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Author: cstrohm Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308881  
Subject: Question about cash back cards Date: 10/7/2012 5:55 PM
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Our Citi Dividend Platinum card stops giving its 1% cash back after we earn $300 in a year. Since rewards cards cost merchants more in fees, does Citi reduce merchant fees on our purchases with that card once we reach the threshold and they're not giving us the cash back any longer that year?
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Author: 401kinvestor Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 306025 of 308881
Subject: Re: Question about cash back cards Date: 10/7/2012 6:02 PM
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Citi charges the same no matter what. I get an Ax Blue or Chase Freedom card instead of Citi.

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Author: alstroemeria Big gold star, 5000 posts Top Recommended Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 306026 of 308881
Subject: Re: Question about cash back cards Date: 10/8/2012 7:21 AM
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does Citi reduce merchant fees on our purchases with that card once we reach the threshold

After what's been happening in banking--and so many other corporations--over the last decade or three, you think there's a chance they have other businesses' interests as a priority over their own profit? Corporations are people too, my friend--selfish people.

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 306029 of 308881
Subject: Re: Question about cash back cards Date: 10/8/2012 10:31 AM
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No. They just don't want to have to pay you very much...

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Author: EvrClrx311 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 306033 of 308881
Subject: Re: Question about cash back cards Date: 10/8/2012 2:03 PM
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Most cards have it the other way around... they pay you less, or even nothing, until you get to a certain level of spending and then the cash back picks up even more.

Very odd your Citi does it that way. Only reason for it is to make more profit off of those who use the card a lot. Customers who charge a lot more are bringing in more business, I would assume.

Most of this is speculation on my part... but thinking out loud. Chime in if someone can debunk this:

Could it be that Citi created this system in an attempt to push away responsible card members who charge a lot ($30,000+ a year) but pay it off at all times (in my mind it seems reasonable that someone looking at cards thinking $300 reward [$30,000 a year spending] limit will prevent them from cashing in all their spending are probably the upper middle class to rich types who can just pay off their card every month). Those members will look for other cards that offer better rewards for their excessive spending.

I can't think of any other reasonable explanation for them to cap the return except... people are just ok with it, or don't think they'll reach it. Otherwise they'd move on to someone else to get a better reward.

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Author: 2gifts Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 306042 of 308881
Subject: Re: Question about cash back cards Date: 10/9/2012 12:12 PM
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Most cards have it the other way around... they pay you less, or even nothing, until you get to a certain level of spending and then the cash back picks up even more.

Actually, I think more and more cards have gone the way of Citi and cap your cash back. I know that Citi does it, and I'm pretty sure that Discover and Chase also do it. I do know that because of that, I don't use my Citi, Chase or Discover very much unless they give the best cash-back bonus at the time. Generally speaking, I use my AMEX Blue card for everything, and they do work as you say where I have to spend $6500 to reach the top tier, but I do that when I make the first college tuition payment, so I get a lot back each year.

probably the upper middle class to rich types who can just pay off their card every month

I disagree with this thinking on a very fundamental level. I don't think that it is only rich types who can afford to pay off their card every month. I think it is anyone who only spends within their means and only charges each month what they can afford to pay off at the end, and that has nothing to do with the size of the means and everything to do with the ability to manage that means, whatever size it might be.

In my house, I won't put anything on the credit card that isn't in the budget/plan and for which the money isn't already sitting in the bank at the moment I make the purchase. I don't consider it within my means if I need the next paycheck to be have the money. I either have the funds right now or I don't, and if I don't, I will wait until I do prior to making the purchase.

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 306043 of 308881
Subject: Re: Question about cash back cards Date: 10/9/2012 12:59 PM
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I think you missed the first part of his assumption - about the cap. I would definitely think it is middle to upper class people who have to worry about maxing out a $30K spending cap for the year. I do it regularly, but for me it's mostly for work travel reimbursables. It's not so easy to max out $30K or $40K a year unless you have very liquid funds.

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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 306044 of 308881
Subject: Re: Question about cash back cards Date: 10/9/2012 2:03 PM
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Could it be that Citi created this system in an attempt to push away responsible card members who charge a lot ($30,000+ a year) but pay it off at all times (in my mind it seems reasonable that someone looking at cards thinking $300 reward [$30,000 a year spending] limit will prevent them from cashing in all their spending are probably the upper middle class to rich types who can just pay off their card every month). Those members will look for other cards that offer better rewards for their excessive spending.

I think I understand what you are saying, but the way it is phrased is confusing. Everyone should not charge what they can't afford to pay.

It isn't unusual for regular expenses (insurance, utilities, food) to be charged. If only one card is being used, it doesn't take being upper middle class to reach the limit. Also, those that travel for business often have to use their own card and file for reimbusement.

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Author: tconi Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 306045 of 308881
Subject: Re: Question about cash back cards Date: 10/10/2012 3:45 AM
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I do it regularly, but for me it's mostly for work travel reimbursables.

sometimes I think you are actually me, only somewhat taller, with sharper knives


peace & just what I would say
t

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Author: exeter17 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 306047 of 308881
Subject: Re: Question about cash back cards Date: 10/10/2012 11:44 AM
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Fidelity Visa doesn't. At least, they haven't squawked on the ~100K I've run through my card this year. They pay a fixed 2% and I get some bonus like at Newegg, Tiger, and ATT

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Author: exeter17 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 306048 of 308881
Subject: Re: Question about cash back cards Date: 10/10/2012 11:45 AM
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Sorry meant Fidelity Amex. Fidelity Visa is only 1.5% back

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Author: tconi Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 306049 of 308881
Subject: Re: Question about cash back cards Date: 10/10/2012 2:31 PM
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I get some bonus like at Newegg, Tiger, and ATT


and if you shop through ebates, you can get more

peace & percentages
t

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Author: exeter17 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 306050 of 308881
Subject: Re: Question about cash back cards Date: 10/11/2012 8:33 PM
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Yeah, never had a lot of luck with Ebates kinda seems scammy to me. Have you have much luck with them?

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Author: ed1007 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 306051 of 308881
Subject: Re: Question about cash back cards Date: 10/12/2012 2:39 PM
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>>>It isn't unusual for regular expenses (insurance, utilities, food) to be charged. If only one card is being used, it doesn't take being upper middle class to reach the limit. Also, those that travel for business often have to use their own card and file for reimbusement.<<<


I do this but my organization requires the use of the company card for plane tickets. Booo. Luckily, I do not travel that much any more. My wife and I put everything we spend on AMEX blue; groceries, fuel, misc. purchases, cell phone bill, etc. The only limitations are if the merchant does not take AMEX, I use another card or pay cash, or if the merchant charges a surcharge for using a credit card, I go somewhere else.

We also have a yearly budget broken down into months, so I know about how much will go on the card each month. Last Jan. I paid the amount due + the expected amount to be charged over the next month. I now have scheduled payments of ~1/2 the average budgeted expenses sent automatically twice a month on the day after our paychecks are deposited, and the actual bill payed in full automatically when the statement is issued. That last check is usually nothing or a few tens of dollars as I included the higher spending months of November and December in the calculation I think of it as levelizing all my expenses.

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Author: tconi Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 306052 of 308881
Subject: Re: Question about cash back cards Date: 10/12/2012 7:25 PM
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I have had decent luck with them - to the tune of about $150
snippee is a big fan as well.


peace & YMMV
t

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Author: jimjaz Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 306059 of 308881
Subject: Re: Question about cash back cards Date: 10/20/2012 1:38 PM
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2gifts,

You are spot on with your way of thinking with regard to credit card debt. I am in the very same frame of mind- if I don't have the money, then I will wait to "charge it", because the bill gets paid in full every month. Been that way for 20 years now.

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