Just Say No To Teaser Cashback Offers

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I’m not a fan of credit cards that offer promotional cash back offers because, let’s be honest, they charge their interchange and processing fees regardless of what their reward program is, so why not kick as much back to the cardholder in Month 1 as you would in Month 7 (or 13)? So, when Citi announced that the Citi Dividend Platinum Select Card would now be offering 5% cash back on purchases at gas stations, supermarkets, drugstores, convenience stores, and utilities for only 6 months, I thought that was a joke. I’m sorry, that particular Citi card isn’t going to get a coveted share of wallet with a promo rate like that, especially since Citi just reduced the rewards from this 5% to the current 2% rate. (here are some of the best cash back credit cards available today, don’t settle for promotions)

Listen Citi, you won’t get people applying for your card and putting it in their wallet if they only get 6 months. Make it permanent. Consumers, don’t get duped by these types of offers. Applying for new cards all the time, chasing a few measly percentage points on cashback is going to be brutal to your credit score. Find a card that won’t play these cashback games, apply for it, and stay loyal to it so the card companies know they can jerk people around by adjusting the rules as they see fit.

It’s clear that Citi regrets their decision to reduce the rate from 5% to 2% (otherwise why offer the promotion?) and it’s clear that they also enjoy the added revenue from not paying out as much (otherwise why make it 6 months and not permanent?), so don’t give them a reason to herald this offer a success by clamoring back for 3% extra for six months.

{ 11 comments, please add your thoughts now! }

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11 Responses to “Just Say No To Teaser Cashback Offers”

  1. MoneyDummy says:

    You tell ’em, Jim!

    Let us all chant it together. “Long live the Chase Plus Rewards card! Long live the Chase Plus Rewards card!”

    The good news is that if all the rest of the rewards cards get rid of their good (and by good, I mean at least 5% cash back on certain purchases) rewards, the Ramseyites and the use-credit-pay-it-every-month-its won’t have to debate it anymore. LOL.

  2. Yep, this is why I have the Chase Plus Rewards Card. Citibank used to have a spot in the wallet… Now the card is just gathering dust.

  3. theWizard says:

    Yea, I had a Citi Divident getting 5% until the 14th of last month. I used it up to that day and then it got pulled from the wallet and moved to the inactive file. I then switched to my Chase Plus Rewards and haven’t looked back. I’m still waiting a cycle or two for all the bonus money to post to the citi card before I cash out, as you can only cash out $50 or more at a time.

  4. I agree! Citi was the first rewards card I had, and I loved the 5% rate I was getting. I was actually getting so much in rewards that I had to get a new card from Chase in order to not go over my limit at Citi.

    Of course, then Citi announced they were reducing their rewards to a pathetic 2% and I just stopped using the card altogether. It’s the backup I carry around in my wallet now, but that’s about it.

  5. Dean in Des Moines says:

    Don’t mess with credit cards and there’s nothing to complain about. 5% or 2%… it’s not worth the bother anyway.

  6. Weekly Roundup – 05/11/07

    Here’s a quick look at the articles that caught my eye over the past week…

    Jim hates credit card cashback teasers. Funny, because I just posted about one such reward credit card offer.
    JLP has some thoughts on what to do when you’r…

  7. Hazzard says:

    I just can’t bring myself to jump in to the credit card games. I just use a non-rewards Visa from my credit union. It’s a permanent low interest rate (I never carry a balance anyway) and I trust my credit union not to screw me over.

  8. I agree with you about not chasing short-term offers like this one. (Though I supposed if the numbers worked out well enough, I might.)

    Though, personally, I have chased one of the 1-year offers: the Citi Driver’s Edge card. This one is truly a great deal, for the first year and subsequent years. If you participate in the “Drive Rewards” program and drive enough miles, in the first year, you can earn up to 12% back on gas/grocery/drug store purchases and up to 2% back on other purchases. In subsequent years it drops to up to 6% on gas/grocery/drug purchases.

    I basically replaced my Citi Dividend card with the Citi Driver’s Edge.

  9. citi sucks says:

    I use the Emigrant Direct card. The savings rate is up to 5.05%. With 10K in savings, you receive 1.4% and it automatically deposits in your savings account for you. Very easy. I currently have the citibank card that dropped from 5% to 2% so I’ve been looking for another card for the gas, groceries, etc, however I use the Emigrant for “everyday purchases”.

    I’ve also found another credit card via the internet. Although I like the platinum card I found this one, , called “everyday rewards visa” with:
    Up to 4%* cash back
    4% on gasoline at the pump
    Up to $250 in monthly purchases
    3% on cinema and video rentals
    Up to $150 in monthly purchases
    2% on groceries, restaurants and fast food
    Up to $750 in monthly purchases
    Up to 1% on everything else
    .25% on first $10,000 each year, 1% thereafter with no limits

    Once you’ve accumulated $100 in rebates, they automatically send you a check attached to your next monthly statement

  10. Tommy says:

    In figuring out my optimization of rebate cards, I take into account my time to get the rebate as well. That is why I use the following:

    Paypal Debit Card with 1.5% cash back on everything (instantly and automatically…none of this waiting around to reach a certain amount or calling for a check). Also, while your funds wait to be spent, you earn very close to 5%

    Amex Simply Cash Small Biz card. This one nets you 5% back with no caps at gas stations, on cell phone service, and at office supply stores (ink anyone?). Also it is automatic…the cash back is calculated every two months and is applied directly to your balance.

    Another tip: I label each card in my wallet with the terms…like:
    “0% until 02/14/2008”
    “5% back gas, cell, office”

    That way everytime you go to yank one out of your wallet, you know what’s up.

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