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math is never irrelevant.

imbatman said:   math is never irrelevant.

If rewards points are 1c/point, then the reward structure on the 2 cards are identical for gas purchases (which is what everyone uses this for). In that case, everyone should convert for the $250 bonus no questions asked.

I pay my balance every month, therefore, I don't care if the interest rate go to zero. Paying me back .25% when at one time used to be as high as 2% is rediculous. I called USAA and will be getting a CC with them starting with .45% from 0 to 5k spent, .85% plus $22.50 for 5k to 10k spent and 1% plus $65 for 10k to 17K spent, over 17K will be getting 1.25%. Good by PFCU and don't be surprise if you loose very many of what used to be loyal CC members.

garlui said:   I pay my balance every month, therefore, I don't care if the interest rate go to zero. Paying me back .25% when at one time used to be as high as 2% is rediculous. I called USAA and will be getting a CC with them starting with .45% from 0 to 5k spent, .85% plus $22.50 for 5k to 10k spent and 1% plus $65 for 10k to 17K spent, over 17K will be getting 1.25%. Good by PFCU and don't be surprise if you loose very many of what used to be loyal CC members.

Why would you do that?

What a weird rewards scheme. by using relevant math it looks like your best Cash Back return is if you spend exactly 10k in the year. at 1.525% Cash Back. It goes to 1.25% as your spending approaches infinti.
If you spend 10,500, you'll be getting exactly 1.5%. Anymore than that, and you're better off getting a Cap One Cash rewards (1%+.5% bonus = 1.5% - thank you Jimmy Fallon). Why make life so complicated? Even though I do love me some USAA.

kwest said:   I would submit that this conversion for those of us charging gas is unequivocally a no brainer. Why? Because of the $250 bonus. Even if redemption options on the Visa Prepaid Card are devalued (say $50 card for 6,000 points, or ~$0.83c/point = 4.15% Cash Back on gas), we can use simple math to find the break-even point determining how much gas we would need to purchase for the loss of reward rate to 4.1% from 5.0% to overtake the $250 incentive.

I am also going to assume that since we must spend $1k, that most of us will use this at a combination of Gas+Grocery merchants, thus not sacrificing any Cash Back on this amount of spending.

$250/(5.0%-4.15%)= $29,411

So if you think that the benefit rates will remain the same long enough for you to charge over $29k in gas, then DON'T convert. If you think you will spend less than $29k on gas, CONVERT.

Personally, I spend about $150-200/mo on gas driving 9k mi/yr. This is only 2k or so per year. So I would need the reward structures to stay the same for 14+ years before I even break even by passing on this conversion.

NOTE: All this math is irrelevant if the rewards points are truly worth 1 cent per point redeeming for the Visa Prepaid cards.


I second this...also factoring Discover/Citi/Chase rotating 5% on gas, there is no real loss. Worse case scenario, I could also start using the BOA 1-2-3 card where with the bonus, I would be whole for the next $12,500.00 in gas spend (more since grocery would get 3 points).

mathfaster said:   Thrilla said:   ... Especially since the highest CB I get for supermarkets is at a paltry 2%.

Try applying for an AMEX Blue Cash Preferred card. 6% back on groceries. $75 annual fee but if you spend any decent amount on groceries in a year you will get that back fairly quick. If your grocery sells gift cards you get 6% back on those as well.


This might seem like a stupid question.. cause I never seem to remember to look while I'm there. I have the regular Blue Cash.. If I buy a gift card from the grocery store, does the gift card itself cost $5 to buy or anything? i.e. $100 GC costs $105 .. or $50 GC costs $55?

Onenote said:   offer webpage said: you can jumpstart your rewards by earning 5,000 points the very first time you use your card and another 20,000 points when you spend $1,000 within the first 3 months.

That's ambiguous. Is that 3 months starting today (12/28/11)? Or Feb. 1, 2012? or the first day of the billing cycle after Feb. 1, 2012?


The letter I got says "from the effective date of your switch". While that could mean the date they print your card or the date you activate it, more than likely (and the most conservative guess) it would be the day you submit the form to request the switch.

jnheinz said:   
This might seem like a stupid question.. cause I never seem to remember to look while I'm there. I have the regular Blue Cash.. If I buy a gift card from the grocery store, does the gift card itself cost $5 to buy or anything? i.e. $100 GC costs $105 .. or $50 GC costs $55?


Off-Topic question (that's being discussed quite a bit right now in the Blue Cash thread).
Third party gift cards (like a shell/Exxon/BP gas card) do not have a fee, so $50=$50. a VISA/MC/AMEX Gift card charges a fee. a $100 AMEX gift card will cost you $5 or so.

dj said:   What is not universal about a prepaid visa card? IMO, that is better than most of the other choices on most cards.

The problem is, what is the conversion rate for prepaid visa cards? Many of the programs I've seen only offer 1/2 value for prepaid cards (ie: $100 visa would cost 20000 points)

LordKronos said:   Onenote said:   offer webpage said: you can jumpstart your rewards by earning 5,000 points the very first time you use your card and another 20,000 points when you spend $1,000 within the first 3 months.

That's ambiguous. Is that 3 months starting today (12/28/11)? Or Feb. 1, 2012? or the first day of the billing cycle after Feb. 1, 2012?


The letter I got says "from the effective date of your switch". While that could mean the date they print your card or the date you activate it, more than likely (and the most conservative guess) it would be the day you submit the form to request the switch.


Actually, after reading the letter again, it also says you'll automatically begin earning points after your first billing cycle following feb 1, 2012, and that you'll continue earning cah back until then. So it might not be effective until the first day of the billing cycle after feb 1.

I'm also wondering how long we have to make the conversion and get the bonus? Obviously it's going to be a limit time offer, but I don't see a deadline on the letter

Note that the 3% says "Supermarket" not Groceries.
Remember when Penfed offered 5% on Gas, 3% on Groceries and1.25% on everything else.
Groceries included Super-WalMart. I assume now that SWM is not included in Supermarkets.

I like the cash coming off my bill and also only use Penfed for Gas. I plan to stay put.

kwest said:   I would submit that this conversion for those of us charging gas is unequivocally a no brainer. Why? Because of the $250 bonus. Even if redemption options on the Visa Prepaid Card are devalued (say $50 card for 6,000 points, or ~$0.83c/point = 4.15% Cash Back on gas), we can use simple math to find the break-even point determining how much gas we would need to purchase for the loss of reward rate to 4.1% from 5.0% to overtake the $250 incentive.

I am also going to assume that since we must spend $1k, that most of us will use this at a combination of Gas+Grocery merchants, thus not sacrificing any Cash Back on this amount of spending.

$250/(5.0%-4.15%)= $29,411

So if you think that the benefit rates will remain the same long enough for you to charge over $29k in gas, then DON'T convert. If you think you will spend less than $29k on gas, CONVERT.

Personally, I spend about $150-200/mo on gas driving 9k mi/yr. This is only 2k or so per year. So I would need the reward structures to stay the same for 14+ years before I even break even by passing on this conversion.

NOTE: All this math is irrelevant if the rewards points are truly worth 1 cent per point redeeming for the Visa Prepaid cards.


To be a bit more pessimistic, I've seen a number of programs that only offer half the value when points used for visa prepaid card, so a $100 visa card would be 20000 points. If that's the case (and there are no better options with store gift cards), then this essentially ends up being a 2.5% Cash Back on gas with a $125 bonus. So the math there says the break even point is $5000 spent on gas.

Even with that figure, that's more than a couple years worth of gas for me, so I think I'd rather take the money now and then figure out which other card(s) to use if necessary.

LordKronos said:   dj said:   What is not universal about a prepaid visa card? IMO, that is better than most of the other choices on most cards.

The problem is, what is the conversion rate for prepaid visa cards? Many of the programs I've seen only offer 1/2 value for prepaid cards (ie: $100 visa would cost 20000 points)

I called before switching and was told it's 1 to 1. I also said I don't want to change if that could change in the future, she had no Idea what I was asking so gave me to a supervisor who said would always be that way. Have been with PenFed for over 4 years now and have always found them great, honored my reservations for 5% CDs even though i did not qualify and got in through the glitch they had early on. I don't think they play games and screw customers.

There are two big reasons for an issuer to move from straight Cash-Back to point schemes:

1.) Can offer reward items for less than face value (e.g. gift cards) or even make some money back from AM EX Gift Card transactions via their own interchange fee.

2.) Can easily adjust the value of point redemptions in the future. BoA has been especially adept at this. I don't think that PenFed would do this in the short term, but I would say it's likely that eventually they will devalue their points at some point in the future. To someone who is not paying close attention, it's a lot easier to miss point deflation, and they don't have to send you a letter about it since you're still earning the same amount with each purchase.

jnheinz said:   mathfaster said:   Thrilla said:   ... Especially since the highest CB I get for supermarkets is at a paltry 2%.

Try applying for an AMEX Blue Cash Preferred card. 6% back on groceries. $75 annual fee but if you spend any decent amount on groceries in a year you will get that back fairly quick. If your grocery sells gift cards you get 6% back on those as well.


This might seem like a stupid question.. cause I never seem to remember to look while I'm there. I have the regular Blue Cash.. If I buy a gift card from the grocery store, does the gift card itself cost $5 to buy or anything? i.e. $100 GC costs $105 .. or $50 GC costs $55?


Depends on the Gift card. Visa, MC, AMEX cards usually have a fee on top of the face value. Others, like Outback, Staples, do not. It usually says on the back of the card if there is any fee in addition to the face value.

imbatman said:   mathfaster said:   Thrilla said:   ... Especially since the highest CB I get for supermarkets is at a paltry 2%.

Try applying for an AMEX Blue Cash Preferred card. 6% back on groceries. $75 annual fee but if you spend any decent amount on groceries in a year you will get that back fairly quick. If your grocery sells gift cards you get 6% back on those as well.


even the everyday Blue Cash (no annual fee, 3%) is better. Or HHonors AMEX (6 pts/dollar at grocery) if you like Hilton points.


This would replace my AMEX Blue Cash Everyday, which I only use for supermarket purchases. If anyone else is thinking about doing the same, remember not to cancel the AMEX right away - it pays cash rewards out on the annual anniversary of your card.

Has anyone in California received the letter yet? Wonder why they would be targeting some but not others...who knows if I'm even eligible for the bonus if they don't send a letter....

tjguitar85 said:   Has anyone in California received the letter yet? Wonder why they would be targeting some but not others...who knows if I'm even eligible for the bonus if they don't send a letter....

Just follow the OP's link and enter your info...

Another idea... can you convert, get the bonus and later switch back to the original product? I'm assuming they might not let you switch back.

clutchcargo777 said:   tjguitar85 said:   Has anyone in California received the letter yet? Wonder why they would be targeting some but not others...who knows if I'm even eligible for the bonus if they don't send a letter....

Just follow the OP's link and enter your info...


I saw it, just wasn't sure if it'd actually work if I wasn't targeted.

tjguitar85 said:   clutchcargo777 said:   tjguitar85 said:   Has anyone in California received the letter yet? Wonder why they would be targeting some but not others...who knows if I'm even eligible for the bonus if they don't send a letter....

Just follow the OP's link and enter your info...


I saw it, just wasn't sure if it'd actually work if I wasn't targeted.


I did it without receiving the letter (OK, too lazy to check the mail) and it worked.

ETA: It only asks you for your name, zip code, email address and last four of your account number. There is no promo code.

tjguitar85 said:   Has anyone in California received the letter yet? Wonder why they would be targeting some but not others...who knows if I'm even eligible for the bonus if they don't send a letter....

I'm in Michigan, and I just got my letter today. The postmark is from Maryland. Mail takes longer to to get to CA than MI.

tjguitar85 said:   Has anyone in California received the letter yet? Wonder why they would be targeting some but not others...who knows if I'm even eligible for the bonus if they don't send a letter....

The letters were apparently sent on Tuesday from Virginia. Don't worry, yours is on a truck traveling west somewhere

i spoke to rep at penfed and she told me that there will be WalMart best buy gap etc... gift cards , def better than the AMEX they have. Additionally once you switch over you cant switch back. I'm holding back cuz I'm still calculating whether 250 dollars in gift cards is better than having 5% back post automatically every month...

duhdaveman said:   i spoke to rep at penfed and she told me that there will be WalMart best buy gap etc... gift cards , def better than the AMEX they have. Additionally once you switch over you cant switch back. I'm holding back cuz I'm still calculating whether 250 dollars in gift cards is better than having 5% back post automatically every month...

I am wondering the same thing, I guess it is time for me to really research some of the suggestions in this thread and others in FWF to see what the consensus is for the label of best rewards card. With interest rates so low on CDs and now this I am going to have to drink a lot of champagne on new years to cheer me up.

which is the best card for CashBack available in the market? I started this card when they offered 1.25% on everything then they reduce to 1% and now no more CashBack! I am only interested in Cash Back and no points.

mak101 said:   which is the best card for CashBack available in the market? I started this card when they offered 1.25% on everything then they reduce to 1% and now no more CashBack! I am only interested in Cash Back and no points.

Nerdwallet: http://www.nerdwallet.com/cash-rewards-credit-cards

Plan on having wife apply for present card, then switch. I will keep old card, in case terms of new card go south. Will miss the automatic deduction of cash reward from account balance, but will get over it or go back to old card.

Can't see passing up $250 (plus $10 for 1000 points) on prepaid Visa card (can use at WalMart)

Got my letter yesterday.
Now I'm trying to find out what other gift cards are available.
Will they send a new prepaid visa every time, or are they adding it on to a previous one?
I will have to call them to find out.

Copy of letter

WinterTexan said:   Plan on having wife apply for present card, then switch. I will keep old card, in case terms of new card go south. Will miss the automatic deduction of cash reward from account balance, but will get over it or go back to old card.

Can't see passing up $250 (plus $10 for 1000 points) on prepaid Visa card (can use at WalMart)


Is there an option to keep the old card? It seems like you will get moved to the new plan on 2/1/2012 wheather you want to or not.

Looking at the PDF copy of the letter it appears that keeping this old card it would only be useful for gas purchases ONLY for 5% CB. The 1% on everything else is being reduced to 0.25%.

Iím surprised that no one has mentioned the Visa Platinum Card from Fort Knox Federal Credit Union. This card features Cash Back rebates of 5.00% on gas purchases and 1.25% on all other retail purchases.

http://www.fkfcu.org/visa.html


Everyone is eligible for membership by joining the American Consumer Council --it's free.

http://www.americanconsumercouncil.org/


The initial requirement for membership is only $15, of which $5 represents one share in the Credit Union, and the remaining $10 covers your one-time-only membership fee.

http://www.fkfcu.org/membership.html

ablang said:   Looking at the PDF copy of the letter it appears that keeping this old card it would only be useful for gas purchases ONLY for 5% CB. The 1% on everything else is being reduced to 0.25%.

As I understand it, you get the .25% Cash Back PLUS the points with the new card. Assuming you can get a Visa Cash card at $1 per 100 points, the new card is superior in every way.

Since receiving the letter, I've reviewed the current Cash Back threads on FW, and the link provided by mathfaster. Think I've narrowed my choice down to the Capital One Cash rewards. It's 1.5% over a year and they will credit the card account. I personally want no hassle, no revolving categories that I have to ask for and/or that don't apply to my spending habits, no cards for places I don't visit, no debit card that takes money out of the rewards spending stream and makes it impossible to "recycle" the reward money for additional reward.

As an aside, there is a discussion in the "how to flip/profit from rebate cards" thread of taking Visa, AMEX, or Mastercard debit cards to a major bank to cash or deposit in your account. An option for some, but not me as I use a local bank.

Thantoz said:   ablang said:   Looking at the PDF copy of the letter it appears that keeping this old card it would only be useful for gas purchases ONLY for 5% CB. The 1% on everything else is being reduced to 0.25%.

As I understand it, you get the .25% Cash Back PLUS the points with the new card. Assuming you can get a Visa Cash card at $1 per 100 points, the new card is superior in every way.


From the letter:
"After switching, you'll automatically begin earning points with every purchase after your first billing cycle following February 1, 2012. Until then, you'll continue to receive Cash Back, so you will never miss out on earning rewards.

okwiater said:   Thantoz said:   ablang said:   Looking at the PDF copy of the letter it appears that keeping this old card it would only be useful for gas purchases ONLY for 5% CB. The 1% on everything else is being reduced to 0.25%.

As I understand it, you get the .25% Cash Back PLUS the points with the new card. Assuming you can get a Visa Cash card at $1 per 100 points, the new card is superior in every way.


From the letter:
"After switching, you'll automatically begin earning points with every purchase after your first billing cycle following February 1, 2012. Until then, you'll continue to receive Cash Back, so you will never miss out on earning rewards.


At which rate though?

Am I correct that Penfed no longer considers WalMart as grocery?

If they did consider it grocery- this would make the decision to switch easy to nab the 3%, plus the $250.

AccessGuy said:   Iím surprised that no one has mentioned the Visa Platinum Card from Fort Knox Federal Credit Union. This card features Cash Back rebates of 5.00% on gas purchases and 1.25% on all other retail purchases.

http://www.fkfcu.org/visa.html


Everyone is eligible for membership by joining the American Consumer Council --it's free.

http://www.americanconsumercouncil.org/


The initial requirement for membership is only $15, of which $5 represents one share in the Credit Union, and the remaining $10 covers your one-time-only membership fee.

http://www.fkfcu.org/membership.html


FKFCU harder to get approved. as I recall, they declined me for "too much available credit". And I had much less than I have now..

Here are a few alternatives:

Lake Michigan Credit Union: 3% gas, 2% groceries, 1% everything else

AMEX Blue Cash Preferred: 6% groceries, 3% gas and department stores, 1% everything else ($75 fee)
AMEX Blue Cash Everyday: 3% groceries, 2% gas and department stores, 1% everything else (no fee)

AARP Visa: 5% everything for six months, then 3% travel, 1% everything else.



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