No. of Recommendations: 1
<Background>

I have no debt other than current bill cycle credit cards, which are always paid in full to avoid interest charges. As I use the term, "no debt" also means I own my home free and clear with no mortgage. It has been several years since I adjusted my use of cash back credit cards. My preference is for cards with no annual fee (duh!), and no ramp up in rewards structure. While I pay much more attention to my budget than the amount of cash I'm getting back, I'd rather not have incentives pointing me at spending more than I otherwise might.

Cards I've been using for the past few years are:

1. Citi Dividends MasterCard. Pays 1% cash back on all purchase, with no ramp up. Cash back is paid by mailed check, in $50 increments. I have to pay attention to when the reward builds up and request a check. The most important feature of this card is Virtual Card Numbers, which allow me to set a credit limit and expiration date for online and phone purchases. I use them for purchases at all new-to-me online merchants, as well as merchants whose courtesy and competence I don't fully trust. I also use this card at merchants that don't take American Express. The most important such merchant for me is Sam's Club.

2. Fidelity Investment Rewards Amex. Underlying issuer is FIA Card Services, a division of Bank of America. Has a points system that works out to 2% cash back on all purchases, with no ramp up. Cash is paid by deposit to my Fidelity brokerage account, automatically when the balance exceeds $50. There is a cycle timing issue that lets FIA hang on to my cash back for an extra 29 days or so, but that's a minor nuisance compared to 2% back on everything.

Cards that have earned an honorable retirement in a locked file drawer are:

3. Chase Freedom MasterCard, recently re-issued by Chase as a Visa. Seems to have cash rewards no better than the Citi MasterCard unless I want to have a Chase checking account. Been there, done that, don't want to go back. Chase earned an honorable retirement for this card by changing rewards to my detriment several years ago, and has a heavy burden of proof to earn a place in my wallet for this card.

4. Discover Open Road Card: Earned an honorable retirement when Discover changed the terms from 5% back on gas to 2% back on gas and restaurants, while also changing the increment for cash back from $20 to $50. I couldn't see having a specific card for gas at 2% when I already had a card that paid 2% back on everything.

Recently, Discover has convinced me to start using their card again. The promotion is $75 cash back if I make $1000 of purchases in the months of June, July, and August. That works out to 7.5%, so I was willing to shift some of my 1% and 2% purchases to Discover to clear that hurdle. As I looked, Discover has also created an option to get a Discover gift card with the cash back, in denominations as low as $20. Right now, I'm about $80 away from getting to $1000. I'll get there easily with gas and restaurant purchases between now and August 31. The working plan is to see where that lands me with rewards, and then use Discover for gas and restaurant purchases I'd make anyway until the rewards come out to minimal spoilage before shifting usage back to the Fidelity Amex for gas and restaurants.

</Background>

Today I was at Sam's Club, and saw their promotion for a Sam's Club MasterCard. The large print promises 5% cash back on gas, 3% on dining and travel, and 1% on all other purchases. On the face of it, this is better than Discover or Fidelity Amex for gas and restaurants, and as good as Citi MasterCard for everything else. I sat down to read the terms and decide whether I wanted to jump for the higher rewards.

Stuff that jumps out at me from the terms:

The underlying issuer is Synchrony Bank. I was not familiar with that name, but my good friend Google tells me this is the former GE Capital Bank.

5% on gas is limited to $6,000 of purchases per calendar year. This is far more than I will spend in a year on gas.

5% on gas and 3% on restaurants and travel excludes purchases at warehouse clubs other than Sam's. You do get 5% on gas bought at Sam's Club.

The application includes an agreement to have your Sam's Club membership automatically charged to the Sam's MasterCard.

Cash back is issued as a check mailed in February for cash earned the preceding calendar year. The check is made out to Sam's Club, and must be schlepped to a Sam's Club for redemption. Uncashed checks expire in 180 days, which shouldn't be an issue for me.

Maximum amount of cash back in a year is $5,000. There is no way I'm charging enough in a year to get that much cash back, even if I shift all charges to this card.

There is no mention of online shopping, so I assume this card has nothing comparable to Citi's virtual card numbers.

Opportunities for spoilage: Apparently the cash back is whatever was earned in the year, to the penny. I could quit using the card in December, then close it after getting the reward the following February. Rewards are forfeited if I stop being a Sam's Club member or close the card before the check is issued. I forfeit the rewards earned in a year if they are less than $5. There is also spoilage if I don't keep the account in good standing, which is not an issue.

At this point, I have not yet applied for the Sam's MasterCard. There is no doubt that I can get one if I do apply, and that I can get a credit limit that is suitable for my needs.

Potential pros and cons, as I see them right now, include:

Pros: Better cash back on gas and restaurants, travel being irrelevant to me. MasterCard is accepted just about everywhere.

Cons: Another card to manage for optimal cash back, potentially splitting the cash back pie more ways if I still want to use virtual card numbers for online purchases. Probable hassle redeeming the cash back. If I have problems with Sam's Club down the road, potential cost of an extra year's membership (payable in November) or forfeiting a partial year of cash back.

I'll sleep on this before making a decision. I'd also appreciate thoughts from this board on how good/bad a deal this is.

Does anyone have any good or bad experiences with GE Capital Bank/Synchrony Bank as a card issues that might affect a decision on whether to do business with them?

Does anyone here have this card? Has it been around long enough that you have experience with the procedure for in-club redemption of rewards? If so, how big a nuisance is it?

Is there anything else I seem to be overlooking?

Patzer
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