The excitement of the week is the new Citi DoubleCash card. There have been a number of posts from the 1099 contractors who work for Citi about this card, two I noticed were View from the Wing and then at time of writing this, The Points Guy (he won the SEO battle!) so lets look at this from a more objective perspective. More objective because I am not being compensated by Citibank to highlight their products to my readers.
Is it a 2% cash back card?
The lads are careful to point out it is a 1% and 1% card in their marketing copy, but then they do go onto say that it’s 2%, here is a comment by Leff:
I favor points over cash back. But I also recognized that if I’m doing any un-bonused spend, I’m effectively buying points at 2 cents apiece, since I could otherwise be earning two cents per dollar spent.- View from the Wing
Brian, The Points Guy:
Also, I left out the 2% cash back Fidelity Amex since it requires you to have a Fidelity account; its earnings would be equal to those of Double Cash. – The Points Guy
So, once they get over the marketing copy and add in their own ‘take on things, they both think of this as being a 2% card. So why doesn’t Citi just call it a 2% card? Well, because it isn’t a 2% card it is 1% and 1%. 1% when you earn, and 1% when you pay off.
Why would Citibank do that?
Could it be possible that there is more to the math than meets the eye? Hell yeah it can. But don’t let that stop you from selling the card folks. If you check out the terms and conditions from the DoubleCash card you will see the following:
The Purchase Tracker Clause
You will also earn 1% cash back on payments you make that appear on your current month’s billing statement as long as the amount paid is at least the Minimum Payment Due that is printed on your billing statement and there is a balance in the Purchase Tracker. The balance in the Purchase Tracker is reduced by eligible payments you make. When the Purchase Tracker reaches $0, you won’t earn cash back on payments until more eligible purchases are made. – Citibank DoubleCash Terms and Conditions
I know Ts & Cs are such a drag… so let me do some snipping for you folks:
You will also earn 1% cash back on payments… (If)…. there is a balance in the Purchase Tracker… (and)… When the Purchase Tracker reaches $0, you won’t earn cash back on payment
So what’s wrong with that? Still 2% right?
Nope. It’s 1% AND 1%, that isn’t 2%.
- Spend $1000 on your Fidelity Amex, you get $20 back providing your account is in good order. You get it back at the end of that cycle.
- Spend $1000 on your Citi DoubleCash and you get $10 back, and another $10 when you have paid down the Purchase Tracker.
So here goes.. what happens if your statement closes on say April 1st with Citi, and you get a balance of $1000 added onto the tracker. You have earned your 1% on purchases, and you pay off your bill in full. You don’t get $20 on the same day, there is a gap, this gap means the money is with Citi and not you for a period of time, which makes it inferior. Maybe that’s a few days, maybe that’s a billing cycle.
A slight difference I hear you cry!
Ok – what happens if you spend $1,000 on the Fidelity Amex and pay the balance before your statement closes? how much do you earn? $20 right!
What happens if you spend $1,000 on the Citi DoubleCash and pay the balance before your statement closes? Does the Purchase Tracker go up, or do mid statement payments reduce it? Remember, the phrase ‘ Purchase Tracker reaches $0, you won’t earn cash back on payment? I called into Citi to explore this, and they confirmed that the Purchase Tracker updates at the end of the month. So, if you pay down a balance mid month, that just became 1% spend and 0% pay off bonus.
Think about it – Month 1 balance zero, spend $1,000, pay off mid month you certainly earn nothing that month for payoff as your tracker is zero. Month 2… well there is confusion. Maybe your $1,000 posts as Purchase Tracker valid spend, but you have no balance, so you are always behind, or maybe it doesn’t post at all, because you paid it down early.
Whichever you slice and dice that it ain’t a 2% card lads.
Let’s make the Citi DoubleCash the best card ever!
So the Points Guy decided the route to take was to compare it to 1% cards. Guess what… it won! He excluded the 2% Fidelity Amex from the scientific experiment by claiming it wasn’t comparable because you have to have Fidelity Account. So go get a fricking Fidelity Account. Sweet holy mother of all things that drive me bonkers! You get the Cash Management Account here, for free, and it even comes with a Debit Card that refunds ATM fees!
Leff claims the Fidelity Card earning 2% is inferior because not everywhere takes Amex. True… but there are very few, very strange places that exclusively don’t take Amex.
You see the ‘we don’t take Amex argument is overplayed because non-category spend is already a subset of total credit card spend, and then within that subset of non-category only some merchants don’t accept Amex, for that fraction of a fraction, you can use the Arrival, or heck, just earn 1x Ultimate Reward.
Keep on thinking my friends.
Thanks Matt, I had read the terms and conditions and found those clauses confusing. Figured it had something to do with Citi finagling a way to decrease the implied 2% payout. Wondered if it meant you had to pay the minimum but not the full amount in order to keep the purchase tracker from being 0. Really appreciate the clarification. (Had already decided the AmEx Fidelity was a better card.)
Well, I’m not sure.. But the day I trust citi to do the right thing and not be up to mischief is hopefully far away.
Nice analysis. I will point out that Sams Club does not take Amex (at least not here, in-store), which is annoying when I’m trying to meet minimum spend on an Amex because we make pretty good weekly purchases there.
All in all though, I agree this card isn’t that good, especially with the more “hidden” terms about the 2nd 1%
Certainly, there are some places that don’t accept Amex, but not all of your non Cat spend IMO. That card is being overplayed.
Just on a lighter note – Costco takes only Amex and it is cheaper than Sams 😉
One workaround is buying Walmart gift cards using Amex and use them at Sam’s club. Funny how Amex acceptance is no longer an issue when SPG increased bonus come about or small business Saturday.
You can work the gift card angle in either direction at your favorite warehouse club – Costco sells giftcards online and take a variety of payment options, which include but are not limited to AMEX.
Similarly, you can buy Walmart giftcards (usable at Sams) with a variety of payment options, not limited to Mastercard.
So, either way you can get out of the “single payment system only” with an extra step if you need to.
Thanks for the clarification about the Purchase Tracker issue. It will be interesting to see how the timing works in practice. If mid-cycle payments don’t “count,” this reduces the benefit and plays havoc with the idea of cycling one’s CL.
I bet the commission on a click referral through their ad-copy is more than 2% of $1000.
No bet!
I look forward to hearing from the first card users to see if mid-month payments earn only 1%. If they do, it’s a deal breaker for me as I max and pay my cards multiple times per month.
I suspect that’s not the intent, but I certainly could be wrong. There’s been a lot of emphasis put recently on promo deals to encourage people to pay their CCs instead of carrying balances.
Good catch and I’ll be watching to see how it plays out. Please make a followup post when you confirm one way or another.
I’ll try to – my mind moves in weird ways, so might have forgotten by then…
So what happened?
I didn’t get a card
nice post, thank you for going over T&Cs. There are a lot of people in this community to pay off balance before statement closes, so this is a big deal if you don’t get second 1%.
Not to mention, there is no sign-up bonus for this card! Even Fidelity Amex gives $75, and Cap1 Venture gave 110,000 (matching) at one point…
Cheers,
PedroNY
No bonus for FIA at the moment. It was such though…
Loved your analysis in this post. More than that loved those excellent gif’s :). Wow, tons of creativity at work 🙂
I only wrote this so I could photo shop Gary’s selfie.
Nicely done analysis. However, it was not very classy to include that Photoshop picture of Gary. Certainly there is a lot of pimping going on over there at BA but at least he post some useful info now and then. I could name quite a few more blogger out there who would deserve to be called out much more….
Anyhow, I am really impressed you caught that tricky 1+1 T&C!
I just liked his selfie in the loo. No harm intended.
Why is it not classy? It’s from Gary’s own blog. Plus you have to admit those pajamas do look like a spacesuit.
Great analysis… All this travel means I haven’t had the chance to keep up on such Hot Deals as this Citi card… gosh, I feel like I’m missing out. Did the Barclay Arrival+ go away? Or is it somehow inferior because you only get 2% if you don’t redeem on travel? Like the Fido is inferior because you need a Fido account? Or they are both inferior because they have sign-on bonuses too? — not intended to be snarky, just haven’t had my morning Thai Massage.
It should be noted that if you open a cash management account, you’ll be hit with a chex systems inquiry. I think the better justification for the amex fidelity card being superior is the fact that it earns points which are basically BoA WorldPoints.
That said, I’m still going to downgrade one of my Citi cards to this if only to see how the whole process works.
Good to know, thanks.
Agree on all points except the Amex acceptance one. I think there is some value in the card being a MC. I’ve been hit with this a couple times this year on some fairly large purchases with home improvement vendors. They took visa/mc (at the same price as cash) but not Amex.
I’m not saying it doesn’t exist, I’m saying it’s overplayed.
Ja ja ja ja ja I Like you Mat! That’s why you have credibility my friend well done!
While I agree that the Citi card isn’t the best cash back card I also think you’re scaring your readers by “wondering” if they’ll only get 1% back instead of 2%.
A more likely explanation is that the clause was put in place so that a cardholder could not expect to make a large prepayment, get the add’l 1%, and then cancel, expecting a full refund. Now perhaps I’m wrong but I read nothing that implies the 1% for payment won’t be rendered back to the cardholder once the statement closes.
But you are completely correct in calling out the usual credit card jackals!
And, you seem to be the only blogger who has actually called Citi to ask about the needlessly complicated system/wording. I do wish you’d have pushed for a clearer answer, but maybe it’s a pipe dream to think you’d actually get one from a bank rep or lawyer!
For my money, Saverocity and Travel Is Free stand far above the rest of the travel ‘hacking’ blogs. Any conversions coming from my household will be directed accordingly. Anybody signing up using the usual suspect’s affiliate links are just feeding the jackals. It’s incumbent upon us all to explain this to any ignorant newbies, patiently.
Well, they should be scared. Or more accurately there should be a voice of reason warning them that all may not be as it seems.
Otherwise everyone is just throwing around biased reviews to capture conversions.
We will see how it turns out, but id have preferred it greatly if when this card ‘broke’ in the news it came with a more balanced viewpoint than just saying ‘it’s 2%!!’
That’s not really fair or true, Matt is the only person that called and posted about it. I called them and didn’t get a response I felt comfortable mentioning “I think it works like this, but I’m not sure” so I didn’t include it in the blog post because it doesn’t add anything of value.
I also have an e-mail interview with a Citi exec sometime next week which will likely lead to more answers. The truth is nobody really knows how this new card is going to work at the moment, the fine print is vague enough that it can be interpreted either way.
I hope they can explain how their own product works 🙂
Without a doubt, weird systems like this raise a red flag that they very likely exist to create an advantage for the company, and therefore disadvantage the consumer.
Exactly what the wrinkles are (possibly not crediting prepayments, not granting cashback if you miss a payment, etc) they are undoubtedly going to benefit Citi and not the customer.
Here’s the chat that I had with Citi. The rep was pretty clear that mid-cycle payments would still earn the full 2%.
“Welcome
A Citi representative will help you in approximately 0 minutes 2 seconds.
For your protection, we’ll never ask you for passwords, PINs, User IDs, security words or any part of your social security number during a chat. Other information may be required to help us verify your identity. This chat may be recorded or monitored for quality purposes.
You are now chatting with Steven.
Steven: Welcome to Citi Live Chat. We appreciate the opportunity to service you. How may I help you?
MICHAEL: Hi. I’m thinking of getting the Citibank Double Cash card. It looks like mid-month payments reduce my purchase tracker. If I make a mid-month payment (i.e., before the statement cycles), do I not earn the extra 1% payment bonus on those or do I get the payment bonus when I pay it off, regardless of when I make a payment.
Steven: That’s a great question, Mr. Mike! You earn the bonus whenever you’d make a payment to your Citi Double Cash card account!
MICHAEL: Great, thanks. So even if I make a mid-month purchase and pay down the purchase tracker, I’ll still earn that extra percent?
Steven: Right! That’s why it’s called the Double Cash card! You earn a bonus whenever you use the card for a purchase, then a second bonus whenever you make a payment against the purchase balance!”
But if the purchase tracker is less than mid payment amount you don’t earn it.
My two cents, Matt you over complicated something fairly simple. My money is on Citi giving you one percent on the purchase and one percent on the payment, assuming the payment is eligible. There are a few activities that are not eligible, hence the verbiage discussing the purchase tracker. No point in arguing over something that will be fully known in a week or two.
I know you said you may be bored of this in a week or two, but I will be back to post the reality of the card. As I read the T&C, you get 1% on the front end and 1% on the back end, assuming you make the minimum payment and the payment is going towards something eligible (which in my case will be all my spending on this card). The additional language is to lock up any loop holes. Also, it clearly states that you can pay the card off at anytime, and as long as the debt has registered it will be eligible for one percent back.
Looking forward to proving this is in fact a two percent card (fingers crossed).
I look forward to it- though I think you already would agree that if you pay mid month and your tracker isn’t registered to that amount you don’t earn. Prime example would be on first month.
Matt, I don’t know why you have to make this so complicated. Do you have an anti Citibank bias? This is a no annual fee card pays you 2% cash back if you pay your bill every month (like I do). It is superior to the Capital One card (which also offers 2% cash back but has a $59 annual fee), and if you don’t want to limit your redemptions to only travel, superior to the Barclay’s Arrival card (which has a $89 annual fee and only gives you 1% for non-travel redemption). The only downside is that the DoubleCash card does not offer a signing bonus for new account holders and has a 3% foreign transaction fee. However, this does not matter to me as I am getting this card via a product change from another Citi card account and have other no foreign fee transaction cards for my international travel. I spend $1,000 per month at Sam’s Club. I will make $240 per year just my using my Doublecash card at Sam’s Club.
I didn’t make it complicated, Citi did.
Believe I have read in other forums that mid cycle payments actually did indeed earn the additional 1% so in effect it was truly a 2% card.
Can anyone on this thread comment and verify?
I’ve heard the same but don’t know personally.
I just had a chat with a CSR–mid cycle payments do indeed count!
Good stuff!
My wife has a Citi Double Cash card and all is not what it seems.
Card is paid in full on receipt of the statement.
$1046.xx worth of purchases made during the statement month and $1046.xx paid before the due date.
Of that 1014.xx, only $655 was eligible for the other 1%!
Hmm that’s odd. From what I’ve heard it typically pays out correctly, though sometimes it can split between months based upon when the charges were made (is it possible that some were after the statement close date?)
i understand it is difficult to write an unbiased article, but really…
“So go get a fricking Fidelity Account. Sweet holy mother of all things that drive me bonkers! You get the Cash Management Account here, for free, and it even comes with a Debit Card that refunds ATM fees!”
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Huh?
i’m just saying there are parts of your article that sling mud at the Citi Double Cash card with inaccurate statements:
“I called into Citi to explore this, and they confirmed that the Purchase Tracker updates at the end of the month. So, if you pay down a balance mid month, that just became 1% spend and 0% pay off bonus.”
-previous comments state that mid-month payments do in fact qualify for their 1% cash back offer-
so i’s just sharing my opinion, a lot of the article feels like a sales pitch for the 2% Fidelity Amex, even if its not… but when you start off a sentence with “You get the Cash Management Account here, for free” with a link bumping to another article that includes affiliate links, then I start to wonder… (i honestly do appreciate your clearly labeled “Affiliate Link>” labels tho)
If I had wanted, I could have just put in the citi affiliate link to this post- but instead I said it was risky to try a new card with many unanswered questions.
The cash management post had a link in it that is dead-I’ve just not bothered cleaning it up because I don’t care for affiliate links.
Go click it and see. No affiliate money in my mind with these posts.
Let me add some context for you too:
At the time of writing EVERYONE was pushing this link (for affiliate money) without knowing the answer to the cash back questions I raised here. And while you say they are inaccurate, this really is what people were telling me from Citi…
As for it being a pitch for the Fidelity Account – it was, because Fidelity is awesome, and proven 2% but Fidelity NEVER had an affiliate channel, so it wasn’t a pitch in the way you think.
Lastly. I’d already stopped using any and all credit card affiliates at this time, (the link was dead) so it never crossed my mind that it existed.
Right now I do have affiliates back after readers pleaded with me to do so, I agreed providing that I give 100% of the money they make to charity – I keep zero.
It is good that you question these things, but you missed the mark.
well that’s awesome then… for charity, i had no idea, my b
I have had this card since January and it is a true 2% cash back card. The reason there is confusion resolves around how Citi awards the cash for both the purchase and the payment. With Citi you get your money at the conclusion of each monthly billing cycle, unlike Capital One’s Quicksilver card that you actually earn immediately after it clears. This means there maybe payments still pending upon the closing of a statement period, which does mean you wait another month to get that cash at end of the next billing cycle. I did find one gotcha that isn’t easy to see that can reduce your 2% to something slightly less…If you select to redeem your cash back as a statement credit you won’t earn 1% on that amount as a payment. It’s treated like a purchase credit so it dodges “earn 1% cash back on payments”. Slimy practice since it’s basically the same thing but the simple work around, is to take the cash back as a direct deposit or some other form and pay your card as you normally would with the linked account.
I can confirm that the 1%+1% purchase/payment rewards are credited even if you make an early payment with a Purchase Tracker amount at $0. My wife and I received this card about 3 weeks ago. We made several purchases immediately, then we made a payment of $137.53 as soon as the first handful of purchases cleared from ‘Pending’ status. Now that the next billing/statement cycle has started and our new balance is ready, our online summary is showing the previous purchases and payment as cashback rewards: $527.59 in purchases = $5.28; $137.53 payment = $1.38. Again, this is within the first 3 weeks of having the card.
Yep- it works as 2% for many things, though the 1% trap does come in to play with certain transactions… Typically not those of the ‘regular’ variety.
This card is designed for the user to carry a balance every month. Read the legal terms I found on the application, (The purchase 1% is reduced by the 1% payment in the Purchase Tracker):
*Cash Back on Purchases: Unless you are participating in a limited time promotional offer, you will earn 1% cash back based upon eligible purchases appearing on your current month’s billing statement. Eligible purchases you make will be accumulated in the “Purchase Tracker” shown on your billing statement. The Purchase Tracker shows the balance eligible to earn cash back on payments each billing cycle. Eligible purchases do not include balance transfers, cash advances, convenience checks, disputed or unauthorized purchases/fraudulent transactions, Card Account fees and finance charges and fees for services or programs you elect to receive through us. Limited time promotional offers do not apply to personal banking transactions you make so you will only earn 1% on these transactions.
*Cash Back on Payments: You will also earn 1% cash back on payments you make that appear on your current month’s billing statement as long as the amount paid is at least the Minimum Payment Due that is printed on your billing statement and there is a balance in the Purchase Tracker. The balance in the Purchase Tracker is reduced by eligible payments you make. When the Purchase Tracker reaches $0, you won’t earn cash back on payments until more eligible purchases are made.
Bottom Line: False advertising by Citi since they are not clearly identifying that a balance in the Purchase Tracker is required! To earn 2%, you have to carry a balance and then you end up paying a significant amount on the interest rate on the balance!