[FPMD: Sorry for the late posting today. Went to Universal's Halloween Horror Nights last night and slept way in. Highly recommended if you are in Orlando around this time of the year.]
I've mentioned I'm a fan of financial guru Dave Ramsey. Dave is famous for his tough grandpa money tips that whips you into financial shape. Dave hates credit cards. And Dave is right - for the majority of credit card holders in America, simply having a credit card cause them to spend more. But I believe I'm not "majority" of Americans, so I went and added up all the rewards I've received from my credit cards thus far in 2016, and this is what I found...
Rewards, Rewards, Rewards!!!
Above is all of my credit card rewards and spending as of the September 2016 statement. Some qualifiers:
- It may look ridiculous that I've spent $35,078.25 in just 9 months, let me reassure you I'm not balling like crazy - roughly $30,000 of that is manufactured spending. I will address how I manufacture spending in a later post. Stay tuned...
- The reward conversion rates are sourced from The Points Guy. I'm actually redeeming my Chase Ultimate Rewards points at a much higher rate than the quoted $0.021/pt. For example, I was able to use 80,000pts to book a first class ticket to China worth a staggering $7,000! My redemption rate for that flight was ~$0.0875/pt.
- The table does not reflect the Chase Sapphire Reserve card I recently received. I anticipate my earning rate to be significantly higher when those 100,000 bonus points are credited.
Future Proof Take
Much research has gone into consumer behavior, and most of it shows that we spend more when we use plastic. But the question is how much more? NerdWallet cites a study by Dun & Bradstreet where they found people spend 12-18% more when using credit cards instead of cash. As much as I wish I can do the same analysis on my own spending, I simply can't - I don't have any records on my spending before I had a credit card! What I can say is that I'm earning 10.22% back on all my credit card spending so far in 2016. We'll never know if I would be spending 10% less if I never had a credit card, but I'll take 10.22% over 0% if I had paid for everything with cash.
I will continue to track my credit card spending and rewards and update the table accordingly. One question I am interested in answering is whether having more credit cards increases my spending significantly vs if I stop applying for any new cards. Stay tuned...