Discover Motiva

August 25th, 2009 No comments »
discover motiva

discover motiva

Basically, if you do not pay off your credit cards each month, this card may be an option for you. If you make 6 payments in a row on time, you get your monthly interest for that 6th month back. This means you wouldn’t have to pay interest for 2/12 months a year if you were someone who consistently pays on time.

In comparison with the other Discover cards, the card is really only worth it if you have an interest rate around 11% or higher, and you could never see yourself maximizing the spending in the other Discover Card’s categories.

Very Rough Example:

Balance of 10,000 and 11% interest
Monthly interest would be about $92.00
Total Return on the year would be $184.00 if all payments were made on time.
*Discover More Card Appx Cash Back when $10,000 spent and bonus categories maxed= $185*

As you can see the card is very comparable to the other Discover cards.

The card has an introductory APR 3.99%, meaning your rewards for the first year would not be so great. However, at the same time your paying less interest, so it’s not really a loss. After 6 months, the minimum APR on the card would be close to 12%, meaning you would receive greater rewards than the More and Open Road Cards. If you are someone who does carry a balance and makes their payments on time, this is definitely the best reward card to choose.

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Miles by Discover

August 18th, 2009 No comments »

Miles by Discover

Miles by Discover

The first thing you need to know, with any miles reward card, is an air mile is not an actual mile. Miles by Discover Card advertises its 1,000 miles received each month you make a purchase for the first year, as well as its 2 mile/dollars spent reward for the first $3,000 spent in travel and restaurant purchases. If a reward mile were actually a mile, I (living in New York) could expect a free flight to Orlando each month as I would receive the 1,000 bonus miles.

*Note: The values of frequent flyer miles are widely disputed and these figures are just an estimate for comparison with other cards*

This is certainly too good to be true, and here’s why:

Reward Miles =/= Actual Miles of Flight

A 900$ coach flight to Europe may cost around 50,000 miles, as opposed to the actual distance of less than 4,000 miles.

Now if you were able to capitalize on the $3,000 spent in travel and restaurant purchases, as many customers shopping for an air mile reward card might, the miles earned would be similar to as follows:

20,000 miles if you spent $5,000

25,000 miles if you spent $10,000

50,000 miles if you spent $35,000

If you value the coach flight to Europe at anywhere between $500-1100 (many factors influencing this), you can see that this probably the best Discover card for travelers, as other similar Discover cards return cash back of around $425-435 with similar spending habits.

Although consumers of any frequent flyer miles program or miles reward program report often report trouble with blackout dates, seat selection, etc; when spending their miles, it is very possible to spend them, here’s a good guide with tips on the best way to get the most out of your points:

http://www.budgettravel.com/bt-dyn/content/article/2005/06/04/AR2005060400484.html

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Discover Open Road Card

August 15th, 2009 No comments »

Discover Open Road Card

Discover Open Road Card

The review for this card is almost identical to that of the Discover More Card, except the rewards are focused on, as the name of the card implies, road purchases. While this includes car washes, “windshield wipers” (as advertised by the discover.com website), and most car related purchases, the majority of users will end up using the savings on gas.

The savings cap at 5 dollars a month (5% of 100 dollars), meaning if the user was able to cap the $100 dollars in auto purchases each month, which many will with current gas prices, yearly savings would be around $60. This may be slightly less than the More Card, but is perhaps more consistent, and perhaps easier to reach as I’d imagine more people could spend $100 a month in gas then they would be to spend $400 a quarter in entertainment purchases.

Annual savings would be approximately as follows:

$125 if you spent $5,000

$175 if you spent $10,000

$225 if you spent $15,000

$425 if you spent $35,000

If you were extremley organized, spent enough in the required categories, and needed to save money, you could get both cards and receive annual savings similar to as follows:

$177 if you spent $5,000

$227 if you spent $10,000

$277 if you spent $15,000

This would be rather difficult to keep track of and may not be worth the savings of around $40-50 of using an individual card, but to some it may be and can’t hurt. For anyone else, either of these two cards is a decent rewards cards considering there is no annual fee, an excellent online shopping mall for discounts, and they other excellent features such as decent APR’s and 0% charge on balance transfers for the first 9 months of use (for qualified users).

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American Express Gold Card

August 13th, 2009 No comments »

American Express Gold Card

American Express Gold Card

Not your typical credit card, as the balance is contractually due in full each month.

Useful for a business or entrepreneurs as it limits float expenses; or, those who really don’t need the actual “credit” part of cards and carry them for convenience/rewards purposes.

A 25$ gift certificate is valued at around 2,500 points; valuing a point at approximately 1 cent. Or, for comparisons with cash rewards, it would be half this or .05 cents for the most part. Your first 1,000 on groceries and gas receive double points, and most people would reach that I assume in a year. The card has no annual fee for the first year, but the second year is $150, so in cash comparison; apprx $14,000 would need to be spent to break even.

Luckily, there are lots of ways to earn up to 10x points. For example, shop through AmEx’s online shopping mall and get 4x points on an apple laptop, or a new Ralph Lauren polo (Or any items from these brands.)

American Express probably has the best selections in its rewards store, which includes virtually everything. You can buy pretty much any retail good you can think of, or even exchange points for frequent flyer miles, cash, etc.

The last thing that hasn’t been mentioned about the Gold Card, which is what really sets AmEx apart from other companies as well as justifies the annual fee if you do continue to use it past the initial year, is the customer service and exclusive benefits. American Express will often take back damaged or defective goods that the store itself may not take back, and will use its position of financial authority in other similar situations to help the cardholder. I have read many stories online about individuals who were unable to return a defective vacuum or video game system to the store, but were able to get their money back when AMEX stepped in.

I kind of disregarded my goal of finding a clear and definitive point at which the reward program pays off, but unfortunately it is difficult with American Express Gold Card as there are many variables in the point system. If you need a card just for convenience/rewards, the gold card is highly recommended. If your someone who uses a card to pay their bills to earn points, you can very easily spend in excess of 15,000 a year which would pay for the annual fee, and would probably enjoy the nice selection of rewards. Don’t think you’d ever spend that much? Take advantage of the free year and see if the service and benefits are worth your hard earned cash. If not, you can always switch to another card.

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Discover More Card

August 11th, 2009 1 comment »
Discover More Card

Discover More Card

While the card highlights it’s 5% cash back rewards, it’s most promising feature is probably its discount through its online shopping mall, which gives 5-20% cash back at no limit from stores such as Nike, GNC, Hewlett-Packard, and Barnes and noble (the majority being 5-10%).

The 5% cash back itself is only in select categories, and is usually capped at 20$ a quarter. If Q1 is groceries for example, after 400$ spent on groceries you would hit your cap of 20$ for 5% cash back and go back to your default cash back rate, which is only:

.25% for the first 3,000 dollars you spend

1% for your purchases which exceed 3,000 a year

A family taking advantage of the 5% cash back bonus each quarter and capping out at the 20$ bonus each quarter would see annual savings of about:

$135 if you spent $5,000

$185 if you spent $10,000

$235 if you spent $15,000

$435 if you spent $35,000

These are decent savings considering the card has no annual fee.

My Recommendation: Good card to have for the generous online discounts (wide variety and some are actually pretty good) and maybe take advantage of the 5% cash back up to the cap each quarter. Pick up either this or the Discover Open Road Card

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