3% cash back CC offer, am I missing something?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
MattB
Posts: 649
Joined: Fri May 28, 2021 12:27 am

3% cash back CC offer, am I missing something?

Post by MattB »

Hi Bogleheads,

DW and I typically use Citi bank's double cash, a 2% cash back on everything card.

I received a pre-approved offer today for a new credit card today from "Bank of the West, BNP Paribas." The offer is $200 for spending $1,000 in the first 90 days, "3% cash back on qualifying dining, gas, and grocery purchases," "unlimited 1% back on all other purchases," "0% APR for 18 months," and "No annual fee."

I'm wondering what's the catch? Is anyone familiar with this card? Is there something in the fine print that I'm missing?

The new card seems better for our current situation than the citi double cash, since about 80% of our credit card spending is on groceries, we never carry a credit card balance, and we would get 3% back on that instead of 2. But I'm leery of new cards, intro offers, etc. So thought I would run it by the group.

Thank you for your thoughts.
Jags4186
Posts: 6930
Joined: Wed Jun 18, 2014 7:12 pm

Re: 3% cash back CC offer, am I missing something?

Post by Jags4186 »

There is no catch. That is pretty standard fare for a no annual fee card. You’re free to get that and use the Citi Double Cash for non gas, dining, and grocery purchases.
z3r0c00l
Posts: 3151
Joined: Fri Jul 06, 2012 11:43 am
Location: NYC

Re: 3% cash back CC offer, am I missing something?

Post by z3r0c00l »

Probably nothing, there are a dozen cards offering similar bonuses. Some here (myself included) get all of the cards and use them just enough to get the bonus. Right now the best card I have seen without annual fees is offering $300 on $1500 spend. Lots of $200 cards out there. If you have the time might as well go for it, get a few per year make $1000 or so easy money.

I will make $1500 this year with minimal effort, maybe 1 hour or so total:

$500 from Tasty Works
$400 from Citi
$250 from Ally
$200 from Amex
$misc from cash back

There are going to be some conditions that you have to meet. You may not be able to get a similar bonus from the same bank within x years, or you may have to keep your account open for y months before closing it.
Last edited by z3r0c00l on Wed Aug 03, 2022 7:22 pm, edited 1 time in total.
70% Global Stocks / 25% Bonds / 5% cash
User avatar
anon_investor
Posts: 12311
Joined: Mon Jun 03, 2019 1:43 pm

Re: 3% cash back CC offer, am I missing something?

Post by anon_investor »

That is nothing surprising, many cards now offer extra cash back on certain catagories now. Is there a spending cap for the 3% cash back?
User avatar
whodidntante
Posts: 11003
Joined: Thu Jan 21, 2016 11:11 pm
Location: outside the echo chamber

Re: 3% cash back CC offer, am I missing something?

Post by whodidntante »

Using a 2% cash back card leaves a lot of money on the table. Even the offer you got by mail is not even close to top tier.
Good Listener
Posts: 849
Joined: Wed Dec 30, 2015 5:24 pm

Re: 3% cash back CC offer, am I missing something?

Post by Good Listener »

Coming from an older man, figure out what a 1% difference makes on your total credit card bill and see if it's worth it having another card.
Good Listener
Posts: 849
Joined: Wed Dec 30, 2015 5:24 pm

Re: 3% cash back CC offer, am I missing something?

Post by Good Listener »

Coming from an older man, figure out what a 1% difference makes on your total credit card bill and see if it's worth it having another card.
toddthebod
Posts: 232
Joined: Wed May 18, 2022 12:42 pm

Re: 3% cash back CC offer, am I missing something?

Post by toddthebod »

MattB wrote: Wed Aug 03, 2022 7:11 pm Hi Bogleheads,

DW and I typically use Citi bank's double cash, a 2% cash back on everything card.

I received a pre-approved offer today for a new credit card today from "Bank of the West, BNP Paribas." The offer is $200 for spending $1,000 in the first 90 days, "3% cash back on qualifying dining, gas, and grocery purchases," "unlimited 1% back on all other purchases," "0% APR for 18 months," and "No annual fee."

I'm wondering what's the catch? Is anyone familiar with this card? Is there something in the fine print that I'm missing?

The new card seems better for our current situation than the citi double cash, since about 80% of our credit card spending is on groceries, we never carry a credit card balance, and we would get 3% back on that instead of 2. But I'm leery of new cards, intro offers, etc. So thought I would run it by the group.

Thank you for your thoughts.
My Amazon Visa gives me 5% on Amazon.com and Whole Foods, 2% on gas, restaurants, and drug stores, and 1% on everything else.

My Costco Citi Visa gives me 4% on gas, 3% on restaurants and travel, 2% on everything at Costco (stacks with Executive membership) and 1% on everything else.
User avatar
nisiprius
Advisory Board
Posts: 47214
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: 3% cash back CC offer, am I missing something?

Post by nisiprius »

In case you haven't noticed, companies have all sorts of ways of making a tiny discount or rebate look big. In the case of credit cards, offering the cash back in selected categories is a way of doing that.

Look at how they "fooled" you. You gave the thread the title "3% cash back CC offer." But it isn't 3% back, it's only 3% back on dining, gas, and grocery purchases. Correction, "qualifying" dining, gas, and grocery purchases.

If you actually get this card and keep track, what percentage of the money you spend using this card is really going to be given back to you? I would be astonished if it is anything close to 3%. In order to get 3%, you would need to familiarize yourself with what dining, gas, and grocery purchases are "qualified" and use it for those and nothing else.

And there's even a possibility that the only "qualified" groceries purchases just happen to be at merchants that are just a hair more expensive than others. Do you get 3% cash back on grocery purchases at Walmart? At Costco? At Aldi? Have you checked? I'll bet you don't. It's conceivable that the card might cost you money if it successfully steers you to higher-priced stores.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
yohac
Posts: 517
Joined: Sat Sep 01, 2018 1:42 pm

Re: 3% cash back CC offer, am I missing something?

Post by yohac »

Is 1% of your grocery spending really going to amount to much? I juggle five cards to get the highest cash back for every situation, whereas DW just uses our 2% card for everything. Maybe I save an extra couple hundred a year. It really depends on whether your priority is maximizing or simplicity.
patrick
Posts: 2072
Joined: Fri Sep 04, 2009 3:39 am
Location: Mega-City One

Re: 3% cash back CC offer, am I missing something?

Post by patrick »

nisiprius wrote: Wed Aug 03, 2022 8:24 pm In case you haven't noticed, companies have all sorts of ways of making a tiny discount or rebate look big. In the case of credit cards, offering the cash back in selected categories is a way of doing that.

Look at how they "fooled" you. You gave the thread the title "3% cash back CC offer." But it isn't 3% back, it's only 3% back on dining, gas, and grocery purchases. Correction, "qualifying" dining, gas, and grocery purchases.

If you actually get this card and keep track, what percentage of the money you spend using this card is really going to be given back to you? I would be astonished if it is anything close to 3%. In order to get 3%, you would need to familiarize yourself with what dining, gas, and grocery purchases are "qualified" and use it for those and nothing else.

And there's even a possibility that the only "qualified" groceries purchases just happen to be at merchants that are just a hair more expensive than others. Do you get 3% cash back on grocery purchases at Walmart? At Costco? At Aldi? Have you checked? I'll bet you don't. It's conceivable that the card might cost you money if it successfully steers you to higher-priced stores.
I have not used with the particular card mentioned, but other category cards I've used interpret the category definitions reasonably. As a quick check of my own results, I looked up the most recent monthly statement in which I had made purchases on my Citi Custom Cash, Chase Freedom, Discover, and US Bank Cash Plus cards. Every purchase but one met their 5% categories resulting in an overall cash back of 4.86% of the amount spent on those cards. Of course this does raise the question of why one should accept a card that only gives 3% cashback.
secondcor521
Posts: 785
Joined: Wed Sep 10, 2014 4:11 pm

Re: 3% cash back CC offer, am I missing something?

Post by secondcor521 »

nisiprius wrote: Wed Aug 03, 2022 8:24 pm And there's even a possibility that the only "qualified" groceries purchases just happen to be at merchants that are just a hair more expensive than others. Do you get 3% cash back on grocery purchases at Walmart? At Costco? At Aldi? Have you checked? I'll bet you don't. It's conceivable that the card might cost you money if it successfully steers you to higher-priced stores.
Usually the CC companies don't do this.

The general idea is that they pay you the 3% on the categories that people spend money regularly on so that you'll make it your default credit card and use it for everything. It's no different from a grocery store loss leader - you buy the Doritos for $2.59 a bag, but you need milk and eggs and Cheerios also, and they hope it'll become your regular grocery store for everything.

People who are willing to track all the categories and use different cards at different places can eek out the higher percentages. Many BHers do this I think. The CC companies figure most people aren't that industrious or organized.

OP, the only typical "catch" I know of, other than the one I mention in the second paragraph above, is that there are often redemption hurdles. For example, I have a USBank card that pays 4% for eating out, 2% groceries and gas, and 1% everything else. You earn the points, but you can only redeem them in $25 chunks. Another example is my Fidelity 2% Visa, which can be redeemed for cash at half value (ie 1%) or can be deposited into a Fidelity account to get the full 2% worth (this works for me because I dump the cash back into my Fidelity HSA). Generally you have to log in to cash out points, although many cards will let you set up auto-redemption.

Well, and also there's the fact that a 1% difference on spending might not really add up to much, as a previous poster pointed out. When I did that exercise, I figured out that I'm leaving maybe $50 or $100 on the table by not doing the multiple card / multiple category approach. Which I'm fine paying as a convenience fee to be able to just use a single card (which for me is the Fidelity 2% Visa).
Ron Ronnerson
Posts: 2841
Joined: Sat Oct 26, 2013 6:53 pm
Location: Bay Area

Re: 3% cash back CC offer, am I missing something?

Post by Ron Ronnerson »

This is potentially an outstanding offer. The no annual fee is always nice but the terms of 3% cash back on dining, gas, and groceries is not all that special. You are already earning 2% on the Citi card so the 1% difference is nothing amazing. You can quite likely even find other credit cards that provide just as much or more cash back in the special categories of this card. So I wouldn’t be too taken in by the 3% cash back on a few categories.

Where the card potentially really shines, though, is the 18 months of no interest. I say “potentially” because how great this feature is will depend on the amount of credit line they give you and your willingness to take advantage of that credit line by making use of interest rate arbitrage.

For example, let’s say they give you a credit line of $20k and you come close to maxing it out within a short amount of time. Then you make minimum payments for the next 18 months. The cash you would use to normally pay the balance in full instead goes somewhere earning a rate higher than the zero percent interest rate being charged to you. I Bonds are currently paying 9.62% for the next six months and will likely pay something similar the six months after that so that might be an option.

If you sign up for this and charge tens of thousands of dollars, you’ll earn maybe a couple hundred dollars in cash back (though that part is sort of a wash since you could have very likely earned it just as easily on another card). You also get a $200 bonus for spending $1k in the first 90 days. That’s nice too but nothing to write home about. Now comes the fun part. Assuming you can make 10% (about what I Bonds are currently paying) on that $20k over the next 18 months will earn you $3k.

Your credit score might take a bit of a hit (which could be an issue if you want to borrow for something else like a home loan) and you might not like the feeling of being in debt. However, if you can deal with those things, this offer could make you a decent chunk of money.

I’m currently charging up 3 credit cards offering zero percent for 15-18 months. I make the minimum payment only and will pay the balance in full once the promo ends (or I might transfer the balance to another card if it makes sense to do it).

The real opportunity here is the interest-free loan being offered for 18 months during a time of relatively high inflation. It does come with risks, though, so proceed carefully.
Gronnie
Posts: 309
Joined: Sun Oct 19, 2014 2:08 pm

Re: 3% cash back CC offer, am I missing something?

Post by Gronnie »

If you have a lot of grocery spending the Amex Blue Cash Preferred would be the best card for you.
LittleMaggieMae
Posts: 1797
Joined: Mon Aug 12, 2019 9:06 pm

Re: 3% cash back CC offer, am I missing something?

Post by LittleMaggieMae »

The only thing you may be missing is understanding what merchants "qualify" for the dining, gas, and grocery purchases.
The unlimited 1% on all other purchases isn't that great... I think many of the new offer cards have 1.5% cash back on all purchases.
See if you can find the "fine print" for the merchants who qualify and see how that matches up to how you dine out, buy gas, and grocery shop.
That will tell you if the card is going to work the way you want it to.

I'd also check on how you redeem the rewards just so it isn't a surprise. I have a Wells Fargo card where the minimum amount I can redeem is $25.00 for example.

An example of the annoying need to shop at qualifing merchants would be, I think it's my BoA 123 card, where I don't get the 2% cash back bonus if I buy groceries at Target. And I don't think it liked Meijer's either. :( It's fine with Aldi, Jewel, and my local groceries. I don't shop that often at target or meijers but when I do it's usually a "stock up" and a much bigger spend than at Aldi or Jewel.

Late last year I took a Chase "travel" card offer (I think it's Chase Unlimited Freedom <-- isn't that an oxy-moron??) - I got $250.00 bonus (just had to spend $500 in 3 months), 5% cash back on groceries for 1 year (till November 22) and 1.5% on everything else. Those are the reasons I took the card. That 5% on groceries (includes target and meijers!!) has been awesome. It also gives me 3% cash back at restaurants (I don't eat out much), and 3% at walgreens/cvs (I don't shop there much), and some sort of discount on whatever qualifies as "travel" (I don't do that much either).

I find that the 5% categories from Discover and older Chase Freedom cards (currently gas and paypal) along with the new Chase "travel" card's 1.5% is giving me more "rewards" for my spending habits. (A typical month of CC spending (across all cards) is usually 1K or less). I'm getting 5% cash back on gas and most of my internet purchases (Chewy's & Amazon) for 3 months - and of course 5% cash back on groceries.

Would you be better looking for a bonus deal where the card has rotating 5% offers? (gas, groceries, amazon, home improvement) with a 1.5% cash back on everything else? And get 5% cash back at least some of the time during the year on stuff you purchase most often?
User avatar
anon_investor
Posts: 12311
Joined: Mon Jun 03, 2019 1:43 pm

Re: 3% cash back CC offer, am I missing something?

Post by anon_investor »

LittleMaggieMae wrote: Wed Aug 03, 2022 11:04 pm The only thing you may be missing is understanding what merchants "qualify" for the dining, gas, and grocery purchases.
The unlimited 1% on all other purchases isn't that great... I think many of the new offer cards have 1.5% cash back on all purchases.
See if you can find the "fine print" for the merchants who qualify and see how that matches up to how you dine out, buy gas, and grocery shop.
That will tell you if the card is going to work the way you want it to.

I'd also check on how you redeem the rewards just so it isn't a surprise. I have a Wells Fargo card where the minimum amount I can redeem is $25.00 for example.

An example of the annoying need to shop at qualifing merchants would be, I think it's my BoA 123 card, where I don't get the 2% cash back bonus if I buy groceries at Target. And I don't think it liked Meijer's either. :( It's fine with Aldi, Jewel, and my local groceries. I don't shop that often at target or meijers but when I do it's usually a "stock up" and a much bigger spend than at Aldi or Jewel.

Late last year I took a Chase "travel" card offer (I think it's Chase Unlimited Freedom <-- isn't that an oxy-moron??) - I got $250.00 bonus (just had to spend $500 in 3 months), 5% cash back on groceries for 1 year (till November 22) and 1.5% on everything else. Those are the reasons I took the card. That 5% on groceries (includes target and meijers!!) has been awesome. It also gives me 3% cash back at restaurants (I don't eat out much), and 3% at walgreens/cvs (I don't shop there much), and some sort of discount on whatever qualifies as "travel" (I don't do that much either).

I find that the 5% categories from Discover and older Chase Freedom cards (currently gas and paypal) along with the new Chase "travel" card's 1.5% is giving me more "rewards" for my spending habits. (A typical month of CC spending (across all cards) is usually 1K or less). I'm getting 5% cash back on gas and most of my internet purchases (Chewy's & Amazon) for 3 months - and of course 5% cash back on groceries.

Would you be better looking for a bonus deal where the card has rotating 5% offers? (gas, groceries, amazon, home improvement) with a 1.5% cash back on everything else? And get 5% cash back at least some of the time during the year on stuff you purchase most often?
Those PayPal 5% catagories are golden. Those quarters I use PayPal Bill Pay to pay my utlity bills with those CCs and always can hit the quarterly spend cap ($1,500) to net the maximum cash back of $75.
cowbman
Posts: 357
Joined: Sat Jan 14, 2017 2:10 pm

Re: 3% cash back CC offer, am I missing something?

Post by cowbman »

The OP may wish to consider the Bank of America Preferred Rewards program, if he/she values cash and simplicity.
Topic Author
MattB
Posts: 649
Joined: Fri May 28, 2021 12:27 am

Re: 3% cash back CC offer, am I missing something?

Post by MattB »

Thanks, all, for your responses.
cowbman wrote: Thu Aug 04, 2022 1:37 am The OP may wish to consider the Bank of America Preferred Rewards program, if he/she values cash and simplicity.
I think this may be where we're headed in the long term.
LittleMaggieMae wrote: Wed Aug 03, 2022 11:04 pm The only thing you may be missing is understanding what merchants "qualify" for the dining, gas, and grocery purchases.

...

I'd also check on how you redeem the rewards just so it isn't a surprise. I have a Wells Fargo card where the minimum amount I can redeem is $25.00 for example.

...

Would you be better looking for a bonus deal where the card has rotating 5% offers? (gas, groceries, amazon, home improvement) with a 1.5% cash back on everything else?
I'm going to give it a try to see if our regular grocery store (TJ's) is included. If so, I'll keep this at least until I've earned the $200 sign on bonus, and probably for some time after that. If not, I'll get an amex with the 6% on groceries, because I understand they code TJ's as a grocery store.

The card comes with a $25 minimum to redeem. But that shouldn't be too hard to meet. We spend about $1k in groceries/month, which would be $30 back.

I don't have the attention span for rotating categories. I prefer one card for one purpose. Or one card for all purposes, etc.
nisiprius wrote: Wed Aug 03, 2022 8:24 pm Look at how they "fooled" you. You gave the thread the title "3% cash back CC offer." But it isn't 3% back, it's only 3% back on dining, gas, and grocery purchases. Correction, "qualifying" dining, gas, and grocery purchases.

If you actually get this card and keep track, what percentage of the money you spend using this card is really going to be given back to you? I would be astonished if it is anything close to 3%. In order to get 3%, you would need to familiarize yourself with what dining, gas, and grocery purchases are "qualified" and use it for those and nothing else.

And there's even a possibility that the only "qualified" groceries purchases just happen to be at merchants that are just a hair more expensive than others. Do you get 3% cash back on grocery purchases at Walmart? At Costco? At Aldi? Have you checked? I'll bet you don't. It's conceivable that the card might cost you money if it successfully steers you to higher-priced stores.
I wouldn't say I was "fooled" so much as I didn't think it was worth writing "3% back on qualifying dining, gas, and groceries; with no limit on dining or groceries, and a $1,500 quarterly limit on gas; with no annual fee; etc." in the subject line.

I would also say that I could probably get 3% of my spend back. I'm planning to use this card for gas, groceries, and eating out. I don't spend anywhere close to the limit on gas each month, maybe $60. And groceries and eating out are unlimited categories. I'll report back after a few months.
User avatar
jeffyscott
Posts: 11270
Joined: Tue Feb 27, 2007 9:12 am

Re: 3% cash back CC offer, am I missing something?

Post by jeffyscott »

Gronnie wrote: Wed Aug 03, 2022 10:39 pm If you have a lot of grocery spending the Amex Blue Cash Preferred would be the best card for you.
That card has an annual fee of $95 and 6% on groceries, up to $6000 per year. Citi Custom Cash is the better option for groceries, with no annual fee and 5% on $500 per month in grocery store spending, as long as that is your top category. We also got a $200 bonus for spending $1000 in first 90 days, not sure if Custom Cash is still offering that.

Since we use it only for grocery stores, we always get 5% on that category. The Amex card net rebate for groceries would be 4.42% at best ($6000 x 6% - $95 = $265 net rebate, which is 4.42% of $6000).
The two greatest enemies of the equity fund investor are expenses and emotions. ― John C. Bogle
Jack FFR1846
Posts: 15322
Joined: Tue Dec 31, 2013 7:05 am
Location: 26 miles, 385 yards west of Copley Square

Re: 3% cash back CC offer, am I missing something?

Post by Jack FFR1846 »

There are lots of high offers for spending categories these days. Every quarter, my Citi Sears card has sent me targeted (I think) offers. Last quarter was 10% for restaurants, grocery and gas. This month, it's 10% on everything with a minimum of $1000 spend. I do make sure to read the offers as the first quarter was 10% only on spend between $500 and something strange like $1250. All of this is paid in thank you points that I redeem for CVS gift cards to get the max percent back. Oh, when you do redeem, always look at what you get back. If I have enough for a $100 CVS card, it would only give me $50 for a statement credit.
Bogle: Smart Beta is stupid
stoptothink
Posts: 11993
Joined: Fri Dec 31, 2010 9:53 am

Re: 3% cash back CC offer, am I missing something?

Post by stoptothink »

Just make sure that the places you shop are actually categorized as "groceries". Neither of the three grocery stores that I shop at 99% of the time are, they are all categorized as "shopping" even though two of them sell nothing but groceries (the 3rd is Walmart).
michaeljc70
Posts: 8753
Joined: Thu Oct 15, 2015 3:53 pm

Re: 3% cash back CC offer, am I missing something?

Post by michaeljc70 »

cowbman wrote: Thu Aug 04, 2022 1:37 am The OP may wish to consider the Bank of America Preferred Rewards program, if he/she values cash and simplicity.
If you consider opening a Bank of America bank account, a BOA credit card and a Merrill Lynch brokerage account "simplicity"....
MotoTrojan
Posts: 11238
Joined: Wed Feb 01, 2017 8:39 pm

Re: 3% cash back CC offer, am I missing something?

Post by MotoTrojan »

Wells Fargo Propel (Amex) is a free card and is also 3% back on dining, gas, but also travel (super helpful for me). Plus if you also get a Visa Signature card (also free) you can transfer your points and turn that 3% cash-back into 4.5% off on travel booked through their portal.
AlphabetBackward
Posts: 7
Joined: Mon Feb 04, 2019 6:23 pm

Re: 3% cash back CC offer, am I missing something?

Post by AlphabetBackward »

I got this card back in 2020 before the pandemic mainly for the sign up bonus though I didn't have a 0% promotion.

I only used it for groceries as I didn't have a card that beat the 3% (until the Citi Custom). Unless things have changed, you can only redeem rewards in 25 dollar increments which I hate.

And I can't attest to this, but I had a similar card from Golden 1 CU with the 3% in the same categories and I didn't get the dining 3% at a Hawaiian BBQ chain/fast food so maybe the dining might be a bit more restrictive. Bank of America's dining on the Customized Cash seems to cover more in my experience, but your mileage may vary.

Otherwise, pretty normal card but I'm letting it close since I have better cards.
cowbman
Posts: 357
Joined: Sat Jan 14, 2017 2:10 pm

Re: 3% cash back CC offer, am I missing something?

Post by cowbman »

michaeljc70 wrote: Thu Aug 04, 2022 7:29 am
cowbman wrote: Thu Aug 04, 2022 1:37 am The OP may wish to consider the Bank of America Preferred Rewards program, if he/she values cash and simplicity.
If you consider opening a Bank of America bank account, a BOA credit card and a Merrill Lynch brokerage account "simplicity"....
This does require some initial work, but relatively little ongoing work
User avatar
anon_investor
Posts: 12311
Joined: Mon Jun 03, 2019 1:43 pm

Re: 3% cash back CC offer, am I missing something?

Post by anon_investor »

michaeljc70 wrote: Thu Aug 04, 2022 7:29 am
cowbman wrote: Thu Aug 04, 2022 1:37 am The OP may wish to consider the Bank of America Preferred Rewards program, if he/she values cash and simplicity.
If you consider opening a Bank of America bank account, a BOA credit card and a Merrill Lynch brokerage account "simplicity"....
Not simplicity, but some of the best cash back rewards available (if you have $100k to park in a Merrill Edge account - this includes IRAs).
Topic Author
MattB
Posts: 649
Joined: Fri May 28, 2021 12:27 am

Re: 3% cash back CC offer, am I missing something?

Post by MattB »

anon_investor wrote: Thu Aug 04, 2022 8:07 am
michaeljc70 wrote: Thu Aug 04, 2022 7:29 am
cowbman wrote: Thu Aug 04, 2022 1:37 am The OP may wish to consider the Bank of America Preferred Rewards program, if he/she values cash and simplicity.
If you consider opening a Bank of America bank account, a BOA credit card and a Merrill Lynch brokerage account "simplicity"....
Not simplicity, but some of the best cash back rewards available (if you have $100k to park in a Merrill Edge account - this includes IRAs).
Thank you for the comment. This has been a really helpful thread. And you've pushed me to seriously consider going for the preferred rewards program.
User avatar
anon_investor
Posts: 12311
Joined: Mon Jun 03, 2019 1:43 pm

Re: 3% cash back CC offer, am I missing something?

Post by anon_investor »

MattB wrote: Thu Aug 04, 2022 9:08 am
anon_investor wrote: Thu Aug 04, 2022 8:07 am
michaeljc70 wrote: Thu Aug 04, 2022 7:29 am
cowbman wrote: Thu Aug 04, 2022 1:37 am The OP may wish to consider the Bank of America Preferred Rewards program, if he/she values cash and simplicity.
If you consider opening a Bank of America bank account, a BOA credit card and a Merrill Lynch brokerage account "simplicity"....
Not simplicity, but some of the best cash back rewards available (if you have $100k to park in a Merrill Edge account - this includes IRAs).
Thank you for the comment. This has been a really helpful thread. And you've pushed me to seriously consider going for the preferred rewards program.
Definitely check out the megathread:
viewtopic.php?f=2&t=150033&newpost=6806910&view
User avatar
jeffyscott
Posts: 11270
Joined: Tue Feb 27, 2007 9:12 am

Re: 3% cash back CC offer, am I missing something?

Post by jeffyscott »

michaeljc70 wrote: Thu Aug 04, 2022 7:29 am
cowbman wrote: Thu Aug 04, 2022 1:37 am The OP may wish to consider the Bank of America Preferred Rewards program, if he/she values cash and simplicity.
If you consider opening a Bank of America bank account, a BOA credit card and a Merrill Lynch brokerage account "simplicity"....
Not to mention, juggling multiple credit cards in order to optimize rewards. I may one day migrate to this program, but then I have about 15 open credit card accounts and over 1 million airline and hotel points accumulated mainly from sign-up bonuses and use as many as 8-10 different cards in a month, while the OP implied that they generally put everything on one card and stated "I'm leery of new cards, intro offers, etc.".

For groceries, I think you can get 3.5% under the B of A PR program, less than Citi Custom but with a higher cap (the higher limit does nothing for me, but may matter to the OP, who spends $1000 per month). Or if, like me, your groceries are ordered online with free pick-up, then it's 5.25%. If the OP would get 3.5% rather than 3% on groceries of $1000 per month, that's only $60 per year, but if it would be 5.25% then it'd be $270 per year.

I think it's a $2500 per quarter spending limit for those B of A rebates, so the OP may need multiple cards in order to get the 5.25% or 3.5% on all groceries. So then, perhaps getting two custom cash cards would be the easier route to get nearly the same as the 5.25% or much more than the 3.5%?
The two greatest enemies of the equity fund investor are expenses and emotions. ― John C. Bogle
pshonore
Posts: 7767
Joined: Sun Jun 28, 2009 2:21 pm

Re: 3% cash back CC offer, am I missing something?

Post by pshonore »

If I'm buying groceries in a real grocery store (Aldi, Chain grocery, etc) I use the AMEX card and get 6% back. If I'm in Walmart, I use the Wmart pay app and get 5.25 % back (online category with BOA rewards). I also get the 5.25% on prescriptions and everything else at Wmart that way. Gas and dining goes on Citi Costco at 4% and 3% respectively. Most others go USAA at 2.5% - soon to change to BOA at 2.625% since USAA is dropping to 1.5%. Wish I could find a good deal on fuel oil -right now I get 2.625% from BOA.
manlymatt83
Posts: 743
Joined: Tue Jan 30, 2018 8:23 am

Re: 3% cash back CC offer, am I missing something?

Post by manlymatt83 »

Have you seen the Blue Cash Preferred card? 6% on groceries. It does have an annual fee but if you do the math, it can work in your favor pretty quickly.
smooth_rough
Posts: 160
Joined: Sat Feb 12, 2022 2:14 pm

Re: 3% cash back CC offer, am I missing something?

Post by smooth_rough »

I'm seeing cards mentioned here, that I don't see on NerdWallet, or WalletHub.

What are best sites to rank the current credit card offerings?
Ron Ronnerson
Posts: 2841
Joined: Sat Oct 26, 2013 6:53 pm
Location: Bay Area

Re: 3% cash back CC offer, am I missing something?

Post by Ron Ronnerson »

smooth_rough wrote: Thu Aug 04, 2022 4:48 pm I'm seeing cards mentioned here, that I don't see on NerdWallet, or WalletHub.

What are best sites to rank the current credit card offerings?
This is one that I sometimes use: https://www.doctorofcredit.com/best-cur ... n-bonuses/
User avatar
dodecahedron
Posts: 6333
Joined: Tue Nov 12, 2013 12:28 pm

Re: 3% cash back CC offer, am I missing something?

Post by dodecahedron »

nisiprius wrote: Wed Aug 03, 2022 8:24 pm And there's even a possibility that the only "qualified" groceries purchases just happen to be at merchants that are just a hair more expensive than others. Do you get 3% cash back on grocery purchases at Walmart? At Costco? At Aldi? Have you checked? I'll bet you don't. It's conceivable that the card might cost you money if it successfully steers you to higher-priced stores.
Checking the fine print is always good advice, and I can't say about the rules for the SilverCard, since I am unfamiliar with that specific card, but the OP now says he believes he will be heading towards the BoA cards.

If nisiprius is betting that the 3.5% grocery rewards for the BoA Cash Rewards cards do not apply to Walmart, Costco, and Aldi, he is betting on the wrong side.

BoA defines the grocery category to include warehouse stores as well as conventional supermarkets. And in fact, as FrugalProfessor has pointed out, it is actually possible to get 5.25% from BoA Cash Rewards credit cards on grocery store purchases if the store provides a way to pay with an online app (as Walmart does) or a workaround like using store giftcards bought online (as Costco does.) With Aldi, you do admittedly have to "settle" for 3.5% since they don't have an online payment app nor do they sell store gift cards online.

FrugalProfessor has refined this to a fine art: he gets 5.25% cash back on most of his credit card purchases and 8.75% back on Walmart and 9.25% at CVS.
User avatar
anon_investor
Posts: 12311
Joined: Mon Jun 03, 2019 1:43 pm

Re: 3% cash back CC offer, am I missing something?

Post by anon_investor »

dodecahedron wrote: Thu Aug 04, 2022 5:01 pm
nisiprius wrote: Wed Aug 03, 2022 8:24 pm And there's even a possibility that the only "qualified" groceries purchases just happen to be at merchants that are just a hair more expensive than others. Do you get 3% cash back on grocery purchases at Walmart? At Costco? At Aldi? Have you checked? I'll bet you don't. It's conceivable that the card might cost you money if it successfully steers you to higher-priced stores.
Checking the fine print is always good advice, and I can't say about the rules for the SilverCard, since I am unfamiliar with that specific card, but the OP now says he believes he will be heading towards the BoA cards.

If nisiprius is betting that the 3.5% grocery rewards for the BoA Cash Rewards cards do not apply to Walmart, Costco, and Aldi, he is betting on the wrong side.

BoA defines the grocery category to include warehouse stores as well as conventional supermarkets. And in fact, as FrugalProfessor has pointed out, it is actually possible to get 5.25% from BoA Cash Rewards credit cards on grocery store purchases if the store provides a way to pay with an online app (as Walmart does) or a workaround like using store giftcards bought online (as Costco does.) With Aldi, you do admittedly have to "settle" for 3.5% since they don't have an online payment app nor do they sell store gift cards online.

FrugalProfessor has refined this to a fine art: he gets 5.25% cash back on most of his credit card purchases and 8.75% back on Walmart and 9.25% at CVS.
I have 2 of the BoA Customized Cash Rewards Visas specifically because I can get 3.5% cash back at Costco and 5.25% cash back at Costco.com. We do a lot of shopping at Costco...
tomsense76
Posts: 1375
Joined: Wed Oct 14, 2020 1:52 am

Re: 3% cash back CC offer, am I missing something?

Post by tomsense76 »

nisiprius wrote: Wed Aug 03, 2022 8:24 pm In case you haven't noticed, companies have all sorts of ways of making a tiny discount or rebate look big. In the case of credit cards, offering the cash back in selected categories is a way of doing that.

Look at how they "fooled" you. You gave the thread the title "3% cash back CC offer." But it isn't 3% back, it's only 3% back on dining, gas, and grocery purchases. Correction, "qualifying" dining, gas, and grocery purchases.

If you actually get this card and keep track, what percentage of the money you spend using this card is really going to be given back to you? I would be astonished if it is anything close to 3%. In order to get 3%, you would need to familiarize yourself with what dining, gas, and grocery purchases are "qualified" and use it for those and nothing else.

And there's even a possibility that the only "qualified" groceries purchases just happen to be at merchants that are just a hair more expensive than others. Do you get 3% cash back on grocery purchases at Walmart? At Costco? At Aldi? Have you checked? I'll bet you don't. It's conceivable that the card might cost you money if it successfully steers you to higher-priced stores.
All they mean by qualified is they provide cash back based on a merchant category code (MCC) associated with each transaction. If the OP (or anyone) looks at their cash back credit card agreement in detail, it will spell out which MCCs qualify for cash back. There is much more detail about what each MCC means. In some cases they do associate with a specific merchant (like a particular airline or hotel chain) and this does get used by some travel cards for example. However most of the time (like with groceries, gas stations, pharmacies, etc.), they are lumped into one big category code. There of course can be gray areas where it is unclear how a merchant will be classified. For example at my local farmers market, they sometimes sell prepared food. It is not always clear if it will qualify as grocery or restaurant. Sometimes one needs to just try it and see what happens.

That said, it isn't unreasonable to wonder why there is cashback at all. The first part of the answer is simply that there are high transaction costs associated with cards, which the credit card companies are sharing with the consumer. The second part of the answer is the credit card companies are collecting user data and using it themselves or selling it to third parties (this article about the Visa & Plaid planned merger helps give a flavor of what is going on; should add this particular merger was blocked by DOJ). Both of these reasons have attracted a wave of fintech companies in recent years all hoping to take market share away from the major players.

So the question any consumer should be asking, is who am I comfortable sharing my data with and what data? In the cases where one doesn't want to share data, they should just be paying in cash (an example where one might want privacy is buying a prescription for a special condition). In some cases cash gets a discount anyways due to the lack of transaction costs paid by the merchant. Also in the case of small businesses, using cash may go a bit further for the business.

In the long term, would expect improvements in financial transaction processing to result in lower cashback offerings over time.
"Anyone who claims to understand quantum theory is either lying or crazy" -- Richard Feynman
Post Reply