Math in Real Life: Credit Card Comparison
Oct. 12th, 2013 05:28 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
livingdebI almost shredded the credit card application like always, but then I noticed that the reward was 1.5% on everything. My current rewards credit card pays me 1.1% on everything + 10 cents per purchase + 4% on a rotating set of categories. I don't buy much in the different categories. (There was a nice surprise when one of the things on my vacation turned out to be in the "amusement park" category. And I generally can manage to buy gas when there's a gas category.)
An added bonus is that you don't have to wait until the rewards add up to a certain minimum amount like with my current card; you can cash them in every month.
Another added bonus is $100 if you charge at least $500 during the first three months.
That sounds better. But is it really? I looked at all of this year's statements and calculated the percentage I actually earned. It was above 1.5% for five months and below it for five. Duh, I added up the total expenditures and total awards and saw that overall I've earned 1.4%. The higher percentages mostly happened in the months where I spent less, which is in the months where I didn't have any large expenditures like property taxes or car insurance.
So it looks like a good idea to switch to this new card. I don't really want to carry around a lot of credit cards. But R's on my account, too, with his own credit card number, so things might be easier if I left the old card open.
And then I remembered how it wasn't much of a problem when I used to have two rewards credit cards before and thought that if I get the new one, maybe I should use both. I'd use the old one for small purchases and purchases in a category with extra rewards and the new one for everything else. But what's the cut-off point for small? Algebra will tell me!
(I almost never get to use algebra; for some reason I get really excited when I have the chance to use it.)
The question: When does 1.1% plus 10 cents = 1.5%? (Okay, it's whenever 0.4% is a dime. I don't even need to do all the work. But I almost never get to!)
0.011x + $0.10 = 0.015x
$0.10 = 0.015x - 0.011x
$0.10 = 0.004 x
x = $0.10/0.004
x = $25.00
Check work:
($25 * .011) + $0.10 = 0.275 + $0.10 = $0.375
$25 * .015 = $0.375
Of course then there's the whole question of whether they'd actually give a credit card to a jobless person. Yes, they do ask for income. Oh, but for my current employment status I could check the "Retired" box instead of the "Unemployed" box. They do ask the value of my investment accounts. Although the highest category is just "More than $50,000," not necessarily enough to finance a retirement. Oh, I would also get to say that I own my home and that my "Monthly rent/mortgage payment" is zero. Freakish.
So then because it's modern times, I did some online research. The new card is well reviewed. And I learned another bonus: it doesn't have that extra fee for using it in foreign countries.
Then I went to a forum for people who want to save up loads of money and live super cheaply so they can retire young and I asked what people who have already done that should put on their credit card applications. They said by no means say that I'm retired. Credit card companies like people whose income is increasing faster than inflation (and who might not be about to die on them with unpaid debt). I should say that I'm self-employed. They said it's okay to use a round number for the salary--that doesn't set off alarm bells for them like it does for the IRS.
An added bonus is that you don't have to wait until the rewards add up to a certain minimum amount like with my current card; you can cash them in every month.
Another added bonus is $100 if you charge at least $500 during the first three months.
That sounds better. But is it really? I looked at all of this year's statements and calculated the percentage I actually earned. It was above 1.5% for five months and below it for five. Duh, I added up the total expenditures and total awards and saw that overall I've earned 1.4%. The higher percentages mostly happened in the months where I spent less, which is in the months where I didn't have any large expenditures like property taxes or car insurance.
So it looks like a good idea to switch to this new card. I don't really want to carry around a lot of credit cards. But R's on my account, too, with his own credit card number, so things might be easier if I left the old card open.
And then I remembered how it wasn't much of a problem when I used to have two rewards credit cards before and thought that if I get the new one, maybe I should use both. I'd use the old one for small purchases and purchases in a category with extra rewards and the new one for everything else. But what's the cut-off point for small? Algebra will tell me!
(I almost never get to use algebra; for some reason I get really excited when I have the chance to use it.)
The question: When does 1.1% plus 10 cents = 1.5%? (Okay, it's whenever 0.4% is a dime. I don't even need to do all the work. But I almost never get to!)
0.011x + $0.10 = 0.015x
$0.10 = 0.015x - 0.011x
$0.10 = 0.004 x
x = $0.10/0.004
x = $25.00
Check work:
($25 * .011) + $0.10 = 0.275 + $0.10 = $0.375
$25 * .015 = $0.375
Of course then there's the whole question of whether they'd actually give a credit card to a jobless person. Yes, they do ask for income. Oh, but for my current employment status I could check the "Retired" box instead of the "Unemployed" box. They do ask the value of my investment accounts. Although the highest category is just "More than $50,000," not necessarily enough to finance a retirement. Oh, I would also get to say that I own my home and that my "Monthly rent/mortgage payment" is zero. Freakish.
So then because it's modern times, I did some online research. The new card is well reviewed. And I learned another bonus: it doesn't have that extra fee for using it in foreign countries.
Then I went to a forum for people who want to save up loads of money and live super cheaply so they can retire young and I asked what people who have already done that should put on their credit card applications. They said by no means say that I'm retired. Credit card companies like people whose income is increasing faster than inflation (and who might not be about to die on them with unpaid debt). I should say that I'm self-employed. They said it's okay to use a round number for the salary--that doesn't set off alarm bells for them like it does for the IRS.