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Honest question on AF's

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Anonymous
Not applicable

Re: Honest question on AF's


@kdm31091 wrote:

Generally, you are only going to be able to justify an AF if you are a moderate to high spender. Some dump cards after AF hits because they were simply opening it for the sign up bonus (sorry, but it's the truth). Not that everyone does that, but it's a factor.

 

That's the other thing, some kind of get talked into cards because of the great bonus, but if you have to spend a lot of money above what you would normally spend to get the bonus, it's not a good deal. Spending $3000 to get $400 is great, but, if you normally would have spent $1500 in 3 months, that's still worse than just saving your money and getting a card that suits you better.


1. Hey, I resemble that remark.

 

2. But if your spend aligns or is over the required amount then it works out. Never spend money you wouldn't normally spend just to get a bonus.

Message 11 of 71
Chris679
Established Contributor

Re: Honest question on AF's

Most of the talk about removing AF on this board is from people who are/were rebuilding. Now they their situation has improved the are rightfully trying to get those fees removed because they are graduating to better cards. I don't see a ton of discussion about the high end cards because that is a simply question of math. When you are starting out/rebuilding there is more gray area about if you should continue to pay AF or not.
Message 12 of 71
Anonymous
Not applicable

Re: Honest question on AF's

Ok so let's see if i can explain succinctly how i approach credit cards. I will say right off the bat that my income is relatively low (mid 30k's).
The only card i keep and justify the annual fee solely from the earning structure is the chase ink plus the 5x UR at office supplies where i buy giftcards to southwest, amazon etc makes up for the fees.
All other cards i will either get if
1) they have no AF and i like the earning structure. Stuff like Fidelity Amex, Freedom or formerly Cash+
2) Cards with AF that have a bonus. I would never get an AF card without a bonus. If the AF is not waived the first year then the bonus has to be substantial. After the first year i have to evaluate whether the card has recurring benefits worth keeping. Hotel cards that offer one free night per year usually make it worth keeping for that alone. However, i would not spend much money on those. There are very few cards that are better than the Fidelity/Doublecash for regular non-category spend. Someone like me does not spend nearly enough money to make stuff like the EDP be worth it solely for the category spend. The only AF card that i can think of that i would actually put a great of spend on is the club carlson premiere that offers 5 points/$ for general spend.

Am i "building a relationship" with banks? I am through my no AF cards. Those should convince them that i can pay on time. That is all they want really. Beyond that, they want to make as much money as possible out of me, and i want to make as much money as possible out of them. It is business, pure and simple. No hard feelings. No feelings at all. They certainly have none for you
Message 13 of 71
bada_bing
Frequent Contributor

Re: Honest question on AF's

I have two AF cards that I've had for years; a BoA AlaskaAir card and a BCP. I generally

avoid AF's unless they really make rewards sense. Most AF cards do not make longterm

sense for my spend. 

 

The AkAir is easy to explain, I spend ~$8K  on Alaska airlines per year, and between

the bonus miles and the annual companion fare coupon, it's a no-brainer with no competition.

I don't like BoA as an issuing bank, but that's another story.

 

The BCP is a more convoluted benefit calculation. I could do slightly better, cashback wise,

if I picked up a second Sallie Mae and dumped the BCP and it's annual fee. My BCP is just for

groceries (about $6k a year) and car rental ($1k a year). It isn't just about a simple cashback

calculation. As much as I currently love Barclays, I am not 100% confident the Sallie Mae is 

nerf proof, not nearly to the extent I belive BCP is. Amex offers some purchase protections I

believe superior to Barclays. I will attempt to get a second SM later this spring, but I'm not willing

to dump the BCP just yet, even if I'm successful. Diversification is hard to quantify, but definitely

has some value.

 

One AF card I will app for and then dump sometime in the next 18 months is either a CSP or an

Ink, for the purpose of consolidating and transfering about 100k UR I have sitting stranded on my

Freedom and Ink cash. I have no long term use for either CSP or Ink plus, I just need a conduit for

UR transfer. Not exactly ethical I admit.

+ 850 FICO8 since 2015, Thanks MyFICO - 5+ years since last HP
Message 14 of 71
kdm31091
Super Contributor

Re: Honest question on AF's

I agree that Sallie Mae is probably not nerfproof, I think BCE/BCP have a lesser chance of being nerfed. 5% even with Sallie's caps doesn't seem like something that will last forever on a no AF card (think: there are really no other no AF cards with 5% on anything, much less groceries, yes the caps are low, but still, who knows).

 

The other downside of Sallie vs. the Amex choices like BCE/BCP is the lack of redemption variety. Some don't see it as an issue, because they take statement credits anyway, but I like that my BCE at least has some flexibility and I can get gift cards too.

Message 15 of 71
Anonymous
Not applicable

Re: Honest question on AF's


@kdm31091 wrote:

I agree that Sallie Mae is probably not nerfproof, I think BCE/BCP have a lesser chance of being nerfed. 5% even with Sallie's caps doesn't seem like something that will last forever on a no AF card (think: there are really no other no AF cards with 5% on anything, much less groceries, yes the caps are low, but still, who knows).

 

The other downside of Sallie vs. the Amex choices like BCE/BCP is the lack of redemption variety. Some don't see it as an issue, because they take statement credits anyway, but I like that my BCE at least has some flexibility and I can get gift cards too.


I'd rather buy GC's and use statement credit.

Message 16 of 71
yfan
Valued Contributor

Re: Honest question on AF's


@kdm31091 wrote:

I agree that Sallie Mae is probably not nerfproof, I think BCE/BCP have a lesser chance of being nerfed. 5% even with Sallie's caps doesn't seem like something that will last forever on a no AF card (think: there are really no other no AF cards with 5% on anything, much less groceries, yes the caps are low, but still, who knows).


Actually, the Orbitz Visa is a no-AF card that gives you 5% back on Orbitz purchases, and 2% on all other purchases. There is also no FTF. But you have to use the rewards for Orbitz hotel bookings. There is also no FTF.

Message 17 of 71
Anonymous
Not applicable

Re: Honest question on AF's


@yfan wrote:

@kdm31091 wrote:

I agree that Sallie Mae is probably not nerfproof, I think BCE/BCP have a lesser chance of being nerfed. 5% even with Sallie's caps doesn't seem like something that will last forever on a no AF card (think: there are really no other no AF cards with 5% on anything, much less groceries, yes the caps are low, but still, who knows).


Actually, the Orbitz Visa is a no-AF card that gives you 5% back on Orbitz purchases, and 2% on all other purchases. There is also no FTF. But you have to use the rewards for Orbitz hotel bookings. There is also no FTF.


And the buypower card has some similar rewards for buying a GM vehicle. 
But orbitz hotel credit or GM new car credit ain't cash

Message 18 of 71
yfan
Valued Contributor

Re: Honest question on AF's


@Anonymous wrote:

@yfan wrote:

Actually, the Orbitz Visa is a no-AF card that gives you 5% back on Orbitz purchases, and 2% on all other purchases. There is also no FTF. But you have to use the rewards for Orbitz hotel bookings. There is also no FTF.


And the buypower card has some similar rewards for buying a GM vehicle. 
But orbitz hotel credit or GM new car credit ain't cash


Right. But it can be just as good if it's something you use. The Buypower card's 5% is limited to $5,000 a year in spending though.

Message 19 of 71
Anonymous
Not applicable

Re: Honest question on AF's


@yfan wrote:

@Anonymous wrote:

@yfan wrote:

Actually, the Orbitz Visa is a no-AF card that gives you 5% back on Orbitz purchases, and 2% on all other purchases. There is also no FTF. But you have to use the rewards for Orbitz hotel bookings. There is also no FTF.


And the buypower card has some similar rewards for buying a GM vehicle. 
But orbitz hotel credit or GM new car credit ain't cash


Right. But it can be just as good if it's something you use. The Buypower card's 5% is limited to $5,000 a year in spending though.


@Would take you 10 years just to cover TTL at max spend @ 5%

Message 20 of 71
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