Centsible Cards, Part 1

If you have read this blog and decided that you want to earn and save money, or be able to pay your big bills with credit cards every month, you're probably wondering which cards give you the best rewards.  Come to your Centses is here to help you with this process.  Today, I will begin a series of posts entitled "Centsible Cards".  I will be providing details of the best cards to use to earn a good amount of cash back/rewards for categories outside of mortgage/rent payments that make a up a good chunk of the average consumer's budget.  The first product we will discuss is from American Express.


American Express Blue Cash Everday/Preferred

The American Express Blue Cash offers consumers 3% cash back at grocery stores (up to $6000 in purchases per year), 2% cash back at gas stations and department stores, and 1% cash back everywhere else.  The Preferred version, which I carry, offers 6% cash back at grocery stores (with the same stipulation mentioned above), 3% cash back at gas stations and department stores, and 1% everywhere else.  American Express charges a $75 annual fee for the Preferred version, so it's important to track your spending and make sure that you are still making a profit after factoring in the fee.  The focus of this post will be the Preferred version. 

The American Express Blue Cash Preferred card lets you earn unlimited cash back, and it's pretty easy to redeem.  Once you have earned $25 in rewards, you are able to redeem.  You can earn $25 quickly with this card.  One complaint I have about this card is the amount of time that it takes for the cash back to post.  Essentially, the cash back is available one billing cycle behind the current one.  That means you have to wait almost 30 days after your billing cycle closes to be awarded the cash back dollars.  Once they are awarded, however, you can redeem them in a few easy steps.  Your rewards dollars are displayed prominently on the page, allowing you to click the "Explore Rewards" button to view ways to redeem your cash back.  I personally redeem the cash back as a statement credit.  You do have the option to use it to buy goods in through an online portal, as well as gift cards.  You will get the best value and easiest redemption, generally speaking, by redeeming for a statement credit.  The credit will show up in your balance the day after you redeem it. 

6% cash back at grocery stores is particularly useful for large families.  You can save even more money if you shop at stores that offer fuel points and take advantage of coupons and sales. For instance, Kroger gives 1 fuel point for every dollar spent on items in their store.  They are currently giving 2 fuel points per dollar spent on weekends.  This is definitely something to take advantage of.  Per the terms and conditions, American Express does not count Target, WalMart, and other stores in this category as grocery stores, even though these places have large grocery sections.

Cash back at gas stations can be earned inside the store and at the pump.  This is not the case with all cards that award rewards on gas, so it's important to note this fact.  Purchases at grocery stores and superstores that also sell gas are unfortunately not awarded cash back, per the terms and conditions.

Most department stores qualify for the cash back option.  You can get a list of stores here.

The Blue Cash Preferred offers other features, such as roadside assistance and purchase protection.  You can read about those and other features in detail here.

I believe that this card is a great option for your wallet.  I carry it and have been very pleased with my earnings.  Tomorrow, we will continue our series on the most rewarding credit cards for every day purchases.

Cash back, points, or miles on everything

Come to your Centses is a blog focused on the every day consumer, regardless the size of your paycheck.  Plenty of other blogs exist that help the reader earn rewards that allow them to travel to exotic places at cheap rates.  I'm a reader of those blogs and find that they can be helpful.  Many consumers aren't worried about traveling to Asia or the Caribbean, but they are concerned about making every dollar count.  Come to your Centses is here to help that consumer.

Before I divulge any additional info, I must issue an apology.  The tips provided here will be vital, but will not be explained in full detail.  The information I have gleaned from reading numerous forums and talking to other credit card enthusiasts is closely guarded.  The concern in this community is high that repeated advertising of these deals will lead to them being shut down by the banks.  Ultimately, I will give some tips, but won't go into detail publicly.  I am willing to discuss this information offline.

Prepaid debit card products, such as Rush Card and Bluebird by American Express have bill pay features that allow you to pay any bill.  This includes mortgage and rent payments, water bills, and car payments.  What does that mean to you?  Well, if you indirectly figure out ways to load prepaid debit card products with a credit card, you can use your credit card for every single expenditure in your budget.  That means that you can earn cash back, miles, and points on every single item in your budget.

To fully maximize your rewards, you need to get cards that pay the most rewards possible for the category that you are spending in.  As stated in a previous post, you want to make sure that the rewards are easy to earn and redeem.  In the next post, we'll talk about some of those cards in detail.

The Application Process

Now that we've discussed general rules on how to choose the best card to apply for, let's discuss the application process.  The process isn't too complicated, but there are a couple of important things to keep in mind.

Search for the best signup bonus

Make sure that you scour the web for the best signup bonus.  The credit card issuer will often detail bonuses on their webpage.  Different credit card forums and blogs will display links to special offers as well.  In addition, issuers will send out mailers to flood your mailbox at home.  Finally, you can sometimes locate lucractive bonus opportunities at brick and mortar bank locations as well. 

The best signup bonuses also show up during different times of the year.  For example, the Chase Freedom card bonus varies.  I have received mail offers for anywhere from $100-$300 cash back from Chase.


Tell the truth

Be sure that you don't misrepresent income or anything else on your application.  This could come back to harm you later.  For example, American Express sometimes conducts financial reviews of its customers if they see activity on their cards that trouble them.  American Express will ask you to send in several documents, including information regarding your income.  Providing misinformation can cause accounts to be closed, and you can be blacklisted from applying for other cards from that company in the future.

No doesn't necessarily mean no

If you apply for a card and don't get approved, don't give up.  Their are reconsideration departments at the issuers that can still approve your application, if you can convince them.  Be prepared to discuss items on your credit report and your current financial situation.  Again, make sure that you are honest.  Also, treat the reconsideration representative with respect.  Very often, you will get the result that you want.

Timing is everything

Here is quick disclaimer.  You are responsible for your credit and should make sure to research your credit score.  I offer tips and tricks based on what has worked for me and my credit profile. 

I am able to apply for several credit cards at a time because my credit and spending history supports this.  If you have a new credit profile or have a lower score, you need to start out slowly.  It makes sense to apply for 2 or fewer cards if you fall into the latter category.  I also recommend allowing a good amount of time to pass before attempting to add to your credit card collection.  If you are new to this game, wait about 6 months before you process another application.  Once you have established that you can handle credit well, applications can generally be submitted every 3-6 months, depending on the institution that you are applying for credit from.

The tips above will help you get approved for the best cards and limits based on your credit profile.  In the next post, we will finally delve into products and issuers that will help you save and earn money on everyday expenditures.

How do I determine what cards to apply for?

I would like to begin this post with an important disclaimer.  Applying for credit cards can impact your credit score, sometimes drastically.  Companies will pull your credit report to determine your creditworthiness.  When they do this, an inquiry shows up on your credit report that can ding your score.  Ultimately, you are responsible for your credit and should be sure to consider this and other factors before applying for credit cards.  In addition, if you are about to apply for a mortgage within the next year, I highly recommend that you don't apply for anything until you complete that process, assuming that you want a smooth path to approval and the best possible interest rates.  Having said these things, my goal and purposes is to help fellow consumers by sharing tips and experiences for earning and saving money with credit card rewards and programs.

Now that you're ready to begin applying for credit cards, it's time to identify cards that are worth applying for.  Not sure where to start?  I have some centsible tips.

Make sure the card you apply for earns rewards.


Every card that you apply for should allow you to earn miles, points or cash back.  Avoid applying for any card that doesn't allow this.  During my college years, I was happy to apply for a credit card for a free t-shirt.  Needless to say, that was not a fantastic benefit. 

Get the point.

Regarding points, be aware every point earning card is not created equal.  In a future post, I will discuss the importance of assigning value to points to ensure that you get the most bang for your buck.  As an example, the points I earn on the Chase Sapphire Preferred have a different value from the points earned with the 123 Rewards Visa card for Kroger stores offered by US Bank.  In a future post, I will expound on this premise.

Abide by the 2% Rule.

Generally speaking, you should apply for cards that net a minimum of 2% cash back or 2 miles earned per 1 dollar spent. For example, Fidelity offers American Express cards that meet this criteria. 

Take 5.

There are several cards in the market that offer 5% cash back on select categories of spending throughout the year.  Examples of these categories include gas stations, drugstores, movie theaters, and restaurants.  These are places that we attend regularly.  5% cash back on these purchases can really add up quickly.  I don't see a reason why you shouldn't aim to have every single one of these cards in your wallet.  I currently carry the Discover IT and the Chase Freedom.

Patience is a virtue. But...

Once you earn your rewards, you want to be able to redeem them quickly and easily.  Before applying for a card, check to see if there is a threshold of total rewards earned that you have to reach before you redeem. Also, look to see if you can redeem for gift cards, credit to your statements, or as currency on retailer websites such as Amazon.  Some credit card issuers take a bit longer to apply rewards to your account, thus limiting your ability to cash them out quickly. This doesn't mean that the card isn't worth applying for, but it's something to keep in mind.  Some issuers offer products that require a high threshold be reached before you can redeem. Know this information before applying.

See the fee.

Some rewards cards charge an annual fee, although it is generally waived for the first year.  You need to include the cost of the fee in your calculations if you want to know if a card will benefit you and help you earn and save money.  When I first entered the credit card rewards game, I was averse to annual fees.  Now, I have a few cards out of the 16 that I currently own that have fees.  It made sense to pay the fee in order to earn the rewards after I did the math.  These cards may or may not work for you, so make sure you do the math also.

Take the bribe.

Credit card issuers promise lucrative sign up bonuses to sign up for cards.  Many times these can result in hundreds of dollars worth of rewards or cash back.  Pay attention to the spending threshold that has to be met to receive the sign up bonus.  Also, make sure you know how much time you have to meet that bonus.  Credit card bonuses can net you big cash back and rewards.  I typically apply for several cards at a time so I can reap the benefits quickly.

Plan your attack. 

If you're just getting into the credit card rewards game, you want to set yourself up for success.  Research which issuers are more conservative than others.  Discover is known in the miles, points, and rewards community as a conservative lender.  Also keep in mind that some products that an issuer offers are easier to be approved for than others.  For example, it's pretty easy to get a Chase Freedom card than it is to be approved for the Chase Sapphire Preferred.  You want to plan your application strategy accordingly. I highly encourage you to read credit card forums such as this one on MyFico to learn about the habits of lenders.

I hope that you are coming to your centses and realizing how easy this game is to play with a little research.  In the next few posts, we're going to ramp things up and discuss the actual application process and what to do if you're initially declined for a product.  We are also going to delve into specific card issuers and their products and discuss how to earn and save in detail.  Add a comment and let us know how you choose what cards to apply for.

How do I get in the game? Part II

During part 1 of this post, I shared information about how to get into the credit card rewards game.  Today, we’re going to complete that discussion and cover the credit score in more detail.  MyFico.com has an excellent resource page with information covering credit scores. 

Your credit score is calculated using both positive and negative information on your credit report.  It weighs the information based on a proprietary model and then produces a score.  The illustration below from MyFico.com shows the weighting percentages:

As you can see, payment history and amount owed are the two biggest factors that affect credit scores.  They are controllable factors with the proper knowledge and discipline.  How can this information be used to get into the credit game?

Credit issuers aren’t likely to list a particular score range that is necessary to qualify for one of their products.  Based on anecdotal evidence, you generally want to have a credit score of 660 or higher to get a viable credit product and a score of 720 or higher to acquire the best products and the best rates.  I must stress that this is anecdotal evidence that I have gathered during my many years of perusing credit card forums.  If your score isn’t high enough to get the product that you are shooting for, you here are some tips.

Payment History

Starting today, pay all of your bills on time.  Any payment that is 30 days late, with few exceptions, will show up as a derogatory entry on your credit report.  Even if you pay the bill on day 32, it will take time to recover from the hit that your credit score will take.  Don’t fret and give up if you can’t make the minimum payment.  When you find yourself in this predicament, call your creditor and explain your situation.  Attempt to work out payment arrangements that allow you pay amounts that you can afford without damaging your credit score.  It’s important to note that once a late payment shows up on your report, it’s there for 7 years.  If you’re new to credit, avoid this at all costs.  If you've already experience a mishap, start a new habit of paying on time right
now.  I personally use Mint.com to easily help me keep track of my accounts and due dates.  I encourage you to check out that site.

Amounts Owed

As I mentioned in my profile, I mishandled credit during my collegiate years.  I ended up with accounts in collections a year or so after I graduated.  Realizing the error of my ways, I called my creditors and paid my debts.  Admittedly, I actually negotiated settlements and paid a less than 100% of some my debts.  You can choose to simply pay off the entire amount, or take the same course of action.  I am not promising that a creditor or collection agency will offer a settlement, but it doesn’t hurt to ask.  Once I paid the settlement or entire debt, the account would indicate this on the report.  I encourage you to take control of your financial destiny and take similar steps.  You will have a great sense of accomplishment when you rid yourself of the shackles of debt.

Managing the amounts you owe on your accounts that are open and current is vital to your credit score as well.  This generally applies to your revolving credit, such as credit cards.  Again drawing form anecdotal evidence, you don’t want to use more than 30% of your available credit on any of your individual lines of credit.  Personally, I have decided not to use more than 10% of my available credit.  I believe that this makes me more attractive to lenders, and it makes me less vulnerable if something happened to my financial well being for a period of time.

Here is a vital additional bit of information regarding amounts owed.  Generally speaking, the amounts owed that show on your credit report will be the balance on your account when your billing statement closes.  To ensure that your amounts owed and overall credit utilization is low, you want to make sure that you pay your balances down before the billing cycle ends.  I have made it a habit to ask my credit issuer for my billing cycle close date when I am initially approved for a credit card.

Length of Credit History, New Credit, and Type of Credit Used

The sooner you can get into the credit card game, the sooner you can earn and save money.  It will also help you establish a history with lenders and show a pattern of on time payments.  Applying for new credit can have an impact on your score, but it’s generally small.  You want to slowly add cards to your portfolio if you are a new credit user or recovering from poor credit decisions in the past.  Six months of good payment history is a solid benchmark when you are in this predicament.  Finally, it’s good to have a mixture of installment loans, such as auto loans or mortgages, in addition to the credit cards on your report.

Using the tips above, you can prepare your credit report and score for credit card applications.  In the next few posts, I will discuss the application process and how to determine what cards to apply for.

How do I get in the game?

During yesterday's introduction, I discussed the ability to earn money on everyday spending using credit card rewards.  Undoubtedly, you're wondering: how do I get in the game?  Before you get in the game, you have to prepare yourself. I'm going to explain some steps to take to get into the credit card rewards game.  As a disclaimer, much of the information in this post will be directed to those who have poor credit or no knowledge of how to maximize credit.  If you don't fall into one of those two categories, you'll find more helpful information in later posts.

In order to be approved for the best rewards cards, you will need to have good credit.   It is vitally important to check your credit report and score before you apply for ANY credit product, credit cards notwithstanding.  I'm sure that you have seen some commercials with some catchy tunes promoting sites that provide free credit scores.  Keep in mind that many of these sites ask you to sign up for credit monitoring services in order to acquire your free report.  Government law mandates that receive one free credit report per year. This report doesn't require you to pay for anything. AnnualCreditReport.com is the site that manages those requests for the US consumer and you can access that site here.   Often, you will be able to access your free credit report right away.  If the site can't authenticate you, you'll have to mail in some requested information in order to receive your report. The address and necessary info will be provided in an easy to understand manner.

Once you have ordered your report, check for discrepancies.  Ensure that you don't have incorrect data, such as accounts that you didn't sign up for or improper collection activity.  Peruse your report and pay special attention to the section that discusses potentially negative information.  Bankruptcy, tax liens, IRS levies, and items of that nature will be found here.  Collections accounts, such as unpaid cable or cell phone bills will be find here as well.   If you have something on your credit report that is incorrect, you can dispute that information through the credit bureau and the organization that submitted the derogatory information.  The bureau will then investigate the matter and contact you through your desired method when they have a resolution.  This process can take up to 3 months, so get started right away.  We will discuss later how to handle negative information that is unfortunately accurate.

Besides your credit report, you will also need know your credit score before you get in the game.  Similar to credit reports, there are several different sites out there that will sell you several different types of credit scores.  The bureaus and other companies have generated scores based on internal models. Examples include VantageScore and Transrisk scores.  These products help you gauge your credit health, but generally aren't the scores used by credit issuers.  Instead,  it's vital that you acquire your FICO score. Equifax and Myfico both sell this particular score.   I have personally purchased a FICO score from  Equifax.  Keep in mind that Myfico is just as reputable, so you rest assured that you are ordering a quality product if you choose that site.

Once you purchase your score, the particular company may offer extras in addition to the actual numeric score, such as simulators and tips on understanding how your score was calculated based on your report.  For instance, Equifax will allow you to estimate the impact to your score if you pay off a debt or all of your bills on time over a specified time frame.

Checking your credit report and score are vital steps to getting you into the credit game.  Even once you are in the game, you should be constantly monitoring both so you can maintain your credit and ability to apply and be approved for the best products and rates.

In part 2 of this post, we will take a closer look at the credit score.  We will discuss the breakdown of the score, how to improve your score, and an acceptable range of scores that allow you to secure the best credit products.

Credit cards vs. Cash: Why use credit?

Many people fear credit cards and don't use them because they have preconceived notions that tell them using credit cards leads to big financial trouble and uncontrollable debt.  Credit cards can be trouble for individuals who use them as a source of income and as a means of survival.  In these difficult economic times,  consumers may feel compelled to resort to such methods as a way to support themselves and their families.  Credit cards aren't simply harbingers of financial gloom and doom, however.

Credit cards are powerful tools that can be used to the consumer's advantage.  They can help you manage your cash flow throughout the month.  Cash back and rewards credit cards can help you supplement your income by giving you points or cash back on your everyday spending.  Effectively using these tools will help you avoid being in debt to card issuers, and instead fill your pockets with cash or help you save money on your purchases.

Proponents of the theory that paying for everything with cash is the best way to handle your finances suggest that you spend less money since you can only spend what you carry in your pocket.  Psychologically, a consumer may be apprehensive about a purchase when they realize that all of the cash in their pocket will be gone upon completion of that purchase.  But, why let fear influence your financial life?  Are you really willing to miss out on thousands of dollars in earnings and savings due to lack of knowledge and understanding about how credit cards can work for you?  Maybe you are.  My goal in establishing this blog is to help my fellow consumer.  This space will be a place where consumers that use credit card rewards can demonstrate and share tips about how budgeting your money and having the discipline to stick to that budget will keep you out of financial trouble.  During this journey, I will share information on products, tricks, tips, tools and strategies for earning and saving money on everyday spending.  Along the way, will have a guest author come by and share some Uncommon FashionCents that will include tidbits about fashion and the best way to save money on the hottest fashion.  We will also cover Utter NonCents from time to time which will include tidbits about movies and sports.  

I look forward to this journey and I'm excited that you've decided to join me.  Let's Come to our Centses and put more money into our wallets!