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Taking advantage of a credit card cancellation

WalletI just called yesterday to cancel the American Express Gold Card I got back in June when they were running the $250 signup promotion and the officer on the phone who spoke with a nice British accent offered $25 credit to my account if I don’t close the card right away.

I don’t think I am going to keep it for much longer though. The annual fee they start to charge after the introductory year is just ridiculously high.

Another time I was canceling a credit card the agency (Citibank) offered me to move my credit line to another card I had with them. Not that I need any more credit than I already have but still it could come handy one day. It doesn’t cost anything so why not. Also I heard that large credit limits positively affect your credit history (provided you don’t carry big balances).

Sometimes when I call to cancel a credit card the clerks offer low interest balance transfers. If balance transfer is what you are looking for then it is always worth to ask for 0% and no balance transfer fee. Pressured by your intention to cancel the card the officer may be more willing to look for opportunities to offer you a nice promotion. I got 0% a couple of times when canceling a card and used it to finance the remainder of my car loan.

Unfortunately I have never been successful to improve my cash back rate or extend the cash back promotion on my cards, which is what I would like to do the most.

Tell me your story. What perks were you able to bargain for when canceling those credit cards?

The photo is courtesy of Sanja Gjenero @ stock.xchng

$100 after $250 in purchases with Citi Professional

Update 09/13: Citibank has discontinued this promotion. You can find more sign up offers like this one here

Citi $100 gift card offerCredit cards are my passion, I don’t seem to miss a single decent offer. They save me money (cash back rewards and 0% balance offers), they offer convenience (not having to deal with cash), some provide extra warranty and insurance coverage. I use credit cards a lot!

I have spent some time today to examine all on-going credit card promotions and this $100 gift card from Citi looks like the hottest deal out there (excluding probably just the last offer from AmEx which I was told is expiring this week). Let’s take a closer look at what this card is worth.

Citi Professional Card with ThankYou network (offer link)

  • $100 gift card after $250 in purchases (promotion!)
  • 3 ThankYou Points for every dollar you spend at restaurants, gas stations, on auto rentals and certain office supply merchants
  • 1 ThankYou Point on every other dollar spent

$100 sounds very tempting. Let’s see if I miss anything on the rewards part should I switch to this card permanently. I think any cash back card offering same rewards is superior to a ThankYou card because you don’t have to deal with the hassle of converting points to the things you need. Here for comparison are 3 popular cash back cards from Citibank. (this promotion has expired)

Alternative cards

Citi Professional Cash CardCiti Professional Cash Card (offer link)

  • 3% cash back on purchases at restaurants, gas stations, on auto rentals & at certain office supply merchants.
  • 1% on all other purchases

This card is identical to the one above except you miss on the promotion bonus ($100 gift card) but will be getting cash instead of ThankYou points (ThankYou points are rewards points that you can exchange for merchandise or for gift cards from participating merchants at ThankYouNetwork).

Citi Cash Returns CardCiti CashReturns Card (offer link)

  • First 3 months: 5% on all purchases
  • Thereafter: 1% on all purchases after

Straight 5% for 3 months sounds like a good deal. This would be the card of my choice if I expected a lot of upcoming expenses. For example airline tickets for my trip to Ukraine for the entire family were around $5000 which means I would get $250 right there. Otherwise, I would not sign up to this card. 3 months is too little time to rip the benefits. (this promotion has expired)

Citi Divident Platinum SelectCiti Divident Platinum Select (offer link)

  • First 6 months: 5% cash back at gas stations, supermarkets and drug stores, convenience stores, and utilities including cable. 1% on all other purchases
  • Thereafter: 2% cash back at gas stations, supermarkets and drug stores, convenience stores, and utilities including cable. 1% on all other purchases

I currently have this card. For the first 6 months it offered very good cash back rate but after 6 months were over I had to switch to Chase Freedom which offers 3% on similar spending categories plus each time you collect $200 in rewards account, Chase will add $50 which effectively increases your cashback rate from 3% to 3.75%. (this promotion has expired)

Conclusion

Citi Professional with ThankYou network is designed for professionals with significant auto rental and office supply expenses. If it wasn’t for the $100 gift card bonus I would suggest Citi Professional Cash Card instead since it offers the same rewards but in cash.

For us, the average folks with full time jobs, I recommend Chase Freedom. The cashback rate is slightly higher (read above) and rewards categories are a better fit. By the way, it comes with a signup bonus as well, although currently only $50.

My 10% Discover Card cash back bonus

Maybe this image hasn’t turned out very sharp (I was using my cellphone camera) but it won’t stop me from posting it here because this is a letter I received today from Discover Card. In it there are 7 Sharper Image gift cards $80 each — the cash back bonus I accumulated over the past 2 years.

Discover Card 10% Cash BackI use my Discover Card exclusively at gas stations because it pays a flat 5% back on each gas purchase. Now, the most inquisitive readers will quickly calculate that 7 by $80 is $560 which would mean I have spent over $10,000 on gas over the 2 years. This is not so. In fact I spent just around $5,000, roughly $200 a month.

What is the trick? The trick is that with Discover you can use your cash back bonus to buy gift cards at some places for half the face value and Sharper Image store happens to be one of them.

I picked Sharper Image because I am a geeky kind and I love all the cool stuff they sell however you don’t have to. Here is the complete list of their partners. From these, here are those that sell their gift certificates at half the price:

  • Big City Chefs
  • Carnival Cruise Lines
  • Celebrity Cruises
  • Crabtree & Evelyn
  • Enterprise Rent-A-Car
  • FTD.COM
  • Great American Days
  • Holland America
  • Hollywood Video
  • Hyatt Hotels & Resorts
  • Kalamazoo Outdoor Gourmet™ Grills
  • Lenovo
  • Lobster Gram
  • MobileCraze
  • Mrs. Fields
  • Norwegian Cruise Line
  • PGA TOUR Ticket-to-Golf!
  • Princess Cruises
  • Royal Caribbean International
  • Samsonite
  • Sharper Image
  • Sprint
  • Ultra Diamond Outlet

I will spend some of my cash back to buy this digital camera (to replace the one my daughter broke during our trip to Ukraine) and will probably sell the rest using one of these gift card selling services. After all the math is applied, my cash back essentially comes to a flat 10%. What do your cards pay you? Please share in your comments!

For more information on what other cards I have and how I use them, please read my earlier post: Have a credit card — will save.

American Express signup bonus (worth $250)

Update: this American Express promotion has expired, click here for a similar offer from Citibank ($100 gift card after your first purchase)

I had a very rewarding week in the US before I left for Ukraine. The $250 check arrived from the Chase Freedom card promotion I participated in March. Same week I received 25,000 points (worth $250) for signing up to American Express small business credit card offer I participated in December. $500 in one week felt very rewarding! ;-)

I recently received a tip from one of my readers about another limited time promotion American Express is running this month. This time just like in December they offer 25,000 points for signing up to a Business Gold Rewards Card. This card usually has $125 annual membership fee which is waved for one year with this offer. You will need to make one purchase before the end of 2007 and the bonus will be credited to your rewards account within 6-8 weeks.

To participate, click on the image below and fill out the online application. According to the offer description the bonus 25,000 points may be redeemed for one domestic round–trip airline ticket however as I understand these are regular reward points and you can do with them whatever you like (I converted my last bonus into a $250 Home Depot gift certificate). If you participate in this offer, please write about it in the comments.

American Express Credit Card $250 Promotion

Tune up your credit cards!

Credit CardI will admit I am a credit card geek. I consider credit card one of the most influential financial tools ever invented. The notion of being able to charge now and pay later is not new but it is credit cards that made it wide spread. I just love credit cards and the power they give me to pay at my discretion not worrying if I have enough cash on me.

Borrowing money is not however how I use credit cards. I pay my monthly bill in full and carry balance only on some cards that offer 0% interest. The best part about credit cards is what some of them will pay me back in a form cash back or other sorts of rewards, miles or points.

Since every card is different and pays different percentages on different types of expense, I tend to carry a few in my wallet. I wrote about what exactly cards I carry back in February. That set of cards is a result of a careful selection among a number of offers available from several credit card providers.

Once in a while I have to update my cards as providers discontinue their offerings or new better credit cards are launched. Apparently I am not alone in my constant search for that perfect combination which will maximize my rewards. Joel, the founder of CreditCardTuneUp, was solving the same problem back in August 2006 when he faced the dilemma of what to use instead of the discontinued Citi Dividend Platinum Select MasterCard that used to pay 5% back on gas, grocery and drug stores.

I was surprised by how many options I found and the variety of the cards’ reward structures. I was OK with the idea of managing two or even three credit cards if it would mean a substantial increase in rewards. The trick was to figure out the best combination of 2 cards and 3 cards for my spending profile and see the difference in rewards. During my research I realized that there are plenty of other people out there trying to make the same decision about which rewards credit cards to use. So I thought I’d try to solve the general problem and maybe even make the solution available to others.

And so he did and as the result a web tool was born that helps you choose the best combination of up to 3 rewards credit cards based on your spending habits.

Before you rush checking out the website I should warn you that it was obviously made by a geek for geeks. As I first looked at it, the design hurt my eyes and the amount of information overwhelmed me. But I slowly got used to it and started to appreciate the powers it gave me as I was experimenting with different combinations of credit cards.

If you like CreditCardTuneUp you might also want to take a look at this other tool which helps you find the best card to transfer your balance to. However I honestly hope you don’t carry a balance and will not be needing it.

The photo is courtesy of Steve Woods at Stock.Xchng




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