Showing posts with label Cashback. Show all posts
Showing posts with label Cashback. Show all posts

January 22, 2014

My Latest Round of Credit Card Applications - January 2014

As I discussed in this post, I apply for a new round of credit cards every 90 days.  Remember, this is not for you if you are a) working on improving your credit b) planning on applying for a loan such as a mortgage in the near future or c) if you periodically carry a balance on your cards.  The rewards that you'll gain in these cases will be heavily offset by either not being able to qualify for the lowest lending rate (due to recent inquiries on your credit report) or actually paying interest if you carry a balance.  Each application will typically ding your credit 2-5 points (those inquiries fall off over time and your score will go back up) thus the reasoning for applying for cards every 90 days on the same day.  The inquiries fall off roughly at the same time and on the day you apply, the other banks don't see that you applied for a card earlier in the day.  My FICO score has only approved over two years of doing this every quarter.  Before this round of applications, my score ranged from 765 - 780.

Now that the disclaimer is out of the way...My quarterly "churn" happened to be this past weekend so here's an overview of the cards I applied for and why.  I'll provide an update on the results later in the week.

1)  Bank of America Alaska Airlines Visa Signature(R) Card

This card offers 25,000 miles upon approval.  Meaning no minimum spend required.  The card does offer an annual fee of $75 which is not waived for the first year.  I've been meaning to start stocking up on Alaska Miles since they introduced their partnership and award chart with Emirates.  For 100,000 miles, you can fly (one-way) from the US to the Middle East in First Class on the Emirates A380.  Not a bad way to travel especially when you know you can shower on-board.  I value Alaska miles at $.02 each making the sign-up bonus worth $500.

January 11, 2014

Miles & Points vs. Cashback

A lot of people have asked me why they should switch from a cashback (or a debit card) to a miles/points earning credit card.  Everyone is in a different situation but generally speaking, all of us like to travel in some capacity.  You might like to travel to weddings, family gatherings, business travel, domestic vacations, international vacations, or all of the above.  Here are my thoughts on why you can derive so much more value from leveraging the variable valuation of points and miles cards for your everyday spend.

The top cashback card on the market right now is the Barclays Arrival(TM) World MasterCard.  The annual fee is waived for the first year ($89 thereafter) and offers a 40,000 point sign-up bonus and 2% cashback on everyday spend.  In addition, you can get an additional 10% back on your travel "redemptions" effectively making the rebate 2.2% back on spend.  So once you're received the signup bonus, you are capped at a 2.2% return on your spend because cashback is cashback.  You can't redeem the "points" for something that varies in cost like a plane ticket or a hotel night. And that is the best deal on the market (ignoring periodic 5x bonuses that Chase Freedom and Discover cards offer in specific categories).