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Is Grandma Surviving On Plastic?

Saturday, January 19, 2013 - 5:20 PM
According to the survey, many seniors are apparently using their credit cards as a "plastic safety net" and a stand-in for an emergency fund.

Seniors Spending More on Credit Cards
4
ShorebreakShorebreak2,604 posts since
Apr 6, 2010
Rep Points: 14,108
1. Sunday, January 20, 2013 - 12:38 PM
I really resent these articles that make it look like seniors who use credit cards are out of control with their finances.  I really have learned to appreciate "plastic" the older I get because it means I can go shopping and purchase extra items we forgot to put on our list because I don't have to be concerned about not having enough cash with me.  It means less trips to the store and less wasted gas.  Now I am astute to make sure I always keep enough funds in our checking account to pay off monthly whatever the credit card bill may be.  One must be responsible to use credit cards without running up bills one can't afford.  I think a lot of seniors are in my category no matter what certain "rating gauges" show.
5
paoli2paoli21,367 posts since
Aug 10, 2011
Rep Points: 5,993
2. Sunday, January 20, 2013 - 2:11 PM
I have used cash back credit cards for many years. We even purchased a lot of things when we built our home on a 5% cash back credit card. Continue to get 5% back on gasoline, 3%  on groceries and 1% on everything else. It adds up to what I consider a lot of money each year. I never have over $5 in my purse. The card is paid off each month and the credit union debits my checking account and I don't have to worry about the statement getting misplaced or a payment forgotten etc. 

It is going to be interesting to see if we will have to pay income tax on this income at some point.  
4
Ally6770Ally6770909 posts since
Jan 16, 2010
Rep Points: 2,643
3. Sunday, January 20, 2013 - 3:28 PM
Rosie:  Don't mean to be nosey but can you share the name of the "Cash Back" credit card?  Our card gives us Reward points which are useless to us since we have to purchase things with the points to use them.  We have thousands of useless points over the years.  I would prefer to get cash back like you are doing.  If you can share the name of the card, I would appreciate it.  Thanks!
2
paoli2paoli21,367 posts since
Aug 10, 2011
Rep Points: 5,993
4. Sunday, January 20, 2013 - 8:28 PM
Pentagon Federal has 5% cash back on gasoline paid at the pump. They take it off the bill each month. They have another card that pays points of 3% with groceries and 1% on everything else. When you get $50 call and they will mail you a $50 visa  gift card. 

Lake Michigan credit card pays 3% on gas 2% on groceries and 1% on everything else. When you get $50 call and they will put it in your checking account, put it on your credit card etc. They have a reward checking account that pays 3% on up to $15,000. I have had it for a few years. It used pay 4%. 

AARP had a Chase credit card that paid 5% off everything for 6 months and that is what we used when we built our home. This was about 2 years ago. 
3
Ally6770Ally6770909 posts since
Jan 16, 2010
Rep Points: 2,643
5. Sunday, January 20, 2013 - 9:16 PM
Paoli2: Some "rewards" cards allow the option of getting cash back in exchange for your points. "Pure" cash back cards would include the Chase Freedom Visa, Capital One Cash Rewards Mastercard,  Bank Americard Visa, American Express Blue Cash, and Discover cards.

Follow-up

Paoli2: Let me elaborate a little bit. My Dad had a rewards card with Chase that earned points, and he always redeemed his points for cash. That particular card was "converted," I think in 2011, to the Chase Freedom Visa card (which is a pure cash back card). He also has a rewards card which earns points with Capital One, and likewise has always been able to redeem his points for cash back. In fact, his particular Capital One card is a better deal than Capital One's Cash Rewards card (which I have), because he earns two points per dollar spent, while the redemption is only one point per dollar, which works out to a 2% cash reward when using the cash back redemption option! I have a Visa with River Valley Bank that earns points, and have used the cash back redemption option as well. So I think there is a fair chance that your rewards card might also have a cash option. What is your rewards card called, and who is the issuing bank? Feel free to PM me if you like.
2
WilWil242 posts since
Feb 26, 2010
Rep Points: 1,285
6. Sunday, January 20, 2013 - 9:46 PM
Rosie and Wil:  Thanks so much for the helpful info on the cash cards.  I have been hounded by Chase for years to get their card.  Maybe I will look into that soon.

WiL:  I sure hope you are right about getting cash back for reward points.  I sure have tons of points!  I will call them Tuesday and see what they say.  Thanks for the info.
2
paoli2paoli21,367 posts since
Aug 10, 2011
Rep Points: 5,993
7. Tuesday, January 22, 2013 - 8:10 AM
Paoli2: Let us know what you are told today when you call about redeeming your points for cash. You might also want to ask about the possibility of a statement credit if sending you a check or electronic transfer isn't available.
1
WilWil242 posts since
Feb 26, 2010
Rep Points: 1,285
8. Tuesday, January 22, 2013 - 10:40 AM
Wil:  Looks like I am out of luck with this AT&T Universal Mastercard we have had for upteen years.  I just got off of the phone with a rep in their "Citi Easy Deals" department and she said we have 3991 points and they cannot be redeemed for cash in any manner.  The only way we can use them is to go on their Citi Easy Deals website and buy products listed on a discount.  I checked out their website and the products are not really cheap even after the small discount they allow for each product.  I can only use so many points per product so it seems just a ploy to get us to spend more money with them.

We have kept this card for all these years because it has no annual fee and has never tried to get us to pay one.  I would like to try the Chase card which gives cash back but I just don't trust Chase to keep it with a "no annual fee" after the first year.  Our credit rating as of yesterday was on the highest rung so I don't think we would have trouble getting another new card.  I really don't like the idea that I have to throw away all the Mastercard points but she said they expire after 3 months so we must already have lost a lot.  Thanks for bringing this to my attention.  I really appreciate all the help you, Rosie and Shorebreak have shared about this matter.
1
paoli2paoli21,367 posts since
Aug 10, 2011
Rep Points: 5,993
9. Tuesday, January 22, 2013 - 5:17 PM
Paoli2: If you credit rating is that good, I think you should: (1) Get the Capital One Cash Rewards Mastercard immediately (the one that offers 1% cash back on everything, and the 50% bonus every anniversary - that works out to 1.5% cash back; it is the green colored card that is heavily advertised on TV); (2) Get the Chase Freedom Visa (it offers 1% cash back on everything, and has rotating 5% cash back categories every quarter) OR the Bank Americard Cash Rewards Visa (it offers 1% cash back on every purchase, 2% cash back on groceries and drugstores, 3% cash back on gas) immediately. All three cards have no annual fee, and I don't think that is going to change anytime soon. Bankamericard Cash Rewards Visa is offering a $100 bonus cash back for opening a new account. Chase Freedom Visa is offering $100 bonus cash back and 0% introductory APR for 15 months for opening a new account. For excellent credit, the no annual fee Capital One Cash Rewards is offering a $100 bonus cash back and 0% introductory APR for 12 months for opening a new account. You will then have a Mastercard and a Visa. (3) Do not close the Mastercard account you already have, just don't use it anymore, otherwise you will temporarily "dent" your FICO score . . . and don't even think of closing it until after you have gotten all the new credit cards you want. Furthermore, don't apply for too many new cards at once. Limit it to two for now, and then maybe in about six months, perhaps you could then apply for another one or two if you want. If you follow my advice, you will have two pure cash back cards right away and $200 cash (make sure you meet the spending qualifications to get the bonuses, they probably aren't too difficult).

Later: To answer your DP's question: It is the TV commercial with the female baby. Be aware that the no annual fee card is with excellent credit (they'll offer the same card for those with "average credit" with a $39 annual fee, so be careful when you go to Capital One's website to apply). In addition to the cash back, Capital One allows you to redeem your cash back rewards any time in any amount - unlike all the other cash rewards cards, which have minimum redemption levels ranging from $20 to $50. Furthermore, Capital One is the only major credit card issuer who presently does not charge a foreign transaction fee for transactions made in foreign currencies (useful if you go to, or buy things from, Canada or other foreign countries). I have all three cards I mentioned in my post, and have yet to experience any "negatives." I use Capital One Cash Rewards as my "default" card, and I use the Chase Freedom Visa and Discover cards according to the rotating 5% quarterly categories (also, Discover has the most "rewarding" online shopping mall), and I use the Bank Americard Cash Rewards mostly for groceries and sometimes gas. Another of my regular cards is the Chase Amazon Visa, which earns points, which I use for Amazon purchases (triple points) and restaurants/drugstore (double points) - although it offers other redemptions options, I usually use my points for purchases from Amazon (and you can use ANY amount of points). Of course, pay your balance in full every month and don't spend unnecessarily just for the sake of earning rewards!

P.S. By the way, the "What's in Your Wallet" commercial (featuring Alec Baldwin) is for the Capital One Venture card -- that is a "miles" card (you don't want that one). You want the Capital One Cash Rewards card (the commercial with the girl baby).
2
WilWil242 posts since
Feb 26, 2010
Rep Points: 1,285
10. Tuesday, January 22, 2013 - 5:51 PM
Whew!  Wil, I need to print out your post and study it so I can decide what to do "after" I get all our taxes done.  I am in the midst now of getting everything I need to do Federal and State taxes and our RMDs.  I just don't have time to decide on which one of those great cards to get.  I am so glad you recommended not closing the Mastercard we have right now.  This is the worse time of the year for me with my responsibilities so I don't want to rush into anything unless I have time to think about it.   You are so thoughtful to take the time to share all these helpful ways for me to make a few extra bucks with interest rates being so low.  Much appreciation always for your help!

Wil:  I just handed your printed  post to DP and told him to make a decision on it while I work on taxes.  He wants to know if the Capital One Cash Rewards Card is the one they advertise on tv all the time.  You know the "what's in your wallet" card?  Are there any negatives to any of the cards you listed that I should be aware of?  Will the things we need to buy be stuff normal folks usually buy?  Thanks so much for your time and help. (I think you may have created a "monster" now that I know I can make money off of spending money. :) )
2
paoli2paoli21,367 posts since
Aug 10, 2011
Rep Points: 5,993
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