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.