Are rewards credit cards overrated? Should I be chasing rewards, or is it not really worth my effort?
We don’t think it’s worth it for us other than the initial picking of some decent card (DH has one that gives 2% cash back and has no annual fee which seems to be as good as it gets without any hassle) to use as your primary card.
If you’re into travel, then maybe there’s some credit card rewards that are worth it– a lot of bloggers seem to believe so and post about their travel hacks.
(Of course, credit cards also pay handsomely for recommending their card to other people, so there’s an incentive for bloggers to recommend specific cards.)
But that still doesn’t mean that churning is necessarily worth your time and effort– that’s an individual decision. It may be still in your best interest just to pick a single travel card and accumulate points on that.
So, I guess it’s best to figure out how much you get from signing up or whatever it is for if you see a deal. Or maybe just read about someone’s travel hack on a blog. Then take that number and think about how that compares to the effort of following the rules of the card to get the bonus and of remembering to cancel on the right date (and the risk and cost of forgetting to cancel or not spending enough or spending too much) and what you’re forgoing from your previous card. Then think about the cost of looking for these kinds of deals. Maybe that money saved/earned is worth it to you, maybe it’s not.
For me, our primary card is DH’s 2% cash back card. He has a backup card that I think is also 2% but in points, which I find annoying since the value of points could change at any time. My primary card is 1.5% cash back but has no foreign transaction fees. My secondary card is 1% cash back but has 5% back on selected purchases up to $300/year (currently that’s been spent because of our kitchen renovation corresponding with 5% back from Home Depot). None of these have annual fees. We don’t do much vacationing (though we’ve started doing more), but with our travel plans it generally seems like paying cash six months in advance is a better deal than using points when all four of us are going somewhere (this is especially true around Christmas). We get enough points from work travel to fly DH’s mother in whenever we need emergency childcare because we’re both out of town for work.
So… is credit card churning worth it? That’s a personal decision that depends on how much you hate hassle and what your opportunity costs from the next best no-hassle alternative are. For us, it’s a no-brainer. For someone who does a personal finance blog, perhaps a no-brainer in the other direction.
So… do some chasing at the beginning to pick a good card for your needs and wants. Maybe re-evaluate every few years to see if there’s something better out there. But in general, unless you enjoy chasing rewards (or get rewarded for blogging about them), the potential benefits may not outweigh the hassle.
What kind of credit card rewards do you all use? Do you find chasing rewards to be worth it?