Credit Card Churning vs. Sustainable, Efficient Sampling

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In investing, when a market inefficiency is made well-known and also easy to replicate, you can bet that inefficiency will soon disappear. I was catching up on my magazine stack and saw that Bloomberg Businessweek wrote about credit card churning, where people aggressively sign up for 16 credit cards in a year and bend the rules as far as they will go.

As someone who just came back from Costco, this made me think of their free samples. Manufacturers give out these free samples with the hope their upfront expense will be covered by the additional product sales. Most people will pass on by, some will take one sample, and a few will treat it like their personal buffet line. Now, there are no rules posted, but obviously if everyone takes 10 samples then the system falls apart.

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I’m not hatin’, just observin’. I’ve certainly gotten my share of bonuses in the past. I have a dedicated Google Spreadsheet and know that business card organizers are a great way to keep physical cards organized. (I used to use baseball card pages, but this is more compact and nothing falls out.) However, I am actually quite fine with credit card companies adding some limitations on their bonuses. As the saying goes, I’d rather shear the sheep many times rather than skin it once.

You don’t need to apply for 16 credit cards to earn a healthy dose of travel perks. Keep in mind that for many years, a sign-up bonus of $100 was noteworthy. Right now, I probably won’t write about something unless it is worth at least $500 in total bet value (taking into account both upfront and ongoing rewards, minus any annual fee). This is still a relatively good time for rewards, if no longer the absolute best.

At $500 a pop, just four cards per year will still net you $2,000 in annual perks. Consider it your reward for having a high credit score and good money management skills. (If you don’t have both, don’t do this at all.) Be a sustainable, efficient credit card sampler. Focus on the low-hanging, juiciest fruit only. High value, low work. It’s less stress, less risk, and you can still cover a big chunk of your annual vacation budget every year. I only apply for a maximum of roughly 4 cards per year for myself, and 2 cards per year for my spouse. For example, here are four cards that we have gotten recently that adds up to over $2,500 in value for us:

Back to the Costco free sample analogy. In end, if the product is good, it will be successful. If something isn’t good, giving away stuff won’t matter. For a long time, American Express had the “king” of credit cards points with their Membership Rewards points. But they starting chipping away at the value, and Chase introduced their brand-new Ultimate Rewards points and their Chase Sapphire Preferred card. These days, most people will tell you that Ultimate Rewards are a notch better because they are more flexible and have a higher base value per point.

When you apply for a card, your job is to both happily take the free stuff but also give them a chance to earn your business. Use it for purchases. Try their card website and see how easy it is to pay your bill online or set up automatic payments. Try their points website and see how easy it is to redeem your points. Call up their customer service and see how easy it is to dispute an incorrect charge. If it is a co-branded card, try out the hotels or airlines. See if it fits your lifestyle, be it Four Seasons or Motel 6.

Some can surprise you, especially if you learn about their lesser-known perks. For example, the American Express Delta Platinum SkyMiles card does not heavily advertise that it offers a free economy companion ticket each year upon card renewal. As a couple who regularly flies coast-to-coast on Delta, the free companion ticket has easily offset the $195 annual fee of the card and then some every year, while we also get free checked bags, priority boarding, and improved saver award seat availability.

The article focuses on customers getting stuff from credit card companies. Don’t forget there would be NO bonuses if credit card companies weren’t trying to get your money, either indirectly through the transaction fees you generate and your personal spending habit data, or directly through the interest you pay on your balances. Let them try to earn your business. Keep the good ones. Cancel the ones that fall short. There is nothing wrong with that.

Free FICO Score For Everyone via CreditScoreCard, No Credit Card Required

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Discover has rolled out a new serviced called Credit ScoreCard, which provides everyone access to their FICO score for no charge with no trials or credit card relationship required. (Well, free in exchange for right to market things to you based on your personal information.) Checking your own credit does not impact your credit score. This post provides updated information and instructions regarding this service.

FICO Score details.

  • FICO Score version: FICO Score 8, or FICO 08. This is the most widely used of the many FICO flavors. Score version is directly shown on the website.
  • Credit bureau: Experian
  • Update frequency: Either monthly or when you log in, whichever is longer.
  • Limitations: Available to everyone. You do not have to be a Discover cardholder.

Is this legit? The name is a little generic and perhaps even phishy-sounding, but you can view information at discover.com/free-credit-score, which links directly to creditscorecard.com/registration. The domain registry information matches that of Discover Financial Services.

How to get your score. Here’s a preview of the application and approval process:

  1. You must provide personal information, including Social Security Number. Name, address, etc. This is required for any service that checks your credit score. You do not need a Discover credit card.
  2. You must agree to their Terms & Conditions and Privacy Policy. Basically, they will give your free access to your credit score and other credit information, and they will also collect personal information to market Discover products and other services to you. Don’t miss this chart:

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  3. Identity verification questions. They will ask you some multiple choice questions based on your Experian credit report data in order to verify your identity. If you don’t pass this quiz, I would go over to AnnualCreditReport.com and get a copy of your report to scan for errors.
  4. Set your personal security questions. At this point, you are approved. You just need to set up the standard security questions like “Who was your 2nd grade teacher?”

What kind of information do you get? The score model is FICO Score 8, based on your Experian credit report. This is the same score model and credit bureau offered by American Express, and is within a few points for me (the check dates are slightly off). The other two major bureaus are TransUnion and Equifax. Note that Discover also offers their cardholders access to FICO Score 8 based on their TransUnion credit report. From their terms:

The FICO® Credit Score we provide is the FICO® Score 8. The score range is 300-850. FICO® Credit Scores are based on information on your credit report, and give you a snapshot of your credit report information at a very specific point in time. As the information in your report changes, your score may also change. According to FICO®, 83% of the population experiences changes to their score by up to 20 points month to month. FICO® Credit Scores as well as other credit scores are based on credit bureau information, and may be different from one credit bureau to the next.

You also get access to data points like Total Number of Accounts, Length of Credit (Oldest Account), Revolving Utilization Percentage, and Missed Number of Payments.

How often is it updated? As often as every 30 days, but only if you log in to the website. Many sites operate this way, as it reduces their costs of grabbing your score if you are no longer interested. Also, they want you to log in so that they can show you advertisements. From the terms:

Unless you cancel this authorization, we’ll pull fresh credit report information for you the later of every thirty days or the next time you log into your Credit Scorecard.

Screenshots. Here’s a peek at mine:

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Bottom line. CreditScoreCard by Discover is one of the first free services I’ve seen that offers a FICO Score without requiring you to be an affiliated credit cardholder. If you already have access to this score model and credit bureau combination through other means, you may not want another entity to have access to your personal data. If you don’t, you may find this a very reasonable way to get free access to your Experian FICO 8 score.

Related: Here is additional information about other major credit card issuers with free FICO programs:

Hilton American Express Cards Limited Time Offers (100k & 75k Points)

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Hilton Hotels have co-branded relationships with both Citi and American Express. Until 5/4/16, both the Hilton HHonors Card from American Express (no annual fee) and Hilton HHonors Surpass Card from American Express ($75 annual fee) have temporarily increased sign-up bonuses. The current AmEx policy is that applicants can only get one sign-up bonus, per card in your entire lifetime, so if you’re going to get one you might as well wait until one of these limited-time offers:

Welcome bonus offer not available to applicants who have or have had this product.

Whether these cards are good for you depends heavily on how much you value Hilton points and/or their Elite Silver or Gold status. You can use this search tool to see how much a hotel will cost in any specific area (i.e. Honolulu or Paris). Here are some quick sample redemptions for the months of April, May, and June:

  • Honolulu, Hawaii. Hilton Waikiki Beach is 40,000 points. Hilton Hawaiian Village Waikiki Beach Resort is 50,000 points.
  • San Francisco, California. Hilton San Francisco Union Square is 50,000 points.
  • Orlando, Florida. DoubleTree by Hilton Hotel at the Entrance to Universal Orlando is 20,000 points.
  • New York City, NU. DoubleTree by Hilton Hotel New York – Times Square South is 70,000 points. Hilton Times Square is 80,000 points.

Here are the highlights for the AmEx cards:

Hilton HHonorsTM Surpass® Card from American Express

  • 100,000 Hilton HHonors™ Bonus Points after you spend $3,000 in purchases on the Card within your first 3 months of Card Membership. Offer ends 05/04/2016.
  • 12X Hilton HHonors Bonus Points for each dollar of eligible purchases charged on your Card directly with a participating hotel or resort within the Hilton Portfolio.
  • 6X Hilton HHonors Bonus Points for each dollar of eligible purchases on your Card at U.S. restaurants, U.S. supermarkets, and U.S. gas stations.
  • 3X Hilton HHonors Bonus Points for all other eligible purchases on your Card.
  • Complimentary Hilton HHonors Gold status.
  • Spend $40,000 on eligible purchases on your Card in a calendar year and you can earn HHonors Diamond status through the end of the next calendar year.
  • $75 annual fee.

Hilton HHonorsTM Card from American Express

  • 75,000 Hilton HHonors Bonus Points after you spend $1,000 in purchases on the Card within your first 3 months of Card Membership. Offer ends 05/04/2016.
  • 7X Hilton HHonors Bonus Points for each dollar of eligible purchases charged on your Card directly with a participating hotel or resort within the Hilton Portfolio.
  • 5X Hilton HHonors Bonus Points for each dollar of eligible purchases on your Card at U.S. restaurants, U.S. supermarkets, and U.S. gas stations.
  • 3X Hilton HHonors Bonus Points for all other eligible purchases on your Card.
  • Complimentary Hilton HHonors Silver status.
  • Spend $20,000 on eligible purchases on your Card in a calendar year and you can earn HHonors Gold status through the end of the next calendar year.
  • No annual fee.

Another offer that I would compare with is the Citi Hilton HHonors Reserve Card, which offers a certificate for two free weekend nights. I redeemed for two nights at the Grand Wailea in Maui, which otherwise would have cost 140,000 Hilton Honors points (70k per night).

John Oliver on Why The Credit Report Industry is Awful

John Oliver of HBO’s Last Week Tonight did a humorous monologue on why credit reporting bureaus are awful. Appropriately, it was last week and I finally got around to watching the 18-minute video tonight. Here is the full video link, embedded below:

Here’s the condensed version:

  • Your credit report can affect your ability to borrow (and thus buy a home), your ability to rent, the price you pay for all kinds of stuff, and even your ability to get a job. Sheesh, what else is there left?
  • 1 in 20 credit reports have errors that are significant enough to hurt your chances at the rather important things I just listed above. That’s 10 million Americans.
  • In an effort to show Equifax, Experian, and TransUnion how such errors can hurt both reputations and business, they created the three websites Equifacks.com, Experianne.com, and TramsOnion.com. (Warning: I left some of these unlinked because they may be considered NSFW.)

In general, I do not micromanage my credit score, but it is scary than an error outside your control could have such harmful effects on your day-to-day life. Perhaps this information will also motivate you to check your credit and consumer reports if you haven’t done so recently. There are also an increasing number of free and/or ad-supported sources of credit reports, credit monitoring, and credit scores. The bad news is that the error dispute process is still slow and complicated, and after you try patience and perseverance, you may need to lawyer up in order to get their attention.

Chase Freedom Unlimited Review – 1.5% Cash Back + $150 Bonus

Chase Freedom UnlimitedChase has introduced a new cash back rewards card called the Chase Freedom Unlimited which earns a flat 1.5% cash back on all purchases. The new card will be in addition to and separate from the existing Chase Freedom, which has 5% cash back on rotating categories every quarter and then 1% cash back on all other purchases. Here are the highlights:

  • NEW! Unlimited 1.5% cash back on every purchase – it’s automatic.
  • Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening.
  • Earn A $25 Bonus when you add your first authorized user and make your first purchase within this same 3-month period.*
  • Redeem for cash – any amount, anytime.
  • Cash Back rewards do not expire as long as your account is open.
  • 0% Intro APR for 15 months on purchases and balance transfers. After the intro period, a variable APR of 14.24-23.24%. Balance transfer fee is 5% of the amount transferred, $5 minimum.
  • No annual fee

1.5% cash back on all purchases might have been a great percentage number several years ago, but there are now at least a few competitors with higher effective cash back rates.

(The Capital One® Quicksilver® Cash Rewards Card is also similar at 1.5% cash back.)

But wait, you actually get Ultimate Rewards Points! As with the Chase Freedom card, you technically earn Ultimate Rewards points with this card, which in turn can be redeemed for cash back. 100 points = $1 in cash back, or 1 cent per point. Therefore, you could change the bullets above to the following:

  • You earn 1.5 Ultimate Rewards points per dollar spent on all purchases.
  • Earn a 15,000 Ultimate Rewards point bonus after you spend $500 on purchases in your first 3 months from account opening.
  • Earn a 2,500 Ultimate Rewards point bonus when you add your first authorized user and make your first purchase within this same 3-month period.*

Why does this matter? If you have also have the Chase Sapphire Preferred® Card (or Ink Plus business card), then you can merge your earned points together and transfer all the points in your account into a selection of hotel points and airline miles. If you value those miles/points at more than 1 cent per point, then your 1.5X rewards from this card can be significantly higher. Again, you must have the Chase Sapphire Preferred card as well. Examples:

– You could earn 1.5 United miles per dollar spent.
– You could earn 1.5 Hyatt points per dollar spent.
– You could earn 1.5 British Airways Avios per dollar spent.
– You could earn 1.5 Southwest Rapid Rewards points per dollar spent.

If for example, you placed a perceived value of 1.5 cents on each United mile or Southwest Rapid Rewards point, then you’d receive 2.25 cents of perceived value per dollar spent with this card. Your actual numbers will depend on your own specific redemption choices.

There are no other credit cards with no annual fee that offer such high redemption rates on every purchase, not even from the special co-branded cards from each airline or hotel. Keep in mind though that the Chase Sapphire Preferred itself does have a $95 annual fee. But if you have the Chase Sapphire Preferred card already (like I do), then this card gives me 50% more points on base purchases at no additional cost.

Recap. As a straight-up cash back rewards card, the 1.5% cash back of the Chase Freedom Unlimited can be exceeded by other 2% cash back cards. However, if you or your spouse also has the Chase Sapphire Preferred card, then this card improves by allowing you to receive the equivalent of 1.5 Ultimate Rewards points per dollar spent on every purchase. If you value other travel points like United miles, Hyatt points, or Southwest Rapid Rewards points, then by earning Ultimate Rewards you can obtain solid rewards value and flexibility from this card.

Free FICO Score from Bank of America Credit Cards

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This post provides updated information and instructions regarding the free FICO score that is available to Bank of America credit card holders. (Thanks to reader Andy for the tip.)

Background. Bank of America started rolling out free FICO scores to select cardholders in late 2015, with a stated plan of increased rollout by the end of first quarter of 2016 (March 31st, 2016).

FICO Score details.

How to find the score. You can find the free FICO score on your online account access. The free FICO program is currently not available on mobile apps or the mobile website.

After logging into your BofA.com account, you must opt-in by first going to the “Tools & Investing” tab and clicking on “Learn about credit scores”. Then click on the “Enroll Now” button and accept the terms of the free FICO program.

Here are some screenshots from the website (click to enlarge):

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Here are screenshots of the actual score page (click to enlarge):

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Fine print:

You will be able to view up to a 12-month history of your FICO® Scores in Online Banking, starting when you enroll and for each month up to 12 months after enrollment. After 12 months the history display will re-start. Additionally, you will see two key factors affecting your most recent FICO® Score, except in limited circumstances where TransUnion does not provide us with both key factors. Customers with newly opened credit card accounts may not see their first FICO® Score in Online Banking for up to 60 days after enrollment. In certain circumstances, a FICO® Score may not be available from TransUnion for various reasons, e.g., having a limited credit history. If your Bank of America consumer credit card account(s) are closed by you or us, we reserve the right to end your participation in the FICO® Score Program. You can unenroll at any time by going to the Tools and Investing tab in Online Banking.

Here is additional information about other major credit card issuers with free FICO programs:

New Costco Anywhere Visa Card by Citi Review

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Citi and Costco have finally released the details of their new co-branded credit card, the Costco Anywhere Visa Card by Citi. However, the new card is not available for new applicants until at least June 20, 2016. Here’s a quick overview of the card details based on their FAQ and full T&Cs.

Already have the Costco American Express? You do NOT need to apply for a new card. There will not be an additional hard credit check. This new Visa card will automatically be mailed to the user’s address on file in May 2016. You have to wait until June 20, 2016 to start using it. At that time, any cash rewards and/or debt balance will be transferred over to the new card, and your Costco American Express will be closed automatically.

Do not close your Costco American Express on your own, or you won’t receive the benefits of this automatic transfer.

Card highlights:

  • 4% cash back on eligible gas worldwide, including gas at Costco, for the first $7,000 per year and then 1% thereafter. You will not get 4% cash back for gas purchased at superstores, supermarkets, convenience stores and warehouse clubs other than Costco.
  • 3% cash back on restaurant and eligible travel purchases worldwide
  • 2% cash back on all other purchases from Costco and Costco.com
  • 1% cash back on all other purchases
  • Worldwide Car Rental Insurance and Worldwide Travel Accident Insurance.
  • Damage & Theft Purchase Protection is included, which may cover you for repairs or refunds for items you purchased with your Costco Anywhere Card that are damaged or stolen within 120 days of purchase (90 days for New York residents).
  • No annual fee (with paid Costco membership).
  • Will also serve as your Costco membership card.

The rewards will accrue in the form of “Costco Cash Rewards”. This means you’ll get a paper coupon snail-mailed to you once every year in February based on your previous year’s spending, which you can either (1) use as payment for goods directly at the Costco cash register or (2) convert to cash or check at a Costco customer service desk. You may also do a partial redemption at a cash register and they’ll give you the remaining balance in cash. Coupon must be redeemed in person on or prior to its expiration date of December 31 in the year in which it is issued.

Commentary. I appreciate that this card maintains the overall simplicity of the old card, while slightly improving the rewards percentages. The bonus category percentages went up (new Visa is 4/3/1, old AmEx was 3/2/1). The improved 2% cash back at Costco and Costco.com (formerly only 1%) means that you won’t be as tempted to use another Visa card at their stores. I was hoping for 5% back on gas to match the Sam’s Club card, but I guess we’ll have to settle for 4%.

In terms of the competition, the new Fidelity Rewards Credit Card is another Visa card that should get you 2% back on your Costco purchases. The Citi Double Cash Card is available as both a Visa and Mastercard, but reports are that you can ask Citi to switch from one to the other (update: readers report that you can only go from Visa to MC, not MC to Visa). Finally, the BankAmericard Travel Rewards Credit Card is a Visa and has the potential to earn you up to 2.625% back at Costco in the form of statement credits towards travel (requirements apply).

5% Cash Back Credit Cards: Rotating Categories Update 2016

Activation for 2nd quarter 2016 now open – includes Sam’s Club and BJs Wholesale clubs!

The credit cards below offer a hefty 5% cash back on certain categories that rotate each quarter. It takes a little extra attention, but I also rack up over a hundred dollars in additional rewards per year without changing my spending habits. None of these have an annual fee, so it costs me nothing to keep them all around. New cardmembers often also get an initial sign-on bonus.

Chase Freedom VisaChase Freedom® – $150 Bonus 

From January 1st through March 31st, 2016 you can earn 5% cash back on up to $1,500 spent in the following categories:

  • Gas Stations
  • Local Commuter Transportation (includes taxis, subways, local commuter buses and trains)

From April 1st through June 30th, 2016 you can earn 5% cash back on up to $1,500 spent in the following categories:

  • Grocery Stores (not including Wal-Mart and Target purchases)
  • Wholesale Clubs (includes BJ’s and Sam’s Club)

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Enroll each quarter at ChaseBonus.com. As long as you activate by the end of the quarter the rewards are retroactive. All other purchases earn 1% back, with no tiers or expiration of rewards. Currently, the Chase Freedom® card is offering $150 bonus cash back if you sign up and make just $500 in purchases in your first three months and a $25 Bonus after you add your first authorized user and make a purchase within this same 3-month period. No annual fee.

Discover it 14 ImageDiscover it® Card

From January 1st through March 31st, 2016 you can earn 5% cash back on up to $1,500 spent in the following categories:

  • Gas Stations
  • Ground Transportation (includes taxis and Uber)

From April 1st through June 30th, 2016 you can earn 5% cash back on up to $1,500 spent in the following categories:

  • Restaurants
  • Movies

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Enroll after logging into your online account (look on the right-hand side). 5% rewards won’t apply until after you activate your rewards, so it is best to activate now before you forget. New applicants can get their earned Cash Back doubled at the end of the first year.

Citi Dividend Platinum Select Visa CardCiti® Dividend Platinum Select® Visa® Card (Existing cardholders only) From April 1st through June 30th, 2016 you can earn 5% cash back on up to $1,500 spent in the following categories (calendar):

  • Drugstores
  • Fitness Clubs

This a grandfathered card that is no longer available to new applicants. Log into your online account or call 1-800-231-0891 to activate the rewards each quarter (starts upon activation, not retroactive). The total cash back limit is $300 earned per calendar year.

U.S. Bank Cash+ Visa Signature Card. What makes this card unique is that you get to choose the two 5% cash back categories every quarter, out of a preset selection of niche categories like “Fast Food” or “Sporting Goods Stores”. You also get to choose a single 2% cash back category from a preset selection of broader categories like “Gas Stations” or “Grocery Stores”. 1% cash back on everything else. No limit on total cash back earned.

As you’ll see below, getting 2% is not that special, so this card is best if you spend significantly in the available niche categories. Also, you must remember to choose your categories each quarter! If you do not choose your categories, all purchases revert to only earning 1% cash back for that quarter.

Finally, get a better “Everything Else” card! Don’t settle for the “1% on everything else” that these cards offer. The following cards currently have the ability to offer cash back rewards as high as 2% or even greater. Please read my card-specific reviews for details.

“Disclaimer: This content is not provided or commissioned by the issuer. Opinions expressed here are author’s alone, not those of the issuer, and have not been reviewed, approved or otherwise endorsed by the issuer. This site may be compensated through the issuer’s Affiliate Program.”  

“The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.”

Pay Taxes With Credit Card: Lowest Fee Rates and Limited-Time Promotions

1040clipWe all know that personal income tax filings are due soon, but so are the first round of quarterly estimated taxes for 2016. Many of us with freelance or side-gig income must makes these payments in order to avoid a tax penalty at the end of the year.

You can pay taxes with a credit card, but there is usually a convenience fee attached. So why would you bother?

  • You may wish to earn rewards for the purchase in the form of cash back, points, or miles. These rewards may be of greater value to you than the fee. (* See bottom of post for examples.)
  • You may want to pay off the balance more gradually, especially if you have a low interest rate offer like 0% for 12 months on purchases.

Here I’d like to keep track of the current rates for convenience fees, any limited-time promotions, as well as some credit card with rewards greater than the convenience fees.

Limited-time offer: 1.75% fee with Mastercard from Plastiq. I received an e-mail from Plastiq stating:

Taxes are due in less than a month, so make it easier on yourself by paying them through Plastiq. To make taxes even less painful, we’re offering a special promotion starting today. Get a 1.75% rate for all federal and state tax payments when you use your MasterCard!*

So get ahead of the game and pay your taxes now. This special rate will expire on April 18, 2016 a 5 p.m. PT, so sign in and take full advantage of this limited-time offer!

There is no landing page, but the offer is mentioned on their Twitter so I assume it is not targeted. You must initiate your purchase from this link, which ensures that you can only use the offer to pay federal or state taxes. The sub-categories include income taxes, payroll withholding taxes, self-employment taxes, business taxes, and more.

Standard convenience fee rates for 2016 start at 1.87%.

The IRS keeps a list of approved payment processors and updates it regularly. Here is the list, along with fees valid until December 31st, 2016. All of them accept Visa, Mastercard, Discover, and American Express.

Note that there is a frequency limit on how often you can make credit card payments. You can make credit card payments towards estimated taxes up to twice per quarter.

Screenshot:

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Are the fees tax-deductible? You may also want to take into consideration that the convenience fee may be tax-deductible or a business expense:

  • The fee is deductible for personal tax types as a miscellaneous itemized deduction. However, only those miscellaneous expenses that exceed 2% of adjusted gross income can be deducted. For more information, see IRS Publication 529.
  • For business tax types, the fee is a deductible business expense.

Personal experiences. I have used Plastiq to make credit card payments (though not tax payments yet), and I have used PayUSATax.com back when they were the cheapest option. Both experiences were positive with no issues. Your credit card statement will list this payment as “United States Treasury Tax Payment.” The convenience fee will be listed as “Tax Payment Convenience Fee” or something similar. Here’s what my statement looked like:

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Notably, I know of no reason why you would not just go with the cheapest available payment processor. If they are on the IRS list, they are all officially accepted by the IRS. In fact, in my testing I found the most expensive one to offer the worst in-browser user experience.

To avoid any headaches, I would take great care when making the payments to make sure they are properly designated, as the payments are not reversible or refundable by the processor.

Specific credit card examples. The following cards currently have the ability to offer cash back rewards equal or greater than 1.75%, meaning you can actually make money by paying your taxes with them. Please read my card-specific reviews for details.

New JetBlue Card Review from Barclaycard

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JetBlue has announced two new consumer credit cards – the JetBlue Card (no annual fee) and the JetBlue Plus card ($99 annual fee). These are both issued by Barclaycard, as JetBlue recently ended its credit card relationship with American Express. Are they worth getting? Here’s my brief review of the card highlights and the value proposition breakdown.

Had the JetBlue Card from American Express? You do not need to apply again. Your AmEx card will automatically be replaced with the new JetBlue Rewards MasterCard, issued by Barclaycard, in late March 2016. The JetBlue Rewards MasterCard is slightly different that either card described below and is only available to grandfathered users. It has a $40 annual fee, but you can also request your card to be converted to one of the cards below.

Highlights of the new JetBlue card:

  • Limited-time offer: Earn 10,000 bonus points after you spend $1,000 on purchases in the first 90 days.
  • Earn 3 points per $1 spent on JetBlue purchases, 2 points per $1 spent at restaurants and grocery stores and 1 point per $1 spent on all other purchases.
  • 50% savings on eligible inflight purchases including cocktails, food and movies.
  • No foreign transaction fees.
  • No blackout dates on JetBlue-operated flights & redeem for any seat, any time on JetBlue flights.
  • Chip-card technology and $0 Fraud Liability protection.
  • 0% introductory APR for first 12 billing cycles on balance transfers made within 45 days of account opening. After that a variable APR will apply, 12.24%, 20.24% or 25.24%, based on your creditworthiness.
  • No annual fee.

Highlights of the new JetBlue Plus card:

  • Earn 30,000 bonus points after you spend $1,000 on purchases in the first 90 days.
  • Earn 6 points for every $1 spent on JetBlue purchases; 2 points for every $1 spent at restaurants and grocery stores; 1 point for every $1 spent on all other purchases.
  • Free first checked bag for you and up to 3 companions on JetBlue operated fights when you use your JetBlue Plus Card.
  • Mosaic benefits after spending $50,000 or more in purchases each year.
  • Get 10% of your points back every time you redeem to use toward your next redemption
  • Earn 5,000 bonus points every year after your account anniversary
  • Annual $100 Statement Credit after you purchase a JetBlue Getaways Vacation Package of $100 or more
  • No blackout dates on JetBlue-operated flights & redeem for any seat, any time on JetBlue flights.
  • Chip-card technology and $0 Fraud Liability protection.
  • $99 annual fee.

What are the TrueBlue points rewards worth? You earn JetBlue TrueBlue points on your purchases, which are best redeemed for JetBlue flights. There are some other options like newspaper or magazine subscriptions, but I won’t cover them here.

  • JetBlue TrueBlue works on a revenue-based system. You can book any flight without blackout dates, but the points required depends on the current cash cost of the flight. This is different than a chart-based system, for example might require 25,000 points for any flight within the 48 contiguous states (subject to blackout dates and availability).
  • A reasonable estimate of value is 1 points = 1.4 cents towards a Blue, Blue Plus, or Blue Flex fare. The exact value may vary, but that is the average that I found and the variance is low. Ex. 10,000 points would cover $140 in airfare. See calculation example below.
  • The value of a free checked bag is $15 to $25 one-way, per person. Depending on fare level, JetBlue now charges for checked bags. If you buy it separately on a base fare, a checked bag will cost $20 one-way upfront or $25 one-way at the ticket counter. If you buy the Blue Plus fare which includes one checked bag, that usually costs $15 more one-way. At $30 to $50 roundtrip, the value of the free checked bag feature can add up quickly if you travel as a family or group.
  • Families can share and pool points together, with no transfer fees.
  • TrueBlue points don’t expire.

Every 10,000 points can be redeemed for $140 in airfare. This means 2X points back on restaurants and groceries can be redeemed for 2.8% back in the form of TrueBlue airfare. The 3X points back on Jetlue-operated flights can be redeemed for 4.2% back in the form of TrueBlue airfare. The 6X points back with the Plus card on Jetlue-operated flights can be redeemed for 8.4% back in the form of TrueBlue airfare.

This is in addition to the existing 3X points for TrueBlue members buying Blue airfare, and the 3X points for anyone booking JetBlue flights online. If you have Mosaic elite status, you also get another 3X points.

Calculating the value of a JetBlue TrueBlue points. You can test for yourself quite easily. Here is a randomly chosen, roundtrip San Francisco (SFO) to New York City (JFK) flight. Screenshots are below. It would have either cost $423.30 in cash, or 29,400 points + $11.20 in taxes. The value of a point comes out almost exactly to 1.4 cents per point:

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Recap. The new JetBlue card from Barclaycard can be a good value for regular customers of JetBlue and their free DirecTV. You get extra savings when purchasing JetBlue airfare on the card, and the rewards are free JetBlue airfare. The standard version offers a limited-time sign-up bonus as well as perks with no annual fee. The Plus version with $99 annual fee is best for frequent fliers who can take advantage of the free checked bag feature and also the 5,000 point anniversary bonus. However, if you don’t fly JetBlue enough to have the opportunity to either earn or spend the points, then you should just stick with a more general travel rewards card like the Chase Sapphire Preferred or a top cash back card like the Citi Double Cash.

Navy Federal Credit Union 0% APR No Balance Transfer Fee Promotion

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NavyFed Credit Union has a limited-time promotion going on until Saturday, April 30th where if you do a balance transfer from an external financial institutions to your existing Navy Federal card, you’ll get a 0% APR for 12 months with no balance transfer fee. (All NavyFed cards now have no balance transfer fee, but usually the APR is 10% to 18%.) It is unclear if this offer is targeted to specific customers as it is not mentioned on the home page, but it appears you can simply log in and try for yourself (or call in).

Membership eligibility for NavyFed is primarily restricted to military personnel including Army, Marine Corps, Navy and Air Force – including retirees and family members – but also includes some civilian employees in the Department of Defense. Similar previous offers from NavyFed have used “existing” in their terms to suggest that new credit card applications are ineligible, but that wording does not appear on this offer.

You can save big when you transfer your high-interest credit card balances to your Navy Federal credit card. Make a balance transfer to your Navy Federal credit card and get a 0% intro APR for 12 months. After that, your standard rate will apply. Plus, pay no balance transfer fees.*

This is a solid offer as it has been harder to find a no fee 0% APR balance transfer offer these days even though interest rates are still relatively low. However, you’ll note that Chase is not mentioned in their little balance transfer fee comparison chart as the Slate® Card from Chase is also currently available with a 0% intro APR for 15 months with no balance transfer fee on both balance transfers and purchases and $0 annual fee. You must initiate your balance transfer within 60 days of opening the account.

Both cards are good opportunities to lower the interest rate on your existing balances and accelerate any debt payoff plans. You can even pay off student loans.

Redeeming Citi Prestige ThankYou Points For American Airlines Flights

tyaa0It has been nearly a year since I picked up my Citi Prestige card (review), and I’ve done my best to take advantage of the available perks:

– $250 in Airfare credit for 2015
– $250 in Airfare credit for 2016
– $100 statement credit to offset my TSA PreCheck / Global Entry membership
– Free access to Business Class lounge at Vancouver International Airport via Priority Pass (2 adults, 2 children)
– Free access to Admiral Club lounge at Los Angeles Airport (2 adults, 2 children)
– I reserved a free round of golf ($210 value) at the Ko Olina Golf Course on Oahu, Hawaii via GolfSwitch. Here’s a picture of me at Ko Olina trying to avoid their water(fall) hazard.

You know I was going to get my value out of that $450 annual fee! If I travelled more, I could’ve gotten more usage out of the lounge access, but that’s all I could manage this year.

The final thing for me to do is to redeem my 50,000 ThankYou points (plus the points earned from making purchases on the card). As noted in my review, the easiest way to maximize value is by redeeming the points for any economy flight on American Airlines. (I’m sure you could come up with a higher value via conversion to Cathay Pacific or Singapore Airlines miles and getting business class tickets.) Every 10,000 points = $160 in American airfare, so 50,000 points = $800 in American airfare. (For other airlines besides American, the conversion is every 10,000 points = $133 in airfare.)

In order to get the 1.6x value, you need to book while you have an active Citi Prestige card. The flight itself can be scheduled far ahead of time. Otherwise, you can still keep the ThankYou points with another linked valid ThankYou card (no annual fee options available), but you won’t have the improved American Airlines redemption option.

How to redeem. You can either log into your Citi Prestige account at Citicards.com and then click on the ThankYou points link, or go directly to ThankYou.com. Once there, click on “Travel” and then “Flights” as shown in the screenshot:

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From there, it works like any other flight booking website like Expedia or Travelocity. Input your desired flight details, and it will show you options. The advantage here is flexibility, as there are no geographic limitations or blackout dates. Here are the results of a roundtrip flight during the summer from San Francisco to Honolulu for $571 or 35,687 points:

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Quick math confirms the 100 points:$1.60 value ratio.

Are the Citi ThankYou Travel Center prices the same as AA.com or Expedia? Yes, for every search that I’ve done. Here is a screenshot of American Airlines website for the exact same date and flight details as above, showing the same $571 cost:

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In fact, for another route the Citi Travel center actually showed an additional cheaper flight option with a stopover, while AA.com only showed the more expensive, direct flight.

What if you don’t have enough points to cover the entire flight? Use the Points + Cash option. Citi allows you to split the cost up. You can use up every ThankYou point available at the 100 points:$1.60 value ratio, and then pay cash for the remaining amount.

For example, let’s say the flight you want costs $200 and you only have 10,000 ThankYou points. With your Citi Prestige card, you can book the flight for 10,000 points ($160 value) and $40 cash. Any leftover cash amount can be charged on the Citi Prestige and thus be covered by the $250 annual airfare credit (it doesn’t have to be used up all at once either, and applies to any airline).