Q: Hi Nick, thanks for taking the time to sit down with me!
A: Always happy to take questions from an imaginary interviewer!
Q: Great, let’s get started! First, to let you know where I’m coming from, I have two credit cards. One of them is my primary card and one is my backup. I pay my credit card bill in full every month so that I don’t pay interest, and my credit card bill gives me 1% cash back every month. So I’m doing really well, right?
A: Ummm…. no.
Q: What do you mean? I made $150 in cashback last year!
A: [sigh]
Q: You promised there wouldn’t be any condescending sighs like that.
A: Okay, sorry, I’m being kind of a jackass. It’s just that… I mean… jeez, I’ve made multiples of that in a single transaction.
Q: What? That’s impossible!
A: Now see, there’s problem #1 right there: your attitude. There are lots of ways to have profitable relationships with banks, and the reason they exist is because most people have a little voice that says things like “That’s impossible!” or “I can’t do that!”
Q: So you’re telling me I could make a thousand dollars in a single credit card transaction.
A: You? No. Not even close, and frankly you probably never will. Not that that’s a bad thing, mind you. It takes a combination of experience, aptitude, and enthusiasm to do things like that, plus you usually have to be kind of weird. You’re short on all four counts.
Don’t get me wrong: it’s great that you’re responsible with credit cards. It’s great that you don’t carry any debt with them. All I’m saying is that you can–with minimal effort–do better than you’re doing right now.
Q: But this credit card stuff is so complicated!
A: There are literally millions of non-rocket scientists who manage to use coupons to save money at the grocery store. And you know what? Couponing is not any more complicated that basic credit card management. We’re not talking about a high cognitive burden.
But with that said, some people really do not have an aptitude for this stuff and should not try any of the stupid credit card tricks you see featured in blogs like this. Who should and shouldn’t? I have no idea. As those Greek oracles used to say, “Know thyself!” Except they said that in Greek, not English, because English hadn’t been invented yet.
But: there are still easy things you can do to transfer more money from banks to yourself.
Q: Okay smart guy, say I’m not cut out for the cutting edge stuff you guys do. Can you give me a simple way to improve the profitability of my banking relationships?
A: Two words: Fidelity Amex. 2% cashback on everything.
Q: [silence]
A: Well?
Q: I’m trying to think of a reason why this is too hard for me. Ummmm… how about, “I don’t have time for all these credit card shenanigans?”
A: It will take you about five minutes to fill out the credit card application online. After that, you’ll earn hundreds of extra dollars, if not thousands, over the life of the card. Assuming this 2% deal lasts forever, which it won’t, because nothing lasts forever, so I’m probably overselling this. But still, you’ll do well. Assuming, that is, that credit card use doesn’t induce higher spending from you.
But it really is that simple. Five minutes, thousands of dollars. Or at least hundreds. It’s better than GEICO.
Q: But won’t this hurt my credit rating?
A: No, one credit card application and one new account will not tank your credit rating. It will temporarily decrease your credit score; how much and for how long depends on the specifics of your situation, but unless you’re about to apply for a mortgage or auto loan you’re probably okay.
Q: So you’re telling me this is the best card?
A: No, there is no “best” card. Asking which credit card is the best is like asking which tool is the best–is it the socket wrench? The table saw? Which tool is best depends on what job you want to do. If you want to get a fairly high cash back rate without having to think too much, then in my opinion the Fidelity Amex is the best card for that job. It’s the only no-fee 2% card out there.
Q: So what are the best credit cards for all the other jobs?
A: Thank you very much for your questions! We’re all out of time for today, but we’ll be back soon with another exciting installment of “Q and A for people who don’t understand advanced credit cardology”! Or maybe not, I haven’t decided yet.
That was good. Hope you continue the series.
LMAO! Classic stuff.
Put the man on the Tonight show. A new comic is born 🙂
Please do one of these “interviews” that focuses on Bluebird and Vanilla Reloads since I really don’t understand how to use these two things to more easily make my minimum credit spend on a new credit card.
As long as we are making suggestions, I think a great article would be how to MS without having to engage with a temperamental Walmart employee. I think that would *really* draw some interest.
My solution: use the kiosk where possible, buy money orders at the grocery store.
Great stuff. Will have to send it to some people. But to be fair, Fido AmEx is not that simple. You need a brokerage account (or mySmartCash could work, not sure) which adds its own complications.
You can just have them mail you checks to cash out rewards. It doesn’t need to go into a Fidelity account.
Yes, mysmartcash works. My cash back just dumps into that account. I have an ATM to withdraw, or move it to another Fidelity account, or one of my other linked accounts.
I was under the impression that you only get 2x when you deposit to Fido. Unless something has changed since 2008 when I got the card.
Is the FIDO 2% CB really the best?
OK – I use the 5% of CHASE BIZ but that’s limited to 50K a year.
THX
When somebody asks “What is the best card?” the answer is always “It depends”. The Fidelity Amex is the best workhorse/general card, and is the only no-fee 2% card, and it would probably maximize cashback for a lot of people. But if you do a lot of spending at office supply stores, it won’t necessarily be the best.