So I have obtained both ING direct 2% cash back (5% expired) and I also have Citibank Platinum credit card (free for life) courtesy of OzBargain. I am wondering what would be better to use for every day usage. Keeping in mind that I never pay interest. I imagine 2% would be greater than the rewards but I just wanted to throw it out there.
Thanks in advanced.
I did the maths on a Citibank Signature a couple days ago:
1.5 points per $1 spend
Citibank Rewards $100 Woolworths Gift Card = 17,900 points.
Therefore you need to spend $11,933.00 to get 17,900 points which will earn you a $100 gift card. Therefore signature earning rate is 0.838%
With a Citibank Platinum it's 1.25 points per $1 spend if I remember correctly, so that's a $14320 spend to get 17,900 points which will earn you a $100 gift card. Therefore your platinum earning rate is 0.698%.
So certainly better of with ING 2% cashback.
With my Citibank Signature I (somehow) got 60,000 points after first spend and no annual fee. I had a platinum card as well, Citibank let me transfer the platinum points to my signature balance. I figured I would be best of taking advantage of the Velocity Rewards transfer with 15% bonus see deal here.
With 60,000 points I could get $335 worth of Woolworths gift cards through Citibank, or I could transfer them to Velocity (at the rate of 1.5 citibank to 1 velocity point) and get 40,000 velocity points + the 15% bonus = 46000 velocity points, which can easily be sold for 1 point for $0.01, which means I would earn $460 through velocity, rather than $335 keeping it in Citibank. Morale of the story, you might want to transfer out your citibank points to velocity if you wanted to use them for flights or to sell, especially when they have a bonus offer, than redeeming them through Citibank.
(if I messed up any calculations yell out)
Cool that's great feedback. Just to clarify did you already have the Platinum credit card and then upgrade to the Signature or did apply for the Signature separately?
I had to apply for the Signature separately, they wouldn't do an upgrade, they even did a credit check and asked for payslips etc despite having a Platinum card with them already. I still have the Platinum card, I'll cancel it soon as no point having both.
thanks buddy. did you actually meet the 70k limit?
Yeah I did but from what I remember reading in previous OzBargain deal posts, you may still be accepted if you don't quite meet it depending on your other circumstances (worth a go anyway).
Got any points for me hamza23?
I'm hungry for some! :)
Regarding the ING 2% rebate - you need to deposit $1k/month into the orange everyday account. Does this attract the 3.5% savings maximiser saving rate?
Nope no interest on the everyday account, but you don't need to keep it in there, you can deposit $1k to you everyday account and move it to your maximiser.
I'm not sure if you can just transfer the $1k to your maximiser and still receive the cashback, I'm not game to test it, but it might work if you read the wording in your account on the bonus offer section, it says deposit at least $1k to any personal ING Direct account. Might pay to message them and ask if you wanted or maybe someone else knows for sure:
The cash back offer will apply for the next calendar month when a deposit of at least $2,000 (will reduce to $1,000 from 1 July 2014) from an external bank account is made to any personal ING DIRECT account in your name (excluding Living Super) by the last day of the preceding calendar month
For purchases under $100 I would use the ING card for the simple reason that you get the cashback a day or two later and can spend it again. Compare that with saving enough points for a basic flight, which can take years (and you still pay tax and fuel surcharges).
The only time credit card points may be worthwhile is if you're buying a business class airfare. The profit margins are rather fat there and airlines will effectively give you more than 2% on your spending. But you still have to pay tax and fuel surcharges.
But even with a business class seat it may be preferable for many people to get a cheap sale fare on a budget low-cost airline and insead redeem the rewards points for gift cards, which would be worth more in cash than the budget airfare.
For example if I can fly to Sydney for $50 on Tiger, or use $400 worth of rewards points for a business class seat on the 2 hour flight, I would much prefer $400 in gift cards and then pay $50 for the budget airfare myself.
Another weird thought… the 2% you get back can be used again in the next purchase to get another 2%. So it's like compound interest. Whereas if you cash in rewards points for a gift card then you miss out on any reward or cashback until you use up the value on the gift card.
Overall I definitely use my ING card whenever I can get 2% cashback, but I do use my AMEX or Altitude black if it's over $100 or there is no paywave…
Actually my AMEX card may give me more than 2% returns on supermarket purchases because I get 3 points per dollar and 1 point = $0.01. Even so, I still don't bother with the AMEX and just use my ING for 2% instant cash.
If I go to Aldi then I used to forefeit any cashback or rewards points because they charge credit card and paywave fees. However, their credit card fee for paywave is 0.5% and ING gives us 2%, so we should still use paywave at Aldi. Actually if you spend $100 at ALDI they will add a $0.20 credit card fee to take it up to $100.50, and then you get $2.01 back from ING so the net cashback is actually 2.01%-0.5% = 1.51%!
I hate to be a fudd, but saving a few hundred dollars in 5 or 10 years this way, considering any effort with transfers, monthly repayment etc seems a bit useless.
Real savings can be gained by diy repairs, fixing own car, buying 2nd hand wisely, and shopping around and in bulk for groceries etc. As well as making the big purchases (cars, homes, big necessities) very frugally.
These choices likely outweigh tiny efforts & waste, like turning off lights, saving 4c on petrol, having everything under the sun insured, being an automotonic consumer, etc etc.
The biggest saving of course (sort of) is getting a high wage.
Just seems a waste of energy and time to save say $2000 in 10 - 20 years through these schemes, when serious frugal grocery shopping alone, or maintaining your own 2nd cars, might each outweigh all other efforts you could make elsewhere many,many times over.
IE. think about the realistic longterm outcome. Is it really smart?
Note: I mean well by this.
not to say your point is invalid, but I daresay him knowing whether to use a CC or a cashback card is going to set him back very much time. He might spend 10 minutes posting/looking through this thread.
why not have/do both?
yeah i know where you're coming from. you do make sense and i do have a crappy car and i'm trying to put myself into a position of saving for a house (still studying). the way i see it is there are two ways to making money. saving and not spending. i'm trying to do both i guess.
thanks for taking your time to respond though. i appreciate it.
You forgot the third way. Earning money.
Saving money by saving on things you were gonna spend in is great (the best). Example: saving money on electricity.
Saving money by not spending on things you don't need (more specifically, those that do not offer you great benefit) is also great. Example: spending on a Mercedes instead of a second hand Toyota
Of course this sort of thing completely changes as soon as you say something like "I've always wanted a Mercedes by the age of 23 so I've saved up so much for it and I'm gonna buy it"
If that's what you really want that's what you really want and no one can tell you otherwise… unless you're convinced yourself that as you got older a Mercedes is not worth the money, as I did.
Without a doubt 2% cashback is superior.
Reasons have been outlined quite well in comments above so I won't add anymore.
I have both, ING's 2% is better than Citibank rewards' return of roughly 0.5-1%. If the merchant accepts paywave and the cost is less than $100 I use ING, for everything else (provided there is no CC surcahrge) I use my Citibank rewards card.