It's Just Money

WorldPoints, a review

This was the first credit card that I ever got.  They were on campus at my college.  I was a naive (stupid) freshman.  A credit card?  No annual fee, you say?  AND I get a free t-shirt?  C'mon, I'd be stupid to pass this up, right?

It was for an MBNA America Visa card.  Over the years my wallet has seen a few cards have come and go, but this one remained.  It's my oldest existing source of credit.  Although it's a small factor in credit scores, it's a factor still.  Besides, it has my school logo.  I feel like shaking my pom poms every time I use it.  Cha-ching!  Rah Rah Rah!

A few years ago, I stopped using the card entirely.  It had zero points programs associated with it.  I began using my American Express Hilton Honors rewards card, and on occasion the Discover card.  But I continued to carry the MBNA Visa, because some places only accepted Visa or Mastercard, and it was (and still is) my only card of either type.

I was about to cancel the card, when I learned about the WorldPoints program.  Simple, straight forward.  One point per dollar spent on the card, redeemable for cash, gift cards, travel or merchandise.

So, I still have the card, which has since been bought out by Bank of America.  Or B of A for short.  AKA Bunch of A-holes.  Sorry, that's rude.  I didn't make it up.  Although I wish I did.

Anyway, how about this WorldPoints program?  Is it any good?  Let's take a look.

Points, Miles, Rewards Update

My points are really starting to add up.  It looks like I'm going to get sail right past my 240,000 Hilton Honors points goal way early.  I'll have to figure out if I want to start using some of it, or what else I would want to use it for.  Well, here it is...

Southwest Rapid Rewards:  One free ticket voucher in hand, and 13.5 points needed for another free ticket.  I flew twice in October, and they gave me 2 points per leg.  I'm not sure why, but I'm not going to argue against it.  I guess it was some sort of promo. 

Hilton Honors Points:  195,444.  Our 240,000 goal was for our honeymoon more than a year away.  So, like I said, we're going to hit this early.  Maybe we can use it at another hotel also on our honeymoon.

MBNA WorldPoints:  23,698.  25,000 points seems to be the magic number.  At that level, we can redeem it for a free flight anywhere in the continental 48, 250 bucks, or some pretty decent merchandise like a digital camera (no, I still don't own one).  Here's what's completely baffling.  The $250 or a free flight seems like a good equal value swap.  A cross country flight is likely to run about that much or more, depending on your destination.  You can also redeem for gift cards, but the redemption rate sucks.  You can get a $100 GC to a number of popular places like Amazon, Barnes & Noble or Banana Republic, but it will cost you 12,000 points!  That doesn't make any sense.  Even worse, you can get a $250 Visa gift card for the bargain price of 32,500 points.  What?  Why wouldn't you just take the cash?  Anyway, I think I'll use it for a flight once I get over 25,000.

Discover Cash Back Bonus:  $29.45.  I think I'll get more Hollywood Video vouchers.  It's pretty cool.  You can exchange $20 worth of cash back bonus for ten Hollywood Video or Blockbuster vouchers.  Given that movie rentals are more than four bucks these days, you're getting double value.

American Airlines:  6,450 miles

MyPoints Balance:  3,078.  For 5,750 points I can get a $50 Stuart Anderson card.  That's a pretty decent free dinner.  The same $50 card at Target would cost 7,250 points.  How lame is that?  $50 at Old Navy runs 6,250 points.  I think I'll get the dinner out.  Of course, I still have a lot of points to go.

There you have it.  My points, miles and stuff.

Discover Card: Get More

I have written before my review of Discover Card's Cash Back Bonus Program.  By no means is it the best program around, but it has some real strengths.  The biggest one is the "Get More" program that allows you to earn 5% cash back on all purchases that fall under a specific category.  The program rotates every quarter, and some, obviously, are more valuable than others.  For example, a few quarters ago they offered 5% cash back on all grocery store purchases.  Well,  little known secret: you can get up to $50 cash back on Discover Card purchases at some grocery stores.  They add the $50 to your purchase amount, and you are not charged financing, cash advance fees, and earn rewards as though you just bought a bunch of rib eye steaks.

The current program is the most valuable "Get More" offer that they have run, perhaps short of the grocery store one.

Discover Card: Get Set for Fall

As far as cash back, points, miles, and bonuses go, Discover is not among the best.  It's somewhat ironic, because they were the originator of the cashback bonus, and touted as America's #1 Cash Rewards Program.  Touted by themselves, of course, but nonetheless touted.  There are really only two reasons that I keep my Discover Card.  1) Cash at the Grocery Store and 2) the Get More Program.

 

Upfront Rewards Credit Card Offer

I love new gimmicky offers.  It gives me a chance to read through the numbers and fine print to figure out how exactly they are trying to rip you off.

Most credit card offers are pretty simple.  They come in with a low or 0% introductory APR, they offer that low or 0% rate for balance transfers, cash advances, purchases, anything to get you to carry money on the card.  They know that most people lack discipline, and once the money is there, it will stay there, even after they jack the rates up to 23.98%.

So, this one is not wildly different, but had an interesting twist.

Very unhappy with Bank of America/MBNA

Not too thrilled with Chase right now either.  As I noted in a previous post, I am using 0% balance transfers to pay off my auto loan.  I applied for two cards, Citibank and Chase.  Citibank approved me for $5,500, and they sent me a check payable to me for $5250, no fees, 0% for 12 months.  Deposit the check, make payment to auto loan.  Beautiful.  This is how it is supposed to work.

Chase is a little different.  I'm approved for $10,500, which makes me happy.  It means that I don't have to apply for any more cards to accomplish my auto loan payoff.  They agree to a $10,000 balance transfer, but won't send a check.  I verify that it is no fee, and 0% for 12 months.  I give them my BofA/MBNA(hereafter just MBNA) account number, which has virtually no balance.  I called MBNA beforehand to verify that they will mail me a check for overpayments.  They send $10,000 to MBNA.  I call MBNA to request that the amount be sent to me.  I am told that it will take 7-10 days.

Here's where things get ugly.

Adventures in 0% Balance Transfer refinancing my Auto Loan

I mentioned before that I was planning on using a series of 0% balance transfers to pay off my auto loan.  If only it were as easy as giving American Honda Finance Corp (AHFC) my Visa number and being done with it.  Well, never that simple, but it wasn't too bad either.  Here are the details.

CNN Money's Best Travel Rewards Cards

We all have our opinions about which cards are the best.  Whether you are a fan of the cash back, airline miles or some other perk for charging it, there's a reason you carry what you carry.  Most of us in the PF blogging community (bloggers and readers alike) are not only trying to save money in every way possible, but also find the best value for the places we are spending our money.

CNNMoney.com posted their review of the best travel reward cards.  The cards were:  Starwood Preferred American Express, Marriott Rewards Visa, and the American Express Membership Rewards.  The article makes the point that hotel rewards are often the better deal, as we often spend as much or more on hotel stays as on airfare.  This is especially true for multi night stays or road trips.  I agree with this, and is why my card of choice is the American Express Hilton Honors Rewards card.

That being said, I was a little surprised that two of the three were American Express, which is known for higher fees to the retailers.  I was also very surprised that all three cards charged an annual fee.  In order to justify the annual fees, you must charge a considerable amount on your card on an annual basis and really take advantage of the rewards.  Even given that, there are so many terrific rewards cards (such as my Amex Hilton card) that do not charge an annual fee, I don't understand how much better the rewards for these cards could be in order to warrant paying the fee.

I also prefer the Hilton card because when I travel without using points to pay for my room, Hilton offers a wider range of less expensive locations to choose from.  Most points programs give extra points for using their services and paying full price.  The Starwood family has many beautiful hotels, such as the Westin brand, the W, Le Meridian and the Sheraton, but none are what you could call mid-low range prices.  The Hilton family also has nice hotels for those times that you are redeeming your points, but also offers the lower priced Hilton Garden and Hampton Inn.

If you are using a rewards card, always consider the alternative methods of accumulating points.  Hotel stays, online purchases, car rentals, airline partners may all be part of the formula that helps you amass enough points to go where you want sooner.

Discover Card Cashback Program Review

Discover Card advertises its Cashback Rewards program as America's #1 Cash Rewards Program. 

I wonder what that #1 ranking is based on.  Do you think it means it's the best, most rewarding program?  Maybe they did a scientific polling, and determined that it was the most popular cash back rewards program available.  I'm guessing it means that either more people use their cash back rewards program than any other, or that they actually give out more money in cash back rewards than any other program.  Either way, it is impressive, and worthy of boasting.

So, how good is the program?  Well, on its face, not very.  Used for normal everyday purchases, the cash back is according to the following schedule:  0.25% if the purchases are part of the first $1,500 in purchases during the anniversary year; 0.50% if the purchases are part of the second $1,500 in purchases; and 1.0% if the purchases are part of the purchases in excess of $3,000 during the anniversary year.  So, depending on your usage volume you will earn up to a marginal rate of 1% cash back.  Not bad, but we all know that there are plenty of cards that offer 1% from the first dollar.

But is that the whole story?  Well, let's look at the language of the cash back schedule once again.  The impression is that if you spend $5,000 in one year you will make $31.25 ($1500*.25%+$1500*.50%+$2000*1.0%).  However, it depends on how you spend that $5,000.  Let's say it's the first day of your card's anniversary period and you buy lunch at McDonald's for $4.76.  Then a TV at Best Buy for $289.  Then you buy dinner to go at Koo Koo Roo for $6.24 so that you can enjoy it in front of your new TV.  Expensive day.  You spent $300 even.  But I get some cash back right?  Yea, seventy five cents.  Okay, fine but I'm buying an engagement ring tomorrow.  Another expensive day, but at least it will mean big cash back rewards.  So tomorrow, you go to Robbins Brothers (which you shouldn't do, see my post I Bought An Engagement Ring!) and plunk down $4,700 even on the rock.  There $5,000.  At least I get $31.25 back right?  Sorry, the $4,700 purchase was "part of the first $1,500."  You get $7.50 back.

Be careful of language such as this when you make large purchases.  You make purchases like this only so often.  You might as well make sure to maximize any cash back or rewards.

That's not the whole story.  You only get your cash back in $20 increments.  Any accrued amounts below $20 are not legally yours.  Also, if your card is closed for any reason (by you or them), any accrued cash back rewards are forfeited.

So, why do I still have this card?  Here's the good part.  On an ongoing basis Discover Card has cash back promotions.  They select a type of spending, and all qualifying purchases are rewarded with 5% cash back.  From April 1 through June 30, they will pay 5% for gas, car washes, Auto Zone, Firestone, Midas, Pep Boys and Sears Auto.  You get the theme right?  You have to sign up for the program each time every three months when they change the promotion, but it takes only seconds.

The promotional purchases do not count towards your annual spending schedule, but heck, it's still 5%.  In the past it was available on restaurants, grocery stores, drugstores.  Not all at the same time, but they vary it.

So, as you can imagine I almost exclusively use my Discover Card for the promotional purchases.  I also use it at the grocery store.  I'm not sure if this is available at every grocery store, but at Ralph's (Kroger where you are), and Albertson's (Safeway where you are) when I use my Discover Card, I can request up to $50 cash.  It does not count as a cash advance, and there is no fee.  It is simply recorded as though I made a $50 purchase.  This gives me the float time on the money, saves me a trip to my bank's ATM, and give me some cash back on getting cash, however small.

Redeeming your Discover Cash Back is also rather involved.  When you have accumulated $20, you can request a check, or have them credit it to your account.  They'll add 20% if you donate it to charity.  Or you can redeem it for gift cards with their retail partners.  If you choose the latter, you will receive up to double or greater value for your twenty dollars.  You can get a $40 gift card from Lobster Gram or Sharper Image.  You can get a $30 gift card from Sunglasses Hut, or a $25 gift card from Borders or Pier One.  I always select Hollywood Video.  You get a coupon book good for 10 free rentals from Hollywood Video.

My Fiancee and I used to be members of Netflix, but we didn't watch enough movies to make it worthwhile.  However, we like to rent movies from time to time, and they are over four bucks each at either Hollywood Video or Blockbuster!  This gives me a greater than $40 value for my $20 cash back, allows me to use it as I please, and I am not required or tempted to make a larger purchase (like using a $25 card to buy a $70 item).  They are generally good for about a year.

So, overall, I have a lot of criticisms of the Discover Card, but I still use it.  The key is to use it properly.  I only use it for the promotional purchases, or at the grocery store when I need some cash and my actual grocery purchase is relatively small.  I only redeem my cash back for Hollywood Video rentals.  This way, if I am earning 5% on my promotional purchases, and getting double value from the Hollywood Video coupons, I am effectively earning a 10% cash back on my purchases.  Pretty dang good.

Also, of course, there is no annual fee, and you should always pay your bill in full each month.