Many people recently asked me about an ad that they saw from Citizens Bank about a new credit card offering 10% cashback on all purchases.
Earning 10% cashback on everything would be pretty nice! Though, anyone who knows a thing or two about credit cards knows that giving this level of cashback is not possible (unless they somehow got taxpayers to pay for it).
So what is the catch? I looked a little deeper into the terms and saw that there are actually several catches:
Catch #1 - It’s only for the first 9 months.
They are only offering the 10% cashback for the first 9 months.I would say that this is more like a nice welcome offer, rather than a revolutionary 10% cashback card.
Catch #2 - Its capped at the first $1,000 you spend per month.
Offering unlimited 10% cashback for the first 9 months would have been nice enough as well. But this is not the case either. They are only offering the 10% cashback for the first $1,000 you spend per month.
Catch #3 - Deduct the 1.8% that the card earns in any case.
I wouldn’t call this a catch, but in reality, since this turns out to be just a welcome offer, we need to treat it like a welcome offer.
When Chase for example offers 80k points on the card_name after spending $4,000 within the first 3 months, then those 80,000 points are bonus points on top of the regular points which that card will earn in any case through regular spending.
So even if the number 10% sounds good, in order to compare apples to apples, I would deduct the 1.8% that the card earns anyway. So you’re really only earning an 8.2% cashback bonus.
To sum it up
So to look at it in a more accurate light, it’s definitely not the revolutionary 10% cashback card they are trying to promote it as. It’s rather a card earning a $738 welcome bonus after spending $9,000 on the card within the first 9 months (split up in $1000 in spend per month).
$738 is a decent welcome offer, but if you hop over to The Ultimate Credit Card Finder you can find many better offers with less spending required.
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great job explaining! thanks sam!