A Credit Card Rating System Introduction (Series Part 1 – June 2019)

 

A CREDIT CARD RATING SYSTEM

The responsible use of cash reward credit cards has been very helpful in reducing my monthly expenses. In order to help me decide what new credit card I should apply for at any given time, I have developed a credit card rating system. It guides me in determining which credit card will best meet my needs at the time I apply for it. This blog post series will explain my system in detail to help others decide what cards and card qualities to consider as well.

THE CATEGORIES OF CREDIT CARDS

The categories of credit cards are shown in the illustration below. Note that each serves a different purpose. Cash reward credit cards provide a crucial feature that some of us value most, cash back for a reduction in expenses. To apply the system where it has great value, I will use the cash back or cash rewards cards category as the primary focus of this blog post series, A CREDIT CARD RATING SYSTEM.

credit-card-rating-system
“CompareCards says issuers are providing such generous deals, they’re virtually irresistible for those willing to switch.”
CASH BACK AKA CASH REWARDS CREDIT CARDS

With cash back credit cards, one can get reductions in monthly credit card charges. This is crucial for the survival of someone who is a Former Middle-Class Person as well as a senior citizen. In fact, the benefits offered to make life easier with these cards increases almost daily. This is because credit card issuers are becoming increasingly competitive with generous offers to lure new customers to switch credit cards.

ADD TO RATHER THAN SWITCH CARDS

It can be preferable to add a new credit card rather than switch by elimination. On the other hand, there are many details to keep in mind when adding rather than switching. In spite of that, one major benefit of having a bounty of (cash reward) credit cards is a substantial amount of total available credit. This means that if a credit cardholder uses a very small % of his/her total available credit each month, a major factor of one’s credit score remains ‘EXCELLENT’. When it comes to credit scores, most systems use a total of six factors and using a small % of available credit is one of them. But adding new cards definitely has its pluses and minuses. In spite of the challenges, I have found adding cards to be a plus. More about this in the other posts in this series.Here is an article about this from Credit Karma.

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There are Six Primary Credit Card factors in the major FICO® scoring system as illustrated by Credit Karma®
HOW TO KEEP MANY CASH BACK CREDIT CARDS ACTIVE AND IN ORDER
There is no way to use every card each month. As a result, I use a rotation/pairing system that allows me to use only several cards each month. The pairing part means that I make available one card in each of my charging categories, if possible. Even though I have developed a system, I still have to be vigilant. That means staying within my spending budget and making all my payments on time. In other words, there needs to be a way that I can keep track of every detail of every card at all times. More about that in the other posts.

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Credit Card Cash Reward Categories are similar to traffic signals. This one is from Pixabay.
MY CREDIT CARD RATING SYSTEM AS IT IS APPLIED TO CASH BACK CREDIT CARDS

The additional posts in this series will focus on how my credit card rating system relates to how I choose cash rewards credit cards. I can and do use it for deciding on all my accounts. The beauty of this system is that it can be used across the board with any cash reward card. In fact, it can be used for deciding on any type of credit card as well.

SUMMARY

Here are the links to this five part series about my Credit Card Rating System: Introduction to A Credit Card Rating System
The Rating System Used for Cash Back Credit Cards (Series Part 2 – June 2019)
Excellent Cash Reward Cards (Part 3 – June 2019)
Mixed Cash Reward Credit Card Benefits (Part 4 – June 2019)
Risky Cash Reward Credit Cards (Part 5-June 2019)

Please note: I am not a certified financial planner or professional advisor. These blog posts about the use of credit cards are based on my own experience which I freely share. But I can take no legal or financial responsibility for the results you may have in attempting to follow my system. But I do wish you the best and welcome your comments and questions at the VERY end of this post. You will have reached the end because you can not scroll down any further. As well, you will have reached the comment form.

SOURCES & RESOURCES

To learn more about credit card cash rewards, go to these blog posts:
Credit Card Categories, Sign Up Incentives and Cash Rewards
How To Compound Cash Rewards
Nerd Wallet | Credit Cards Market Place
The Former Middle Class Ebook Series

The learn more about all kinds of credit cards, go to following link about CompareCards.com (A.) and its sublinks (B. through I.)
A. CompareCards® by Lending Tree
B. Best Credit Card Offers July 2019
C. Low Interest Cards
D. Balance Transfer Cards
E. Cash Back Cards
F. Reward Cards
G. Airline Cards
H. Business Cards
I. No Annual Fee Cards

 

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Credit Card Cash Rewards Explained

 
Credit card cash rewards can offer added benefits to credit card owners. But sometimes it can be confusing to claim them. In addition, not all cash rewards are the same.

Types and Distribution of Credit Card Cash Rewards

There are several types of credit card cash rewards as well as different ways they can be distributed. It is important to know when and how they can be made available to make the most of these rewards.

Credit-Card-Cash-Rewards
American Express® statement credit cash reward printed and stored either digitally or manually for proof of distribution.

Types of Cash Rewards

There are between three and four types of cash rewards. The most direct is the statement credit applied directly to your credit card statement, illustrated above. But which statement is the question. Is it your current statement or your next statement? I often find that a call into the credit card company is needed to clarify this question.

The other types of cash rewards are illustrated here. They are gift cards, merchandise and friend referral rewards.

Credit-Card-Cash-Rewards
Types of additional cash rewards available as illustrated by Amex®.

Distribution of Credit Card Cash Rewards

This is where things can get confusing. Distribution has several options:
• anytime by request online or by phone
• with a minimum of $25 in rewards by the same methods
• in increments of $25 in rewards by the same methods

credit-card-cash-rewards
Capital One® offers cash back in any amount at any time plus lots of other rewards.

Option One is the simplest and most direct. Capital One and now Bank of America credit cards both offer this service. See the illustration above,

Option Two is where things can get complicated and there are drawbacks. This is because you can’t withdraw cash rewards at any time. There has to be an accumulation of at least $25 to do so. American Express distributes cash rewards this way. Read the fine print inside the red outline.

credit card cash rewards
Cash rewards are available for a minimum of $25 dollars. See the fine print inside the red lines.

Then there is Option Three, the least desirable way to cash in cash rewards. They can only be made in increments of $25. As illustrated below, cash rewards can be distributed only in increments of $25.

credit card cash rewards
Wells Fargo Go Far® Cash Rewards program distributes rewards only in incremented of $25.

Reading the fine print is important to understand what types of credit card cash reward exist and how they can be distributed. You can also learn more about credit cards on this blog by going to the search bar and typing in credit cards.

SOURCES AND RESOURCES

Capital One Cash Back VISA Credit Cards
Bank of America Cash Back VISA Credit Cards
Wells Fargo Credit Cards
American Express Credit Cards

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Using Cash Reward Credit Cards for Survival & Profit

 

Introduction

I’ve talked a lot about using cash reward credit cards, lately. It actually feels like I am living in a credit card world. In fact, this for two reasons. One is because I have wanted to learn everything I could about cash reward credit cards, credit scores and credit reports, too. The other reason, probably the most important one, is that cash reward credit cards have become one of my most essential survival tools.

cash reward credit cards
Alison D. Gilbert, The Credit Card Maven
The Credit Card Maven

As a result of my intense interest and need to know everything I can about credit cards, I’ve even created a Facebook page called The Credit Card Maven. This is where I post information as I have researched and sourced it. I have found a number of websites, blog posts, Facebook pages (listed here) and groups that are extremely helpful resources in my quest for knowledge as The Credit Card Maven in my credit card world. Included are:
Credit Card Mastery
Credit Karma
CreditCards.com
NerdWallet
Wallet Hacks
Wise Bread
 

cash reward credit cards
Viper Tool Storage Box Survival Toolkit as part of My Credit Card World
Credit Cards as a Survival Tool

As I mentioned at the start of this post, credit cards have become a survival tool in my credit cards world. It was not by design that this came to be.

It was more a matter of circumstances. Once I got a feel for how useful and profitable using credit cards could be, my desire to use them and master it increased. Let me give you an example.

I have had cash reward credit cards for a number of years. I can accumulate up to about $40. in a two month period from one of them. That was a good beginning. Then I decided to get a travel rewards card in anticipation of someday going to visit my family in Colorado. I used it and kept on accumulating points.

Credit Card Currency

When I went to check on the conversion to paying for an airplane ticket, the results were not impressive. I had to find something better. This time by design, I set out to find the best deal I could for air travel benefits using a credit card. I found one that I ultimately used for my flight. It rewarded me with 30,000 points and a $100. discount on my airplane ticket. This was such a great deal that I have enough points to return to Colorado for free, right now.

cash reward credit cards
Credit cards currency from 123RF.com
Now that’s what I call using credit cards as currency. If I could do that with a travel rewards credit card, I wondered what other benefits and rewards I could manifest in my credit cards world. I familiarized myself with a few other travel rewards cards as part of getting a second ticket for my husband and having funds for other things related to our vacation. All in all, my activities resulted in a savings of between $400 and $500 for our trip.

 

 

Credit Card Investing

Let me present one more situation where the skilled use of a credit card became very profitable. I found an offer for a cash rewards credit card that would refund $100 on spending $500 within 90 days of acquiring the card. That would be a 20% profit. I had never accomplished that in the stock market. It seemed like a very good investment to me. I wasn’t sure if I would be granted another card as I had accumulated quite a few by this point. But it came through. I fulfilled the requirements. Now I am just waiting for my investment to pay off.

cash reward credit cards
Credit Card Monthly Rotation represented by a photo from blog.taxact.com
Credit Card Monthly Rotation

I made another discovery. It may seem a bit confusing. In fact, I am kind of surprised that I am even able to do this. I am calling it credit card monthly rotation. It is based upon a combination of the nature of credit cards themselves and good credit card hygiene.

Each credit card has a closing date and a payment due date. Since I have several cash reward credit cards and they have different closing and payment dates, I can stagger them and not have to pay them at the same time. If I make my purchases and schedule my payments using my monthly rotation system, I have a revolving credit situation. In other words, if my budget in a particular month needs to be exceeded, I can use a card that has a closing date that will allow payment the following month. I just have to make sure the funds will be available then. I also have to have a very good bookkeeping system to keep track of every detail of every card.
 

cash reward credit cards
Brian Cain’s Credit Card Mastery Course
Credit Card Mastery

What is credit card mastery? Have I achieved it? It turns out that this term exists. I did not invent it as I thought I had. There is actually a course called Credit Card Mastery that costs $97. Much of it seems similar to my own system. Although I have not taken that course, it looks very comprehensive. This is an introduction to the course and an explanation of it by founder, Brian Cain.

Based upon my understanding and goals to achieve Credit Card Mastery, I believe that I am on my way but I have not achieved mastery yet. When will I achieve it? There are several requirements that I have established for myself:
• My credit scores average will be over 800 again. It is only about 10-20 points from that now.
• My monthly rotation system will have proven itself to work and I will have a sense of mastery in my credit card world
• My Credit Card Management Chart will be complete and committed to memory. As a result, I will have a firm grasp on all my cards and a natural flow for their use in rotation as needed.

Conclusion

To many people, understanding credit scores and reading credit reports are overwhelming and confusing. There is no need to not have transparency and clarity about your credit cards world. Credit cards are an important tool and can even be crucial for personal survival and business development. Study the resources provided. Take the Credit Card Mastery Course if you can. Having one’s finances in order and being able to live solvently in a credit card world are not luxuries. They are necessities and everyone deserves to have them.

cash reward credit cards
The Cool Piggy Bank property of The WalletHacks.com and the cover image of their facebook page
Sources & Resources

CreditCardMastery.com, a course developed by Brian Cain
CreditCards.com, find a credit card that’s right for you
CreditKarma.com, free credit scores and more
NerdWallet.com, Best Credit Cards of 2017
NextAdvisor.com, all about finances
WalletHacks.com, founded by Jim Wang
WiseBread.com, great blog post advice about credit cards and everyday frugal living

FICO SCORE AND CREDIT REPORTING AGENCIES
Equifax
Experian
Transunion
Identity Guard

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