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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

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Credit cards and brokerages

To get the full 2% cash back value from a Fidelity credit card, you have to deposit the money into a Fidelity brokeage account. That's okay - no min on the brokerage account, and Fidelity brokerage is excellent.

To get 2.625% cash back from a couple of BofA's credit cards, you need to have $100K combined in Merrill accounts (and/or BofA bank accounts). That's okay if you've got the investment assets; Merrill is passable as a brokerage and the cash back is good. And you don't need to deposit the cash back there.

Bonus: BofA will add an extra 2% cash back (or points) for charges you make on any of its credit cards on Nov 7, up to $2500 in charges (an extra $50 back).
https://promotions.bankofamerica.com/card/morerewardsday

US Bank has a couple of interesting credit cards. One that is not out yet will give 4% cash back on all charges if you've got $100K in combined assets (like BofA). From the little I can see, its brokerage arm does not impress: only 100 free stock/ETF trades/year and a $50 annual fee for balances under $250K. But that extra cash back will likely cover the brokerage annual fee and more.

Another US Bank card, Altitude Connect, has no annual fee and some quirky travel benefits. No foreign transaction fee, four free airport lounge passes/year, additional passes if your flight is delayed by over two hours, $100 credit every four years toward TSA Pre-Check (or Global Entry), some travel insurance, and 4x points for travel without having to use its travel service. Like Fidelity, you have to redeem points into a US Bank account to get full value.
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Comments

  • Robinhood has a 3% cash back card - no limitations (aside from standard ones on buying cash-equivalents) - with 5% cash back on travel booked via Robinhood Travel portal.
    https://robinhood.com/creditcard/

    Technically, the card has no annual fee, but you have to be a Robinhood Gold member ($50 annually or $5 per month). Robinhood Gold also comes with a bunch of other perks, including 4.5% APY cash account, 1% Deposit Boost, and 3% IRA Match on contributions.
    https://robinhood.com/us/en/gold/

    There is a variety of redemption options, including into Robinhood brokerage account.
    https://api.robinhood.com/creditcard/legal/reward-terms
  • As with Fidelity, you'll get less than full value from the card if you don't redeem points into a Robinhood account (or spend the points at Robinhood). Not a big deal if you're a Gold member already.

    I also tend to discount the value of points earned/redeemed through proprietary travel "portals". I've usually been able to do significantly better with other travel sites. The one exception to worse pricing at "portals" I'm aware of is Capital One. That is because they price match.

    On paper at least, the Robinhood credit card looks good. The brokerage, not so good, at least for me since I use mutual funds and Robinhood doesn't. YMMV.

    https://robinhood.com/us/en/support/articles/investments-you-can-make-on-robinhood/
  • Only if you already know the answer, for purposes of the BoA Nov 7 bonus, does paying property tax with the BoA CC count as a purchase?
  • I've used Fidelity's Rewards Visa for approximately 8 years.
    I appreciate that it offers 2% cash back on all purchases so that the cardholder
    doesn't have to contend with varying cash back rates in "revolving categories."
  • I took the Schwab AMEX, then canceled it. Impossible to get past the stoopid voice-prompt system in order to speak to anyone. Anyone at all.
  • I've used Fidelity's Rewards Visa for approximately 8 years.
    I appreciate that it offers 2% cash back on all purchases so that the cardholder
    doesn't have to contend with varying cash back rates in "revolving categories."

    Hence my interest in looking at cards that give high flat rates when coupled with brokerages.

    Flat rate cards cited above:
    Fidelity: Fidelity Rewards (2%) - must redeem into Fidelity account for full val
    BofA/Merrill: Unlimited Cash Rewards (1.5%, 2.625% w/$100K invested) but foreign xact fee
    BofA/Merrill: Travel Rewards (1.5%, 2.625% w/$100K invested) - must redeem against travel charges
    Robinhood: Robinhood Gold (3%) - $50-$60 annual fee, for full cash val must redeem w/app into RH acct
    US Bank: Smartly Card (2%, 4% w/$100K invested) - $50 annual brokerage fee, foreign xact fee, for full val must redeem to bank acct

    It's not hard to find cards paying 2%, but they are usually inferior in some way(s) to Fidelity. For example, Wells Fargo Active Cash (WFC, need I say more?) and Bread Financial Cash Back (Amex, not Visa/MC)

    Cards paying more than 2% come with strings and/or costs, some slight some more consequential.
  • @BaluBalu Will your county seat allow you to use a cc?
  • Our county allows property tax payments via credit cards, but there is a fee. So, I just pay by online via e-check.

    I do pay auto, home & life insurance via a credit card and I get cashbacks for those.
  • My city charges 2% for CC property tax payments. Even with a Fidelity card (2% cash back), I would come out ahead.

    Say my tax is $100. I would be charged $102 and get 2% of that back, i.e. $2.04. Not a big win, but a win none the less. Add in the security of a credit card, not giving access to my bank account to the city, and the roughly 30 day float I get on the payment, and using the CC seems like an obvious choice.

    Only downsides are that it eats into my credit limit and potentially affects credit ratings.
  • Recently my credit score is increasing. One behavior I changed is pay off most of the balance before or soon after statement closed but before calendar month end. As to cause and effect, I am not sure.
  • Derf said:

    @BaluBalu Will your county seat allow you to use a cc?

    Yes.

  • edited November 2
    I and my wife use our Fido Visa card too for about everything, and can't be bothered to do the labor of using / tracking our sundry BoA cards. (We also use dedicated Amazon- and LLBean-related cards for shopping at those sites.)
    But here's a PSA, off-topic as it doesn't involve a brokerage: For Verizon cellphone customers I call attention to their black Visa card (Synchrony), as for all food-related purchases, gas, and Vz purchases (including Fios service) it gives you 4% ... applied to your cell bill. Quite something.
    So in many months our cell bill is like something from the 1990s. If we ate more (fed kids, e.g.) and used more gas (we buy v little in our hybrid dotage), it would be crazy.
  • edited November 2
    That Verizon credit card is appealing for Verizon cell phone customers
    with it's 4% credit for gas and all food-related purchases.
    I use my Costco Anywhere Visa by Citi for gas, restaurant, and travel purchases.
    This card offers 4% cash back on gas and EV charging purchases for the first $7,000 per year.
    Card holders receive 3% cash back on restaurant and eligible travel purchases.
  • Similar to everyone here, we like our Costco Visa card for many purchases and get a healthy check by year end.

    These days in foreign travel we get the best exchange rates using our credit card. Still having some cash is good in certain places, but majority of places readily accept credit cards.
  • I put nearly all my spend on Amex plat (non-Schwab, only b/c I like the # and don't want to change)....I burn those 1x points for upgraded travel to conferences/vacations. I do get value from the various benefits associated with the high annual fee, so I'm only paying a tiny fraction (if anything) to be an 'Amex member' each year.

    Some consulting stuff goes on Amex business which earns me double points.

    Amazon/WF purchases go on the Prime card, and it's my general backup with no FTF.

    A few bucks gets put on my United Visa each year just to keep the ~1M miles I have active.

    I probably could do more / get more from my cards, but I don't want to open a bunch of cards and/or play rotating-benefits/perks and keep track of all that stuff.
  • edited November 2
    "I probably could do more / get more from my cards, but I don't want to open a bunch of cards
    and/or play rotating-benefits/perks and keep track of all that stuff."


    Same here.
  • beebee
    edited November 2
    Much like the CC transaction fee that the tax collector charges for using you CC to pay your taxes, more and more merchant are passing the CC transaction fee along in your bill.

    Many just add it after you hand them your credit card and neglect to mention a 3% fee.
  • edited November 2
    @bee

    If merchants neglect to mention surcharges for Mastercard or Visa purchases,
    they are not following defined rules for surcharging.

    Visa

    I am a U.S. merchant who intends to surcharge. What is the process I need to follow?
    • If you intend to surcharge Visa requires that you:
    • Notify your acquirer at least 30 days prior to commencing surcharging
    • Include the surcharge amount within a dedicated data field (labelled Field 28) in the transaction
    message sent to Visa (your acquirer will enable the population of this field)
    • Limit surcharging to credit cards only (debit cards and prepaid cards cannot be surcharged)
    • Limit the amount to your merchant discount rate (MDR) for the applicable credit card or 3% whichever
    is lowest
    • Disclose the surcharge as a merchant fee and, for both in-store and online transactions, clearly alert consumers to the practice at the point of entry, the point of sale or transaction, and on every receipt

    Visa Merchant Surcharging PDF


    Mastercard

    Merchant disclosure to consumer
    A merchant must provide clear disclosure to the merchant's customers of the merchant's surcharging practices at the point of interaction which shall include the amount of the surcharge and the dollar amount of the surcharge on the transaction receipt provided by the merchant to its customers. Merchants should refer to the specific rule for additional consumer disclosure obligations.

    Nothing in the Mastercard rules affects any obligation of a merchant to comply with applicable state or federal laws, including but not limited to state laws that may prohibit or restrict surcharging of credit transactions, and federal and state laws regarding deceptive or misleading disclosures.

    https://www.mastercard.us/en-us/business/overview/support/merchant-surcharge-rules.html
  • @Observant1 "(debit cards and prepaid cards cannot be surcharged) " Do you know if this applies to all DCC or just Visa & Master ?
    1 debit & 1 CC here
  • beebee
    edited November 2
    @Observant1,

    I have also noticed "prepared food Tax" or "Meal tax"... as much as 12%.

    https://taxfoundation.org/blog/meal-taxes-prepared-food-restaurant/

    Then there's often a variety of suggested tip amounts 18% - 22%.

    Now this CC 3% surcharge...

    Don't get started on what they charge to chill and pop the top off a beer.

    Leery to use my debit card.
  • @Derf

    Several sources indicate surcharges can only be added to credit card transactions
    and not to debit card or prepaid card transactions.
    However, assessing debit card surcharges is a commonly broken rule according to Hancock Whitney Bank.

    https://www.hancockwhitney.com/insights/surcharging-on-card-payments
  • Still with CapitalOne at 1.5% for everything, no fee. No problem paying most recurring bills. The customer service is exemplary, something I’d not want to lose for half a percent. Schwab Visa used to deposit 2% directly into brokerage account, but long gone. Schwab Bank debit card is super for foreign travel because all ATM fees are rebated. Having committed to memory my checking account # at BOA and my CapitalOne card, I am reluctant to change. As a character in Ionesco’s The Bald Soprano says, “I have a good memory, but it’s short.”
  • edited November 2
    "I have also noticed 'prepared food Tax' or 'Meal tax'... as much as 12%."

    I live in the Seattle area and frequently dine at restaurants.
    I scanned the Tax Foundation article and discovered Seattle
    has the fifth highest combined tax rate on meals - 10.35%.:-(

    "Then there's often a variety of suggested tip amounts 18% - 22%."

    Tipping has gotten way out of hand.
    Many restaurants and food trucks in my area provide tipping options for customers who pick up take-out orders.
    During the height of COVID-19, I would leave tips for take-out orders due to the extraordinary circumstances.
    I have now stopped tipping for take-out orders.
    What additional service is being provided which warrants a tip?
    I always tip when dining in a restaurant which provides service.
  • For Verizon cellphone customers I call attention to their black Visa card (Synchrony), as for all food-related purchases, gas, and Vz purchases (including Fios service) it gives you 4%

    That's interesting. Verizon gives a $10 or $20 discount when you pay FiOS bills with autopay, so long as you don't pay by credit card. But it makes an exception for its own Verizon Visa. Doesn't work for me though. I've already got other cards that give me 5% on groceries and 4% on gas and can't see getting a card just for FiOS.

    A few bucks gets put on my United Visa each year just to keep the ~1M miles I have active
    United stopped expiring miles a few years ago. "Our miles never expire ..."

    Perhaps there's something special about keeping a 1M balance?

    If merchants neglect to mention surcharges for Mastercard or Visa purchases, they are not following defined rules for surcharging.

    In NYS, a merchant must disclose total price including credit card surcharges (in dollars) prior to sale. AFAIK it's an open question as to whether out-of-state merchants selling to NYS residents must comply.

    Still with CapitalOne at 1.5% for everything, no fee
    CapitalOne seems to have an excellent reputation, and as I noted above, price matches on its travel "portal", making its Venture cards more valuable than other banks' for travelers.
  • edited November 2
    Prime visa 5% Whole Foods and Amazon, Target 5% card, Lowes 5% card. I used to use WF visa 2% for everything else but today I ordered the 4% VZ visa which will replace that for gas/groceries and whatever else I get 4% on. Will use the WF 2% for anything the VZ card doesn't give me 4% like utilities etc... I need to see what the VZ card covers, maybe I can get rid of the WF card.
  • edited November 2
    msf said:


    >> already got other cards that give me 5% on groceries

    I missed it --- which one is that?

  • @msf I did some digging on U.S. Bank website and it looks like you might be able to get away with $50K IRA balance to avoid the $50 annual fee on their upcoming Smartly Visa.

    This may need to be verified, but it seems like if you enroll in the free U.S. Bank Smart Rewards program they will waive the IRA fee starting @ $50K plus give you a few other perks.

    If so: 3% cash back @ $50K IRA and 4% cash back @ $100K IRA - no annual fee.
  • I must be missing something about CapitalOne. None of their 1.5% cash back cards seem to have a higher rate on travel like others offering 4% or 5%. Price match is nice but it only works for 24h, only refunds in travel credits, and you have to go through the hassle of calling them to get it… So, for the unlikely chance that you have overlooked a good deal before booking and then find one within 24h afterwards, you’d have to give up extra 0.5% to 3.5%+ of cash back available at other cash back cards. Does this compute…??
  • @Observant1 Thanks for the link.
  • Credit card is a very profitable business. That is one reason Visa and Master stocks are often in growth funds. They charge the merchants up to 5% fee and give back the customers, 2-3% and pocket the rest. Our corporate credit card, American Express charges the most in the CC business, over 5%. Supposedly Am EX has no credit limit on the card and that is great for business travel. I have experienced, however, that it is less accepted in many places and I ending paying with my personal Visa card.

    Cash payment is far from dead. Many utility companies accept auto-pay only through your checking account. Some grocery stores and small retailers accept cash payment in form of either checks and debit card, Gas stations offer two tier pricing on gas for either debit card or credit card.

    The surcharges in restaurants are ridiculous. Many now are asking for 20+% for tips. In Europe there is no tipping required. The business pay their decent wages.
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