# A credit card dilemma,what is your take on this?



## Ruth n Jersey (Jan 20, 2017)

The hubby and I have always had two credit cards. We have had the same two since we were married. We use them often and always have paid them off on time. Never have paid a cent of interest. 

In the last few years we have been getting advertisements in the mail asking us to apply for their credit card. The incentive is that a certain about will be applied to our card after we have used it.. Sometimes it is quite a bit of money. Once we got  $200.00,another $100.00 usually nothing lower than $50.00. My hubby takes advantage of all of them. He gets the card,we use it for the amount they are offering,pay the bill, the amount given us is deducted from the bill. The end result is that we have paid nothing. He then cancels the card. We have saved hundreds doing this. We also have had no problems with any of the companies,in fact several have sent us more incentives. 

I'm beginning to feel a bit uncomfortable doing this. Do you see any problems arising from doing this? I read that canceling credit cards can lower a persons credit score. I'm not sure if that is true. We have checked our score and everything is fine,besides at our age maybe it really doesn't matter. Our home is paid for and we have no debt. What do you think of this practice?


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## QuickSilver (Jan 20, 2017)

I think opening a new card will lower your credit score as they have to do a credit check.. and I know that will do it.


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## Aunt Bea (Jan 20, 2017)

It could lower your credit score but if you pay your other cards when due and keep your line utilization under 15% of the limit on them it should not have a big impact on your credit score.

Doing this is certainly legal but IMO it's gaming the system and increasing the cost of the credit cards for all customers.  Who is the one in the wrong, the credit card company for making the offer or the gamer for accepting the offer, that is definitely one of those things that we could go round and round on.  If it works for you and your husband by all means go ahead.


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## steelcitiesgray (Jan 20, 2017)

Ruth, How are you paying nothing? I receive similar offers and mine have been something like spend $2000 in 2 or 3 months and you receive a $200. credit at the end of the time period. I've never seen one that says spend $200 and receive a $200 credit or $200 cash back. Could you post the next special offer you receive?
It does effect your credit score if you are opening and closing credit cards.


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## Ruth n Jersey (Jan 20, 2017)

steelcitiesgray said:


> Ruth, How are you paying nothing? I receive similar offers and mine have been something like spend $2000 in 2 or 3 months and you receive a $200. credit at the end of the time period. I've never seen one that says spend $200 and receive a $200 credit or $200 cash back. Could you post the next special offer you receive?
> It does effect your credit score if you are opening and closing credit cards.



Yes,steelcitiesgray,you are correct. I didn't explain it correctly. The one we just received needed you to spend $500.00 over a period of time to receive the $200.00 credit. Usually we stock up on sale items through the time period. We also have a large freezer. I try and buy meats on sale and freeze them. During Christmas it took no time at all to spend the amount to qualify,with gifts,etc. We will be traveling to see my daughter soon and gas,food and motels will also help. The hubby was a cost accountant before he retired. Ho loves figuring this stuff out. Me, not so much. I couldn't be bothered. I have to admit we have saved doing this. If that's what makes him happy,so be it. Better this than if he gambled that amount away from our savings.


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## steelcitiesgray (Jan 20, 2017)

Still, you got a great deal, $200 if you spend $500. My deal with Amex was $200 but you needed to spend $2000.


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## Buckeye (Jan 20, 2017)

I'm with your hubby.  If you do the math and you come out ahead, take the money and run.  But on the other hand, it seems like a lot of work for $200.


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## OneEyedDiva (Jan 23, 2017)

I recently did this. I ignored the first solicitation but after I thought about it, I realized that opening the card gave me a just as good a return as my investments last year. The deal was charge $1,500 in the first three months and get $200 cash rewards. Another reason I went for it is because I had just closed my AmEx-Costco card and my credit score is excellent. 

Since I have frozen my credit, it would be a pain for me to keep rotating in/out credit cards so I wouldn't do it often. There are several things that determine your  FICO score. Having too many open cards is one. But if you already have a good score and don't maintain big balances, the effect may not be too harmful.  Otherwise I don't feel there is anything wrong with what your husband is doing. After all, the two of you were solicited and he is just fulfilling his part of the bargain(s). Just make sure he calls the companies of the cards he cancels to tell them he's canceling. If it appears they are still open or that the company canceled, it could adversely affect your score. Here is how your FICO score is determined. http://www.myfico.com/credit-education/whats-in-your-credit-score/


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## Ken N Tx (Jan 23, 2017)

I have just recently started to use my CC more often because of the *cash back awards*. Previously we used the card mainly for when we traveled..I do pay off the balances when they are due.. last month, we earned $60 which I turned around and applied to my balance..


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## Knight (Jan 23, 2017)

Nothing wrong with your husband entertaining himself doing what he is good at. It's not a mystery why credit card companies make those offers, you and your husband just happen to be positioned to turn this into a win situation for yourselves. 

There was no mention in your post about the annual percent charged if failure to spend and the charges were not paid in full.


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## Dennis K (Jan 23, 2017)

I have seen this tactic used often by credit card companies and the target group is not the type of people I see posting here. They are going after people who will use these cards for the sake of the free money but then not be able to pay off the minimum they have to charge to the card, along with additional charges made. Then these people are stuck with minimum monthly payments and high interest charges. The companies will then get their initial investment to suck a person in back in short order and continue to make a profit. 

I doubt if credit card companies like people like many of us who pay off their cards in total every month and never carry a balance. I received my first credit card over 40 years ago, and have several now. Not once have I carried a balance. I just see them as a convenience verses carrying cash or writing a check and not a way to spend money I do not have. Are you taking advantage of their offer? Probably. But not anywhere close to how they take advantage of others using this tactic. So I say, more power to you.


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## SeaBreeze (Jan 23, 2017)

Ken N Tx said:


> I have just recently started to use my CC more often because of the *cash back awards*. Previously we used the card mainly for when we traveled..I do pay off the balances when they are due..View attachment 35040 last month, we earned $60 which I turned around and applied to my balance..



Same here, we used to just use the credit card for vacations, but now we use them more often, especially for bigger purchases. Capital One and Discover are the main ones we use for cash back, and always pay off full balance when due.  If we can't afford to pay off the full balance, then we don't buy the item, works out well.


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## jujube (Jan 23, 2017)

If your FICO score drops, it should be back up in a month or so.  I charged $3000 worth of furniture last year on my primary card that I get cash-back on and then paid the card off immediately (and I mean the next day!)  That purchase made my FICO score drop 20 points immediately for some reason (for the first time in years, it went below 800), but it was back to the earlier level within two months.  I have no idea why it dipped so radically as I have lots of credit available and no debt.


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