All good credit card deals must come to an end
September 2nd, 2005 | by mbhunter |A helpful person read a post that I had made in misc.consumers.frugal-living about the Chase PerfectCard™. In that article I stated, and still believed to be true, that the PerfectCard’s gas rebate was without limit. Wrong!
“Regarding the PerfectCard … You are wrong about the limits. I think they recently put limits on rebates. I got something in the mail, and it says at their website that gas station rebates are limited to $15/month. I have found that, in time, everything under the sun deteriorates.”
Sure enough, this is true. I don’t know when they changed it. My apologies for any misrepresentation. This applies to the 3% rebates — only the first $500 of gas-station purchases qualifies for the 3%. (Whether those above and beyond qualify for the 1%, I don’t know.) I still believe that there is no cap on the 1% rebates for everything else.
So, for convenience users of credit cards (those who pay off their balance in full each month) who want to use their credit card rebates wisely, it’s a little tougher. (Again, if you carry a balance, please do not try this, because the interest rate you pay is much higher than the rebate.) If you put more than $500/month in high-rebate purchases on your card, you’ll max out cards that have either a $15 monthly limit on 3% rebates or a $300 annual limit on 5% rebates:
First case: $500 in purchases per month times 3% (0.03) = $15 in rebates
Second case: $500 in purchases per month times 12 months times 5% (0.05) = $300 in rebates
So, if you have both types of cards, and make more than $500 in qualifying “high-rebate” purchases, you need to “pace yourself” on both cards throughout the year. If you find yourself accumulating more than $25/month in 5% rebates, you’ll run out before year’s end. But if you use this card until the rebate is capped at $300, then start using the 3% card, you run the risk of hitting the monthly $15 cap on that card.
They sure aren’t making it easy for the convenience users to rack up a lot of rebates. That’s not very nice of them! 
Especially when you can pull up a chair and watch the gas prices go up! But it did remind me that all credit card offers are subject to change at any time, for any reason.
(Note: If you want to see what all of the fuss is about, check out the Chase PerfectCard™ MasterCard® or the Chase Cash Plus® Rewards Visa. Please carefully read the terms if you decide to apply for these cards!)
5 Responses to “All good credit card deals must come to an end”
By Sol on Sep 3, 2005 | Reply
I would like to see some more info on what the best rebate-credit card there is out there.
I have read that the Chase cards have so many restrictions that they really aren’t all they are cracked up to be.
I have a Wells Fargo card that pays a 1% (cash rebate) on all debit/credit transactions. I don’t think there is a limit on the amount. Sure would like to find a better deal out there.
By Ostrauder on Sep 4, 2005 | Reply
One more issue about using a rewards credit card is that you spend more than you would if you had to pull the cash. This is the reason fast food places like Wendy’s and Mcdonalds accept credit cards. People using credit will spend a little more. If you have will power and spend wisely the cash back is great. If money is tight this can be a budget buster.
Ostrauder
http://www.fightingdebtblog.com/
By mbhunter on Sep 5, 2005 | Reply
Sol, that’s a good card as long as you pay off your balances in full each month and spend as you would cash. The PerfectCard does not have any limit on the 1% (non-gas) purchases. It’s only the gas purchases that are capped at $15/month. (As of 5 Sept 05 — check T&C yourself to make sure!)
Ostrauder has an excellent point also, and I’ll respond to that one next.
By mbhunter on Sep 5, 2005 | Reply
Ostrauder, excellent points. Well put!
I try to point out that rebate credit cards are NOT a good deal if you carry a balance. But overbuying is just as big an issue, and one that I haven’t really explicitly mentioned yet.
I frequent McDonald’s and Wendy’s (for their spicy chicken sandwich!) and I know that it’s easy to buy more when you’re hungry — and especially easy when they ask if you want to “biggie-size” it! It’s an easy calculation, as the Fool.com article referenced in one of your posts mentions — credit orders are 35% bigger on average than cash orders.
Frankly, I’m surprised it took this long to get CCs in McDonald’s and Wendy’s.
By WOW! Credit Cards on Dec 6, 2006 | Reply
A perfect example of this is the Citi Dividend Platinum Select card. Recently, it changed from 5% cash back, to 2% cash back on purchases. Initially, this was one of the best “cash back” offers out there! But soon after (probably after they drew enough people in), they changed the program.
Keep an eye on your credit card terms! You may find out you’re not getting what you signed up for!