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  1. #1
    Registered User Enthusiast
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    Overrated New Cardmember Bonus Example

    I think Discover is currently offering an example of an overrated new cardmember bonus.

    It sounds great that they will double your first year points. But how good is this. For it Miles, you can effectively earn 3% back for the year. For the it card, you can double your cash back to 10% on bonus categories and 2% elsewhere.



    Both sound great. And both probably work out to costing Discover the same: 3%. (After all the it card comes with limited opportunities to earn bonus category points.)

    But if you are willing and able to take out multiple cards during a year, you can always be working on new card offers worth 25% back or more. A lot of no-fee cards offer $150 on rewards after you spend $500 - that is a 30% bonus, and does not include the regular value of your rewards.

    I am really getting into collecting these bonus rewards. And I think you should too, if you want your spending to go further.

  2. Overrated New Cardmember Bonus Example
  3. #2
    Registered User Semi Pro Member
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    321
    I don't disagree with your strategy. But it is getting harder to pursue thanks to new rules put in place to limit the benefits to card hacking. Discover, for instance, only lets you get a signup bonus one time. You cannot just use it, quit, and sign back up and get the bonus again.

    Other things people think about are:

    Simplicity: just one card makes it easier to keep track of their finances and not overspend.

    Other Perks/Consumer Benefits: I know a lot of people like the superior customer service of Discover and Amex, especially when it comes to extended warranties, purchase price protection, and accident/theft protection. Visa and MasterCard are catching up in this front too. But it is less certain because they are open loop (relying on the issuing banks), where Amex and Discover are closed loop and control the whole process.

  4. #3
    Registered User Junior Member
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    I'll bite, lathinker. What is a signup offer you do like?

  5. #4
    Registered User Enthusiast
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    Right now, the offers I like best are the $150 of bonus cash back by sending $500. That provides a 30% yield before the regular rewards. And on a fairly low level of spending.

  6. #5
    Registered User Junior Member
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    Quote Originally Posted by lathinker View Post
    Right now, the offers I like best are the $150 of bonus cash back by sending $500. That provides a 30% yield before the regular rewards. And on a fairly low level of spending.
    I have to admit, that sounds a lot better than trying to force spending on bonus rewards categories, and only getting 5% back for that.

    Do you have specific cards to recommend?

  7. #6
    Registered User Semi Pro Member
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    Not to step on your toes LAThinker, but here is what I came up with for cards offering $150 cash back bonus offers:

    Amex Blue Cash Everyday ($150 if you spend $500 in first 3 months)

    Chase Freedom and Freedom Unlimited ($150 if you spend $500 in first 3 months)

    That was all I could find. The Quicksilver just misses, offering $100 if you spend $500 in the first 3 months. I think the limited opportunities for the 30% bonus level is why so many card hackers like the travel cards. Even though the yield is lower - usually between 12% - 17% in value - and the spend requirement higher, you can earn a larger number of points.

    Just as an example, the Venture card lets you earn a bonus 40,000 miles (worth $400 in travel rewards) if you spend $3,000 in the first 3 months. That works out to bonus rewards worth an extra 13% on your spend. But it lets you collect $400 in rewards in one place.

  8. #7
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    Those are the same ones I know of Mr. Cards. My understanding is that others, including the Quicksilver, will match those from time to time.

    I am new to card hacking, so I may just be assuming too much that you can get these offers multiple times a year.

    What I do like about the lower spend thresholds to hit the bonus amount is that you can get there without manufacturing spending. The one thing I want to do is avoid taking on credit card debt.

    This is why I am not yet sold on travel hacking. Even if I can pay for airline tix and hotels, travel always involves so much more incidental spending. And if I was just saving points to use for my regular travel to visit family, I am better off with the cash back.

  9. #8
    Registered User Senior Member
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    192
    Buyer beware. Once you need to manufacture spending to get a bonus offer, you are getting yourself in trouble. So I do like the idea of getting the bonus offers, I am in agreement with lathinker to aim for the easy ones (which also yield more for your dollar).

    Leave the the ones requiring $4,000 in spending to the big spenders. You know, the ones paying 25% APR on their thousands of dollars manufactured spending and thinking they are coming out ahead because they got $400 off a $1,000 plane ticket they could not afford in the first place.

  10. #9
    Registered User Enthusiast
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    Quote Originally Posted by creditwatcher View Post
    Buyer beware. Once you need to manufacture spending to get a bonus offer, you are getting yourself in trouble. So I do like the idea of getting the bonus offers, I am in agreement with lathinker to aim for the easy ones (which also yield more for your dollar).

    Leave the the ones requiring $4,000 in spending to the big spenders. You know, the ones paying 25% APR on their thousands of dollars manufactured spending and thinking they are coming out ahead because they got $400 off a $1,000 plane ticket they could not afford in the first place.
    I am being wary, but I now think it is possible to "manufacture" spending at a high rate without actually coming out of pocket any significant sums, and certainly far less than you can earn back in rewards. Once I complete a full cycle or two, I'll reveal the tricks I've picked up. I don't want to to give out bad info if I end up getting myself in trouble.

  11. #10
    Registered User Semi Pro Member
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    414
    I think you are underestimating the value of doubling your rewards for a year. It just lets you spend your time meaningfully - maybe enjoying family and friends or reading a good book. Not wasting time hopping from card to card in an endless desire to spend more and earn more points just to hopefully get a free airline ticket or hotel stay.

    You are missing out on the joys of living simply.

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