A reader, Jen recently sent me a few questions about credit cards. Most of the questions are related to the American Express 6% Cash Back Credit Card & 150 Reward Dollars [1].
After diving into a lot of details about how it works and other credit card topics, I figured other readers might also be interested in Jen’s questions and the answers.
American Express Blue Cash Preferred Card
I was wondering with Blue Preferred I see there is a $6000 limit….for 6%. If we add more cards is the limit per card or per account?
Jen is referring to the 6% cash back on groceries for the Blue Cash Preferred® Card from American Express [2]. Limits for cash back cards are usually applied at the account level.
If you and your spouse Avoid Joint Credit Cards [3] and you each open your own account, you can each spend up to $6,000. This is routinely how my husband and I double up on credit card cash back.
Also, it says max of $6,000 per year. Do they mean calendar year or year since you opened card?
The $6,000 is based on the American Express “annual reward year” which they define as 12 billing periods in a row starting with the one that begins in January.
I am hoping to buy credit card gift cards and use them towards tuition. Does the receiver get charged a fee though? Is the max 500? Do you get charged an activation fee once or each time you reload? Also, do you know about the gas for Giant and Safeway? It seems credit card gift cards don’t count according to the fine print. Is that true?
Jen is referring to the strategies I use in How to Stack Gas Rewards on American Express for Free Gas [4].
To answer your questions about buying gift cards, no the receiver doesn’t pay a fee to use the gift card. However, be sure that the institution that you are paying your tuition to doesn’t charge a convenience fee for you to pay your tuition with payment methods other than a check.
The largest gift cards I have found are $500. I do not reload those cards, and pay only a one-time fee at the activation. As far as gas rewards and whether or not you earn them purchasing gift cards, you’ll have to check with your individual grocery store. Each one runs separate promotions and they vary between chains. In fact, our local grocery store recently switched from gas perks to another cash back reward system.
Also, how do you use the gas most efficiently? Obviously, the more empty the tank the better but that’s hard to time no? Or could you do 2 cars in the same fill up?
Check the gas rewards for limits on the number of gallons. For example our gas rewards were up to 20 gallons. Since my car doesn’t hold that many gallons, we always redeemed the gas perks using my husband’s SUV to maximize the gas savings. You could also fill up two cars at the same time if you need to, just be sure to park so that you can put it on one transaction.
What about roadside assistance with Amex….. can we cancel our triple a account to save?
Here’s a helpful discussion about AAA: Is AAA Worth It? [5] You’ll have to compare the benefits you use from AAA with the roadside assistance from American Express. Also, don’t forget to compare any coverage you have with your car insurance policy. We’ve found based on our own personal travel habits that the cost of a tow truck if we need one is actually less expensive in the long run than purchasing other coverage.
More Credit Card Questions
I remember hearing once that closing credit card accounts was worse than having many open is that true?
In the credit models I have reviewed in detail, the credit score models were impacted negatively with a closed account because it lowered the amount of credit available for utilization percentages and shortened the average length of time (if it was an old card). However, don’t forget there are other factors in the credit score models [6] that also impact the score like late payments. In practice I keep cards open indefinitely, we currently have 76 open credit cards [7] and have no issues with our credit score.
I was at Kohl’s which I rarely go to and they said do you have a credit card here because you can get 20% off today…… I said I had one a long time ago anyway she proceeds to punch all my info into the computer and without even realizing it I basically signed up for a new renewal card which I had not planned nor wanted to do!!!!!!!!!!! esp. with all the good offers you have been posting….. and yes we are hoping to buy a house soon so how does this negatively impact your credit score?
Here is a helpful guide to How Much Credit Inquiries Really Matter? [8] In general, I wouldn’t worry too much about the Kohl’s card, but it is a good lesson. If anyone begins asking you for your information, you have the right to stop them and ask if they will be making a credit inquiry. You do not need to proceed if they are unsure or say yes.
However, you mentioned you are planning to buy a house soon. A mortgage will likely be the largest expense you ever have. I wouldn’t make any additional credit inquiries on your credit report until after you purchase your house. Saving a few dollars in the long run on groceries or credit card cash back won’t be worth it if you have to pay a higher rate for the next 30 years on your mortgage!
I hope that helps Jen!