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More details about the Wells Fargo 5% card

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EDIT: A few data points are trickling in… see the comment section below.

Following up on yesterday’s brief post about the new Wells Fargo credit card offer for 5% back on gas, grocery, and drugstores for 6 months, I wanted to mention a few things:

There are three different 5% offers. There’s the Wells Fargo Cash Back Card, which offers a flat 5% cash back on GGD purchases. This one seems to me like it’s the best deal, and in fact it’s the one I applied for.

There’s the Wells Fargo Home Rebate Card, which also gives you 5% cash back, but only to be applied toward your mortgage… and only Wells Fargo mortgages.

Finally there’s the Wells Fargo Rewards Card, which instead of giving you 5% back gives you 5X points. I’ve looked through the Wells Fargo redemption catalog and I don’t see anything that gives you more than one cent per point, except…

Business Card Customers can get 1.25 cents per point. The business card is not eligible for any 5% bonuses, so the big question is whether Wells separates business points and personal points, or whether business can redeem personal points at the business rates. I have no experience with the Wells rewards program and I can’t figure it out for certain from their website.

If you go to the Wells Fargo Rewards page, you’ll see three rewards catalog links on the right side of the page. The first is for personal accounts, where the rewards are no better than one cent per point as far as I can tell. The next two are for business customers, and if you look here for example you’ll see a $1,250 cash reward for 100,000 points.

Is 6.25% possible? If you scroll down this page a bit, you’ll see this: “Link your Business Card Rewards program to all your other eligible Wells Fargo Rewards programs and you can combine points at redemption.” BUT… there’s a footnote on that statement that says “Not all programs are eligible for linkage. Please refer to your program terms and conditions to determine eligibility.” Your guess is as good as mine. If anybody knows for certain, I’m all ears.

The Rewards Card (the one with points) is capped at 120,000 points per year. Thanks to commenter HikerT for reminding me of this. The terms and conditions state, “Annual Point Cap Maximums: Cardholders may earn a maximum of 120,000 points per calendar year.” However, the T&C for the cash back version state, “There are no annual cash reward maximums.” Which is another way of saying ‘unlimited’, of course. Let’s hope it’s the good kind of unlimited and not the Citibank kind.

Do you need to have a relationship with Wells Fargo before you apply? Commenter Carl at Frequent Miler wrote this:

Hmmm… I just got declined because I don’t “have a relationship with Wells Fargo.” I called and tried to be my most charming self as I told them this was a great way to start a relationship, but the CSR wasn’t charmed at all. She told me my credit (high 700s) “was not strong enough to override the lack of a relationship.” She told me if I’m serious about a relationship I should visit a branch and take steps to build a relationship (open accounts, take out loans, etc.) and after 30 days I can try again — but no promises.

That’s worrisome… my application is currently pending, though I’m less optimistic after seeing this post. Unfortunately, that’s all I’ve seen about this possible complication.

Can you get multiple 5% offers? Since Wells has been out of the credit card game for so long not much is known about their underwriting standards. Rapid Travel Chai has pushed the envelope of credit cards from one issuer in one app-o-rama, and perhaps some brave soul will do the same with Wells and advance society’s knowledge of this critical question.

How will all this play out? That’s what I’m really curious about. Several years ago Citi and Chase both had unlimited 5% cashback promos (CashReturns and AARP, respectively) and it took them a good 12-18 months to shut them down. Whereas now there are more people playing this game so the lifespan of a good deal can be pretty short, as we found out with Citi this year.

Spectacular flameout or slow, steady burn? You make the call!

Microsoft Office for $10, the 1% savings boost, and Barclays tightens up

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MICROSOFT OFFICE FOR $9.95: Some of you may already be aware of this, but it’s possible for those with the right employers to get Microsoft Office for only $9.95. This is done via the Microsoft Home Use Program, wherein employees of companies that use Microsoft Office can get a version for their home computer on the cheap. To find out if you’re eligible, just enter your work email on the page linked above.

HOW MUCH WILL SAVING 1% MORE GET YOU?: A nice interactive graphic from the NYT on how much an additional 1% of savings adds up to over the years. (H/T: Barry Ritholtz)

$500 VISA GIFT CARDS TO RETURN AT OFFICE DEPOT: Chase Ink fans, get ready: the scuttlebutt is that $500 gift cards are returning to Office Depot. Though there is some talk on Flyertalk that they’ll only accept cash. This could turn out to be a YMMV situation, as with certain retailers who let you buy gift cards with gift cards. We’ll see…

RAPID TRAVEL CHAI’S APP-O-RAMA: It’s often informative to read the results of somebody’s app-o-rama, especially if they’re applying for more cards than you’ve ever applied for at once. I therefore enjoyed seeing how Rapid Travel Chai did: 5 credit cards approved, 1 pending, 2 denied. The two denials were from Barclays, and the lesson:

In line with many recent reports, Barclays has gotten very tight and reconsideration would not budge. They were most concerned about overall number of recent accounts and want me to have a longer track record with existing Barclays accounts. Similar happened with my wife a month earlier for the Arrival even though she has only ever had one Barclays card, the US Airways, and that for a year. So I think it may be best early on to go for one big Barclays score like the 4 I got last Decemberand then let them cool for a year or more.

MORE ON MONEY AND HAPPINESS: The Economist has a review of Happy Money: The Science of Smarter Spending. In a nutshell:

This slim volume is packed with tips to help wage slaves as well as lottery winners get the most “happiness bang for your buck”. It seems most people would be better off if they could shorten their commutes to work, spend more time with friends and family and less of it watching television (something the average American spends a whopping two months a year doing, and is hardly jollier for it). Buying gifts or giving to charity is often more pleasurable than purchasing things for oneself, and luxuries are most enjoyable when they are consumed sparingly. This is apparently the reason McDonald’s restricts the availability of its popular McRib—a marketing gimmick that has turned the pork sandwich into an object of obsession.

I’ll second the television suggestion–I (mostly) gave it up a few years ago and I don’t miss it one bit. I say “mostly” because I’ll still watch live sporting events or catch up on TV shows via Netflix, but I’ve cut out aimless channel-surfing entirely.

I will never understand the McRib obsession, though. Those things–and I say this as somebody who actually likes McDonald’s hamburgers–are appalling.

The $235K child, the latest on gift card churning, and free pretzels!

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RAISE A KID FOR LESS THAN $235,000!: Abby Hayes at Dough Roller discusses the annual USDA report that comes up with an eye-poppingly large number on how much it costs to raise a child. She points out:

Many people, unfortunately, take the report to mean that if you can’t set aside $200,000+ (per child) in the next 17 years, you’re better off not having a kid at all. But that’s not true. This report shows what people do spend on their children, not what they have to spend on their children…

If you check out the actual 2011 report, you’ll see that from birth to age 2, low-income families spend about $8,000 on a child, while middle-income families spend about $12,500. High-income families spend more than $20,000.

She goes on:

Housing is the biggest expense on the USDA’s list, taking about 30 percent of the child-related expenditures. But take it from someone who lives in a one-bedroom apartment with a toddler, you don’t have to provide lots of extra space for your child.

Babies, especially, take up next to no room and would prefer to sleep closer to you, anyway. But even older children don’t need a room of their own; it won’t kill them to share with a sibling.

If housing is a big expense for you, consider downsizing. Families in 1973 lived in an average of 1,525 square feet, according to the Census Bureau.

In 2010, the average home was more than 600 square feet larger at 2,169. Our families haven’t gotten any bigger, so there’s no reason a family can’t live comfortably in a smaller space.

We’ll back her up on that. Our house is technically large at 2,600 square feet, but 1,000 of that is our basement, which is used for storage, a tiny office, guest accommodations, and occasional playtime for our three kids. The vast majority of our living is done in 1,600 square feet. We have two kids sharing a bedroom, and they wouldn’t have it any other way–they keep each other company at night.

Our house is an older one which we completely gutted and renovated before moving in. This gave us the flexibility to re-do the floor plan, which we did with children in mind, and it has worked out great for us. We don’t feel cramped at all.

A small, well-designed house is cheaper, takes less time to clean, less work to maintain, and is less expensive both to build and take care of. We’ve noticed that the ‘tiny house’ articles we’ve run get a decent amount of click traffic, so we’ll refer you to Sarah Susanka’s “The Not So Big House” if you’re into that kind of thing. Even if you prefer bigger houses, it’s got some good ideas on how to optimize use of the space you have.

EVERYTHING YOU WANTED TO KNOW ABOUT GIFT CARDS (BUT WERE AFRAID TO ASK): Frequent Miler has been all over recent developments in the credit card fanboy subculture. If you want a good overview of how to get some easy frequent flyer miles, click here and here for his recent guide to gift cards. He’s focused on the Visa and Amex type, while Chasing The Points has had a lot recently on buying and selling merchant gift cards.

FREE PRETZELS ON NATIONAL PRETZEL DAY: It’s hard to believe it, but National Pretzel Day is already upon us again! Here’s a list of the locations where you can get a free pretzel this Friday, April 26. All you have to do is walk up to the counter and say “National Pretzel Day”. (H/T: Maximizing Money)

In case you weren’t aware, National Pretzel Day has an official spokesperson.

 

The Federal Reserve just made things easier for credit card fanboys and credit card thieves

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Some of you may have already read about this on Flyertalk or Million Mile Secrets, but it’s now possible to get a PIN for prepaid gift cards. Let’s get the obvious implications out of the way first: it’s now easier to churn your credit cards for points. You can now use prepaid gift cards to load your Bluebird Amex at Wal-Mart, to buy money orders, and and to get cash back from point of sale transactions, among other things.

We don’t have much to add to the max-out-all-your-5%-cards-ASAP-before-this-deal-dies discussion, other than maybe to refer you to our Best Buy post a few days ago for another possible angle. There is one aspect of this whole development which is very curious, however. As a poster on Flyertalk pointed out, all of this is happening because the Federal Reserve released new guidance for the gift card issuers which prompted them to very hurriedly start issuing PINs for their cards. Check out this excerpt from The Hill’s coverage of the situation:

“Quite honestly, the prepaid industry was shocked when the staff of the Federal Reserve Board issued [the informal guidance] less than three weeks before the effective date,” said Brad Fauss, the executive vice president and general counsel of Brightwell Payments, a payroll card company.

The guidance is not officially binding in theory, but in fact it’s usually what the financial services industry has to follow, thus the sudden rush to make this happen. Here’s a relevant excerpt from the Fed guidance:

Q2. Must an issuer of a general-use prepaid card that is enabled for processing transactions over a PIN network and an unaffiliated signature network provide or permit activation of the PIN at the time the prepaid card is purchased for the card to comply with § 235.7(a)?
A2. An issuer complies with § 235.7(a)’s prohibition on network exclusivity only if card transactions can be processed over both unaffiliated networks on the card. Transactions can be processed over a PIN network only if the cardholder has a PIN to use for card transactions. Where an issuer intends to meet the requirements of § 235.7(a) by enabling a PIN network on the card, the issuer may comply by activating the card at the time of purchase and providing a PIN at that time or by activating the card by telephone subsequent to purchase and providing a PIN at the time of activation.

What on earth is all this about? To find out, let’s go to rule 235.7(a):

§ 235.7 Limitations on payment card restrictions.

(a) Prohibition on network exclusivity. (1) In general. An issuer or payment card network shall not directly or through any agent, processor, or licensed member of a payment card network, by contract, requirement, condition, penalty, or otherwise, restrict the number of payment card networks on which an electronic debit transaction may be processed to less than two unaffiliated networks.

So the Federal Reserve is saying that issuers must allow their cards to access more than one network, and that the only way for them to do so is to provide PIN numbers with prepaid gift cards. Why do they have a concern about network exclusivity? We’re not sure, but our guess is that it involves antitrust concerns.

Maybe we’ve been reading Barry Ritholtz’s blog for too long, but we’re just too cynical about our nation’s financial authorities to be surprised that the Fed is requiring prepaid gift card issuers to do something which makes it easier for credit card aficionados to more easily exploit the credit card rewards system and make it easier for people with stolen credit cards to convert them to cash.

Of course, this particular blog is not likely to have any effect on Fed regulations, so we’re certainly not about to advocate for any sort of change, especially when we and our very clever readers are in a position to benefit from the Fed’s incompetence. All we’re going to say is, whip out your Chase Inks and your Citibank Preferreds and make hay while the sun shines!

And congratulations to Ben Bernanke! We’re only one week into April, but you’ve already got the PFD Man of the Month award wrapped up!

Man of the Month! (Courtesy of the Huffington Post)

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