For years I have been using the same credit card account that I opened when I was in college. At that time, MBNA America phoned me and offered me a university-affiliated card. That card looked pretty sweet with a photo of my university’s newly built library on it. I believe the initial spending limit was a mere $500, which isn’t a lot to me now, but back then seemed a small fortune. After all, it was $100 more than the monthly rent of the studio apartment I rented in my junior and senior years!
Eventually Bank of America acquired MBNA and I was issued with a boring gray card. Of course, my credit limit has increased multiple times since I first signed up. However, I have always had a similarly mundane account — no frills, no airline miles, and no rewards. I didn’t realize what I was missing until I began to meticulously look at everything that I am doing financially.
Back in April, I was inspired to learn more about cash back cards after watching Graham Stephan’s video “I Found the BEST Cash Back Credit Cards.” Considering that I use my credit card for nearly every purchase I make that is greater than $20, and that I do a lot of online shopping with it, I was shocked to learn that I could be getting about $1000 back per year on my purchases. Note, while I do buy a lot with my card, I pay off the complete account balance every month. After viewing the video I decided to research what cards were out there and developed a plan of action that involved two companies, Bank of America and Amazon.
Bank of America Cash Rewards World Mastercard
I learned that Bank of America has their own cash back card, so I decided that I would call them and find out about getting my card switched over to the Bank of America Cash Rewards World Mastercard. I thought it would be worth maintaining this long legacy account with the company, since they had something that offers rewards, even if it wasn’t the best option available. Their rewards details as outlined on the Bank of America website are as follows:
- 3% cash back in the category of your choice: gas, online shopping, dining, travel, drug stores, or home improvement/furnishings
- 2% cash back at grocery stores and wholesale clubs
- 1% cash back on all other purchases
- You’ll earn 3% and 2% cash back on the first $2,500 in combined choice category/grocery store/wholesale club purchases each quarter, then earn 1%.
There’s no annual fee and the cash rewards don’t expire. Each month, when planning for future purchases, the 3% choice category can be changed online or via the mobile app. After looking at my 2018 credit card account Year End Summary to get a sense of how my money was spent, I decided to choose the travel category for now and to continue into the summer months, as my 3% cash back category. This will give me a little extra money back as I plan and pay for my summer vacation for hotels, plane tickets, and car rentals. The thing to note about the 3% and 2% categories is that essentially they max out after you have spent $10,000 (broken down to $2,500 per quarter), then everything else earns at 1%. This is part of why I decided to go ahead and apply for a second rewards card.
In sharing this story, I’d like to highlight the process to get my Bank of America Cash Rewards World Mastercard. I first contact Bank of America by phone on Friday, April 19th. Customer service representative Andrew did a fine job of explaining the cash back program to me and answering any questions that I had. He mentioned that it may take 4 to 6 weeks to get the new card! Okay, why exactly does it take that long to get a new card out to a long-time customer? I received an email that the card was on its way on May 14th and finally received the physical card on Friday, May 17. My card number remains the same, though the expiration date has changed. I’m left wondering why this needed to take so long to process.
Amazon Prime Rewards Visa Signature Card
After years of ignoring Amazon’s offer of a credit card every time I shopped online, based on all the perks that Graham had discussed in his video, I decided that I would apply for theirs. As a stay-at-home single mom, I wasn’t sure if I would get approved for a new credit card, so I had been putting off applying, but I should have done this years ago. I was an early adopter of Amazon: I recently noticed Amazon had a little note in my account that says when I first started using them. 1998. Yep, me and Amazon go back more than 20 years!
I’ve been an Amazon Prime member nearly as long as Amazon Prime has existed. Therefore, I was eligible for the Amazon Prime Rewards Visa Signature card which pays 5% back on Amazon purchases, whereas the regular Amazon Rewards card pays 3%.
Here are the cards perks as outlined on the website:
- 5% Back at Amazon.com and Whole Foods Market for purchases, including digital downloads, Amazon.com Gift Cards, Amazon Fresh orders, Amazon Prime subscriptions, and items sold by third-party merchants through Amazon.com’s marketplace.
- 2% Back at restaurants, gas stations, and drugstores
- 1% Back on all other purchases
I filled in the form online on Wednesday, April 24 and was immediately approved with a credit limit of $5,000. The card number was added to my Amazon account and I was able to use it right away for purchases made on Amazon. On Wednesday, May 8 I received the email stating that my Amazon Prime Rewards card was on the way, but never mind that, I had already received it in the mail the day before that! Also, when I received my physical card I noted that the credit limit had been raised to $9,700.
EDIT ON May 23, 2019: I received my first credit card bill from my Amazon Prime Rewards card. I earned $95.75 in cash back this month! Note, I did have a couple large Amazon purchases in the past month that helped increase the total.
Making the Most of Cash Back
By smartly using both of these cards, I will get:
- 5% back on my Amazon purchases using the Amazon Prime Rewards card
- 3% cash back for my travel using the Bank of America Rewards card*
- 2% back at grocery stores using the Bank of America Rewards card*
- 2% back at restaurants, gas stations, and drugstores using
the Amazon Prime Rewards card - 1% back anywhere else using either card
* For up to $2500 worth of purchases each quarter total between travel and grocery stores
If you are thinking about switching credit cards, my first recommendation is to see what is available to you through your current credit card company. Do some research online and then phone their customer service department. Ask a lot of questions until you are happy with the package you are getting.
There are plenty of options for researching new credit cards online, so you should be able to find one that suits you. Each company has slightly differing criteria for their cards pertaining to what percentage cash back you will receive and from which purchase categories. Some of them are limitless and some have a capped amount for rewards. Some have no annual fee, others will waive the annual fee for the first year, and a few have fees as high as $99+ per year. A few of the companies are offering monetary bonuses after signing up and spending a certain amount of money using the card. Also, keep in mind that if you travel a lot, a credit card company that has bonus airline miles might be a better option for you than one with cash back.
Each of the credit card companies’ promotions quote various APRs and even within one company your APR may differ from another person’s who has a card from that company, based on your credit score. I haven’t mentioned APR in this quick run down, because I pay my card off every month, it doesn’t matter what the quoted interest rate is to me. But do keep the APR in mind when you are looking for a new card if you tend to keep a running balance.
If you want to find a different credit card than these, I recommend using Bankrate for financial comparisons, so I’m linking to their list of The Best Credit Cards of 2019.