March 13, 2009
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The Best Bang for the CC Rewards Bucks, Pt.1
Worthwhile plans.Trying to plan for the most effective credit card rewards program can be inundating, at best. Especially today when the credit card industry is, itself, in straights, effective rewards are subtly being substituted with ‘perceived rewards'. Just because you get more points doesn't mean that translates into usable gains. Often times, the only way to redeem those points is to spend ten times the value of the points, themselves, and buy things you have no use for (like CitiBank's ‘Extra Cash' rewards). Other times, you happen onto a plan that gives you $681 back in cash at year's end just for buying groceries with a credit card as Susan Hodara found out with AMEX. Big difference here.
Of course, your shopping habits come into play in a small way but, typically, most credit card consumers do have many common needs, like buying groceries. In my opinion, the only programs worth the paper their written on (so electronic forms are worth even less) are those that deliver real cash (as opposed to perceived). So, here is a basic rundown of the typical credit card rewards program terms available today to save you all that research and just cut right to the chase:
1) AMEX/Blue Cash:
o APR: 12% to 18%.
o Rules: 5% back for groceries, gas & drug store items;
1.5% back on other credit card purchases.
o Promo: 0% purchases; 3% bal. xfers (3% xfer fee ) for 12 mo.
o Conditions: Must charge at least $6,500 per yr.;
Else reward drops to 1% and 0.5%.2) Cap 1/No Hassle:
o APR: 8% to 15%.
o Rules: 2% back for groceries & gas;
1% back on other credit card purchases.
o Promo: 0% APR for 12 mo.
o Conditions: $29 Annual Fee for lower credit card Scores.
Points never expire.