[Aroy]

Originally Posted by binand

How do you figure that? That people are saving 8-10% of expenditure over a year by using credit cards?

.............

I cannot vouch for 8%, but using credic card gives the following savings/cash back

1. Extended credit. I regularly plan my card spends so that big ticket items are bought at the beginning of the cycle and I get 50 days credit.

2. Cash back from AMEX comes to about 0.25% after converting points to Rupees.

3. Cash back from Amazon-ICICI card is between 2% and 5%

4. All cards have reward points.

5. Many times the schemes of credit card companies result in lower prices than cash. I have faced situation where the LG Dealer said that all the PayTM and Bank Card schemes were much better than the cash discount he could give.

That is what you gain over cash transaction.

[BRV]

HDFC Bank is not issuing new Credit Cards from December.

Having Citi Indian Oil Card for more than a decade now (only credit card I have). Recently, read about Citi leaving its Indian business, was scouting for a new card and reached out to HDFC relationship manager and asked for a suitable credit card. I was surprised to hear that they are not issuing new credit cards.

Is it due to the RBI restrictions on HDFC bank? or is it self imposed guidelines due to ongoing pandemic defaults?

[Zodak]

Quite an interesting thread, Being an avid credit card user for the last ten years, here's my take on this.

It's essential to figure out what points/loyalty you value the most and then decide which credit card to go for. In my opinion, unless you are a very high spender, splitting spend between various cards hurts and makes life a wee bit more complicated. Since I want to gather points for travel, I went for Axis Vistara and HDFC Diners. The sole reason for getting Axis Vistara was gold membership and it being a VISA has more acceptability (primarily offline) than Diners. But now I can transfer Diners point to Vistara, so my Vistara usage has gone to a minimum. Both of these are paid cards. Vistara gives me two business class tickets (domestic) every year, and the value I get out of it is much more than the fee I pay for it. I traveled to Kashmir (3 people, to & fro), and I traveled in business by just paying for two premium economy seats. I had to do various permutations and had to be on call with Vistara folks for a good half an hr, but in the end, it was worth it. Moreover, when I bought my car last year, I paid through Credit Card since that helped to reach milestone benefits (points + 2 more business class tickets).

Not going HDFC Diners details but since lockdown, most of my retail spend has moved to Amazon, which now gives 5X rewards. This means that if I use the points for travel via HDFC smart buy, I get approx 15% as cashback on everything. It used to be 30% till last year. All my near family members know about this, and whenever they are making any big purchase on Amazon, they ask me to do it. Now I have enough points on my Diners to do a Europe trip with my wife & kid. I am just waiting for Corona to go away . One other advantage of using Credit Cards is that I can monitor my spending, which is difficult if I use cash or multiple payment modes.

So, in summary, what I am saying is that Credit Cards are highly beneficial if:-
1. If you can stop the urge to spend more by using a credit card than you otherwise would and pay the bill in full every month.
2. Basis your need, figure out the best Credit Card and not divert your spending to multiple cards.
3. Play the loyalty/point games to the fullest

[binand]

Originally Posted by BRV

HDFC Bank is not issuing new Credit Cards from December.

Is it due to the RBI restrictions on HDFC bank?

RBI ban: https://www.newindianexpress.com/bus...s-2231302.html

[mav2000]

Originally Posted by Zodak

So, in summary, what I am saying is that Credit Cards are highly beneficial if:-
1. If you can stop the urge to spend more by using a credit card than you otherwise would and pay the bill in full every month.
2. Basis your need, figure out the best Credit Card and not divert your spending to multiple cards.
3. Play the loyalty/point games to the fullest

I am in the same boat. I now have enough points to do a couple of Europe trips, but waiting for things to settle down.

Originally Posted by binand

RBI ban: https://www.newindianexpress.com/bus...s-2231302.html

Yes, its because of that.

[warrioraks]

Originally Posted by binand

At the end of everything if the returns are limited to Rs. 15K per month I feel I can earn far more than that by spending the same amount of time on massaging my portfolio.

Would you be willing to share your knowledge around how to earn guaranteed 15k per month by investing time in portfolio management? Maybe this is a discussion for another thread but I am genuinely interested.

I am a guy who does extensive planning to extract the maximum reward points from my credit card. But that has a limit as capped by the issuer bank.

Fact of the matter - I do have some more time to spare that I can redirect towards portfolio management if you are willing to share your tricks.

[tejas08]

Originally Posted by binand

I suppose I am in this category. I don't chase reward points (in fact, I suppose most of what I get do go waste). Looking at what you've written, there is a world of difference between you and me: I take driving vacations or package vacations. I don't buy Apple or Samsung or any ultra highend mobile phones - certainly none that costs more than 50K. I don't shop on Flipkart. I am quite unwilling to commit to an annual spend threshold. All of these I believe are examples of wanton consumerism; I prefer saving to consuming.

But the Premier Miles usually is good enough for a return flight trip for my family from Bangalore to Kochi each year.

At the end of everything if the returns are limited to Rs. 15K per month I feel I can earn far more than that by spending the same amount of time on massaging my portfolio.

The only situation which might make me take a different view than above is if they applied a 15% discount at the end of the month at the time of statement generation itself.

Just some examples of where you save money using credit cards (Considering a Family of 3 or 4 with a monthly household earning of approx. 1.5 Lacs:

1. Utility, Landline, Mobile Bills - Approx. 15% (Annual Spends - 84,000 Rs)
2. School Fees - 3.3% (Annual Spends - 70,000 Rs.)
3. NPS Investment - 2.3% (Annual Investment - 50,000 Rs.)
4. Fuel - 2.3% Minimum (Annual Spends - 100,000 Rs.)
5. Insurance (Life, Medical, Car, Bike) - 10-12% (Annual Spends - 120,000 Rs.)
6. Groceries, Fruits, Vegetables, Milk (Online) - Approx. 15% (Annual Spends - Rs. 144,000)

These are basic spending in a household. The above translates to a savings of Rs. 50,000+. So that NPS investment essentially become free over the year.

Then there are many offers which if used correctly can save a lot more like

1. I took cashback of 6000 Rs. on fuel spends of 14,000 Rs. on Amex. That's 42% back on fuel.
2. Booked flight tickets to Italy for a vacation back in 2019. Got 8,300 Rs. worth reward points back on each ticket worth 58,000 Rs. That's 15.6% returns.

Spending time on massaging your portfolio is good if you understand stuff. But not many people can understand stock market and stock market investment so easily. I tried and then gave up. I decided to only focus on Mutual Funds for long term investments and let the fund managers take those decisions. So now my decision making is only limited to choosing the right mutual fund based on certain parameters and take a look at the performance once a year.

At the same time, I am spending time on understanding Credit cards to save a lot more on my spending which eventually increases my spending capacity at the same time.

Originally Posted by Aroy

Cash back from AMEX comes to about 0.25% after converting points to Rupees.

Amex points are definitely worth more than 0.25 Re per point. Use the 18K and 24K Gold Collection. You will get a minimum of 0.37 Re. per point value. If you travel (even once a year), convert to Marriott Bonvoy points and you can get 0.4-0.5 Re per point through hotel bookings.

Originally Posted by Zodak

Now I have enough points on my Diners to do a Europe trip with my wife & kid. I am just waiting for Corona to go away .

Sailing in the same boat. Waiting to get vaccinated in the next 3-4 months and then start planning trips. Have accumulated enough points on DCB / Infinia and converted to Singapore Airlines KrisFlyer Miles for Business Class return tickets to anywhere in South East Asia. Europe too is possible but Europe has a huge surcharge and taxes on business class redemption. So will be looking at a different strategy for Europe.

You should look at adding American Express cards to your list. They are good for travel related redemptions.

[sid_deb]

Originally Posted by tejas08

Then there are many offers which if used correctly can save a lot more like

1. I took cashback of 6000 Rs. on fuel spends of 14,000 Rs. on Amex. That's 42% back on fuel.
2. Booked flight tickets to Italy for a vacation back in 2019. Got 8,300 Rs. worth reward points back on each ticket worth 58,000 Rs. That's 15.6% returns.

You are really using these cards to the best level possible Which AmEx credit card offers point 1?

[Fordlover88]

Is there any offers on HDFC Smart pay for HDFC Millenia card especially in amazon/flipkart?

[m8002?]

Originally Posted by tejas08

Just some examples of where you save money using credit cards (Considering a Family of 3 or 4 with a monthly household earning of approx. 1.5 Lacs:

1. Utility, Landline, Mobile Bills - Approx. 15% (Annual Spends - 84,000 Rs)
2. School Fees - 3.3% (Annual Spends - 70,000 Rs.)
3. NPS Investment - 2.3% (Annual Investment - 50,000 Rs.)
4. Fuel - 2.3% Minimum (Annual Spends - 100,000 Rs.)
5. Insurance (Life, Medical, Car, Bike) - 10-12% (Annual Spends - 120,000 Rs.)
6. Groceries, Fruits, Vegetables, Milk (Online) - Approx. 15% (Annual Spends - Rs. 144,000)

Even I used to get the highest points earlier when using by CC to pay for my LIC premiums. Now, they have added a 1.5-5% charge for credit cards and I feel that it doesnt make any sense. Its the same for school fees and apartment maintenance. So moved all of them to Netbacking.

Are you telling that its economical to pay using CC even with the upfront service charges?

[tejas08]

Originally Posted by sid_deb

You are really using these cards to the best level possible Which AmEx credit card offers point 1?

The Amex shop small offer in November / December. 500 Rs. cashback on spends of 1000 Rs. or more. Not a regular offer. But this single offer alone gave me almost two tank-full of Fuel. Multiple HP Petrol Pumps were listed under this offer. As such with the rates, filling the tank goes to 3000+ Rs. Asked the pump attendant to swipe 3 x 1000 Rs. Got 1500 Cashback per Amex card.

The beauty of Amex cards on such cashback offers is addon cards get the same benefit as additional card. So I have total 4 Amex cards. Got 4 x 1500 Cashback. Some people have as much as 10 Amex Cards (Primary, Addon and Bank Tie-up ones).

Originally Posted by m8002?

Even I used to get the highest points earlier when using by CC to pay for my LIC premiums. Now, they have added a 1.5-5% charge for credit cards and I feel that it doesnt make any sense. Its the same for school fees and apartment maintenance. So moved all of them to Netbacking.

Are you telling that its economical to pay using CC even with the upfront service charges?

Depends on the card and then there are other ways to do it. Like Standard Chartered Ultimate gives 3.3% flat, BOB Eterna gives 3.75% on online spends. So 1-1.5% surcharge is still less than the returns. I generally time these spends. Like I have an annual spends calender made. I keep checking for offer emails from banks about 4-5 weeks before the spend actually comes up.

HSBC had 5X offer on insurance spends in March and April 2021. HDFC & Standard Chartered had 5X on Insurance from Jan-2021 to Mar-2021. So these offers multiply your savings.

[binand]

Originally Posted by warrioraks

Would you be willing to share your knowledge around how to earn guaranteed 15k per month by investing time in portfolio management?

Rule #1: there is no guarantee.

I'm at the hobbyist level. Bulk of my portfolio is managed by a PMS, I only retain a fraction of my net worth for me to play around with (and I don't beat the PMS return either).

Originally Posted by tejas08

Spending time on massaging your portfolio is good if you understand stuff. But not many people can understand stock market and stock market investment so easily.

That I do to an extend. As I made it clear upfront, I am speaking only for myself, YMMV for everyone else.

[warrioraks]

Originally Posted by binand

Rule #1: there is no guarantee.

I thought so. This is the biggest reasons why planning for credit car spends to optimise reward points make sense. The returns are guaranteed!

You just need to find the right card which has a reward system that jingles your bell.

[binand]

Originally Posted by warrioraks

I thought so. This is the biggest reasons why planning for credit car spends to optimise reward points make sense. The returns are guaranteed!

The thing that I can't wrap my head around is that to reap such rewards I have to spend more. If the system worked in such a way that at the end of the month the 10 or 15% discount is applied and I have to pay only the balance - I'm in. But right now it seems like I have to maintain 5-6 cards, time purchases carefully, move funds around etc. to get such rewards - and buy things like air tickets, mobile phones etc. to benefit from them. No doubt it is beneficial to those who revel in it, but that is not a leisure-time activity that appeals to me.

[warrioraks]

Originally Posted by binand

The thing that I can't wrap my head around is that to reap such rewards I have to spend more. If the system worked in such a way that at the end of the month the 10 or 15% discount is applied and I have to pay only the balance - I'm in. But right now it seems like I have to maintain 5-6 cards, time purchases carefully, move funds around etc. to get such rewards - and buy things like air tickets, mobile phones etc. to benefit from them. No doubt it is beneficial to those who revel in it, but that is not a leisure-time activity that appeals to me.

I had a similar thought process at one point of time. But now I am a convert. Especially since I got my Diners Black card. Seems the credit card companies got to me.

Hope you are able to evade them, I couldn’t