Advice on Choosing a First Credit Card

I recently had an exchange with an old friend of mine named Spencer, who is finishing college and interested in acquiring his first credit card. He writes:

I was writing to ask your advice on Credit Cards. I know that you are a credit master, and I’m finally looking at getting my first card. I’ve been searching around, but so far I’m still totally overwhelmed. Do you have any suggestions for a first, easy to handle card? I’ll just get getting it to establish my credit line and using more like a Debit card (only buying things I can already pay off)… Any advice would be much appreciated. I don’t wanna end up with credit issues like Greece… :-)

Mr. IM replies:

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Citi Adds $60 Annual Fee to Many Cards – Watch Your Mailbox

If you have a credit card from Citibank, keep an eye on your mailbox because Citi has recently implemented a $60 annual fee for many of their cards. Citibank – the same too-big-to-fail monstrosity – the same company that accepted taxpayer bailout money and subsequently jacked up interest rates across the board – yeah, that company. Not content with the cash they’ve already wrung from the taxpayers, they have now tacked on this $60 fee to many cards that previously had no annual fee. However, Citi will generously refund the $60 if you spend $2,400 per year on the card. Wow, thanks for nothing, Citi. Continue reading

Chase Sapphire Sign-up Bonus – $100 or $150

Chase-Sapphire Chase is promoting their new Sapphire credit card by offering a sign-up bonus for it. The card comes in both a free version and an annual fee version, with a $100 and a $150 sign-up bonus respectively.

Unfortunately, it doesn’t look like you can get both bonuses because the offer is only good for first-time cardholders who do not already have existing accounts. You can convert an existing Chase card to Sapphire, but don’t count on getting a bonus that way.

Free Version – $100 Bonus

Chase Sapphire – Regular

Chase-Sapphire-100Getting a $100 bonus with this card is easy-peasy. Once you’re approved, all you have to do is make a single purchase of any amount and pay it off. Six-to-eight weeks later, you should receive 10,000 bonus points, which you can redeem for a $100 check, a gift card, or a credit toward a travel purchase.

After that, feel free to throw the card in the sock drawer where it belongs since there are much better cards out there. There’s no annual fee, unlike the Preferred version.

Here’s a screenshot of the offer for the sake of preservation. Click the image to enlarge.

Preferred Version – $150 Bonus

Chase Sapphire – Preferred

Chase-Sapphire-150 If you don’t mind doing a little more work, you can squeeze an extra $50 bonus versus the regular Sapphire card. To do so, you must spend $1,000 on the card within the first three months after your account is opened. Qualifying transactions include purchases and balance transfers, but not cash advances. If your normal monthly spending would not get you to that level, you could always buy gift cards or dollar coins from the US Mint.

Six-to-eight weeks after you hit the magical 1k threshold, you will receive 15,000 bonus point, which you can redeem for a $150 check, a gift card, or a credit toward a travel purchase. One advantage of the Preferred card is that points are worth 25% more when used to book airline travel through their rewards website. If you pursue this option, you can redeem your 16,000 points (15k + 1k spending) for a $200 flight credit worth $200. You could also opt to transfer your 15,000 bonus points to frequent flyer miles (1:1 transfer).

The downside to the Preferred card is the $95 annual fee, waived for the first year. The generic rewards program this card offers (1 point per dollar spent) does not make it worth paying an annual fee, so be sure to cancel sometime during the first year. You could also call and try to have it converted to the regular Sapphire card.

Other Thoughts

I admit that I have a growing dislike and mistrust of Chase, especially after they slashed and burned the savings interest rate at WaMu after their takeover, and especially after they effectively killed the Chase Freedom card. Screwing some sign-up bonus cash out of Chase feels like sweet vengeance to me. :-)

As with all bonus offers, who know how long they will actually last? The $100 bonus for the free version has been around for several weeks now, while the offer for the Preferred card has been volatile. First, it was a 25,000 points after first purchase offer. Then it dropped to 15,000 points, but the annual fee was not waived (which totally sucked – making it worse than the bonus for the free version). At some point, Chase once again decided to waive the annual fee for the first year, but raised the spending threshold to $1,000 in order to get the bonus. That’s where the offer stands now.

Mr. IM’s recommendation – The bonus for the Preferred card is only worth it if you plan to redeem it for a flight credit (to earn the extra 25% point value) AND if you remember to cancel before the end of the first year (set a Google Calendar reminder to help). Otherwise, most people should just grab the quick-and-easy $100 bonus for the regular Sapphire card.

In the end, any way to transfer some cash from Chase’s pockets to the consumer is good in my book. :-)

VISA Black Credit Card – Exclusive or Egotistic?

Visa - Black Card To the best of my knowledge, I’m not a pretentious jerk-wad. Nor is my ego inflated by enticements of luxury and exclusivity. I’ve never owned a “Members-only” jacket, if that means anything at all.

Imagine my surprise, then, when I received an invitation to apply for the exclusive Black Card from VISA, which (according to the marketing mumbo-jumbo) is the world’s most prestigious and versatile credit card. The invitation exuded exclusivity and hubris. After all, why would I want to use a credit card that common people (riff-raff) use when I can show the world my elegant distinction with the swanky black card?

Um, I call bollocks!

Before I deconstruct the BS that is the mentality allowing the Black Card to exist, here are the card’s bullet points:

  • Limited Membership
  • 24-Hour Concierge Service
  • Exclusive Rewards Program
  • Luxury Gifts
  • Patent Pending Carbon Card
  • Annual Fee $495

You read that right – the annual fee, just for the so-called privilege of carrying the card, is $495 per year. And what does that staggering membership fee grant you, other than the privilege of looking like an idiot? Here’s the unedited text of the advert:

For those who demand only the best of what life has to offer, the exclusive VISA Black Card is for you. The Black Card is not just another piece of plastic. Made with carbon, it is the ultimate buying tool.

The Black Card is not just for everyone. In fact, it is limited to only 1% of U.S. residents to ensure the highest caliber of personal service is provided to every Cardmember. Made with carbon, the Visa Black Card is guaranteed to get you noticed.

Become a Black Card member today and enjoy our 24-hour world class Concierge Service ready to assist you with all your business, travel and leisure needs.

This, to me, is nothing more than PR spin. Why in the world does a credit card need to be prestigious anyway? That’s like food or beverages that need to be extreme. Are there really people out there who are so insecure that they feel the need to stroke their egos by plinking down a prestigious credit card on a store counter versus a normal one? I pity them.

Monocle-man

I say, that's quite an exquisite credit card.

The marketing-geniuses behind the Black Card want you to believe that you are a superior human being. You are so superior, in fact, that you deserve, nay, DEMAND only the best of what life has to offer. You shouldn’t be caught dead carrying an ordinary credit card. Common people use those! And you’re not common, are you?

As a new Black Card member, people will notice you. Women will throw themselves at you. Men will line up to give you high-fives. Peasants and other mere-mortals will make sweeping bows as you walk by.

In fact, here is how a typical scene will play out every time you make a purchase with your card:

Hot store clerk: The total is $29.50.

VISA Black Cardmember: Here you go (hands over Black card).

Hot store clerk: Nice card. I definitely notice you and feel an uncontrollable urge to sleep with you right now.

VISA Black Cardmember: That sounds great. It’s too bad I have such a small penis.

Yeah, I went there. This brings us to the crux of the matter. The creators of the VISA Black Card take advantage of the one thing that allows such a ridiculous card to exist: INSECURITY. It preys upon people’s feelings of not being good enough, smart enough, talented enough, successful enough, or satisfied enough with their bodily endowments. These feelings are natural. We are all humans, after all.

Insecurity drives people to attempt to make up for their perceived shortcomings in other ways: by flaunting wealth, by driving souped-up cars and revving engines annoyingly in public, by keeping up with the Jones’, and by paying exorbitant fees for an exclusive credit card.

Douchebag Seriously, why in the world should one credit card be perceived as more elite than another? I don’t buy it. A credit card is a tool that serves a purpose. It’s not a status symbol. And people who pay $495 a year for a credit card that promises recognition, exclusivity, and the lure of luxury gifts lead insecure, pathetic lives. These people deserve pity, not the best of what life has to offer.

VISA’s slogan for the Black Card is: The World Awaits. Hey VISA, I propose a few slogans for your marketing team to consider.

Alternative slogans

VISA Black Card – Drowning in debt has never been more stylish!

VISA Black Card – THE card for people with more money than brains!

VISA Black Card – Show the world what a douche you are!

The Fall of Chase Freedom – Continued Commentary

chasediscovermeld.pngIf you have a Chase Freedom card, you have likely received a letter from them touting some upcoming improvements to your account. I received my letter a little over a week ago, and I giddily responded here.

The main highlights are that Chase is tossing aside the 3% cashback scheme for set categories (such as groceries and gas) in favor of rotating categories (à la Discover). They’re also nixing the current ability to cash in $200 of rewards for a $250 check, one of the primary benefits of using the Chase Freedom card.

Not long after my previous post went live, a representative from Chase’s External Affairs department contacted me. She asked me to clarify a few points. No, that’s not quite right. She wanted to point out some inaccuracies in the posting so [my] site and its authors have an accurate point of reference about Chase Freedom and its features.

Okay, sure. I’m the only author on this site, and I think I already have a pretty solid grasp of the Freedom card and its fall toward obsolescence. But out of appreciation (and respect) to the Chase representative, I will post her comments here. Continue reading