March 20, 2006
Credit card perks
I must admit that I'm one of those personal finance bloggers who actually advocates the use of credit cards…for those who can handle it. If you pay off your credit card bill in full each month, you're handling it admirably. If you're carrying a balance from month to month on a card that charges interest, please don't fool yourself into thinking that you're handling it.
For those of us who are handling credit cards well, there are a few perks that make it worth it. For example, a cash back credit card can get you anywhere from 1% to 5% back. I like the Chase Cash Rewards Plus card because it's one of the highest-return cash back cards. For paying your monthly bills and expenses with a Chase Cash Rewards Plus card,, you could get enough "points" to score a $50 check every month or two. It's pretty cool to get money back, don'tcha think?
Another cool perk that's probably available to most credit card holders, but only makes sense if you're not carrying a balance, is those "Credit Protector" checks. I'm starting to get about one every month, and they're $15 or $20 each time. The intended purpose is to lure you into getting a useless "Credit Protector" plan that covers you if you suddenly lose your job and can't pay your credit card bill. They typically come with a 30-day free trial period, so it's free if you cancel within 30 days. I like to use them as a source of extra cash by depositing them in the bank and then cancelling the service within the 30-day period.
If you're really in the mood to take advantage of your credit card, use a combination of the "float", or grace period, and a high-interest savings account like Emigrant Direct or HSBC. If you've got 25 or 30 days until you have to pay the bill, put that money in your savings account and keep it there until you pay the bill. On an average $1,000 credit card bill, that could net you up to $47 a year. If your credit card bill is larger than that, it's even more worth your time.
Speaking of high-interest savings accounts, I need to transfer our savings to a higher-interest account. The rate difference will mean probably $50 more in interest over a year's time.
Filed under Credit Cards by Sean
Comments on Credit card perks »
Isn't the Chase Cash Rewards Plus card limited to something like $300 per year in rewards? And you also have to request a check each time you reach $50. I'd love to find a card with no limits and that automatically deposits the money in my account.
[...] I ran across this post over at An Uncommon Way to Wealth this morning. It touches on some of the different perks that credit cards offer. I take advantage of two of the perks mentioned in the post. Cash back: I have a Chase Cash Rewards Plus card that gets all of our everyday expenses. It gives us 5% cash back on our grocery, gas, and drug store purchases as well as 1% cash back on all other purchases. We have other cards that give us cash back, but we don't use those as much anymore. We're trying to hold off on those in hopes they'll notice the drop off in activity and extend a 0% balance transfer offer. [...]
Wonderful Blog! We share many of the same views! I defiantley agree with using a credit card if youcan handle it. My husband and I have been using one for almost three years and are about to take our first free vacation from the rewards! We use MBNA.
I've looked around on the Internet and it seems like everyone agrees: there's no $300 limit on the Chase Cash Rewards Plus credit card. The Citi Dividend card has the $300 limit, but the Chase card doesn't. So, the Chase card is superior.
I just pulled up the Chase Cash Rewards Plus rules & regulations PDF, and it's definitely limited to 30,000 points per calendar year. It takes 5,000 points to get a $50 check, so that figures out to $300 per year.
The URL to the PDF is http://www.firstusa.com/xcards4/ccards/chase_cashplus_champ/CashPlusBrochure.pdf
I haven't found any card that offers an unlimited cash back reward except for the one from Emigrant Direct (only for account holders). It pays something like 1.4%, unlimited per year, and automatically deposits into your account twice per year. If I liked Emigrant, I might actually go for that deal. I'm currently with HSBC and haven't heard good things about Emigrant, so I really don't want to switch.
Dave
Darn. I took others' comments as the gosh-honest truth. That'll teach me to do my research. Still, $300 is $300. I'll just have to get an additional credit card.
I spent half my day today researching reward credit cards and deciding on the best one for my wife and I to use. After much deliberation (and a headache from reading fine print) we decided on the Citi Diamond Preferred Rewards card.
The link goes to my blog post if you want to read about my reasoning.
[...] I ran across this post over at An Uncommon Way to Wealth this morning. It touches on some of the different perks that credit cards offer. I take advantage of two of the perks mentioned in the post. Cash back: I have a Chase Cash Rewards Plus card that gets all of our everyday expenses. It gives us 5% cash back on our grocery, gas, and drug store purchases as well as 1% cash back on all other purchases. We have other cards that give us cash back, but we don't use those as much anymore. We're trying to hold off on those in hopes they'll notice the drop off in activity and extend a 0% balance transfer offer. We only recently got the Chase Cash Rewards Plus card because I found out it pays 5% cash back at Wal-Mart Supercenter, which is where we do all of our grocery shopping. At the same time, we got a Chase home improvements rewards card. It pays 3% cash back at home improvement stores such as Home Depot and Lowes. With us in a brand new house and my desire to DIY, I figured it would be a good addition to our wallet. I also set up some of our recurring bills to be charged to our MBNA Mastercard which pays 1% cash back on all purchases. I could have set them up with our Chase card, but I've read posts about MBNA closing accounts because only their bill pay service was being used. I don't want to risk losing our oldest and largest credit line. I believe this is one of the most overlooked ways to earn cash back. Think about how much you spend on utilities per month. That could be an untapped boost to your cash back earnings. Take our latest utility expenses for example: Electric: $125 Gas: $200 Satellite: $50 Internet: $45 Telephone: $28 Cell phones: $90 Those are all charged to our MBNA credit card. 1% of that is only $5.38, but that's money I wouldn't have otherwise. Why not take advantage of it? Would you not pick up a quarter on the street because it's only a quarter? We still have a couple of bills that we have to use the bill pay service from our checking account on. They either don't accept credit card payments or are not a merchant in MBNA's network. But, overall, we've tried to maximize our cash back potential. Float: The other perk mentioned in the article is the so-called maximum float. I am just starting to take advantage of this. I don't tempt the grace period with my cards because that's just too edgy for me, but the way I do it is pay off credit cards with another credit card. Even though I don't do it this way, it seems you could do this for several months before you actually have to pay the balance. Our MBNA Mastercard has a $25k credit limit. So, we charge everything on our other two cards and then pay them off with our MBNA card. When the MBNA card comes due, we pay it off in full. We always pay our cards in full on or before their due dates. No sense in carrying a balance if we don't have to. What are some other ways you maximize your cash back or other perks you get from your credit cards? Explore posts in the same categories: credit cards Grab the Permalink [...]