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10 sec. decision, would you forgo all your current/ future credit card reward points

Home The Lounge 10 sec. decision, would you forgo all your current/ future credit card reward points

  • Avatar burritos 
    Participant
    Status: Physician
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    Joined: 04/23/2018

    for $100,000(tax free)? Yes or no. No spreadsheets or calculators to figure out the optimal course of action. Gut feeling answer please.

    My sister and brother in law who don’t have kids use their points to fly business/first class on their vacations every 1-2 years. They love their points and push hard for us to use their same system. They’ve probably figured out the optimal way to use points, but I’m just not into it and I don’t want to spend extra time and effort on it. We just use our points for cash back plus we(my wife) use multiple cards. So all the points accumulate over different cards which I’M not going to keep track of. So I asked them one day to get them off my back the above question. They are both good at math and they both said no. I mean, you’d have to spend 5-10 million dollars worth of purchases to get $100k no?

    #227995 Reply
    ACN ACN 
    Moderator
    Status: Physician
    Posts: 668
    Joined: 01/08/2016

    Yes. Easy. No brainer.

    If you're ever having a bad day, just remember in 1976 Ronald Wayne sold his 10% stake in Apple for $2,300.

    #227996 Reply
    Avatar AR 
    Participant
    Status: Physician
    Posts: 873
    Joined: 03/10/2016

    If you give me the 100K immediately, I take it.  I think that over my life I’ll probably eclipse 100K in benefits from these things.  But lots of that is in the distant future, so the present value is less.

     

    #227997 Reply
    Avatar angeladiaz99 
    Participant
    Status: Physician
    Posts: 90
    Joined: 09/30/2018

    Yes. Easy. We’ve already done it without the $100,000 carrot.

    We have two cash back credit cards for our household. One is the primary, one is the backup. Simplicity trumps all especially since we’ve had multiple bad experiences with credit cards being stolen.

    We still travel first class for all our vacations, we just pay for it ourselves. At our household income level, we have the luxury of foregoing the points game (as fun as it may have been in the past)

    #227998 Reply
    Avatar dayman 
    Participant
    Status: Physician
    Posts: 77
    Joined: 12/09/2017

    Easy yes because I can invest the 100k. Then I’m pulling off 4-5K for travel annually.

    If I couldn’t invest it, that’s a harder question. I have used points for probably 20K worth of travel over the past two years, but that rate is not sustainable. I’d still probably take the cash, who knows what happens to CC points in the future.

    Most people redeeming big points for things like international business class get them from sign up bonuses, not spending.

    #228000 Reply
    Avatar StarTrekDoc 
    Participant
    Status: Physician
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    Joined: 01/15/2017

    for $100,000(tax free)? Yes or no. No spreadsheets or calculators to figure out the optimal course of action. Gut feeling answer please.

    My sister and brother in law who don’t have kids use their points to fly business/first class on their vacations every 1-2 years. They love their points and push hard for us to use their same system. They’ve probably figured out the optimal way to use points, but I’m just not into it and I don’t want to spend extra time and effort on it. We just use our points for cash back plus we(my wife) use multiple cards. So all the points accumulate over different cards which I’M not going to keep track of. So I asked them one day to get them off my back the above question. They are both good at math and they both said no. I mean, you’d have to spend 5-10 million dollars worth of purchases to get $100k no?

    Click to expand…

    Short answer – No.

    Small process changes can pay off big time; more extensive changes pay off more.  Travel hacks on points for those who travel Business/First class anyways is even easier to reach since the ROI on those easily push in 6%-10% depending on timing and costs of Business/First class.  That $100,000 = $10M spend (1% return) suddenly becomes $2M spend that you’re going to be doing anyways.

    eg – by simply using Upromise gateway each time for nonAmazon shopping, we were able to fund 529 plans that are currently worth $120,000.   That’s completely on our daily spend and compounded earnings over the last 10 years through that portal.   — yes, we spend a lot through spend mechanisms, but the point is — it’s NOT HARD — nor dangerous, nor risky.   That’ $100,000 is tiny over lifetime of travel hacking.

    eg  Our recent 1 week Hawaii trip was nearly fully funded by points and hacks.   Our Hilton Diamond got us the attached FREE upgrade at Grand Wailea which is their 1 BR suite with private Lanai — sells at $2400/night — stayed 2 nights on points/certificates — cost credit card $450.  for that which also had $250 resort credit yearly to boot.

    Travel hacks — totally worth it.

     

     

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    #228001 Reply
    Liked by Craigy, abds, ddswifey
    Avatar AR 
    Participant
    Status: Physician
    Posts: 873
    Joined: 03/10/2016
    Earnest refinancing bonus

    Yes. Easy. We’ve already done it without the $100,000 carrot.

    We have two cash back credit cards for our household. One is the primary, one is the backup. Simplicity trumps all especially since we’ve had multiple bad experiences with credit cards being stolen.

    We still travel first class for all our vacations, we just pay for it ourselves. At our household income level, we have the luxury of foregoing the points game (as fun as it may have been in the past)

    Click to expand…

    I think the OP’s question assumes that you have to give up cash back also.  Not that it changes your answer.

    #228004 Reply
    Liked by angeladiaz99
    Avatar AR 
    Participant
    Status: Physician
    Posts: 873
    Joined: 03/10/2016

    for $100,000(tax free)? Yes or no. No spreadsheets or calculators to figure out the optimal course of action. Gut feeling answer please.

    My sister and brother in law who don’t have kids use their points to fly business/first class on their vacations every 1-2 years. They love their points and push hard for us to use their same system. They’ve probably figured out the optimal way to use points, but I’m just not into it and I don’t want to spend extra time and effort on it. We just use our points for cash back plus we(my wife) use multiple cards. So all the points accumulate over different cards which I’M not going to keep track of. So I asked them one day to get them off my back the above question. They are both good at math and they both said no. I mean, you’d have to spend 5-10 million dollars worth of purchases to get $100k no?

    Click to expand…

    Short answer – No.

    Small process changes can pay off big time; more extensive changes pay off more.  Travel hacks on points for those who travel Business/First class anyways is even easier to reach since the ROI on those easily push in 6%-10% depending on timing and costs of Business/First class.  That $100,000 = $10M spend (1% return) suddenly becomes $2M spend that you’re going to be doing anyways.

    eg – by simply using Upromise gateway each time for nonAmazon shopping, we were able to fund 529 plans that are currently worth $120,000.   That’s completely on our daily spend and compounded earnings over the last 10 years through that portal.   — yes, we spend a lot through spend mechanisms, but the point is — it’s NOT HARD — nor dangerous, nor risky.   That’ $100,000 is tiny over lifetime of travel hacking.

    eg  Our recent 1 week Hawaii trip was nearly fully funded by points and hacks.   Our Hilton Diamond got us the attached FREE upgrade at Grand Wailea which is their 1 BR suite with private Lanai — sells at $2400/night — stayed 2 nights on points/certificates — cost credit card $450.  for that which also had $250 resort credit yearly to boot.

    Travel hacks — totally worth it.

     

     

    Click to expand…

    Do you have any good resources/links for learning about Business/First class travel hacking techniques?  It’s something I’ve been meaning to look into, but I just never got around to it?

    #228006 Reply
    q-school q-school 
    Participant
    Status: Physician
    Posts: 2640
    Joined: 05/07/2017

    for $100,000(tax free)? Yes or no. No spreadsheets or calculators to figure out the optimal course of action. Gut feeling answer please.

    My sister and brother in law who don’t have kids use their points to fly business/first class on their vacations every 1-2 years. They love their points and push hard for us to use their same system. They’ve probably figured out the optimal way to use points, but I’m just not into it and I don’t want to spend extra time and effort on it. We just use our points for cash back plus we(my wife) use multiple cards. So all the points accumulate over different cards which I’M not going to keep track of. So I asked them one day to get them off my back the above question. They are both good at math and they both said no. I mean, you’d have to spend 5-10 million dollars worth of purchases to get $100k no?

    Click to expand…

    Short answer – No.

    Small process changes can pay off big time; more extensive changes pay off more.  Travel hacks on points for those who travel Business/First class anyways is even easier to reach since the ROI on those easily push in 6%-10% depending on timing and costs of Business/First class.  That $100,000 = $10M spend (1% return) suddenly becomes $2M spend that you’re going to be doing anyways.

    eg – by simply using Upromise gateway each time for nonAmazon shopping, we were able to fund 529 plans that are currently worth $120,000.   That’s completely on our daily spend and compounded earnings over the last 10 years through that portal.   — yes, we spend a lot through spend mechanisms, but the point is — it’s NOT HARD — nor dangerous, nor risky.   That’ $100,000 is tiny over lifetime of travel hacking.

    eg  Our recent 1 week Hawaii trip was nearly fully funded by points and hacks.   Our Hilton Diamond got us the attached FREE upgrade at Grand Wailea which is their 1 BR suite with private Lanai — sells at $2400/night — stayed 2 nights on points/certificates — cost credit card $450.  for that which also had $250 resort credit yearly to boot.

    Travel hacks — totally worth it.

     

     

    Click to expand…

    testify!  perhaps you need to teach the rest of us about all this stuff.

     

    #228008 Reply
    Lordosis Lordosis 
    Participant
    Status: Physician
    Posts: 2165
    Joined: 02/11/2019

    Absolutely.

    All we do is a cash back card.  Maybe gets us a grand a year so 100K now would far out weight that.

    CC hacking seems like too much work.  Similar to extreme couponing.  Both can get you a lot but you need to put in the effort.

    Typing that reminded me that I bought one of those coupon books from a school fund raiser a few months ago.  Totally forgot about it.  Maybe I can dig it out and buy some junk I do not need!

    “Never let your sense of morals prevent you from doing what is right.”

    #228009 Reply
    Liked by docnews, SLC OB
    Avatar hightower 
    Participant
    Status: Physician
    Posts: 1501
    Joined: 12/07/2016

    I would probably take the 100k, though I will say I love my credit card reward points.

    We use one card for everything.  It’s a delta amex.  We get free flights every year, we always have at least silver medallion status which means always free checked bags, sky priority and we almost always get upgraded to at least delta comfort seats, and occasionally first class.
    We just use our card like a checking account.  Each month I pay off the balance in full before we ever pay a dime in interest.  It’s pretty simple without the need to think about anything.

    I wish I were more motivated to be a travel hack person like startrekdoc though…

    Food for thought, if you’re not using a rewards card for all of your purchases than you’re subsidizing those who are when you shop for anything.  Retailers factor in the price of the cost of consumers paying with high fee credit cards into everything we buy.  So you’re paying for the use of those rewards cards whether you like it or not;)

    #228010 Reply
    Liked by Craigy
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
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    Joined: 01/09/2016

    Yes, 3 sec. decision.

    Johanna Fox Turner, CPA, CFP: I am not your financial advisor; any responses are for general purposes only
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #228011 Reply
    Avatar L 
    Participant
    Status: Physician
    Posts: 18
    Joined: 11/15/2016

    Without hesitation, yes.

     

    I use credit cards for convenience and for credit card protection.  The rewards are just a way to entice me to spend money I shouldn’t be spending.

    #228016 Reply
    CordMcNally CordMcNally 
    Participant
    Status: Physician
    Posts: 3047
    Joined: 01/03/2017

    I would take the $100k.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #228020 Reply
    Avatar HikingDO 
    Participant
    Status: Physician
    Posts: 370
    Joined: 03/09/2017

    Instantly yes, without a question. My southwest CC pays me back in points, worth 2% of charges, or $0.02 for every dollar I charge. I’d have to charge $5,000,000 in lifetime charges to just break even by saying no. No brainer.

    #228027 Reply

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