Interesting Money » Credit cards

Advice on Choosing a First Credit Card

Mr. B — Mon, 17 May 2010 03:54:30 +0000

I recently had an exchange with an old friend of mine named Spencer, who is finishing college and interested in acquiring his first credit card. He writes:

I was writing to ask your advice on Credit Cards. I know that you are a credit master, and I’m finally looking at getting my first card. I’ve been searching around, but so far I’m still totally overwhelmed. Do you have any suggestions for a first, easy to handle card? I’ll just get getting it to establish my credit line and using more like a Debit card (only buying things I can already pay off)… Any advice would be much appreciated. I don’t wanna end up with credit issues like Greece…

Mr. B replies:

Hi Spencer! No, you definitely don’t want to end up with debt issues like Greece, but if you’re fiscally responsible, you will avoid it.

First of all, I’m glad that you already plan to treat the credit card like a debit card – that’s the golden rule of CC usage. Too many believe believe the credit line granted to them by a credit card company is somehow their money. Nothing could be farther from the truth. A credit line is borrowed money, money that will accrue interest if not paid back in full within the grace period. Never buy anything on credit that you cannot afford to pay in full. Keep that motto in mind and you will never have credit problems.

So that’s the first rule of thumb. Here are some other thoughts:

1) Just say NO to annual fees. Ignore all cards that come with an annual fee just for using the %@# card!

2) Ignore the APR. It’s used to calculate how much interest you will pay each month if you don’t pay the card in full by the due date. Paying interest is for suckers. I don’t care if my APR is 400%, I’ll never have to pay it. Credit card companies hate you if you pay your bill in full by the due date – you’re considered a deadbeat to them because you’re not profitable.

3) DO care about rewards. As an incentive to get you to use your card (and hopefully rack up debt), many companies use loss-leaders in the form of CC rewards. Essentially, they end up paying YOU to use their card. Reward systems vary: sometimes they’re in the form of airline miles, straight-up cash, or some other arbitrary point system. I prefer simple reward systems above anything else, and therefore suggest finding a card that will give you at least 1% cashback on all purchases. CC rewards are nice, but don’t let them manipulate you into inadvertently spending more money on the card just to build rewards (as in: I only need to spend another $300 before I can cash in my rewards!). Again, keep the golden rule in mind, and always ask yourself, if I were spending cash for this purchase, would I still buy it?

4) Forget about balance transfers. This is a major way CC companies earn fees. In essence, it’s how people end up paying one credit card with another. They’re loaded with fees. Just follow the golden rule, and you’ll never need to worry about it.

5) Ditto on cash advances. Just forget they exist. NEVER use an ATM to pull money from a credit card. This is called a cash advance, and your CC company will charge you an arm and a leg for it. That’s what debit/ATM cards are for.

6) Read the paperwork. You’ll get a bundle of paperwork with your card. Read it all, or at least scan for the F-word (fee, of course!). You will also occasionally receive notifications of policy changes in the mail. Again, look for that F-word. It’s pretty rare for them to suddenly spring something like an annual fee on you, but it could happen. I have about 20 credit cards (ya really), and I’ve only had them introduce an annual fee once. I immediately canceled the card. The moral of the story is: don’t just throw away notices from the CC company in the mail.

7) If you’ve read this far, by now you’re surely looking for specific recommendations. Okay, okay, I’ll give you a few. First, though, allow me to say that I hate Chase. Those a$$holes change their terms all the time, always in their favor. I’ve seen them kill reward systems for my favorite cards. Just avoid them!

You are a student, but I recommend staying away from student cards unless you don’t get approved for others. Student cards usually are pretty stingy with their credit lines, thereby making it easier to go over your limit (and get charged fees, of course). If you have to get a student card, then one of the Dividend Platinum Select cards from Citi on this page would be alright. This one from Capital One would be okay, too.

For non-student cards, here is one that is worth a look. It’s from Associated Bank (look for the Rewards card), and it has a $25 bonus (statement credit) the first time you use it. However, it looks as it you also must have a banking relationship with them in order to apply for the card. Oh, and here is one from Dollar Bank that offers 1.25% rewards. Again, the only catch is that you also have to have a regular bank account with them to be eligible. It might be too much hassle for the little extra rewards amount.

One final thing: almost all CC applications ask for annual or monthly household income, not just your personal income. This is used to help determine your credit limit, and many people think of it as a commonly exploited loophole. What is a household anyway? Everyone in your dorm or apartment? If you live at home, it could be your parents’ and other siblings’ income! I don’t suggest outright lying, but unless they ask directly for your personal income, just know that certain liberties are available. Again, follow the golden rule, and you’ll avoid trouble.

Hope that gets you started! Feel free to ask more questions, and let me know the results!

(NB: no affiliate links are used in the above message.)

Citi Adds $60 Annual Fee to Many Cards – Watch Your Mailbox

Mr. B — Sun, 14 Feb 2010 23:51:57 +0000

If you have a credit card from Citibank, keep an eye on your mailbox because Citi has recently implemented a $60 annual fee for many of their cards. Citibank – the same too-big-to-fail monstrosity – the same company that accepted taxpayer bailout money and subsequently jacked up interest rates across the board – yeah, that company. Not content with the cash they’ve already wrung from the taxpayers, they have now tacked on this $60 fee to many cards that previously had no annual fee. However, Citi will generously refund the $60 if you spend $2,400 per year on the card. Wow, thanks for nothing, Citi.

Thanks to a reader named Bill for pointing this out to me. Several different cards are apparently affected, including:

Citi AT&T Universal Card
Citi Diamond Preferred Rewards Mastercard
Citi Dividend World Mastercard
Citi Dividend AMEX Card
Citi Drivers Edge Card
Citi Home Rebate Mastercard
Citi mtvU Student Card
Citi Platinum Select Mastercard

There may be others as well, so be sure not to throw away any junk mail from Citi without reading it carefully. I have four credit cards from Citibank, though the only one mentioned in this list is the mtvU. So far, I have not yet received a letter, but we’ll see if it arrives in the mail anytime soon. I’ll be sure to update this post if it does.

Citi’s addition of this annual fee is a bid to do two things:

Get people to use the cards more often, thereby generating more revenue for Citi.
Squeeze even more cash from the taxpayers who saved their butts in 2008.

You can read about more people’s experiences on this Sickdeals thread and this Fatwallet thread. Here is a scan of a letter from Citi, compliments of the user unsmart3d on SD:

My favorite part:

The reason we are making this change is to maintain the quality of our service amid the rising cost of doing business.

Cough, cough… BS! Wow, they’re really laying it on thick and heavy. Anyway, I don’t mean to give Citi too hard a time. After all, it’s perfectly within their rights to impose an annual fee on all of their cards if they want. They can choose to do business that way. No one is forcing us to use Citi credit cards… and as consumers, it’s within our rights to call and cancel our accounts if we receive one of these letters! We can choose to take our business elsewhere.

That’s exactly what I intend to do if one of these letters graces my mailbox. If you have received one, I’d love to hear your thoughts and what you’ve chosen to do.

Schwab Invest First Credit Card – Working Link

Mr. B — Sun, 29 Nov 2009 19:44:11 +0000

You’ve probably heard about the Schwab Invest First credit card already. You know, the one that offers 2% cashback on all purchases? It’s been available for roughly a year now, but Schwab has stopped actively promoting it. A working application link is difficult to find, but try this one below:

Application Link

In years past, my most-oft-used card was the Chase Freedom card. No longer! Once Chase decided to flush the Freedom card down the toilet, I started hunting for a new rewards credit card.

As it so happens, the Great Recession has taken its toll, and if you have any credit card at all, you’ve likely seen your limit slashed, APR raised, and any rewards program reduced. Pitiful, really.The most frustrating aspect is that many of the biggest recipients of the taxpayer bailout (TARP) have been the most aggressive to punish cardholders. I’m looking at you, Chase!

Anyway, 2% cashback offering from Schwab was already enticing when it debuted at the end of 2008, but it’s flat-out one of the best deals around now. Here are some highlights:

Unlimited 2% cashback on all purchases; no spending tiers or caps
Cashback automatically deposited monthly into a linked Schwab brokerage account
No foreign transaction fees (great for traveling abroad)

It isn’t the sexiest card around, but it offers one of the best reward systems right now. The only hurdle at the beginning is that you also need to open a Schwab brokerage account to collect the rewards. Fortunately, this is easy to do, and can be opened simultaneously with the Invest First card. The brokerage account has no monthly fees, and the $1,000 minimum deposit is waived when you link the card to the brokerage account.

I like this card because the cashback rewards are automatically deposited straight to the brokerage account each month. You don’t have to worry about accumulating cashback to a certain dollar amount before you redeem. I also appreciate the lack of foreign transaction fees. In a time when other companies are raising their foreign fees to 4% or higher, this is a breath of fresh air. Earlier this month my wife and I traveled to Puerto Rico, and I can verify that the 0% foreign transaction fee is true.

Screw Chase. Screw Citibank. Unless Schwab waters down the 2% cashback rewards, I’m making this my main credit card.

Chase Sapphire Sign-up Bonus – $100 or $150

Mr. B — Sat, 25 Jul 2009 22:19:00 +0000

Chase is promoting their new Sapphire credit card by offering a sign-up bonus for it. The card comes in both a free version and an annual fee version, with a $100 and a $150 sign-up bonus respectively.

Unfortunately, it doesn’t look like you can get both bonuses because the offer is only good for first-time cardholders who do not already have existing accounts. You can convert an existing Chase card to Sapphire, but don’t count on getting a bonus that way.

Free Version – $100 Bonus

Chase Sapphire – Regular

Getting a $100 bonus with this card is easy-peasy. Once you’re approved, all you have to do is make a single purchase of any amount and pay it off. Six-to-eight weeks later, you should receive 10,000 bonus points, which you can redeem for a $100 check, a gift card, or a credit toward a travel purchase.

After that, feel free to throw the card in the sock drawer where it belongs since there are much better cards out there. There’s no annual fee, unlike the Preferred version.

Here’s a screenshot of the offer for the sake of preservation. Click the image to enlarge.

Preferred Version – $150 Bonus

Chase Sapphire – Preferred

If you don’t mind doing a little more work, you can squeeze an extra $50 bonus versus the regular Sapphire card. To do so, you must spend $1,000 on the card within the first three months after your account is opened. Qualifying transactions include purchases and balance transfers, but not cash advances. If your normal monthly spending would not get you to that level, you could always buy gift cards or dollar coins from the US Mint.

Six-to-eight weeks after you hit the magical 1k threshold, you will receive 15,000 bonus point, which you can redeem for a $150 check, a gift card, or a credit toward a travel purchase. One advantage of the Preferred card is that points are worth 25% more when used to book airline travel through their rewards website. If you pursue this option, you can redeem your 16,000 points (15k + 1k spending) for a $200 flight credit worth $200. You could also opt to transfer your 15,000 bonus points to frequent flyer miles (1:1 transfer).

The downside to the Preferred card is the $95 annual fee, waived for the first year. The generic rewards program this card offers (1 point per dollar spent) does not make it worth paying an annual fee, so be sure to cancel sometime during the first year. You could also call and try to have it converted to the regular Sapphire card.

Other Thoughts

I admit that I have a growing dislike and mistrust of Chase, especially after they slashed and burned the savings interest rate at WaMu after their takeover, and especially after they effectively killed the Chase Freedom card. Screwing some sign-up bonus cash out of Chase feels like sweet vengeance to me.

As with all bonus offers, who know how long they will actually last? The $100 bonus for the free version has been around for several weeks now, while the offer for the Preferred card has been volatile. First, it was a 25,000 points after first purchase offer. Then it dropped to 15,000 points, but the annual fee was not waived (which totally sucked – making it worse than the bonus for the free version). At some point, Chase once again decided to waive the annual fee for the first year, but raised the spending threshold to $1,000 in order to get the bonus. That’s where the offer stands now.

Mr. B’s recommendation – The bonus for the Preferred card is only worth it if you plan to redeem it for a flight credit (to earn the extra 25% point value) AND if you remember to cancel before the end of the first year (set a Google Calendar reminder to help). Otherwise, most people should just grab the quick-and-easy $100 bonus for the regular Sapphire card.

In the end, any way to transfer some cash from Chase’s pockets to the consumer is good in my book.

VISA Black Credit Card – Exclusive or Egotistic?

Mr. B — Sat, 04 Jul 2009 00:30:00 +0000

To the best of my knowledge, I’m not a pretentious jerk-wad. Nor is my ego inflated by enticements of luxury and exclusivity. I’ve never owned a “Members-only” jacket, if that means anything at all.

Imagine my surprise, then, when I received an invitation to apply for the exclusive Black Card from VISA, which (according to the marketing mumbo-jumbo) is the world’s most prestigious and versatile credit card. The invitation exuded exclusivity and hubris. After all, why would I want to use a credit card that common people (riff-raff) use when I can show the world my elegant distinction with the swanky black card?

Um, I call bollocks!

Before I deconstruct the BS that is the mentality allowing the Black Card to exist, here are the card’s bullet points:

Limited Membership
24-Hour Concierge Service
Exclusive Rewards Program
Luxury Gifts
Patent Pending Carbon Card
Annual Fee $495

You read that right – the annual fee, just for the so-called privilege of carrying the card, is $495 per year. And what does that staggering membership fee grant you, other than the privilege of looking like an idiot? Here’s the unedited text of the advert:

For those who demand only the best of what life has to offer, the exclusive VISA Black Card is for you. The Black Card is not just another piece of plastic. Made with carbon, it is the ultimate buying tool.

The Black Card is not just for everyone. In fact, it is limited to only 1% of U.S. residents to ensure the highest caliber of personal service is provided to every Cardmember. Made with carbon, the Visa Black Card is guaranteed to get you noticed.

Become a Black Card member today and enjoy our 24-hour world class Concierge Service ready to assist you with all your business, travel and leisure needs.

This, to me, is nothing more than PR spin. Why in the world does a credit card need to be prestigious anyway? That’s like food or beverages that need to be extreme. Are there really people out there who are so insecure that they feel the need to stroke their egos by plinking down a prestigious credit card on a store counter versus a normal one? I pity them.

I say, that's quite an exquisite credit card.

The marketing-geniuses behind the Black Card want you to believe that you are a superior human being. You are so superior, in fact, that you deserve, nay, DEMAND only the best of what life has to offer. You shouldn’t be caught dead carrying an ordinary credit card. Common people use those! And you’re not common, are you?

As a new Black Card member, people will notice you. Women will throw themselves at you. Men will line up to give you high-fives. Peasants and other mere-mortals will make sweeping bows as you walk by.

In fact, here is how a typical scene will play out every time you make a purchase with your card:

Hot store clerk: The total is $29.50.

VISA Black Cardmember: Here you go (hands over Black card).

Hot store clerk: Nice card. I definitely notice you and feel an uncontrollable urge to sleep with you right now.

VISA Black Cardmember: That sounds great. It’s too bad I have such a small penis.

Yeah, I went there. This brings us to the crux of the matter. The creators of the VISA Black Card take advantage of the one thing that allows such a ridiculous card to exist: INSECURITY. It preys upon people’s feelings of not being good enough, smart enough, talented enough, successful enough, or satisfied enough with their bodily endowments. These feelings are natural. We are all humans, after all.

Insecurity drives people to attempt to make up for their perceived shortcomings in other ways: by flaunting wealth, by driving souped-up cars and revving engines annoyingly in public, by keeping up with the Jones’, and by paying exorbitant fees for an exclusive credit card.

Seriously, why in the world should one credit card be perceived as more elite than another? I don’t buy it. A credit card is a tool that serves a purpose. It’s not a status symbol. And people who pay $495 a year for a credit card that promises recognition, exclusivity, and the lure of luxury gifts lead insecure, pathetic lives. These people deserve pity, not the best of what life has to offer.

VISA’s slogan for the Black Card is: The World Awaits. Hey VISA, I propose a few slogans for your marketing team to consider.

Alternative slogans

VISA Black Card – Drowning in debt has never been more stylish!

VISA Black Card – THE card for people with more money than brains!

VISA Black Card – Show the world what a douche you are!

The Fall of Chase Freedom – Continued Commentary

Mr. B — Thu, 21 May 2009 22:38:09 +0000

If you have a Chase Freedom card, you have likely received a letter from them touting some upcoming improvements to your account. I received my letter a little over a week ago, and I giddily responded here.

The main highlights are that Chase is tossing aside the 3% cashback scheme for set categories (such as groceries and gas) in favor of rotating categories (à la Discover). They’re also nixing the current ability to cash in $200 of rewards for a $250 check, one of the primary benefits of using the Chase Freedom card.

Not long after my previous post went live, a representative from Chase’s External Affairs department contacted me. She asked me to clarify a few points. No, that’s not quite right. She wanted to point out some inaccuracies in the posting so [my] site and its authors have an accurate point of reference about Chase Freedom and its features.

Okay, sure. I’m the only author on this site, and I think I already have a pretty solid grasp of the Freedom card and its fall toward obsolescence. But out of appreciation (and respect) to the Chase representative, I will post her comments here.

About Cash Back

Earn 1% cash back every day, everywhere, on all purchases with no caps or expiration dates.

I originally wrote that there was no change here, and it’s true, mostly. The base rate of 1% cash back rate is exactly the same as it used to be. According to the Chase representative, cash back used to expire after 36 months. Now, it never expires.

To be honest, I don’t ever remember reading that Chase Freedom cash back used to expire after 3 years. Perhaps it did, so I’ll concede this point, minor as it is. The bigger picture is about the unchanging 1% rate, not the expiration date. That’s how the bullet point starts, after all.

The triple cash back rewards you earn on gas, grocery store and fast food purchases will no longer be available. However, there will be opportunities to earn 3% cash back in new spending categories throughout the year.

Chase offered no defense as to why the original categories are disappearing, but took offense to the obvious comparison to Discover Card, which already offers 5% cash back in rotating categories per quarter.

Chase’s comment: With Discover, they typically have very low quarterly spending caps of $400, so the customer can only earn a bonus $20. With Chase Freedom, our quarterly spending caps are at least $1200, so even at 3%, the customer can earn $36 in bonus cash back. Also, please remember that with Discover, the customer only earns .25% on their first $3,000 in annual spend, and then 1% for the remainder of the year. With Chase Freedom, you always earn 1% on all purchases no matter what your annual spending level is.

About the Online Shopping Portal

Continue to earn up to an additional 10% cash back when you shop online at www.chase.com/rewardsplus.

In the previous article, I made another obvious comparison – Chase Rewards Plus versus ShopDiscover. Both are online shopping portals that offer additional cash back by clicking through their respective sites. I also pointed out how Chase Rewards Plus has existed for a long time and therefore should not be considered a new feature or improvement of the new Freedom card. Once again, Chase offered no defense as to how Rewards Plus is suddenly a new improvement, but only to the obvious Discover comparison.

Chase’s comment: With Chase Freedom, we also have merchants that earn up to 20%. However, we wanted to give customers a more realistic picture of what they could earn, instead of touting the few merchants (such as Teleflora, Vistaprint and ftd.com) that earn 20%. The overwhelming majority of merchants in Discover’s program only earn 5%. Discover has just over 100 merchants in their program, whereas with Chase Freedom, there are over 300 merchants participating.

About Pay Yourself Back

Pay Yourself Back – by making a purchase with your Chase Freedom credit card and redeeming it for a credit to your account.

In the previous article, I only pointed out how this is not a few feature.

Chase’s comment: However, the minimum redemption amount for this item was $150 and has now been reduced to $25, so customers can take advantage of this option much more quickly.

Okay, fair enough. For people who actually use this feature, perhaps it is an improvement.

About Gift Cards

Get more of your favorite gift cards from Starbucks Coffee, Target, iTunes, and Marriott – starting at just $25.

I made no complaints about this point in the previous article, only continued to bemoan the loss of the extra $50 cash back bonus.

Chase’s comment: We are now offering over 100 gift cards (instead of the limited time only 3-4 gift card choices) to choose from so that the customer has more choices when it comes time to use their Cash Back Rewards.

C’mon Chase, don’t you have anything to say to your customers about the loss of the extra $50 cash back bonus for redeeming $200?

Chase’s comment: ….

Mr. B Bites Back

Here’s my reply:

T##### (the Chase “External Affairs” representative),

First of all, I appreciate you taking the time to contact me. Most of your comments address the comparison of Chase Freedom to Discover, and while you raise some valid points, you’ve missed the bigger picture.

Frankly, I don’t really care if Chase throws out the set 3% cashback categories in favor of rotating categories, nor do I care care about the “realistic picture” of Chase Rewards Plus versus ShopDiscover. As a consumer, I do not care how Chase Freedom compares to Discover AT ALL. I will use whichever card I deem best for a given situation.

What I DO care about is Chase’s blatant disregard for the educated consumer. It’s an obvious insult to us to remove certain key benefits and call it an “improvement.” One primary reason why I applied for the Freedom card was the 3% cashback for groceries and gas. Yes, the removal of these categories stings a little, but I can live without them. I’ll just use a non-Chase card for those categories now. However, calling it an improvement for me is sheer nonsense.

On the other hand, the $250 reward for redeeming $200 was another primary reason why I used this card. Now that I’m almost to the $200 threshold, you remove that feature and then try to tout it as an improvement? Ha! What an insult!

Had Chase admitted something like, “Due to an uncertain economy, we are changing the rewards structure of the Freedom card….” then I would be much more understanding. As it is, stripping away key benefits and lauding them as improvements is infuriating and despicable.

T#####, I realize that these decisions were likely not yours to make, so in no way do I hold you to blame. After all, you’re just doing your job, right? Out of respect for you, I will update the article with your comments, but if you could deliver a message to your boss for me, I would appreciate it.

The message is this: Chase, you are effectively killing the Freedom card with your supposed “improvements.” While stripping away features for the sake of profit is completely understandable from a business perspective, stripping away features and spinning them as “improvements” to the customer reeks of indignation and offense. Rest assured that “on or about June 30″, this consumer will never again use the Freedom card.

Cheers,

Brian

The Aftermath?

What do you think? Too harsh? Not harsh enough?

The overall motto here should be: don’t treat your customers like idiots. If Chase had not tried to convince me that the card changes were good for me, I would likely continue using my Freedom card, but only in the way I use my Discover card – exclusively for the rotating categories. Instead, I won’t use my card AT ALL come June 30.

How about you? If you have a Freedom card, will the upcoming changes affect your usage?

Chase Freedom Card Turns into Discover

Mr. B — Tue, 12 May 2009 20:00:00 +0000

Update: read some continued commentary on this topic here.

Since 2007 the Chase Freedom card has been one of my most oft-used credit cards. I like it because it gives me 3% cashback at grocery stores, gas stations, and quick service restaurants, like fast food, pizza places, and coffee houses. It was even part of my credit card usage plan for maximum rewards.

I say “was” because yesterday I received a letter in the mail from Chase. The outside of the envelope loudly boasted about upcoming improvements to the Freedom card. Uh oh. When a credit card company talks of improvements, they usually just mean for them, not for you.

And what are the supposed improvements?

Straight from the horse’s mouth, with my commentary below:

Earn 1% cash back every day, everywhere, on all purchases with no caps or expiration dates.

Okay, that’s exactly the same as before. No change yet.

The triple cash back rewards you earn on gas, grocery store and fast food purchases will no longer be available. However, there will be opportunities to earn 3% cash back in new spending categories throughout the year.

No longer available? How is that an improvement? Oh, right, they’re replacing it with rotating spending categories. I think another company already does that, but with a 5% cashback rewards program. So, Chase Freedom is imitating Discover, but sucking at it?

Continue to earn up to an additional 10% cash back when you shop online at www.chase.com/rewardsplus.

Hmm, this sounds familiar as well. Once again, Chase Freedom is a lesser variation of ShopDiscover, which yields up to 20% cashback. Just for the record, the Chase Rewards Plus shopping portal is not new – it existed long before this letter arrived touting it as an improvement.

Pay Yourself Back – by making a purchase with your Chase Freedom credit card and redeeming it for a credit to your account.

Well, at least this feature is new. Nope, this isn’t new, either. Thanks, Kim!

Continue to redeem for checks, which now start at $50. Note: The $50 bonus when redeeming $200 in Cash Back Rewards will no longer be available after June 30th.

AARGH! That was one of the main benefits of the Freedom card! If you saved up to $200 in cashback rewards, you could redeem it for a $250 check, therefore effectively yielding 3.75% / 1.25% cashback. Chase, please tell me how removing this extra bonus is an improvement.

By the way, the reward checks always started at $50. No change there, either.

Get more of your favorite gift cards from Starbucks Coffee, Target, iTunes, and Marriott – starting at just $25.

Okay? I’m still reeling from the loss of the $50 bonus.

On or about June 30, 2009, your account will be automatically updated with the benefits listed above. You’ll receive a Welcome Kit explaining all your new rewards – and other benefits such as Purchase Protection – in greater detail.

Chase, you make me laugh. Benefits? Congratulations on being masters of spin. How hard did your employees laugh when creating and sending these letters? Did you think we (the customers) wouldn’t notice?

Allow me to sum up the situation for you: Chase is desperate to save cash however they can, so not only did they slaughter the WaMu savings account rates when they took over, they’re now effectively killing the Freedom card. I can’t think of how a single cited improvement benefits the consumer rather than Chase itself, at least compared to how the program previously worked.

All-in-all, the major modifications effectively turn the once-mighty Chase Freedom card into a wimpy version of the Discover card. I’m very close to the $200 reward threshold, so it looks like I must use the Freedom card exclusively for now so that I can grab my $250 bonus check before it disappears.

After that, it looks like my Freedom card is destined for the sock drawer.

Here’s a scan of the letter I received.

Another AMEX Blue Sky Bonus Offer – Watch Your Mailboxes

Mr. B — Mon, 17 Dec 2007 04:12:35 +0000

A day rarely goes by in which I do not receive a credit card offer or two (or five!) in the mailbox. Some people undoubtedly consider it “junk.” As the saying goes, “one man’s trash is another man’s treasure.”

I wish I could say that all the card offers I receive are “treasure,” but unfortunately, most of them really are junk. However, some of the best card offers I have ever received have arrived as unsolicited “junk” mail.

For instance, earlier this year I received a targeted bonus offer for an AMEX Blue Sky card. I applied for the card because of an offer of 30,000 bonus points (equivalent to $400 in travel expenses). My points credited months ago, and I finally took advantage of them the turn a $450 flight into a $50 flight. Nice!

A Second Offer

I’ve been using the Blue Sky card as part of the collective “other” purchase category in my credit card usage plan for maximum rewards. Imagine my delight when a second offer arrived – not for me, but for my wife!

The bonus offer is the same: spend $1000 on the card by a certain deadline, and you will receive 30,000 bonus points. In our case, the deadline is the end of February, so provided that we make it our primary card once it arrives, we should not have any trouble reaching that barrier.

Here’s a recap of the card: AMEX Blue Sky

Earn one point for every dollar spent (equivalent to just over 1.3% cashback)
7500 points equals a $100 credit (toward a travel purchase)
Points are unlimited and never expire
0% Intro APR for Up to 12 Months on Purchases
No annual fee

Points are redeemable for “travel” purchases (such as airline tickets and hotel), and redeeming points for travel is painless. I redeemed my points quickly on their web site. As a side note, AMEX gave me my most generous credit limit with this card.

So, watch your mailbox, and don’t throw away credit card offers without a quick inspection! Thanks to this offer, we will have now earned $800 from AMEX alone. The timing is perfect since we are planning a trip to Europe this summer. Due to the battered dollar, the trip will be expensive enough as it is, so saving $400 on a plane ticket is a welcome deal!

Discover’s Dirty Little Cashback Bonus Secret

Mr. B — Sun, 18 Nov 2007 18:20:02 +0000

If you use a Discover credit card, there is something you should know – a dirty little secret that Discover probably doesn’t want you to know.

Actually, it’s not so secret because they actually publish it on their website, but it IS secret because it’s not so easy to find.

Before I spill the secret, first you must understand Discover’s tiered cashback bonus system, based on how much you spend on the card each year.

Up to $1,500 spent annually on purchases: 0.25% cashback
From $1,501 to $3,000 spent annually on purchases: 0.5% cashback
Above $3,000 spent annually on purchases: 1% cashback

As you can see, only after you spend $3,000 in a given year do you finally achieve 1% cashback status, which is mediocre at best. Given the number of credit cards that offer a minimum of 1% cashback bonus on ALL purchases, the luster of the Discover system wanes further.

The Secret Unveiled

The dirty little secret, however, adds insult to injury. Here it is: purchases made at certain large stores (such as Wal-Mart) only earn 0.25% cashback, no matter how much you have spent annually. Furthermore, dollars spent at these large stores do NOT count toward the progress toward the 1% tier level. Don’t believe me? See for yourself.

Quoted from their site (bold is my emphasis):

If you have a Discover Card that earns Cashback Bonus, you will earn a fixed .25% Cashback Bonus on purchases made in-store or online at select warehouse clubs or discount stores, including grocery stores affiliated with these stores, such as BJ’s Wholesale Club, Costco, Sam’s Club Wal-Mart, Wal-Mart Neighborhood Markets and Supermercados Amigo stores. These purchases will not be included in calculating the total amount of purchases made during your anniversary year in order to determine your up to 1% tier level. However, purchases of gas at these stores will be treated the same as all your other gas purchases.

There you have it. If you frequent any of the aforementioned stores, do not whip out your Discover card, as there are many better choices. Once again, this shows that the main reason to ever use a Discover card is for the revolving categories in the Get More program.

Personally, I avoid Wal-Mart like the plague, but I have several family members who think that it is the only store on Earth! One of these same relatives also thinks that Discover is the best credit card because of its “great” cashback bonus system. After I sent her links to the dirty little secret, she immediately applied for an alternative card.

Citi mtvU – A Great Student Credit Card

Mr. B — Sat, 17 Nov 2007 22:52:46 +0000

I rarely apply for a credit card without some kind of sign-up bonus, but I recently made an exception for the mtvU card from Citi. Yes, this is a “student” credit card, and though the end is in sight for my doctorate, I am still technically a student!

What I Like

Here’s what I like about the card:

5 “Thank You” points for every dollar spent at:

Restaurants (including fast food)
Bookstores
Music/Video stores
Movie Theatres

This has become my new “restaurant” card on my credit card usage plan. The other major benefit is that Amazon.com is supposed to appear on your statement as a “bookstore,” meaning that all Amazon purchases should earn five points! I tend to spend more money than I should there, so I will soon learn whether this is true.

Citi also offers additional bonus points for getting good grades each semester, plus a monthly credit of 25 points simply for paying your statement on time. Nice!

What I Don’t Like

The card is ugly. Really ugly, as in bright-blue with a gaudy logo. I left the “activate now” sticker on my card because at least it hid the logo.

What I Don’t Care About

The card also offers other perks, such as 10% off some of the junk at the MTV store. Ooh! Ooh! It can also help me get VIP passes to mtvU’s Spring Break! Lame.

Other Thoughts

Like all the other cards I use, there is no annual fee. While I did not have to send Citi any scans of my transcripts or student ID, I did have to select my university from a list on the application. Also, Citi did not ask for household income or for a co-signer on the application. It may be possible for non-students to get this card, but I’ve heard a few horror stories about Citi cracking down and asking for faxes of transcripts and other identifying material.

Still, if you can get this card, I highly recommend it, at least for the cashback at restaurants. Even though I won’t be a student much longer, I can still continue to use the card.