Credit Cards, a Biblical Christian View: Part 1, Dangers
Credit Cards, a Biblical Christian View: Part 2, Benefits
More Resources on Biblical Financial Stewardship
Best Deals on Credit Cards:
A Biblical Christian View
Credit card rewards programs can be a valuable way to save a few percentage points on what you spend. Again, it is important to reiterate that they are worthwhile if–and only if–you avoid the dangers of using credit cards by totally avoiding high-interest debt and by guarding against and avoiding the danger of overspending. The article below is the third part of a study on credit cards; before reading it, I highly recommended that you read Credit Cards, a Biblical Christian View: Part 1, Dangers and Credit Cards, a Biblical Christian View: Part 2, Benefits. Before applying for any credit card, it is also a very good idea to obtain a free copy of your credit score and credit report by clicking here.
If you have a good credit, you should be able to get at least 2% cash back on all your purchases while getting a higher percentage, frequently 5% or 3%, on certain categories of purchases. Please note that some of the links below are referral links for which I will receive compensation if you successfully apply for a card. I do not believe that has impacted what I have said about the cards or my recommendations.
Cash Rewards Cards–Flat Rate of 2-5% Cash or Rewards Back on all Purchases:
My favorite choice: 2.2% back in transferable points or cash deposited into an investment account with American Express
A card that has a place in my wallet is the American Express Blue for Business Card. This card, which has no annual fee, earns two American Express Membership Reward points per dollar spent up to $50,000 a year. American Express Membership Rewards points, when transferred to American Express’s airline and hotel partners, can be very valuable. You can use a free tool like PointsYeah to see where you can fly to with Membership Rewards, and, in the right circumstances, you could do something like taking a first class or business class flight that would cost thousands of dollars in cash for about as much or sometimes even less than you would pay for an economy class flight if you redeemed the point for cash. When combined with the American Express Platinum Card for Schwab—a high end card with a high annual fee but lots of benefits that may outweigh the fee— in addition to valuable transfer partners, you can redeem your points with a 10% bonus in their value, making them worth 1.1 cent each when transferred into a Schwab checking, brokerage, traditional, or Roth IRA account. I like to combine the ordinary spending power of the Blue for Business card with the American Express Gold Card’s 4 points per dollar at grocery stores and restaurants and the many perks of the Schwab Platinum Amex Card. (The Gold card has a $250 annual fee but receives $220 a year back in dining credits, reducing its annual fee to $30 if you value the credits as equal to cash.) I have extensively utilized both the ability to transfer Membership Rewards and the ability to redeem them into a Roth IRA. Furthermore, I have found American Express to have quality customer service when I have needed assistance.
Apply for the American Express Blue for Business Card by clicking here.
Apply for the American Express Platinum Card by Schwab here.
Apply for the American Express Gold card here.
Note: If the links above are not taking you to the right card, you can click on any of them and then navigate to the personal or business card that you want to apply for.
2.62% Cash Back on All Purchases + 5.25% at either Gas, Groceries, Online Shopping, Drugstores, Travel, or Home Improvement Stores with Bank of America
The Bank of America Unlimited Cash Rewards Card has no annual fee and gives you 2.62% cash back on all purchases, with no limit. It is a great card to combine with the Bank of America Customized Cash Rewards Card, which gives you 5.25% cash back on up to $2,500 a quarter in purchases at a useful category of your choice—the categories are Gas, Groceries, Online Shopping, Drugstores, Travel, and Home Improvement Stores. There are two catches, however—you only get the 2.62% on all purchases and 5.25% on a useful category such as groceries if you are a Premium Rewards (or higher) tier customer with Bank of America. To achieve that status you need to have $100,000 or more in some combination of investments with Merrill Edge or products with Bank of America; at that tier, you get a bonus 75% in cash back with each credit card. I believe the easiest way to do this is to move $100,000 in assets into a Roth IRA with Merrill Edge and just leave the money there. However, if you do not have $100,000, the cash back rates on these credit cards is significantly less attractive. If you have at least $50,000 with Merrill Edge or Bank of America, the credit cards get 2.25% and 4.5% cash back, respectively (a bonus of 50%). If you have at least $25,000, you get a bonus of 25%, so that the Unlimited Cash Rewards card gets a low 1.87% and the Customized Cash Card gets 3.75%. If you have $0-$24,999 with Bank of America or Merrill Edge, then you only get the base rate on the two credit cards of 1.5% on the Unlimited Cash and 3% on the Customized Cash card in one category. Thus, the cards are not good unless you have at least $50,000 with BofA/Merrill, and they only become very good if you have $100,000+ you can deposit with them.
Furthermore, Bank of America does not have good customer service. Even if you have $100,000 or more with them, if you need to call them and speak to an agent, the automated system is very customer-unfriendly. It will waste your time giving you information you do not want or need, force you to press one for this and two for that and seven for this, and if you do not do it right, it will deliberately hang up on you and make you start all over instead of transferring you to an agent who can help. Bank of America also has an outdated autopay system that will not reduce the amount it deducts if you make a payment in the middle of your statement cycle. Let us say that you have a $5,000 payment to pay your card off in full at the end of the month. If you pay $2,000 in the middle of the month, the bank will still deduct a full $5,000 at the end of the month, leaving you with a $2,000 credit balance instead of just taking your card down to $0 by taking out only $3,000. If you want the credit balance back, Bank of America representatives will tell you that it can take over a month to get the money back. Nor does Bank of America help you much if you need to dispute a charge—they make it difficult to do that, and difficult to win a dispute. They will also send you emails that you do not want with no “unsubscribe” button; you will be forced to either get emails you do not want or need or put all BofA emails in SPAM, in which case if there is something that actually is important—such as a fraud notification—you will not find out about it. I had a Bank of America home loan at one time and believe I would never do it again because of their unbelievably poor service; I had to write to the president of Bank of America in order to get a crazily unjustifiable issue resolved. The poor customer service with Bank of America, combined with the fact that American Express both gives much better customer service, has transferable points, and has investment options with Schwab if one also has the Schwab Platinum card, makes me prefer the Amex Blue for Business card to the Bank of America Unlimited Cash Rewards card for purchases outside of bonus categories. I also think that Fidelity and Schwab are better brokerage companies than Merrill Edge. However, the 2.62% and 5.25% rates are very attractive.
Apply for the Bank of America Unlimited Casth Rewards Card by clicking here.
Apply for the Bank of America Customized Cash Rewards Card by clicking here.
3% or More Back on All Purchases-Some Strings Attached-X1 Credit Card
The X1 Credit Card offers 3% back on all purchases if one spends at least $1,000 a month on the card. Their app also offers useful “boosts” that provide 4% or 5% back on purchases in a variety of categories, such as gas or restaurants. There is no annual fee for the X1 card. Thus, the X1 card offers a very attractive rate for a card with no annual fee.
For many people the X1 card could be an attractive option and a definite keeper. However, there are some downsides to be aware of:
1.) You cannot call customer service. You have to use the app to contact them. What if you can’t get anywhere with the app? This is not my favorite. However, it is also possible that one calls an agent and can’t get anywhere either if a company has agents who are not competent, so being able to use the phone does not necessarily solve anything anyway.
2.) You cannot get paper statements. Your credit card statements are all done through their app. They do email you to remind you when a statement is generated, but I like paper statements.
3.) You cannot redeem the points at full value for cold, hard cash, only to cancel out transactions at selected merchants (kind of like buying a gift card for these merchants). Now the range of options here is quite attractive—there are over 50 options, including everything from Apple to American Airlines to Airbnb to REI to Hotels.com, so for many people this kind of redemption is almost as good as cash. But the fact that you cannot redeem your points for actual dollars at full value (although you can redeem them at a reduced rate for cash; instead of $0.01 per point value towards a merchant, you get 70% of that for cash, so 10,000 points is $100 back at REI but only $70 in actual cash back) is a negative. Even if you never shop at any of the merchants where you can get the full 3% back (unlikely for most people) at a 70% back rate for cash, however, 3 points per dollar becomes 2.1% back for cash, which is still superior to a flat-rate 2% cash back card.
4.) If you spend less than $1,000 a month on your X1 card you do not get 3% back, but a (still decent) 2%.
I can understand why the X1 card does these things-the fees merchants pay to take credit cards is less than 3%, in most instances, so a card that gave you 3% of actual cash back on everything would have an extremely difficult time breaking even, let alone turning a profit. It would be losing money every time you made a purchase. By the combination of extremely low overhead (no paper statements; no human beings who take calls with customer support; everything in their app; deals cut with companies that allow X1 to offer point redemption at face value while they get a discounted deal; some customers spending less than $1,000 a month and so not getting 3% back) X1 appears to be able to offer customers 3% back on all their purchases so long as they spend at least $1,000 every month with the card. In other words, they may be able to continue in the long-term as a successful business, like Chase or Citibank or American Express, instead of going bankrupt for offering people too high a rate of cash back. For many people, the X1 credit card is a logical and reasonable choice for their default card for purchases outside of bonus categories. Someone who spends $50,000 a year on a credit card will get $1,500 back with the X1 card instead of $500 back if he is using a credit card that offers only 1% back or only $1,000 back with a 2% back card. With the bonus categories or “boosts” the X1 card offers, one can get even more back–4%, 5%, or more on selected categories that are often quite useful.
The X1 card is also made out of metal, not plastic. It feels nice in your hand. I really don’t care about how the card feels in comparison to what monetary value it offers me, but some people are into that kind of thing.
If you open an X1 card using the link here, you will also receive 4-10% back for a period of time on all purchases (a very, very attractive rate, which I will also get for a period of time if you open a card with this link). X1 has a system where they do not do a hard pull on your credit unless they are very likely to approve you. They tell you ahead of time before they officially pull your credit file. In other words, the application process first gets your approval to do a soft pull that does not negatively impact your credit score in any way and tell you if you are going to be approved or not. I like this—it is an attractive feature for those interested in the card. If you are not going to be approved, they don’t touch your credit score at all; they only do it if they are very likely to approve you.
If you can live with the bare-bones features described above, I believe the X1 card is an attractive option that could be a financially reasonable default credit card for many people.
Click here to apply for the X1 Credit Card.
2.5% Cash Back on Up to $10,000 In Purchases a Month,
Few Strings Attached: Alliant Credit Union
The Alliant Credit Union Visa Signature Card gives you 2.5% cash back on up to $10,000 in purchases a month (anything over $10,000 gets only 1.5%). To get the 2.5%, you have to:
1.) Have an Alliant checking account.
2.) Receive e-statements on that account.
3.) Receive at least one electronic deposit in the account a month ((direct deposit, ATM deposit, mobile check deposit or transfer from another financial institution)
4.) Maintain an average daily balance of at least $1,000 in the checking account.
If you do not meet the four requirements above, you get 1.5% back (unattractive) instead of 2.5% (very good) back on the card. However, these requirements are quite easy to meet, so the Alliant card is quite attractive for use outside of bonus categories. The Alliant card has no annual fee.
Apply for the Alliant Credit Union Visa Signature Card by clicking here.
4.5% Towards Travel or 3% Cash Back On Many Purchases with U. S. Bank
The U. S. Bank Altitude Reserve Card gives you three points per dollar on purchases made with a mobile wallet like Apple Pay, Samsung Pay, or Google Pay; if you can tap your phone to pay you get 3 points per dollar, and the points are worth either 1 cent each as cash back or 1.5 cents each when used on the U. S. Bank travel portal for flights, hotels, or rental cars. While you cannot get three points per dollar on Internet purchases with this card (except for travel purchases, which get 3 points per dollar), it is now possible to pay for almost anything with your phone, so getting 3% back in cash on anything you can pay for in person is quite attractive. The card has a $400 annual fee which is largely cancelled out through by giving you a $325 annual travel, dining, and takeout credit. You also get access to Priority Pass lounges at airports (12 free visits a year), a $100 credit for Global Entry or TSA Precheck, and a few other benefits. I have found U. S. Bank to have customer service that is better than that of Bank of America but worse than that of American Express.
Apply for the U. S. Bank Altitude Reserve Card by clicking here.
2.2% Cash Back On All Purchases + 5.5% in One Category with Citibank Credit Cards
The Citi Double Cash Credit Card gives you 2 Thank You points per dollar on all purchases, and points can be redeemed at a cent each—it is a simple 2% back card with no annual fee. However, if you also get a Citi Rewards Plus Card, all Thank You Point redemptions get 10% back, so you end up with 2% + 10% = 2.2% back on all purchases. You can combine these two cards with a Citi Custom Cash Card, which gives you 5% back on up to $500 a month in one of the following categories. If you get the extra 10% back from the Citi Rewards Plus card, it actually gives you 5.5% back. If you add in the Citi Premier Card, you get an uncapped 3.3% back at grocery stores as well as the ability to transfer Thank You points to valuable airline and hotel partners, potentially making them worth far more than one cent each. I have found Citibank’s customer service to need improvement; Citibank makes it hard for you to reach a person, and its automated system—like that of Bank of America—will not transfer you to a person if you press the wrong number in the automated system, but after pressing one for this and two for that and seven for this and nine for that and wasting a bunch of your time, it will hang up on you and make you start over if you do not do what it wants, showing that Citi places a low value on the time of its customers. If you can deal with this kind of dubious service, the ability to get 2.2% in cash or points that transfer to airline or hotel partners, as well as 5.5% in a useful category, makes for an attractive combination.
Click here to apply for the Citi Double Cash Credit Card.
Click here to apply for the Citi Rewards Plus Credit Card.
Click here to apply for the Citi Custom Cash Credit Card.
2% Back On All Purchases With the Capital One Venture X Personal or Business Card
NOTE: The part below here is being edited.
Click here to apply for the Capital One Venture X Personal Credit Card
Click here to apply for the Capital One Venture X Business Credit Card
Cash Rewards Cards–Flat Rate of 2% Cash Back on all Purchases
Some credit cards offer a flat rate of cash back on all purchases, while others increase the rate of cash back depending upon how much one spends. In my opinion, the two best cash back credit cards are the Citi Double Cash Mastercard and the Fidelity Investment Awards Visa Card. The Citi Double Cash card gives you 1% back in cash as soon as you make a purchase, and then an additional 1% when you pay the purchase off. Since you should be paying your bill in full every month, that means with only a small time delay you are getting 2% cash back whenever you use the card. The Fidelity Visa gives you a straight 2% back as long as the money is transferred into a Fidelity Investments account. If one does not have a Fidelity account, then you get a lesser amount. However, it is very easy to open up a Fidelity account, and while (of course) Fidelity wants you to keep the money with them, you can withdraw the money from the Fidelity account to your linked back account as soon as it is deposited. I have both of these cards and have found them to provide good customer service.
There are other cash back cards out there; one that offers a cash back rate that is competitive with the Fidelity Visa is the Capital One QuickSilver Rewards Visa Card, which provides a flat 1.5% cash back on all purchases. Do not confuse this card with the Capital One QuickSilver One Rewards Mastercard, which also gives 1.5% cash back but has a $39 annual fee. (None of the cards described above have an annual fee. For the average person, paying an annual fee for a credit card is not a good idea.) Many credit cards offer 1% cask back, and some offer even less. It is rarely worthwhile to use a credit card that gives less than 2% cash back when one that gives 2% cash back (and also has good customer service) is available.
c. 4% Back on All Purchases
There is a way to get c. 4% back on all purchases that you make with a certain credit card. I believe that it is worthwhile enough to have its own page devoted to it; click here to find out how to do this.
Cash Rewards Cards–Specific Categories get up to 5% Back
5% Back on Gas and Groceries
Some credit cards offer less than the flat 2% cash back on all purchases but allow customers to get a higher percentage on certain categories. A card that offers 5% back on gas, groceries, and bookstores (including Amazon.com) is the Sallie Mae MasterCard. (You can apply using the link here, but the online application tries to force you to sign up for e-statements. You can get normal statements by applying over the phone at (800) 307-0341.) Other purchases receive 1% cash back. The card is designed for students who wish to apply the cash back to their college loans, but anyone, student or not, can have the cash back in the form of a statement credit. The only significant drawback is that the 5% rate is only available for the first $250 a month spent on gas and groceries combined, and on the first $750 spent at bookstores. Of course, both the husband and wife in a family could get one, and then the 5% would be available on $500 a month on the combined gas and groceries category and $1500 on the bookstore category.
Another card worth considering is the the Pentagon Federal Credit Union Platinum Rewards Card. This credit card gives one 5 points on gas paid for at the pump, 3 points on supermarket purchases, and 1 point on all other purchases. You can redeem the points for Visa gift cards that can be employed wherever credit cards are accepted, so they are not much different than cash. For years the points were exactly equivalent to cash, so that 5 points was the same thing as 5% cash back, but relatively recently Pen Fed reduced the value of the points (without sending out any notice) so that 1 point is only 85% of cash value. In other words, if one received 5% cash back then spending $100 on gas would lead to $5 back, and 5 points was the same thing as $5. Now, however, 5 points is only worth 85% of $5, that is, $4.25. In other words, the card does not really offer 5% cash back on gas, 3% cash back on groceries, and 1% on everything else anymore; it now offers 4.25% back on gas, 2.55% back on supermarket purchases, and 0.85% back on everything else (5 x 0.85 = 4.25; 3 x 0.85 = 2.55; 1 x 0.85 = 0.85). I do not appreciate the fact that they reduced the value of the points without any notice, nor the fact that it is nearly impossible to find out that the points are not really equivalent to dollars until one has already applied for the card, employed the card, and then attempted to redeem points. Also, the fact that they reduced the value of the points in the past makes me wonder if they will do it again in the future. Besides this negative, there are two others that I believe should be mentioned. First, the card application page states: “Cardholders may sign up for free electronic statement notification to avoid paying a $1.00 fee for mailed paper statements.” In other words, if you want to get your credit card statement in the mail, you will have to pay $1 every month. There are certain exceptions to this rule, and I was able, after dealing with some of their representatives, to continue to get free paper statements even after this rule was initially instituted (some time after I first got this credit card), and I continue to get free paper statements without any problem today. I have quite a few bills that come in the mail every month, and I would have a hard time keeping track of everything without physical paper statements. Second, their customer service, while not terrible, is also not the greatest. Since Pen Fed is a credit union that offers credit cards, not a financial giant offering a credit card, at times one wants to speak to a human being about a credit card issue and it is not that easy. Despite these negatives, the Pentagon Federal Credit Union Platinum Rewards Card is, in my opinion, worth recommending because few cards offer 4.25% back or higher on gas all year round, and the 2.55% back on groceries is also not shabby. For other sorts of purchases, the 0.85% cash back is not very good. One other positive about the card should be mentioned–it imposes no foreign transaction fees, so it is a good card to use outside of the United States.
Pentagon Federal Credit Union also offers the PenFed Platinum Cash Rewards Visa Card, which offers 5% back in cash on gas if one meets certain conditions listed on the website. Otherwise one earns only 3% back on gas, and, if the conditions are not met, one is assessed a $25 annual fee after the first year. The card does not give any cash back at all on purchases other than gas. The same $1 a month fee as described above applies if one wants paper statements instead of e-statements. It has no foreign transaction fees.
In order to get a Pen Fed credit card, one needs to become a part of the credit union. People in the military, employees of the United States government, and various other parties can join the Pentagon Federal Credit Union for free. Everyone else can also join, though, by making a small one-time donation to a military charity or a military advocacy organization. Join the Pentagon Federal Credit Union by clicking here.
The Blue Cash Preferred American Express Card provides customers with 6% back at U. S. Supermarkets (up to $6,000 per year in purchases), 3% back at select department stores, and 1% back on everything else. However, it has a $75 annual fee. If you spent the entire $6000 a year on groceries, you would get $360 cash back. Subtracting the $75 annual fee, one is left with $285 net cash back, which is 4.75%–and that is the very best deal you can get if you spend exactly $6,000 a year on groceries. The annual fee makes this card, in my opinion, inferior to the Sallie Mae MasterCard and the Pentagon Federal Credit Union Platinum Rewards Card discussed above.
c. 5% Back on Travel
You can get 5 points back per dollar spent on airfare with the PenFed Premium Travel Rewards American Express Card, as well as 1 point per dollar on other purchases. The card has no foreign transaction fees. I do not own this card, but I suspect that points convert the same way that they do with the PenFed Platinum Rewards Card described above, so that 5 points is equal to 4.25% cash back and 1 point is equal to 0.85% cash back.
5% Back on Some Utilities and Office Supplies
The Chase Ink Cash Business Card offers 5% cash back on cellular phone, landline, internet and cable TV services, as well as office supply stores, each account anniversary year, for up to $25,000 a year in combined purchases, as well as 2% cash back on the first $25,000 spent at gas stations and restaurants. Other purchases earn 1% cash back. The Chase Ink card has great customer service. Of course, it is a business card. However, if you have any kind of self-employment income at all, whether from selling items on E-bay, to being a Mystery Shopper, to having an e-book for sale, to teaching music lessons, to doing odd jobs for others, to filling pulpits in churches or teaching Bible college classes where you receive financial recompense in addition to spiritual blessings from the Lord, you have a business. You can identify as a Sole Proprietor, use your name as the business name, and use your Social Security Number as your business tax identification number. However, you should be careful about using a business card for personal use; see the article here for information. (You also ought to be sure that you are paying taxes on your income, Romans 13).
5% Back on Rotating Categories
A number of credit cards offer 5% back in rotating categories that typically change each quarter of a year. That is, some categories receive 5% back in January-March, then others in April-June, then others in July-September, and finally others in October-December. Cards with rotating 5% back categories include the Chase Freedom Card and the Discover It Card, The U. S. Bank Cash + Visa Signature Card allows you to pick two (usually rather narrow) categories in which you can receive 5% cash back.
While the 5% back is nice, the rotating quarterly categories can be confusing and difficult to keep track of. You usually need to contact the card company every quarter to activate the 5% categories, or you do not get the higher rate. Sometimes the categories are good, sometimes they are not, and sometimes they are hard to remember and you may find out you are getting 1% back when you thought you were getting 5%.
Summary on Cash Back Cards
In summary, by using the right credit card, you can consistently get c. 5% cash back on gas, groceries, and many other categories from your cell phone to your Internet bill. You can also get at least 2% cash back on all your other purchases. If you avoid the dangers of credit card use, these rewards can help you to be a good steward of your financial resources. Be sure to tithe on whatever credit card rewards you receive–in the eyes of God, they are “increase,” and you are to tithe on all your increase (e. g., Deuteronomy 14:22).
Rewards Points vs. Cash Rewards
Many credit cards do not offer cash back, but points of some kind. If you are thinking about getting a card that offers points instead of cash, make sure to figure out what the actual cash value of the points is. One credit card may determine that 100 points is the same thing as $1, another may say that 1,000 points is the same thing as $1, another may say that 10,000 points is the same thing as $1, others may have a variety of other amounts that are equivalent, and another credit card may not allow you to redeem points for cash at all, but only for other things such as airline flights, merchandise, or gift cards. A downside of points is that the company can more easily reduce the value of accumulated points than they can simply take away cash back. For example, consider how Pentagon Federal Credit Union reduced the value of their points without even notifying their customers (as I described above when reviewing their credit cards). If points can be redeemed for gift cards that you are actually going to use (such as for gas stations in your area, or large merchants such as Walmart or Target), then they have a value closer to cash than if they can only be redeemed for, say, gift cards to restaurants that are luxuries, not necessities. Points redeemable for flights, hotels, and so on are obviously much more useful for some people than for others, and in certain situations cards with preferential point redemption may be better than cash for some people. For example, if a person who needed to fly frequently could either redeem points for cash at a 1:1 level, or can redeem points for airline tickets where points are worth more than the simple cash equivalent, he may find that the points on a particular credit card are superior to simple cash back in his situation. Keep in mind that credit card companies only get a few percentage points on each dollar spent in fees from merchants, and they cannot give their total body of customers rewards that are worth more than what they are making from merchants without going bankrupt. In general, I prefer simple cash back to the complexities credit cards offer with points, especially if the points are not directly redeemable for cash, but this preference may not hold for everyone.
Best Deals on Opening Bonuses
A variety of credit cards offer hefty opening bonuses. I have personally gotten an offer in the mail for a credit card that gave a newly approved applicant 150,000 points, equivalent to $1,500, and also another one that offers new cardholders $750. There are a number of cards that have opening bonuses of $500 or more. Generally speaking, you should only open a credit card account if the card is one that you think you will actually use–opening a card simply to get an opening bonus is usually not a good idea. It certainly is not a good idea, in the vast majority of situations, to open a credit card at a department store or some other retail outlet for something like $10 off a purchase or 30% off one item. Credit card companies make offers far better than that, and since opening a new card can, at least temporarily, lower your credit score, you ought to refrain from unnecessarily applying for credit cards just to get a small opening bonus. On the other hand, if a card is willing to give me $500 or $600 to try it out, I am definitely going to give it serious consideration. If you find a card that you believe would be beneficial, before filling out an online application spend five minutes searching the internet for opening bonuses associated with the card. If, say, the normal webpage states that the card has a $100 opening bonus, search for that card and the words “$200 opening bonus” or “$250 opening bonus.” If the bank website states that the card comes with an opening bonus of 50,000 points, which are worth $500, search for the name of that card and “70,000 bonus points” or “60,000 bonus points.” That small amount of time could net you some extra cash; if it does not, you are only out a few minutes.
Oftentimes credit cards with generous opening bonuses in the $500 range have significant minimum spending requirements, such as, for example, spending $3,000 or $5,000 within the first few months of obtaining the credit card. If you are blessed to get an opening bonus worth $1,000, you are likely to have to spend $10,000 to obtain it. Obviously, it is not good financial stewardship for you to spend $5000 wastefully to recoup $500. However, there are ways to “spend” the money without really spending it and thus meet minimum spending requirements for credit card opening bonuses. Here are a few ways:
1.) You can purchase and give yourself gift cards that are cash equivalents. If you go through Ebates, you can even get cash back on the purchase of American Express gift cards that can be used just like cash wherever American Express is accepted and save some extra (sign up here).
2.) You can also purchase gift cards for specific merchants that you would use anyway at a discount. If you know in the next few months you will get $500 in groceries at Walmart, you can purchase a discounted Walmart gift card and get part of the way to your required purchase balance to get the opening bonus.
3.) You can make purchases in advance that you would need to make in any case, such as refilling the heating unit in your house with oil or natural gas, paying in advance on your car or home insurance, and so on.
4.) You can also pay your taxes or other bills with a credit card through organizations such as Official Payments. (The IRS offers a list of companies through whom you can pay your taxes with a credit card here.) While they typically charge a fee, such as, for federal taxes, between 1.87% and 2.35%, so it is generally not worth it to use such a service simply to pay your tax, if you are able to meet your minimum purchase requirement in such a manner it could well be worthwhile.
Annual Fees
Some credit cards–including those with some of the highest opening bonuses–have annual fees. However, many other cards, including the vast majority of those recommended above, have no annual fee. Unless the benefits you receive from a card with an annual fee very clearly outweigh what you could get from a similar card with no fee, I would recommend keeping only cards that do not charge you anything. Credit card companies make plenty of money from the fees they assess merchants and from people who foolishly fail to pay off their balances in full every month. Why should you pay them an annual fee just to have their card?
This fact does not mean that, if, for example, I received an offer for a credit card with a very large opening bonus (for instance, $500 or more), with no annual fee for the first year, but an annual fee for subsequent years, I would not seriously consider applying for the card. The credit card company appears to be convinced that their product is so good that they can offer a huge bonus to people to get it and waive their annual fee the first year, believing that they will willingly pay the annual fee in subsequent years. I do not believe it is wrong to take them up on such an offer, and, if the card turns out not to be worth the annual fee, to close it within the initial year and keep the opening bonus. However, I do not think it is Christ-like to repeatedly open and close a card of this kind in multiple years to rake in repeated opening bonuses. Christians are to love their neighbors as themselves, and that includes people who own credit card companies. Giving a card a try once because of a very attractive opening bonus, and then closing it, can be done with an upright conscience; repeatedly opening and closing a card with no intention whatever of keeping it is simply milking the company for money and does not meet the Christian standard of conduct of doing (and even thinking about) what is true, honorable, just, pure, lovely, virtuous, of good report, and praiseworthy (Philippians 4:8) but is a violation of the Eighth Commandment, “Thou shalt not steal” (Exodus 20:15).
Concluding Summary
In summary, you can get 2% cash back on all purchases with a credit card, as well as 5% back on gas, groceries, utilities, and many other categories. There is even a way to get c. 4% off on just about all your purchases. Thus, if–and, it must be repeated, ONLY if–you avoid the dangers of credit card use, then a careful and judicious employment of credit cards can be part of sound Biblical financial stewardship.
Credit Cards, a Biblical Christian View: Part 1, Dangers
