Cash Back Credit Cards

Rewards Credit Cards: Worth The Hassle?

May 8th, 2009

largecreditcardsMost credit cards from major issuers are automatically tied to a rewards program.  Rewards, after all, encourage more frequent use of the card, apart from giving the cardholder a little something back in exchange for using it.  Considering that credit cards represent a huge profit source from many banks and lenders, do rewards really benefit you more?  Or are they just another ploy to entice you, without any long-term benefits?

Should you really go for a rewards credit card or just apply for a card with a local bank?

1. Spending More

In order to earn more rewards, you’ll need to spend more.  If you’re buying stuff on credit and not settling your balance month to month, any amount you gain in rewards will likely be eroded by the premium you’re paying for the debt.  That’s a recipe for disaster.

2. Regular Consumer Spending Doesn’t Maximize Rewards

With the stingy points and earnings from rewards cards, it’s impossible to derive any considerable benefit if you only use it for regular consumer expenses.  Groceries and utilities will only represent a small amount of points earnings every month. Unless you can use it for business expenses (e.g. online advertising, travel), any points you earn before the expiry date will be paltry at best.

3. Higher Fees

Because rewards credit cards supposedly offer you more, they usually come with higher fees, interest rates and approval requirements.  If you’re not earning too many cash back or points based on moderate use, those extra costs are essentially paid for no added value whatsoever.

Worth The Hassle?

While rewards credit cards may look attractive on the surface, they’re not the best card for everyone.  Unless you use your card to spend a considerable lot (that’s way beyond your typical monthly expenses), the benefits you’ll derive from them are hardly all that enticing.

Biodegradable Discover More Card Review

May 3rd, 2009

discoverbioLooking for more ways to reduce your environmental footprint?  How about getting the new earth-friendly Biodegradable Discover More Card.

Unlike regular plastic materials used for cards, the biodegradable credit card is designed to have 99% of its components  break down in regular landfill conditions. It also leaves no toxins that can seep into the soil and water supply.  Put simply, the Biodegradable Discover More Card will leave next-to-nothing in the way of waste once its useful time is over.

A cash back credit card, the Biodegradable Discover More Card offers some pretty good rebates.  Purchases under select categories can get you a 5% money back, with non-specified categories netting you a flat 1%.  Unfortunately, we can’t get a list of the preferred categories at this time, but we expect them to be similar to most of Discovery’s offerings.

There are no limits to the rebates this card allows, so you can use it to earn as much cash back as you want.  Certain online partners even give higher rebates (up to 20%), so make sure to look into that if you are considering getting this account.  The card has no annual fee, six months 0% introductory APR for purchases and twelve months introductory APR for balance transfers.

Should you get the Biodegradable Discover More Card?  If you’re interested in getting a regular Discover More Card, the features of this one are pretty similar, with the added attraction of doing less damage to the environment.  Do note that the “environmental” bit is more a marketing move than any actual green efforts, though – don’t go around calling yourself “green” just because you got one, lest you piss off the wrong people.

USAA Credit Card Review

April 21st, 2009

usaaccThe USAA credit card is one of the highest-rated rewards and cash back credit cards in the market.  If you qualify for it, getting one in your wallet is totally in your best interest.  Available in both Mastercard and American Express branding, you can apply for a USAA credit card if you fall in any of the following criteria:

1.  You are an active-duty officer and enlisted personnel in the US Armed Forces
2.  Your parents are eligible for a USAA card and have taken a USAA insurance product (either property or auto)
3.  You are a member of the National Guard or the Selected Reserve
4.  You are an officer candidate in a USAA-commissioning program (e.g. ROTC)
5.  You are a former member of the military in good standing

If you fall in any of the above slots, you may be qualified to get a USAA credit card and we highly recommend that you go after one instead of other current offerings in the market.  Both the Amex and Mastercard versions of the USAA card enrolls you in one of two programs.  You can either apply for it as a cash rebate card or as a rewards card.  Both cards have no annual fee and will net you as low as 7.75% APR.

Cash Rebates. If you opt for the cash rebates program, you get a tiered earnings system.  For the first $2000 you spend, you earn 0.35%.  For the next $2000, you get 0.75% in rebates.  For the next $11,000, it’s a full 1%.  Once you get past that, earnings jump up to 1.25% all throughout, with the money sent your way every January.

Rewards. If you opt for the rewards, you earn a straightforward one point for every dollar you spend.  Points can be exchanged for airline tickets, merchandise, gift cards, donated to charities or converted into cash.

More than the rewards and earnings, though, the USAA Credit Card continually boasts of the best customer service you can find.  In fact, more good things have probably been said about their helpful customer support than any current credit card in the market.

Bank Of America Accelerated Cash Rewards Amex Card

April 4th, 2009

boaacceleratedamexIf you have a cash-back card but can’t squeeze the most value out of it because most of your purchases are either in non-major categories or you can’t meet the cutoffs, Bank of America’s, American Express-branded Accelerated Cash Rewards Card just might prove a good alternative.  There aren’t much perks to it, just standard cash returns on a regular schedule, but that might be all you’re looking for.

Instead of having to shop in set categories to maximize your cash back, this card gives you a flat rate for all purchases.  There is no minimum spending to reach a certain quota nor are there are no caps to how much rebates you can earn.  In fact, it’s a great card for those who don’t want to be hop through obstacles in order to maximize their credit card’s value.  Every time you use it, you get the most that you can from it.

Rebates are given out at a flat 1.25% across all categories.  There are no limits to how little or how much you can earn.  You can get your cash back in the form of a check, direct into your credit card statement or deposited into your Bank Of America account.  APR is average for these types of cards, offering between 8.99% to 18.99%.  There’s no annual fee as well.

If there are certain consumer categories that take the bulk of your spending and you find cards that offer better rates than 1.25% for them (without all the hoop-chasing), they will probably be better options.  If you think specialty cash back cards like those doesn’t benefit you as much, the Bank Of America Accelerated Cash Rewards Amex Card will probably suit you better.

Don’t Let Your Credit Card Reward Points Expire

March 30th, 2009

rewardscatalogs1Most of the time, rewards credit cards feature higher APR and more expensive maintenance fees, all of which should be easily offset if you’re able to make use of the points you earn to grab those rewards.  That is, if you actually make use of them, unlike an overwhelming majority of credit card holders.

Even though cashing in those rewards cost nothing, many people simply seem to not care enough, ignoring their points till the last minute and even letting them expire.  You do know they expire, don’t you?  If you don’t know the constraints on your points, check the terms of your credit card agreement to verify.

Keeping It Alive

If your points are near expiry and you can’t find anything in the rewards network you’d like to exchange it for, call up customer support and inquire about possible ways to keep the points alive.  While some will require you to either use up the points before the end date or lose it forever, some credit card companies will offer a bit more options.

Many companies allow your points earnings to stay past due date if you make certain types of purchases.  Find out the cheapest thing you can get to keep those points alive and get it.  I’ve heard of some rewards network that allow a single 99 cent iTune download to let you keep those earnings active.

If there’s really no choice but to use them up, try requesting if the points can be converted into payment for some of your charges and fees.  That’s at least better than being forced to get another ugly toaster.

Credit Card Review: Discover More American Flag

March 3rd, 2009

discoveramericanThe Discover More Card – American Flag  is a cash back card with a patriotic theme (although that really has nothing to do with the offer).  Designed for those with high credit scores, it’s a difficult credit card to get approved for, but should be worth  it once you receive one.

Through the Discover More Card – American Flag, cardholders can get up to 5% cash back bonus in common categories like travel, home, movies and restaurants.  Other purchases get anywhere between 0.25% to 1%.  General purchases get 0.25% rebate for spending of less than $1500 annually,  0.5% for use between $1500 and $3000 and 1% for those who spend over $3000.  Basically, the more you use your card, the better rebates you’re going to get.    This card will work best for big spenders who have enough money to cover their monthly balances.

When you choose to redeem your rewards as gifts from Discover Card partners, you get double the value, which can really pile up considering how common the purchases you need to make in order to earn the full 5% on the card.  Even better, there’s no cap on the amount of rebates you can earn plus you can let it pile up for as long as 36 months.

For those lucky few who qualify, there’s an introductory rate of 0% for all purchases for the first six months and balance transfers for the first year.  There’s no annual fee for everyone approved for the card, although the best  post-introductory APR is reserved for those with the best credit scores.

Keep Track Of Your Rewards Points

February 26th, 2009

Rewards are some of the most attractive features you can find in credit cards.  If you accumulate enough points, you can find yourself entitled to numerous perks, items and gifts.  Many credit card users, however, fail to keep track of their rewards points, often leaving it to expire.  As a result, they fail to reap the benefits that are among the main reasons why they got a rewards card in the first place.

Why People Lose Track

Many people lose track of their rewards points simply out of disinterest.  Points take time to mature enough so that you can trade it in for something attractive and many simply don’t have the patience for it.  The overwhelming reason, however, for most people’s inability to track rewards cards is that most every other card they have has a rewards program.

If you own two credit cards, for instance, one of them with a rewards program, it shouldn’t be too hard to keep tabs on its current status.  Once you start owning four or five rewards cards, however, things can get complicated really fast, with most people opting to just give up on keeping track of them.

Choosing Rewards Cards That You Can Easily Keep Track

The obvious solution is to choose rewards cards with points and systems that you can easily keep track of without much extra effort on your part.  Many rewards programs now have websites where credit card holders can check their existing points as well as what products they are eligible to use it for.  This way, all you need to do to keep abreast is log on to your account every once in a while.

Credit Card Rewards And Tax Returns

February 10th, 2009

Tax returns can be tricky when filling out. With the amount of transactions you end up being party to over the course of a year, it can be difficult to figure which ones need to be reported and which ones can be kept out of the records.

When you spend a considerable amount on your credit card, chances are that you’re receiving some decent rewards in return. I’ve personally known people, for instance, who earn $1,000 to $3,000 a year on combined rebates and rewards from credit cards alone. The question then is: should these be reported as miscellaneous income when filing your taxes?

If your rewards and cash-back rebates are taxable, you should be receiving a 1099-MISC from the credit card company as they will be obligated by law to do so. In the case of reward cards, I’ve never actually met anyone who has received such a document, whether they’re getting $100 rebates or $1000 returns. To me, this is a clear indication that rebates and rewards can be treated as gifts (from the credit card company) instead of income, which should mean that it’s fine to keep them out of your tax returns.

As of the moment, there is no clear stance from the IRS on whether credit card rewards and rebates should be subject to federal income tax. Many tax professionals advice that such perks are not considered taxable income and can be treated as such.

While this is almost 100% guaranteed for typical consumer cards, the rules may prove different for businesses whose expenses are considerably larger than a typical cardholder. In such cases, consulting with an attorney or a tax expert may prove a better course of action.

Best Instant Approval Credit Cards From American Express

January 31st, 2009

Instant approval credit cards are great when you have excellent credit ratings – no waiting, no hassles and no trouble when applying for an account. If you’re thinking of getting an instant approval credit card, you may want to consider looking into one of these offers from American Express – they’re among the best available online.

Blue From American Express

This card gives 0% APR on all purchases for the first 12 months, along with a 2.99% interest rate for balance transfers during the same period. You also get 1 reward point for every dollar you spend, which you can redeem from Amex’s online rewards store.

Blue Cash From American Express

Featuring similar benefits as the regular Blue Card (0% introductory APR and 2.99% balance transfers), the Blue Cash offers cash back rewards, allowing you up to 5% rebates on certain purchase categories and up to 1.5% for non-qualifying purchases.

Hilton HHonors Card Platinum

If you frequently stay at the Hilton during your trips, nothing beats the instant-approval HHonors rewards card. You earn five reward points for every dollar spent at any Hilton hotel, along with other purchase categories like groceries, gas and medicines. All other purchases earn you three points to a dollar. You also get an instant 50,000 points when you sign up.

American Express Preferred Rewards Gold Card

This card offers one reward point for every dollar you spend, redeemable for items in American Express’ rewards network. You get 10,000 bonus points immediately upon sign up which you can redeem automatically as a $100 gift card if you so wish.

Using Cash-Back Credit Cards To Your Advantage

December 31st, 2008

Cash back credit cards are one of the most popular rewards cards for a simple reason – they’re pretty straightforward to use. Every time you use your credit card, you earn certain percentages of it back. No counting miles for flights and no fiddling with points to find gifts, just money.

When They Are Good

A cash back credit card is great to have when you don’t keep large balances month to month. That’s because rebate cards often come with high annual fees and finance charges for the privilege, which can easily offset any earnings you incur.

If you like keeping a balance floating in your statement, it’s best to find lower-interest offers instead. While you won’t get any cash back, you’ll probably still end up saving more money in the end.

Balance Required

Some rewards cards that offer rebates will give you higher cash back percentages if you carry balances month to month. Sounds like someone trying to get you into serious debt? Yes, it does, doesn’t it?

Anytime a credit card offers you something like this, consider it a red flag. Even if you can’t work out the computations, the most likely result is that any additional reward you earn will cost you more in charges and fees over the long haul. Otherwise, why would they encourage such an undesirable use of credit?