Ask the grumpies: Is chasing credit card rewards worth it?

Leah asks:

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?

RBOC

  • DH opines on Apple Watch faces: Discoveries about what I want in a watch after a few days of an apple watch:
    • 1) Digital time, not analog. I want to know the exact minute of the current time without any mental gymnastics.
    • 2) The date, because multiple times each day I seem to need to know the date and if I’m not at a computer I would otherwise have to pull my phone out of my pocket.
    • 3) Some apps are very handy to have on my wrist (timer, stopwatch, calculator, weather, voice memos) and could be done with a non-smartwatch or a phone, but this is easier.
    • 4) “complications” that change visually (like the activity tracker’s rings filling up or the current temperature) are informative, while ones that are only a shortcut are a waste of space (the ten most-used apps are just a button press and a tap to reach anyway).
    • 5) Moving backgrounds are attractive, but the available options are really limited (e.g., why no pachinko balls just bouncing around, or the game of life?) 6) Similarly, more customization would make several of these faces more attracive. Why are the customization options so limited. I think many of the round dials look out of place on a rectangular face, then the all-one-color options look boring (but the all-one-color “low-power” mode is just a line around the border which I like a lot), and then there are the two-tone rectangular options which look good except I hate the handful of color choices.
  • The biofilm that I’m allergic to has returned and taken over the post-filter on our whole house water filter.  DH has temporarily bypassed the filter system to get disgusting but lovely-because-it’s-chlorinated water back into our house to hopefully kill all the biofilm.  And it seems to be working– not a sign of pink slime anywhere, even places I hadn’t bleached recently.  And showers aren’t itchy for me.  The problem is that DC2 is still allergic to our city’s water.  Fortunately even after we got the whole house filter, I made DH replace our shower filter and had the contractors put in an under sink filter with our new kitchen sink.  So DC2 is using our shower and only drinking from the kitchen sink filtered tap.  Man I’d forgotten how awful our local water tastes.  And after seeing the pre-filter after a month, I’m not sure I actually should be drinking it.  But I appreciate the way chlorine kills.  DH thinks we’ll get aquasauna’s UV filter next (~$600), though the big problem is that the bacteria is coming from inside the house, not outside.  My thought is that once a month we should flush out our system with unfiltered water.
  • We have had three separate incidences of (different) students advocating extremism in our (different) classes during presentations or class discussion in the past week, and those are only the ones brought to the attention of our department chair.  Have any of you been having to deal with an increase in extremism, and what do you do?  (This hasn’t happened in my stats classes, thankfully, but next semester I have an elective.)
  • I’m getting kind of tired of reading about damaged heroes who need the understanding heroine to fix them.  I think that means I need to find some more books that have plots other than just the romance.  I’m also really tired of the indication that the hero and the heroine are going to get together is that their meet cute is them insulting each other.  Moonlighting is not real.  That is not how people get together.  It’s a trope that deserves to die.  I could use some Gary Stu heroes, please!  Just like my DH.  ;)  Let me see other heroines have their Prince Charming sweep them off their feet (and then I dunno, solve a murder or something).  (Solution:  Read a bunch of m/m romances…)
  • Our junk hotmail address has gotten on some spam email list with .de addresses (I’ve tried getting hotmail to send these directly to trash, but it is sending them to junk instead).  The composition of these emails is very different than our usual porn etc. spam– it seems to be targeted at not very bright trump supporters.  We’re winning gift cards from the dollar store.  We’re learning secrets of combat training, especially shooting, and we’re being offered Trump vs. Biden t-shirts.  We’re learning how to appeal our disability claims and get speedy loans.  Tricks for diabetes destruction and compression gloves.  Savings exclusive to veterans.  For some reason, they also want us to buy Wild Alaskan seafood and CBD.  The scariest, along with the combat training, are the dire warnings that someone is going to take our guns away.
Posted in Uncategorized. Tags: . 8 Comments »

Should I put lump sums in the 529 instead of dollar cost averaging?

One of the reasons this blog seems to have become a spendapalooza is that there’s really not any obvious place for extra money to go.

But there actually is one place for extra money to go– the kids’ 529 plans.  (A 529 plan is an awesome way to save for college or vocational school such that the earnings are tax-free.  But, it’s a good idea to max out your retirement before setting money aside in 529 plans because retirement accounts aren’t included in college financial aid calculations and you can take out loans for college but you can’t for retirement.)

In the past, I’ve always said, “and the kids’ 529s are on track to pay for the school of their choice [by the time the graduate college].”  What I mean by that is that we’ve been putting away $750/month in the accounts, even in the summers when I don’t get paid.  (It used to be $500/month, but we increased it when we paid off the mortgage and stopped paying for daycare.)  But we haven’t *actually* put enough money to be able to cash flow the remainder of the cost of (a four-year private) college yet.  We’re just on track to.

Over the next 4 years before DC1 starts college, $750/mo works out to $36,000 (actually a little less than that since it’s November, but it’s an estimate).  Over the next 8 years before DC1 ends college, it would be $72,000.  (That’s a LOT of money!)

We could just put in $36K (instead of $9,000) over the course of this year and then either start contributing again once we know where DC1 is going to college or not based on the cost of hir chosen school.  (Given hir struggles in English, it is likely that HMC is out, but also out with HMC is its insanely high $72K/year tuition.  I told DC1 we could get hir a unicycle anyway.)

Doing it this way loses some dollar-cost averaging benefits, but it gains the benefits of a longer period of untaxed earnings.

There are some wrinkles to doing BIG 529 account transfers.

The first is that even though the account is a custody account and doesn’t actually belong to the child, it still is subject to the annual gift tax.  For 2019, the amount that can be given annually without tax is $15,000.  Each parent can give that amount, so a married couple can give $30,000 in one year.  $36K is more than $30K, but there’s a loophole with the 529.

This wrinkle has its own wrinkle:  An individual or couple can give a larger lump sum, so long as the total given in that five year period is still less than 5 times the annual exclusion.  So DH and I *could* give $150K this year so long as we didn’t contribute again for another 5 years.  (Of course, that’s a moot point because we don’t actually *have* $150K to give, but you get the idea.)  That means when DC1 actually gets into college, we should be able to continue to contribute to hir 529 without penalty.

So our plan is to do a lump sum of $36K this month to DC1’s account (this gets rid of all our excess cash and digs pretty deep into our emergency fund, but the emergency fund doesn’t actually have to be full until May since we can cash flow most emergencies when we’re both being paid).  Then we will stop contributions to hir account entirely.  We will continue as normal with DC2’s account (contributing $750/month) until we build up excess cash and I start to feel like forcing DH to buy all the Apple products again.  At that point we will re-evaluate and decide whether we want to do a lump sum to DC2’s account or if we just want to increase the monthly contribution.  I’m sure I will post about what we end up doing.

In ~4 years when we know where DC1 is going to college, then we’ll decide whether or not to start contributing to that 529 plan again, and we will have a better idea about how much DC2’s account can bear without going over.

Grumpy Nation, I don’t have a good question for this post.

Link Love

Racial Disparities in Voting Wait Times: Evidence from Smartphone Data

This thread is dedicated to window seat.

White men need to listen to underrepresented folks and promote diversity, not punish diverse people.  No underrepresented minority should have to apologize about noticing underrepresentation in order to get ahead.

An academic take on habits.

Ask the Grumpies: How bad is Chick Fil A really?

Debbie M asks:

I would like to know more about the Chick-Fil-A controversy. Here is where my knowledge has been over the years.
* First – Wow, they are so dedicated to their religious morals that they are closed on Sundays. That’s got to be costing them money. So I respect that. Also, the secret to their lemonaid deliciousness is that it is made with lemon juice, water, and sugar. No garbage.
* Later – Yikes–they’re funding de-gayification torture. Okay screw that. I mean it’s one thing to have different beliefs from me (I’m an atheist-leaning agnostic), but quite another to torture people, even in a misguided attempt to help them get to heaven. Not something I want to help fund.
* Recently – they’ve decided to stop funding anti-gay charities, but one of them was the Salvation Army. Is there something I don’t know about the Salvation Army? (Of course they are claiming they actually help more gay folks than most other charities, if for no other reason than that they’re gigantic.) Neither of these seem like the de-gayification place. Then I heard they stopped funding that one already, years ago.
* Then a bunch of Christians decided to boycott them for stopping this funding.
* Now they’re backtracking.

So how bad are these charities? Do the anti-gay beliefs of these charities infiltrate their work? Also, is Chick-Fil-A a bad place for gay people to work? (I mean worse than for other people? Though at least they pay more than minimum wage.)

People in our town like Chick Fil A because they don’t tend to screw up catering orders and they have playgrounds.  I have not eaten there in over 10 years because they taste like Hate and are also just super salty and greasy and once when one of our kids was still in diapers someone (I think my in-laws, see above re: playgrounds) fed hir chick fil a and I have never smelled a more disgusting poo.  We don’t eat at any national fast food chains (except occasionally Subway or similar regional chains), so our boycott really means nothing.

teresa says:

Chik fil a has been/still is openly opposed to marriage equality. As far as the organizations they are not contracting with anymore [ed:  actually, their “not contracting” lasted a day– they backtracked]:

The fellowship of christian athletes requires members to pledge that they will not “engage in homosexual activity.” Which is pretty openly discriminatory.

Salvation Army is openly a fairly conservative evangelical christian organization. They hold the position that it’s not sinful to *be* lqbtq+ but it is unacceptable to *act* on it (or have anything but heterosexual married sex) and also opposed marriage equality. Telling a group that they don’t deserve a full human life and basic civil rights is maybe not the same kind of overt torture as conversion therapy but it’s still not okay.
It seems like in recent years they took down the formal position page on their website that explicitly states this but have not made any statement about changing their beliefs. Their more recent statements are along the lines of “wellllll we love all sinners so we also provide charity to people even though they’re lgbtq+” and formal statements that they “don’t lobby to roll back marriage equality because we don’t employ lobbyists” and extend benefits to employees’ same sex spouses “because the law says we have to right now.” People have also still reported being turned away or discriminated against at Salvation Army facilities for being trans (apparently with the excuse that it makes other clients uncomfortable to have a trans person around).
It’s not the issue under discussion but they’re also still openly anti choice.
There’s probably more nuance I don’t know.

delagar adds:

They have also donate to Focus on the Family, the Family Research Council, and Exodus International, all of which are anti-LGBTQ groups. They’ve promised before to stop donating to anti-LGBTQ groups, and then backtracked and resumed donating.

Vox has a pretty good article, here: https://www.vox.com/the-goods/2019/5/29/18644354/chick-fil-a-anti-gay-donations-homophobia-dan-cathy

And an older one here: https://www.vox.com/the-goods/2019/3/21/18275850/chick-fil-a-anti-lgbtq-donations

Here’s what a recent (and well-worth reading) Forbes article says about being an LGBT patron at Chick Fil A (the article also has more detail about the organizations they fund):

I will admit I was once a patron of Chick-fil-A. And I have had earnest conversations with local franchisees about the company’s funding of anti-LGBTQ groups. Those conversations were a lot like the one I had with my local Roman Catholic church pastor, who assured me I was welcome, and that they would always welcome me, no matter what was said by the corporation (or in the church’s case, the bishop or pope).

She is now eating elsewhere and is no longer Catholic.

Back in 2012, Chick Fil A said they would stop donating to political causes… and they did, sort of.  They donated to organizations who had hate as only one of a few objectives, or that specifically excluded LGBTQ beneficiaries, rather than organizations whose only objective is to promote hate.  Of course, there’s some discussion in the twitterverse about whether or not the owners who are getting rich from Chick Fil A profits still donate to the hate-only causes with their own wealth.  I don’t know, but I would not be surprised.  I’d rather not have intolerant people getting rich and having all the political power that comes with wealth.

Even if they made the best chicken sandwich under the sun, I do not want money I’m giving a company to go towards funding anti-LGBTQ groups.  There is zero benefit to funding hate and so much harm.  So, no, don’t eat at Chick Fil A, and let people know why you don’t.

These white Christian people seem so nice.  So genuinely likeable.  And yet… they thinkingly or unthinkingly do these things that encourage hate on a large scale.  In person and individually they’re so nice.  But eating at an organization that sponsors hate is not a politically neutral act.

Things we’ve loved this past year

The best purchase we have been enjoying has been TSA Pre.  I didn’t appreciate how much I would appreciate it.   Similarly, I continue to be delighted to take toll-roads with a toll tag for the city nearest us.

Having a battery that can fuel a phone or laptop during travel has been really great.  I’ve also been able to occasionally help out fellow travelers.  We have bought several Anker products (amazon link) and have been very happy with all of them.

This kit to make a music box (not sponsored) is probably the coolest kid’s present this year.  Even after the music box has been created, it provides hours of fun choosing different songs.

DH wants to give a shoutout to this guy who organizes boxes of electronic components (I guess the actual organization is done in China, according to the box, also, not sponsored).  DH is in love with a box of resistors.  It brilliantly stores resistors on labeled sheets of paper in little plastic bags in a little box.  If DH hadn’t stumbled on it online, he would have done what all of his former labs have done and bought a fishing tackle box or cabinet and sorted them that way.  This is much more compact and it’s much faster to find things.

This backpack from Tom Bihn (not sponsored) has made traveling much easier.  I’ve stopped taking my own bag and use DH’s backpack instead.

Last year I suggested that DH buy me some bras, figuring he’d get something to his taste (Sorry!  The TMI was only in my brain though :/.).  Instead he went to a department store and got boring but very supportive bras in my size that cost quite a bit more than the kind I used to pick up for myself at Target.  Things I would think of as Grandma-style or for women with larger busts than what I have.  And… it turns out that’s what people (my shopping buddy, my sister… though to be fair, I WENT bra shopping with my shopping buddy and did not get this kind even with the lady at the bra store measuring me and hard selling) have been meaning when they’ve been telling me I need better bras for my clothing to fit better.  So… lesson learned.  Pay more for better bras and better bras aren’t ones that look fancier, but ones that have more coverage.  And how is it that DH is better at buying women’s underwear than I am?

While we’re on the subject of women’s clothing, I got some amazing tights from Target online.  The brand is A New Day (not sponsored) and all of the tights I got from them have been crazy amazing, from the plain black, to the patterned, to the super soft super warm fleece lined tights that are warmer than a lot of pants.  No tears yet! 100% recommend (and we don’t get any kickbacks from Target!)

What things have you loved this past year? What purchases have made your life easier or better?

The problem with buying an Apple Watch and why we finally gave our 12 year old a smart phone

I heard somewhere that the Apple Watch detects heart attacks and then notifies authorities.  This is not actually true.  But I thought it was true.  DH works from home alone and my second biggest fear is that he’s going to have a heart attack at home and his life could have been saved if people had been around to get him medical attention (my biggest fear is similar but involves semi-trucks and crossing the street).  So I decided that an Apple Watch would be a good thing for DH to get, especially after reading a bunch of highly compelling stories about people whose lives were saved by the watch.  After additional research, I did find out that the newest version of the Apple Watch, the Apple Watch 5, is very good at fall detection and will alert authorities and I have instructed DH to attempt to fall (in addition to chewing the aspirin I make him keep at his desk) should he feel a heart attack coming on and is unable to call 911.  This is only somewhat tongue-in-cheek (yes, I do make him keep aspirin at his desk).  Version 5 also has better detection of heart problems that aren’t heart attacks, so if it’s a heart problem that has some warning signs that would be nice too.  So even after I found out that the heart attack thing isn’t true, I was sold on him having one.

It turns out, if you buy an Apple Watch 5, you’re going to need a new iPhone to go with it (because your iPhone 6 isn’t compatible).  You find this out after you get the watch in the mail and have to decide whether to upgrade the phone or return the watch.

When you get a new iPhone 8, you’re going to need a new SIM card to go with it (because your old iPhone 6 SIM card isn’t compatible).  Fortunately, unlike the iPhone 8 ($450 plus tax), the SIM card is only $5 (plus $4 s/h plus tax).  You also find this out after you get the new iPhone in the mail, but by this point you’re committed.

DC1 is going to get the hand-me-down iPhone 6, which is surprisingly beat up (surprisingly because mine is still in really nice condition).  Turns out it’s only worth about $60 resale which is just a little more than we’ve been paying for DC1’s crappy flip phones.  DC1’s current crappy dumb phone has been driving us crazy because it doesn’t get very good reception at hir school which means zie leaves us voice mails that we can’t understand and zie doesn’t get our texts when we need to pick hir up.  It also has such a terrible battery life that I went and bought hir an external battery. Zie has lost or washed so many flip phones at this point we assumed this one would not last long, but it’s been a few months.  Zie will still have it as a back-up when zie inevitably loses the iPhone.

We are going to have to have a long talk about proper smart-phone use and internet addiction and all those other lovely things, but it will be nice for DC1 to be able to use an electronic calendar and to actually get the texts that hir orchestra teacher tends to send in the middle of the day.

Do you have a smart watch?  If applicable, when did your kid get a smart phone?