Keep Citibank VISA with new Costco AMEX?

[atgcpaul]

I currently have a Citibank Mastercard that I earn airline miles on. I've had it for over 10 years. 1 mile for every $1. Costs me $50/year. I've been able to use the miles for several trips.

We are also Executive members at Costco and recently got their AMEX card. There's no fee as long as we're Costco members. We earn varying levels of cash back depending on what we buy. We made a little on the cash back from the Executive membership alone last year. I used to pay by debit, but with BofA about to charge $5 for debit purchases, I decided to stop using debit over CC.

We pay off our cards every month and never carry a balance over.

I was thinking of completely ditching the Citibank card for the following reason. I need to spend at least $25K to get one free ticket. And that money is only good towards flying. With AMEX, if I spent $25K on varying purchases, I could probably get back $300/year. The value of a free airline ticket is probably going to be greater than my AMEX cash back, but at least I can use it for anything I want. Also, that free ticket isn't exactly free because of the $50 fee.

I think I should keep a non-AMEX card with Citibank because some places don't take it, but I could just get one of the no free cards. If I stay with Citibank, I shouldn't take a ding on the credit score, right?

Any problems with my logic?

[LCHIEN]

So far that Fee based card has cost you $500.
If you look it up the value of an airline mile varies from about .7 to 1.5 cents per mile. It depends on several things, among them the flexibility to fly when you want for more miles vs. what you can get for fewer miles if you are willing to go when they have seats.
Its also estimated that using miles for upgrades is worth 3-5 cents per mile IF you would consider spending the actual retail money on a business or first class seat. Most people wouldn't.

I find the value to be on the low side since I have to spend the higher rates to get tickets to meet cruise ships and the like - plus they are charging so many fees on tickets with miles.

Anyway if you spend about $25K per year the value of the airline miles ranges from 122 to $375, or $72 to $305 if you subtract the $50 fee.

OTOH, on most any bankcard you can get 1% cashback (I use Discover) which if you spend $25K has a value of $250 to spend as you like with no strings attached. Sometimes I get more cashback percentage on promotions.

I'd ditch the fee-based card and get a no-fee Visa and or MC or discover with cashback.

I pay my auto and home insurance, groceries, gasoline and Utilities with my cash back card. Its easy to rack up $25K per year. Like you I pay off the balance every month. Also the safety is much better with CC vs. debit cards.

[Mildoc]

My personal favorite is the Amazon VISA from Chase.

I order a LOT from Amazon, and earn 3 points ($3, good at Amazon) for every $1 I spend at Amazon, and 1 point on everything else.

Those points bought all Christmas and other presents last year and this year, plus a lot of shop stuff.

At 3 for 1, and being a Prime member with free 2 day shipping, I have no desire to change.

[twistsol]

While I'm a fan of AMEX and a former employee, the card still isn't accepted as universally as Visa/MC, especially in rural areas and outside the US. Your logic makes sense, but you'll need to carry a Vis/MC as well ... or cash.

With any of the free cards, the bank will drop you after a couple of years if you don't use it much and/or pay it off every month. The 1-2% fee they get from the merchant every time you use the card barely covers their transaction costs. If you're not paying a fee or interest, they're losing money on you.

[herb fellows]

Not to confuse you further, but this deal just came up on Slickdeals this morning.
I signed up for it.

Basically, $69 a year for the card, 50,000 free mile sign up bonus, they say good for 2 round trips. Using their low cost calculator on the Southwest website, I was able to get at least 3, maybe more, round trips from NY to Denver. Not bad for $69!

Also good for many stores, Amazon ($600 in gift cards for your $69 investment), Lowes, Home Depot etc.

Check the details, but it looks good to me, I'm sure it won't last long.


http://slickdeals.net/permadeal/6062...=Google+Reader

[scmhogg]

If you are planning any large purchases in the near future, investigate before you cancel any cards. Cancelling a credit card will lower your FICO. As will applying for a new/replacement card.

Steve

[jackellis]

My wife loves to play this game. Her sister is "the queen" at figuring out how to travel to Europe every year with minimal cash outlays for plane tickets.

I don't have much patience for gaming the credit card issuers. I have an Amazon Visa I use for everything and I hoard the points for tool and book purchases. I also have a Mastercard for instances where Visa isn't accepted or (heaven forbid) I misplace the other card (it's happened twice).

I did accumulate a lot of frequent flyer miles on one airline back when I traveled a lot, but doing so required a lot of connections through Salt Lake and Dallas. Unfortunately, those miles are all gone now that I could really use them - spent doing nice things for family members.

[JimD]

I have paid off my credit card balances every month for 30 years and never gotten dropped. I carry an American Express for work, a MasterCard, and a Discover. The MasterCard is no-fee and I get 1% back. I use it or the Discover for most daily expenses and carry very little cash. I get multiple offers for new cards nearly every week. I dumped a Bank of America Visa or MasterCard when they would not take my late wife's name off the account. Citi REALLY likes to try and sell you things but has otherwise not been an issue. Their latest annoying promotion was to send me a unrequested American Express card and then make me talk to a representative to cancel it (could just punch buttons if I would keep it). I made a stink and asked to be taken off all future promotions of any kind. If they annoy me enough, I will order a new card and cancel this one when it arrives. It may affect my credit rating but I seem to have a good enough rating to do what I need to do so I don't think I care.

I refuse to pay to get something fancier. I only plan to carry a no fee credit card (no debit cards for me) which gives me cash back. Until nobody will give me one, this is what I will have.

Jim

[kramer katt]

credit score

credit cards are services of MC, Visa etc
even if staying at the same bank if you change the account will be like you cancelled the first card (ding) and applied for a new account (ding)
Try a credit union

[atgcpaul]

I guess I'll just take the FICO hit and drop the Citi card. We just refinanced anyway and I've got no big purchases planned that will need credit approval.

[sscherin]

I have that same Amazon/Chase card..
Making the payment is easy since I also have chase for the checking account.. I just transfer $$ over from checking..

I switched to the Chase/Amazon card after Capital One notified me they were switching my card to an annual fee..I cleared the balance on the Capone card and canceled it asap.

Funny thing is now I get offers from Capital One daily begging to come back.. NO fee we swear!!.. whatever..

I'm paying all my medical bills from the surgery through the Amazon card.. Its one way to rack up points quick

[Skaning]

I've carried a Discover for probably 25 years from back in the days when they were part of Sears. Only problem is it's not always accepted. Discovers merchant fees are higher so many smaller merchants won' contract with them.

AMEX is more of a travel card that's trying to break into the retail business through COSTCO. It has the ame issue as Discover only, I've observed, worse.

Back in the day, I kept an AMEX card for work expenses then the employer got us one and that closed that account.

Got a Visa through my credit union, no fee and accepted world wide. Overseas has no clue about Discover I have found. Possible advantage for AMEX there but Visa works everywhere.

Pay all off each month.