HOW DO YOU KNOW IF YOU HAVE TOO MANY CREDIT CARDS?
How many are too many? Is there a set rule or a prescribed limit? Apparently not from what I have read. But what I have found is that when I have to spend hours almost daily to monitor them, it is too many for me.
How many Credit Cards Should You Carry? from moneyunder30.com
HOW DID I END UP WITH SO MANY CREDIT CARDS?
When I discovered that cash reward credit cards could be a reliable way to reduce my monthly expenses, I started applying for them as often as I could. Of course, the idea was to get the largest promotional welcome bonus, the highest % of cash rewards as well as a substantial amount of available credit. Therefore for about the last three years, gathering cash reward credit cards has become a major pastime. Well, guess what? Now I have too many cards.
From creditcard.com, One Credit Card or Many? How to Decide?
THE JOURNEY TO TOO MUCH
It has been a tremendously educational experience collecting all the cards I have. Primarily, it has helped and still helps to reduce my expenses. In addition, I have written many blog posts and several Ebooks about this. Doubtless, there will be more. But the most significant comment I can make at this time is that right now I have too many. As I mentioned in a previous blog post, I have reached critical mass.
There are Six Primary Credit Card factors in the major FICO® scoring system as illustrated by Credit Karma®
For most of this time, my primary concern has been focusing on the 5 or 6 FICO® credit score factors that go into building a good credit score. Certain cards have taken priority for charging purchases. Then it recently occurred to me that if I did not start using all of my cards, some could be closed for inactivity. That could affect my credit score negatively by lowering my available credit, changing the average length of time I have had cards and flagging too many closures. Low and behold, that is exactly what happened this week. One of my co-branded cards was closed without notice for inactivity.
Credit Monitoring Alert from CreditSesame.com
HOW MANY CARDS DO I NEED?
I need enough cards to satisfy the FICO® score factors. Fortunately, I found a formula that I could use to determine how many cards to own, which ones to keep and those to phase out since I had surpassed critical mass. These are the factors I now consider in which cards to use:
a. the oldest aged accounts
b. those with the best credit line and lowest credit utilization ratio
c. the ones with optimal returns in my top spending categories
d. those that give me the maximum value for use with my favorite merchants, stores, airlines or hotels
Optimize the Credit Cards You Carry with A ‘ Straight Flush’
HOW MANY CARDS DO I WANT?
My sense is that I would like to have no more than ten at the most. For example, my ‘straight flush’ analogy illustrates most of them. Beyond that, I think that one or two travel cards are essential. Other than that, an additional card or two in the ‘straight flush’ formula would be OK too.
My FICO® score in September 2019 according to CreditJourney
CONCLUSION
I am at a new beginning. I have climbed the credit card mountain in excellent standing. Now it is time to descend the other side with equal care. Therefore future writings on this topic will involve reducing my load doing my best to maintain my great credit card standing while keeping also 6 FICO® score factors in balance.
‘Account Closed, SYNCHRONY NTWRK’. This is the credit monitoring alert I received on September 23, 2019 from two of my weekly lists for credit card account activity. CreditSesame posted one of them and WalletHub posted the other one. Credit Monitoring Alert from CreditSesame.com
Credit Monitoring Alert from WalletHub.com
WHAT DID AN ACCOUNT CLOSING MEAN?
These and other questions raced through my mind. The only thing that was clear was that one of four Synchrony cobranded credit card accounts were involved. The reason was that the symbol ‘SYNCHRONY NTWK’ was included. Other than that, I did not know which card had been closed. In fact, my biggest concern was not which card it was but how this would affect my credit score.
My concern involved several credit card score factors. First of all, as a result of a credit card closing, I would have less available credit. That could affect my ‘available credit ratio’ credit score factor. I could lose points on my credit score because this ratio is one of six major factors in determining one’s credit score. But let me not get ahead of myself. Before anything else, I had to figure out which card had been closed.
Details of account closing notice from CreditSesame.com
WHAT ACCOUNT HAD BEEN CLOSED?
Since I couldn’t tell from the details provided in the closing notice which card had been closed I had some searching to do. In fact, all that was clear was that it was a Synchrony card. That meant it was a co-branded card. In fact, this was the third time a co-branded card had been closed:
First was my Best Buy card co-branded with CitiBank
The Second was my Lane Bryant card co-branded with TD Bank
And now one of my cards co-branded with Synchrony Cards The Synchrony Network card that was cancelled.
THE SEARCH
I went online. One by one I checked each Synchrony cobranded account. When I came to the ‘Welcome Home’ Synchrony card, I received a response that no such account existed. Right there was my clue.
THE EVIDENCE
To be certain, I called them. Sure enough, their response was that the card had remained inactive for too long. Since I had not used it since February 3, 2017, two and a half years, they were entitled to close it without any written warning or final notice. Actually, they do not have to provide any. Instead, I had been responsible for the account closing. This is because I had not paid attention to the cobranded card closing game.
THE COBRANDED CREDIT CARD CLOSING GAME
Then I remembered that this was exactly what had happened with two of the other times there had been a card closing. A pattern began to emerge with these co-branded cards, USE IT OR LOSE IT!.
In fact, inactivity is the death knell for a co-branded card, because:
These cards are primarily designed for making large purchases to be paid over a long period of time without interest. But, the card company does earn interest when the account can’t be paid on time. In addition, this kind of purchase needs to be made on going to keep the co-branded card alive.
The infographic explanation from WalletHub of ‘Why My Credit Score Changed’.
THE EFFECT ON MY CREDIT SCORE
Fortunately, even though I have had a few closings, my credit score seems to have lost only a few points, if any. As a matter of fact, I still have a credit score of over 800. Besides that, I don’t think the ‘length of time factor’ was hurt either. Lastly, I am relieved to have one less card to worry about. Everything should return to my best score within a month or two. But this account closing reminds me of how ‘high maintenance’ a co-branded credit card can be.
There are Six Primary Credit Card factors in the major FICO® scoring system as illustrated by Credit Karma®
From Credit Karma, How Many Credit Cards Does the Average American Have?
WHAT IS CREDIT CARD CRITICAL MASS?
Credit card critical mass refers to the appropriate number and kinds of credit cards to have. How does one know what kinds to have? How many to have? When enough is enough? Then, when is how many too much, therefore, when is it time to stop collecting more or even cut back? What is the best way to cut back? This blog post will attempt to answer these questions. But keep in mind that the numbers and types of cards will vary depending upon the person, their lifestyle and needs.
COLLECTING CREDIT CARDS
When I started collected credit cards, I went through some very active phases. The reason for these was manifold:
a. building up my credit
b. getting promotional welcome bonuses
c. collecting cash rewards
d. establishing the best cash rewards rates
e. traveling bonuses
A straight flush similarity to an ideal collection of cash reward cards. Image from Dreamline.
THE CASH REWARDS SWEET SPOT
At one point in my credit card collecting, I realized that I had achieved a cash rewards credit card sweet spot. I compare this to a straight flush in the card game of poker. The blog post, A Two-Pronged Credit Card Rating System (Part 2 – June 2019) goes into detail about this. The straight cash rewards flush looks like this collection of credit cards: 6% for US supermarkets
5% for purchases at many cobranded store cards
4% for dining out
3% for gas
2% for health care services and items
1.5% for all purchases
REACHING CRITICAL MASS
In the collecting cards phase, I saw only the small picture. At the time I applied for a card, I found it a necessity. After a few years, I accomplished all of my above goals and then some. Not only did I reach my credit card critical mass but in retrospect, I surpassed it. How did I know that I had done this? That was easy to answer. I knew because the number of cards I had to deal with had become unmanageable.
Store Credit Cards image from rewardscreditcards.org
SURPASSING CRITICAL MASS
As the owner of many credit cards, I was forced to see the big picture and began to ask myself these questions:
a. how many cards did I really need?
b. what categories did I spend the most in?
c. with that in mind, which cards did I use most often?
d. which cards was I leaving dormant?
e. why was I having trouble keeping track of my card purchases when it came time to do my monthly accounting?
f. how could I make things more manageable?
g. when was enough, enough?
h. how could I safely cut back on the number of cards I had?
THE CREDIT CARD CRITICAL MASS FORMULA
Fortunately I found a formula I could use to determine about how many cards to own, which ones to keep and those to phase out since I had surpassed critical mass. These are the factors I now consider in which cards to use:
a. the oldest aged accounts
b. those with the best credit line and lowest credit utilization ratio
c. the ones with optimal returns in my top spending categories
d. those that give me the maximum value for use with my favorite merchants, stores, airlines. or hotels
Credit Card Cash Reward Categories are similar to traffic signals, go, caution, turn at your own risk. This image is from Pixabay.
PHASE OUT RATHER THAN CLOSE CARDS
It is best not to close cards. Instead, let them phase out by letting them be dormant. Make sure that any card that has fees stays open only if it is useful by the above standards. Otherwise, close it to avoid any future fees if it is going to be dormant.
IN CONCLUSION
It is beneficial to have both network and co-branded cards when they have value. But it is wisest not to gather more cards than are really necessary. It can become a real nuisance to have too many cards to care for. On the other hand, it is great to have just enough to be helpful and profitable.
There are 5 Credit Card Types, image from Mortgagefit.comAccording to Mortgagefit.com administrator’s blog, there are 5 credit card types. The image to the left illustrates them. They include:
5. co-branded credit
4. store credit
3. charge credit
2. general credit
1. secured credit
In addition, the following describes what they are. This is also according to their blog administrator. Keep in mind that the blog post is from 2011.
There are five types of credit cards according to Mortgagefit.com
5 TYPES OF CREDIT CARDS REDUCED TO THEIR ESSENTIAL 2 PLUS
In my opinion, the administrator’s blog post uses generic definitions. By today’s standards, they are not technical or simple. In addition, the post is dated. As a result, it is not exactly accurate by today’s standards. Therefore, I have attempted to clarify the types of credit cards that exist. In my blog post series written about credit cards, these are the types of credit cards:
1. network
2. co-branded
3. secured and unsecured
In my blog post, Different Types of Credit Cards And Their Best Uses, Part One – July 2019, network and co-branded are explained. Part Two in that series reviews network and co-branded cards as well as explores secure versus unsecured cards. To compare accurately, I want to explain each type individually, mine versus the Mortgagefit.com definitions.
#5.Co-branded
There is some agreement of terms between mine and Mortgagefit.com. #5.co-branded: #Co-branded credit cards: These cards are the same as general credit cards. But these cards have a “special relationship” with a particular organization or retailer. So, if you purchase goods/items from those particular organization or retailers, then you will be able to extra rewards and benefits. However, these cards can be used in other stores as well. A good example of such a card is Amazon.com credit card.”
#1.Secured Cards
“People who have a bad credit history or no credit history at all can take help of these secured cards. These secured cards are similar to that of general credit cards. However, in case of these cards, you must make a fully refundable deposit, either by cash or by sending a check. This deposited amount is considered as your credit line. As a result of this deposit, all the secured cards offer guaranteed approval.” This standard seems to work about the same today. So this card’s name and description are still solid. Here’s one card in both blog post comparisons.
But I find #4.store credit, #3.charge credit, and #2.general credit somewhat confusing. Therefore, I wish to simplify them to be more accurate by today’s standards. Otherwise, they should be eliminated.
#4.store credit, #3.charge credit, and #2.general credit
“General Credit Cards: A very common type of credit card is the general credit cards. Such credit cards don’t require any kind of security deposit and can be used in most stores/shopping malls or to make any kind of purchases.” This seems to describe both network and co-branded cards.
#Charge Cards: These cards are very similar to general credit cards. However, the major difference lies in that fact that unlike general credit cards, you will have to pay your total balance in full every month.” What does this remind you of by today’s standards? The only one, in my opinion, is what is called a store credit card. I find them to be minor players in the credit card count either way. I still find them confusing.
#Store Cards: These cards are similar to that of credit cards. However, these cards can only be used to buy goods at the store that has given you the card. Macy’s Credit Card is a good example of a store card.” These sound like store cards that are not backed by any banks. Therefore, I would combine charge cards and store cards into one kind of credit card. That reduces the number to four kinds of kinds from 5. In addition, I am still confused by charge cards today. I have about five of them. The only reason I got them is for the 5% discount when I charge merchandise in their stores.
CONCLUSION: A FINAL TALLY
What then is really the number of types of credit cards? Let’s look at each category.
1. Secured cards are definitely relevant today especially with people starting out to establish credit. But since they are offered by large banks, and can be upgraded, I do not give them their own category. Total of 0.
2. Somewhere in-store card, charge card, and a general credit card are what we call, the network and co-branding cards. They are unsecured cards and do not need their own category. Total of 2.
3. Charge cards are fazing out overshadowed by the above cards. In my opinion, they rate a total of 0.
WHAT DO YOU THINK? Please go to the comment box and share your thoughts with the world
COMMENTS AND QUESTIONS
This is only a SAMPLE of the comment box that can be found and filled in at the bottom of this page as well as each blog post page.
Readers are welcome to comment on this blog post by scrolling down to the VERY bottom of the page. That is where you will find the comment form where the words ‘start the discussion’ are. Questions are also welcome. But it is best to contact me for Q&A on The Credit Card Maven Facebook Page.
In Part Two, I explore two areas of focus in Credit Card differences. They are network versus co-branded credit cards in addition to secured versus unsecured credit cards.
THE FIRST FOCUS AREA OF CREDIT CARD DIFFERENCES: NETWORK VERSUS CO-BRANDED CARDS
I will answer Credit Card differences in Part Two of Different Types of CreditCards and Their Best Uses. The first question I will answer is, ‘Why get network cards’? Then, ‘Why get store co-branded cards’? And finally, ‘What is the difference’?
NETWORK CREDIT CARDS
Referring back to Part One, it was explained that there are four types of major network credit cards, AMERICAN EXPRESS, DISCOVER, VISA, and MASTERCARD. Purchases can be charged just about anywhere with these cards. But there are no interest-free payment plans available.
There are four major credit card types or networks: American Express, Discover Cards, VISA, and MasterCard. Image from Cardrates.com
COBRANDED CREDIT CARDS
In contrast, co-branded credit cards offer interest-free payment plans. This is what makes them an essential part of credit card differences. The banks that these cards cobrand with are rarely major banks. That is because their primary purpose is cobranding not checking, savings, etc.
Co-branded credit cards from The EXtravel.comHere is an example of special interest free financing with Shop Your Way (Sears/Kmart) cobranded by Citibank
CONCLUSION TO NETWORK VERSUS COBRANDED CREDIT CARDS
Thus a prudent mix of both types of cards is the optimal way to benefiting from credit card differences, the best percentages of cash rewards available combined with interest-free, overtime purchase payments. The blog post A Two-Pronged Credit Card Rating System (Part 2 – June 2019) reviews the reason to get a straight flush scenario with the major network cards.
A straight flush compared to a winning hand of cash reward cards. Image from Dreamline.
THE SECOND FOCUS AREA IN CREDIT CARDS: SECURED VERSUS UNSECURED CARDS
The above questions about network versus cobranded cards will be followed by an explanation of the difference between secured versus unsecured credit cards. On top of that, information about more cobranding banks that were mentioned in the last post will be discussed. Links will be provided in the SOURCES & RESOURCES area, as well.
Quoted from 5 Types of Credit Cards, “People who have a bad credit history or no credit history at all can take help of these secured cards. These secured cards are similar to that of general credit cards. However, in case of these cards, you must make a fully refundable deposit, either by cash or by sending a check. This deposited amount is considered as your credit line. As a result of this deposit, all the secured cards offer guaranteed approval.”
Quoted from the ‘General Credit Cards’ section from the same post, “General Credit Cards: A very common type of credit card is the general credit card. Such credit cards don’t require any kind of security deposit and can be used in most stores/shopping malls or to make any kind of purchases.” This definition would include what we call an unsecured, network credit card or co-branded card.
IN CONCLUSION
As stated earlier, there are really only two kinds of cashback credit cards, network and cobranded. In fact, the secured or unsecured featured is really just a qualification. But it is not its own category as the post 5 Different Types of Credit Cards states.
COMMENTS AND QUESTIONS
This is only a SAMPLE of the comment box that can be found and filled in at the bottom of this page as well as each blog post page.
Readers are welcome to comment on this blog post by scrolling down to the VERY bottom of the page. That is where you will find the comment form with the words ‘start the discussion’. Questions are also welcome. But it is best to contact me for Q&A on The Credit Card Maven Facebook Page.
There are two overall credit card types, network, and cobranded retail store cards. Within these types, there are four network types of cards AMEX, Discover, VISA, and MASTERCARD as well as hundreds of cobranded retail store cards.
This can lead to a great deal of confusion in choosing what to apply for and obtain. Therefore, the goal of this post is to untangle the confusion by identifying the types, networks as well as cobranded ones that exist to distinguish and choose between them. This way, one will have the advantage of applying for and using the best cards while avoiding problematic or less valuable ones.
ADDITIONAL INFORMATION
Besides this post’s specific information, one can find the recently published blog post series on ‘A Credit Card Rating System’. For additional reading, it is filled with information about my helpful Credit Card Rating System in a five-part series.
The traffic signal is the primary visual for this blog series. This image is from Pixabay.
To begin with, there are four networks or ‘major’ Credit Cards. In fact, they are the pillars of the credit card world. Specifically, the first two listed have no bank affiliations. Within them, Discover has the most international acceptance. Then the second two partner with large banks. These cards networks are:
1. AMERICAN EXPRESS (AMEX)
2. DISCOVER
3. MASTERCARD
4. VISA
There are four major credit card types or networks: American Express, Discover Cards, VISA, and MasterCard. Image from Cardrates.com
SECOND TYPE: CO-BRANDED STORE CREDIT CARDS
Store Credit Cards image from rewardscreditcards.orgNext are the store credit cards. There is a significant difference between them and the major network credit cards category. That is their tendency to be backed by smaller banks and their primary function which is to provide no-interest payment plans for making large purchases (hundreds to thousands of dollars) at major retail stores.
EXPLANATION OF CO-BRANDED CARDS
Here’s an explanation of why cobranded cards are so valuable to have as part of the ideal mix of the two major types of credit cards.
The Benefits of Co-Branded Cards in Your Pocket from an unknown source
BEST STORE CREDIT CARDS
What banks do these cards cobrand with? Let’s take a look. This section actually has a list of of some of them as well as the bank affiliations they have. Best Store Credit Cards according to WalletHub.com
Best Retail Store Credit Cards and the banks that cobrand them. Enlargment of above image
BANKS THAT COBRAND THE BEST STORE CREDIT CARDS
According to WalletHub.com, this is a list of the banks that cobrand the best store credit cards. Amazon.com Store Card-Synchrony Bank
Costco Anywhere-Citibank
Target-TD Bank
TJX Store Card-Synchrony Bank
Kohl’s Credit Card-Capital One
Fingerhut Credit Account-WebBank
MORE ABOUT THE BANKS THAT COBRAND STORE CREDIT CARDS
Many stores are cobranded by Synchrony Bank to offer a huge variety of choices
Synchrony Bank
Synchrony Bank specializes in cobranded credit cards. Offering cards that are tailored to particular customers, they have credit cards for store brands, gas stations and more.
“Most are offered with no annual fee and some have excellent rewards available. Synchrony Bank credit cards can be a good choice if you’d like to earn and redeem rewards with a particular brand.” From Synchrony Cards report by US News
Although the following also cobranded with the top retail banks, they will not be gone into in detail at this point. With one exception, Comenity bank which cobrands with 91 retailers will be explored in detail after the list of the other four top cobranding banks. Citibank TD Bank Capital One WebBank
Comenity Bank
91 Comenity Bank partners with retail credit cards from UpgradedPoints.comComenity Bank cobrands with many store credit cards with fleible benefits, quote from upgradedpoints.com
WHAT’S NEXT IN PART TWO
The following issues will be explored in Part Two of this topic, Different Types of Credit Cards And Their Best Uses. Why get network cards? Why get store brand cards? Secured versus unsecured credit cards.
COMMENTS AND QUESTIONS
This is only a SAMPLE of the comment box that can be found and filled in at the bottom of this page as well as each blog post page.
Readers are welcome to comment on this blog post by scrolling down to the VERY bottom of the page. That is where you will find the comment form where the words ‘start the discussion’ are. Questions are also welcome. But it is best to contact me for Q&A on The Credit Card Maven Facebook Page.
Although this final post in the five-part series is about risky cash reward cards and their qualities, I would first like to review the rating system itself. Then this post will get into the details of risky cash reward credit cards and qualities.
CASH REWARD CREDIT CARD RATINGS REVIEW
As explored in earlier posts in this series, I have created a rating system for Cash Reward Credit Cards. It is similar to how traffic signals operate. This image is from Pixabay.
To make the most of cash reward credit cards, it is important to know about the qualities of any cash reward credit card before obtaining or using it. This is because not all cash reward credit cards have the same qualities. Therefore, when you know the qualities, you know how to plan for the most benefits from it and how to avoid the least of them. Let me explain how this works by reviewing the traffic signal system I developed.
THE TRAFFIC SIGNAL SYSTEM FOR CASH REWARD CREDIT CARDS AND QUALITIES
Cash Reward credit cards can be divided into three quality categories similar to a traffic signal: GREEN LIGHT credit card cash reward cards are detailed in the blog post Cash Reward Credit Cards Considerations (June 2019). YELLOW LIGHT cash reward cards are detailed in the blog post, Cash Reward Credit Card Cautions (June 2019). RED LIGHT cash reward cards and qualities are detailed in this blog post. It is about qualities to avoid or even cards with severe drawbacks. If possible, avoid the card limitations but not the card completely if it has redeeming qualities. As the saying goes, ‘don’t throw the baby out with the bathwater’. Sometimes, I find this does apply to cards that have qualities in the RED LIGHT quality category. Thus, here are some situations where this has proven to be the case.
RISKY RATED: PROCEED WITH GREAT CAUTION OR NOT AT ALL
The red ‘Warning’ traffic signal light from Pixaday images.
This post, Part Five of The Credit Card Rating System reveals risky cash reward cards that can present some rather challenging situations. In such cases, I would either pass or proceed with great caution. Anyway, there are several reasons people do acquire such cards:
1. less than stellar credit score which makes better quality cards unavailable
2. lack of knowledge about better quality cards
3. need for any financial benefit at the given time
USE ONLY WITH THE GUIDANCE OF A RELIABLE RATING SYSTEM
As mentioned in Part 4, there are many cash rewards credit cards that require caution when using because of the mixed qualities they possess. I also mentioned that in order to manage all types of cards, I had to set up a system for rating cash reward credit cards.
MY SYSTEM
My system helps determine what degree of cautious awareness is required to use such a card and/or qualities safely. Along these lines, I have reserved this post about risky cash reward cards to focus on what card(s) comprise the riskiest qualities to use. In other words, this post is about the ‘Red Light’ Cash Reward Credit Cards qualities and cards that possess them. These can be the least desirable cards to have.
RED LIGHT CREDIT CARD CASH REWARD CHARACTERISTICS TO AVOID
The red ‘STOP’ light traffic signal light from Pixaday images.
The following information is based upon my own experience and is not necessarily documented research facts. Where it is a fact, a source will be sited.
The CARECREDIT® REWARDS MASTERCARD
For instance, the new CareCredit® Rewards MasterCard has some unusual perks. There are categories in which one can receive 2% cash back. They include medical practitioner charges, drug store charges, and some other unique categories for this rate. But there is a serious limitation in cash reward delivery.
LONG DELAY TO RECEIVE CASH REWARDS
This illustration of a long delay to receive a cash reward is a story about The Care Credit Rewards Card. Promotional signup bonus availability does take the amount of time clearly stated in the application, after 90 days.
On the other hand, cash rewards for the most desirable credit cards take simply a matter of days. Here’s where you can get stopped by a red light. It is also where you may have to weigh whether or not the positive considerations outweigh the qualities to avoid.
When you call, you have to:
1. be specific about asking for the redemption of your cash rewards, in increments of $10
2. verify your information with the customer service representative
3. clearly state, ‘I want to redeem my cash rewards, now’
4. find out when you can expect your cash reward
5. write down every detail each time a call is placed to them about this
The immediate result is the following. It takes one to two billing cycles after calling to request your cash rewards. The number of months delay depends upon what date in relation to the statement date the request is made. Now, are you totally confused as well? I was.
LONG WAIT FOR PROMOTIONAL SIGNUP BONUS TO BE AVAILABLE
In some cases, I have spent the minimum needed to qualify for a promotional bonus in less than the time provided. Some cards will pay me the bonus early. On the other hand, some won’t. It is clear which is preferable. Find out the quality related to this. It is important to know how long the wait is.
CITIBANK N.A. SPONSORED CARDS
Some of the cash back cards sponsored by Citibank, NA are problematic.In addition to VISA, MASTERCARD, AMEX, and DISCOVER CARD, there is a variety of bank-sponsored credit cards such as Citibank N.A., Synchrony Bank, TD Bank, and Comenity. In my experience, Citibank N.A. cards can be problematic. For example, I constantly have trouble logging into my accounts. These include Staples | More Account, and The Home Depot. In addition, one of my accounts was closed without warning due to lack of use. Most credit card companies will write at least once, if not more to notify a customer about an impending closing. To say the least, this is a nuisance if not a real inconvenience.
OTHER QUALITIES AND CARDS TO AVOID OR USE AT YOUR OWN RISK
The red ‘STOP’ light traffic signal light from Pixaday images.
LOW PROMOTION SIGNUP BONUS
There have been times when I really needed a promotional bonus to help pay some bills even if it was only $100. It is not always possible to get the best card with double that rate. Therefore, compromise comes into the picture. Because it’s been quite a while since I needed to signup for one of these cards, I am not sure which they are. But you will find out when you see their offer.
LONG WAIT FOR PROMOTIONAL SIGNUP BONUS TO BE AVAILABLE
In some cases, I have spent the minimum needed to qualify for a promotional bonus in less than the time provided. Some cards will pay me the bonus early. On the other hand, some won’t. It is clear which is preferable. Find out the quality related to this. It is important to know how long the wait is. As mentioned, CareCard Rewards MC is such a card.
$50 MINIMUM IN CASH REWARDS BEFORE DISTRIBUTION IS AVAILABLE
Barclay Bank MasterCard®. There are so many other cards that offer cashback so much quicker. One really needs to question why to bother with this one. Unless this card is used to charge all one’s expenses, it does not make sense to use it. In addition, 1.5% is not such an attractive rate anyway. In my opinion, this is one of those cards to sign up for when you just really need the $100. promotional signup bonuses.
A Review of The Home Depot Card which offers no cash back
NO CASHBACK OR 1% CASH BACK
There are so many cash reward cards with enticing deals that there should be no reason to acquire a card that offers no cashback or only 1% back. Unless there is a good reason, stick to this. Here’s one exception.
When we went to The Home Depot to make some purchases. We got a $25 promotional signup bonus. That paid for what we bought. But after that, the card has sat gathering dust. We have to make a purchase on it or our credit limit will go up at the beginning of next month. At least they wrote to let us know. On the plus side, there are some good promotions on large purchases and time to pay them off.
UNAFFORDABLE HIGH ANNUAL FEES
Some Chase Cards have very high annual fees. But keep in mind that if you can afford it, the benefits can be commensurate with such a fee. But if money for such a fee is not saved and readily available, it can be a disaster.
The Best Buy Citibank Card was cancelled without warning
CANCELLATION OF CARD WITHOUT WARNING FOR LACK OF USE
We had a Best Buy Credit Card issued by Citibank®. We failed to use it within the given time required. But we received no communication from them notifying us that our card would be closed if we did not use it within the given amount of time. To my knowledge, at least one or more letters are required before an account is closed. Shame on you Citibank.
LIMITED ‘LIVE’ HOURS TO REACH THE BANK
This can often be a problem with store credit cards and smaller bank credit card companies rather than large banks. Their hours of in-person availability tend to coincide with regular business hours, 9am-5pm or maybe 8am-8pm. But they are not 24/7.
CONCLUSION
As you can see, there are not always very clear distinctions when it comes to choosing a cash rewards card. Some things may work in your favor while some may not. In addition, ratings and credit card consideration details can change over time. It is best to check the most recent information posted about each credit card. Don’t be afraid to ask questions. Keep asking questions until you get the right answer. Reread this blog post series as well.
Please note: I am not a certified financial planner or professional advisor. These blog posts about the use of credit cards are based on my own experience which I freely share. But I can take no legal or financial responsibility for the results you may have in attempting to follow my system. But I do wish you the best and welcome your questions on the comments at the very end of this post.
Mixed cash rewards are the category of cards that most cash reward cards fit into. Therefore, this blog post will offer much details about this category. Unlike Green Go cards that have excellent ratings, these mixed benefit cards can have many pros and cons. Because of this, I refer to them as yellow light cards. Their mix of offerings can make it very difficult to decide whether to go or to stop from securing one.
CASH REWARD CREDIT CARD RATINGS
To make this easier to understand, the rating system for Cash Reward Credit Cards is similar to how traffic signals control vehicular movement. Image is from Pixabay.
In order to make the most of mixed cash reward credit cards, one should first compile a list of the pros and cons of the cards being considered. I recommend applying for only one card at a time. Let me explain how the mixed category works.
THREE CASH REWARD CARDS BENEFIT CATEGORIES
As described in previous posts in this series, Cash Reward credit cards can be divided into three types of benefit categories. This is similar to how a traffic signal directs vehicular activity. Both the GREENLIGHT and REDLIGHT signal are fairly straight forward in their comment. The former directs one to GO while the latter clear indicates STOP.
But the middle or mixed category does neither clearly. In fact, it leaves the decision up to the driver. That person must make a judgment call on their own. In spite of this, a judgment call does not have to be made blindly.
The yellow ‘caution’ light traffic signal from Pixaday images.
YELLOW LIGHT CASH REWARD CARDS
So far, all the credit cards mentioned in this series have no annual fees. But cards that do have annual fees can pay substantially more rewards, like the Blue Cash Preferred Card from American Express®. For the privilege of the much higher cash reward levels, there is an annual fee of $95. Coincidently, there is also a signup bonus of $250. Right there, the annual fee is offset. For the most part, I prefer not to get cards with annual fees. Somehow, money needs to be made available to pay the fee each year.
MAKING A JUDGMENT CALL
This works well for people with savings. But it may not be practical for Former Middle-Class people who barely make ends meet on a monthly basis to allow for this. Saving up $95 for the annual fee tends to be a luxury reserved for the Middle Class. But, in spite of my limited funds, I made a judgment call and went for a card with an annual fee. My thinking was as follows.
Normally, I get 3% cashback for groceries. Figuring charges of around $400/month for groceries at 3% gives me a return of $12/month. That becomes $24/month at 6%. Over a year, I make an additional expense reduction of $120. That pays for the annual fee of $95. In addition, the promotional signup bonus is $250. This is clearly a win-win situation. I just have to make sure I have the annual fee put aside each year. Another point in its favor is that the total of necessary charges. It is $1000 in 3 months. That is the same as many other cards with fewer benefits.
The Blue Cash Preferred Cash Rewards Credit Card can be an excellent choice for grocery shopping and gas. But you need to pay a $95 annual fee. Recommended by Best Cash Back Credit Cards (June 2019)
MAKE THE BEST FIT FOR A GIVEN CATEGORY
Also, check the fit as described in the third post poker analogy. Does it fit into the % flush or straight flush? Does it have the most benefits for type category you want a card in? Refer back to Blog Post 3as a helpful example. Also refer to the example below.
HOME IMPROVEMENT CARDS
If you are looking to form an ongoing credit card charging relationship with a home improvement superstore, controversy reign on which store and credit card are best. Lowe’s seems to outrank The Home Depot. Also see the review of the Barclaycard in the Sources & Resources Section at the end of this post.
[caption id="attachment_19475" align="alignleft" width="703"] At first glance, a great deal. But read the fine print.
MORE CONSIDERATIONS
Green Go cards are clearly transparent in what makes them excellent considerations for cash reward cards. Yellow mixed consideration cards are not as straight forward. Then, the pros and cons need to be weighed more carefully to decide if one in this category is a good choice. Consider the amount of a promotional bonus they pay. Know the % of return and any limitations regarding that. See which side of the scale they tip to, more pros or more cons.
Check the fine print. That means the not obvious, hidden qualities of the card. As a matter of fact, these can result in more negative than positive qualities. For example, the Barclaycard account sounds good at first glance. But it does have one major drawback. I know of no other card with this drawback. Surprisingly it does not pay cash rewards until $50 worth has been accumulated. So beware of such fine print. In addition, Some other cards charge no annual fee for the first year but do charge one after that.
CONCLUSION
The final post in this series will focus on the qualities and kinds of cards that are in the RED signal area. They should be avoided or pursued with the utmost caution. Because they are risky, sometimes that makes them plain unsuitable in my opinion. In addition, the risk is like making a right turn on red when you’re not sure there was a sign indicating that it is okay to do so. Or you make the turn without looking so see if a card is coming from your left. Beware Risky Cash Reward Cards
Please note: I am not a certified financial planner or professional advisor. These blog posts about the use of credit cards are based on my own experience which I freely share. But I can take no legal or financial responsibility for the results you may have in attempting to follow my system. But I do wish you the best and welcome your comments and questions at the VERY end of this post. You will have reached the end because you can not scroll down any further. As well, you will have reached the comment form.
This post, excellent cash reward cards is the third in this series. By now readers most likely understand that in order to choose excellent cash reward cards including the excellent benefits they offer, it is key to have a reliable cash reward credit card rating system. Then one can best evaluate the quality of any card being considered.
A CASH REWARD CREDIT CARD RATING SYSTEM
My system for rating Cash Reward Credit Cards has two parts. First there is the similarity to how traffic signals regulate traffic.
TO REVIEW IN GENERAL
As a rule, cash reward credit cards offer all kinds of cash benefits as compensation for making purchases with them. In order to make the most of cash reward credit card choices, you need to know a card’s pros and cons.
As a matter of fact, excellent cash reward cards tend not to have much of anything in the way of drawbacks. In other words, you want to pick a card that bats as close to 1000 as possible. That is the purpose of an excellent cash rewards card.
With this in mind, once you know what to look for and what to avoid, then you’ll have the tools necessary to plan for the best card with the most benefits. In other words, an excellent rated card. Let’s look at this more closely.
GREEN LIGHT CREDIT CARD CASH REWARD CARDS
Green light adapted from a Pixaday image.
Greenlight cash reward credit cards offer these types of benefits:
1. good to excellent percentages on cash rewards (3-5%)
2. $150-$200 promotional bonus for opening an account and even more on cards with annual fees
3. cash rewards are available in any amount at any time
4. rewards redemption is possible by a variety of methods
5. choose from several categories for top rewards rate
6. payment date and statement closing dates can be changes
The Bank of America® 2019 Top Rated Cash Reward Credit Card Mastercard is a ‘green light’ card. Specifically, it has a 5-star rating from CompareCards® by Lending Tree
The Bank of America® Cash Rewards MasterCard
Green light adapted from a Pixaday image.One cash rewards credit card that provides all of the qualities listed below is the Bank of America® Cash Rewards Mastercard. In fact, it has been rated No. 1 in Cash Reward Credit Cards for 2019 repeatedly on websites like comparecards.com.
The benefits include:
a. $200 promotional signup bonus
b. 3% reward in a specific categories
c. user can choose which category gets 3% from several options
d. cash rewards accumulated are available in any amount at any time
e. no annual fee
Another top rated card is the Capital One® Quicksilver Card which also has an excellent rating of 4 1/2-stars from NerdWallet.com.
Capital One® Cash Rewards Quicksilver MasterCard
Green light adapted from a Pixaday image.Also a highly rated cash rewards credit card is the Capital One® Quicksilver Card. It’s only possible drawback is the 1.5 percentage rate on cash rewards. But that is still better than getting only 1%. Besides, rewards are available at any time. As a result, the following benefits clearly outweigh the drawbacks on some other cards with a higher % rate.
The benefits include:
a. $150 promotional signup bonus
b. 1.5% everywhere, on everything
c. redeem any amount of rewards at any time
d. no annual fee ever
Please note: I am not a certified financial planner or professional advisor. These blog posts about the use of credit cards are based on my own experience which I freely share. But I can take no legal or financial responsibility for the results you may have in attempting to follow my system. But I do wish you the best and welcome your comments and questions at the VERY end of this post. You will have reached the end because you can not scroll down any further. As well, you will have reached the comment form.
A TWO-PRONGED CASH REWARD CREDIT CARD RATING SYSTEM
I’ve developed a credit card rating system that is very helpful in choosing Cash Reward Credit Cards. Specifically, the system analyses what particular cash rewards credit cards can and can’t do to help lower my monthly charged expenses at any given time.
THE TRAFFIC SIGNAL SYSTEM
My system is similar to the way a traffic signal works. The image is from Pixabay.
To start, the first part of the system is analogous to how a traffic signal operates. In other words, Cash Reward Credit Cards offer percentages of cash benefits to cardholders for charging purchases on their cards. Then, there are a variety of different qualities to benefit from.
To make the most of cash reward credit cards, become familiar with the benefits of all the cash reward credit card accounts being considered. As a refresher to the first post in this series, cash reward credit cards use can be divided into three benefits categories. For example, this is similar to a three-colored traffic signal. Thus, I have named the cash reward credit cards as reflections of the actions to take in response to traffic signal lights:
GREEN LIGHT indicates a clear go-ahead signal YELLOW LIGHT suggests proceeding with some degree of caution RED LIGHT urges avoiding or proceeding at one’s own risk
Study and choose carefully. As mentioned, this is because cash reward credit cards do not all have the same qualities or rates of return. In fact, they can be very different. As a result of studying each card’s personality, one will become familiar with the specific qualities. That way, a person will have an idea of how to plan for the most beneficial outcome. This means studying how best to use each card on its own. It includes observing the power of using them in combination with others.
CREDIT CARD TEAM WORK
In fact, cash reward credit cards work best as a team. Let me explain how this works. Different cards offer a different % of cashback for different categories of purchases. Thus, the ideal situation is to gather a group of the highest rate of cash return for each of the card categories that one uses most. For example, if one charges mostly for groceries and gas each month, the goal would be to acquire cards that pay the highest rate in these categories. In fact, these days that can be between 3% to 5%, and even 6%.
A straight flush compared to a winning hand of cash reward cards. Image from Dreamline.
LET’S PLAY CASH REWARDS POKER
Ironically, credit card teamwork actually reminds me of a winning hand in the card game of poker. In comparing the two, one would want to come up with cards of the same suit. But each with a different card in numerical order. This is known as a straight flush. See the example above. In actuality, the only difference is that in the game of poker there are only 5 playing cards. But in my credit card system, there are ideally 6 credit cards. Therefore, a winning hand would be 6 cards with these percentages in the categories listed:
6% for US supermarkets
5% for all purchases on a store card
4% for dining out
3% for gas
2% for health care
1.5% for all purchases
Here’s a tip from James Wang of WalletHacks.com. Be certain to label credit cards with a magic marker to remind you what card to use for what category of purchase and % of the return. By doing this, you won’t forget and use the wrong card. Remember, you want to get the highest percentage of cash return out of each purchase. For that reason, this clever trick is invaluable.
CONCLUSION
Note that the next three blog posts in this series will specifically explore two things. First, each of the qualities of cash reward credit cards will be explored. Then specific cards will be analyzed. An easy way to remember the categories is Green for GO, Yellow for CAUTION, and Red for AVOID or proceed at your own risk!
Here are the links to all five posts in this series:
Please note: I am not a certified financial planner or professional advisor. These blog posts about the use of credit cards are based on my own experience which I freely share. But I can take no legal or financial responsibility for the results you may have in attempting to follow my system. But I do wish you the best and welcome your comments and questions at the VERY end of this post. You will have reached the end because you can not scroll down any further. As well, you will have reached the comment form.
At first glance, a great deal. But read the fine print.
