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GKosh wrote:
I used to have a Private Issue card that gave up to 2% cash back.

However, they started charging a fee for having the card and I refuse to pay
fees to carry their card.

I cancelled and started using my regular old 1% cash back discover card with no fee.
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I used to feel the same as GKosh regarding paying an annual fee to use a credit card until I did some analysis between credit cards.

Let's assume the following in a comparison between the Discover Card (1%) cash back max with no max dollar amount and the Private Issue Card (2% cash back max up to \$500 with \$18 annual fee).

I've constructed the comparison using a scenario of \$15000 total annual charges.

Discover______________%rebate_______\$value
\$0 to \$1000___________.25%__________\$2.50
\$1001 to \$2000________.50%__________\$5.00
\$2001 to \$3000________.75%__________\$7.50
\$3001 to \$15000_______1.00%_________\$120.00

In this example the maximum annual benefit on the Discover Card is \$135.

Private Issue_________%rebate_______\$value
\$0 to \$1000___________.25%__________\$2.50
\$1001 to \$2000________.50%__________\$5.00
\$2001 to \$3000________.75%__________\$7.50
\$3001 to \$12000_______1.00%_________\$120.00
\$12001 to \$15000______2.00%_________\$60.00

In this example the maximum annual benefit on the Private Issue Card is \$195. Subtracting the \$18 annual fee results in a net benefit of \$177 or \$57 more than Discover. The more you charge above \$12000 per annum you'll obviously reap greater rewards

Clearly, this is only beneficial if you charge a great deal. I happen to do exactly that, I charge groceries, gas, dining, entertainment, etc., literally everything I can (I'm also a stickler for paying balances in full each month with no exceptions). If my mortgagor would let me, I'd charge my monthly mortgage payment. The bottom line is that the \$18 annual fee, while a nuisance, is clearly not a "deal breaker" if you charge heavily.

Regards, MFFerdZoo

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