for the 5 other nights for the week (and airfare etc). And perhaps staying at a Wyndham property for the week would have been cheaper for the week than your 5 nights, but you have to use Marriott. Or perhaps you don't want to take a vacation so your points are "stranded" or worse, forfeited.
With a cash card, redemption is generally near 100% since they pay out on a regular trigger. A good redemption is one that you can actually use.
My personal strategy for for regular purchases is PC Mastercard (which is points based yes, but near to cash). Why? Because I will always buy groceries, and with careful use of the specials, you can double and sometimes triple dip in this program - we generally accumulate enough points per year to cover about a month's groceries or roughly 8% of our food budget. The points earned are for something essential that I am always going to buy (food), so to me it is a cash like benefit. We tend to use our points at major holidays so that entertaining family isn't painful; just an added benefit that the Christmas dinner shop for $250 is effectively payment free when checking out. And if I put the grocery money saved into the travel fund, I have enough in a year to pay for a full week at that Wyndham property IF I choose to take a vacation. I don't have to take a vacation to use the points, the money can be spent elsewhere.
This long ramble is just to point out that the banks and card issuers have whole departments of people dedicated to figuring out how to retain as much of YOUR money as possible. Having worked inside the system, I have spent a lot of time thinking about how to use THEIR programs to maximize MY benefit. I see many posts on here that make me cringe because I see that my former colleagues are still very successful at creating a perception of value.
Here endeth the rant (with all respect to you Sean).