No. of Recommendations: 1
When Sam's Club started taking MasterCard again, I converted my Discover to a Discover Gas Card (now called a Discover Open Road Card). When I signed up, the deal was 5% back on gas and auto repairs at several places I don't want to use, i.e. 5% back on gas. There was a limit of $1200 of 5% purchases per year.

If I had stayed home, I might or might not have put $1200 of gas on the Discover in a card year. That's a moot point, because I took a driving vacation last week. I bought enough gas that when I came home, I started a spreadsheet to track the Discover purchases and see when I would run out of the $1200.

Lo and behold, one of the items in my held mail was a Discover change in terms and conditions. In addition to no longer counting Warehouse (i.e., Sam's Club) and 5% purchases towards the tiers for getting more than 0.25% cash back, the limit on the 5% for gas is redefined as $100 per billing cycle. For reference, my four most recent billing cycles had gas purchases of $101.27, $90.22, $122.51, and $102.39. For the current bill cycle, there's $300+ and counting due to my trip last week.

Fortunately, the changes don't take effect until October 1. That means I can take another trip next month, use up most of the $1200 for the current card year, and just put one tank a month on Discover until I hit $1200. I will then have several months to contemplate what to do about this.

Another piece of the fine print tells me that as of November 1, any cash back earned will be forfeited if my account is inactive for 18 months (up from 36 months). Hmm. Put this together with Discover's requirement that cash back can only be redeemed in even $20.00 amounts, and it's likely that I give up some change if I get mad at the complexity and stop using the card. Let me think about this.

Option 1: Try to milk the full $60 per year out of the 5% back. This would mean tracking the charges to the penny, ending a transaction on a partial fill of the gas tank when the month got to $100, and continuing the tank with a purchase on Citi MasterCard. Then there's the risk that one of the transactions is delayed and hits the wrong bill cycle. I don't think I'm willing to go to that much work.

Option 2: Track the cash back I've earned. Try to make it come out as close to $20 as possible, then stop using Discover. This is attractive, because I get every last penny on the table then no longer have to jump through the ever-changing hoops.

Option 3: Just use Discover for one or two tanks of gas per month. When a large fill would break $100, quit using Discover until the next month. This is a bit more work tracking than I like, but keeps the card active.

Option 4: Pick a date (October 1 is sounding possible) when Discover's terms become so complex that I'm no longer willing to wade through them. Take the easy 1% back from Citi MasterCard instead of trying to wade through the Discover complexities to avoid the 0.25% back.

I'm leaning towards Option 2 or Option 4, but I'll spend some time thinking about it. Discover seems to be motivated by a desired to change terms so that the Discover Get More card means Discover gets more and its customers get less. In the grand scheme of things, I think there's other complex stuff I could spend my time on that would pay better than $60 per year back from Discover.

I understand that Discover probably loses money on customers like me who only use the Open Road card for 5% purchases. But since Discover seems disinclined to offer competitive cash back other than as temporary gimmicks, they aren't motivating me to become a profitable customer for them.

No hard feelings, but perhaps it's time to look for a different cash back card to back up Citi.

Patzer
Print the post Back To Top
No. of Recommendations: 0
Option 5?

Amex Blue Cash... after you spend $6500 within the calendar year you earn 1.5% on anything and 5% on gas, grocery (not warehouse) and pharmacy purchases...

Before $6500 I think the earn level is something like 0.5% for everything and 1% for gas/grocery/pharmacy.

No limits on spending or what you can earn...

Payout is at the end of the calender year, last year I got a couple of hundred, but wasn't religious about using the amex...

This year I have been only using the amex and I put all my regular monthly bills onto the card as well...
Print the post Back To Top
No. of Recommendations: 0
Another piece of the fine print tells me that as of November 1, any cash back earned will be forfeited if my account is inactive for 18 months (up from 36 months). Hmm. Put this together with Discover's requirement that cash back can only be redeemed in even $20.00 amounts, and it's likely that I give up some change if I get mad at the complexity and stop using the card. Let me think about this.

Man, talk about adding insult to an already craptastic cashback scheme. I'll be exercising your Option #2 on my (non-gas) Discover Card. When I get the inevitable "you're not using your Discover card, what can we do to make you love us again?" call, I'll make sure to let them know that Citibank gets all my luv, and why.
Print the post Back To Top
No. of Recommendations: 0


I think I'm giving up using my Discover as well. My anniversary date in August 11.. so I am going to see where my cash back sits on this months billing. Citi_Bank had an add.. that read something like _ Here's something that Discover doesnt' want you to Discover.. haven't called-checked into it yet though.
Cherie



Print the post Back To Top
No. of Recommendations: 0
I'd suggest Penfed with its 1.25% cash back credited monthly to your account. Currently they're offering 5% pay at the pump with no limit but this is a promotion subject to change. You'll need $20 to apply and $5 to keep in the credit union account. The card is useful overseas since there's only a 1% currency conversion fee offset by the cash back.

Here are the posts I've made on Penfed. It's become my primary use card for everything except groceries where I use the 2% from Citibank.

http://boards.fool.com/Message.asp?mid=24420722
http://boards.fool.com/Message.asp?mid=24424041
http://boards.fool.com/Message.asp?mid=24601266
http://boards.fool.com/Message.asp?mid=24944636
Print the post Back To Top
No. of Recommendations: 1
Amex Blue Cash... after you spend $6500 within the calendar year you earn 1.5% on anything and 5% on gas, grocery (not warehouse) and pharmacy purchases...

Before $6500 I think the earn level is something like 0.5% for everything and 1% for gas/grocery/pharmacy.


That's an attractive card for people who have very large budgets or wash a lot of business expense through their personal cards. I've never considered it seriously because of the tiers and the places that don't take Amex, but let's think about it. Since I keep detailed records in Quicken, it shouldn't be very hard to figure out whether this is a winner.

I do very little spending that the cards consider grocery or pharmacy, so most of the analysis is on the 1% spending. Breakeven as compared to a pure 1% cash back card is at $13,000 of spending in a card year.

If I kick out the places that I know don't take Amex, I only put $9,541 on credit cards in the last 12 months. The actual amount I could, in theory, put on Amex Blue might be lower. I'm only kicking out Sam's Club and my daughter's college, but there might be more places I charged that don't take Amex.

As compared to Citi MasterCard, most purchases work out to lose 0.5% before $6500, gain 0.5% after $6500. Gas/grocery/pharmacy works out to lose 1% before $6500, gain 3% after $6500. If I assume gas/grocery/pharmacy purchases distributed evenly through the card year, that's equivalent to those purchases being worth twice as much as undesignated purchases for purposes of breaking even. That brinks the amount of 1% equivalent purchase I might have put on Amex up to $11,486. I still do better with Citi MasterCard. The $300 per year limit on cash back is not a problem for my spending patterns.

Okay, I remember why I never seriously considered Amex Blue before. The numbers don't work out for me, and I'm not interested in increasing spending or shifting purchases to other (read: costlier) merchants in order to make the cash back more attractive.

Patzer
Print the post Back To Top
No. of Recommendations: 1
No hard feelings, but perhaps it's time to look for a different cash back card to back up Citi.

We use the Chase Freedom card as our main card now with Citi as our backup. 3% back at gas stations, grocery stores, and drugstores. 1% everywhere else. If you wait until you earn $200 in rewards (instead of $50) they will send you a check for $250.

I was able to apply for the card when a link to get $250 cash back after the first purchase was available. I found the link on Slickdeals.com

Dawn
Print the post Back To Top
No. of Recommendations: 0
wash a lot of business expense through their personal cards

This is a big help in hitting that $6500 mark... I had a couple of trips and high ticket purchases early in the year, so I hit the $6500 mark early.

I find that in my case even w/o the business expenses my normal monthly bills will get me to the higher tier--

Electric : $ 50
Home Fuel : $100 (on the budget plan that avgs monthly cost)
Cable/Internet: $100
Cell Phone : $100 (family plan that includes mom, dad, etc)
Grocery : $350 ($80-90/wk, includes beer :*) )
Car Fuel : $150
Work Food : $100 (company cafe takes amex, ~$5/day)
Misc/Entnmnt : $100
-----------------------
Total :$1050

I figure it takes just over 6 months to break even in my specific case, obviously doesn't work for everyone else or those who read the LBYM board closer then I do.

I find that 9/10 places that I go to will take amex, it's usually the smaller or non-chain places that don't accept it... the big disappointing one for me (as you pointed out) was my university, I spend about $4000/yr on night classes, half of which is at the beginning of the year...
Print the post Back To Top
No. of Recommendations: 4
my four most recent billing cycles had gas purchases of $101.27, $90.22, $122.51, and $102.39.

just curious, but would it make more sense to buy a vehicle that gets better fuel efficiency?

i'm assuming you live on the west coast if your fill-ups are regularly over $100.00...is that correct? are prices in the 3.50-4.00 range out there?

assuming $4.00/gallon, that puts you in a full size pickup truck or SUV with a 24-26 gallon tank, if i'm doing my math right.

so my question for you is...and please don't take this the wrong way...it's entirely possible you NEED a full size truck or SUV for work or some other reason. in which case you should completely ignore most of this post (as I'm sure the idea of fuel efficiency isn't foreign to anyone who drives a vehicle these days)

if you're so concerned about getting some cashback on your gas purchases, why not make an effort to minimize the fuel you HAVE to purchase in the first place?

Mike
(who admires your attention to detail, but thinks you may be looking at the wrong details)
Print the post Back To Top
No. of Recommendations: 4
i'm assuming you live on the west coast if your fill-ups are regularly over $100.00...is that correct? are prices in the 3.50-4.00 range out there?

assuming $4.00/gallon, that puts you in a full size pickup truck or SUV with a 24-26 gallon tank, if i'm doing my math right.


I read the original post differently than you. I didn't read it as approximately $100 fillups. I read it as approximately $100 total gas purchases during a billing cycle. It could be purchases of $35, $40 and $25.

Your point is still valid about how people could save more by driving fuel efficient vehicles.

IF
Print the post Back To Top
No. of Recommendations: 1
my four most recent billing cycles had gas purchases of $101.27, $90.22, $122.51, and $102.39.

just curious, but would it make more sense to buy a vehicle that gets better fuel efficiency?

i'm assuming you live on the west coast if your fill-ups are regularly over $100.00...is that correct?


I love the analysis, but it happens to miss the mark. Those are monthly totals, with 3 or 4 tanks of gas per month. I got a bit annoyed when the cost of filling the tank broke $30, but it's still usually below $35.

why not make an effort to minimize the fuel you HAVE to purchase in the first place?

Interesting that you should say that. I've been trying to drive less, with modest success. Filling the tank is about every 10 days now, as opposed to about every 6 days a year ago. Most of this is factors beyond my control that happened to work out well.

I also noticed on my recent trip that putting the cruise control on at the speed limit increased mileage from 24-26 to 27-30 on the highway. Apparently wind resistance is a bigger factor than I thought in my current vehicle. The next long trip will be optimized for fuel economy, and I'll accept the longer drive time.

Alas, the numbers don't work out well in trading for something that gets 30+ mpg around town. Perhaps I can go there when daughter gets her license; let her have the current car and get something smaller for me.

Patzer
Print the post Back To Top
No. of Recommendations: 0
I love the analysis, but it happens to miss the mark. Those are monthly totals, with 3 or 4 tanks of gas per month. I got a bit annoyed when the cost of filling the tank broke $30, but it's still usually below $35.

Entirely my fault for misreading your post. I'll be honest, I clenched my teeth a bit at the thought of *regularly* filling up for over $100 in one visit to the pump.

When my fiancee and I rented a Penske truck + car carrier to move her down here this past May, we had the joy of filling up the 28 gallon tank not once, but THREE times. The prices were only (ha!) about $3.00 per gallon, but we still shelled out over $250 between gas and tolls (they love to hit you for those extra axles) -- this has made the decisions to forego some of our typical summer roadtrips a little easier this year.

We'll miss some of our favorite festivals back up north this August, but I definitely won't miss the travel costs...especially considering we've jumped the "long-distance" hurdle we'd been leaping each month, somewhere between Raleigh and Boston.

Keeping my vehicle in it's best shape, tire pressure included, still only gets me about 26-28 hwy. If I didn't have ~$5k sunk in a new engine and transmission, i'd probably be shopping for something a bit friendlier. But for now, i'll enjoy the peace of mind that comes with having an odometer reading close to six figures, while the powertrain still promises another 70-80k hassle-free miles.

I also find that with the fiancee around, we drive less as well.

"To reduce stress, avoid excitement.
Spend more time with your spouse."

--Robert Orben"

An excerpt from last month's Forbes "Thoughts on the Business Life."

http://members.forbes.com/forbes/2007/0604/212.html
Print the post Back To Top