Comment by hvb2
16 days ago
> Otherwise, you're giving up 1-3% discount.
I would be curious what percentage of people actually qualifies for a card with over 2% cashback especially without a monthly fee. My guess is that that percentage is very low.
High earner/spender, sure but that's not most people
It's not hard at all. Citi Custom Cash has 5% on the highest category spend each month for the first $500 (I use it on groceries). American Express Blue Cash Everyday has 3% on groceries/gas/online purchases for up to $6000 purchases each year. Chase Freedom Flex and Discover It have rotating categories every quarter, sometimes groceries, gas, Amazon, PayPal, etc. None of these required much income to be approved.
I know that Discover has a card with a 5% discount category that changes once a quarter. Everything not in the category gets 1%. It's not hard to get the card (or at least wasn't) and was frequently advertised to college students.
If you combine that with a card that gives 2% on everything than it wouldn't be hard to average over 2% cashback as long as you were mindful about using the discover card for qualifying purchases and the 2% card for everything else.
> as long as you were mindful about using the discover card for qualifying purchases and the 2% card for everything else.
And that's the rub. Credit card companies know most people won't be too mindful most of the time about their spending habits.
There is one other rub - because I use my bank's card I get better interest rates. How does a .25-.5 % on my various loans and checking account compare to 2% on groceries - this is a complex question that it not easy to answer.
If you have Amazon Prime, I recommend getting the no-fee Chase Amazon card. 5% on Amazon and Whole Foods; 6% on some Amazon “no rush” deliveries.
No affiliation; just a happy user.
I treat the Amazon Prime membership as the "card fee". The cash back accumulation per year is always greater than the membership fee for me. (The original main benefit of savings on shipping is of course also nice, though if I'm honest with myself I'd say the majority of my purchases didn't actually need 2-day/1-day/same-day shipping. Very nice luxury however.)
I have a 2% cash back credit card from my bank, with no monthly fee. It started as a 1% cash back card around a decade ago, and slowly crept up to 2%. It's a nation wide credit union that has certain requirements to join though.
My first US credit card was a 4-3-2-1% rewards program and I had literally zero income at the time. I was told by the banker, "oh you can't do that right away, you must first get a secured card to build your credit score, after a year you can try applying for real", but I told them I don't care and to send the application anyway, and I've got it.
Ever since then, I wondered how much of the "not qualifying" is due to misinformation like this.
Most true not qualifying are either
1. People with proven bad credit.
2. People asking for a lot of money without proven good credit.
3. People asking for more specialized credit, such as lines for businesses or lines for high earners.
The question is what percentage of overall population are 1, 2 and 3 combined, and is it big enough to warrant the perception that high reward cards are only for high earners/spenders.
My instinct says hell no, not even close.