Boston Gal's Open Wallet

if you care about your FICO score, realize it might be negatively affected if you cancel a card you've had for a long time. One of the things that affects your FICO score is credit tenure.

 

Hi Anonymous,

I did think of that. My Amex card says I have been a member since 2001 while my Mastercard says I have been a member since 1998.

When I switched my Mastercard from an airline rewards card to a cash back reward card I made sure to clearly communicate to the customer support person that I wanted to transfer my credit history from my old airline reward card to the new cash back reward card. This should not be a problem if you are switching cards within the same company.

So while cutting my ties with Amex will close an account and might hurt my FICO score in the short term, I will still have the other older card open and active - so it should not be a big loss.

Hopefully I can recover from any ding over the next few years (when I might need a high-as-possible FICO score again).

 

I would keep teh AMEX. The annual fee is for their rewards program. Just drop your membership from the rewards program and keep the card. You never know when you may have a purpose to make use of it.

 

What about switching to a different AMEX card that doesn't have an annual fee? I have a Blue card that I never use, but the knowledge that it's there in case something happens to my VISA (like it being canceled without my knowing about it when my hairdresser reported receipts being stolen).

 

I have a bunch of cards.

Citibank Simplicity - no longer offered but we're grandfathered in. 5% back on gas/pharmacy, 1% else

Citibank driver 6% car, 1% else for first year then 3% and 1%.

American express True Earnings Costco, 3% eating out, 2% travel (excellent travel card, gives fair exchange rate), 1% else

Discover 5% get back more, and 1% on else.

 

Every year I think twice about paying my Amex renewal fee. But when I compare the fee to the benefits I get (gift cards purchased with "points", special discounts and other offers, perks like free programs when buying tickets to certain events, etc) it always comes out in my favor to keep the card. Also, I've on rare occasions encountered businesses that accept Amex, but not Visa/MC. And no, no one at Amex paid me to write this.

 

You could use the same transfer trick and get one of the fee free blue cards from AmEx.

I use my cash back Mastercard as my primary card and the free blue card as a backup.

-Russ

 

If you're a costco member, I highly recommend the Costco Amex card.

The rewards are great. 3% on restaurants and gas, 2% on travel expenses, and 1% on everything else with *no* annual limits.

And no annual fee.

Two years ago my wife travelled a lot for work, and our rebate was $890. Last year, with much less travel our rebate was still around $450.

 

The American Express card is not "free" without the reward program as Chris in Boston said. At least not my green card. My card has an annual fee of $50 and an annual fee of $45 for the reward program. So $95 per year for the card.

Since I travel a lot for business and rack up $10,000 - $20,000 per month on the card which then gets expensed to my company, paying $95 per year for the benefits of the card and the reward points makes sense for me.

Boston Gal sounds like she is no longer racking up large monthly charges on the card and if it is just a secondary card in her wallet, paying $95 per year likely does not make sense and kicking it to the curb is the thing to do.

Looking into switching to the Amex Blue is a good idea, but the benefits for that card generally are not as good as for a comprable reward Visa card - which might be a better second card for BG to carry.

 

I was about to do the same things a couple of years ago. The Amex representative suggested something else. You can apply for the Blue card which is free. THen link your rewards program which will keep any points you still have alive. THen cancel the fee based card and you will still have an Amex rewards card. There are times when the Amex card is best or where some mechants (like Costco) only take that. They still do have the best customer service in town.

 

I'd feel uncomfortable with only one type of card. What if MasterCard's network goes down or something? Why not keep the AmEx to use just in case, assuming you can get the fee waived.

For this reason, I have a Visa (which I never use) and a MasterCard (which earns cash back).

 

I have tried calling American Express in the past to see if I could get the fee waived - it was a no go. As above mentions, yes, I am currently paying $95 per year for this card - $50 annual fee and $45 reward fee.

I am just not that impressed with the Amex Blue card. It would still cost me $45 a year to be part of the reward program.

I definately would not want a second Mastercard. I am thinking of a new Visa card or perhaps the Discover card. I am not sure.

But what I am sure about is I don't want to pay $95 in April just to keep a second card in my wallet. Particularly when I have averaged charging just $40 or less on it per month. So the reward points are not really accumulating and the other benefits associated with the card are just not being used.

 

BG, you might want to take a look at Amex's "Simply Cash" business card. It gives you 5% cash back on gas, office supplies, and wireless services, and 1% cash back on everything else. No annual fee, no limits, and other discounts through the "OPEN Savings" program.
I've had it about a year, and love it.

 

Whatever you do, be careful with that visa /mastercard debit card.

Did you know that debit cards have *none* of all the nice protections against fraudulent charges that credit cards have?

While you can use a visa/mastercard debit card as if it were a credit card (online), I'd recommend against it unless the vendor is reputable. All the risk is with you, as opposed to credit cards where the risk is with the vendor. Want to dispute a charge? Sure, but you've *already paid for it*, and the question is whether you will get refunded.

Read that fine print...

 

USAA credit cards have been the highest rated by consumers for the past few years in a row. They have no fee rewards and cash back cards, great customer service, and they have a long record of keeping people happy so they wouldn't surprise you with fees in the future. They have Mastercards and Amex ;)

 

USAA sounds great, but you need to be a member to get one of those nifty cards and I just don't see myself joining the military for a credit card ;)

Who is Eligible?
Membership is open to:

Children of USAA members.
Active-duty officers and enlisted personnel.
National Guard and Selected Reserve officers and enlisted personnel.
Officer candidates in commissioning programs(Academy, ROTC, OCS/OTS).
Recently retired or separated military personnel.
Former USAA members who had auto or property insurance.

 

I am not going to recommend a specific card, but I tried the one card thing for a little while and got burned when trying to buy something and they didn't take mastercard (and I wasn't carrying that much cash with me). Keep two cards just in case, whether it be a visa or discover.

 

I would keep AMEX. Their buyer's assurance program is the sole reason why I keep the card. Any problems with wonky appliances past the warrenty date or problems with charges, AMEX always sees me through.

 

BG-- you can become a member of USAA for the banking services. You just won't have access to the insurance products.

 

When I investigated getting an Amex card, I couldn't see any point to paying the annnual fee. That was some time ago, but it sounds like you've found similar things from your research.

Few commenters have addressed the question of having one credit card; I think two is much better than one. Every so often something goes wrong with one, and not having a backup makes that much more strenuous than it needs to be. I have a spare credit card (with no annual fee) I keep in a drawer and use once a year, and from time to time it comes in very handy.

 

You might look into the Amex One card, cash back into a high yield savings acct, $30 annual fee.

 

Oh oh! I have a GREAT suggestion! I have an American express JET BLUE card. So far, I think its totally worth it. Now, granted, I have only owned ot half a year... but I am on my way towardsa a free flight with JET BLUE because of this card.

Its easy. 100 pints = free flight.

If you use it and pay it off immediately (duh, YES) then you get points towards a free flight.
If you apply online, you get 25 points towards a free flight.
If you fly, you get points.
I have flown once, just got back from FL, and I have 56 points already... and will have more since I bought a few gifts while down there.
These points dont expire.
I like this card for vacations.

 

I have a Visa and a Discover card. Since we travel overseas at least once a year, the Visa comes in very handy. The visa reward is with miles.

The discover card offers cash back. Often times they have promotions for certain types of stores for a few months. However, i do run into places that do not accept discover

One thing I've noticed (may or may not be true) is that Discover is they're own 'bank'. Whereas my Visa is tied with Chase and United. I tend to get a lot of junk mail to sign up for bank visa cards. Nothing from Discover.

 

Don't forget the Starbucks Duetto Visa. You get 25 free Duetto dollars after your first purchase. After that it's a measly 1% reward rate. But the 25 dollars of free Starbucks decadence is well worth the application for the frugal person that would normally shun $4 coffee.

Be sure to state clearly that you want to use your Duetto dollars when using. Some ignorant sales persons have charged my purchase to my card instead the past. By the time I notice, it's too late. (I don't want to be the guy arguing in line about having been charged $4.) Maybe they're better now that they have all be 'reeducated'.

 

We're fans of the Amex Blue Cash - no annual fee, and if you charge a LOT each year, you'll get a lot in cash back. "Once you spend over $6500 on your Card, you can earn 5% cash back on all your everyday purchases at supermarkets, gas stations and drugstores and 1.5% cash back on all other purchases"

Before that milestone, you get 1% at gas/grocery.drug stores, and 0.5% on everything else. This year, we bought all new appliances and charged it to the Amex, so we're past the milestone already.

Downside: not everyone takes Amex, and you'll only get the big rewards if you charge big. They do have a calculator on their site.

I have the Citicard Drivers Edge Options card for the gas rewards & the mileage rewards. This first year has been nice to me. After the first year, the gas rewards drop to 3%, which isn't as generous, but still a bonus.

 

I recommend that you have a second credit card from a different bank. If you have to put a block on your credit card then you have a back up. I have had banks block my credit card if there was activity they considered suspicious or because of a stolen card, fraudulent charges etc.

There are plenty of banks that offer no annual fee cards, so I don't see any significant benefit from having an American Express. I have an Am Ex Gold card, but would not bother if it did not come with my brokerage account.

 

Boston Gal,

I recommend getting a Visa card for traveling outside the country. I went up
to Quebec recently and was surprised to find that Visa was widely accepted (I left mine at home :()

Discover/Novas may work overseas.

I have:

- Discover Card (use as much as I can and buy up tons of Bed Bath and Beyond gift cards)

- Citibank Dividend Reward Mastercard
(not that great of a card mind you, but is widely accepted)

- Citibank Visa
(never use this. I would have canceled it, if it wasn't for that Canada trip and having a card which I can buy things for my wife without her seeing)

- USAA Mastercard
(great card it seems. My wife manages this, so I haven't been able to directly compare its performance to our Citibank card. We use it only for the sweet 5% gas bonus)

 

First an AMEX Blue card with cash back is an excellent credit card to hold. Lots of interesting benefits and no annual fee. Frugal fatwallet'ers run away from cards with fees because (generally) you can get the same card and benefits without a fee if you work at it.

Second, having accounts that are "old" is important to your FICO score but so is your total balance utilization. If you have 1 card with a limit of $1000 and you put $500 on it your total utilization is 50%.

The higher your total utilization the greater the impact on your FICO score.

Your utilization varies month to month with a bit of a lag to the credit agencies. So you may have to wait a "long" time for it to fall off your report.

If you needed a loan you could end up having to wait or deal with a higher interest rate.

 

Since there seems to be a lot of people on here who know a lot about rewards cards I thought I would post my question (to BG as well). We have a American Airlines citibank card. We put everything that we can on this card to rack up miles (we pay it off every month). This, along with other miles actually flown, usually gets us one ticket to Australia (we go every year to visit family) every other year. The value of this flight is around $1400 to $1500 depending. Is there a card I can get cash back in this amount if we are charging on average about $1400-$1500 per month? The card has an $85 a year fee and I'd like to drop that if I can find another cash reward card that would work for us to just save for the trip with the cash back instead of using the mileage. I want to get away from being locked into flying Qantas (even though they are one of my fave airlines I'd like to be able to take advantage of other airline deals). Thanks!

 

I had the Delta Skymiles AmX for a long time then dropped it down to a fee free Delta "Options" that didn't have an annual fee. I do think it would be frivolous to pay that high an annual fee when you're using less than $45 a month. But if you want to keep your AmX account open, just ask them what they have w/o an annual fee.

 

I would keep the card or get an Amex Blue or another type of Amex with no annual fee. I've noticed that particularly in other countries there are businesses which only accept Mastercard or only accept Amex, etc... Just be on the safe side..

Noi

 

Julie (and maybe BG),

One card you might want to look into is the Starwood AmEx. It is fee free the first year and $45/year thereafter. I believe you receive 10,000 points for applying as well. Every dollar spent earns you one point (and double points when used for purchases at Starwood hotels on top of points earned for staying there). Even if you don't frequent Starwood hotels, the best benefit is that every time you get to 20,000 points, you can convert those points to air miles on a variety of airlines and receive a 5,000 bonus (i.e. 20,000 Starwood points = 25,000 air miles on American Airlines). Some of the conversions aren't as good as that (United is 2:1) but for a lower annual fee than the Citi AAdvantage (I used to have that), you can earn AA miles faster. Of course, the points can also be redeemed for hotel stays at Starwood properties and I think this usually equates to a reward percentage well upwards of 2%.

Hope that helps...

 

Julie (and maybe BG),

Go with the Starwood Amex. Annual fee is $45 (no fee for the first year). You get 10,000 bonus points with your application and thereafter you earn 1 point/dollar. You also get double points on Starwood hotel stays charged to the card (on top of the points you earn for the stay). When you get to 20,000 points, you can convert to AA (or other airlines) and receive a bonus 5,000 miles (i.e. 20,000 Starwood points = 25,000 AAdvantage miles).