Last week an email scudded into my inbox, telling me I have three months to use my hard-earned US Air miles, or they expire unless I book another US Air flight before their end-of-life date. Their life cycle is now down to 18 months! It only makes sense to book if I have somewhere I need to go, so this is yet another way in which this particular airline, which hogs 2/3 of the flights in Philadelphia, infuriates me.
So Ron Lieber's article today in the New York Times on loyalty bonus clubs caught me eye. He is more of a fan than I am, for sure. His take is that free miles and hotel rooms help you afford travel treats you wouldn't have the money to pay for; my take is that if you're tight for cash, discretionary travel is not a great idea.
However, I did note his report on two credit card offerings, no-fee, which offer 2% cash back. One problem in changing credit cards is that if you have automatic payments, they all go haywire when you change your account, and it generates a lot of work. But you may want to consider these, they sound like good deals. Note that American Express is not accepted universally.
So perhaps the biggest news of 2008 was the introduction of two new cash-back credit cards, the Fidelity Retirement Rewards American Express card and the Schwab Bank Invest First Visa Signature card. Both earn 2 percent cash back on all purchases, with no annual fee and no limit on what you can earn each year. Many cash-back cards yield just 1 percent, though some offer more at the grocery store or gas station.
Two percent cash-back cards have come and gone over the years, and they tend to disappear because they’re simply not profitable for the card companies. Fidelity and Schwab, however, may be willing to maintain the new rebates in an effort to attract new customers and keep the ones they have. Fidelity encourages cardholders to deposit their cash back in a Fidelity individual retirement account, while Schwab forces you to put the money in one of its Schwab One brokerage accounts.
Stating the obvious, this is only a good idea if you pay your bills on time and avoid credit card interest rates.
Interestingly, one of the most popular blog posts I've ever written - it gets hits most every day - was about how much I hated dealing with the Advanta Credit Card company. Apparently I am not alone in this! In fact, LOL, when I typed "I Hate Advanta" into google, the name of that post, I see it's #1. People pay for that position. I have never heard from Advanta. Just more proof of their lack of interest in making customers happy.