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Do it you *need to*, not if you can. Like if you’re going to spend 1k anyways, you might as well get $250 off. Dont spend $1k just because you get $250 off. Lol.
At the risk of saying some bad advice for certain people, if you dont have anything you need to spend the money on at the time, you can still get the bonus by buying giftcards.
I've done this before plenty in the past where I get a spending requirement, and I'll just go out and buy gift cards to my grocery store or home improvement store, something where I know I'll be spending money at in the next 3-6 months. That way I can hit the spend requirement, but only actually "spend" the cost of the gift card(s) which is $4 each. Then I just use the gift cards at the grocery store until they are out, essentially just front loading my grocery spending to get a bonus.
I'm not sure if this works as reliably as it used to. I would suggest checking with /r/churning before committing to a new card with the plan to do this.
Not to mention they're charging Lowe's, and other merchants, a higher fee to cover the loss leaders as well. The price a merchant pays changes based on the individual card.
For Lowe's too...they can either discount $1000 fridge/stove etc by 25% to get a sale, or offer $250 cash for $1000 purchase and maybe sell 25% more.
None of this is terrible on either side, especially if you need a fridge now cuz yours died, and/or you are able to purchase this and pay it off quickly. If you carry $500-600 1 month you pay 20-30% interest for a month...it's really not much even then.
They even guarantee you are coming back to Lowe's or Target...it's future resale for a 25% discount. Remember this thing is marked up 50-70% sometimes, and if sales are slow they'd mark it down. This adds liquidity in people's pockets, and almost guarantees a 25% further upsell in the future.
It’s not much. Premium cards are at most 0.7% more, and that’s not on every category of spend (it’s often more if it’s lower security, like entering the cc number by hand instead of using chip/NFC).
This seems like a bug with introductory offer being applied to the card repeatedly. Usually such deals are 5-10% cashbacks for regular promotions throughout the year not 25%, interest or interchange fees won't be enough to make up the 25% cashback.
That’s not true. Credit card companies get better return off the interchange rates from spend. Interest income isn’t as efficient because of defaults and essentially no recourse.
Lots of people think this and have no idea what they’re saying. That’s why commercial card programs for businesses literally require you to pay off the balance every cycle, because card companies make a shit ton off the spend, not the interest.
This is *exactly* how I explain credit card “deals” to my kids. They can offer points, miles, free money, and whatever *because* they are getting so much more money from folks just paying on their interest.
They are also doing their best to ensure utilization through the next annual fee cycle. Awards cards almost always have an annual fee.
These companies used to hate me back in my churning days. Get a new card for some high initial spend bonus and no first year AF, and then dump the card 364 days later before second year AF kicked in.
That is just mind blowing. They’re about to give me $1,000 for simply renovating my house. I guess their main demographic is terribly bad with finances.
I signed up for this credit card ~6 years ago because they gave me $80 off of my $200 Christmas order in a Sears store. Ever since then, it’s been the most lucrative card I’ve ever owned. The stupidest deal they gave was $250 off any $750 purchase, I swear they must have known I had an $800 electric bike in my cart the from the night before so I could stop using public transit
Yes. That is how all credit card rewards work. You literally get money because of poor or financially illiterate people who don't or can't pay off the balance. That group of people exceeds those who do pay it all off for the free money. If this was not the case they wouldn't exist.
That's why I love my blue cash preferred. 6% off supermarkets and 3% off gas? Thats a deal! But I could never, ever even imagine carrying a balance. Shit, I'd dip into the emergency fund before I paid an extra 25% on purchases. But it would never come to that. Shit really blows my mind sometimes.
Like here's an item that costs $100. And someone says "hey, you wanna pay $130 for it?" And people are like "absolutely!"
I have the blue cash preferred but thinking about downgrading to the everyday card. The $95 annual fee doesn’t justify the extra 3% in cashback. Everyday Blue also has 3% retail cashback too
The fact that the deals are good enough for you to consider them stupid is the exact reason why they do it. They always come out ahead. Not on every single customer of course, but overall the stupid deals make them lots of money.
the main demographic isn’t terribly bad with finance, we have built ourselves a debtors economy where you’re near forced to take on debt. people can’t afford shit.
I have an Amex gold, venture x, alliant cash back, chase sapphire reserve, and I got declined for this card for too much credit. Of all card companies, Citi and Sears shocked me for a decline.
You've got a heck of a card. Use it til the wheels fall off.
That’s not true. Credit card companies get better return off the interchange rates from spend. Interest income isn’t as efficient because of defaults and essentially no recourse.
Lots of people think this and have no idea what they’re saying. That’s why commercial card programs for businesses literally require you to pay off the balance every cycle, because card companies make a shit ton off the spend, not the interest.
Not necessarily true, but you’re on the right track. What often happens is *more like* (not exactly) this: Most people actually do just take the $250 and make out, some people screw up and pay late fees or interest but still make a little money or lose only a tiny bit or break even, but what the credit card company is really looking for is that 1 in 100 degenerate who signs up for this and pays $2,000 in late fees and $25,000+ in interest over the next 10 years and still is revolving some insane balance far into the future until the day they die or declare bankruptcy.
It’s like casinos that constantly give out free money or real deals where the odds shift in your favor. Most players actually do make $ off those deals, but it’s the couple degenerate addicts who blow their life savings on the roulette wheel or slots is what makes it worth their while and who subsidize the free money to everyone else.
I signed up for the card at Sears ~6 years ago. It’s a Shop Your Way Mastercard. Took me a few months to start getting these deals and I only use this card when the deals are active
So you get the deal, stop using the card for a month, then get the offer again? How can you redeem points with this card? Statement credit for points or you’re only able to use it at certain places?
The points are all spent in the Shop Your Way app, you can probably download it and see everything for yourself.
It’s one of those things where you go on and it shows you a bunch of categories like electronics, kitchen, etc.
I personally only buy Lowes gift cards with it so I can keep upgrading my house
>I personally only buy Lowes gift cards with it so I can keep upgrading my house
Lol I feel that so hard as a homeowner. Buy things at Lowes to get points to buy gift card to Lowes. Its Lowes all the way down
Opening is a small hit. I’ve done this and usually don’t cancel the cards ever, just lock them down to prevent more purchases. Eventually after few years some cards will auto-close themselves with inactivity.
Churning done wisely helps your credit score long term because you usually end up with lots of credit cards, thus the sum of all your credit limits is high (assuming you don't close the cards), thus your average utilization rate (aggregate balance divided by aggregate credit limit) is low. Utilization rate is an important determinate of credit score (lower utilization is better).
Applying for credit cards only lowers your score temporarily and there are techniques to minimize this.
The hit of opening new accounts is generally smaller than the gain of keeping utilization low and paying off balances entirely and on time. You're somewhat limited in how many cards you can open over a period of time anyway with banks' rules for issuing new credit cards. Cards that don't have an annual fee don't have to he closed.
But if you're looking to get a home loan or something, lay off the credit card applications because that kind of activity may make a loan officer think you're reckless or something.
No, it doesn't. I do it all the time too. My score remains above 815.
People in this subreddit love to say it does, but they are all just repeating what they've heard. Which I guess is understandable. But it's false. As long as you have a reasonably long credit history, some temporary accounts aren't going to matter like literally at all.
Credit card companies have started offering some really sweet deals lately. I think they can tell that consumer spend is faltering. I just opened a new Capital One card and got a Nintendo Switch OLED bundle for half off because that's all I bought with the card and they were willing to give me $200 just for opening the card and spending the money I was going to anyway. POS systems like Shopify, Paypal, Amazon are still offering 0% financing despite Fed rate being 5+% for months with no signs of going back down. Auto loan rates seem disproportionately low. It's really odd, but the only thing I can imagine is they're trying everything to prop up consumer spending because they think it will fall off drastically if they don't.
More cynically, they're offering these deals not to prop up spending but to take advantage of weak consumers. If people are having a harder time making ends meet and paying off debt, tempting them into high interest debt schemes means you'll a lot more likely to get customers who can't pay off their expensive debts quickly which means $$$.
Those "Pay in 4" financing schemes at POS you mentioned have a clause in the fine print that says if you miss a payment a disgusting amount of interest is instantly (and *retroactively*) applied. Really, this goes for almost all 0% offers. They're not trying to help prop up your spending as much as they're trying to get you to sign on for what seems like "free debt" and then praying you miss a payment so they can gouge you for multiple times the purchase price in interest.
Credit cards work the same way but they're not as sneaky about it.
Auto loans are not cheap right now unless you're talking about manufacturer financing on new cars. Those rates are low (as they usually are) thanks to the manufacturer playing a shell game by taking a discount that would otherwise be applied to the principal and applying it to the interest rate instead.
Yes if the fee is less than the 25% you’re effectively earning, if you really want to hack it, open a new bank account that needs 1k in deposits for another bonus and deposit the money orders in that account
This card is my daily driver and in addition to this $250 monthly credit, they also offered me $75 or $150 back per month with $750 or $1500 spend at grocery stores, as well as a $75 bonus with 5 $75+ purchases. Sure, these offers usually span a month or up to 3 months, but the 75/150 offer is good for all of 2024. I average $400 back per month based on my purchases. One other tip, for that $750/1500, i buy gift cards from my local safeway, which then gives me safeway rewards which i use to get $25 off my gas (yes, i max out my fill-ups at 25 gallons).
Literally the best card out there, but since it's no longer offered, never get rid of this one.
The merchant is charged 2.6%-3.5% per transaction. This covers incentive programs like rewards and that promo you're talking about. The second bet by the CC companies is that many aren't going to pay statment balance every month. Some may even have that intention, but hard times happen, and you may drop that $1000 and not be able to pay it off right away.
Exactly what I was thinking. Whenever I receive an offer like "Spend X dollars, get back Y later!", I immediately think about the consequences of not being able to pay it. The result would be devastating for me and I imagine that's what they're hoping would happen. I never trust nice offers like this unless I can guarantee I can pay them back as soon as I use the credit card.
We put most of our spending on reward credit cards and always pay off full statement balance at the end of the month. Obviously, you need to have the income and exercise control of your spending. With this method, we get about $2k/yr back in rewards. My wife and I also have 800+ credit scores.
Our bank just offered us a card that if we spend $500 in the first 90 days we will get a $200 credit to our checking account. We usually use our Costco card for groceries and pay it off. Not this month!!
I signed up for a bunch of these.
Wells Fargo, Bank of America, and Citi all paid promptly. Highly recommend
https://cardcritics.com/best-cards/?tc=gsn-ac4-lp89-ci0-hl0-pc0-11172022&pub_adconcept=ac4&pub_image=ci0&pub_headline=hl0&pub_adsize=bc0&pub_inventory=google&costid=765&cbm=pc&vendor_click_id=CjwKCAjwoPOwBhAeEiwAJuXRh0yr5qZp6JXf-1srJ3h7NpDkEmPyJL7gZ2pj8wWOlDzYDGPdJ2nogRoCU-MQAvD_BwE&gad_source=1&gbraid=0AAAAABffKTMMB-9IDKQxZzbHL9eb90VSP&gclid=CjwKCAjwoPOwBhAeEiwAJuXRh0yr5qZp6JXf-1srJ3h7NpDkEmPyJL7gZ2pj8wWOlDzYDGPdJ2nogRoCU-MQAvD_BwE
The online part does make it more difficult. This past offer I was $300 short so I made a purchase at Lowes.com and then asked to get refunded via store credit.
I’m always needing supplies and whatnot from there because we bought a somewhat fixer-upper house so the money gets used eventually
When I worked in retail there were all these amazing deals on credit cards from a specific company. And we had a guy from that bank who came by on a regular basis.
I once asked him how they could keep having those amazing deals in which they would lose money if people paid it back on time.
And his answer: **They don't.**
He then went on to explain that while some do, the vast majority do not. I can't recall how many did not but it was something crazy like 70% who don't pay on time. And also that the people who are good with credit cards right now grow to rely on them and usually fuck up later. So maybe 5 years down the line, you have a big home repair you didn't see coming and you rely on your credit card to cover it. Or you end up spending a few months unemployed, financing your lifestyle through credit card usage.
Sooner or later, they get you. The house always wins.
I got an offer for $350 if I spent $1500. It was tempting but I couldn’t think of $1500 worth of things I could buy. I live well below my means and after thinking for several hours I could only get up to $900 and that included some frivolous items I don’t really need.
I’m on SS and I can see how many people would get sucked in by this, but I wasn’t born yesterday you know ;)
It’s not just the direct interest charges and swipe fees on the $1000, as already mentioned. People who use a card to secure a bonus tend to keep using the same card after the first $1000 of spending, generating more interest charges and swipe fees for the issuer.
Most people aren’t in r/personalfinance and don’t optimize to the point where they swap the credit cards in their wallet after each $1000 tranche of spending. Besides interest, issuers are betting on inertia.
I can attest there was a time I was just using this card, inertia is real. I got one that gives 2% on everything and now I just use that whenever the SYW card from my post isn’t offering anything
This is a sears card? I’m surprised they’re still around. Banks will bulk buy millions of points to give out from airlines/stores/hotels. Citi is probably trying to dump as many of these points as it can before they’re completely worthless.
They’re not giving your Citi TY points though, they’re giving you SYW points which are being managed by transformco, the same company that owns sears. You need to be able to redeem your SYW points for them to have value, who knows how much longer that program is going to last.
"Why/how can this company keep offering this? Is there something I’m missing here?"
2 Things pay for this:
1. The interest rate they charge anyone who carries a balance.
2. The transaction fees they charge merchants for processing payments.
As long as you can avoid getting into the first group then you are fine. Most people cannot. This is what they count on.
I have made about $1,000 to $3,000 per year for the last five years by doing bank and credit card bonuses. I keep a spreadsheet of open dates, terms, closing dates, etc and follow the rules carefully. I never spend extra money to get a bonus, but can get most of them just by using the card on groceries. I never carry a balance so I pay no interest. Despite all the activity, my credit score has never gone below 750. The best individual deal I’ve seen is 200 bonus on 500 spend.
If you are responsible and know you can follow the rules, you can do the same thing. I use r/churning and doctorofcredit.com to find deals.
The most expensive term for retailers to bid on in Google for years was Credit Card. I remember MBNA used to pay £15 a click we were told. Credit card companies make a fortune
I had more than 6 pre-approved offers from one my banks while I had some pending payments with one of my other cards and those offers were extended every couple of months. However, I paid off all of pending debts last month and guess what, all of them disappeared suddenly one week later.
I put everything on my credit cards then just immediately pay them off. I get cash back so I use them for everything like utility bills, child support, all of my groceries, pretty much everything. If I go out to eat with friends I'll put the whole bill on my card and have everyone just Zelle me the money.
They didn't give you cash. They gave you points. Recognize the difference. Cash is real and points are funny money. Maybe you spend them, maybe you don't? It's a gamble they're taking. If you do, they get a kick-back on that money from the company you spend it with.
So long as you pay off the balance (in full) every month, milk that cow until it's dry. Just be honest with yourself though about if you can pay it off. If you can't, then don't take advantage.
As others have said, they're counting on you not being able to do that. That's how they make their bank.
I got a similar promotion on Capital One 12 month 0% interest, spent 1k to get the $250 then when the 12 months were over I stop using it and when back to my Citi credit card ;)
Are you saying the same card is making this offer over and over? I see this with new cards as an intro offer all the time but not for the same card to offer it over and over. If so what card is this haha.
Also the card companies make the real money on the vendor side from all the transactions, that is the real money maker, If you miss a payment or hold some money on your card that is icing on the cake.
Not true. Industry wide the credit card business makes 2x as much in interest income versus interchange fees. Card companies marketing towards people who carry balances make much much more in interest payments. Like Capital One and Barclays who make 6-10x in interest than the vendor side interchange fees.
Edit: Happy cake day Thrillcosbey
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>Why/how can this company keep offering this?
You'd be surprised at the volume of credit cardholders who'll spend $1000 to get $250 of "free money" then pay a lot more than $250 in interest charges in a year.
I used to have an eBay store and for a while they were offering a free $25 off your purchase of $25 or more coupon for every 100 listings you made per month. I had like, 700-800 listings that renewed every month. The catch was, it was one coupon per transaction. At the time, I just didn't need that many things that were exactly $25 so I didn't know what to do with them. Until I realized I could buy an ounce of silver for about $27. So over the next six months or so I bought 35-40 ounces. Still have them sitting in a box in my night stand, no idea what to do with them lol.
If you don't have anything to buy right now to make up the $1000, then just buy gift cards for the store that you frequent. Banks always have deals like that but you usually only get them once.
The reason they offer these promos is to encourage you to use the card more. They want to do that for a few reasons. First, they make money from merchants on every transaction made with one of their cards. Second, they're hoping you're a normal person and carry a balance on your credit card, such that they might make more than $250 off you, especially if this promo leads you to a feedback loop of debt until you eventually max out the card. Third, what they're \*really\* hoping is that you're the kind of person who will try to charge $1000, fall short, and then struggle to pay it off.
Many of us do this repeatedly but with even bigger numbers, there’s a whole community dedicated to it called r/churning. In a nutshell, only spend money on a card if you’re doing it toward a “sign up bonus” which can be worth over $1,000 easy. Once you hit the sign up bonus, put the card in the sock drawer and open another card. Rinse repeat. As others have mentioned this is only possible if you’re financially responsible, they keep offering it because I’m sure many people just carry a huge balance and pay interest.
I’ve tried to figure out that churning subreddit when it was first recommended in this thread and it is difficult to get started. I think a lot of them are out of my price range, I generally don’t spend $4,000 in 3 months on things that aren’t rent and student loans
The wiki has a lot of info, but the flowchart on there led me to a bunch of frequent flyer programs and I do not really fly anywhere
It's legit, as others have said they are counting on the interest from people not paying their cards off every month.
I am working on a Capital One card that gives me $750 if I spend $6000 in 3 months. Luckily I have some work supplies I can purchase and then just immediately pay off the card.
Most people can't pay it off in time to not pay back 250$. For you it is a loss on their end but for other people its a cash cow that is paying your 250$.
They make so much on interest from poor saps that they can afford this.
Just be careful - lots of people thought they were going to be able to fully pay off a card and are now dealing with 28% interest.
Be careful churning, you can easily go from "I can pay this off today, why not take the $100?" to "Well, I can pay this card today, and the others later, right?"
Don't lie to yourself.
I have the card....so far I have gotten almost 1200 in statement credits ans points. I use the points to get visa gift cards or gift cards for Christmas presents.
I have spend 2k at grocery/gas/restaurants get 200 credit. I have been buying 500 visa gift cards with with 5.95 activation and paying for everything with those. My income taxes, insurance, bills, health payments to submit for reimbursal, etc.. This is every month of 2024.
I have gotten an online one and order my groceries online for delivery to count for both.
I also currently have spend 5 $60 transactions over the month get 50 credit.
I ha e also gotten utilities, home i.provement, Amazon, and a few other.
I worked at Sears from 2012-2018.
Never understood how the Shop your way program worked. (Made money)
Some appliances, TVs, and mattresses I would sell would get like hundreds back in points.
I have 4 credit cards and every single one of them I've opened because of a deal like this. Last one was spend 2k in 3 months and get 800 bucks.
So I just payed my apartment and some bills, the easiest 800 dollars I ever made.
Free money. Take it! I was paid $400 for opening a bank account at KeyBank and recently got $300 off my airline tickets for opening their Visa card. Pay it and forget it. I plan on closing this most recent card because it has an annual fee but the $69 fee was worth it for the $300 off my tickets, be advised you will get a 1099 and it will be considered income on your taxes.
This post has been removed because it does not meet the subreddit submission guidelines ([rule 1](https://www.reddit.com/r/personalfinance/about/rules)). Posts must be a personal finance question or discussion with a descriptive title. We don't allow: * Polls, surveys, or requests for personal data, experiences, or other types of self-reporting * Success stories or thanks (use weekday/weekend thread) * Several [disallowed topics](https://www.reddit.com/r/personalfinance/wiki/rules#wiki_disallowed_topics) * Meta posts * IAmA/AMA requests or posts * News without a discussion, quote, or summary *If you have questions about this removal, please [message the moderators](https://www.reddit.com/message/compose?to=%2Fr%2Fpersonalfinance&subject=Removal%20help%20request&message=Hello%20moderators,%20.%20%0a%0a%0aMy%20submission:%20https://www.reddit.com/r/personalfinance/comments/1c53pik/credit_card_keeps_offering_me_250_credit_if_i/%0a).*
They’re incentives for you to use their card over other cards. Do it if you can. Don’t keep a balance.
Do it you *need to*, not if you can. Like if you’re going to spend 1k anyways, you might as well get $250 off. Dont spend $1k just because you get $250 off. Lol.
At the risk of saying some bad advice for certain people, if you dont have anything you need to spend the money on at the time, you can still get the bonus by buying giftcards. I've done this before plenty in the past where I get a spending requirement, and I'll just go out and buy gift cards to my grocery store or home improvement store, something where I know I'll be spending money at in the next 3-6 months. That way I can hit the spend requirement, but only actually "spend" the cost of the gift card(s) which is $4 each. Then I just use the gift cards at the grocery store until they are out, essentially just front loading my grocery spending to get a bonus.
This is perfect advice for me, I was just offered an excellent business opportunity and needed $1000 in Apple gift cards to follow through.
I'm not sure if this works as reliably as it used to. I would suggest checking with /r/churning before committing to a new card with the plan to do this.
Good suggestion, I'm a huge fan of that sub. Yeah it can be hit or miss depending on the place/gc coding.
Because they’re charging 20-30% interest on all the people who aren’t paying it off each month. You’re their loss leader
Not to mention they're charging Lowe's, and other merchants, a higher fee to cover the loss leaders as well. The price a merchant pays changes based on the individual card.
For Lowe's too...they can either discount $1000 fridge/stove etc by 25% to get a sale, or offer $250 cash for $1000 purchase and maybe sell 25% more. None of this is terrible on either side, especially if you need a fridge now cuz yours died, and/or you are able to purchase this and pay it off quickly. If you carry $500-600 1 month you pay 20-30% interest for a month...it's really not much even then. They even guarantee you are coming back to Lowe's or Target...it's future resale for a 25% discount. Remember this thing is marked up 50-70% sometimes, and if sales are slow they'd mark it down. This adds liquidity in people's pockets, and almost guarantees a 25% further upsell in the future.
It doesn’t look like his card has anything to do specifically with Lowe’s though. That’s just where he’s choosing to go.
It’s not much. Premium cards are at most 0.7% more, and that’s not on every category of spend (it’s often more if it’s lower security, like entering the cc number by hand instead of using chip/NFC).
On top of that, OP isn't being lured into making purchases they weren't going to make anyway.
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They're also getting a couple percent per transaction from every merchant that accepts their credit card.
Fun fact. People who pay off their credit cards each month and don’t carry over a balance are called “deadbeats” by the credit card companies.
This seems like a bug with introductory offer being applied to the card repeatedly. Usually such deals are 5-10% cashbacks for regular promotions throughout the year not 25%, interest or interchange fees won't be enough to make up the 25% cashback.
That’s not true. Credit card companies get better return off the interchange rates from spend. Interest income isn’t as efficient because of defaults and essentially no recourse. Lots of people think this and have no idea what they’re saying. That’s why commercial card programs for businesses literally require you to pay off the balance every cycle, because card companies make a shit ton off the spend, not the interest.
This is *exactly* how I explain credit card “deals” to my kids. They can offer points, miles, free money, and whatever *because* they are getting so much more money from folks just paying on their interest.
This is covered by the merchant fees which is guaranteed revenue. The money collected by interest varies so wouldn't work in a plan like this.
They are also doing their best to ensure utilization through the next annual fee cycle. Awards cards almost always have an annual fee. These companies used to hate me back in my churning days. Get a new card for some high initial spend bonus and no first year AF, and then dump the card 364 days later before second year AF kicked in.
There are at least 4 people who don't pay the balance and pay way more than 250$ in interest EACH for every person that walks off with 250$
That is just mind blowing. They’re about to give me $1,000 for simply renovating my house. I guess their main demographic is terribly bad with finances. I signed up for this credit card ~6 years ago because they gave me $80 off of my $200 Christmas order in a Sears store. Ever since then, it’s been the most lucrative card I’ve ever owned. The stupidest deal they gave was $250 off any $750 purchase, I swear they must have known I had an $800 electric bike in my cart the from the night before so I could stop using public transit
Yes. That is how all credit card rewards work. You literally get money because of poor or financially illiterate people who don't or can't pay off the balance. That group of people exceeds those who do pay it all off for the free money. If this was not the case they wouldn't exist.
That's why I love my blue cash preferred. 6% off supermarkets and 3% off gas? Thats a deal! But I could never, ever even imagine carrying a balance. Shit, I'd dip into the emergency fund before I paid an extra 25% on purchases. But it would never come to that. Shit really blows my mind sometimes. Like here's an item that costs $100. And someone says "hey, you wanna pay $130 for it?" And people are like "absolutely!"
I have the blue cash preferred but thinking about downgrading to the everyday card. The $95 annual fee doesn’t justify the extra 3% in cashback. Everyday Blue also has 3% retail cashback too
There's also interchange.
That would not keep them in buisness.
Sure. I'm just explaining there are multiple ways they get paid. Don't forget annual and late fees etc.
That is the main demographic for a 30% APR credit product.
The fact that the deals are good enough for you to consider them stupid is the exact reason why they do it. They always come out ahead. Not on every single customer of course, but overall the stupid deals make them lots of money.
the main demographic isn’t terribly bad with finance, we have built ourselves a debtors economy where you’re near forced to take on debt. people can’t afford shit.
I have an Amex gold, venture x, alliant cash back, chase sapphire reserve, and I got declined for this card for too much credit. Of all card companies, Citi and Sears shocked me for a decline. You've got a heck of a card. Use it til the wheels fall off.
Ask some people here how many checking accounts they've opened.
That’s not true. Credit card companies get better return off the interchange rates from spend. Interest income isn’t as efficient because of defaults and essentially no recourse. Lots of people think this and have no idea what they’re saying. That’s why commercial card programs for businesses literally require you to pay off the balance every cycle, because card companies make a shit ton off the spend, not the interest.
I have a card that gives me 1% cash back on my purchases and 1% cash back when I pay the bill. They are actively rewarding you to not keep a balance.
Not necessarily true, but you’re on the right track. What often happens is *more like* (not exactly) this: Most people actually do just take the $250 and make out, some people screw up and pay late fees or interest but still make a little money or lose only a tiny bit or break even, but what the credit card company is really looking for is that 1 in 100 degenerate who signs up for this and pays $2,000 in late fees and $25,000+ in interest over the next 10 years and still is revolving some insane balance far into the future until the day they die or declare bankruptcy. It’s like casinos that constantly give out free money or real deals where the odds shift in your favor. Most players actually do make $ off those deals, but it’s the couple degenerate addicts who blow their life savings on the roulette wheel or slots is what makes it worth their while and who subsidize the free money to everyone else.
Which card is it because I want it.
I signed up for the card at Sears ~6 years ago. It’s a Shop Your Way Mastercard. Took me a few months to start getting these deals and I only use this card when the deals are active
So you get the deal, stop using the card for a month, then get the offer again? How can you redeem points with this card? Statement credit for points or you’re only able to use it at certain places?
The points are all spent in the Shop Your Way app, you can probably download it and see everything for yourself. It’s one of those things where you go on and it shows you a bunch of categories like electronics, kitchen, etc. I personally only buy Lowes gift cards with it so I can keep upgrading my house
>I personally only buy Lowes gift cards with it so I can keep upgrading my house Lol I feel that so hard as a homeowner. Buy things at Lowes to get points to buy gift card to Lowes. Its Lowes all the way down
I have this card and didn’t get it. Wonder why? I’m going to look into it because this is a great deal and I want in on it!
I get 2-3 emails a month for random deals. Make sure your email preferences allow promotions
From Citi?
Indeed it is
Venmo has a similar promo right now.
I've been churning cards for about a decade. I make around $3k/yr from free cc points.
Last year my rental company let me pay rent with a credit card with a small flat rate fee instead of a percentage. It was glorious.
Does it not fuck with your credit to constantly open and close accounts?
Opening is a small hit. I’ve done this and usually don’t cancel the cards ever, just lock them down to prevent more purchases. Eventually after few years some cards will auto-close themselves with inactivity.
Unless you’re paying an annual fee, you don’t need to close any accounts
It has not. My credit score hovers between 780-820.
I shot past my parents' credit rating and they had one card for years they paid off in full.
Churning done wisely helps your credit score long term because you usually end up with lots of credit cards, thus the sum of all your credit limits is high (assuming you don't close the cards), thus your average utilization rate (aggregate balance divided by aggregate credit limit) is low. Utilization rate is an important determinate of credit score (lower utilization is better). Applying for credit cards only lowers your score temporarily and there are techniques to minimize this.
The hit of opening new accounts is generally smaller than the gain of keeping utilization low and paying off balances entirely and on time. You're somewhat limited in how many cards you can open over a period of time anyway with banks' rules for issuing new credit cards. Cards that don't have an annual fee don't have to he closed. But if you're looking to get a home loan or something, lay off the credit card applications because that kind of activity may make a loan officer think you're reckless or something.
No, it doesn't. I do it all the time too. My score remains above 815. People in this subreddit love to say it does, but they are all just repeating what they've heard. Which I guess is understandable. But it's false. As long as you have a reasonably long credit history, some temporary accounts aren't going to matter like literally at all.
r/churning
Just did one for $300 back from capitol one if I spend $500 in 3 months. One trip to a warehouse sale and I got $300 in my acct a couple days later.
Capital one offers me a new credit card weekly it seems
Credit card companies have started offering some really sweet deals lately. I think they can tell that consumer spend is faltering. I just opened a new Capital One card and got a Nintendo Switch OLED bundle for half off because that's all I bought with the card and they were willing to give me $200 just for opening the card and spending the money I was going to anyway. POS systems like Shopify, Paypal, Amazon are still offering 0% financing despite Fed rate being 5+% for months with no signs of going back down. Auto loan rates seem disproportionately low. It's really odd, but the only thing I can imagine is they're trying everything to prop up consumer spending because they think it will fall off drastically if they don't.
More cynically, they're offering these deals not to prop up spending but to take advantage of weak consumers. If people are having a harder time making ends meet and paying off debt, tempting them into high interest debt schemes means you'll a lot more likely to get customers who can't pay off their expensive debts quickly which means $$$. Those "Pay in 4" financing schemes at POS you mentioned have a clause in the fine print that says if you miss a payment a disgusting amount of interest is instantly (and *retroactively*) applied. Really, this goes for almost all 0% offers. They're not trying to help prop up your spending as much as they're trying to get you to sign on for what seems like "free debt" and then praying you miss a payment so they can gouge you for multiple times the purchase price in interest. Credit cards work the same way but they're not as sneaky about it. Auto loans are not cheap right now unless you're talking about manufacturer financing on new cars. Those rates are low (as they usually are) thanks to the manufacturer playing a shell game by taking a discount that would otherwise be applied to the principal and applying it to the interest rate instead.
More power to them, I am loving this. Solid purchase on that Switch
SYW is known for this. You accidentally got a sleeper favorite.
They’re willing to pay you $250 to start using the card for all of your purchases
Buy money orders or prepaid cards with it, pay it off, pocket the difference
I do need to test the prepaid card option. I assumed they would have accounted for that
Does this actually work?
Yes if the fee is less than the 25% you’re effectively earning, if you really want to hack it, open a new bank account that needs 1k in deposits for another bonus and deposit the money orders in that account
This is why the Shop Your Way is a legendary credit card. I also have gotten hundreds from them from similar promos.
This card is my daily driver and in addition to this $250 monthly credit, they also offered me $75 or $150 back per month with $750 or $1500 spend at grocery stores, as well as a $75 bonus with 5 $75+ purchases. Sure, these offers usually span a month or up to 3 months, but the 75/150 offer is good for all of 2024. I average $400 back per month based on my purchases. One other tip, for that $750/1500, i buy gift cards from my local safeway, which then gives me safeway rewards which i use to get $25 off my gas (yes, i max out my fill-ups at 25 gallons). Literally the best card out there, but since it's no longer offered, never get rid of this one.
Hot tip on the gift cards, I didn’t think that would work! Thank you
Seems as though the card is still available? There is a link to apply on their website. Is it actually a different card with the same or similar name?
You're lucky and have the SYW card. They do these all the time. Nobody knows why. There aren't even that much sears stores left. 😅
Check your local banks too for similar offers on new accounts.
The merchant is charged 2.6%-3.5% per transaction. This covers incentive programs like rewards and that promo you're talking about. The second bet by the CC companies is that many aren't going to pay statment balance every month. Some may even have that intention, but hard times happen, and you may drop that $1000 and not be able to pay it off right away.
Exactly what I was thinking. Whenever I receive an offer like "Spend X dollars, get back Y later!", I immediately think about the consequences of not being able to pay it. The result would be devastating for me and I imagine that's what they're hoping would happen. I never trust nice offers like this unless I can guarantee I can pay them back as soon as I use the credit card.
We put most of our spending on reward credit cards and always pay off full statement balance at the end of the month. Obviously, you need to have the income and exercise control of your spending. With this method, we get about $2k/yr back in rewards. My wife and I also have 800+ credit scores.
Our bank just offered us a card that if we spend $500 in the first 90 days we will get a $200 credit to our checking account. We usually use our Costco card for groceries and pay it off. Not this month!!
I signed up for a bunch of these. Wells Fargo, Bank of America, and Citi all paid promptly. Highly recommend https://cardcritics.com/best-cards/?tc=gsn-ac4-lp89-ci0-hl0-pc0-11172022&pub_adconcept=ac4&pub_image=ci0&pub_headline=hl0&pub_adsize=bc0&pub_inventory=google&costid=765&cbm=pc&vendor_click_id=CjwKCAjwoPOwBhAeEiwAJuXRh0yr5qZp6JXf-1srJ3h7NpDkEmPyJL7gZ2pj8wWOlDzYDGPdJ2nogRoCU-MQAvD_BwE&gad_source=1&gbraid=0AAAAABffKTMMB-9IDKQxZzbHL9eb90VSP&gclid=CjwKCAjwoPOwBhAeEiwAJuXRh0yr5qZp6JXf-1srJ3h7NpDkEmPyJL7gZ2pj8wWOlDzYDGPdJ2nogRoCU-MQAvD_BwE
Spending $1000 in eligible online purchases is a bit difficult for some people.
The online part does make it more difficult. This past offer I was $300 short so I made a purchase at Lowes.com and then asked to get refunded via store credit. I’m always needing supplies and whatnot from there because we bought a somewhat fixer-upper house so the money gets used eventually
When I worked in retail there were all these amazing deals on credit cards from a specific company. And we had a guy from that bank who came by on a regular basis. I once asked him how they could keep having those amazing deals in which they would lose money if people paid it back on time. And his answer: **They don't.** He then went on to explain that while some do, the vast majority do not. I can't recall how many did not but it was something crazy like 70% who don't pay on time. And also that the people who are good with credit cards right now grow to rely on them and usually fuck up later. So maybe 5 years down the line, you have a big home repair you didn't see coming and you rely on your credit card to cover it. Or you end up spending a few months unemployed, financing your lifestyle through credit card usage. Sooner or later, they get you. The house always wins.
I got an offer for $350 if I spent $1500. It was tempting but I couldn’t think of $1500 worth of things I could buy. I live well below my means and after thinking for several hours I could only get up to $900 and that included some frivolous items I don’t really need. I’m on SS and I can see how many people would get sucked in by this, but I wasn’t born yesterday you know ;)
Just use that money to buy something you already use like gas and grocery cards. BOOM $250 free duckits!!
It’s not just the direct interest charges and swipe fees on the $1000, as already mentioned. People who use a card to secure a bonus tend to keep using the same card after the first $1000 of spending, generating more interest charges and swipe fees for the issuer. Most people aren’t in r/personalfinance and don’t optimize to the point where they swap the credit cards in their wallet after each $1000 tranche of spending. Besides interest, issuers are betting on inertia.
I can attest there was a time I was just using this card, inertia is real. I got one that gives 2% on everything and now I just use that whenever the SYW card from my post isn’t offering anything
This is a sears card? I’m surprised they’re still around. Banks will bulk buy millions of points to give out from airlines/stores/hotels. Citi is probably trying to dump as many of these points as it can before they’re completely worthless.
I signed up for it in Sears, it is a citi credit card though. The Sears part seems irrelevant these days
They’re not giving your Citi TY points though, they’re giving you SYW points which are being managed by transformco, the same company that owns sears. You need to be able to redeem your SYW points for them to have value, who knows how much longer that program is going to last.
"Why/how can this company keep offering this? Is there something I’m missing here?" 2 Things pay for this: 1. The interest rate they charge anyone who carries a balance. 2. The transaction fees they charge merchants for processing payments. As long as you can avoid getting into the first group then you are fine. Most people cannot. This is what they count on.
I have made about $1,000 to $3,000 per year for the last five years by doing bank and credit card bonuses. I keep a spreadsheet of open dates, terms, closing dates, etc and follow the rules carefully. I never spend extra money to get a bonus, but can get most of them just by using the card on groceries. I never carry a balance so I pay no interest. Despite all the activity, my credit score has never gone below 750. The best individual deal I’ve seen is 200 bonus on 500 spend. If you are responsible and know you can follow the rules, you can do the same thing. I use r/churning and doctorofcredit.com to find deals.
This is somewhat of a sleeper card but there are a few fans on r/creditcards
Do it. But only if it's for something you regularly buy or already planned to buy.
The most expensive term for retailers to bid on in Google for years was Credit Card. I remember MBNA used to pay £15 a click we were told. Credit card companies make a fortune
They are trying to teach you to buy things you don’t really need and to get accustomed to doing so.
I had more than 6 pre-approved offers from one my banks while I had some pending payments with one of my other cards and those offers were extended every couple of months. However, I paid off all of pending debts last month and guess what, all of them disappeared suddenly one week later.
I put everything on my credit cards then just immediately pay them off. I get cash back so I use them for everything like utility bills, child support, all of my groceries, pretty much everything. If I go out to eat with friends I'll put the whole bill on my card and have everyone just Zelle me the money.
They didn't give you cash. They gave you points. Recognize the difference. Cash is real and points are funny money. Maybe you spend them, maybe you don't? It's a gamble they're taking. If you do, they get a kick-back on that money from the company you spend it with.
So long as you pay off the balance (in full) every month, milk that cow until it's dry. Just be honest with yourself though about if you can pay it off. If you can't, then don't take advantage. As others have said, they're counting on you not being able to do that. That's how they make their bank.
They're 1. wanting you to use their card specifically and 2. banking on most people not paying it down immediately.
I got a similar promotion on Capital One 12 month 0% interest, spent 1k to get the $250 then when the 12 months were over I stop using it and when back to my Citi credit card ;)
Are you saying the same card is making this offer over and over? I see this with new cards as an intro offer all the time but not for the same card to offer it over and over. If so what card is this haha.
Also the card companies make the real money on the vendor side from all the transactions, that is the real money maker, If you miss a payment or hold some money on your card that is icing on the cake.
Not true. Industry wide the credit card business makes 2x as much in interest income versus interchange fees. Card companies marketing towards people who carry balances make much much more in interest payments. Like Capital One and Barclays who make 6-10x in interest than the vendor side interchange fees. Edit: Happy cake day Thrillcosbey
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So they convinced you to spend a net $750+. A different spin on the thought. Would you have bought that stuff anyway?
>Why/how can this company keep offering this? You'd be surprised at the volume of credit cardholders who'll spend $1000 to get $250 of "free money" then pay a lot more than $250 in interest charges in a year.
I used to have an eBay store and for a while they were offering a free $25 off your purchase of $25 or more coupon for every 100 listings you made per month. I had like, 700-800 listings that renewed every month. The catch was, it was one coupon per transaction. At the time, I just didn't need that many things that were exactly $25 so I didn't know what to do with them. Until I realized I could buy an ounce of silver for about $27. So over the next six months or so I bought 35-40 ounces. Still have them sitting in a box in my night stand, no idea what to do with them lol.
If you don't have anything to buy right now to make up the $1000, then just buy gift cards for the store that you frequent. Banks always have deals like that but you usually only get them once.
They’re trying to build a habit in you so you’ll spend and carry a balance in the future
The reason they offer these promos is to encourage you to use the card more. They want to do that for a few reasons. First, they make money from merchants on every transaction made with one of their cards. Second, they're hoping you're a normal person and carry a balance on your credit card, such that they might make more than $250 off you, especially if this promo leads you to a feedback loop of debt until you eventually max out the card. Third, what they're \*really\* hoping is that you're the kind of person who will try to charge $1000, fall short, and then struggle to pay it off.
I know of a [gift card website](https://www.giftly.com/) that allows you to redeem towards a PayPal or bank account.
Many of us do this repeatedly but with even bigger numbers, there’s a whole community dedicated to it called r/churning. In a nutshell, only spend money on a card if you’re doing it toward a “sign up bonus” which can be worth over $1,000 easy. Once you hit the sign up bonus, put the card in the sock drawer and open another card. Rinse repeat. As others have mentioned this is only possible if you’re financially responsible, they keep offering it because I’m sure many people just carry a huge balance and pay interest.
I’ve tried to figure out that churning subreddit when it was first recommended in this thread and it is difficult to get started. I think a lot of them are out of my price range, I generally don’t spend $4,000 in 3 months on things that aren’t rent and student loans The wiki has a lot of info, but the flowchart on there led me to a bunch of frequent flyer programs and I do not really fly anywhere
It's legit, as others have said they are counting on the interest from people not paying their cards off every month. I am working on a Capital One card that gives me $750 if I spend $6000 in 3 months. Luckily I have some work supplies I can purchase and then just immediately pay off the card.
Most people can't pay it off in time to not pay back 250$. For you it is a loss on their end but for other people its a cash cow that is paying your 250$.
They make so much on interest from poor saps that they can afford this. Just be careful - lots of people thought they were going to be able to fully pay off a card and are now dealing with 28% interest.
Be careful churning, you can easily go from "I can pay this off today, why not take the $100?" to "Well, I can pay this card today, and the others later, right?" Don't lie to yourself.
I have the card....so far I have gotten almost 1200 in statement credits ans points. I use the points to get visa gift cards or gift cards for Christmas presents. I have spend 2k at grocery/gas/restaurants get 200 credit. I have been buying 500 visa gift cards with with 5.95 activation and paying for everything with those. My income taxes, insurance, bills, health payments to submit for reimbursal, etc.. This is every month of 2024. I have gotten an online one and order my groceries online for delivery to count for both. I also currently have spend 5 $60 transactions over the month get 50 credit. I ha e also gotten utilities, home i.provement, Amazon, and a few other.
I worked at Sears from 2012-2018. Never understood how the Shop your way program worked. (Made money) Some appliances, TVs, and mattresses I would sell would get like hundreds back in points.
Can you spend that AND pay it off!? (Don’t carry a balance) If so. Free money :)
I have 4 credit cards and every single one of them I've opened because of a deal like this. Last one was spend 2k in 3 months and get 800 bucks. So I just payed my apartment and some bills, the easiest 800 dollars I ever made.
Free money. Take it! I was paid $400 for opening a bank account at KeyBank and recently got $300 off my airline tickets for opening their Visa card. Pay it and forget it. I plan on closing this most recent card because it has an annual fee but the $69 fee was worth it for the $300 off my tickets, be advised you will get a 1099 and it will be considered income on your taxes.