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@Anonymous wrote:Quick hijack- if you're spending between $10-12K/year on groceries is this still better than other cards even with the increased fee? Have the SM but of course that has a cap and who knows if it will last in its current form.
It's always hard to compare with the OBC! With the OBC, IF you can reach the threshold some other way, $12K of groceries earns $600. But there is an implicit AF on that first $6.5K which depends on how you spend and what other cards you have. Assuming you have a 2% card and meet the threshold on 0.5% spend, that's a $100 fee for a net of $500. If you do you threshold spend at drug stores (and what can you buy there I wonder...!) the net is $565
BCP on the first $6K would earn $360, the next $6K on a 2% card would earn $120, for a total of $480 - $95 = $385. IF you have a BCE as well for the second $6K, that nets $445
@longtimelurker wrote:
@Anonymous wrote:Quick hijack- if you're spending between $10-12K/year on groceries is this still better than other cards even with the increased fee? Have the SM but of course that has a cap and who knows if it will last in its current form.
It's always hard to compare with the OBC! With the OBC, IF you can reach the threshold some other way, $12K of groceries earns $600. But there is an implicit AF on that first $6.5K which depends on how you spend and what other cards you have. Assuming you have a 2% card and meet the threshold on 0.5% spend, that's a $100 fee for a net of $500. If you do you threshold spend at drug stores (and what can you buy there I wonder...!) the net is $565
BCP on the first $6K would earn $360, the next $6K on a 2% card would earn $120, for a total of $480 - $95 = $385. IF you have a BCE as well for the second $6K, that nets $445
Thanks for the reply. Totally forgot about the OBC. Looks like that's the way to go. I don't have the BCE and don't have a desire to add two more Amexes.
@longtimelurker wrote:
@UncleB wrote:Not to derail this thread, but I'm actually surprised another issuer hasn't tried to come up with an offering that is similar to the BCP with regard to grocery stores. Honestly, if another card were to offer even 4% on groceries with no AF, I would probably jump ship in a heartbeat.
Right, but I presume that would be unprofitable, especially with a lower swipe fee than Amex! We did have Sallie Mae offering 5% (with 1/2 the cap of the BCP) which has gone for new users, and one of the geographically restricted TX CUs offers the equivalent of 3.3%
I always shake my head when I hear people say that would be unprofitable to the banks. Trust me folks, the banks are making a crap load of money off of us and would still make a boatload of profit even it the return was 10% on groceries. You realize they get a cut everytime someone swipes their card. Do you understand how many people are out there swiping as I type this? I would really love to know what the numbers are in terms of how much money the banks make in say a given month off of swiping. Lets not even talk about annual fees and interest paid. Trust me people, they end up on top everytime.
@jawbrkr wrote:
@longtimelurker wrote:
@UncleB wrote:Not to derail this thread, but I'm actually surprised another issuer hasn't tried to come up with an offering that is similar to the BCP with regard to grocery stores. Honestly, if another card were to offer even 4% on groceries with no AF, I would probably jump ship in a heartbeat.
Right, but I presume that would be unprofitable, especially with a lower swipe fee than Amex! We did have Sallie Mae offering 5% (with 1/2 the cap of the BCP) which has gone for new users, and one of the geographically restricted TX CUs offers the equivalent of 3.3%
I always shake my head when I hear people say that would be unprofitable to the banks. Trust me folks, the banks are making a crap load of money off of us and would still make a boatload of profit even it the return was 10% on groceries. You realize they get a cut everytime someone swipes their card. Do you understand how many people are out there swiping as I type this? I would really love to know what the numbers are in terms of how much money the banks make in say a given month off of swiping. Lets not even talk about annual fees and interest paid. Trust me people, they end up on top everytime.
I'm sorry but that's just silly. Unless you are privy to a banks bottom line you have no idea exactly how money they are making off credit cards. LTL knows very well that cc companies earn money off of swipes. They are in business to make money. Nonetheless you have no idea if they would continue to make money off of a 10% rewards program. Why stop there? Why not 20% or 30%? If a bank could generate profits off a 10% rewards program you can bet that one of them would offer it as a way of getting customers. At some point rewards programs offset the profits they are making from swipe fees, AFs and interest so the banks have to set the percentage at a point where the profits they generate are worth it.
@jawbrkr wrote:
@longtimelurker wrote:
@UncleB wrote:Not to derail this thread, but I'm actually surprised another issuer hasn't tried to come up with an offering that is similar to the BCP with regard to grocery stores. Honestly, if another card were to offer even 4% on groceries with no AF, I would probably jump ship in a heartbeat.
Right, but I presume that would be unprofitable, especially with a lower swipe fee than Amex! We did have Sallie Mae offering 5% (with 1/2 the cap of the BCP) which has gone for new users, and one of the geographically restricted TX CUs offers the equivalent of 3.3%
I always shake my head when I hear people say that would be unprofitable to the banks. Trust me folks, the banks are making a crap load of money off of us and would still make a boatload of profit even it the return was 10% on groceries. You realize they get a cut everytime someone swipes their card. Do you understand how many people are out there swiping as I type this? I would really love to know what the numbers are in terms of how much money the banks make in say a given month off of swiping. Lets not even talk about annual fees and interest paid. Trust me people, they end up on top everytime.
Yes, hence the use of "swipe fee" in my post. But we know that swipe fees are way under 10% (usually in the 2-3% range) and a lot of parties get their cut (in the case of V/MC, the network, the processor as well as the issuing bank). These cards are not profitable if only used for rewards categories and no interest no AF. The banks know that many people will either use outside the categories and/or carry a balance.
Cards are nerfed precisely because they are not generating the expected income. BCP started out uncapped, and that was quickly changed when people were putting several hundred thousand through the grocery category. Cash + also capped and changed its categories away from ones easy for high spend. A large number of people swiping isn't positive if the banks make a net loss (rewards-portion of swipe fee) on each swipe
I agree with all of the above... but a guy can dream, right?
Until something better comes out (by better I mean the numbers work out better for my personal spend pattern) I guess I'll be sticking with the BCP.
It's extremely unlikely that they would grandfather some and not others. Were you charged the annual fee yet (first statement?) It's possible that they notify in waves, nearer the renewal time, but doubt that.