Why didn't this article mention my cards: The Barclay "Black Card" ($495) and the "Gold Card" ($995). Chase, at $450, that's a bargain.
6
It can be a good deal, but you have to USE the perks and rewards... I once the the Black Card from RBS, which was £300 annually - but didn't take full advantage... lesson learned...
3
Merchants' rates are higher for rewards cards, and therefore consumer prices are higher to make up for any potential losses from high fees.
Say each dollar spent earns you 1 point. And to be rewarded one standard, domestic airfare ticket you need 50,000 points. Assuming the standard airfare averages around $500 dollars, you've now "earned" 1 percent on your $50,000 "investment" i.e., consumption of goods/services. Merchants' fees for rewards cards are often 2% higher than non-rewards cards. Therefore you are likely losing 1% through higher prices. On everything. Because no business can afford not to take every kind of credit card.
The only people profiting are the card companies and banks.
Say each dollar spent earns you 1 point. And to be rewarded one standard, domestic airfare ticket you need 50,000 points. Assuming the standard airfare averages around $500 dollars, you've now "earned" 1 percent on your $50,000 "investment" i.e., consumption of goods/services. Merchants' fees for rewards cards are often 2% higher than non-rewards cards. Therefore you are likely losing 1% through higher prices. On everything. Because no business can afford not to take every kind of credit card.
The only people profiting are the card companies and banks.
7
If your theory is correct then everybody is paying more and only those of us who are taking advantage of these rewards cards are benefitting. But I don't think it's true that everyone is paying more. Yes, retailers pay a small percentage to the credit card companies, but the ease with which consumers can make purchases with plastic, and the resultant increase in sales, probably more than makes up for it.
2
The most frustrating part of this credit 'game', is that ultimately, all shoppers pay for these cardholder rewards, regardless of whether we have the cards or not.
Because the annual fees are obvious deals for most cardholders, we can be sure they are not funding the total of the rewards reaped. Some of the fees get absorbed by the credit card companies (through their gouging interest rates), and the rest is paid for by higher charges to merchants (who have no ability to turn down premium or rewards cards). And guess who the merchant inevitably passes the cost back to?
Well if we're all paying for these payouts regardless, we might as well all hop on and reap the rewards too, right?? And so the margin of hidden costs gets driven higher and higher, with Mastercard and VISA laughing all the way back to the(ir) banks.
Because the annual fees are obvious deals for most cardholders, we can be sure they are not funding the total of the rewards reaped. Some of the fees get absorbed by the credit card companies (through their gouging interest rates), and the rest is paid for by higher charges to merchants (who have no ability to turn down premium or rewards cards). And guess who the merchant inevitably passes the cost back to?
Well if we're all paying for these payouts regardless, we might as well all hop on and reap the rewards too, right?? And so the margin of hidden costs gets driven higher and higher, with Mastercard and VISA laughing all the way back to the(ir) banks.
15
This is all very individual. If you're aware of the benefits and pitfalls of credit cards, and are a savvy money manager, and you can do a realistic cost/benefit analysis, then by all means go for it. The problem here isn't the card, it's the "going viral" thing. That means herd mentality, awesomeness, and self-satisfaction. Somewhere among those viruses are a lot of people who probably don't even know the terms of the cards they have now. That wouldn't be a good start with a card that compels you to maximize your spending and debt.
9
I used American Express Platinum in 80s and 90s. They are worth the annual fee as I use to travel extensively and use to get points and coupons. Now I don't travel or do shopping, just read NYT. So, I don't need it. The deep recession brought a permanent change in mindset. They no longer go and buy because they have credit card. Now, a variety of credit cards available, one can choose based on their needs.
6
I just read all the comments and they made me sad. I can't believe that so many people refuse to accept that these credit card offers are real and, with some effort, can provide cardholders with unbelievable rewards. Just ask my daughter who spent her 14th birthday this summer in Rome because I was able to covert 150000 Amex points and $700 into 3 round trip tickets to Europe that would have been $3900 otherwise. To the non-believers - you are really missing out. Do yourself a favor and sign up for this chase card. It's the best rewards card offer that has ever come along.
14
Fred, Fred, if you're going to tell tales, you must make them taller.
Twin daughters.
The whole summer.
One million Amex points.
See how easy that was? You're welcome!
Twin daughters.
The whole summer.
One million Amex points.
See how easy that was? You're welcome!
9
But see, you're part of the problem. You have not counseled caution or the importance of an informed decision. You have simply gone Nike. The problem is, a lot of people are making their decision on just that much information. That the problem with viral. A lot of people just don't want to be the last one with a $450 credit card the benefits of which take a good bit of work to figure out.
5
Lorem ipsum, I can't tell if you're being sarcastic? Everything I said is fact. Anybody who uses one of these cards for rewards knows this.
1
Whatever happened to FISCAL RESPONSIBILITY?
As a P/T Independent Contractor for a Nonprofit, one of the services our small department provides to the low-income and disabled communities is a series of 3 credit-focused workshops over three months.
The topics are:
Understanding Credit: How to Manage it and Why it Matters
Negotiating: What to Do When your Credit Needs Work
Behavior and Budgeting: How Cash and Credit Interact
If an individual would like us to pull their report and work with them one-on-one re discrepancies on the report and/or budgeting so as to work on paying/taking care of some items on their report to raise the score higher the fastest (consider a pie chart) our financial counselors will do this at no cost.
While buying credit can be a good thing, in today's day and age more and more people seem to forget at the end of the billing cycle its time to pay up...
As a P/T Independent Contractor for a Nonprofit, one of the services our small department provides to the low-income and disabled communities is a series of 3 credit-focused workshops over three months.
The topics are:
Understanding Credit: How to Manage it and Why it Matters
Negotiating: What to Do When your Credit Needs Work
Behavior and Budgeting: How Cash and Credit Interact
If an individual would like us to pull their report and work with them one-on-one re discrepancies on the report and/or budgeting so as to work on paying/taking care of some items on their report to raise the score higher the fastest (consider a pie chart) our financial counselors will do this at no cost.
While buying credit can be a good thing, in today's day and age more and more people seem to forget at the end of the billing cycle its time to pay up...
2
People using these rewards cards and carrying high interest balances are idiots. People using these cards, paying in full on time, and maximizing travel rewards are smart. If you are going to spend the money anyway (like a cell phone bill) you might as well earn reward points, or at the very least cash back.
9
I am using the Chase Reserve card and am in the process of cancelling other cards in my wallet. It is a great deal, but as with most benefits banks extend, this card (and its siblings) are just another example of how the rich (or at least the top few percent) in our society get richer. If you spend in an upper middle-class mode and don't carry a balance on your card, this is wonderful. I'm confident the banks have calculated the potential benefits of offering this card to me. For those the banks know won't qualify or be interested in this card, they can expect that the banks have calculated that in those situations profits will come from carried balances, failure to pay minimum monthly amounts etc.
2
I don't like to play games with credit cards.
It's not worth my time.
I earn my money at work and buy what I need using a free credit card.
These scheming scamming cards are not for me.
It's not worth my time.
I earn my money at work and buy what I need using a free credit card.
These scheming scamming cards are not for me.
21
It's funny, no one reads the fine print. I've owned MANY business cards over the years, including some of these. People...sad news...you've been utterly duped. If you think you are "making money" on these cards with rewards, you really have drank the Kool-aid. The companies hide fees, structure things so that they seem attainable quickly but then change it quickly so it is not attainable. You will not make back you $450. If you did, then it would be cheaper for the company to simply give you a free card. And believe me, the company will do the cheapest thing.
You are falling for a very old scheme. Stop with the credit cards. Save money to buy something. It will mean more to you and you will have more joy in it if you buy it after EARNING it.
You are falling for a very old scheme. Stop with the credit cards. Save money to buy something. It will mean more to you and you will have more joy in it if you buy it after EARNING it.
12
You're absolutely wrong. You definitely make back the fee, as long as you pay your balance on time and don't pay any interest. First year alone you'll earn two $300 travel credits, because it's a calendar year fee, so you're already +$150. The 100,000 point bonus can be used for $1,500 of travel, at a minimum. So after a year, you're up $1,650. And that's without accounting for any of the points you earn from normal spend in that year.
Everyone has to do the math for themselves after the first year to determine whether it's worth it. But in the first year, you definitely come out ahead.
Everyone has to do the math for themselves after the first year to determine whether it's worth it. But in the first year, you definitely come out ahead.
16
You're wrong. I currently have the Chase Sapphire Preferred. I have never carried a balance on the card, nor have I ever paid a fee, since the first year is free. I already have points worth about $700. I will be downgrading this card to a non-fee Chase card when I have the Sapphire Reserve in-hand. I will pay the $450 fee, which will be offset by $300 dollars in travel reimbursement, plus the ~$1500 in sign-up points. The $150 annual fee each year is offset by charging ~10-15K yearly depending on food/travel expenses. If I don't spend that, I'll just downgrade the card. All of these points are transferable. I'm not even mentioning the standard list of benefits supplied by Visa Infinite, which are substantial.
To be clear, I am making no changes to my lifestyle, I am just getting free money from Chase. There are certainly losers out there. They are the merchants who opt to accept these cards, and people who don't know how to manage a budget.
To be clear, I am making no changes to my lifestyle, I am just getting free money from Chase. There are certainly losers out there. They are the merchants who opt to accept these cards, and people who don't know how to manage a budget.
9
A $95 Delta AMEX card gets you a free checked bag and priority boarding. If you were the type of person who would pay for checked luggage, the card pays for itself in 2 round trips, and priority boarding is a nice bonus. It's not rocket science, just basic math.
7
The key reason I have a premium credit card is for the travel protection (insurance). On a recent flight my backpack was thrashed (thank you Air Canada); the airline was unsympathetic as I hadn't complained to their baggage desk (I was in a rush to catch my departing train). No problem - with minimal paperwork I was issued a cheque for $500. My annual fee for the card is $125, so do the math . . . ps
7
This article reads like a piece of paid advertising for the banks.
I'd like to have seen a real journalist approach the subject.
What is the history of these kind of deals?
How does this affect retailers?
How many people actually end up caught into a debt cycle? (more than 70% do not pay off the cards in full every month)
Is this being marketed on college campuses the way the banks did in an almost scandalous way throughout the 1990s and 2000s, creating huge debt problems for the country, leading up to the 2008 recession?
I wouldn't touch one of these "deals" with a 10 foot pole, though I am looking into buying more shares of the big name banks that are clearly on a push to hook more people again. Clearly, that's where the money is to be made in the short term. The trick is to get out before they cause the next credit based crash and have to be saved yet again at taxpayer expense.
I'd like to have seen a real journalist approach the subject.
What is the history of these kind of deals?
How does this affect retailers?
How many people actually end up caught into a debt cycle? (more than 70% do not pay off the cards in full every month)
Is this being marketed on college campuses the way the banks did in an almost scandalous way throughout the 1990s and 2000s, creating huge debt problems for the country, leading up to the 2008 recession?
I wouldn't touch one of these "deals" with a 10 foot pole, though I am looking into buying more shares of the big name banks that are clearly on a push to hook more people again. Clearly, that's where the money is to be made in the short term. The trick is to get out before they cause the next credit based crash and have to be saved yet again at taxpayer expense.
16
I'm big into points for travel. The $450 fee is nothing when you think about the bonus points. The card I have (not Chase) gives me back $250 in travel credit, $100 back in Global Entry and 4th night free in any hotel booked through the credit card concierge. It also gives me a pass to various airline lounges around the world. For me the fee means I prepaid the airline travel. The real perk though were the bonus points that I can transfer into a number of different airlines frequent flyer programs. So 50,000 points transferred into Air France/KLM can get me very close to a business class ticket to Europe that's worth about $4,000 or so. It's worth it to me, BUT if you don't have the discipline or the means to pay off the card every month, don't get seduced into free trips. Better you not get into debt.
10
Our business adds a 7.5% surcharge to purchases made with these cards. The card holders can afford it, right?
9
It's a zero-sum game. The gains to the persons chasing the card value are costs to general consumers (mostly via fees passed along to merchants, and then in turn to consumers). In addition, the cost of running the card program itself, advertising, admin, etc., needs to be passed along to consumers. Then there are the costs of time spent chasing the card programs themselves. All of these are general costs to society at large, which would realize enormous aggregated savings and be better off overall if the card program did not exist.
5
It's a free market. It's competitive. It's profitable. It's what people want. If credit card companies weren't providing a valuable service they would be out of business. Services cost money. I'm sorry if any of this is a surprise, but to claim these programs provide negative value is absurd.
3
Absolutely, positively, not a shadow of a doubt that these benefits will be slashed to a small fraction of their current level if ANYONE has found a way to profit off of them other than the issuer.
5
Well, I'm just an ex-Noo Yawkuh of mature years but modest means, so I do the sensible thing. My cash-back card is fee-free. I use it for every purchase that accepts it, and pay my bill in full every month, and apply all cash-back rewards to the account balance.
I used it abroad recently, because it had no transaction fee tacked on top of the exchange-rate calculations. I don't care about the arcane world of travel reward points etc. I used a no-frills airline for my trip, and was mighty satisfied with the service and the actual hot meals and tasty snacks my cheap ticket entitled me to. You kids can go nuts over Wall Street's latest scam if you want to.
I used it abroad recently, because it had no transaction fee tacked on top of the exchange-rate calculations. I don't care about the arcane world of travel reward points etc. I used a no-frills airline for my trip, and was mighty satisfied with the service and the actual hot meals and tasty snacks my cheap ticket entitled me to. You kids can go nuts over Wall Street's latest scam if you want to.
6
As with much of the silliness which drives the pop-world; who cares? Life is brutal, short and random so if an object allows a fellow human to forget their mortality, flaws and irrelevancy then I'm thrilled (though hiding it well).
4
I use an American Express Cash Back Rebate card that has no annual fee and gives me cash back on all purchases. The percentage starts off small, but after I spend $5000 annually, I get 1.5% back with no limit. I've received over $1200 in rebates each of the past three years (the money is credited to my February statement). I put everything on that card, from a $1.08 Big Gulp at 7-11 to thousands of dollars for my son's camp tuition. I pay off my bill in full each month so there is no cost to me. I understand that this card may not be the best for some merchants, but that is how purchasing works these days and I take advantage of what American Express offers to me.
6
Supporting the very banks that crashed the economy. Well done people.
3
The credit card companies will rob you and destroy your finances.
Apparently, people just don't learn from the experiences of others.
Apparently, people just don't learn from the experiences of others.
5
No, irresponsible spending destroys your finances. Set a budget, live within your means and do get rewards on your spending where and when you can. If your spending makes this card worthwhile... get it... if not find the best card for you... If you can't control yourself then don't get a card at all... but that is because you would destroy your finances.. And, this card only goes to those with good credit... a high FICO score comes from a long history of well managed spending and paying.
6
Proceed with caution.
If the "deal" really is a good deal, then go for it. But that means doing some real analysis and not just reacting to hype.
I paid off all my debt 6 years ago. Credit cards and car loan were first. Followed by the student loan and mortgage. My finances have flourished ever since. Debt, especially short term, held me back for far too long.
Now I do the large majority of my purchases with cash. I use a debit card for online purchases but only use a limited number of retailers.
I use the debit card for airplane tickets and online hotel bookings. That's about it. When traveling I also use it for cash. I get a better exchange rate and fewer fees than using my card for each individual purchase.
Not to mention, the retailers, especially the small businesses, appreciate it because they don't have to pay card fees either.
I'm not saying my way is better. Just putting out a voice for debt-reduction. There are always lots of groups, banks mostly, promoting all the reasons we should get into debt. But there are lot of reasons to structure personal finances with as little debt as possible. Since the banks don't make money at that we don't see much attention given to it by the media.
By the way, NY Times editors, how about running a few personal finance pieces on the value of minimizing debt?
If the "deal" really is a good deal, then go for it. But that means doing some real analysis and not just reacting to hype.
I paid off all my debt 6 years ago. Credit cards and car loan were first. Followed by the student loan and mortgage. My finances have flourished ever since. Debt, especially short term, held me back for far too long.
Now I do the large majority of my purchases with cash. I use a debit card for online purchases but only use a limited number of retailers.
I use the debit card for airplane tickets and online hotel bookings. That's about it. When traveling I also use it for cash. I get a better exchange rate and fewer fees than using my card for each individual purchase.
Not to mention, the retailers, especially the small businesses, appreciate it because they don't have to pay card fees either.
I'm not saying my way is better. Just putting out a voice for debt-reduction. There are always lots of groups, banks mostly, promoting all the reasons we should get into debt. But there are lot of reasons to structure personal finances with as little debt as possible. Since the banks don't make money at that we don't see much attention given to it by the media.
By the way, NY Times editors, how about running a few personal finance pieces on the value of minimizing debt?
5
Using a debit card online can be risky.
6
Why don't these rich hogs donate some of their substantial fortune to helping the needy, rather than making already fat and powerful banks fatter and even more powerful?
7
Why would Trump supporters who don't trust government or anybody else, send 5% of every credit card purchase to NY City banks that pay their CEOs $1 million per month? J P Morgan Chase pays Jamie Diamon $20 million per year.
7
You have to spend quite a bit to really take advantage of these reward cards.
I know I don't spend enough to get the really good stuff, but as someone who travels out of the country at least once a year, having a card with an annual fee pays for itself in not having to buy travel insurance. Then I just use the reward points on Amazon.
I know I don't spend enough to get the really good stuff, but as someone who travels out of the country at least once a year, having a card with an annual fee pays for itself in not having to buy travel insurance. Then I just use the reward points on Amazon.
1
No you don't.
You get 3x points for each $1 spent on travel and restaurants. Each point is worth a $0.01 cash back (more if you transfer to airlines). You also get $300 back for your first $300 in travel expenses.
That means if you spend $5,000 on travel + restaurants per year (with at least $300 on travel) you break even on the $450 fee. That's about $420 per month. Not a lot.
$5,000 = 15,000 points = $150 in points + $300 travel reimbursement = $450
Then you can add in all the other perks like regular points, bonus points, sign-up bonus, Global Entry reimbursement, purchase protection, lounge access, etc.
This is a very good card if you spend responsibly and pay your bill. You just need to weigh your spending profile against the rewards.
You get 3x points for each $1 spent on travel and restaurants. Each point is worth a $0.01 cash back (more if you transfer to airlines). You also get $300 back for your first $300 in travel expenses.
That means if you spend $5,000 on travel + restaurants per year (with at least $300 on travel) you break even on the $450 fee. That's about $420 per month. Not a lot.
$5,000 = 15,000 points = $150 in points + $300 travel reimbursement = $450
Then you can add in all the other perks like regular points, bonus points, sign-up bonus, Global Entry reimbursement, purchase protection, lounge access, etc.
This is a very good card if you spend responsibly and pay your bill. You just need to weigh your spending profile against the rewards.
4
It is funny reading so many of the comments that scoff at the fee and call the card holders innumerate when it is clear that the critics have not done the math.
Card fee is $450 but the first $300 of travel expenses each year are credited back (that includes taxis, airfare, tolls etc) so net fee is $150. The 100,000 point bonus earned by spending $4,000 in first 3 months is worth at least $1,500 on the Chase Travel Portal and potentially more by transferring to partner airlines. Many of us have normal spending that exceeds the minimum needed. I always pay my cards in full so I don't have credit card debt
Most who got the card read all the terms and did the math and decided it was a good value
Card fee is $450 but the first $300 of travel expenses each year are credited back (that includes taxis, airfare, tolls etc) so net fee is $150. The 100,000 point bonus earned by spending $4,000 in first 3 months is worth at least $1,500 on the Chase Travel Portal and potentially more by transferring to partner airlines. Many of us have normal spending that exceeds the minimum needed. I always pay my cards in full so I don't have credit card debt
Most who got the card read all the terms and did the math and decided it was a good value
69
Shhh. More breakage = better benefits / longevity.
There is no free lunch. Any kickback (what this is) paid in the form of a reward credit of some kind for participating in a specific rewards program is paid for by higher retail prices across the board. And everybody pays them.
I suppose the biggest losers are all-cash payers -- people who can't, or won't, use credit cards. They pay full-freight, don't receive any price discount for a cash transaction or the kickback everyone using cards receives. But the awarded subsidy is a mere fraction of the true capital gain since more than 50% of any added value is retained by the rewards credit card issuer, the sponsoring bank and the credit-bank system (Visa, Mastercard, AmEx, etc) itself. Every consumer loses. It's a question of how much.
Just another financial-services industry scam, needless to say. These people have no shame.
I suppose the biggest losers are all-cash payers -- people who can't, or won't, use credit cards. They pay full-freight, don't receive any price discount for a cash transaction or the kickback everyone using cards receives. But the awarded subsidy is a mere fraction of the true capital gain since more than 50% of any added value is retained by the rewards credit card issuer, the sponsoring bank and the credit-bank system (Visa, Mastercard, AmEx, etc) itself. Every consumer loses. It's a question of how much.
Just another financial-services industry scam, needless to say. These people have no shame.
2
The author failed to make any mention of the $300 credit for travel fees. The annual fee is effectively $150. That works out to a round trip, pretty much anywhere in the world, for $150. Disappointing from the NYT to miss such a critical fact.
8
My wife has a "free" no fee VISA card from BOA which easily pays for travel charges by crediting points - works like a breeze plus no fee.
If you pay your balance on time, (I understand that's a big "if" for many people) the best card out there is the Citi Double Rewards card. There's no fee, and you get 2% back. 1% accrues as you spend and another 1% when you pay. Doesn't matter if it's gas, groceries, electronics, etc. 1% on everything and another 1% if you pay on time.
If you spend $1,000 a month on charges, that's $240 back for the year. Plus no fee.
If you spend $1,000 a month on charges, that's $240 back for the year. Plus no fee.
4
Not if the majority of your spending is on food, drink, and travel. In that case, this card is much more valuable.
As a recovering mileage junkie, I think the mythology of "Travel Hacking" through points redemption is on par with some of greatest of financial sins that we commit against ourselves.
I've been using loyalty cards since they came onto the scene in the 90s, and have redeemed literally millions of points for travel over the years. As a road warrior, I used to boast about miles traveled in hyperbolic terms, like trips to the moon (four to be exact). On paper, the notion of mileage / points accrual makes so much sense - but over the long haul, the fundamental change in your spending/saving behavior suffers as we trade sound economic decisions in favor of justifying credit decisions in the name of "points".
Mileage Junkies are easy to spot because they are always justifying their activities or decisions on the basis of earning status in a loyalty programs. They take "one more trip" - or the need to "stay one more night" or ruthlessly find ways to game the points system to scramble mileage points from different programs into a single bucket to make something meaningful out of nothing. There is a certain thrill to gaming the points system and scoring business-class tickets to Beijing -- you feel like you "won". But after you check the math, you realize that the "free ticket" to China you got for 200,000 "points" was really $200,000 dollars spent.
That's insane.
I've been using loyalty cards since they came onto the scene in the 90s, and have redeemed literally millions of points for travel over the years. As a road warrior, I used to boast about miles traveled in hyperbolic terms, like trips to the moon (four to be exact). On paper, the notion of mileage / points accrual makes so much sense - but over the long haul, the fundamental change in your spending/saving behavior suffers as we trade sound economic decisions in favor of justifying credit decisions in the name of "points".
Mileage Junkies are easy to spot because they are always justifying their activities or decisions on the basis of earning status in a loyalty programs. They take "one more trip" - or the need to "stay one more night" or ruthlessly find ways to game the points system to scramble mileage points from different programs into a single bucket to make something meaningful out of nothing. There is a certain thrill to gaming the points system and scoring business-class tickets to Beijing -- you feel like you "won". But after you check the math, you realize that the "free ticket" to China you got for 200,000 "points" was really $200,000 dollars spent.
That's insane.
58
It's not at all insane if the $200K you reference was money you were going to spend in a given period anyway in the form of regular expenses.
In that scenario, the only cost increase you are seeing is the number of annual fee charges you get hit with in the period during which you accrue the points.
But as long as the value of the item or service for which you redeem the points exceeds the cost of the annual fees, you're gaining a return you wouldn't otherwise receive by spending the same amount through some other means.
In that scenario, the only cost increase you are seeing is the number of annual fee charges you get hit with in the period during which you accrue the points.
But as long as the value of the item or service for which you redeem the points exceeds the cost of the annual fees, you're gaining a return you wouldn't otherwise receive by spending the same amount through some other means.
2
Except when you have the discipline to buy what you needed to buy anyway, the free ticket is in fact free.
2
Not true if the 200,000 points were garnered with bonuses and not 1:1 point to dollar spending. My wife had over 300,000 points in a Marriott account simply from a few wedding overnights, all of our groceries and gas, and the Megabonuses and signup bonuses that Marriott doles out. The card is $85/year, but you get a Category 4 free night for free. Instead of going to ATM or using debit, get a card and pay the balance in full each month. At end of year, spend a week at a Ritz-Carlton. It feels nice to stay at a $700/night resort for free (and to top it off, Marriott gives you 5th night free when you buy 4 nights with points!).
2
If merchants don't like paying high credit card fees why they don't offer discount to cash customers?
I am always very happy to patronize businesses that do not accept credit cards at all.
I am always very happy to patronize businesses that do not accept credit cards at all.
4
I believe it's illegal to have a two-tiered pricing system.
Great article, but it misses two major points though: (1) There is a $300 annual credit for travel spending, which reduces the net cost to $150; and (2) it includes a very valuable Priority Club membership (which the Amex Platinum and Citi Prestige, among others, also offer) which is great when you travel.
1
I am confused. What do I get for $450 a year? I have two free rewards cards. When I use them not even the clerk sees them so it can't be the snob appeal. I use my free credit card to buy gift cards at the local grocery for stores, restaurants and airlines etc that I shop. The grocery in turn gives me great gas perks. I rarely have had to pay for gas because there is no limit. At the moment, I have $5.54 in gas perks that can be used for 30 gallons at a time. They don't mind when you fill your car AND gas cans. In addition using my credit cards give me points redeemable for money off on my statement or amazon credit. I pay my bill in full at the end of the month. I got the offer for the $450 card and I looked at it incredulously and then shredded it.
2
$300 travel credit effectively lowers fee to $150. You get a huge sign-up bonus (100,000 points) worth $1,500. And you earn 3x points on all travel and dining (most cards earn 1 point per dollar). Plus some other benefits (lounge access, purchase protection, etc.). This card is absolutely worth it for the first year (you get $1500 from the sign up bonus for $150). After the first year, it will all depend on how much you travel, but for many people it will be incredibly lucrative. So much so that I worry the benefits will be cut.
2
Talk about cloak and dagger. It's not just the $450 annual fee, unless you are paying it off every month, the interest is compounded daily. I think the millennials that think they are getting something for free, are not. They are paying a lot for the privilege of using these 'premium' cards and the Bankers are laughing all the way to the bank.
1
no wonder America is the land of the broke.
3
pt barnum said that there is a sucker born every minute. This proves that he was probably right.
4
So the retailer pays, what, 3% to the credit card system to get your business, and dribbles some of it back to the cardholders in the form of various perks.
The retailer -- be it Macy's or the retailer down the street, or a hotel -- is already paying some landlord a disproportionate share of their revenues -- and most of that is not for the building (the fixtures inside were provided by the tenant, and their triple-net lease likely has them paying for insurance and property taxes, utilities and building maintenance) but for the location --- which the landlord didn't create.
The bank wins and wins, being paid by the retailer (3% or so) and by the customer (in the form of annual fees and extreme interest on any unpaid balances). The retailer pays and pays. And ultimately, the customer pays and pays.
Why do we permit and even encourage rent-seeking?
The retailer -- be it Macy's or the retailer down the street, or a hotel -- is already paying some landlord a disproportionate share of their revenues -- and most of that is not for the building (the fixtures inside were provided by the tenant, and their triple-net lease likely has them paying for insurance and property taxes, utilities and building maintenance) but for the location --- which the landlord didn't create.
The bank wins and wins, being paid by the retailer (3% or so) and by the customer (in the form of annual fees and extreme interest on any unpaid balances). The retailer pays and pays. And ultimately, the customer pays and pays.
Why do we permit and even encourage rent-seeking?
3
Get a debit card and live within your means. Period.
5
Use a credit card and get protection from being scammed by a merchant, get the perks, AND pay it off every month. That's what I do. I use my debit cards only to get cash from an ATM. With a debit card, it's too easy for a crook to wipe out your account.
4
This article could have better explained the math that is drawing people to the new Chase card. Yes, it's a $450 annual fee, but:
- You get $300 per year direct cash back on travel purchases (airfare, trains, hotels, taxis, rental cars, etc.) So that brings effective cost down to $150, as long as you travel even modestly.
- You get a refund on your Global Entry or Pre-Check application. So that's another $85 or $100 cash back, at least for the year you use the perk. Effective first-year cost is now down to $50-65.
- You get free access to a network of airport lounges around the world - over 900 lounges total. Cash value really depends on how much you use this.
- The card offers some of the best built-in travel/car insurance and purchase protection of any credit card.
- This 100k point sign-up bonus can also be transferred at a 1:1 ratio to several airline and hotel programs. That translates, for example, into a free round-trip airfare to Asia (70k points) plus a free night at the Park Hyatt Tokyo (30k). That itinerary would cost up to $2k alone.
This is why people are rushing to this card. The 'bottom line' makes sense for those who travel, or even aspire to travel, and who pay off their cards every month.
- You get $300 per year direct cash back on travel purchases (airfare, trains, hotels, taxis, rental cars, etc.) So that brings effective cost down to $150, as long as you travel even modestly.
- You get a refund on your Global Entry or Pre-Check application. So that's another $85 or $100 cash back, at least for the year you use the perk. Effective first-year cost is now down to $50-65.
- You get free access to a network of airport lounges around the world - over 900 lounges total. Cash value really depends on how much you use this.
- The card offers some of the best built-in travel/car insurance and purchase protection of any credit card.
- This 100k point sign-up bonus can also be transferred at a 1:1 ratio to several airline and hotel programs. That translates, for example, into a free round-trip airfare to Asia (70k points) plus a free night at the Park Hyatt Tokyo (30k). That itinerary would cost up to $2k alone.
This is why people are rushing to this card. The 'bottom line' makes sense for those who travel, or even aspire to travel, and who pay off their cards every month.
44
Explained better than the article! Thanks
4
Agreed, the author was totally negligent in not mentioning the $300 credit.
1
American consumerism, the more you spend the more you save.
24
Excellent math. How stupid are we really? No...wait...don't answer it.
2
Foreign reading comprehension, the faster you do it the less you get.
2
This article illustrates what my mom taught me. It takes money to make money. If you don't have the financial background where the companies are offering or approving the cards for you, you don't have a shot at them in the first place. If you don't spend enough, you don't make back what you paid for the fee. If you don't pay off in full each month, you can easily lose as well.
2
I hate - no, 'hate' is an understatement -, I loath having to deal with paperwork.
At some point in my life I was travelling for business to Central and South America every other month for 4 years, then to Canada, same frequency, for another 3 years. A colleague of mine suggested I apply for a frequent flyer's card, which I did. But it never worked. I always forgot to give the ff card at check-in and there was no way I would bother to go through a super-tedious procedure to register the flight miles after the trip; I never bothered to find out what these frequent flyers miles could be used for (I was flying business anyway and didn't need a card to have access to airport lounges); and at the end of these 7 years my flying schedule changed from Latin America & Canada to trips to the US, so I discovered that my ff card only covered certain airlines and not US companies like Delta or United...
I still have the useless thing in an old handbag at the back of a wardrobe shelf somewhere...
At some point in my life I was travelling for business to Central and South America every other month for 4 years, then to Canada, same frequency, for another 3 years. A colleague of mine suggested I apply for a frequent flyer's card, which I did. But it never worked. I always forgot to give the ff card at check-in and there was no way I would bother to go through a super-tedious procedure to register the flight miles after the trip; I never bothered to find out what these frequent flyers miles could be used for (I was flying business anyway and didn't need a card to have access to airport lounges); and at the end of these 7 years my flying schedule changed from Latin America & Canada to trips to the US, so I discovered that my ff card only covered certain airlines and not US companies like Delta or United...
I still have the useless thing in an old handbag at the back of a wardrobe shelf somewhere...
7
simple solution, just get a cash back card that gives a fixed amount back on all your purchases (i.e., 1.5%). Problem fixed. No paperwork.
1
I used to fly tons for business. I made sure to enroll in the FF programs and carry the cards. As a result I flew several times to Europe and Hawaii for free, flew my family around some, and got my seats upgraded more than half the time. It was well worth the effort to me.
1
I gave up FF miles after my Air France miles expired. Just before they did, I tried to use them for a planned trip, but the fees for any particular "free" flight made it useless compared to just buying a ticket from another airline.
1
A popular idea spurs competition. This is the way the market is supposed to work.
4
Charles Schwab changed it's fees after 9/11 and I was paying more per quarter in a "management" fee than my funds were generating in dividends for several quarters until I could sell them outright at breakeven. Your card company will collect the rewards for it's investment once the next financial crash hits and you won't be traveling when you lose your job. That statement you forgot to send in by an expiration date because you were busy and distracted will now place any dispute you may have under arbitration with the credit card issuer's attorney. Good luck!
12
Can the author please list (in bullet form is fine) the benefits of paying $450.00 per year for this card? It's still not clear to me.
What is monumentally clear, however, is that the fee multiplied by the number of subscribers translates to astronomical "free" earnings to the banks' bottom line with no realized benefit to anyone but the shareholders.
For $450.00 a year, I want 2 nights free at a hotel; free breakfast when I travel; an upgrade every time I fly -- either to a better seat or class; and a 10% discount everywhere I shop. Otherwise, the 450 is a scam.
What is monumentally clear, however, is that the fee multiplied by the number of subscribers translates to astronomical "free" earnings to the banks' bottom line with no realized benefit to anyone but the shareholders.
For $450.00 a year, I want 2 nights free at a hotel; free breakfast when I travel; an upgrade every time I fly -- either to a better seat or class; and a 10% discount everywhere I shop. Otherwise, the 450 is a scam.
70
There are plenty of resources all over the internet that will give you a thorough rundown of what makes this card worth it. But, for starters:
-There is a $300 annual credit against ANY travel, and it's automatic. As long as you spend at least $300 on travel per year, this already lowers the fee to effectively $150. In addition, this is a calendar year credit, so for the first year you have the card you can get two credits in the same time period you pay one fee (i.e. spend $300 on travel before December 31 and then spend $300 after December 31 before your 1-year anniversary, get two $300 credits). That already nets you a $150 gain in the first year with the card.
-The card comes with a 100,000 point sign-up bonus once you spend $4,000 in 3 months. These points can be redeemed for travel through the Chase portal for 1.5 cents a point, which makes that sign-up bonus worth effectively $1,500. So now you have $2,100 of value for a $450 fee.
-For people who travel a lot, the card earns 3x points on all travel and dining. If you travel constantly for your job, for example, this becomes a very lucrative card to hold onto, even after the first year.
-The points can also be transferred to various travel partners (Hyatt, United, and about 10 others) where they can often be redeemed for a value even higher than 1.5 cents a point - this is another issue, though, and much more complicated.
-There is a $300 annual credit against ANY travel, and it's automatic. As long as you spend at least $300 on travel per year, this already lowers the fee to effectively $150. In addition, this is a calendar year credit, so for the first year you have the card you can get two credits in the same time period you pay one fee (i.e. spend $300 on travel before December 31 and then spend $300 after December 31 before your 1-year anniversary, get two $300 credits). That already nets you a $150 gain in the first year with the card.
-The card comes with a 100,000 point sign-up bonus once you spend $4,000 in 3 months. These points can be redeemed for travel through the Chase portal for 1.5 cents a point, which makes that sign-up bonus worth effectively $1,500. So now you have $2,100 of value for a $450 fee.
-For people who travel a lot, the card earns 3x points on all travel and dining. If you travel constantly for your job, for example, this becomes a very lucrative card to hold onto, even after the first year.
-The points can also be transferred to various travel partners (Hyatt, United, and about 10 others) where they can often be redeemed for a value even higher than 1.5 cents a point - this is another issue, though, and much more complicated.
Yeah, she could have at least gone over it. I can see why - probably didn't want to make the article just come off as an advertisement.
It might be even better, which is where the frenzy comes from.
1. 100K point sign up bonus, which is huge (and likely temporary). This bonus alone is worth $1K if you just redeem for straight cash, worth $1.5K minimum if you redeem for travel in their UR portal, and worth potentially much more if you transfer points to other airlines/hotels.
2. $300 automatic no questions asked statement credit on travel that resets every calendar year (NOT since you opened! this benefit resets in january). Chase defines travel very loosely - any hotel/flight/airbnb/taxi/uber/mass transit and even radpad (paying rent online) counts as travel. No other card really does this on such a broad scale and automatically.
3. Full access to Priority Pass airport lounges, which is normally a $500 yearly membership
4. Full statement credit on TSA Pre Check and Global Entry fees
5. All points spent through their UR portal get a 50% redemption bonus.
6. You can transfer the points directly to a wide array of airline/hotel programs (100k is enough to get a free first class rt flight to almost anywhere).
7. All the visa infinite perks (no FTF's, primary rental car insurance, etc).
All said it's easily $2500 in value minimum incl sign up bonus and annual fee for the first year of owning. But you must have excellent credit, and a good salary (reports of at least $60k+ min)
It might be even better, which is where the frenzy comes from.
1. 100K point sign up bonus, which is huge (and likely temporary). This bonus alone is worth $1K if you just redeem for straight cash, worth $1.5K minimum if you redeem for travel in their UR portal, and worth potentially much more if you transfer points to other airlines/hotels.
2. $300 automatic no questions asked statement credit on travel that resets every calendar year (NOT since you opened! this benefit resets in january). Chase defines travel very loosely - any hotel/flight/airbnb/taxi/uber/mass transit and even radpad (paying rent online) counts as travel. No other card really does this on such a broad scale and automatically.
3. Full access to Priority Pass airport lounges, which is normally a $500 yearly membership
4. Full statement credit on TSA Pre Check and Global Entry fees
5. All points spent through their UR portal get a 50% redemption bonus.
6. You can transfer the points directly to a wide array of airline/hotel programs (100k is enough to get a free first class rt flight to almost anywhere).
7. All the visa infinite perks (no FTF's, primary rental car insurance, etc).
All said it's easily $2500 in value minimum incl sign up bonus and annual fee for the first year of owning. But you must have excellent credit, and a good salary (reports of at least $60k+ min)
4
Since one night at a good hotel can now easily cost $450 -- you really want a lot, don't you...
1
Vacations are not free. They are corporate personnel control.
4
And presumably someone is paying for all this; that is, non-card users who are paying higher prices so that others can travel free.
1
Affluent customers? The article mentions a travel blogger and a person who works for a non-profit----and shows a photo of a barista. Affluent?
Customers who are actually affluent don't need this kind of nonsense. They have money.
Customers who are actually affluent don't need this kind of nonsense. They have money.
22
You need a good minimum salary to qualify and excellent credit, so I'd say yes to affluent. Not nearly as "affluent" as people might first think for "affluent" credit cards though. You can get it with a solid middle class income and good credit.
That travel blogger makes serious cash for the record. He flies pretty much everywhere for free due to the points he generates and easily makes six figures.
That travel blogger makes serious cash for the record. He flies pretty much everywhere for free due to the points he generates and easily makes six figures.
2
Amen!
OK, got it. A credit card for people who don't care what their carbon footprint is and like to have a lot of fossil fuels burned for their enjoyment.
8
people who spend a lot on credit cards rarely care much about carbon footprints. They are conspicuous consumers and materialists.
2
RIGHT ON!!!!
1
Story never really explains how the card works. Since there's no free lunch, really, it would have been interesting to know. Worthless article, IMO.
10
"What's a point?"
"What difference does it make? You get 100,000 of them and they're free!"
"Sign me up!"
"What difference does it make? You get 100,000 of them and they're free!"
"Sign me up!"
4
A point is worth about 2 cents. 100,000 points gets you at least 1500 in travel
2
Nobody - certainly not the credit card companies - is giving anything away. Anyone who thinks they're actually gaining anything by using one of these rewards cards has been seriously fooled. The cost of the rewards is built into the price of most of what we buy. It's akin to a tax. Conversely, if you don't use a rewards card, you're actually losing in the grand scheme, as you're paying for the rewards without availing yourself of them. The people that end up on the short end of the stick are those who can't qualify for a card, and small retailers who can't build enough into their pricing to cover themselves for the costs of accepting the cards. This is a scam of the highest order.
71
The companies certainly don't give anything away for free. What you miss in your analysis is that this only holds true on a net basis. The companies actually DO give away something for free, but they make enough in interchange fees and interest to more than offset the giveaways on a net basis. As long as a consumer makes sure he/she is on the winning side, one can definitely get something for free out of the deal.
1
So, if I pay the $450 fee, take the 100,000 points, and the $300 travel reimbursement, then downgrade my card to a non-fee Chase card, I'm being scammed? Even if you keep the card after a year, you're only losing if you charge < $10,000/year and carry a balance. The math is simple.
There are two yuge factors driving this industry:
1. The Federal Reserve's near zero interest rate policy - in effect for 8 years and no "mission accomplished" banner on the horizon. Banks get a line of credit for low cost money to create and promote such card gimmicks while passing on costs to others - a part of the Fed's 'jobs' program. And the banks earn big profit from those who do not pay off their balance every months pay 5% to 20% interest on their outstanding balances. This is gravy on top of the costs borne by merchants for accepting the card, a cost they try to recoup from all buyers, including those who pay with debit cards and cash. Further, banks write off about 5% of balances annually on cards issued to "dead beats" who default on their obligations (and are passed on to collection agencies for pennies on the dollar). The loss is covered by card users and merchants.
2. There is a move afoot to ban the use of large bills ($50 and $100) ostensibly to reduce "crime", collect taxes, and "grow the economy because "negative interest rates" would do that:
http://www.fuw.ch/article/grosse-banknoten-sind-ein-fluch-2/
Of course, in the long run, this will deliver ALL the people and ALL their money to bankers, who will get their cut on every financial transaction for ever. And give big government a window into our personal lives. This will also be a "security" measure to thwart criminals, tax evaders, and "terrorists", and "health" because cash is "dirty".
1. The Federal Reserve's near zero interest rate policy - in effect for 8 years and no "mission accomplished" banner on the horizon. Banks get a line of credit for low cost money to create and promote such card gimmicks while passing on costs to others - a part of the Fed's 'jobs' program. And the banks earn big profit from those who do not pay off their balance every months pay 5% to 20% interest on their outstanding balances. This is gravy on top of the costs borne by merchants for accepting the card, a cost they try to recoup from all buyers, including those who pay with debit cards and cash. Further, banks write off about 5% of balances annually on cards issued to "dead beats" who default on their obligations (and are passed on to collection agencies for pennies on the dollar). The loss is covered by card users and merchants.
2. There is a move afoot to ban the use of large bills ($50 and $100) ostensibly to reduce "crime", collect taxes, and "grow the economy because "negative interest rates" would do that:
http://www.fuw.ch/article/grosse-banknoten-sind-ein-fluch-2/
Of course, in the long run, this will deliver ALL the people and ALL their money to bankers, who will get their cut on every financial transaction for ever. And give big government a window into our personal lives. This will also be a "security" measure to thwart criminals, tax evaders, and "terrorists", and "health" because cash is "dirty".
13
"The Federal Reserve's near zero interest rate policy - in effect for 8 years and no "mission accomplished" banner on the horizon."
any real beneficiary from this card would pay it in full at end of pay period. Hence no interest. Hence the question why interest rate even a relevant issue?
"There is a move afoot to ban the use of large bills ($50 and $100) ostensibly to reduce "crime", collect taxes, and "grow the economy because "
nearly all people use credit cards for large purchases and on-line purchases. Why is cash an issue?
any real beneficiary from this card would pay it in full at end of pay period. Hence no interest. Hence the question why interest rate even a relevant issue?
"There is a move afoot to ban the use of large bills ($50 and $100) ostensibly to reduce "crime", collect taxes, and "grow the economy because "
nearly all people use credit cards for large purchases and on-line purchases. Why is cash an issue?
$450 annually to use a credit card? Really? In what universe is it where this is considered a good idea? Only a universe where folks have more money than (common) sense it seems.
10
It is a very good idea to those who travel frequently or for anyone who will get in excess of $450 in benefits. Pretty simple really.
20
No, Michael F, not that simple at all. When they start reducing benefits and upping the miles you need for a free ticket plus adding on fees and taxes it starts to become quite complex and expensive. As always the devil is in the details, and the fine print.
1
You must not understand the benefits if you think it is a waste of money. Google the benefits and you'll see it is actually a very financially good deal.
1
Credit cards are also great because you get an interest-free loan each month, as long as you pay the balance. If you time it right you may not have to pay for something for up to 40 days after you bought it, without interest.
For example, I had grad school tuition in an account earning interest, when tuition was due I used card to pay it, and a month later used account to pay off card. In that month the money earned about $50 in interest. not a fortune but with all the other big expenses I get interest-free loans on it adds up over the year. Anytime someone will lend you money without interest you should take the offer. Then when you get points also it's rally a no-brainer and I don't understand those who think it's smart to use only cash.
Personally I prefer Amazon points since there are no restrictions and I can use them right way. With my tuition charge I got over $100 Amazon credit. Nice.
For example, I had grad school tuition in an account earning interest, when tuition was due I used card to pay it, and a month later used account to pay off card. In that month the money earned about $50 in interest. not a fortune but with all the other big expenses I get interest-free loans on it adds up over the year. Anytime someone will lend you money without interest you should take the offer. Then when you get points also it's rally a no-brainer and I don't understand those who think it's smart to use only cash.
Personally I prefer Amazon points since there are no restrictions and I can use them right way. With my tuition charge I got over $100 Amazon credit. Nice.
29
What's "interest"?
"Credit cards are also great because you get an interest-free loan each month, as long as you pay the balance. "
credit card companies charge retailers a 3% fee + fee for machine. Who do you think, eventually, pays for this (or a large portion of it)? From an aggregate social point of view these things are a drain, not a benefit.
credit card companies charge retailers a 3% fee + fee for machine. Who do you think, eventually, pays for this (or a large portion of it)? From an aggregate social point of view these things are a drain, not a benefit.
Your advice sounds good on the surface and works for a few. But you are ignoring the "human element". The vast majority of people lack the discipline and awareness to take advantage of the narrow window of opportunity offered by the card and instead end up trapped into paying ridiculous interest and exorbitant fees.
I strongly encourage any college age person who asks my advice to stay far away from credit cards no matter how much "free" stuff is offered.
I strongly encourage any college age person who asks my advice to stay far away from credit cards no matter how much "free" stuff is offered.
3
We are using points to fly on BA to Kenya from the east coast in couple months. ... BA gives a companion voucher if your spend 30k in a year (Jan-Dec). You use points for the first and the companion voucher gets you a second ticket. We are building a house ... so more $$ being spent. We both got the signing bonus and now have two vouchers with enough points to fly first on one and business on they other any place BA goes. It's a killer deal ... now the taxes are 3k. But still - 2 first class ticket. I'm sure we will get some more before the project is finished.
3
$30,000? For a companion voucher?
4
Makes sense when used for overnight business class flat bed flight from US to Europe. High taxes and fees amount to what an economy class ticket would cost.
Clearly, this card makes financial sense only to big time spenders who travel a lot. Since I hate flying, this card would be a waste of my dollars. So, thanks...but no thanks.
9
Yeah I don't get spending large sums on travel/vacations. You spend five, ten, even twenty thousand on a trip and then what do you have when you are done? Some photos and a few geegaws you bought and maybe if you are lucky a ripping case of diarrhea. Not a wise way to use your money.
3
Travel is an excellent way, if not the best way to use your money. At least in my eyes. What is your alternative? Bigger house/car/etc? Those are nice, but there is something to be said about experiencing something you've never experienced before, that has value beyond material goods. For me, I'd much rather have a smaller house and a cheap car in order to afford more time abroad or off work than just chase the rat race till I die.
Is that stereotypical dream of retirement not fueled by the visions of living your sunset years as if it were a perpetual vacation? Retiring by the beach, in a cozy mountain town, traveling the world, etc. Eventually you realize you have plenty of money and time and don't really need more things.
Is that stereotypical dream of retirement not fueled by the visions of living your sunset years as if it were a perpetual vacation? Retiring by the beach, in a cozy mountain town, traveling the world, etc. Eventually you realize you have plenty of money and time and don't really need more things.
A much wider life experience is what I get out of travel. Has left me more humble, more questioning, and more grateful than my many years of college or my possessions.
What is that saying? A fool and his money are soon parted? Whoever came up with that idea probably got a big raise and bonus.
16
you just made me laugh! so true.
Credit card perks are inflationary and should be abolished. Card issuers increase merchant fees to pay for the perks (and profit for the issuer) and merchants increase prices to cover the charged. Prices for cash buyers go up thereby increasing inflation. The ultimate result is that wealthy people are able to transfer wealth from poorer people to themselves in yet another small example of how the system is rigged for the wealthy.
17
And people say the economy is not strong.
3
It is very strong -- for a very few.
1
just go to y our local malls and eating establishments. They are full. There is no recession.
I suppose this is very vain, but I do pay fees on very nice, harder-to-obtain cards, and the compliments when it 'plunks' down is quite an ego rub.
3
I'm surprised that Donald hasn't issued a TRUMP CARD, perhaps with some of his golden hair embedded in it for authenticity
Everyone would certainly be impressed with it when you do the PLUNK DOWN.
Everyone would certainly be impressed with it when you do the PLUNK DOWN.
5
Try the CITI Double Cash card... It pays you 2% back on EVERYTHING you use it for. You get 1% back immediately, then 1% back when you pay it back... it has NO annual fee... Using the annual fee figure of $450 mentioned, one would have to spend $22,500 to get the $450 back, just to break even... Spending $22,500 with the CITI Double Cash Card, earns you $450...
16
Using my Chase cards, I'm averaging anywhere from 2%-25% back on my purchases. This quickly exceeds the return of the Citi Doublecash card, as long as I'm willing to use the points for travel.
Value seekers? I see that's a new one; there's one born every minute. Who knew this decade would be a commemoration of PT Barnum.
17
Let's not forget, you need to spend first to get the perks, and spend a lot.
17
Over 30 years ago I was looking forward to the rebate on a credit card at the end of the year, based on my spending. When I saw how small the rebate was, it was an eye-opener, and I learned my lesson. Very few people can play this game. As in gambling, the house always wins, in this case the house is the bank.
8
A "Gift"? Sure. Believe what you like. A Gift - from a bank. You are delusional.
A gift from the same industry that strong armed 5,500 employees to create false accounts for their customers. (My guess is there are well more than 5,500 out there). An industry that pressures its good customers EVERY time they go near the place they keep their money in.
A gift from the same industry that strong armed 5,500 employees to create false accounts for their customers. (My guess is there are well more than 5,500 out there). An industry that pressures its good customers EVERY time they go near the place they keep their money in.
17
$450 annual fee per card? Wells Fargo might sign you up for four or five cards.
10
as a stockholder in that co. I can only hope.
There's NO 'free lunch' - so who is paying for this nonsense in the end?
5
There is a charge of $450. How is that a free lunch.
2
The article does not once mention that the blogosphere earns significant affiliate commissions to advocate for these credit cards. In addition, if one actually looked at the offerings of both the CITI Prestige (especially before the reduction of benefits) and now the Chase Sapphire Reserved, one would see that they are most likely a net loss for both companies for the average "cost-concious" user - that cannot last.
4
I suspect the credit card companies offering these deals hope to make a good portion of their profit off of the fact that most Americans are innumerate.
4
Credit cards is one major reason why our economy is so screwed up. Companies know that people are able to easily get free credit on cards, and hence are able to jack up their prices knowing that people who do not have the money to buy their goods will just put it on a card because it takes no effort and it's a thoughtless act. This drives up prices without regard to wages, putting most quite a few things out of the reach of normal people, and beginning the vicious credit cycle. I moved to Portugal a couple of year's ago, where credit cards are still seldom used. My phone, cable, and internet bill is 25 Euros a month compared to the $200 dollars plus in the States, and most other goods are similarly prices, except for high end products and, interestingly enough, anything American, such as Levi's jeans, where a pair will run over 100 Euros.
5
I have a travel credit card with an annual fee. Every year I call them up and tell them that if they want me to continue using their card - I'm a heavy user - I want the annual fee waived and they always waive the fee.
5
Amex Platinum has a "2 for 1" perk...fly on selected airlines first or business class and bring a companion for free.
That alone is worth the fee for the card.
That alone is worth the fee for the card.
3
For now these cards are probably good deal, if you do your homework carefully. Why for now? Perk inflation. There are only so many airline clubs, free airline tickets, and free hotel rooms. As more of us pile on, the cost of the perks goes up, and the availability and quality go down. For example, airline frequent flyer status used to be a great perk. Until the upgrade lists started reaching 50 names for a finger full of available seats, and the miles required to get tickets you could actually book doubled.
3
Every thousand cards issued by Chase nets the company $450000 in fees alone. The spokeswoman for Chase mentions that Chase has issued "tens of thousands" of cards so far--not bad for Chase's bottom line. The question is: How many of these new card holders can be trusted to use the card to their own advantage--and remain financially solvent?
7
We are dealing with adults here. Isn't that their problem.
1
The NYT should have a special for all its many stories directed to the 10% high flyers and spenders.
12
1. If you know what you annually spend, and of that amount what can be charged to a credit card, then it is pretty easy to calculate the monetary value of the benefits and if they are greater than the annual fee.
2. Most stores build the credit card transaction fee into the sale price of all of their goods, so if you choose to not use a credit card you are just subsidizing everyone else who does.
3. As for all of the typical fear mongering about using credit cards, as long as you pay the balance off at the end of every month you never pay a cent in interest. If you charge more than you can afford to pay off that is your fault for failing to properly manage your finance. The credit card did not make you run up a debt.
2. Most stores build the credit card transaction fee into the sale price of all of their goods, so if you choose to not use a credit card you are just subsidizing everyone else who does.
3. As for all of the typical fear mongering about using credit cards, as long as you pay the balance off at the end of every month you never pay a cent in interest. If you charge more than you can afford to pay off that is your fault for failing to properly manage your finance. The credit card did not make you run up a debt.
31
I am not sure that people who do not use credit cards are subsidizing those who do. A store has costs associated with handling check and cash transactions that it does not have with credit card transactions.
3
There isn't a discount for not using a credit (or debit) card, despite the lower cost to the merchant, as you point out.
But there is often a much bigger cost to the person who spends more than they can afford on things that they don't really need. When their spending is out of control, these people then pay minimums on their credit cards and end up being gouged with absurd amounts of interest.
But there is often a much bigger cost to the person who spends more than they can afford on things that they don't really need. When their spending is out of control, these people then pay minimums on their credit cards and end up being gouged with absurd amounts of interest.
Maybe I am subsidizing or not when I used cash, but I still like the idea of my transaction involving just me and the shop. I do not like the idea of all my purchases going through a database for analysis and archiving. I certainly don't like the idea that's being pushed on us that cash is on the way out, helping to make sure that someone, somewhere makes money off my transaction with the shop. And lately, those someones somewhere have been making a fortune in fees.
3
"I want a phone ... Black ... It should ring." (Alan King, during the Princess Phone of Colors Craze)
Nerds blogging on the Best Deal of the Month in Credit Cards.
Issuers putting algorithms to the task of extracting as much money as they can from People who spend.
Hackers drooling at the increased use of these vulnerable cards by wealthier clients.
I wonder if I can fit under my bed and stuff the little I have in that mattress.
The 21st Century is just delightful. Where's my Demurral?
Nerds blogging on the Best Deal of the Month in Credit Cards.
Issuers putting algorithms to the task of extracting as much money as they can from People who spend.
Hackers drooling at the increased use of these vulnerable cards by wealthier clients.
I wonder if I can fit under my bed and stuff the little I have in that mattress.
The 21st Century is just delightful. Where's my Demurral?
8
Ever try booking a flight to a popular European city for June, July August with credit card points? Good luck and all that with 100,000 pts gold, platinum, sapphire, onyx... Green is the only color that airlines recognize.
23
Yup! Do it every summer with no problem at saver rates :) Advanced planning can go a long way!
4
The real problem with these cards is that the merchant (restaurant, dry cleaner, retailer) pays a much higher fee to the bank and credit card brand for accepting these premium cards. Under the contract they must sign with card brand and the bank to accept any card, they must accept all cards! They have no choice. Then, the banks keep adding more cards with more expensive fees for the merchants after the merchant has already signed the agreement. It's legalized extortion by the card companies and the banks. Small mom and pop retailers (and large ones, too) are being forced by the credit card issuers to pay for the vacations of the credit card issuer's customers. Nice business if you can get it!
166
No one forces the retailer to accept them. I have been to retailers who did not accept my preferred card. I've been to cash only retailers. I simply take my business elsewhere.
1
That is true, but if you're market is the 30 and under crowd, I can't see any way you can not accept bank cards and still stay in business.
Sometimes I'll use plastic at major retailers, but at the small stores and restaurants, I will use cash. These fees can be outrageous and most of the time, people use plastic (or other electronic means) because they're lazy or they like this flashy new gimmick. And every single time someone taps his plastic card on a payment machine or waves his phone at it, someone is getting some of that money. Why encourage it? And all this easy access plastic doesn't lend itself to budgeting for most people. Save the aggravation and the wallet and just have some cash with you when you're out. You can't overspend if you don't have it in your pocket.
2
I notice how young the people mentioned in the article are. I'm old enough to know: (a) I'm not paying a fee to have a credit card - AND the card I have is going to give me cash back at the end of the year, (b) I don't care about travel benefits - unless someone is going to offer me a flight on a private jet, and (c) paying cash is an excellent way to go through life.
But to all those who have $450 extra to make themselves feel "special" I say: knock yourselves out, have a great time, and in 5 years tell me what your $2,250 in fees actually got you.
But to all those who have $450 extra to make themselves feel "special" I say: knock yourselves out, have a great time, and in 5 years tell me what your $2,250 in fees actually got you.
42
This is really black & white short term thinking. I have had this conversation with a number of people. They have the basic discipline to pay off their debt every month. They get far more back than their annual fees for spending no more than they would have in cash. If you have to travel for work you can see a return on the order of 10x what you pay in annuals fees. It would be foolish to leave so much on the table.
7
What I like re the AE platinum card: concierge services that book a table for me at a restaurant NYT has reviewed in Verona, Milan or Rangoon. They can buy tickets for my clients visiting from overseas who want to see Hamilton in a couple of days. Entry in a delta sky lounge at an airport like Detroit or JFK, which serves snacks and soups gratis, plus free wifi. And unlike visa, AE (any color) will investigate my disputes w a merchant on my behalf, usually successfully. All that is worth the price of entry.
5
United Airlines offers a similar card for a similar fee, with a travel rebate on part of the fee, but it is plastic. I opted for their $95 annual fee card; use it and you can get the $95 fee credited. It also gives credit for making a United reservation.
The appeal here is that the card is made out of a metal alloy and is targeted at millennials. The annual fee, plus double digit interest rate just sounds like too much of a high price to pay.
Finally, for good cash back; there is the American Express Everyday Blue card. No annual fee, an interest rate around 12%, and cash back on purchases.
The appeal here is that the card is made out of a metal alloy and is targeted at millennials. The annual fee, plus double digit interest rate just sounds like too much of a high price to pay.
Finally, for good cash back; there is the American Express Everyday Blue card. No annual fee, an interest rate around 12%, and cash back on purchases.
6
The interest rate doesn't matter if you don't carry a balance. I never look at it.
7
For me, the credit card company should pay me a fee for my use of their card. I could just as easily use cash. Might constrain me a bit, but that might be a good thing. I wouldn't pay them a nickel.
Maybe we should all start using cash? Wouldn't that be a trip??
Maybe we should all start using cash? Wouldn't that be a trip??
76
a 2%-3% credit card fee is built into all prices that merchants charge you, so using cash has no benefit to you, unless there is a cash discount. Using a credit card also makes it easier to track your expenses for tax and accounting purposes. There are credit cards with no annual fees that earn 1-2% cash back, which are best for most people, as the money accumulates on its own and you don't have to worry about it. The $450 fee is really $150, as there is a $300 rebate on money spent on travel; so, the Sapphire Reserve makes sense financially if you spend more than $5,000 a year on travel and dining (which would give you $150 in rewards).
Everybody needs to do the math themselves, and make a careful decision. And then, not spend too much. And cancel the card when it no longer makes sense.
Everybody needs to do the math themselves, and make a careful decision. And then, not spend too much. And cancel the card when it no longer makes sense.
1
My card does pay me. 2% cash back on every purchase. As long as I pay my balance in full every month, I am receiving a 2% discount on everything I buy.
4
I use just 1 CC for tens of thousands in purchases per year. It's a 'rewards' card in the sense that a very worthwhile charity gets 1% of the value. I get nothing other than the satisfaction of making a contribution. Not a bad deal at all.
1
Me and my wife were both denied this card due to chase 5/24 rule. This is a very good card for churners. There is an army of people who churn, manufacture spend and do AOR. These people frequently are in business class, get priority boarding, hotel upgrades and a lot of perks. Mind you, it's a lot of work. I have a measly 2 million miles across several airlines, people have a lot lot more. Don't discount these people as stupid, it's a clearly profitable trade.
27
Don't jump to conclusions that people are foolish to pay the $450 fee.This article doesn't tell the whole story.
The real fee is actually $150, not $450. That is because you get a credit annually on you first $300 in travel expenses put on the card. Also you get 3X points on all travel and dining expenses. The points are worth at least 1.5 cents if used wisely. If you travel frequently as my wife and I do, this card more than pays for itself.
The real fee is actually $150, not $450. That is because you get a credit annually on you first $300 in travel expenses put on the card. Also you get 3X points on all travel and dining expenses. The points are worth at least 1.5 cents if used wisely. If you travel frequently as my wife and I do, this card more than pays for itself.
65
The fee can actually be reduced to a $150 credit, as the $300 travel credit is based on a calendar year, while the $450 membership fee is assessed every 12 months.
I can see that access to upper class lounges for someone who flies a lot could be worth the fee. An occasional traveler who flies for vacation, not so much.
As a merchant, I am quite annoyed that some cards have a .2% fee, and others have a 3% fee, and I can't tell, and aren't supposed to know, the difference.
As a merchant, I am quite annoyed that some cards have a .2% fee, and others have a 3% fee, and I can't tell, and aren't supposed to know, the difference.
62
To say nothing of what it costs to take American Express. Profit margins are thin enough without being gouged on that end as well.
3
Let's face it - all these cards pay for these perks from the fees charged to merchants for taking the card, which means goods have to cost more. So who pays? We all do. It's a grand socialist experiment where "elite" travelers ride on the backs of everyone else.
So what else is new in this world of rich vs poor?
So what else is new in this world of rich vs poor?
3
These are ways for people who make good money to get tax free income. It's a tax cheat scam. You buy your ticket for business travel and you get reimbursement for the cost of your ticket. Then the credit card company gives you a "gift" for buying the ticket through them. See? You get points or cash or 'miles' which is income to you which is never reported. The money came from somewhere (indirectly from your employer, in a way) and you pocket it, tax free. Of course this tax free income is not available to cops, teachers, bus drivers, auto mechanics, nurses, etc. It's another bonus you get because you are wealthy. Congratulations.
114
Not so fast. I'm not an income tax expert, but is it a gift or income? If it is a "gift", only the person that gives you the gift must file income tax and even then, only if it exceed $14,000. Generally, 100 points = $1.00, so you really need to accumulate over 1.4 million points in one year in order for the bank to have to file tax on your gift. Of course, this is personal income tax, not business income tax, which I'm sure is different.
I'm sure the bank treats this as business expense, in which case it deducts from the tax burden. The burden really lies with the person who made the original expense, which had to pay more to the merchant to cover for accepting the credit card to begin with.
I'm sure the bank treats this as business expense, in which case it deducts from the tax burden. The burden really lies with the person who made the original expense, which had to pay more to the merchant to cover for accepting the credit card to begin with.
13
Nice try. Many business road warriers spend a good portion of their lives crammed into crowded dirty aircraft, in sleep in cheap hotel rooms and eat junk food for days on end. Getting access to an airline lounge and perhaps a free flight for vacation with a seldom-seen family is hardly a scam.
42
There were a lot of very miffed employees when a major U.S. maker of aircraft told them the points belonged to the compnay because it paid for the flights.
2
My wife and I have one of these cards, Chase Preferred that has $95 annual fee ($0 fee for the first year). Posters here will have their opinions, but this is an excellent card if you're careful. We did the math efficiently (we both are STEM prof.s) before deciding to get the card.
We use the Preferred card for most of our expenses and paying bills. You can also transfer points from your or your spouse's other Chase credit cards to this card (amazing)! In the last 5 months we've been richer by 120,000 points from all the bonus and accrued points from our expenses, which is equivalent to two business class return tickets for Asia or Europe, where we frequent. But, you've to master the art on how to convert the points to buy air tickets or pay for a vacation.
The final trick: We pay off every penny of our card balances at the end of every billing cycle. So, if you can manage your finances aptly, these cards are amazing! In our case the monthly or annual expenditure is fairly constant no matter if I used this credit card or a debit card or cash. but if I hadn't used the credit card I wouldn't have received these points, aka two business class tickets, that are worth $10,000 if you book through travel sites!
My suggestion: Cut your coat according to the cloth and do your math well before getting these cards. Get them only if you can afford to. These are amazing for deals, travels etc., but if you're not careful you will land in serious debts. Don't ruin your credit scores.
We use the Preferred card for most of our expenses and paying bills. You can also transfer points from your or your spouse's other Chase credit cards to this card (amazing)! In the last 5 months we've been richer by 120,000 points from all the bonus and accrued points from our expenses, which is equivalent to two business class return tickets for Asia or Europe, where we frequent. But, you've to master the art on how to convert the points to buy air tickets or pay for a vacation.
The final trick: We pay off every penny of our card balances at the end of every billing cycle. So, if you can manage your finances aptly, these cards are amazing! In our case the monthly or annual expenditure is fairly constant no matter if I used this credit card or a debit card or cash. but if I hadn't used the credit card I wouldn't have received these points, aka two business class tickets, that are worth $10,000 if you book through travel sites!
My suggestion: Cut your coat according to the cloth and do your math well before getting these cards. Get them only if you can afford to. These are amazing for deals, travels etc., but if you're not careful you will land in serious debts. Don't ruin your credit scores.
205
Looking up the Chase Preferred Card, 120000. points is equal to about $1050 dollars. How can that about be enough to purchase two business class return tickets for Asia or Europe? Maybe one million two hundred thousand points is enough with the 25% bonus that is given if you book through the Chase service.
5
It's sad when the basic discipline to pay your debts at the end of the month is considered a feat.
3
After years of decent access to mileage upgrades, AA has suddenly refused to book any mileage upgrades until 24 hours before the flight--for Gold cards- longer lead time for Platinum...but uncertainty prevails.
I have been a Milion-miler loyalist to AAdv for decades, but now Chase Sapphire holds appeal. The problem: how it will actually allow me to upgrade.
After 2 back surgeries, this must be a certainty or no card is worth the fee.
I have been a Milion-miler loyalist to AAdv for decades, but now Chase Sapphire holds appeal. The problem: how it will actually allow me to upgrade.
After 2 back surgeries, this must be a certainty or no card is worth the fee.
21
I too had an AA rewards card, but now I travel to many places that AA doesn't go, so I switched to an Expedia card, no international fees and lots of points I can use at Expedia on any airline, car or hotel. A much better idea!
Great. More ways for the well-heeled among us to squeeze the not so fortunate or the unaware. All these "free" perks are paid for by the merchants who have to raise their prices overall to cover the ever escalating cost of allowing patrons to pay by credit card, especially for programs that offer big rewards. And so the gap grows ever wider ...
310
Except for a very rare few - you would be better to get a no-fee 1.5% cash back card....
But then again - millennials are nothing if not foolish consumers of credit.
But then again - millennials are nothing if not foolish consumers of credit.
12
Or a no-fee 2% cash back card, but clearly you're the expert recommending a 1.5% back card.
3
Or, Bob, you don't care that the 2% rewards card pays for it in part by outsourcing customer service to low-wage countries whereas others (1.5% as at least 2 examples) do not do as much of that. But hey, don't let your lack of caring or morals get in the way of saving a few pennies in an unsuccessful attempt to appear more knowledgeable.
Dead on, Grandpa! What's worse: Before too long, their kids will be playing on your lawn.
I don't know why so many of the commenters here are so down on the use of premium credit cards. The $450 fee will pay for itself over the year in airline points. Every year I travel home to Vancouver twice for free using points earned from my Citi American Airlines Executive card. There is also a free trip to LA for two over Labor Day with the points and access to the Admiral's Club lounge which makes traveling more relaxing. Cash is king but you can't use it for everything- might as well get the free points!
11
reply to Jo Rees: Perhaps, "many" of the commenters have better usage for that $450- like shopping for the kids school clothing, or- gawd forbid- adding it to a SAVING plan.
9
You can't live only for your pension, you could be hit by a bus an never get it (as my father used to say). If you are not willing or interested to run the calculations of value for yourself, then perhaps you are right and you should not spend the money in this way because it would not work for you.
You are right, if you don't travel.
This article fails to mention that one of the perks of the card is automatic reimbursement of the first $300 in annual travel spending. I received the card a few weeks ago, went on a short boat tour with a friend, and the $268 was credited as soon as it posted. This credit extends to all kinds of travel -- gasoline, subway passes, trains, airfare, hotels, etc. Additionally, the card offers 25% discount with two rental car companies; I already rebooked a car for $58 less than my original cost. So at this point, 3 weeks in, I've already earned back all but $124 of the annual fee, with the remaining $32 of the $300 credit still to come. With 100,000 points transferable to multiple airlines, this will be at least two international round trips. Using credit cards to earn miles has been an incredible boon for me over the last few years: I don't have a massive income, but I do have great credit. As long as you pay your balance in full every single month, cards like this have great value. (And, as to the naysayers of you can never find seats with miles, I have flown on various airlines all over the US, plus Spain, East Africa, Japan, an incredibly expensive internal flight in Peru --- all on miles in the last 4 years).
22
The point I made earlier was not that one should not use a credit card in the current environment but that if there were no credit cards, on the average you would likely save more money than what you are getting in "rewards."
To mostly repeat myself, I am still amazed that people think credit cards are more beneficial than if there were no cards. There is no free lunch. The price of everything you buy is jacked up to pay for the administrative costs, merchant charges, and bank profits. If there were none of these costs, folks would have more money to use for airlines, hotels, or chocolate chip cookies, more than the exchange they get for points. Also, with cash people are less likely to purchase stuff they can't afford, racking up huge interest payments or bankruptcy in the process.
Card companies have done a brilliant job of fooling people into believing they are somehow safer with cards than with cash. In fact, people did not get mugged every day, credit card ads notwithstanding. In addition, you had no credit card account to get hacked, causing you endless time, energy and general frustrated misery trying to get things straight. In any case, you are as likely to get mugged for your phone or gadget today as you ever were for cash.
People gravitate toward the simplistic, facts be damned. The fiction of card "rewards" is simplistically simple. And we wonder why the current Presidential campaign largely trades in fiction, sleight-of-mouth, and style over substance.
To mostly repeat myself, I am still amazed that people think credit cards are more beneficial than if there were no cards. There is no free lunch. The price of everything you buy is jacked up to pay for the administrative costs, merchant charges, and bank profits. If there were none of these costs, folks would have more money to use for airlines, hotels, or chocolate chip cookies, more than the exchange they get for points. Also, with cash people are less likely to purchase stuff they can't afford, racking up huge interest payments or bankruptcy in the process.
Card companies have done a brilliant job of fooling people into believing they are somehow safer with cards than with cash. In fact, people did not get mugged every day, credit card ads notwithstanding. In addition, you had no credit card account to get hacked, causing you endless time, energy and general frustrated misery trying to get things straight. In any case, you are as likely to get mugged for your phone or gadget today as you ever were for cash.
People gravitate toward the simplistic, facts be damned. The fiction of card "rewards" is simplistically simple. And we wonder why the current Presidential campaign largely trades in fiction, sleight-of-mouth, and style over substance.
36
I don't think you understand ....... Or maybe you don't travel much. These cards are fabulous, if you are a traveler. For the last 10 years (at least) my husband and I have been flying all over the world, to every continent, including Antarctica, and never paid cash for our tickets. We only paid in miles and we always went first class.
3
Sure you did.
3
Life is too short. I'm not sure why anyone would want to spend so much of their time engrossed in a quest to spend on things they don't need in order to get a cheaper price on something some company is trying to sell them. If that business was not trying to sell it, most would not think to want it.
The quaint fact is, the higher the price, the stronger the desire.
The quaint fact is, the higher the price, the stronger the desire.
21
When the NY Times starts linking to cat videos, you know real journalism is dead.
We are all Matt Lauer now.
We are all Matt Lauer now.
95
Oh come on. That was NYT acknowledging the ridiculousness of a credit card "going viral".
2
$450 annual fee, what kind of a joke is this. I would better use this money for buying an iphone7, than paying these banks.
11
So you get the card, pay $450 fee, get 100K miles, cash these miles in for $1000, and are left with a free iphone 7. Easy, if you know math.
And then you use the $300 travel discount, and you cancel the card. Ka-ching!
Easy, if you know math. Not so easy, if you don't.
And then you use the $300 travel discount, and you cancel the card. Ka-ching!
Easy, if you know math. Not so easy, if you don't.
1
More like $150, after the travel credit, or $50 after the trusted traveler (TSA Pre-Check) credit. I'll gladly pay that to score 2 RT coach tickets to Europe.
For those of us who don't care about traveling all that much, why should we care about these cards? For me, the cash rewards cards work best, since I pay my balance off every month.
24
I think for the right person in a right situation these rewards credit cards can be very beneficial. I was extensively traveling for work for almost 2 years and I was spending almost $2000 a week for work related expenses that I was getting reimbursed for but by having a rewards card, I was also racking up a lot of points that I used later for few free vacations. But once traveling reduced, having a high fee annual rewards card made no sense to me and I closed the account (I have good credit and it had no effect on my credit as far as I can tell). So my advice is that get one, enjoy it until you don't need it.
23
The more credit cards one has, the worse is the credit score. If one carries $100K in available credit, even if the person doesn't use it, is $100K less that you can borrow towards a home mortgage. You can still get a car loan, but with interest through the roof. That's when the $450/annual fee will hit you hard.
10
That's not really true. If you have a lot of available credit with low utilization, it helps your credit score, it doesn't hurt it. Ironically, CLOSING an account will temporarily depress your credit score.
26
How wonderful it would be if consumers could know what the credit score rules actually entail. It would be a very long list if I could remember all the 'rules' I have heard or read about over the years(and I worked in banking industry for over 25 years.)
1
Companies look at your debt-to-credit limit ratio. I have a fair number of credit cards just accumulated over the years and haven't applied to any for at least 5 years. But at any one time, I only have spent less than 10% of my limit. My credit scores are in the excellent category.
6
My use of credit cards goes back many years. Years ago even AMEX took at least a week after cashing your check to credit your account. The USG finally put a stop to that practice.
Today every recurring expense I have is automatically handled by Fidelity at no charge. Also this debit card is currently the only accepted by Costco.
Had a bad experience with my Fidelity card - some young scoundrel charged a $450 pair of running shoes to my account. No problem - Fidelity just cancelled the charge. Was later told by Fidelity that there would be no charges brought against this crook - not worth the effort.
Check your charges every 10 days or so and the instant a check of mine is deposited by Fidelity - it is credited to my account. If it is over $10K - takes a couple of days till it is cleared. NO FEES
Today every recurring expense I have is automatically handled by Fidelity at no charge. Also this debit card is currently the only accepted by Costco.
Had a bad experience with my Fidelity card - some young scoundrel charged a $450 pair of running shoes to my account. No problem - Fidelity just cancelled the charge. Was later told by Fidelity that there would be no charges brought against this crook - not worth the effort.
Check your charges every 10 days or so and the instant a check of mine is deposited by Fidelity - it is credited to my account. If it is over $10K - takes a couple of days till it is cleared. NO FEES
13
I'm trying to get past my sensibility for frugality and understand this. If you're profligate in your spending and want to convince yourself that you're not, then you pay $450 and ... problem solved!
27
If your spending is in the ballpark of $4,000 / 3 months, then there is no need to stop be frugal to unlock the benefits of this card. If your spending is significantly below, it probably doesn't make sense to get the card. If you can wiggle your expenses around to hit $4000 in 3 months (pay off car insurance in full instead of monthly, etc), then you get enough bonus points to pay for a $1500 vacation (for which you have paid $450 - cost of card, $4000 - your normal expenses; and you even get $300 annual credit on travel) Nothing says frugal to me like a free vacation.
4
SIgh, it just depends on what you spend your money on. After a $300 annual travel credit (very easy to use) the card costs $150. It is extraordinarily easy to get more than $150 of value out of the card every year. I get thousands out of mine. So if anything, I am the one being frugal.
1
Thing is, a wallet full of credit cards is nice when you are in fanancia straits. Use them, pay them in full monthly, and they'll be available should you get in a jam. And it's not a crime to run up a huge credit card debt. Or to stop paying. Better than an armed robbery at the local convenience store. That is a crime.
7
They can be a good safety cushion, but using them when you plan not to pay is fraud.
17
It is a crime to stop paying. White collar, but crime, for sure.
2
Too bad there isn't this level of excitement and incentives around saving money as opposed to spending it.
334
Spending below one's means is tough to do but once mastered, the accumulation of capital - when invested wisely in a diversified and long-term manner - becomes the reward.....I tried to do this even though a little late....by the time I turned 55 a couple of years ago I decided to get the AE Platinum card and enjoy the perks. Btw the $450 fee isn't as it seems for it includes the TSA pre heck fee (rebated) and my Delta Aitline fees of up to $200, I believe. I use that and a Chase Preferred Sapphire card ($95 annual fee) for some places still don't accept AE. I never carry a balance at the end of a billing cycle - still trying to spend below my income. Saving is more rewarding than spending.
2
It is hard to save. Every time you try, another major expense pops up.
3
My husband and I use a credit card for nearly every purchase and we pay off the bill every month. We earn points for travel which are always helpful as my husband's family lives 1000 miles away from us.
Plenty of people travel for their jobs and could use the benefits that come with this credit card.
Might do you good to consider that a lot of people are not racking up debt but being smart with their money.
Plenty of people travel for their jobs and could use the benefits that come with this credit card.
Might do you good to consider that a lot of people are not racking up debt but being smart with their money.
5
No difference to us. Our regular annual no fee cash back or points card which we pay off every month is fine. I suspect Chase is assuming some holders will not cancel, forget the annual fee and they will get the 450 next year
7
I hope people realize that many small businesses are paying much higher credit card fees in order to accept these cards - and the "perks" that are "rewarded" are coming out of small business profits. Why do you think so many small businesses do not accept AmEx? I quit using my AmEx when I realized who was really paying for my "rewards".
149
I don't think that's true. Businesses just pay a network fee, so businesses are paying the same thing they'd pay with any Visa card. Chase makes its money off of interest, fees, and promotions. (Though you're right that American Express charges more expensive fees with their network.)
5
Actually it is true. There are two fees that the merchant pays on every credit card transaction. One is the base fee and then there is another fee - on my statement it's called a surcharge - this is all of the extra fees for reward cards (charged to me, a small business owner).
16
I believe these are called 'qualified' vs 'unqualified' cards - via/mc tie them together (merchants have to accept the expensive rewards/corporate cards with the higher discount rate to accept any cards at all) and that would be a better anti-trust lawsuit; breaking the required acceptance of cards with wildly divergent discount rates charged to merchants. Why should merchants have to accept visa corporate cards with a 3+% discount rate in order to accept regular low-cost (non-reward) visa or mc cards? You think these reward cards are hard on merchants? Try looking at the rate that corporate/purchasing cards push on merchants.
1
Please sign me up. Seriously, this card has to be marketed to the Nouveau-Affluent 20 something with more money than they know what [with] to do. Nothing worse than a fool and their money and a marketing department finding a way to make the fool part with that money.
23
CSR is one of the best card to ever come out for the people that travel.
Not only you get 100,000 sign up bonus pts after meeting your minimum, you also get 3 pts per dollar for any travel related expense. Not only that, you get up to $300 travel credit applied immediately after travel related purchase.
Now, this card is not for evreybody. Yes, AF is $450 with $75 for AU.
However, 100,000 pts is good enough and $300 travel credit will justify the $450 AF.
There are people out there who are smart enough to take advantage of the credit card bonuses and travel across the world in luxury without paying a dime.
I feel sad for the people that uses debit card or cash only. You're not seeing the full potential of what credit cards can do FOR YOU!
Not only you get 100,000 sign up bonus pts after meeting your minimum, you also get 3 pts per dollar for any travel related expense. Not only that, you get up to $300 travel credit applied immediately after travel related purchase.
Now, this card is not for evreybody. Yes, AF is $450 with $75 for AU.
However, 100,000 pts is good enough and $300 travel credit will justify the $450 AF.
There are people out there who are smart enough to take advantage of the credit card bonuses and travel across the world in luxury without paying a dime.
I feel sad for the people that uses debit card or cash only. You're not seeing the full potential of what credit cards can do FOR YOU!
5
Feel envious. There's a word for people who don't spend enough to game the point system. They're called savers. Their reward: a good night's sleep untroubled by money worries. What credit card offers anything remotely comparable?
12
There is no mention made of those impulse buys, considered timely necessities, but in some deep recess of these consumers' brains, are really "for the miles." 95% of that junk we can do without. Add that number to the 450$ fee, and you have the price of your vacation, with no credit card debt.
Oh, I forgot, that takes logic and will power.
There are much, much better ways to save money.
Oh, I forgot, that takes logic and will power.
There are much, much better ways to save money.
14
what a coincidence. As a merchant, this very day I cancelled our credit card services. (i.e. we no longer accept credit cards for payment). In some businesses, on-line ones in particular. this would, of course, be impossible. However, in many low margin service industries taking credit cards really hurts the bottom line; someone has to pay for all those perks and that someone is the merchant. The real kicker was that I had to pay a $495 early termination fee to get out of paying the already high fixed and variable transaction fees. What a rip-off. Just one more way all the money flows to the banks.
91
I agree. I am shocked that so few commenters on this thread do not see the problem. Most banks charge merchants 3% fee, a fee for machine and many times other misc. fees. Who, exactly, ends up paying for all these costs in the end (or most)? Is it not consumers (in aggregate). Why do so few commenters see this?
Be prepared to lose a lot of customers. Low margin is better than none.
1
pro gun lefty, I am curious. What are you paying, per month, for your credit card reading machine?
1
Our banking system is stacked with opaque Ponzi scams that through slight of hand and fine print allow the banks to reap billions in profits while convincing us that they "are providing value" and "innovating".
All they are providing is a legal scheme to pick our pockets collectively.
Like our overpriced "healthcare" system we all pay an exorbitant premium for the overhead, profit and marketing of these ridiculous schemes.
All they are providing is a legal scheme to pick our pockets collectively.
Like our overpriced "healthcare" system we all pay an exorbitant premium for the overhead, profit and marketing of these ridiculous schemes.
11
I'll stick with my one and only Visa credit card, with its USD 50 annual fee and which all charges must be paid off in full each month. Thanks but no thanks.
4
That's a LOUSY deal; don't they have "fee free" credit cards in the Netherlands, that pay a 1.5% bonus on certain purchases? Really?
The whole POINT of credit cards is to be ABLE to carry a balance if you need to. It's fantastic if you can pay it off every month, but not everyone can, and most people need credit to deal with emergency expenses.
The whole POINT of credit cards is to be ABLE to carry a balance if you need to. It's fantastic if you can pay it off every month, but not everyone can, and most people need credit to deal with emergency expenses.
2
If you're going to pay off all charges each month and not care about rewards, just get a no-fee card. There are many of them out there. Why pay a fee anyway?
5
The intelligent way to use a credit card is to use it as a substitute for cash, which means paying each monthly statement in full, online, so you don't have to pay the postage. I use one to fill a Walmart gift card and pay 98.5 cents for a dollar's worth of credit. Then, I go to the gas station on the Walmart parking lot and use the gift card to cut 3 cents off the cost of a gallon of gasoline. The 1.5% rebate on every purchase amounts to hundreds of dollars a year. That is money that I can have sent to me in the form of a check to spend wherever I want, or apply against my monthly balance.
I don't need to carry a lot of cash. And I don't have to pay the card company nine Ulysses Grants in advance to play this game. That's $45,000 right there I didn't have to spend.
g.i.'s comment earlier is on the money: "It's a scam."
I don't need to carry a lot of cash. And I don't have to pay the card company nine Ulysses Grants in advance to play this game. That's $45,000 right there I didn't have to spend.
g.i.'s comment earlier is on the money: "It's a scam."
16
Take a moment to think about where all these "rewards" come from. How do they help the card issuers earn a profit at the end of the day?
The hotels and airlines are, I'm sure, willing to lower their rates a little to attract big spenders.
Some of the expense comes off the backs of the businesses that are charged a larger processing fee per transaction when the consumer uses these particular cards. They may end up raising prices a little for everyone just to make up for that. (And it's not like they can selectively choose not to accept a rewards card - a Visa card is a Visa card.)
And I'm sure the rest of it comes from the people who either haven't mastered the skills of financial management or have to carry a balance just to stay afloat or handle an unexpected hardship.
That's where credit card companies make their money. The $450 entrance fee is not a lot to them. A person paying the minimum on $3000 balance at 18.9% pays $497 the first year. They make even more off the person who misses a payment - at 28.9% that $3000 costs $795 for the privilege of having debt, which is probably all that a person who misses payments can reasonably scrounge together month after month.
So the people who have enough money to pay off all of their debt are literally lifted into the air by the burdens borne by the indigent.They sleep under sheets changed by the micro price increases of businesses that ultimately work like a sales tax - disproportionally affecting the poorest the most.
The hotels and airlines are, I'm sure, willing to lower their rates a little to attract big spenders.
Some of the expense comes off the backs of the businesses that are charged a larger processing fee per transaction when the consumer uses these particular cards. They may end up raising prices a little for everyone just to make up for that. (And it's not like they can selectively choose not to accept a rewards card - a Visa card is a Visa card.)
And I'm sure the rest of it comes from the people who either haven't mastered the skills of financial management or have to carry a balance just to stay afloat or handle an unexpected hardship.
That's where credit card companies make their money. The $450 entrance fee is not a lot to them. A person paying the minimum on $3000 balance at 18.9% pays $497 the first year. They make even more off the person who misses a payment - at 28.9% that $3000 costs $795 for the privilege of having debt, which is probably all that a person who misses payments can reasonably scrounge together month after month.
So the people who have enough money to pay off all of their debt are literally lifted into the air by the burdens borne by the indigent.They sleep under sheets changed by the micro price increases of businesses that ultimately work like a sales tax - disproportionally affecting the poorest the most.
33
Nobody is forcing anybody to apply for a credit card. Most people who carry a balance on their credit card are too careless to read the fine print, or not good enough at math. Much like the lottery, it is a tax on stupid people.
3
I agree completely (I was being nice when I said "haven't mastered the skills of financial management").
People can be enticed pretty easily, though, by shiny objects and empty promises. Emotion only needs to trump reason once or twice for someone to get in over their head.
No matter how it happens, the people living large can only do so if there are millions of people indebted at high rates.
I don't think I could sleep comfortably in a complimentary hotel room if I knew it was being paid for by dozens of people who made bad financial decisions or fell on hard times. Everyone likes to know that they're better than most people at something. I'd just feel better knowing that my particular strengths are being put to use to help other people, not take advantage of their lesser skills for my personal gain. (Don't take that personally - I'm only this conscientious when I'm posting on message boards.)
People can be enticed pretty easily, though, by shiny objects and empty promises. Emotion only needs to trump reason once or twice for someone to get in over their head.
No matter how it happens, the people living large can only do so if there are millions of people indebted at high rates.
I don't think I could sleep comfortably in a complimentary hotel room if I knew it was being paid for by dozens of people who made bad financial decisions or fell on hard times. Everyone likes to know that they're better than most people at something. I'd just feel better knowing that my particular strengths are being put to use to help other people, not take advantage of their lesser skills for my personal gain. (Don't take that personally - I'm only this conscientious when I'm posting on message boards.)
"Perhaps as a sign of the strengthened economy, the major issuers say that demand for their premium cards is rising."
I would disagree. As someone who 'churns' credit cards to get the sign-up bonuses (to be redeemed later for flights and hotels) I believe it has more to do with 1) stagnant wages causing people to look for any and all ways to save more money and or make their dollars go further, and 2) the fact that millennials often value experiences over material goods (e.g. travel), driven in part by the fact it's almost become a game of one-upmanship of who can travel the most or go to the coolest/most obscure/most photogenic destination (disclaimer: I am a millennial). Point 1) is just another example of the rise of the new "sharing economy" in my opinion; sure some might host on Airbnb to meet people but 9 times out of 10 it's to make a little more income on the side.
PS If you manage your finances well and study how credit scores and credit cards work, signing up for cards with a $450/year annual fee makes total sense. I can take those 100,000 points and use them with miles/points from another card and redeem them for a $20,000 round trip ticket on Singapore Airlines in a first class suite. Or just fly round trip across the US five times.
I would disagree. As someone who 'churns' credit cards to get the sign-up bonuses (to be redeemed later for flights and hotels) I believe it has more to do with 1) stagnant wages causing people to look for any and all ways to save more money and or make their dollars go further, and 2) the fact that millennials often value experiences over material goods (e.g. travel), driven in part by the fact it's almost become a game of one-upmanship of who can travel the most or go to the coolest/most obscure/most photogenic destination (disclaimer: I am a millennial). Point 1) is just another example of the rise of the new "sharing economy" in my opinion; sure some might host on Airbnb to meet people but 9 times out of 10 it's to make a little more income on the side.
PS If you manage your finances well and study how credit scores and credit cards work, signing up for cards with a $450/year annual fee makes total sense. I can take those 100,000 points and use them with miles/points from another card and redeem them for a $20,000 round trip ticket on Singapore Airlines in a first class suite. Or just fly round trip across the US five times.
13
This article would be far more helpful if it were clearer about the associated rewards of the card, starting with what the 100,000 point bonus is worth.
Is this only a card that frequent airline travelers will find worth the annual fee?
Is this only a card that frequent airline travelers will find worth the annual fee?
10
50,000 points is enough to get you to Europe and back on most US carriers. These particular points are valuable because you can transfer them to multiple rewards programs. For instance, Chase's Ultimate Rewards transfer partners range from Southwest to United to Singapore Airlines to British Air.
6
Those bonus points are worth $1,500 through Chase's travel portal.
2
"Those bonus points are worth $1,500 through Chase's travel portal."
Sure, until Chase devalues them.
Like "miles," rewards denominated in something other then cash are worth only what the issuer says they're worth.
Sure, until Chase devalues them.
Like "miles," rewards denominated in something other then cash are worth only what the issuer says they're worth.
1
Check out your credit union's cards. I use mine's (Affinity Federal Credit Union) rewards card. No fees, lots of perks and easy to use for air travel. There are lots of other services that are terrific (mortgages, car loans). Even better, their employees are the best! They've been my bank since the late 80's.
6
I would be interested to know if those folks who spend so much time, effort and money to accumulate these 'points' spend a s much time and effort planning and investing in their long term (read 30 years or so) future. I have a feeling many will enter later life with little to nothing saved. Except all their old 'heavy weight' credit cards with balances due on them.
18
Meh ...
Cash is still king in my books, * especially when it costs nothing to use it
Cash is still king in my books, * especially when it costs nothing to use it
18
ive been to many strange places in th world, yet never has anyone failed to recognize th us $ 100 bill
usually evokes a broad smile, as well
6
In a sense, you're wrong. It costs you 1 to 5% to use cash vs. a card like Discover. I pay my full balance every month and use my Discover for 90 to 95% of my purchases. Since it's a free card (no annual fee), I pay nothing extra. Yet I get back 1 to 5% on every purchase. If you're smart, credit costs you nothing and actually saves you money. Plus, you lose nothing if you lose your card, other than a flimsy piece of plastic that they will pay to replace. Can't say the same about losing cash.
29
I stand corrected ( if there is no cost whatsoever to getting or using the card AND there are no administration costs or the like for collecting the points )
However, not everywhere can you use credit ( especially for free ) and I am not keen on being tracked and then targeted for using the card.
That sort of freedom and privacy ( to me at least ) is priceless.
However, not everywhere can you use credit ( especially for free ) and I am not keen on being tracked and then targeted for using the card.
That sort of freedom and privacy ( to me at least ) is priceless.
4
It's a scam. Read the fine print and keep a lawyer handy. Don't forget Chase paid billions in fines. Remember what Bernie said about Wall Street.
47
You could look at it as a $450 coupon book. I have a hard time believing I could be paid enough to use a credit card website to book travel services. Credit card websites in general are pretty bad, but the 3rd party websites that list their rewards are uniformly awful. I like the cards that just give cash back and have no currency exchange fee.
95
The secret here and with the Chase Sapphire Preferred card (which has a $95 annual fee and I currently use) is that you don't have to do that. You can transfer your points to airlines or hotel points clubs which exponentially increases their value.
Typical points redemption programs net so that 10000 points is "worth" a hundred dollars. However, if you have 25,000 airline miles you can typically get a round trip domestic ticket with them.
So, if you have 25,000 Chase points, which would typically be worth $250, you can transfer them to get a flight for 25,000 miles. In the domestic flight space that's more of a 1 to 1, but when it comes to business or international tickets we have often been able to get tickets for less than $1000 "worth" of points that would have cost a few thousand each.
These types of cards aren't for those who use them to cover costs they can't afford. As others have noted, they're for folks like us who just use the card for what would have been cash/debit spending, paying bills etc and we have autopay set up to pay it off every month. If we used cash, checks etc, we'd spend the same and not have the points that get us free airline tickets and hotel stays. I'll have to crunch the numbers on whether this card is worth considering given the triple points on certain purchases.
Typical points redemption programs net so that 10000 points is "worth" a hundred dollars. However, if you have 25,000 airline miles you can typically get a round trip domestic ticket with them.
So, if you have 25,000 Chase points, which would typically be worth $250, you can transfer them to get a flight for 25,000 miles. In the domestic flight space that's more of a 1 to 1, but when it comes to business or international tickets we have often been able to get tickets for less than $1000 "worth" of points that would have cost a few thousand each.
These types of cards aren't for those who use them to cover costs they can't afford. As others have noted, they're for folks like us who just use the card for what would have been cash/debit spending, paying bills etc and we have autopay set up to pay it off every month. If we used cash, checks etc, we'd spend the same and not have the points that get us free airline tickets and hotel stays. I'll have to crunch the numbers on whether this card is worth considering given the triple points on certain purchases.
2
The last two times I have used my credit card points to book an airline seat, I wasn't able to assign myself to one. Upon checking in at the airport, I'm told that I'll be able to board if there's space available, since I wasn't assigned a seat. I've technically *paid* for it, and yet I'm given the wait list treatment! Not worth it for me.
2
Merchants must pay at least 5% to the card company for your purchases. So your prices riae. You need to give more coupons than you think!
What I want is a card with no closing date but allows me to pay anytime I want in any given six week period. I don't know when my cards close but I pay them all off in full every 2 weeks just to be sure.
6
Most any bank that offers online bill pay can pay those automatically when the e-bill comes in: the full amount, the minimum due, or something else, and on the day you choose. Takes maybe 5-10 minutes to set up, and then you're good. If it saves you even one late fee, that's reward enough.
2
I'll remember everyone's advice to only use cash when I'm flying Lufthansa first class for under $100, eating caviar and enjoying a nearly private cabin and private transfers between flights. Did you even look into the card or did you just read the NYT articles and have a gut reaction to it?
123
When will the IRS wise up to the tax free benfits of these reward programs? WIth some racking up as much as $50,000 in added income via free hotels, airline tickets, and merchandise, the IRS is again allowing the well to do to refrain from paying their fair share of taxes. And many of these perps are the "carried interest" people who are already paying onluy 15% On much of their income and paying off Congress to maintain status quo.
12
This isn't quite so clear cut. The IRS currently treats rewards as a rebate on your purchases, so no different than say getting a $50 mail in rebate on your new computer purchase. Treating these rewards as taxable income creates a series of problems--how do you value them? The biggest advantage of these points is their flexibility, you can get wildly different values on a per point basis depending on how you redeem them. Do you look at the highest value aspirational redemption you could get? The lowest standard valuation? Since not all types of rewards points are convertible to cash, there's no easy calculation (not to mention most of the programs overvalue their points when they make them available for sale). The points may not have any value if you let them expire unredeemed. Would you look at the listed cash price of whatever award the points are redeemed for? That may not make sense because someone wouldn't have chosen that product without rewards (most people who use rewards to fly a first class ticket listed at $10k would not spend $10k on a plane ticket).
People accumulating $50,000+ a year on credit card rewards are definitely not the majority and those who do are likely fortunate enough to be able to run business spending through their credit card accounts.
It's an interesting question, but I don't really see a practical way of taxing reward points.
People accumulating $50,000+ a year on credit card rewards are definitely not the majority and those who do are likely fortunate enough to be able to run business spending through their credit card accounts.
It's an interesting question, but I don't really see a practical way of taxing reward points.
7
When you receive a discount at the store because an item is on sale, I assume you declare that on your tax return? Getting a $50 shirt for $40 has obviously reduced the store owner's income by $10, thus transferring the $10 to you, and increasing your net worth by $10 vs not getting the discount. You do report all such discounts, right?
3
As a person who has messed up his credit I can tell you credit cards can get you into a lot of trouble. My view from now on is save my money and plus credit cards just enslave you to work harder.
73
These cards are a good deal if you pay your full balance each month so you are not paying any interest, and if you are accumulating points toward rewards for items or services that you are sure you are going to need even if you didn't have the card. There are excellent air miles and hotel point cards that cost less than 100 dollars and don't stint on awards availability. For example American Express Hilton honor cards. Award availability is excellent and Hilton has good hotels wherever you travel in the US or overseas.
18
I don't think I'd want to advertise my financial ignorance by having one of these cards in my wallet.
22
Interesting. You mean in the fashion that I receive $1500 in flights, a $300 travel credit, global entry, plus lounge access for $450? Last time I checked that would be considered a good deal. I'm gonna spend the money regardless. May as well use a card that offers rewards.
82
The author does not mention the credits, which reduce the cost of all these "$450" cards to below zero in the first 12 months. It shouldn't be considered too much of a success to induce people to pay $450 for a card when you are refunding $600+. The test comes in August 2017 when the renewal fees are due.
13
Check again: the $300 travel credit is per calendar year. You get $300 between now and Dec, then another $300 stating in Jan. That makes it even better.
I don't do a lot of these deals, but this one really is amazing for people who can pay off each month and charge the $4k in 3 months. As others have said this one has a NET profit of $1100-$1500 with little effort. A no brainer.
I don't do a lot of these deals, but this one really is amazing for people who can pay off each month and charge the $4k in 3 months. As others have said this one has a NET profit of $1100-$1500 with little effort. A no brainer.
8
For $450.00 you can get a nice credit card that is only 0.3" thick, with a beautiful touch screen display, plays music and makes phone calls - not to mention play a lot of games and run a lot of Apps - a nice Gold iPhone SE with Apple Pay. In a year you can upgrade to the next iPhone for the same $450 yearly fee.
How much debt is in your wallet?
How much debt is in your wallet?
10
Americans have a serious problem with credit card debt. It seems like credit cards make money feel abstract, so people just spend and spend. I prefer using my debit card, which automatically means I'm spending money I already have.
I definitely wouldn't pay money to use a credit card. I have one no-fee card and that's enough.
I definitely wouldn't pay money to use a credit card. I have one no-fee card and that's enough.
215
Many of us who have participated in this hobby are actually concerned to see it being picked up by mainstream media outlets such as NYT. We keep close track of our finances and are acutely aware of the cost/benefit analysis of each card. We don't pay interest on our rewards cards or carry any balances. The cards are used as cash equivalents to earn extra points on our normal spend which open up travel (and other rewards) opportunities that are otherwise beyond our means.
Most people should not do this. Anyone who doesn't have the discipline to keep track of spending and spend within their means will lose at the credit card rewards game. But if you have that discipline, you can open up some great opportunities for yourself.
Most people should not do this. Anyone who doesn't have the discipline to keep track of spending and spend within their means will lose at the credit card rewards game. But if you have that discipline, you can open up some great opportunities for yourself.
152
"I prefer using my debit card, which automatically means I'm spending money I already have."
Keep in mind that if your credit card is hacked, it's the card company that is out money until the various insurance arrangements kick in, but if your debit card is hacked, it's your checking account drained and waiting at the bank's leisure to decide when and how much of the stolen money to give back to you.
Keep in mind that if your credit card is hacked, it's the card company that is out money until the various insurance arrangements kick in, but if your debit card is hacked, it's your checking account drained and waiting at the bank's leisure to decide when and how much of the stolen money to give back to you.
81
Why use a debit card and take the risk of unauthorized use to steal from your checking account ? Just pay off your full credit card balance each month and you have free use of the billing cycle float for your expenditures and assured protection for unauthorized use of the credit card.
28
Have people heard of paying in CASH? It has worked for some time.
And in today's world, no ID thefts when you use cash.
And in today's world, no ID thefts when you use cash.
13
Do you really plunk down $500 + when you pay for an airline ticket, a hotel etc.? You certainly shouldn't carry hundreds of dollars in cash when you travel. Debit cards are subject to ID theft just as much as credit cards are and in some cases it can be worse when it hits your debit card.
13
By paying cash there is none of my data in a big database that are sold to others. Too many people are so careless with their privacy.
6
I've had my credit card hijacked. I found out when I was trying to pay for groceries at the supermarket. A phone call of a couple of minutes resolved the issue, not even enough time that the groceries had to be moved aside.
Credit card companies know your buying habits. When you make expensive deviations, like suddenly spending $4000 on a tv (which is what happened to me), they easily determine it wasn't you. They also generally know where you go, so if someone in another nation starts using your card, that's going to be noticed.
Paying with cash gives me a huge pile of coins and forces me to check to figure out if I have enough cash on me to pay for something, or go to an atm where I might be charged $3 for the privilege of getting more cash.
People have heard of paying in cash. Many people don't like it so much.
Credit card companies know your buying habits. When you make expensive deviations, like suddenly spending $4000 on a tv (which is what happened to me), they easily determine it wasn't you. They also generally know where you go, so if someone in another nation starts using your card, that's going to be noticed.
Paying with cash gives me a huge pile of coins and forces me to check to figure out if I have enough cash on me to pay for something, or go to an atm where I might be charged $3 for the privilege of getting more cash.
People have heard of paying in cash. Many people don't like it so much.
22
apparently there are more than one born every minute
45
These points cards absolutely make sense if you are a big spender and pay off 100% in full every month. Even better if you are a heavy traveler with large expense reports.
I typically charge 10-20k a month in travel for business . With this new chase sapphire i get 3x in rewards points amonth 360k points a year on low end. 100k in points equals at least $1500 in travel thats $5,000 a year. Last year I had over $10,000 in travel dollars. Add in other perks and that 450 fee is well worth it. I have never paid a penny in credit card interest in my life.
I typically charge 10-20k a month in travel for business . With this new chase sapphire i get 3x in rewards points amonth 360k points a year on low end. 100k in points equals at least $1500 in travel thats $5,000 a year. Last year I had over $10,000 in travel dollars. Add in other perks and that 450 fee is well worth it. I have never paid a penny in credit card interest in my life.
19
Trapped, and your expenses are probably all tax deductible business expenses and the benefits are taken as personal benefits not declared on your tax return. Is that right?
9
The IRS considers credit card rewards a rebate on your credit card spending rather than income. There's no need to declare it on your tax return.
5
Got the card -- not a metal version since I waited a bit too long to apply. A total deal!
4
Speaking for myself, I have better things to do with my time than obsess about collecting every last possible point. I have all of three credit cards:
- Pentagon FCU Platinum Rewards - extra points for gas and groceries, and I use those points to buy Amazon gift cards, which for me might as well be cash.
- Citibank Double Cash - Really easy to understand; one percent cash when you make a charge, another percent when you pay it off.
- First Tech FCU - Not a great rewards program, but they are one of a handful of banks that offer Chip-and-PIN which makes European travel way easier than Chip-and-Signature.
- Pentagon FCU Platinum Rewards - extra points for gas and groceries, and I use those points to buy Amazon gift cards, which for me might as well be cash.
- Citibank Double Cash - Really easy to understand; one percent cash when you make a charge, another percent when you pay it off.
- First Tech FCU - Not a great rewards program, but they are one of a handful of banks that offer Chip-and-PIN which makes European travel way easier than Chip-and-Signature.
4
FYI I have chip cards from Amex, Chase Sapphire and Bank of America - it's not unusual these days.
3
What people don't understand about these cards is that their rewards come at great expense to small businesses. My husband runs a small business and the typical 3% credit card processing fee his merchant services account charges jumps to 6% when the card being processed is a rewards card. This makes a huge dent in his profits yet many customers refuse to use an alternate card - because they are counting on their rewards to fund their vacation spending. What they don't realize is that essentially he is being forced to subsidize their travels. Banks should not be allowed to pass on the costs of their rewards programs to other businesses.
547
Your husband does not have to accept any card that places him at a significant disadvantage. There must be more to this story, otherwise why would any merchants accept such cards? One potential advantage would be getting access to customers who spend more per visit, increasing the amount of business overall that is done in a given store.
26
I don't mean to accuse you of misleading people, but that 6% figure is just inaccurate. Interchange rates are set by the credit card companies (Visa/MC/etc), not the banks and each bank's rate structure is available online.
Rates vary based not on whether the card offers rewards, but on the level of card as determined by the issuer (ie a Visa Signature card, which requires a $5k minimum credit limit and higher income, charges a higher interchange fee than a normal Visa with lesser requirements). Anyone can view these variable rates online, but the highest rate from Visa for non-restaurant or hotel retail transactions is 2.10%$+$0.10 according to their most recent published chart (April 2016).
Rates vary based not on whether the card offers rewards, but on the level of card as determined by the issuer (ie a Visa Signature card, which requires a $5k minimum credit limit and higher income, charges a higher interchange fee than a normal Visa with lesser requirements). Anyone can view these variable rates online, but the highest rate from Visa for non-restaurant or hotel retail transactions is 2.10%$+$0.10 according to their most recent published chart (April 2016).
7
Wait @Nicole, so you're essentially saying that consumers should not save money on their travel spending so that your husband can make more money? It's a rational view for your to hold, but I'm puzzled why so many nytimes readers are upvoting it. Everyone wants to save a little more money, whether they're a consumer or a small business. It's bizarre to me to frame it in terms of your husband's business having the moral high ground over his customers. If the costs of processing a rewards card transaction is too high, then your business always has the option of declining to take those cards.
37
I know the problem must be me, but this is what nutty is all about from my perspective. I suppose I could leave my bank my parents, just for the privilege of having the right credit card, but I still like my parents.
Should I argue with my mom however, well, who knows?
Should I argue with my mom however, well, who knows?
1
You live off your parents? What will you do when they can no longer buy everything for you?
1
Somehow I am still amazed that people think any of these credit cards are actually more beneficial to them than if there were no cards, and we went back to cash. There is no free lunch. The price of everything they buy is jacked up to pay for the administrative costs of the card, the charges to the merchants, and the profit for the banks. If there were none of these costs, folks would have that much more money, which they could use for airlines, hotels, or chocolate chip cookies, more than they exchange they get for points. In addition, with cash people are much less likely to purchase stuff they can't afford, racking up huge interest payments or bankruptcy in the process.
Credit card companies have done a brilliant job of fooling people into believing they are somehow safer with cards than with cash. In fact, we were safer with cash. People did not get mugged every day, early credit card ads notwithstanding. In addition, you had no credit card account that could get hacked, causing you endless time, energy and general frustrated misery trying to get things straight. In any case, you are as likely to get mugged for your phone or gadget today as you ever were for cash.
People gravitate toward the simplistic, facts be damned. The fiction of card "rewards" is simplistically simple. And we wonder why the current Presidential campaign largely trades in fiction, sleight-of-mouth, and style over substance.
Credit card companies have done a brilliant job of fooling people into believing they are somehow safer with cards than with cash. In fact, we were safer with cash. People did not get mugged every day, early credit card ads notwithstanding. In addition, you had no credit card account that could get hacked, causing you endless time, energy and general frustrated misery trying to get things straight. In any case, you are as likely to get mugged for your phone or gadget today as you ever were for cash.
People gravitate toward the simplistic, facts be damned. The fiction of card "rewards" is simplistically simple. And we wonder why the current Presidential campaign largely trades in fiction, sleight-of-mouth, and style over substance.
119
Yes, but as you (and other commenters noted) the cost goes to the merchant the benefit to the cardholder. Why should I buy things like groceries with cash (which by the way costs me $3 a withdrawal if there is not a WF ATM handy) when I can buy those same groceries and get either cash back or points for travel.
4
The costs and benefits of cards vs cash is a complex issue and not tilted strongly towards either. I don't think it's a simple case. For the crime aspect I think you need to consider not only the mugging of individuals, but also the fact that there is less to gain in holdups of gas stations, convenience stores, etc.
There are also costs to the merchant for dealing with cash. They need to count it, guard it, make change (it's funny how customers point out errors not in their favor more often than when its not in their favor), and worry about their own cashiers being honest. Cashiers also like it since (and I've chatted with several about this) it tends to be quicker and less work for them.
There are also costs to the merchant for dealing with cash. They need to count it, guard it, make change (it's funny how customers point out errors not in their favor more often than when its not in their favor), and worry about their own cashiers being honest. Cashiers also like it since (and I've chatted with several about this) it tends to be quicker and less work for them.
20
I gladly pay $450 a year for access to the admirals club when flying. A separate place in the airport that offers drinks, food, wifi, solitude from the masses, priority boarding, free checked bag. I could go on. Sometimes it's more about peace of mind than anything else.
16
It's hard to believe that these cards truly present a better value than a regular card with no annual fee and cash back bonus. It's trendy, it's cool, that's why "millenials" like them. In the end it's still a VISA or MasterCard. Nothing special.
43
This is just wrong. Say you spend $25000 on your cards a year. With a 2% cashback card (the highest cashback most people can get), you get $500 a year back. If you're on rewards cards earning 2-3x points back per dollar (easy to do if you have a couple cards to cover various types of spending like dining, groceries, etc), you could earn as much as 75,000 points on that spending. For a little under 60,000 points you can fly first class on Singapore Airlines (one of the most highly awarded airlines in the world) to Europe. For $500 you may not even be able to fly economy round trip to Europe most of the time.
Credit card rewards are not for everyone. You need to be able to manage your finances and not pay interest. But if you do, you can absolutely get more value out of points and miles than straight cashback. A Visa Infinite or a Mastercard World Elite still gives you a lot more than just a Visa or Mastercard.
Credit card rewards are not for everyone. You need to be able to manage your finances and not pay interest. But if you do, you can absolutely get more value out of points and miles than straight cashback. A Visa Infinite or a Mastercard World Elite still gives you a lot more than just a Visa or Mastercard.
4
The rewards card mentioned in the article has a $450 annual fee, true, but also comes with a $300 travel credit (i.e. you get a $300 plane ticket "free"). So for a $150 net annual cost you get to turn, say, your $20,000 a year in spending into 60,000 airline miles (+100,000 sign up bonus). That's a lot of round trip flights to Europe or Asia - something I would indeed call special.
So maybe us millennials like what's cool and trendy, but at least we're not lazy enough to ignore basic math like you non-millennials.
So maybe us millennials like what's cool and trendy, but at least we're not lazy enough to ignore basic math like you non-millennials.
3
YGA, 160,000 airline miles will get you one or two round trips from the USA to Asia - not "a lot" - and the taxes and fees you have to pay for the "free" ticket will be at least a couple of hundred dollars.
This is just a mundane PR stunt by the credit card companies that, because you can post a video of the box being opened by a cat on YouTube, Millennials grab hook, line and sinker.
There is no free lunch.
This is just a mundane PR stunt by the credit card companies that, because you can post a video of the box being opened by a cat on YouTube, Millennials grab hook, line and sinker.
There is no free lunch.
5
Please - where's the story about how to become an upscale travel nomad?
Thanks.
Thanks.
242
I think you're gonna have to write that one on your own but first get one of these cards so you're credible.
2
I have no intentions of ever paying an annual fee for a credit card. Unless these premium cardholders are paying their bills in full every month what they are paying in interest could offset the benefits they think they are accruing.
I've got a no fee Citi card that pays 2% cash back and I pay my bill in full every month so I'm not definitely their ideal cardholder.
I've got a no fee Citi card that pays 2% cash back and I pay my bill in full every month so I'm not definitely their ideal cardholder.
166
I have the same card and the same repayment policy.
Some poor sap is paying Citi through the nose so that I can have the convenience, cardmember benefits and cash back. But it's not me.
Some poor sap is paying Citi through the nose so that I can have the convenience, cardmember benefits and cash back. But it's not me.
6
If you get a big bonus of points at the start...the lure...then you might be getting more than you are paying for overall if you dump the card at or before the end of the year. Corporations have legions of MBAs figuring out how to take your last dime. Some people get a charge out of trying to figure out how to beat them or at least get a bounce.
There is another aspect to this kind of game. Some people are in charge of spending thousands or even hundreds of thousands on behalf of their businesses or other organizations. Why not get something in return? In effect, the card companies are buying that extra business that would otherwise go to some other card. That was one of the good deals with airline miles: spend your company's money, but get the reward, free travel, yourself.
There is another aspect to this kind of game. Some people are in charge of spending thousands or even hundreds of thousands on behalf of their businesses or other organizations. Why not get something in return? In effect, the card companies are buying that extra business that would otherwise go to some other card. That was one of the good deals with airline miles: spend your company's money, but get the reward, free travel, yourself.
8
AmEx Platinum isn't even a credit card, it is a charge card that you must pay in full every month.
3