Dear Readers, over the course of the next several postings, I plan to share with you some of my ‘favorite things’, both products and services. These are ones that I personally use and whole-heartily, even passionately, endorse. I believe in them as good values for the Frugal and the Wise.
This installment addresses banking and credit cards. Read on.
American Express Blue Cash Preferred / American Express Blue Cash Everyday credit cards – the Preferred Card comes with awesome rebates: 6% on groceries, 3% on department stores and gas stations, 1% on everything else. But…. there is a $95 annual fee. On the other hand, the Blue Cash Everyday Card has no annual fee with rebates of 3% for groceries, 2% for department stores and gas stations and 1% for everything else. If you spend more than $3200 per year on groceries, go with the Preferred Card; the annual fee will be worth it. Otherwise, the Everyday Card will do just fine. Plus, both cards offer new applicants a signing bonus once spending reaches a given threshold.
- Cons: AMEX charges a 2.7% foreign transaction fee; if you are traveling abroad, you really can leave home without it. Grocery rebates on are limited to $6,000 of spending (or $360/$180 in rewards) per year.
Capital One Quicksilver Visa – 1 ½% rebate on all purchases, plus no foreign transaction fees. No annual fee. Rental car coverage. This is our everyday go-to card and the one used outside the ‘States. Capital One has been easy to deal the few times I’ve had charges to dispute.
- Cons: I can’t think of any except to also get an AMEX Blue Cash Card to compliment it for better rebates on groceries and gas. Note the caveats below for when not to get a credit card for rebates.
Caution: If you currently carry credit card balances, do not even think about getting a credit card with rebates. Focus first to paying off the cards you already have. Also, do not use the fact that you are getting a rebate as an inducement to spend more; use a rebate card only for items that you would normally purchase anyway (such as gas and groceries).
Another thought on reward credit cards: Years ago, I gave up on credit cards offering airline miles. It seemed that airlines were continually raising the points required for a ticket and it was next to impossible to book a flight, even months in advance. IMO, it’s much better to get cash back (i.e., a credit on your account). But your situation may differ, especially if you travel frequently.
Capital One 360 Online Banking – yeah, I know. I’m the guy who is continually singing the praises of credit unions, but Capital One 360 is a terrific on-line bank. (It used to ING Direct). Easy to use website (but phone app not so much). Free checking and debit card. Fee-free ATM locator. Deposit checks by smart phone. Easy to link with a brick and mortar bank accounts (and credit unions). Get 50 checks for only $5. The FDIC insured money market fund currently pays up to 1% interest. Saving accounts pay 0.75% with no minimum balance.
- Cons: This is strictly an on-line bank. The closest thing they have to branches is a handful of Capital One Cafes in major cities. The cafes are also the only place you can deposit checks via an ATM. (But they do give a 50% discount on Peet’s coffee concoctions purchased with a Capital One debit card or credit card.) Another drawback: their CD rates are not particularly competitive right now.
Credit Unions –if you’ve read my posting Credit Unions are Divine, you know the drill. I’ve been at the Philadelphia Federal Credit Union for 30 years and have enjoyed its broad array of low fee or no fee services as well responsive customer service. It’s CD rates are currently among the highest in the country.
- Cons: Philadelphia Federal Credit Union has numerous branches in the city but none in the ‘burbs. And it is not in the CO-OP nationwide network of credit union branches, although it is in the nationwide network of ATMs. However, I rarely have a need to actually visit a branch (maybe once every several years).
Well, this discussion of my favorite things will be continued. In the meanwhile, please send me your own thoughts and recommendations for credit cards and banking.
So why the photo of John Coltrane? I thought you might enjoy his haunting rendition of Rogers and Hammerstein’s My Favorite Things. (And listening to music is one of my favorite things to do.)