Rewards Cards
 

I have a Master Card Travel Rewards card. There is no charge the first year but a subsequent yearly fee of $25 is incurred. Also, points will start to expire after 5 yrs and no free miles for starting up. However, I figure before the fifth year has ended I will upgrade to another rewards card with no penalty of expiring points. Is this a good plan?

I know that my father has Travel Rewards card that is totally free, from some financial insitution. I can't remember.

I'm not sure any miles or travel rewards card is a good plan. Given the uncertainty and arbitrary value of miles and points, I made a conscious decision after 9/11 last year to discontinue using any points or miles-based credit card and switching to a cash back card. There's nothing stopping a carrier from releasing fewer or no reward seats, or arbitrarily increasing the number of "miles" or "points" required for an award. While getting 1% cash back on my credit card may be less valuable than tens of thousands of miles per year right now, the value of cash is fixed (and once I earn it, it's mine in the bank), while the value of miles are arbitrary and are determined by the airline. Miles can be devalued if they change reward availability, terminate or reduce service to a particular destination, change the redemption scheme, or if the airline goes belly up.

Cash is cash, and I'd rather have something certain now than some "miles" or "points" based currency arbitrarily controlled by an airline or credit card company.

[This message has been edited by channa (edited 10-11-2002).]

I choose the Travel Rewards Card over the Cash Back Card because there was a time in my life when I called friends on the phone and their answer was "Where are you?" I rarely travel and I figure if I am rewarded with a free trip I would be compelled to exercise that option.

Ah! to be young again!!

"However, I figure before the fifth year has ended I will upgrade to another rewards card with no penalty of expiring points. Is this a good plan? "

You suggest that you are going to be able to somehow roll your "travel rewards" over from one card to another by signing up for another card. As far as I know, each of these travel rewards cards operates independently, and the rewards points or whatever are not fungible--that is, the Banc One rewards points can't be converted into First USA reward points (if there is such a thing). So, once you have begun earning travel reward points in one bank's particular system (and not an airline's points or a particular hotel's points, for example), you are stuck with that credit card and that bank until you can claim a reward. Otherwise, I am pretty sure most of them provide that you lose the points if you close the credit card account.

The expiration of the bank-related programs (and the ability to merge credit card charging points with points earned while flying, staying in hotels, and renting cars, among other things) are two of the big reasons to get a card which funnels points into an airline or hotel's programs.

Djlawman

If you don't think you're going to be able to earn enough points for a domestic award within a 5-year period, I think that perhaps an awards card is not the right product for you. I especially wouldn't want to pay even a $25 annual fee for several years if the only benefit was that I might earn enough for a domestic ticket, or not. Especially not in an environment where the likes of Southwest offers $198 coast-to-coast specials from time to time.

Steve made a very good point. If the five years is going to be a problem, you might be better off with a no-fee card. I have friends who only charge a few thousand dollars a year to their $135 Delta AmEx card. This simply does not make economical sense. Go for a cash rebate card instead. There are a number of 1% cards on the market, but Amoco has a 2% card through First USA. The only catch is that the rebate must be used to purchase Amoco gasoline. Another thought might be the two Hilton cards--the AmEx and the Citi. Although HHonors points are not worth what Starwood points are, the two application bonuses alone will beef up a HHonors account. They too do not carry a fee.

The Rewards Card that I have is a Chase MasterCard. According to their website, there is no problem to upgrade to a card with a higher interest rate. There is no problem reaching the first upgrade at 5000 points, and the 15,000 with in five years.

However, from all the feed back I will have to evaluate owning a travel card.

I also changed from Mileage Card to Cash back card the American Express 5% Rebate Card.

I took another look at the brochure and you can redeem the annual fee after 3500 points. This essentually makes my MasterCard FREE!! It's been half a year since I've had my Rewards Card but I will make the call and post the results.

Amex converted my Optima card to the said 5% rebate card. However, the 5% is a bit misleading. It varies from 1.5 % to 3%, and you have to carry a balance to get the additional 2%. In addition, you are capped at $50k of spending. Not a very good deal, in my book. I'd rather use Discover or my UA MP Visa.

But i won't be spending over $50k http://www.flyertalk.com/forum/smile.gif

Also, Discover won't even give you 1.5%, only on selected online merchants do they give you 2%.

I would happily trade in my mileage cards if there was a no-fee 1% rebate card that involved NO NONSENSE. As far as I can tell, they all involve me jumping through hoops to get the 1 percent.

I don't want to make phone calls to get the 1%, I don't want to have to spend a bazillion dollars to get the 1%, and I don't want to have to pay full retail at a high-priced gas station to get the 1%. I also don't want to have to redeem my earnings at an Amoco where gas in $1.59/gallon when the discount station across the street is $1.49/gallon.

Basically, if I spend a hundred dollars this month, I want to be able to click on my monthly bill and see $99.

And, of course, I don't want to pay an annual fee or be tied into using other bank services besides the credit card (which is worse than an annual fee).

Does such a card exist?

Citibank's Dividend has no annul fee. and Amex's 5% cash back has none either.

Citi

Amex

Citi Dividend Card: Close, but no cigar. You get $100 every time you spend $10,000 in a calendar year, up to $300 per calendar year. I can't find the fine print that says what happens if, say, I spend $9900 in 1 calendar year and then the final $100 on January 2.

(Actually, this card is currently in the mail on its way to me. I picked it up because I need a place to park a balance transfer. This card has 0% through Jan '04. On Jan 1, 2003, I will decide whether I want to chase the 1% cash back carrot.)

Amex: I can't find the fine print on the website. I did, however, find the words "up to" everywhere and a phrase something like "paid at the end of the year" as well. Looks like a lot of fine print with this one. Having said that, this card looks like it has promise. If, say, you were making large Home Depot purchases late in a calendar year, you could potentially realize a nice rebate in near-real-time.

The AMEX card does look interesting but I agree, the "up to" wording is not clearly explained. It does state that to get the 5% rebate you have to carry a balance. Does anyone have this card? What are the restrictions for "up to" 3% for supermarkets, drugstores, etc., and "up to" 1.5% on all other purchases?

I've done quite a bit of research on this recently and this is what I've found.

For the Citibank Dividend card, it doesn't matter if it takes you ten years to reach $10K in spending. Once you reach it, you should get your $100 check.

For the AMEX, the payout is as follows:

For everyday purchases, which includes purchases at stand-alone supermarkets, drugstores, gas stations and home improvement stores:

$1-$2000 spent = 0.50% cash back
$2001-$6000 spent = 1.0 % cash back
$6001+ = 3.0% cash back

For other purchases:
$1-$2000 spent = 0.25% cash back
$2001-$6000 spent = 0.5% cash back
$6001+ = 1.5% cash back

With these figures, the conservative estimate is that you need to spend at least $13K/year on your AMEX in order to exceed the flat 1% you can get with the Citibank card. This assumes that you don't spend any money on "everyday" purchases, which means the real number should be somewhat less.

One caveat with all of this. I've noticed that a lot of the credit card companies, AMEX included, have become substantially more vague in describing the specific cash back terms on their websites. In particular, I don't think you'll find any of this info on their web site. I suspect it allows them to do quick back-pedalling should they decide they're being too generous.

I have the new Amex 5% cash rebate card.

The Card Member Agreement did not even specify what supermkts are for 3% after $6k. It just said standlone Supermarkets, and Home improvement stores.

With the Amex card, it looks like *most people* would get something like 1/2 to 3/4 percent back, paid an average of 6 months after the charge was incurred (assuming flat spending over the course of a year). Factor in the time value of money and we're talking about a small, small carrot for this card.

Unless someone can work out a moneymaking method of carrying a balance to get the bigger rebates...but I'm guessing that Amex has crafted these rebates to make sure there are no loopholes.

Honestly, it looks like Amex is targeting this card directly at builders and others in the home improvement industry. To them, this looks like a beautiful card. (For my spending, it's not worth much at all.)

If you really cared about maximizing your AMEX rebate, you could just buy $6K of savings bonds as soon as you got the card. Then you're guaranteed at least 1.5% back on everything else for the year. Factor in the initial 0% APR for the first six months and anyone could afford to do that.

If you're going to talk about the time value of money, though, for most people--I'm not talking about the typical poster here--getting a check even once a year is better than waiting until they accumulate 25000 miles on an airline affiliated card. This is because you not only have to wait until you get 25000 miles to get your ticket, but you don't realize the value of the ticket until you actually get the ticket issued.

I'll agree with that 100% For this reason, I have always stayed away from the "MilesOne" type cards that have the home-grown points. I just don't spend enough money fast enough to make them worthwhile.

Plus, the MilesOne-type cards can hit you with fees, just like the airlines, when you try to redeem. Forget it.

I recently ditched all of my annual fee cards and signed up for the Amtrak Mastercard (no annual fee, 5000 rewards points convert to 5000 Continental OnePass miles) and a couple of no annual fee Amex cards. (I have a Amex Blue and a Platinum Optima - both of which have no annual fee and good benefits and programs, and with more than one Amex card, you can pool your points into the same Membership Rewards account.)
Apparently Amex cards with annual fees earn the same Membership Rewards points as the Amex cards without annual fees. The only difference is that when you have an annual fee card, the points are redeemed at a 1 mile for 1 point ratio while when you have a no annual fee card, you will get 1 mile for 2 points. However, if (you are like me and) you redeem your points very infrequently (e.g. - every few years), you can earn all your points with a no annual fee card and pay an annual fee to upgrade your reward program only when you plan on redeeming your points (when you earn enough points for the ticket you'll need). At that point, all of your points will be redeemed at a 1/1 ratio regardless if you paid an annual fee when they were earned.

That way, you can have a great card with a good rewards program and you'll only have to pay the annual fee when you have enough points for the reward that you want."

Also, as far as I can tell, the Amtrak card is the only one which offers a $1/1point/1mile exchange and no annual fee ever. All of the other mileage cards either have annual fee after the first year or they don't have teh 1/1/1 ratio. If this is correct, it would seem to me that Amtrak has the best no annual fee card - hands down (as long as Amtrak's in business)

How long can you keep the Amtrak Awards account open without actually taking a train trip? Or do you actually ride the train? (Somebody had earlier posted that you couldn't have the rewards indefinitely without a paid Amtrak ticket in there somewhere.)

Points expire after three years unless you take a train trip duiring that time.

In that case, why wouldn't you just transfer the points over to Continental before the three year mark?

For the AmEx extra 2% - could you pay all of the balance except $50 and still be eligible for the 2% during the following month?

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Does anyone have any experience with the eBay Visa card? It appears to be very near a "pure" 1% rebate card with no annual fee. The one percent is credited monthly - no thresholds and no waiting until the end of the year. And as far as I can tell - no spending cap.

Anyone out there have this card?

Only downside: it's a First USA card.

MBNA now offers a few reward credit cards.

GM MasterCard offers 5% rebate that only be redeemed and applied to the purchase of a GM vehicle.

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Kickback King

Hasn't anyone else heard of the Fleet Cash Dividend Visa card? Cash rebate up to 2%. While the details are not given on the website, other than $500 max per year, the tiers are:

0.25% up to $1,999.00 charged
0.50% on next $2,000
0.75% next $2,000
1.0% next $2,000
2.0% on amounts over 7,999.00

The max $500 cash back will be reached at about $30,500 charged.

At the time I got this card, I did a spreadsheet vs. other cash rewards cards, including AMEX when it was only 1.5%, without the 'everyday purchases to 3%; and also according to my spreadsheet, it paid 1.5% after $4000 at that time. The cards were even at $11,000 but the Fleet card pays more after that. If the highest tier for AMEX doesn't kick in now until $6000, then the Fleet card is even more attractive.

And, I think everyone recognizes you lose more in finance charges to carry a balance than you get back in the extra 2% from AMEX.

Fleet site:
http://cards.fleet.com/

Oh, one gripe about Fleet....they started me at a very low credit limit, and only increased it by $2k after 9 months, and will max my limit at the next request, still lower than any other card I have.

On the other hand, I'm approaching the max $500 so I'm switching to another card.

Thanks for the tip, Silicon.

Do you know how Fleet pays out? Is it a year-end payout, or is it paid month-to-month as a credit on your bill?

You receive a check after a year.

By the way, it occurs to me that maybe Fleet doesn't put the tiers on the website so they can change them at any time. You may want to call them and get a copy of the tiers in writing.

I also did a lot of research before settling on this card: Chase StockBack card. I didn't build a spreadsheet for this, but I've been know to get that carried away http://www.flyertalk.com/forum/smile.gif ....

You get 1% back on all purchases. Period. None of this tier stuff or needing to carry a balance to get to 1%. The exception comes when you earn MORE than 1%. You earn more when you purchase from select retailers like BestBuy (2%) and other brick and mortar stores. In their words, "earn up to 25% back at participating stores and 110+ online merchants." There is no anual fee and the APR is very low.

You can opt to get your rewards in cash or placed in a S&P Index Mutual Fund (hence the name "StockBack". I've found it takes over a month for the rewards to move from "pending" to cash.

________________________
http://SecondIncom.com/

[This message has been edited by tiggwin (edited 12-05-2002).]

A few things:

1) I actually applied for the Fleet card a couple of months ago when I was doing credit card shopping. It came and it seems that they've changed their terms since the beginning of the year. Now, it is only an up to 1% card if you do not carry a balance. So nix that idea.

2) You also want to investigate the Citgo Preferred Visa:
http://www.citgo.com/CreditCash/CITG...ferredVISA.jsp

It offers a flat 1% off every statement, limited to $40/month. Very attractive as long as you aren't a big spender.

3) If you're just looking to maximize your return, Principal Bank offers a flat 1.25% card:
http://www.principal.com/bank/ccards_rewards.htm

The (big) catch there is you need to have another account with them.

Check this site out
http://www.creditcardgoodies.com/

I've been checking it for about 8-10 years.
Peter Flur has an in-depth analysis of rebate cards & miles cards.

AmEx used to offer a free AmEx Sheraton card.

I have plenty of 1% rebate cards, and some 1+% cards. The payout varies - once/year, once/month, every $25-100, etc...

Currently I started using AmEx's Delta card even though I primarily fly Continental/Northwest. They gave me 15,000 miles the last two months for only $3,000 of purchases.

Over the past 20 years, so many of my rebate cards have been purchased by other banks or "upgraded" that I usually try to hold a few.

Currently I also have: (1) AmEx Cash Rebate (2) Fleet Savings Bond (3) Citibank Dividend Select (4) Discover Cash Back (5) Chase Shell

Discover offers 2X rebates at Borders, which is just like cash since I buy a lot of books.

Mitchell