Category: Credit Card Reviews

Discussion of credit card offerings

Credit card strategies for uniformed services personnel

Credit card strategies for uniformed services personnel

How do you maximize awards travel and credit cards in relation to the Uniformed Services? One of the laws protecting all seven branches of the Uniformed Services is the Servicemembers Civil Relief Act, or SCRA for short, which provides a host of credit-related benefits to servicemembers. Among them are a cap for APR for credit card balances and more importantly in my perspective, a waiver of annual fees associated with credit cards.

Unfortunately, SCRA for the most part only guarantees a waiver of annual fees for credit cards you had prior to entering active duty. This means you cannot enter active duty and pick up all the credit cards you want and expect to pay $0. You have to plan out accordingly (especially with a company like Chase and their 5/24 rule), but if you play your cards right (no pun intended), you could potentially enter active duty with a handful of high annual fee cards and have all their fees waived.

Prior to entering active duty, I had a Chase Sapphire Reserve Visa, Chase United MileagePlus Explorer Visa, Chase IHG Rewards Club Mastercard, and Barclay AAdvantage Aviator Red Mastercard. Post-commissioning, I called Chase and Barclay and requested SCRA benefits to be considered for my accounts. The process was simple: the companies would verify my active duty status (https://scra.dmdc.osd.mil/scra/#/single-record) and notify me within 30 days of my SCRA status. Within two weeks, both companies wrote back to inform me that (as I expected) I am eligible for SCRA benefits, and all the annual fees (since starting active duty) associated with those cards were waived and will continue to be waived for the duration of active duty! Talk about exceptional value when the Chase Sapphire Reserve Visa card bears a hefty $450 annual fee!

Is there another side to the “for the most part?” how SCRA is applied? While most credit card companies (e.g. Chase, Barclay, Citibank) follow the SCRA law to the letter, American Express is unique and is very active duty-friendly. Per the experience of active duty coworkers, American Express will waive fees for cards even if you applied for and received them after entering active duty, meaning American Express will (uniquely) go beyond the minimum requirement of SCRA. I have my eyes set on applying for the American Express Platinum card ($550 annual fee), a valuable addition to any awards traveler’s wallet, in the near future.

To summarize: in regards to SCRA, if there is a non-American Express card you want, obtain it before entering active duty. For American Express cards, you’ll get SCRA benefits regardless of when you obtain it.

More recently in September 2017, a new act was enacted called the Military Lending Act (MLA). With provisions very similar to SCRA, the MLA also guarantees a waiver of annual fees for cards obtained after September 2017, which means that if you qualify for MLA, you can apply for a card you want now and have its annual fee waived. Unfortunately, the wording of MLA is specific in that it only applies to the Armed Services (Army, Marine Corps, Navy, Air Force, Coast Guard), making PHS officers like myself excluded from the act (see your eligibility at https://mla.dmdc.osd.mil/mla/#/single-record). When I called Chase, Citibank, and US Bank, they confirmed verbally that MLA only covers the Armed Services. But, do you know someone who is currently active duty in the Armed Services? They will be eligible for MLA! Encourage them to apply for a card that best suites his or her travel needs!

These three cards alone can earn you enough miles to fly anywhere in the world in business class

These three cards alone can earn you enough miles to fly anywhere in the world in business class

American Airlines is unique among air companies in that it has made co-branding agreements with two banks: Citi and Barclays. As a result, you can apply for credit cards with both banks and combine the signup bonus into your AAdvantage account. And it so happens that both banks have their highest public offers available right now. If you follow the plan laid out below, you can collect 180,000 AAdvantage miles in signup bonus, enough for round trip travel to anywhere in the world in business class.

Citi AAdvantage Platinum Select World Elite Mastercard

Citi(R) / AAdvantage(R) Platinum Select(R) World Elite(TM) Mastercard(R) - Citi's Best Airline Credit Card with American Airlines AAdvantage(R) miles

  • 60K AAdvantage miles after making $3000 in purchase within the first 3 months of account opening
  • No foreign transaction fees
  • Preferred boarding, up to four on the same ticket, on domestic AA flights
  • First checked bag fee waived
  • Double miles on American Airlines purchases
  • Reduced mileage awards
  • Receive 10% in miles back when redeeming miles for flights, up to 10K per year
  • Annual fee of $95, waived for the first year

Besides earning one-time bonus offer, one of the noticeable features is free checked bag and priority boarding on domestic American Airlines flights. With Delta, United, and American all broadening their reach in Basic Economy fare, card holders can dip into the lowest fare without having to be constrained by the lack of carry-on privilege. You can just check in your bag instead. I personally also find 10% miles back beneficial. If you maximize your rebate (ie, redeem 100K miles on award tickets), 10K AA miles saved more than pays for the annual fee.

60K sign up bonus is the highest I have seen for the public. Apply yours here. It’s important to note that Citi bank has a 24-month window policy. If you have opened or closed any AAdvantage-earning Citi card within the past 24 months, you might be approved for the card but NOT be given the sign up bonus.

Barclay’s AAdvantage Aviator Red World Elite Mastercard

AAdvantage Aviator Red

  • 60K AAdvantage miles after making a purchase within the first 3 months of account opening
  • No foreign transaction fees
  • Preferred boarding, up to four on the same ticket, on domestic AA flights
  • First checked bag fee waived
  • Double miles on American Airlines purchases
  • Reduced mileage awards
  • Receive 10% in miles back when redeeming miles for flights, up to 10K per year
  • Annual fee of $95, NOT waived for the first year

As  you can see, the terms are almost identical to Cit’s Platinum Select card. The biggest difference is with Barclay, annual fee is assessed before the first statement is cut, but sign up bonus is awarded with just one purchase in any amount. Follow the link to apply.

Since Citi and Barclay are different banks, applying for one does not affect the other, besides usual new credit pull on your credit report.

CitiBusiness AAdvantage Platinum Select World Mastercard

CitiBusiness® / AAdvantage® Platinum Select® World Mastercard®

Please note, this the business version of the Platinum Select personal card discussed above. I argued in my previous post that business card is not necessarily limited to profitable business owners.

  • 60K AAdvantage miles after making $3000 in purchase within the first 3 months of account opening
  • No foreign transaction fees
  • Preferred boarding, up to four on the same ticket, on domestic AA flights
  • First checked bag fee waived
  • Double miles on American Airlines purchases
  • Reduced mileage awards
  • $99 Companion fare, good for domestic flight only, after $30,000 spending in a year
  • Annual fee of $95, waived for the first year

There is not much meaningful difference between the business and personal cards. I don’t value $99 companion ticket that much as I may not have a chance to use it.

Here’s the link.

Three AAdvantage-earning cards offering maximum sign up bonus miles at the same time is not common. This will be a quick way to accumulate sizable amount of American Airlines miles. Even though AA domestic award seat is very limited, their OneWorld partners still offer reasonable redemption choices.

Following American Airlines’ award chart, from the US, the most expensive region for award redemption, South Pacific, costs 80K AAdvantage miles one way in business class. The sign up bonus from these three cards will take you anywhere in the world American Airlines or its OneWorld partners fly.

Are you interested in applying for these cards?

The case for business credit cards

The case for business credit cards

While most consumers think of credit cards for personal use only, many banks offer credit cards to business. By double-dipping into both personal and business card offerings, you will find miles and points come a lot faster than personal card alone, not to mention some banks offer attractive perks to business cards only. More importantly, business card applications do not appear on personal credit reports, making it convenient to circumvent limitations imposed by banks such as Chase’s five cards per 24 months, or “5/24” rule.

Do you need to have a fully established business in order to apply for business credit card? Not really. If you freelance, do contract work, or sell items at garage sale or online at eBay or Craigslist, you are engaging in for-profit business and qualify for business credit cards to cover business expenses.

When you apply for business cards, you are not required to provide Employer Identification Number or tax ID. The business name can be something as simple as Smith Family Business. Of course, if your business is taking off, it’s a good idea to incorporate or organize legally anyway and to apply for an EIN. Again, as far as application is concerned, an EIN is not required.

Of course, for small business, credit is secured by owners personally. You have to provide your own social security number on the application.

Are you interested in applying for a business credit card? I will review business card offerings in the future.

Why you should apply for this card next

Why you should apply for this card next

If you have followed my suggestion and have Chase Sapphire Reserve in hand, what would you do next?

The answer will not be as straight forward as CSR being the top choice, but I will argue that building a healthy dose of Chase Ultimate Rewards point reservoir is essential to any successful MMB game plan, and you need to get your second UR-earning card in before 5/24 rule closes in on you.

To that end, the following two cards have distinct merits of their own and warrant consideration: Chase Freedom and Chase Freedom Unlimited.

Clickable card art links to Chase Freedom(Registered Trademark) credit card product page

 

Chase Freedom features 5x bonus categories each quarter

Clickable card art links to Chase Freedom Unlimited (Registered Trademark) credit card product page

Chase Freedom Unlimited has fixed earning ratio of 1.5 point/dollar 

What do they have in common? They both earn Ultimate Rewards points, carry no annual fees, and in conjunction with CSR you already have, see their point value significantly enhanced.

The difference between them comes down to earning bonus. Freedom has a quarterly rotation of different categories that earn five points per dollar spent. Restaurants, gas, drug stores, department stores, home improvement stores, et al, are the usual suspects for quarterly bonus. Non bonus purchases earn one point per dollar spent. Freedom is great if you are organized and can keep up with bonus categories because earning five points per dollar on purchases you normally would make offers excellent values. On the other hand, Freedom Unlimited removes the category bonus but all your purchases earn 1.5 UR points per dollar, ideal for people who prefer collecting above normal rate with simplicity.

Currently, Chase offers 15K Ultimate Rewards points on both new Freedom and Freedom Unlimited accounts, good for $150 cash back each (but I hope you save the points for better value), for $500 in purchases made in the first three months within account opening.

Another option for those who own a business is to apply for Chase Ink Business Preferred card. The card earns 3x on travel, shipping cost, online advertising, and phone/internet/cable services. For a limited time, Chase offers 80K Ultimate Rewards points signing bonus for Chase Ink Business Preferred card, with $5000 purchase requirement for the first three months and an annual fee of $95. If you apply through the link I provided, you will earn the highest signup bonus Chase has ever offered to this card and I will receive a referral bonus and I do appreciate that.

Chase Ink Business Preferred (Service Mark) Card

Chase Business Preferred for business owners

For those who consider Chase Ink Business Preferred card, because the card overlaps somewhat with CSR’s benefits (both open the door for transferring Ultimate Rewards points from all your Chase UR-earning accounts to travel partners, and both earn 3 points per dollar spent on travel), if annual fee is your concern, you may consider after first year just keeping Business Preferred card and converting CSR to fee-free Freedom Unlimited if you don’t have one already or Freedom. Personally, I have two Freedom cards and find it helpful when $1500 quarterly bonus spending limit might be exceeded. Or convert Ink Business Preferred card into Chase Ink Cash card with no annual fee. But I wouldn’t start with Chase Ink Cash.

Why you should consider applying for this card first?

Why you should consider applying for this card first?

With so many credit cards on the market with competing merits, it is understandably difficult, if not impossible, for MMB beginners to sort through a wealth of information and make the first move. Let me make the job easy for you. If you are a beginner aspiring to travel free, with excellent credit but sparse credit applications recently (I will not repeat myself in MMB Basics), you should apply for Chase Sapphire Reserve first!

Ink Business Preferred credit card

Chase Sapphire Reserve stands out among all credit cards in value

The following considerations make me certain that starting with CSR will work for majority of you:

  • Sequence. Let me be clear on your path forward: once you start the MMB game, you will likely find yourself applying for multiple credit cards in the months and years to come. Chase is known to deny applicants who have opened five or more credits at any bank in the past 24 months (aka “5/24 rule”) for all its Ultimate Rewards points-earning credit cards, including CSR. If you plan to include a UR earning card in your portfolio, you need to apply for it first before others.
  • Point transfer. UR points can be used to redeem for gift cards or even statement credits, often at one cent per point ratio. What makes UR stand out in value is to transfer UR points to its vast network of travel partners in airlines and hotels. You will need ONE “premium” UR card (read: card with an annual fee) in order to gain access to transfer option. CSR fits the bill.
  • High fixed point value in travel. In addition to point transfer, CSR holders have the option to redeem UR points towards travel when booked at Chase’s web site at a fixed value of 1.5 cents per point, a very competitive formula.
  • Bonus earning potential. Usually credit cards earn one point per dollar spent. With CSR, you will earn 3x on popular categories such as travel and dining. Unlike other cards that narrowly define travel, CSR considers travel expense anywhere from direct airline, hotel, rental car, or cruise purchases to travel agencies and parking!
  • Generous travel credit. CSR refunds card holders $300 in the form of statement credits for, again, “travel” purchases each year. The credit effectively reduces the annual fee of $450 to $150.
  • Global Entry fee. CSR covers the cost of $100 Global Entry fee, renewable every five years. If you take advantage of this offer, your first year annual fee comes down to $50.
  • Airport lounge access. CSR card holders gain Priority Pass Select membership. With more than 1000 lounges in most major airports around the world, Priority Pass Select offers a relaxed travel experience at airports particularly when one travels on economy.
  • 50K signup bonus. When spent on travel, the signup bonus is worth $750, more than enough to offset the annual fee even without any other card benefits.
  • Conversion to other UR cards. In the worst case scenario, if you are not happy with CSR, you may choose to downgrade it to Chase Freedom, a no-fee card that’s great for earning UR points, before your card anniversary is up.

Chase currently offers 50K signup bonus for new Sapphire Reserve account, when you make $4000 in purchases within three months of account opening. You don’t have to follow my link, but if you apply through the link I provided, you will be eligible for the same great bonus offer and I will earn a referral incentive from Chase, too, and I really appreciate that.

Practicing what I am preaching, I applied and was approved for CSR in August of 2016, within days of its rollout. Recently, second annual fee was billed to my account and I easily convinced myself this is a keeper for me.