Credit card offer

[rosarugosa]

I'm looking for some input on a decision I'm pondering. I've got an offer from Amex for a Premier Rewards Gold Card. The $175. annual fee is waived for the first year, and they will give me 50,000 points if I spend $1000. in the first three months. Points can be redeemed for gift cards at places where we do shop, and it looks like those 50,000 points would translate to $500. They award double points on gas and groceries, and we could easily hit the $1000 requirement assuming our preferred grocery store and gas stations will take Amex (this needs to be researched). I would hate to pass up $500. free dollars. So I'm wondering about signing on and then cancelling when that $175. renewal comes due. What do you think? Some relevant info: we use cards responsibly and pay off balance every month. We have an e-fund and a good-sized HELOC available, so I'm not really worried about the hard pull on our credit report because I don't anticipate us needing credit in the near future. Would this be a slimy thing to do? For some reason, it makes me feel like a bit of a weasel, although I keep reminding myself that MMM refers to the credit card companies as "evil demons," or something along those lines. Can weasels take unfair advantage of evil demons? :)

[razz]

If you have a cc that works right now, that is enough. It is only by spending your money that you save money on the new cc, maybe. Their terms can be changed at any point and you will be stuck with this card. Weaseling can work both ways so you can be sure that the cc company has carefully crunched the numbers to work in their favour.

I cannot imagine buying into this in any way for any reason. It is like buying something that you don't need to save 30% off.

[Dhiana]

Yes, financially responsible people do take advantage of evil demon CC companies all the time. It's part of the CC company's risk of doing business with customers. You do have to read every line of the contract VERY carefully and make sure the card is accepted at the places you wish to use that 'free' money.
And as razz mentioned they can change the terms anytime they feel like it.

Good Luck!

[sweetana3]

We have thought about such offers before (30 years worth). I finally figured out it was not worth our time or effort to keep track of the "rules" to avoid charges and interest. I can almost guarantee they will get you in the end.

My life energy is not worth the pennies I might earn and there are ALWAYS gottchas in the fine print.

We just took advantage of a rebate offer on an appliance purchase and it took two inserts with the rebate card to explain how to use it and when we would lose the benefit in monthly charges. NOT WORTH IT to us. Note that none of the fine print was available to us when making the appliance purchase.

[SteveinMN]

So you need to spend around $350 a month for three consecutive months to score the "deal". You're also not getting "cash" -- you're getting gift cards, which come with their own strings attached. You might also hit up the AmEx Web site and find out exactly how you go about cancelling the card in time to avoid next year's annual fee. I'd need to read the fine print myself, but, on the face of it, this deal seems to good to be true.

[rosarugosa]

Wow, such cynics :)
I will say that offers like these can be worked to one's advantage. Last year, we got a cc offer for a rewards card with no annual fee, and they offered to give us $150 after we used it once. We did and they did. We used it for purchases we were going to make anyway, groceries if I recall. It actually turns out to be a decent cash-back rewards card, and we have continued to use it for gas and groceries. So they gambled with their enticing offer that we would try the card and like it, and we did. They make money from the merchant on transactions, but get no interest from us because we pay it off every month. So it's low-risk, low profit business for them. As long as we only use it for purchases we would have made anyway, and never pay them interest, it's a win-win.
We also have a card with BoA that we never use. Every once in while they send us an offer, e.g. spend $250. and get $25. cash back. We'll use the card for the next few rounds of gas/groceries, get the credit, then put the card back on ice.
So the Amex deal has some appeal. The biggest question is probably whether our preferred grocery store takes it. It clearly would not be a good deal if we went out and made purchases that we weren't going to make anyway.

[lhamo]

I also don't see what people are so worried about. I signed up for a United-affiliated card this year to get bonus miles -- free for the first year, then a $95 annual fee (which I will not pay -- will cancel before it is due). I also got two free elite lounge passes, and will get free checked bags if I fly on United on tickets booked with the card. I plan to wait and see what fares are like this summer -- if United has the cheapest seats, I'll book using them, if not then I'll just book my work trip in June, use the lounge passes on that trip, and then cancel when I get back. I've already gotten the 50k miles deposited in my account -- that's roughly 1/2 of what I need for a RT transpacific flight that typically costs 1200-1800, so $600-900 in savings right there. I will probably do this with several different cards on a rotating basis. You just fulfill the minimum requirements, use it for a reasonable period, and enjoy your bonuses -- what's not to like?

And for those who start panicking about credit scores, mine actually went UP according to Credit Karma after I got this card from 760 to 780. We had a hefty credit card bill in December from our trip expenses and an Iphone purchase I made for a colleague (used that to meet my spend minimum, actually) so I think that pushed it up a bit, too. We paid it off when due, by the way, as we always do.

For people who have never had problems with credit and overspending, I think these deals are great. Lots of people make a decent bit of cash and in-kind benefits by rotating through different credit card offers. But if you have had issues with overspending then the Dave Ramsey approach is probably more appropriate. YMMV.

[Float On]

If I could keep track of it I would do it.
But....I'm bad at organizing what cards are good for what, how long, and trying to remember to cancel right before that first yearly fee would about put me over the edge.
When all the bills were through the mail, I could remember better. Now that everything is on-line I'm actually worse at keeping it organized.
I would have to pass.
If you can keep it organized and get it cancelled before that annual fee - go for it.

[militaryman]

I have collected thousands ( yes, thousands ) over the last 5 years or so doing this
I have a system that I use to keep track of what the offer is and what my requriemnts are and as soon as I get the reward I close the account --- after awhile they stop sending you the offers and then later down the road they start up again.
So far I have not had any credit score issues. Free $$ -- or at least money for which I have put very little time and effort forth for.

[cindycindy]

I also don't see what people are so worried about. I signed up for a United-affiliated card this year to get bonus miles -- free for the first year, then a $95 annual fee (which I will not pay -- will cancel before it is due). I also got two free elite lounge passes, and will get free checked bags if I fly on United on tickets booked with the card.
.

My husband got that exact card; we just bought plane tickets for a trip that we had planned on taking using the points. Next year when the bill comes with the annual fee, we'll cancel the card. Then, I'll apply for one under my name for our next trip. Yes, it takes some time but a lot of money-saving practices do - cutting coupons, researching purchases, etc.

[rosarugosa]

OK, I've spent WAY too much mental energy pondering this, so I just signed up, and I'll report back on how it works out. DH just got an irresistible offer from CitiBank and I think we're going to have to go for that one too. That one is the same type deal we got last year from Eastern Bank, where there is no annual fee and we'll get $150. statement credit after spending $1000. on the card. I'll wait until we fulfill the requirements on the Amex card first, but the Citi offer is good until July, so that should work out just fine.

[Float On]

I'd recommend keeping a spreadsheet or an alarm in your phone to remind you when your getting close to those annual fees.

[shadowmoss]

I set up reminders to be sent to my primary email to remember to pay all my bills, sent a few days before they are due to have time to take care of it. I would do the same for the credit card. Keeps life simpler. I would take advantage of this offer, btw. Then again, I hand on the MMM website a lot. :) He preaches this as one way to manage money, assuming you are already out of credit card debt and can be trusted not to use the card inappropriately.

[rosarugosa]

FloatOn: I don't have a cell phone, but I can clip a note to my calendar or something like that. Low tech version, but will work nevertheless. Thanks :)
Shadowmoss: We don't have any cc debt and anything we charge gets paid off at the end of the month, so I think this can work to our advantage.