I’m going to write a quick article today about a phone call I made to Bank of America recently. As any reader knows, I’m extremely frugal and I look to maximize my money saving ability whenever possible. One avenue I use is credit card reward programs. I don’t spend a lot of money, but if I can earn 1% or more back on my expenses than that’s completely ok with me! Also, everyone should know I pay off all expenses at the end of every month. I carry NO credit card debt whatsoever. That would be very counterproductive to my investment gains.
As I wrote about recently, I use my credit card not only for day-to-day expenses but also as a last resort to pay bills as an emergency backstop. It’s part of my emergency fund, and I’m ok with that. I like to have as much of my money as possible working for me in my Freedom Fund. I have, until now, only had one credit card. It’s through Bank of America and it’s a BankAmericard Cash Rewards credit card with 1% cash back on all purchases. It has a $5,000 credit limit. I’ve been generally happy with the card, however one minor thing did bug me a bit. Within a month of opening my card, BofA started running a promotion where new members would receive a rewards card with tiered cash back of 1%, 2% or 3% depending on the purchase (general, gas, groceries, etc.). On top of that, after spending at least $500 within 3 months the new member would receive a bonus $100 cash back reward. Pretty good stuff!
Well, this irritated me a bit, as I signed up over the phone and I called less than a month before the promotion started. Nobody told me about the upcoming promotion and every time I’ve had interactions with BofA they’ve never asked if I would like this card. I called up fairly angry this past weekend and demanded that I get that card with the $100 bonus. I was told that, basically, I’d have to cancel my card and start up a new card in order to get the new terms. Apparently they cannot make a change to my account without canceling it. This makes little sense to me, and I asked the account manager I was speaking to that if I was going to take the temporary hit to my credit score and go through the process of canceling my card and opening up a new account, why wouldn’t I just go over to Chase who’s currently offering a Freedom credit card with up to 5% cash back on certain transactions along with the same $100 bonus after three months? He had no answer for me, and basically dared me to move to the competitor.
So, I did.
I just received my shiny new Chase Freedom credit card in the mail and I’m pretty happy with it so far. The online management system is very intuitive and it came with a $3,000 credit limit. Everything they’ve promised so far seems to be true and it comes with attractive terms. I’ll be enjoying my 1-5% cash back and will really be enjoying that $100 four months from now. The card also comes with a bonus 10% cash back quarterly with select retailers. For this quarter, it’s Kohl’s.
Now I have to decide whether to actually cancel the BankAmericard through BofA. I’ll probably keep it open as part of my emergency fund as a line of credit. Besides, having a low usage of available credit boosts one credit score and I usually have less than 5% of available credit used at any given time. I’ll likely be calling the customer service as little as possible as they do nothing but anger me.
I talk about credit cards on this blog rarely, but if used correctly it can be a small, but completely passive, separate income stream. I’ve already received my first $25 check from Bank of America and I’ll receive $100 from Chase in four months. Every little bit counts!
Do you use credit cards for the cash rewards?
Thanks for reading.