Thread by @ramit

A friend asked me if the Amazon 5% credit card was worth it ("I spend a lot at Amazon")

How would you decide?

I'll share my thoughts in the comments below 👇

He first thought about getting the Amazon CC because Amazon showed him a big number: "If you had an Amazon credit card, you would have saved $XXX last year"

Very compelling. Companies love to show you big top-line numbers like this.

However, what's missing from this?

In reality, he already has a 2% cashback card. So an Amazon card would get him an incremental 3% of his Amazon purchases (5% - 2%), not 5%.

He should also factor in:
- Annual fees
- Maintenance (setting up accounts, payments, monitoring) <---this is a huge invisible cost

I value simplicity: I have one 2% cashback card, one travel card, & AmexPlat for lounges (luxury -- makes no financial sense)

IMO, when he shared the amount he'd get back, it wasn't worth it

The more you earn, the more you should fight for simplicity

https://twitter.com/ramit/status/1297729983306063872

Comments:

"It doesn't take that long to set up autopay"

"Easy! I use 1 card for groceries, another for gas..."

REMEMBER: In any system, the more moving pieces=higher chance of breaking. Soon you're living a life of 300 $3 decisions that need maintenance

$30K questions, not $3