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?

Our Next Credit Card

Last week I posted that I was looking for a good credit card which offers cash rewards specifically to improve upon the 1% we get for gas purchases on our current Citi Dividends card.

Two stuck out as the favorites, the Pen Fed card (which is for military based people but you can get around that pretty easily) or the Costco American Express True Rewards card.

My dad and a good friend ended up backing the Costco card pretty strongly, and the fact that we’re Costco members means that there’s no charge, so I’m pretty sure that’s what we’re going to get.

Basically, the card offers 3% on gas purchases, 2% on other categories (I think eating out is one) and 1% on everything else.

I did some research and it looks like they’ve had this for awhile, so while there are no guarantees, the fact that these payouts are in place seems to bode well for the long term viability of these percentages.

It’s not a straight cash rewards program. They send you a reward certificate once per year that you have to redeem in the store.  You can either get cash there or get a Costco gift card.  Since we do a once-per-month Costco trip, this should work out just as easily as cash.  We can just use the gift card that we get to pay for our purchases, and take that budgeted amount and funnel it into the earmarked portion of our savings account which we use for rewards.  Easy as pie.

My wife is nervous about adding one more card to the mix.  I don’t think we’re too card crazy, so while this is another thing to keep track of, I think the extra bucks we’ll get in reward money will make it worth the hassle, especially since we’ll be consuming a lot more gas given the camper purchase we just did over the fall.

What do you think?  Are we making a good choice? Am I putting too much effort into what will likely amount to a few bucks difference per month?