I recently got a mail from Consumer Reports (well, not too sure if you could consider this junk mail). There were a couple of large post cards. One offered 2 gifts (free off course) - the Consumer Reports Money Adviser, which contains tips about retirement planning etc. The other was the Ultimate Money Guide. Along with this, they also gave a “sample free content” of one of the issues of the Consumer Reports Money Adviser. In that report were some cash back credit cards that they recommend. Hence, I’m going to put my two cents worth on that given (I think) I know more about credit cards than most people.

Here is the list. I do not think they listed it by preference but rather by alphabetical order. So here goes :

1. Blue Cash from American Express - They are definitely bang on this one. And they rightly stated that it pays (after $6,500 in annual spending) 5% rebates on supermarket, gas stations, and drugstores, and 1.5% rebates on everything else. What they failed to mention, and they should have is that before your spending exceeds the $6,500 threshold, you are only paid 1% and 0.5% respectively. Hence, those who do not charge a lot will not find this card suitable.

2. Capital One No Hassle Cash Rewards - To be honest, I’m not too sure why they included this card here. It pays 1% cash back on everything you spend on the card. And at the end of the year, you will be a 1.25% bonus. Well, that’s definitely better most cash rebate cards but, this is probably the least attractive card listed here and I think they could have very well left out this card.

3. Chase Freedom - Well, I definitely agree that this card should be on the list. In the table on the newsletter, consumer reports wrote “Can choose between cash back points. When rewards reaches $200, you’ll get extra $50 back”. While this is technically correct (as an introductory offer), it fails to precisely explain the cash rebate formula and policy of the card. There are 15 expense category that are eligible to earn 3% rebates for this card (including gasoline, supermarket etc). However, only your top 3 spending in a month for any of the 15 items will earn the 3% rebates. These items include :

grocery stores (that are not affiliated with or departments of superstores, warehouse clubs or discount stores), gas & convenience stores, quick service payment/fast food restaurants, telecommunications, cable/satellite TV/Internet Service Providers, video rentals, department stores, dry cleaners, drugstores, movie theatres, local and suburban commuter passenger transportation (including ferries, bridges, tolls, parking garages, taxis/limos), pet supply stores and veterinary services, utilities, beauty shops (salons and spas), or gym/recreation memberships.

There is also another catch that Consumer Reports did not mention. And that is there is a cap on the rebates you can earn on these 3% items (and the cap is $600 in monthly spending).

4. Citi Dividend Platinum Select Card - This card lets you earn 2% rebates on supermarket, drugstore, gas station and utilities spending and 1% on all other stuff. They also cap the rebates to $300 a year. The rebates are lower than the Chase Freedom Card but they do not impose monthly spending restrictions on items unlike the Chase Freedom. Overall, I would say that yes, they should have this card on the list.

5. Citi Professional Card - I’m really not too sure why this card was included since it is actually a reward card? Lets you earn 3 points/$1 at restaurants, gas stations, office-supply stores, auto rentals and 1 point/$1 for every thing else. It has a 100,000 cap and new cardholders get 10,000 bonus points.

6. Discover More Card - Well, in my opinion, this is a controversial card to include as a ‘top’ cash back credit card. The Consumer Report rightly states that “you get 5% back in designated categories like home or apparel, which changes 4 times a year, 5% through their shopping site; up to 1% on everything else.”

While what they stated is true, there more to it as well. For example, for the first $1,500 in your annual spending, you only earn 0.25% rebates! For the next $1,500, you earn 0.5%. Only after spending $3,000 do you earn 1%. Hence, the rebate formula is not very impressive. However, Discover allows you to exchange rebates for gift certificates (and presently there are about 80 partners) and you can double the value of your rebates for certain merchants. Hence, if you are a gift card junkie, this is actually a great card.

Discover Open Road Card - Consumer correctly states that you earn 5% cash back for gas and auto maintenance - 5% through shopping site - and up to 1% on everything else”. What it does not say is that you can only earn 5% on gas for up to $1,200 in annual spending. Given that is cost over $50 for most cars these days to fill up, that $1,200 limit could be a little bit low.

Other Cards They Should Have Included

Aside from some of the cards which I thought should not have included, I feel that they have missed out on a couple of gems. They include the :

Simply Cash Business Card from American Express - For gasoline savings, this card is probably the best. Why? because you can earn 5% on gasoline purchases. This is better than Chase Freedom or Citi Dividend Card which only lets you earn 3% and 2% respectively. Also, unlike the Blue Cash, you earn 5% straight away. Unlike the Discover Open Road Card, you can earn unlimited rebates. You also earn 5% rebates on wireless phone services, office supplies and equipment. Though this is technically a small business credit card, you can also apply as an individual.

True Earnings Card from Costco - If you are a Costo Member, this is a great card to have. You get to earn 3% rebates on gasoline purchases and restaurants, 2% for travel and 1% on everything else. Best of all, there is no cap on how much rebates you can earn. This I think will make a great rebate card for those looking to save money on gas, eating out and are Costco members!

So that’s my two cents worth on what Consumer Reports had to say. I thought they could have been a little more thorough and included a couple of better cards. What cash rebate cards do you have and should there be any more listed here?

Alright, time to spill the beans on my annual cash rebates with my American Express Blue Cash Credit Card. But before that, here is a quick background on my history with the Blue Cash.

I started using the Blue Cash in August 2005 and hence, this is my second year with the card. All I can say is that I have been more than happy with the customer service. On a couple of early occasions, I missed my payment and my late fee and additional finance charges were waived. A bit part of this had to do with my ten year record with the Amex Gold Card.

So here are the statistics : My annual cash rebate at the end of August 2007 was $401.51. For the calendar year, I charged $20,003.89. Hence, I earned 2% cash rebates. With the Blue Cash, I got my rebates through a statement credit - not a check unlike some other cards like the Citi Dividend Card for example. The only peeve I have with the Blue Cash is that I still cannot see the breakdown of my expenses for the items that I am supposed to earn 5% rebates - gas, supermarkets and drugstores.

This year, I charged less to the card than last year. The reason is because I upgrade my Gold Card to the Platinum Charge Card. So at present, I am absolutely not optimizing my expense to earn the most cash rebates. And because I am contantly looking to check out new cards, I probably will never earn the most rebates!

If you are looking for a cash back credit card, I have no hestitation recommending the Blue Cash® from American Express . But before you do so, you might just want to check out our Cash Back Credit Card Calculator to find the card that will give you the most rebates.

HSBC has just introduced a new card called the HSBC Weekend Card. It is a cash back credit card but with a new twist :

This is how it works. If you use the card on weekends (ie Saturdays and Sundays), then you will earn 2% rebates on your weekend purchases. When you use your card on regular weekdays (ie Monday through Friday), you will earn 1% rebates. Furthermore, you can earn unlimited rebates with this card and the rebate points do not expire.

This is the first cash rebate card of this sort and I think the idea is pretty novel. It gives those who tend to do their grocery shopping or any other type of shopping over the weekend a great way to earn higher cash rebates than a regular credit card.

However, I think it is best to use this card in combination with another card that pays a higher rebate on certain types of expenses. For example, the Chase Freedom Card pays 3% rebates on gasoline and supermarket purchases. Hence, it would be a great idea to combine these two cards.

Some of you (especially stay at home moms) will tend to do your groceries and other shopping during the weekday. So this card will probably not suit you if you are not a weekend shopper.

Kudos to HSBC for coming up with such a novel idea. It gives a new twist and meaning to “Frugal Weekend Shopping”!

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HSBC Weekend Card Review

I just received my Blue Cash Statement from American Express and my “calender year” for the card has just ended. I earned a total of $637.38 in cash rebates after spending $31,395.24 on the card this year. This works out to a rebate of 2.03% for my total spending on the Blue Cash for the year.

One of the first things I did after I got my statement was to go to the website and see precisely how much I spent on groceries and how much rebates I earned for specific categories which the Blue Cash paid 5% rebates. However, American Express does not offer such a breakdown. There is no way to find out precisely what rebates you earn when you make a particularly purchase at a specific store. You can go online to the American Express site and see the rebates you have earned every month and your annual rebates you have earned. But I think being able to show you how much you earned when you use your card at a particular store is important because I want to make sure I get my 5% rebates when I go to an ACME or Ginardi’s or to the gas station. I called customer service who then refered me to the online support department. But it appears that they do not have this feature yet.

Given that the rebate for the Citi Dividend Platinum Select Card has been reduced to 2% for “everyday purchase items” and the new Chase Freedom Card only awards 3% rebates for “everyday purchases”, I’ll be sticking to the Blue Cash for a while as my main cash rebate card. I do, however, have to find a way to quickly charge $6,500 so I can start earning 5% cash rebates on “everyday purchases”.

For a long time, the Citi Dividend Platinum Select Card was probably the most popular and the best cash back credit card available. The card allowed you to earn 5% cash rebates on purchases made at supermarkets, gas stations and drugstores. For a long time, it was the only card of its kind.

Then last year, Chase introduced the Cash Plus Rewards Visa, which was essentially identical to the Citi Dividend Card. The launched of this card gave Citi some competition. However, not long after launch, Chase discontinued their card in July this year. And not long after, Citibank also discontinued the Dividend Card.

Citibank sent existing Dividend Card holders a letter stating that the rebate formula will be changed. The 5% rebates have been reduced to 2% and Citi claims they will soon be adding cable and utilities expense under the 2% category.

Chase meanwhile has introduced the Chase Freedom Card, which allows you to earn 3% cash back every time you use your card for eligible Gas, Grocery and Quick Service Restaurant purchases.

I have a couple of friends who work at both Chase and Citi and they have both told me that both the Citi Dividend Card and the Chase Cash Plus Rewards card were not very profitable. Cardholders tend to pay their bill fully every month and because there was no annual fee and have to pay that 5% rebates, both issuers felt it was better to scale back the rebates paid on these so called “everyday purchase” items.

Hence, the only credit card today that still pays 5% rebates on “everyday purchase items” is the Blue Cash from American Express. However, you have to spend above $6,500 to start earning 5% rebates. The Blue Cash has the advantage over the Citi Dividend and Chase Cash Plus in that you could earn unlimited rebates. You can also earn 1.5% rebates on “other purchases”.

I personally have the Blue Cash (which is a good thing) and perhaps will consider the BP Rewards Visa because I use that station and also because it pays 2% cash rebates on both travel and dining expenses.

The free 5% ride with Citi and Chase appear to be over.