New Citi ThankYou Premier Card Review

Citi ThankYou Premier Card ArtThe Citi ThankYou® Premier Card has re-launched from our partner Citi, with a new sign-up bonus and purchase rewards structure. Get 50,000 bonus ThankYou Points as follows:

  • Earn 50,000 bonus ThankYou Points after $3,000 in purchases within the first 3 months of account opening.
  • First year annual fee waived, $95 after that.
  • No foreign transaction fee on purchases.
  • Chip Technology included for improved acceptance while traveling.
  • No limits on earning points or expiration dates.

What can you do with 50,000 ThankYou Points? Citi has been trying to improve the value and flexibility of ThankYou points, so here is a rundown of what you can do with 50,000 of them. Bonus ThankYou Points not available if you have had a Citi ThankYou Premier card opened or closed in the past 18 months.

$625 in Airfare (ThankYou Travel Center)

With the new Citi Premier card, you get a 20% discount on the standard travel redemption that a “regular” Citi card offers. The reverse math means 1 TY point = 1.25 cents towards travel. Note that this 25% bonus applies all of your points from all Citi cards linked to the same ThankYou account, thus boosting the value of all your other points. (Compare with the Citi Prestige card, which has 33% bonus amongst and other additional features, but also a higher annual fee.)

For example, with my non-Premier card, I found that a flight that cost $360 including taxes and fees on Expedia would cost 36,000 TY points from Citi Travel. But with the Citi Premier, it would only cost 28,800 TY points. ThankYou Travel Center screenshot:

ThankYou Travel Center screenshot:

ty1

Expedia.com screenshot:

ty2

So 50,000 TY points will indeed get you $625 in airfare, with the Citi Travel Center having the same price as compared to Expedia, Orbitz, etc. Since you can book any flight that can be found on Expedia, there are “no blackout dates”.

Don’t have enough points to cover an entire airfare? That’s okay. Let’s say you found a ticket that want for $200 = 16,000 points, but only have 10,000 points available. Citi now lets you pay the difference, so in this case you can get your $200 ticket for 10,000 points and $75. This makes it much easier to use up all of your points at a 25% premium.

$500 in Gift Cards, $500 Check Towards Student Loan / Mortgage

You can view your redemption options at ThankYou.com. I took a quick look and it takes 10,000 ThankYou (TY) points to redeem for a $100 gift card to retailers like Gap, Banana Republic, Barnes & Noble, Bath and Body Works, Bed Bath & Beyond, Cabelas, CVS Pharmacy, Kohl’s, Land’s End, LL Bean, Sears, Lowe’s, Home Depot, Staples, and Walmart. So with 50,000 TY points, you could get five $100 gift cards from different stores.

Want something closer to cash? For a check mailed to you, it is 8,000 points for $50 (1 points = 0.625 cent). The best deal is a check mailed towards your mortgage payment or student loan (made out to your lender), which is 7,500 points for $75 (1 points = 1 cent).

New Airline Transfer Options

Citi ThankYou points are also now available to transfer to certain airline mileage programs on a 1:1 basis including Cathay Pacific, EVA Air, Etihad, Flying Blue by Air France and KLM, Singapore Airlines, and Thai Airways. For example, 50,000 TY points can get you 50,000 Singapore Airlines KrisFlyer miles.

New Rewards Structure

The Citi ThankYou Premier now earns:

  • 3 ThankYou Points for every $1 spent travel including gas, airfare, and hotels.
  • 2 ThankYou Points for every $1 spent dining out and entertainment.
  • 1 ThankYou Point per $1 spent on other purchases.

Triple (3X) points on airfare and hotels, when combined with the 25% travel premium, makes that equivalent to a 3.75% reward towards travel booked through Citi Travel Center. Double (2X) on restaurants (includes bars and fast food) and entertainment makes that 2.5% towards travel booked through Citi Travel Center.

With the improvements in ThankYou point redemption, increased sign-up bonus, and new rewards structure, everything looks to be a little bit better than before. The current sign-up 50k sign-up bonus with no annual fee the first year is attractive. However, a cardholder would need a fair amount of spending in the bonus categories (gas, airfare, hotels, dining out) in order to offset the $95 annual after the first year where they waive it.

Citi Hilton HHonors Reserve Card: Two Free Weekend Nights (Which I Redeemed for $1,109 Value)

hiltonreserveThe premium co-branded Citi Hilton Hotels card, from our partner Citi, is the Citi® Hilton HHonors™ Reserve Card. The sign-up bonus includes certificates good for 2 Free Weekend Nights, with “weekend night” meaning a Friday, Saturday, or Sunday night after spending $2,500 in purchases within 4 months of account opening*. If you like staying at posh hotels, you can get $500+ value out of each certificate and easily $500 of value out of them together. Card feature summary:

  • Earn 2 weekend night certificates good at select hotels and resorts within the Hilton Portfolio after you make $2,500 in purchases within 4 months of account opening*
  • Earn 10 HHonors Bonus Points per $1 spent on hotel stays within the Hilton Portfolio*
  • Earn 5 HHonors Bonus Points per $1 spent on airline and car rental purchases*
  • Earn 3 HHonors Bonus Points per $1 spent on all other eligible purchases*
  • Enjoy the benefits of HHonors Gold status as long as you are a cardmember*
  • No foreign transaction fees on purchases*
  • Travel with ease and enjoy global acceptance with your Citi chip credit card

The two free weekend night certificates have no category restrictions, but do have the following exclusions (often these are condo-hotels). Certificates are valid for 12 months after issuance. Must be used on “standard” rooms (no upgraded suites, etc). Room taxes are included with the certificates. Booking the same rooms using rewards points would cost 50,000-70,000 HHonors points per night. Possible choices include:

grandmaui

Update: I applied myself, satisfied the requirement, received my two rewards certificates, and redeemed for $1,000+ worth of rooms in Hawaii. I applied for this card (Day 0) and made my first purchase Day 7, first statement about a month later, was charged the $95 annual fee, satisfied the spending hurdle, second statement closed, and I was issued the two weekend night certificates via e-mail after that (Day 67). Here is a screenshot:

citihiltoncert

According to commenter TJ below who satisfied the spending requirements in the first billing cycle, s/he got the certificates two weeks after the close of the 1st statement. My guess is that they just want to make sure you pay the annual fee. Also, good tip to check your spam folder for the e-mailed certificates!

I called in to book the nights I wanted at my resort of choice – the Grand Wailea (Waldorf Astoria) in Maui. (I’ve never stayed there before, but it looks pretty awesome.) Keep in mind that although there are no category restrictions (it doesn’t matter how expensive the hotel is on average), you can only book a “standard room” which I believe is their cheapest tier of rooms. So if you want a busy weekend that is coming up soon and those cheaper rooms are sold out, you may not get it. However, I was able to get two consecutive weekend nights. I am also able to cancel without any penalty or fees up until 14 days before the booking.

If I was booking with cash on the exact same dates and exact same room, it would have cost me $1,109.25. Here’s proof via screenshot from the booking website:

citihiltoncert2

If I was to have used points, it would have taken 70,000 per night for a total of 140,000 Hilton Honor points. Note that I took out the resort fees, which are reportedly not waived when booking with certificate or points redemptions (any taxes on the room rate are covered). Resort fees are $25 per night ($28.35 with taxes). You actually get the following stuff too: “Guest internet access; beach umbrellas for use on Wailea Beach; admission to twice daily SCUBA clinics; free bike rental”.

Recap

In the end, this is a great way for casual travelers to stay two nights at a really fancy hotel where you can’t imagine paying over $300 a night. We applied and got ourselves two nights at the Grand Wailea in Maui. However, you should keep in mind that the reward certificates are only for Fri/Sat/Sun nights and are based on room availability so some flexibility in either hotel choice or dates is recommended. On an ongoing basis, the card is ideal for Hilton hotel regulars – You get 10x points on Hilton purchases and free Gold elite status (perks include late checkout, free Wi-Fi, and a free breakfast at many hotels). If you spend $10,000 in a year, you get another free weekend night certificate, which you can weigh against the $95 annual fee.

Citi Prestige Card Review: New 50,000 Point Offer (Worth $800 in American Airlines Airfare)

citiprestigecardfrontOur partner Citi has revamped the Citi Prestige® Card, their premium ThankYou point rewards card. The sign-up bonus has been increased to 50,000 bonus ThankYou® Points after $3,000 in purchases made with your card in the first 3 months the account is open. 50,000 TY points are redeemable for an $800 flight on American Airlines or US Airways, a $665 flight on any other airline, or $500 in gift cards.

There is a hefty $450 annual fee that is not waived the first year, but the card also includes a $250 air travel credit every year that is valid towards any airfare bought from any airline (and also baggage fees). Per the fine print, the $250 annual credit resets every December through the next December. So you could conceivable qualify for a $250 credit on airfare in November and then another $250 in January.

Here’s a summary of the one-time sign-up bonuses and perks:

  • Earn 50,000 bonus ThankYou® Points after $3,000 in purchases made with your card in the first 3 months the account is open.
  • $100 Global Entry application fee credit. Citi will cover the $100 application fee on a one-time basis when you charge it to the card. Global Entry allows you to get through international customs faster when entering the US. The $100 application fee credit will reset once every 5 years.

Here’s a summary of ongoing highlights of the card:

  • $250 Statement Credit for Air Travel each year. Unlike other cards, airfare counts as well as baggage fees, lounge access, and other incidental purchases. This renews every calendar year, so it can be used to help offset the annual fee every year. “This statement credit is an annual benefit available for purchases appearing on your billing statements from December through the following December. Pending transactions that do not post in your December billing cycle will count towards the next year’s Air Travel Credit.”
  • Complimentary access to nearly 40 American Airlines Admirals Club® lounges, plus hundreds of VIP lounges through Priority Pass Select. Valid for you and your entire immediate family (spouse, domestic partner and/or children under 18 years of age) or up to two companions. Priority Pass lounges tend to be at international airports.
  • Earn 3x points on Air Travel and Hotels.
  • Earn 2x points on Dining at Restaurants and Entertainment.
  • 1 ThankYou® Point per $1 spent on other purchases
  • No Foreign Transaction Fees on Purchases.
  • Includes chip technology which increases acceptance overseas.
  • Transfer points to a variety of travel loyalty programs from airlines to hotels.
  • Complimentary 4th Night for any hotel stay. This could be nice, but your stay must be booked through their designated travel agent, so I’m not sure if that means the rates will be the same as say Expedia or Travelocity.
  • Complimentary greens fees at more than 2,400 public and private golf courses around the globe. The terms specify that you get 3 complimentary rounds of golf through the Citi Prestige® Golf Portal (provided by GolfSwitch, Inc.) each calendar year.
  • $450 Annual Fee. Not waived for the first year.

The Citi Prestige is most attractive for people who fly on American Airlines and US Airways (the two are merging). Citi and American are tight these days; the competing American Express Platinum no longer offers American Airlines lounge access at all.

With this card, you can redeem 1 ThankYou point to get 1.6 cents worth of American Airlines and US Airways airfare. You can’t do this with any other ThankYou card, but if you have it then all your ThankYou points earned from any other card can be redeemed this way. That means if you redeem your points towards American Airlines or US Airways airfare, you’ll get 1.6% back standard while the 2X and 3X categories turn into 3.2% back at restaurants and 4.8% back on airfare and hotels. (If you have CitiGold checking account or Citi Private Banker, you’ll get an additional 15% or 25% bonus respectively on ThankYou points earned.) You can also get 1.33 cents per point value by redeeming towards airfare on all other airlines.

Citi ThankYou points are also now available to transfer to certain airline mileage programs on a 1:1 basis including Cathay Pacific, EVA Air, Etihad, Flying Blue by Air France and KLM, Singapore Airlines, and Thai Airways.

Bottom line. If you add up all of the perks including 50,000 TY point sign-up bonus (worth $800 in American Airlines or US Airways airfare), $250 annual airfare credit that resets every December (so you can get it twice under one annual fee), American Airlines first class lounge access, $100 Global Entry application fee credit, 3.2% back on restaurants and 4.8% back on airfare and hotels when redeemed for American Airways airfare), you can see that for the right person the $450 annual fee can be more than worth it. In my mind, that person should fly American or US Airways at least once a year if not more often.

In addition, if you have a big stash of Citi ThankYou points, getting this card could greatly increase the value of your existing point balance due to the special American Airlines conversion rate.

Chase IHG Rewards Club Select Credit Card Review: What Does 60,000 Points Get You?

ihgcardThe Chase IHG® Rewards Club Select Credit Card has a promotion where you can get 60,000 bonus IHG points after you spend $1,000 within the first 3 months of account opening.  This card also has the annual fee waived for the first year. So the question is what will 60,000 of these lesser-known IHG points get you? Put another way, how much should I value a single IHG point?

Here are the card highlights plus my notes from the fine print:

  • Earn 60,000 bonus points after you spend $1,000 on purchases in the first 3 months of account opening. “After qualifying, please allow 6 to 8 weeks for bonus points to post to your account. This new cardmember bonus offer is not available to either (i) current cardmembers of this consumer credit card, or (ii) previous cardmembers of this consumer credit card who received a new cardmember bonus for this consumer credit card within the last 24 months.”
  • Enjoy a free night of card membership at over 4,900 hotels worldwide. “Anniversary Free Night is valid at hotels in the IHG® Rewards Club Family of Brands and must be redeemed, and stay must be completed, within 12 months from date of issue. Anniversary Free Night is valid for one standard room night rate and applicable taxes only. Rooms are limited, subject to prior sale and availability of allocated resources and may be unavailable during high demand periods.”
  • 10% rebate on all points redemptions, up to 100,000 rebated points per year.
  • Platinum Elite status as long as you remain a cardmember. Platinum elite is their highest elite tier and usually requires staying 50+ nights a year. Perks include priority check-in, free room upgrades based on availability, and bonus earning on top of base points. Everyone gets free WiFi internet as well.
  • No foreign transaction fees.
  • $0 introductory annual fee the first year, then $49.

In terms of rewards on purchases, cardmembers will:

  • Earn 5 points for each $1 spent at IHG hotels
  • Earn 2 points per $1 spent on purchases at gas stations, grocery stores and restaurants
  • Earn 1 point for $1 spent on everything else.

IHG stands for Intercontinental Hotel Group which has over 4,700 hotels including the following brands:

  • Intercontinental® Hotels & Resorts
  • Crowne Plaza®
  • Holiday Inn®, Holiday Inn Express
  • Staybridge Suites®
  • Candlewood Suites®
  • Hotel Indigo®
  • EVEN Hotels

IHG Point Value Comparisons

IHG Rewards Club puts out a new list of PointBreaks hotels every few months where you can redeem a hotel night for only 5,000 points. That means your 60,000 bonus points from this card could technically earn you 12 free nights! If those hotel rooms would otherwise cost $100 a night including taxes, you’d be getting $1,200 value from 60,000 points. Valuing the hotels at $50 a night including taxes, you’d be getting $600 value from 60,000 points. This is where you can see valuations anywhere between 1.5 cents and 2 cents per IHG point.

But that’s not very realistic. There are some nice hotels on the list, but the locations are very specific and few people are sufficiently flexible with their travel to constantly take advantage of these deals.

I recently spent a week at a Staybridge Suites in Austin with my family and it was great. The room felt like an apartment with a living room, full kitchen, and separate bedroom. Every morning there was a buffet breakfast with eggs, bacon, cereal, bagels, fruit, yogurt, juice, and so on that I could grab and bring back into my suite where the kids could run around. I’ll be returning and willing to pay the going rate again, so how much would it cost me in points?

Here’s an actual rate quote for 9/16 to 9/22 for the same Staybridge Suites:

ighcard1

Keep in mind that the quote doesn’t include taxes, which would make the $148 average nightly rate into $170 with taxes. The 25,000 points per night include taxes, so that would work out to roughly 0.7 cents per point in value. At that rate, 60,000 points would be worth $420.

Also note that with the 25,000 point redemption, you can cancel up until the very last minute (6pm local time the day of check-in), while the $170 rate is a non-refundable advance purchase. The true equivalent refundable room rate is $203, or $233 per night including taxes. That is more like 0.9 cents per IHG point, where 60,000 points would be worth $560.

You can perform the same calculations for hotels that fit your needs. I tried a bunch of other various combinations and always got between 0.6 cents and 1.1 cents per point equivalent value.

In terms of luxury hotel room nights, let’s try the same week at the InterContinental New York Times Square:

ihgcard2

You’re looking at $493 a night including taxes for non-refundable advance purchase, or $576 including taxes for refundable. Points would cost 50,000 a night, making it roughly 1 to 1.1 cents per point value. At that rate 60,000 points = $600 to $660.

Recap
While it is certainly possible to get $600+ value out of the 70k point bonus, I would stick with a more conservative estimate of $350 (~0.6 cents a point) and hope to be pleasantly surprised. But it’s an easily achievable $400-$450 value at a wide variety of hotels from budget to luxury (32 IHG hotels in Austin, TX area alone for example) with no blackout dates making it suitable for all types of travelers. The annual fee is waived for the first year, so you can enjoy the other perks of the card like 10% point rebate and complimentary Platinum Elite status. After that, you’ll have to decide based on your travel habits if the $49 annual fee is sufficiently offset by the free hotel night perk.

In terms of putting all your spending on this card, since I think an IHG point is often worth less than a cent per point on average, it is not as good an all-around rewards card as many of its competitors. I might put my IHG paid hotel stays on it, but that’s about it.

IHG Rewards Banner

“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.”

Citi Simplicity Card Review: 0% for 21 Months, No Late Fees, No Penalty Rates

citisimplicity175New 21 month offer (1.75 years). I usually focus on rewards-earning credit cards, but I know many folks are still carrying some balances and thus more concerned about their whopping 15% interest rate rather than a relatively puny 2% back on purchases. Our partner Citi has launched the Citi Simplicity® Card, which is uniquely suited for those that want to transfer higher rate balances to a long 0% intro period while also offering some “accident forgiveness insurance”. The highlights:

  • 0% Intro APR on balance transfers for 21 months. Balance transfers must be completed within 4 months of account opening. Balance transfer fee is 3% of balance transfer amount, $5 minimum. This is one of the longest offers out there for balance transfers.
  • 0% Intro APR on purchases for 21 months. This means you can keep charging your new purchases on this card as well and also enjoy no interest for 21 months. Also one of the longest 0% offers available for purchases.
  • No late fees. If you’re late on a payment, you won’t be dinged with a ~$40 late fee as with many other cards.
  • No penalty APR. Even worse than a late fee, a missed payment can lead to a rate hike into a “penalty” APR rate as high as 25% or more. The Simplicity does not have penalty APRs.
  • No annual fee.
  • Direct to human help. If you call in and say “representative”, you’ll be transferred directly to a human, 24 hours a day.

The Citi Simplicity card does not earn any cash back, points, miles, or free toasters; I’d open a separate card for rewards. It does include additional purchase benefits such as Citi Price Protection (price drop protection on brick and mortar purchases) and free Extended Warranty (extends manufacturer’s warranty for up to 12 months).

Alternatively, the Chase Slate® Card offers 0% APR on balance transfers for 15 months with no balance transfer fee, but does not include some of the more consumer-friendly features of this card that ensure your low rates don’t get hiked.

To summarize, the Citi Simplicity® Card is a solid card with one of the longest 0% introductory periods currently available on both purchases and balance transfers. If you are serious about paying off some credit card debt, this offer will get you no interest for 1.75 years with minimal gotchas.

Slate from Chase: 0% APR For 15 Months + NO Balance Transfer Fee for 60 Days + Free FICO Score

Chase Slate Box Banner

Updated with free FICO score information. Looking to pay down debt in 2015? Transfer your balances to the Chase Slate® Card and get 0% APR For 15 Months and pay NO BALANCE TRANSFER FEE if done within 60 days of account opening. You won’t pay any more interest until 2016, and all your money will go towards paying down the balance principal. You can literally borrow money for free and pay it back in 15 months with no interest (keeping in mind you’ll still need to satisfy the minimum payment each month until then). $0 annual fee.

It is very rare these days to find a no balance transfer fee 0% APR offer that is available to all (as opposed to being targeted only to specific customers). You can verify in the Pricing & Terms section of the application, down in the Fees box:

None on transfers made within 60 days of account opening. All other transfers: Either $5 or 3% of the amount of each transfer, whichever is greater.

Make sure you initiate that balance transfer within the first 60 days.

Free Monthly FICO Score
As of March 2015, the Chase Slate card now offers an EMV security chip and a free FICO score every month. The FICO score will be based on your Experian credit bureau report, and they’ll also have a “Credit Dashboard” that tells you reasons behind your score and a summary of your Credit Report information. Here’s a screenshot:

slatefico

According to the WSJ, so far this is only available on the Slate and not other Chase-issued credit cards. This is because the Slate is by far Chase’s most popular card for those transferring existing balances and that means many of those 10 million cardholders care about their interest rates and credit scores.

Lower your interest on balances!
This is a great opportunity for those people with good to excellent credit but are still working hard to lower their debt payments, as now you can have all your money applied directly into cutting down your principal instead of having it go towards interest and/or fees. The 0% APR applies to new purchases as well, so your balance owed will go down that much faster and you won’t have to worry about interest until well into 2016.

Chase Blueprint is a free feature on select cards that lets you break down your balances into things that you want to pay in full each month and bigger purchases that you wish to pay off over time. A gadgety feature, but if at all possible I say nuke those balances completely!

If you wish to get cash from this balance transfer offer without it being classified as a “cash advance”, one option that has worked for me is to ask for the balance transfer as a check or electronically transferred to your bank account. Just call the number on the back of your card after you get it and tell them you’re trying to pay down debt that’s not on another card.

“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.”

Blue Cash Preferred from American Express Review: 6% Back on Groceries + New Bonus

amexbcpUpdate: There is a new link for this card which is offering a $50 statement credit after first purchase within 3 months of card membership, plus another $150 statement credit after $1,000 in purchases within 3 months of card membership. The sign-up bonus is not available to applicants who have or have had this product before.

The Blue Cash Preferred® Card from American Express offers:

  • 6% Cash Back at US stand-alone supermarkets up to $6,000 per year in purchases
  • 3% Cash Back on gasoline at at US stand-alone gas stations
  • 3% Cash Back at select major US department stores
  • and 1% cash back on all other purchases.

Supermarkets details. “US stand-alone supermarkets” means that superstores, convenience stores and warehouse clubs are NOT considered supermarkets. This means no Super Wal-Mart, no Super Target, no Costco. Examples of merchants that count (and this is not a complete list!!) are Meijer, Vons, Whole Food, Winn-Dixie, and online supermarkets such as FreshDirect.

Gasoline details. “US stand-alone gas stations” means that superstores, supermarkets, and warehouse clubs that sell gasoline are NOT considered gas stations. This means no Target, no Costco, no Sam’s Club. Examples of merchants that count (and this is not a complete list!!) are Exxon, Mobil, Hess, Shell, Gulf, Murphy USA, Murphy Express.

Major US Department stores details. These are the only stores that qualify:

• Bealls
• Belk
• Bloomingdale’s
• Bon Ton Stores
• Boscov’s
• Century 21 Department Stores
• Dillard’s
• J.C. Penney (JCP)
• Kohl’s
• Lord & Taylor
• Macy’s
• Neiman Marcus
• Nordstrom
• Saks Fifth Avenue
• Sears
• Stein Mart

The card has a $75 annual fee, but keep in mind that spending $25 per week at supermarkets, that 6% back can earn over $75 Reward Dollars per year ($78) to pay for the annual fee by itself.

If you spend the max cap of $500 a month at supermarkets, that would net you $360 cash back in a year vs. $60 at 1% cash back or $120 at 2% cash back. You should remember that you can find gift cards to many popular retailers at your local supermarket these days. I would put my non-bonus-category charges on a card earning more than 1%.

The Blue Cash Preferred also has 0% intro APR on purchases and balance transfers for 15 months. After that, your APR will be a variable rate, currently 12.99% – 21.99%, based on your creditworthiness and other factors. Balance transfer fee is either $5 or 3% of the amount of each transfer, whichever is greater.

“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.”

Discover it Miles Card Review: 3% Cash Back During First 12 Months

Discover it Miles ImageDiscover started with one credit card. Over the years, they expanded to a bunch of different cards. Back in 2013, they nuked all of them and started fresh again with the Discover it Double Miles your first year. But you know that simplicity never suits large organizations…

So they are growing again, with the addition of the new Discover it® Miles Double Miles your first year. (Not to be confused with the old Discover Miles card… are you following?) Here are the copy-and-pasted highlights, followed by my commentary:

  • No annual fee & unlimited 1.5x Miles on every dollar you spend on purchases. 0% intro APR on purchases for 12 months-then a variable purchase APR applies, currently 10.99% – 22.99%.
  • Exclusive Double Miles Offer: At the end of your first year-when other Miles cards charge an annual fee-Discover doubles all the Miles you’ve earned.*
  • 100 Miles = $1 value. Redeem Miles in any amount toward travel purchases on your statement. Or get cash as a direct deposit to your bank account.*
  • Discover pays you back for your in-flight Wi-Fi fees-up to $30 a year-with an automatic statement credit.*
  • New Freeze It(SM) on/off switch lets you prevent new purchases, cash advances & balance transfers on misplaced cards in seconds by mobile app & online.*
  • Free FICO® Credit Score on statements, online & by mobile app.* And 100% U.S.-based service any time.
  • Free overnight shipping of replacement cards to any U.S. street address at your request. And you’re never responsible for unauthorized purchases on your Discover card.*
  • *See rates, rewards, free FICO® Credit Score terms and other info by clicking “Apply Now.” See complete Discover it® Miles details.

Effectively, this is an ongoing flat 1.5% cash back card with no annual fee and a few added perks. The rewards structure is relatively simple. The card earns 1.5 Miles on all purchases, with no special categories. There is no annual fee. 100 Miles = $1 cash direct deposited into your bank account. You can also redeem at the same value towards any travel purchases, but why bother? As long as you have a bank account, I say go with the cash. So I would call this a flat 1.5% cash back card.

But for the entire first 12 months, you can earn unlimited 3% cash back! The “sign-up bonus” here is that you get double miles at the end of your first year. Since you can convert directly to cash, that means 3% cash back for an entire year. That’s a rare offer, as 3% is probably more than Discover even rakes in through merchant fees. If you put a lot of spending on your credit cards, this can be a big deal.

At 3% back, many bill payment options that charge around 2% fee start looking much better. For example, if you pay estimated taxes to the IRS every quarter like I do and paying by credit card only costs 1.87% (Discover accepted). That means I can get 1.13% back on all my tax payments.

Perks include a $30 inflight WiFi credit and free FICO score every month. They also threw in no foreign transaction fees, and Discover card is pretty well-accepted in Asia (works as UnionPay in China, JCB in Japan). Discover continues other features from its non-Miles card like the free FICO, US-based phone reps, and no late fees on first late payment.

In terms of comparison, recall that I just wrote about the best 2% flat cash back cardsCiti Double Cash and Fidelity American Express. So for the first year this card wins with 3% vs. 2%, but on an ongoing basis you’ll fall behind at 1.5% vs. 2%. Like I said, the 2% cards offer a solid minimum baseline, but there will often be situations where you can beat 2% like this limited-time offer or specific cards with special categories.

If you are comparing against the Capital One Venture Rewards card which is another travel-oriented card that offers 2 “miles” per dollar, the major differences are that it has a $59 annual fee and no $30 inflight WiFi credit. The no annual fee version only offers 1.25 miles per dollar.

Existing Discover cardholder? Discover’s policy in the past had been to only allow one card per person, but now you can have two (i.e. you can have both a Discover it and a Discover it Miles.)

Costco Switches to Citi and Visa in April 2016

Follow-up on Costco dropping American Express. Costco has announced that it will only accept Visa credit cards at its stores starting April 1, 2016. American Express credit cards will no longer be accepted on that date. Customers can still use Visa and MasterCard debit cards, write checks, or pay in cash. Costco members can also still purchase Costco Cash cards online and then use those gift cards to make warehouse purchases.

Costco has also made a deal with Citi for their co-branded credit card. However, I don’t really understand this paragraph from an AP article:

Costco hasn’t said yet whether people will have to reapply for its rewards credit card. Citigroup says it plans to make the transition from AmEx to the Citi’s Visa card as “seamless” as possible. Costco card holders probably won’t need to reapply, industry experts say. However, a small number of Costco card holders won’t be approved for a Citi card. American Express and Citi have different credit standards and a person who may have qualified under AmEx may not be approved under Citi.

I have never heard of anyone switching over issuers like that. I’ve seen people switch from one American Express flavor to another, or one Citibank flavor to another, but never from and American Express to a Citicard. To me, no reapplication means no new credit check on my report. We’ll have to see.

Based on this comment from someone claiming to be a Costco warehouse manager, my prediction is that the new Citi Costco Visa card will offer a tiered rewards system that offers something like 5% back on gas, 3% back at restaurants, and 1% back on everything else. They won’t do bonus groceries as they already sell that kind of stuff in the warehouse. Basically, slightly better than the old Costco AmEx rewards structure and closer to what Sam’s Club offers.

The Best Credit Cards For Millionaires Who Count Their Miles… and The Rest of Us

millThe sales pitch for American Express has always been that their cardholders are wealthy and thus big spenders, which in turn justifies their above-average transaction fees charged to merchants. The theory is a merchant won’t mind paying more in fees if it is offset by higher average receipts (and thus profits). This is why Tiffany & Co takes AmEx and my favorite Indian food truck does not.

However, this recent Bloomberg article suggests that American Express is losing their millionaires because they are actually doing the math on their credit card rewards and finding the perks are better elsewhere. The title in the Businessweek magazine version is “Even Millionaires Count Their Miles“. To which I say, of course they do!

As less-affluent consumers cut spending during the recession and a 2009 law known as the CARD Act limited lenders’ ability to raise interest rates and charge late fees, banks revved up their pursuit of customers with top credit scores who pay their bills on time.

The article quotes hedge fund manager Whitney Tilson, who switched from using American Express for 30 years over to the new Barclaycard Arrival Plus World Elite MasterCard (my review). He states:

The difference between getting 1 percent and 2 percent cash back is thousands of dollars and for that amount of money, Barclaycard has a better offer […]

(I should mention that Tilson is well-known as a disciple of the Graham-Dodd-Buffett-Munger school of value investing. You would think value investors would know a good deal. :) Of course, you could also flip that as the largest shareholder of American Express is… Berkshire Hathaway.)

The problem is that the American Express Platinum used to be “the” card for affluent travelers because it got you into any of the airport lounges from all major carriers. But now if you want access to all American lounges, you need the premium Citi co-branded credit card. To get access to United lounges, you need the premium co-branded Chase card. And so on. AmEx even started building their own airport lounges, but so far there are only four of them. Nowadays, unless you redeem Membership Rewards for frequent flier miles and use them wisely, it is hard to get even 1 cent of cash for 1 MR point these days. Even a plain-vanilla rewards card will pay you 1% cash back and more importantly their direct competitor Chase Ultimate Rewards will get you 1 cent back or 1.25 cents towards travel.

Here’s the Bloomberg graphic of credit cards that cater to “affluent consumers”:

amexmil_small

I want to point out that the graphic is misleading because the AmEx gives a $200 travel credit every year while the Barclaycard $400 statement credit is one-time only. I do agree the Barclaycard at 2.2% back towards travel is good if you have travel charges that you redeem against, and the $400 upfront bonus counters the $89 annual fee.

Not mentioned in the article are two cards that I think are solid no-brainer cards for anyone. Both earn double the cash back from ordinary 1% cards and have no annual fee. Unless you are redeeming frequent flier miles for business class tickets or hotel points for luxury stays (which I try to do with part of my credit card rewards), it is unlikely you are getting more than 2 cents a point.

If you charged $100,000 a year, getting 2% instead of 1% would be an extra $1,000 a year back. Even if you charged $10,000 a year, that is an extra 100 bucks. You don’t need to be wealthy to appreciate simple cold, hard cash. Because there is no annual fee, I think everyone, including millionaires, should have one of these in their wallet.

Costco No Longer Accepting American Express in 2016

Starting in early 2016, you will no longer need an American Express card to pay with a credit card at Costco. Not earth-shattering news (although I do buy a lot of stuff at Costco), but as a credit card geek I thought some of the details that came out were interesting:

  • American Express and Costco are ending their 16-year partnership when their current contract ends on March 31, 2016. After that, American Express will no longer be accepted at Costco wholesale stores.
  • The relationship accounted for 8% of AmEx’s revenue last year, 20% of its worldwide loans, and 10% of its cards in force. That’s a pretty sizable chunk of their business, but American Express had to offer deeply-discounted transaction fees to get it. I guess they didn’t think it was worth it anymore.
  • In Canada, Costco has already dropped AmEx and replaced them with Capital One and Mastercard. Reportedly, Costco is also in talks with CapOne and Mastercard for their US stores as well (though they state they are also talking with other issuers).
  • The co-branded Costco TrueEarnings American Express card is expected to be discontinued, and American Express will probably be offering cardholders an alternative card. It really wouldn’t make sense to keep it around if you couldn’t even use it at Costco.

Sources: WSJ, AP, Marketwatch

Citi Credit Cards: Free FICO Score from Equifax

After announcing their plans last year, Citibank has starting giving out free FICO credit scores. Available to “Citi-branded consumer credit cardmembers”, visit citi.com/creditscore and log into your account to view your score. You should also find it under Card Benefits. The FICO scores will be updated monthly and are based on your Equifax credit bureau data. According to the press release, you can also request that the score be mailed to you by contacting customer service. You’ll also get:

FICO® Score with two key factors impacting their score
FICO® Score Meter to show cardmembers where they fall within the credit score range
A visual of the score range to help them understand what each range means to lenders
A breakdown of the factors that contribute to FICO® scores

For those curious about the specific score model (range 250-900):

Your FICO® Score is calculated based on data from Equifax using the FICO® Bankcard Score 8 model and may be different from other credit scores.

That means this is a industry-specific FICO score, but not a “classic” FICO. From their FICO Score FAQ:

The classic FICO® Score which is in use today by the vast majority of lenders fall within the 300-850 score range. This score range was introduced to establish an easy-to-understand, common frame of reference for lenders and consumers. Industry-specific FICO® Scores, such as those for auto lending or credit card lending, were developed to accommodate the unique characteristics of their respective industry and range from 250-900. Some lenders also use FICO® Score NG, which ranges from 150-950.

As always, checking your own score will not affect the score itself. Reports are that Citi American Airlines consumer cards are included, in addition to Double Cash, Dividend, ThankYou, Forward, Prestige, Simplicity, etc. You may find yourself having to wait a bit (maybe as my cards are new?) as this is what I got:

No score is available for us to provide to you right now. Please check again later.

Screenshot (click to enlarge):

citificosmall