Credit card deals

[murphy_p_t]

I based in USA. I want to get a new credit card & would like to find out what you recommend. I have a Shell mastercard, but they changed the rewards, so there's really no benefit to using it. I pay balance off in full every month.

Mainly, I'd like just cash back, not a list of items I can buy that I'm not looking for. If it offers extra overseas benefits, even better. I think rental car insurance is standard for industry?

I saw Fidelity mentioned on a thread...I'm not sure I want to use a credit card from the same entity where I have a portfolio, in case there's some issue where it could be held hostage. Don't know if this is a valid concern?

Any suggestions?

[SteveGo]

The Fidelity Amex Card is run by FIA Card Services, which is now part of Bank of America. Fidelity does not participate directly in the credit card activity. I believe that Fidelity subsidizes the cash back to some degree. About the only thing that could affect you negatively would be that Fidelity could withdraw their subsidy, and the card would revert to some other reward level.

This, in fact happened, with Schwab. They had a Visa card, similarly managed by FIA Card Services, paying 2% cash back on all purchases, like the Amex card. Then Schwab withdrew its sponsorship. Within a year, FIA cancelled the card, and replaced it with a Bank of America Visa, paying 1% cash back, except gasoline at 3%, and groceries at 2%. I have a Schwab account, and had this card.

Now I have the Fidelity Amex 2% cash back card. I kept BofA Visa card, which I use now exclusively for gasoline. I also have a Blue Cash Amex card which pays 1%,  except groceries at 3%, and gasoline & department stores at 2%.

So between the 3 cards, we get 3% on gasoline, 3% on groceries, and 2% on everything else. Of course, these rebates are only meaningful if you pay the cards in full every month.

Also, I have a Captial One cash back MasterCard, which pays 1% cash back. The main reason I have that one, is there is no surcharge on foreign currency transactions.

I am not worried that Fidelity is going to do me any worse than Schwab did.

[Storm]

The Fidelity cards really are great.  I have the Fidelity AmEx which pays 2% on everything.  For those places that don't accept AmEx, I use the Fidelity Visa which pays 1.5% cash back on everything.

What SteveGo said is all true.  It's run by FIA Card Services, and I have had stellar customer service from them every time I called.  In fact, my wife lost the card once and I had to report it as stolen; there were some transactions at an MTA ticket machine that the thief must have used, and they handled it so well I would recommend them to anyone.

Another thing I should mention:  The Fidelity AmEx has a 0% foreign transaction fee, so if you regularly purchase goods overseas or travel internationally, this is a great feature to have.  Most cards are around 2.9% foreign transaction fees.

[Lone Wolf]

The Fidelity cards really are great.  I have the Fidelity AmEx which pays 2% on everything.  For those places that don't accept AmEx, I use the Fidelity Visa which pays 1.5% cash back on everything.

Great info.  I've had my eye on the Fidelity AmEx but didn't even know about the Fidelity Visa.  These sound very nice!

[Ad Orientem]

FWIW I have a positive phobia of debt.  Credit is another word for debt.  And debt is a four letter word.  I don't do credit cards.  Cash on the barrel head.

[Storm]

FWIW I have a positive phobia of debt.  Credit is another word for debt.  And debt is a four letter word.  I don't do credit cards.  Cash on the barrel head.

Credit cards with cash back are worth it if you are disciplined and setup automatic monthly full balance payments.  I have this setup from my checking account.  Last year I got over $1,000 back on my Amex alone, and another $300 or so on the Visa.  Granted, it screws merchants whenever I use the card, however, you pay the same price regardless of cash or credit so I figure you might as well get as much cash back as you can.

[murphy_p_t]

Granted, it screws merchants whenever I use the card, however, you pay the same price regardless of cash or credit so I figure you might as well get as much cash back as you can.

when dealing with independent stores, restaurants...I like to ask if there's a cash discount.

Sometimes there is.

Looks like I need to look into these Fidelity cards.

[FarmerD]

The Amex Blue Cash Preferred looks good: 6% cash back on groceries, 3% on gas 1% on everything else.  Annual fee of $75 but you get $150 cash back on the first $1,000 spent as introductory offer.  Not sure how many stores take the AMEX card.  I didn't see any other "catches."

I think the Bogleheads forum has a listing of the best credit cards under "Personal Finance non-investing."  There's also a forum thread:

http://www.bogleheads.org/forum/viewtop ... =2&t=88681

[InfoOverload]

I am constantly looking for the best credit card.  I pay mine off every two weeks.

The best one so far has been the Costco Amex.  Your annual fee is your membership fee. You should look it up, but the cash back (I think) is 3% for Gas, 2% Travel and Restaurants, and 1% for everything else. Plus 2% more for everything you buy at Costco.  There is no cap on what you get back.  I own this one and use it all the time.  The only problem is the fact that you also need a second card for the stores that don't take Amex.

Starwood Amex is also very good.  They have a very good reward program.  My favorite reward is the ability to use 1000 points and get 1/2 off your room rate.  I don't own this one, because I already have an Amex card.  If you travel a lot, I think this is one of the best.

Finally, There is a new Chase  Sapphire preferred card that does not charge that alloying 3% when you use it in another country.  I may get this one.

I have a Chase Freedom card, and it used to be great.  They have changed their rules lately, and it makes you feel like you are playing a game, and they are winning.  They rotate which item pays you back 5%, and has a cap.

REI card used to be great, but I ended up with too much stuff. I have 3 tents.

[Storm]

The Costco AmEx is good to use for gas if you already have a Costco membership, especially if you're getting the Costco gas, which is even cheaper.  Otherwise I still prefer the Fidelity AmEx which pays 2% everwhere, not just at Costco.

Here's a tip for those of you that signed up for the Fidelity AmEx:  You have to open a Fidelity IRA at the same time in order to qualify for the Fidelity AmEx.  The default option is that your 2% cash back gets deposited into the IRA.  You can login and change which Fidelity account the money goes to.  If you change it to an individual brokerage account (outside of IRA space) then you have the option of investing it or transferring the money out to your bank to spend.  So, if you would prefer to not have the money locked up in IRA space, be sure to change that setting.

You can also set automatic full monthly bill payment from your checking account, and automatic monthly cash back deposits to your brokerage account, and once you've done all of this, it is literally the easiest rewards card to use.  Once you reach a minimum point value (I think it's 5,000 at 2 points per $1) the money will be automatically deposited into the brokerage account every month.  Most rewards cards make you spend the points, and if you forget to spend them they expire.  This is literally the best option when you look at the restrictions a lot of rewards programs have (can only cash out at 10,000 point increments, etc).

[jackely]

FWIW I have a positive phobia of debt.  Credit is another word for debt.  And debt is a four letter word.  I don't do credit cards.  Cash on the barrel head.

It's only debt if you let it become debt. The way I use the Fidelity Amex 2% cashback card it's the complete opposite of debt. It's positive cash flow. I never used to use credit cards for anything but travel expenses but since I got the card I have gotten into the habit of using it for every purchase I make anywhere they will take it, just like I used to do with a debit card. I have it setup with FIA card services to always pay the balance in full from my checking account so there are never any interest charges. So I not only get the 2% cash back on every purchase but I get a free 30 day float of the money in my interest-bearing checking account.

[Storm]

FWIW I have a positive phobia of debt.  Credit is another word for debt.  And debt is a four letter word.  I don't do credit cards.  Cash on the barrel head.

It's only debt if you let it become debt. The way I use the Fidelity Amex 2% cashback card it's the complete opposite of debt. It's positive cash flow. I never used to use credit cards for anything but travel expenses but since I got the card I have gotten into the habit of using it for every purchase I make anywhere they will take it, just like I used to do with a debit card. I have it setup with FIA card services to always pay the balance in full from my checking account so there are never any interest charges. So I not only get the 2% cash back on every purchase but I get a free 30 day float of the money in my interest-bearing checking account.

Exactly.  That's the same way I use mine.  In a sense you're becoming your own business with a Net 60 accounts payable department.  The reason I say Net 60 is because charges are accumulated throughout the month, and at the end of the month you get a statement.  That amount isn't due until 1 month later.  The auto-pay option automatically pays it on the due date.  So, you could get anywhere between 30-60 days of free interest on the money you've already spent.

If you combined this with a rewards checking account at one of these fine institutions, you'd really be getting a lot of extra yield on your cash throughout the year:

http://www.depositaccounts.com/checking ... ounts.html

[jackely]

FWIW I have a positive phobia of debt.  Credit is another word for debt.  And debt is a four letter word.  I don't do credit cards.  Cash on the barrel head.

It's only debt if you let it become debt. The way I use the Fidelity Amex 2% cashback card it's the complete opposite of debt. It's positive cash flow. I never used to use credit cards for anything but travel expenses but since I got the card I have gotten into the habit of using it for every purchase I make anywhere they will take it, just like I used to do with a debit card. I have it setup with FIA card services to always pay the balance in full from my checking account so there are never any interest charges. So I not only get the 2% cash back on every purchase but I get a free 30 day float of the money in my interest-bearing checking account.

Exactly.  That's the same way I use mine.  In a sense you're becoming your own business with a Net 60 accounts payable department.  The reason I say Net 60 is because charges are accumulated throughout the month, and at the end of the month you get a statement.  That amount isn't due until 1 month later.  The auto-pay option automatically pays it on the due date.  So, you could get anywhere between 30-60 days of free interest on the money you've already spent.

If you combined this with a rewards checking account at one of these fine institutions, you'd really be getting a lot of extra yield on your cash throughout the year:

http://www.depositaccounts.com/checking ... ounts.html

It seemed to evolve within me for a long time and finally float to the surface not too long ago that instead of always looking for the big thing that would make you rich it is much more realistic to be always on the lookout for little things that will make you richer. This is one of them.

[Storm]

FWIW I have a positive phobia of debt.  Credit is another word for debt.  And debt is a four letter word.  I don't do credit cards.  Cash on the barrel head.

It seemed to evolve within me for a long time and finally float to the surface not too long ago that instead of always looking for the big thing that would make you rich it is much more realistic to be always on the lookout for little things that will make you richer. This is one of them.

I was the same way - for about 10 years I only used a debit card because I simply believe revolving consumer credit is evil and I had a bad experience maxing out a $1500 credit card in college because I didn't pay attention to the balance and only made the minimum monthly payments.  Now that I'm older and more disciplined and keep sufficient cash reserves, not to mention a 1 year emergency fund, it only makes sense to maximize the yield.  That extra $1,300 in cash back every year goes straight into the PP for me.

The way I think of money is very different after using the PP.  I now don't think of it as an extra $1,300 now; I basically use a 10x multiplier for what it will be worth in 30 years at retirement.  So, that $1,300 a year from rewards cards is basically $13,000 in my retirement account.

This also makes you really think twice about those consumer discretionary purchases.  I really want a MacBook Air, which coincidentally is about $1,300.  But do I get a computer now, or take the $13,000 later?

[TripleB]

The way I think of money is very different after using the PP.  I now don't think of it as an extra $1,300 now; I basically use a 10x multiplier for what it will be worth in 30 years at retirement.  So, that $1,300 a year from rewards cards is basically $13,000 in my retirement account.

This also makes you really think twice about those consumer discretionary purchases.  I really want a MacBook Air, which coincidentally is about $1,300.  But do I get a computer now, or take the $13,000 later?

Just keep in mind that $13,000 later has the equivalent spending power of $4,000 today. Also factor in the risk that you die before 30 years and never get to use the money, and the risk that your investments don't beat inflation by 4% annualized, every year, for 30 years.

Now it's making buying that MacBook Air right now a more tempting choice

[melveyr]

The way I think of money is very different after using the PP.  I now don't think of it as an extra $1,300 now; I basically use a 10x multiplier for what it will be worth in 30 years at retirement.  So, that $1,300 a year from rewards cards is basically $13,000 in my retirement account.

I do a similar thing when looking at my current dollars. I find the FV of what it will be in 40 years at a 4% real rate of return, and then I multiply that by 0.04 (withdrawal rate). This final amount is the future income I will receive (estimated of course) from my dollars that I invest today.

For me, this equates to roughly 20 cents of perpetual income when I am 60 for every dollar that I invest today. Definitely not amazing, but it is realistic. This math encourages me to save as much as I can while I am still young (I am 20). If only had 20 years to invest I would only get 8.7 cents of income for every dollar that I invested...

[MachineGhost]

This, in fact happened, with Schwab. They had a Visa card, similarly managed by FIA Card Services, paying 2% cash back on all purchases, like the Amex card. Then Schwab withdrew its sponsorship. Within a year, FIA cancelled the card, and replaced it with a Bank of America Visa, paying 1% cash back, except gasoline at 3%, and groceries at 2%. I have a Schwab account, and had this card.

It's unclear from what you wrote...

Is this BofA Visa card (3% on gas, 2% on groceries, 1% on everything else) still associated with Schwab? 

More to the point, is this a card I ought to be able to get?

Guys, don't forget these % rebates have a cap, like $1500 of purchases per quarter.  Read the fine print.

MG

[SteveGo]

It's unclear from what you wrote...

Is this BofA Visa card (3% on gas, 2% on groceries, 1% on everything else) still associated with Schwab? 

More to the point, is this a card I ought to be able to get?

This BofA card is not associated with Schwab. It was given to me by FIA Card Services to replace the Schwab Visa card, after Schwab pulled the plug on it. I would not have gotten this card voluntarily, I only keep it because it gives back 3% on gasoline. I am not likely to burn more than $1500 in gasoline per quarter.

You should be able to get the card if you want it, directly from BofA.

[Storm]

Guys, don't forget these % rebates have a cap, like $1500 of purchases per quarter.  Read the fine print.

MG

The Fidelity cards don't have a cap, but I've seen a lot that do.  I've seen cards offer 5% cash back, but the fine print is that the 5% only applies to the first $300 worth of purchases, or something silly.  I suppose you could open all of those accounts and just purchase the maximum allowed, but who wants to go to all the trouble?