Review of the Chase CashBuilder credit card
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Editor's Rating:
 
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| Intro Purchase APR | Regular APR | Intro Balance Transfer | Annual Fee | Credit Needed |
| N.A. | $0 | Good |
Back in the mid 2000s, Chase did not seem to have a coherent strategy and they actually had a couple of cash back credit cards. One of them was this card, the CashBuilder. The cash rebate formula was complicated, to say the least.
Complicated Cash Rebate Formula - The Chase CashBuilder Credit Card has a tiered rebate structure which allows you to earn up to 2% cash rebate on any purchases. You need to spend more than $6000 a year and carry a balance of $500 or more to earn the maximum 2% rebate. You can earn up to $500 in cash rebate in one calender year. You will get your cash rebate in the form of a check annually.
If you carry a balance of less than $500, you can earn a maximum rebate of up to 1% if your annual spending exceeds $6,000.
| If Monthly Balance is | AND Annual Spending is | then rebate precentage is |
| $0.00-$499.99 | $0-$2000 | 0.25% |
| $2000.01-$4000 | 0.50% | |
| $4000.01-$6000 | 0.75% | |
| $6000 and up | 1.00% | |
| $500 and up | $0-$2000 | 0.50% |
| $2000.01-$4000 | 1.00% | |
| $4000.01-$6000 | 1.50% | |
| $6000 and up | 2.00% |
What did we think of this rebate structure? - If you look at the table above, you will notice that the amount of rebates you can earn will depend on the balance that you carry on the card. Carry less than $500 on the card and the maximum rebate you can ever earn is 1%! Carry more than $500 and you could get back 2% cash back for spending above $6,000.
Forget about this card if you do not carry a balance or carry less than $500 - It is clear that for those who do not carry a balance, this card simply does not make sense. You would be better off getting a simple 1% cash back card. Even if you carry a balance of less than $500, getting a 1% cash back card would be better since there would be no tiers that you have to jump through. As you can earn up to $500 in rebates, that means you can earn rebates up to an annual expenditure of $53,000. Your effective cash rebate percentage is 0.9434%.
Even if you carry a large balance, this card is not all it is cracked up to be - If you do the calculation, the $500 annual rebate cap means that if you spend $28,000 a year on the card, you will max out your $500 cash rebate. That works out to a 1.79% rebate.
Why do you have to carry a balance - So even though 1.79% rebates appears much better than the standard 1%, the fact that you actually have to carry a balance of more than $500 puts me off about this card. If you want to uses a rewards cards like a cash back card, you should not be carrying a balance. Instead, you should be paying off your credit card debt and get into a situation whereby you can pay your bills in full every month. So the ironic thing about this card is that once you have gotten into situation where you are a PIF (pay in full) person, you actually earn less rebates!
Conclusion - The Chase CashBuilder has a very complicated cash back structure which is really one of it's kind. In fact, the way it is structured encourages you to keep a balance of more than $500. Only folks who carry a balance of more than $500 forever and spend about $28,000 a year will reap the full benefits and eventually earn a 1.79% rebates in total. However, for every one else, you could give this card a skip.
Latest Update - Chase has discontinued their cashbuilder credit card. In July 2005, they replaced it with the Chase Cash Plus Rewards Visa Card, which has essentially identical rewards with the Citi Dividend Platinum Select Card. In 2006, Chase once again discontinued the Chase Cash Plus Rewards Visa and replaced it it with the Chase Freedom.