Getting Used To A New Credit Card

We recently signed up for the American Express Costco credit card.  The main reason is that you get 3% cash back on gasoline purchases. With the camper coming out of storage recently and planning a few trips, we know that we’ll be spending quite a bit on gas this summer, and looked for a card that would do the best to offset some of those costs.

The Costco card was definitely the right choice.  I’m all about getting cash (even though Costco makes you get the cash at their service desk, that’s fine with me) and not any sort of points or mileage or anything like that.  I know that some rewards might pay more at first but they tend to lower the rate after a few months or move you to rotating categories.  For gas, I wanted something that didn’t do much changing, and so far as I could tell, the Costco card has been offering the 3% back for a number of years now.

Still, this is our first true American Express card, so there were a number of things that were different when it came time to paying our credit card.

Billing Cycle – The billing cycle was slightly off from our Citi Dividends cards.  This is no big deal,as I pay off all the credit cards at the same time, but because the cycle closed a few days later, our gas costs for the month were slightly higher since there were a few extra days.   No big deal.

Reward Wait Time- The Citi card gives you the cash back in your ‘account’ right away, where the American Express delays the reward by a month.  So, our reward for the first month didn’t show up until a full month later.  This was important to me because I wanted to make sure that the gas stations we typically use were classified correctly (they were) but it took a full month from our first statement to get this verification.

No Early Payments – Most of the stuff we purchase with our credit card fall into distinct categories: Groceries, Gas, Cell Phone Bill and a couple of others.  If we have a ‘large’ purchase, we’ll put it on the card and I will often just pay that portion right way.  This keeps the budget categories in line and gives us the cash rewards. American Express won’t let you pay early, as they will only let you pay based on your last statement date.  Everything else is pending.

None of this is a big deal, but it’s interesting to see the slight differences.  They’re not at all overwhelming, but it makes me realize how quickly things could get out of control if you kept adding different cards. We only have a couple of credit cards that we deal with, but I can imagine that there are plenty of people out there who have so many cards that it gets very easy to miss billing cycle dates or limits or other things.  That’s why we took a lot of time to make sure that getting another card was the right decision for us, and I would encourage anybody using more than a couple of cards to consider simplifying.

Have you found yourself with credit card overload?

I Got A Citi Dividend American Express Card Without Asking For One (But It’s OK!)

I saw a post a few weeks ago on Consumerism Commentary where Flexo got a credit card that he didn’t ask for and really wasn’t all that happy about it.   When Citi sent a replacement credit card for his Dividend MasterCard, they also sent an American Express card.

I read the story with interest, because both my wife and I hold Dividend MasterCards and use them as our primary credit cards, turning down other cards in favor of the cash back that our Dividends card gives us. Most of Flexo’s readers that left comments were similarly put off by getting a card ‘forced’ without asking.

So, when my replacement card came in the mail last week, I looked inside, and also found two cards.  My MasterCard had the same account number, just with a new expiration date.  The American Express card was right there as well.
All credit cards good here

I sat down and read some of the questions on the FAQ sheet attached.  Here’s a brief rundown:

  • You can’t activate just one card without the other (hmmm…not good so far)
  • It only shows up as one account on your credit card (OK, that’s not so bad)
  • For the first twelve months, you get an extra 0.2% cash back when you use the AmEx card over the Master Card, so for purchases where you would get 1%, you get 1.2% and on their rotating special categories you could get up to 5.2%. (Not a huge improvement but a few extra bucks in my pocket is a few extra bucks in MY pocket, OK)
  • Everything shows up on one billing statement and transaction list.  No need to log in to two accounts or pay two bills or anything like that.

I wasn’t too bothered by all this and was sort of neutral by the whole thing, so I decided to activate the card.  I’ve had the card since 2004, have never paid a lick of interest, and have gotten cash back in the four figures, so I was OK with it.  During my call, though, I actually realized this could be a good thing for me.

The automated schpeel was going through the ‘benefits’ of the additional card, notably that you got the extra 0.2%, when they also mentioned “and you can use it at merchants everywhere like,, and Costco.”

Wait a minute, did she just say Costco?

Yep.  She did.

Costco only accepts cash, debit cards, or American Express payments.  We don’t do much in the way of cash for most of our spending.  We only want and have one credit card each (the Citi Dividends card), so we never went with an American Express.  This meant that our Costco purchases get made using our debit card.

This worked, but our days of getting any rewards for using our debit card are long gone.  But, with the new AmEx card add-on, I can swipe it at Costco and get cash back!  Now, our Costco spending isn’t astronomical so this isn’t going to make us rich, but it will definitely add some extra cash back in our pockets, and every little bit of that helps, right?

Now, I know there are other cards that give you better rewards at Costco.  I get that.  But, I try to keep a minimum number of credit cards for the sake of convenience and for keeping my credit score pristine.  Now, I can get some cash back and not have any additional payments to make or any additional credit lines showing on my credit report.

I’m more than good with that.

Have you heard of having one credit card with two different providers?  Are you in Flexo’s court where you think this is a bad idea or am I onto something by being OK with this?