Sunday, June 3, 2012

Benefficient 1.0

Benefficient for Android was launched in the Play Store (or whatever the hell they call it these days) today.  Benefficient was created because I have seven credit cards, each with their own set of rewards that I can never seem to keep straight.  Why do I have seven credit cards?  That's a good question, let me explain.  I make all my purchases with credit cards in order to earn money from the rewards they offer.  I get different rewards for each card and by using the right card for the right purchase I can maximize these rewards, in some cases getting 5% cash back per purchase!  I've been tracking these rewards over the last two and a half years and I've averaged about $1300 cash-in-pocket per year.  I realize this approach isn't for everyone because it requires the discipline to pay the balance each month (which would wipe out any and all rewards accrued), but if you have the financial discipline for this, you can make a lot of money.

So, why is it hard to remember the rewards on my cards?  Let me demonstrate.  My American Express Blue Card gets 5% cash back on gas, groceries and pharmacies and 1% cash back on everything else.  However, that is only after I have achieved the $6500 spent on the card for that year.  Before that limit is met, I get 1.5% cash back on those categories and .5% on everything else.  My Discover More Card gets 5% cash back on revolving categories that change every one to three months.  This card also has category limits in which it stops the reward after say $750 spent in one particular category.

It gets even more confusing when you introduce points/miles into the mix.  My Citi Hilton HHonors Visa card gets 6 HHonors points per dollar at Hilton Brands hotels, 3 HHonors points on groceries, pharmacies and gas, and 2 HHonors points for all other purchases.  However, HHonors points don't exactly match up to cash back percentages.  In order to compare point accruing credit cards to cards that accrue cash back, you need to assign a cash value to the points.  With this particular card, since you can only redeem the points by booking Hilton Brands hotel stays, I've assigned a lower value to the value of the points.  Specifically, each point is worth half of a penny.  In other words 6 HHonors points per dollar spent would equal 3% cash back.  This is my only card of the 7 where I can't redeem for cash, but I like the card because I only use Hilton Brand hotels (the Embassy Suites managers reception with free alcohol pays for itself!) and I know that I will redeem the points that I accrue.

From these scenarios you can begin to see that this is too much information for the average person to remember.  Some people are really good at remembering this type of stuff like the Points Guy who travels frequently and blogs about how he games the travel miles system, but this is his career (or at least his side job).  I however, don't cut coupons, or stand in long lines for Black Friday.  In fact, I actually don't even spend that much time paying attention to credit card rewards.  All I do is think for a second or two before I make a purchase about what card gets me the best reward.  Many times I am wrong.  Actually, I've found by using Benefficient in testing over the last month or so that I am wrong alot more than I thought!

According to my Mint account, I spent about $57k last year, which would make the $1,100 in rewards I redeemed in cash last year about 1.9%.  Considering that I get 2% cash back on all purchases made with my FIA Rewards Card from American Express, and I get 5% cash back on other categories, I should have accrued around 3% (or $1,710) cash back if I had properly optimized!

That's the beauty of Benefficient, you don't have to be like the Points Guy, or the coupon-cutter or the Black Friday shopper.  You can make purchases like normal and rely on Benefficient to do the heavy-lifting!  It's that simple.


Wally Atkins said...

Where's the iPhone version??? ;)

Carlton Northern said...

Haha, it will be out as soon as you develop it!

DrGrease said...