American Express gift cards – good for givers and recipients?

Gift cards are a great way to reward employees, give your kid some birthday money, please a hard-to-shop-for person who has everything, and help brand-new parents who need everything.

All the card networks, some banks and many retailers offer prepaid gift cards. Yet American Express (a CreditCardForum advertising partner) has some of the most customizable, high-limit and easy-to-order options out there. Read on to find out why – and to compare AmEx’s offers with competitors. image of American Express Gift card

Types of American Express gift cards

American Express’s gift cards come in three main flavors:

1. Personal gift cards

Anyone can buy these for $3.95 each, and they come in a variety of designs. You can buy these in person at participating retailers, although you’ll be limited to the denominations and designs in stock.

If you’re ordering online, the denominations you can get depend on the design you choose. In general, however, you can get a card loaded with between $25 and $3,000 and can order up to $5,000 in cards at a time.

These cards also have a personalization option, which allows you to emboss the recipient’s name on the card. To order personalized cards online, go here.

2. Business gift cards

These cards are meant for businesses looking to reward employees and customers, as per these terms and conditions:

American Express Gift Cards Business Purchase Terms and Conditions 2014-07-22 13-54-54

The cost per card is $3.95, and these cards can be purchased only online. For the recipient, there’s no difference between the personal cards and business cards. But, from the purchaser’s perspective, the per-order max is much larger ($75,000 vs. $5,000 for the personal cards).

Plus, the business cards allow for a custom message to be added. So, if you want to give 200 employees (or clients) $50 gift cards that all say “Happy Holidays,” ordering AmEx business gift cards allows you to do that. You can order business custom-message cards here.

3. eGift cards

Only current AmEx cardmembers can order these, and you must purchase them online. The cost per card is $2.95, and you can put up to $100 on each “card” (essentially an email with a card number that allows the recipient to make online purchases). With eGift cards, you’re limited to $250 worth of cards per seven-day period.

Use our chart to quickly compare your three options:

Comopare American Express gift cards
Who can purchaseCost per cardMax per cardMax per orderPurchasing with Membership RewardsPersonalization/customization options
AmEx personal gift cardsAny consumer$3.95$3,000$5,000Redemption value = half a cent per point (5,000 points = $25 card). Can pay for part or all of order with MR points (1,000-point minimum required).Can emboss recipient's first name, middle initial and last name (up to 21 characters).
AmEx business gift cardsCompanies, businesses or other corporate entities$3.95$3,000$75,000Can emboss 2-line custom message. Form message ("Congratulations," "Thank you," etc.) on first line and up to 21 characters on second line.
eGift cardsAmerican Express cardmembers$2.95$100$250 per 7-day periodup to 350 characters) to email containing eGift card.

Important terms

  • The cards are not reloadable.
  • You can’t use them at ATMs.
  • AmEx gift cards are not available to residents of Vermont and Hawaii.
  • You can use Membership Rewards points to pay for the entire or partial cost of the gift cards.
  • Shipping charges will apply if you’re ordering physical cards. Currently, shipping costs range from $5.95 to $15.95, depending on how fast you need the cards.
  • Besides the purchase fee, there are no other fees for inactivity, purchases, etc.
  • All cards have a “good thru” date, but you can request a free replacement if that date passes by calling 1-877-287-4438 for personal and eGift cards and 1-800-297-7327 for business gift cards.
  • If your card is lost or stolen, you’ll be refunded for any funds used after you report the theft – but not before:

Lost stolen gift card

The competition

Visa, MasterCard, Discover, and various banks and retailers offer gift cards. Because it’s always smart to check out the competition, here’s a run-down of what’s out there:

Vanilla Visa gift cards: You can find these at checkout in many drugstores and supermarkets. You can get them in $25, $50 and $100 denominations, and the activation fee is between $4.95 and $7.95. There are no after-purchase fees, such as inactivity fees.

Discover gift cards: Next to American Express, Discover presents the most gift card options. However, ONLY Discover cardholders can purchase them. Discover has business gift cards, personal gift cards and eGift cards. The per-order maximum is 20 cards (up to $3,000) per 7-day period, and the per-card maximum is $500. The cards cost $3.95 each, and a maintenance fee of $2.50 is deducted from the balance after 12 months of non-use. If you’re OK with standard shipping, it’s free. You can also customize cards with a personal message (four lines, up to 160 characters) and name.

U.S. Bank gift cards: Each Visa gift card costs $3.95 at branches and $6.95 online. You can load up to $500 on each card. If the recipient doesn’t use the card for 12 consecutive months after issue, a $2.50 inactivity fee will be deducted from the balance.

Visa and MasterCard gift cards: These can be purchased at certain bank branches and partner bank websites. Visa has a list of its vendors here, and MasterCard has one here. Check with the vendor for purchase costs and fees.

Are American Express gift cards a good option?

American Express’s gift cards have some of the lowest purchase fees out there – and, unlike some other gift cards, you won’t have to worry about the recipient getting hit with an inactivity fee down the road. The only other cost to worry about is the shipping fee if you’re ordering physical cards — and these costs can be pretty high for a single card. Yet, because the shipping fee is per order (not per card), it’s still pretty cost-effective if you’re buying in bulk.

The customization options are a nice touch as well and can make gift cards (often called an “impersonal” gift) a little more personal.

With these gift cards, American Express is catering to those who need to make big online orders, whether that’s a single card with a big balance (up to $3,000) or hundreds of cards with smaller balances. Other gift card providers cut you off with a relatively low per-card maximum or restrict the number of cars you can get at once, meaning large corporate orders are out of the question. Amex gift card payment options

Perhaps the biggest advantage of these cards, however, is that practically everyone can get them (see your online payment options to the right). Only the eGift cards are restricted to AmEx cardmembers. The physical cards can be purchased online with Visa, MasterCard, AmEx and Discover, and there’s no need to visit a branch, go to the store or be an American Express cardmember.

If you’re wondering how American Express is making money on these cards while keeping costs low for purchasers, it’s the swipe fees – the amount merchants pay whenever one of these cards is used. If a company places a huge order and gives out 500 of these cards to all its employees, American Express makes money when those lucky recipients go shopping.

It’s true that some merchants may not accept American Express. But so many do nowadays, that givers can rest assured they’re giving a nice, usable gift.

The bottom line …

While there are plenty of gift card options out there, American Express’s gift cards are relatively low-cost, easy to get online and convenient for large orders.


-----
Editorial Disclosure: The editorial content on this page is not provided by any bank, credit card issuer, airline or hotel chain, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone, not those of the bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Discover it chrome 2% card nixes rotating categories

Are you considering the Discover it card, but don’t think you’ll get much out of the rotating 5 percent categories? Discover recently started offering another version of the ‘it’ card – the Discover it chrome. Like the original ‘it,’ the chrome has no annual fee.

picture of Discover it chromeJust as with the original ‘it’ card, there are two iterations of the chrome: A regular version and a student version. The rewards are the same. The major differences between the regular and student chrome cards are different 0% intro period offers and a different APR range.

Here’s what the cards are offering for new members:

Discover it chrome:

Discover it chrome for students:

According to Discover’s media relations department, cardholders can convert from the original 5 percent card to the chrome version (or vice versa) by calling customer service. Read on to learn if the Discover it chrome is a good fit for you – or a good replacement for the original version if you already have it.

New (probably simpler) rewards

The chrome card offers a permanent 2 percent cash back on spending at gas stations and restaurants and 1 percent on everything else. You get the 2 percent rate for the first $1,000 in combined restaurant and gas purchases each quarter. If you exceed that amount, you’ll earn 1 percent for the rest of the quarter.

The original ‘it’ card, meanwhile, offers 5 percent cash back in rotating categories, which change each quarter. You get the 5 percent back rate for the first $1,500 in category purchases each quarter (and 1 percent after that).ShopDiscover June 2014

As with the original ‘it’ card, you can boost your rewards earnings by utilizing the ShopDiscover.com shopping portal. There, you’ll get an unlimited 5 percent to 20 percent back when you make purchases with Discover’s partner retailers, including Expedia, Land’s End, Kmart, Advance Auto Parts and Target.

However you earn rewards, you can redeem them for cash back (statement credit or direct deposit), gift cards or charitable donations. Or, you can use them to pay for your purchases at Discover’s partner retailers (including Amazon.com).

Same Discover benefits

Discover is known for its generous consumer protection perks. Just like the ‘it’ card, the chrome card offers:

  • Your TransUnion FICO score – free every month
  • Purchase protection: Eligible purchases made on your Discover card are protected for the first 90 days (for up to $500) if stolen or damaged.
  • Extended warranty: You get an extra year on warranties of 36 months or less.
  • Return protection: If you’re unhappy with a purchase and the store won’t take it back, Discover might be able to help. Within 90 days of the purchase, Discover will refund qualifying purchases, up to $500.
  • Price protection: If you purchase something on your Discover card and find a lower price within 90 days, you’re eligible for reimbursement for the difference, up to $500.
  • And more

Which version is better?

The best option for you depends on your spending patterns. Start by reviewing the 5 percent categories for the Discover it card. These are subject to change each year, but, they generally follow the same template. Here are the 2014 categories to use as a reference (in the past, the “Holiday Shopping” category has included certain department stores and retailer websites):

Discover 5 percent Cashback Bonus Calendar

As you might notice, there’s some overlap between the ‘it’ card’s 5 percent bonus categories and the chrome card’s 2 percent categories: gas and restaurants. That means these cards might work best as a team. In fact, you don’t necessarily have to choose between them, according to Discover’s media relations department — you can apply for each card separately, and, assuming you qualify, you can have both. If you do, you can switch your spending over to the chrome as soon as you max out the 5 percent cash-back earnings for gas and dining on the regular ‘it.’ As some of our forum users have pointed out, however, there are some complexities in having multiple Discover cards.

Assuming you don’t want two Discover cards, you’ll need to do some math. Your results will vary, but, generally speaking, those who spend $1,000 or less on gas and restaurants each quarter and don’t make use of the other categories will come out ahead with the chrome card. Higher spenders (especially those who can make even a little use of the quarterly categories) will come out ahead with the regular ‘it’ card, however.


Here’s how the numbers might work out:

Scenario No. 1

… let’s assume you spend:

  • $700 per quarter at restaurants
  • $300 per quarter on gas
  • $0 on home improvements during the second quarter and $0 at retailers that qualify for the ‘it’ card’s holiday shopping category

In this scenario, you’re not taking advantage of the ‘it’ card’s quarterly categories and spending so little that you don’t hit the spending ceiling for either card:

It Vs. It Chrome: Scenario No. 1
QuarterIt card cash backIt chrome card cash back
Q1 (5% on restaurants and movies on 'it' card)$38$20
Q2 (5% on home improvement on 'it' card)$10$20
Q3 (5% at gas stations on 'it' card)$22$20
Q4 (5% on holiday shopping on 'it') card$10$20
Grand total$80$100
WINNER: CHROME CARD (by $20 a year)

Scenario No. 2
… now let’s assume you spend quite a bit more due to a long commute and lots of dining out — and that you make use of the 5 percent categories.

  • $1,500 per quarter on restaurants
  • $1,000 on a big home improvement project during Q2
  • $600 per quarter on gas and an additional $600 in Q3 for a summer road trip
  • $200 on holiday gifts that qualify for the 5 percent bonus on the ‘it’ card in Q4

In this scenario, you’ll be surpassing the $1,000 quarterly spending limit that the chrome card imposes on bonus spending.

It Vs. It Chrome Scenario No. 2
QuarterIt card cash backIt chrome card cash back
Q1 (5% on restaurants and movies on 'it' card)$81$31
Q2 (5% on home improvement on 'it' card)$71$41
Q3 (5% at gas stations on 'it' card)$75$37
Q4 (5% on holiday shopping on 'it') card$31$22
Grand total$258$131
WINNER: 'IT' CARD (by $127 a year)

As you can see, if you can make even a little effort to use the categories, the original ‘it’ can help you come out way ahead. However, the chrome might still appeal to those who don’t want to worry about maximizing categories and signing up for a new one each quarter.

Again, your results will deviate from the above scenarios. Few people spend the exact same amount of money each month, and your rewards will fluctuate, depending on how well your spending lines up with the ‘it’ card’s rotating categories. If you happen to take a road trip in the fall instead of the summer, for example, having the chrome card, which gives you a little extra on gas every quarter, might be advantageous.

How does it fit into your reward strategy?

There’s still one more thing to consider: How the chrome card would fit into your overall reward strategy. If you prefer cards that get you steady cash-back rate year round instead of rotating categories, you’ll want to consider filling the rewards “holes” the chrome card leaves in the grocery and travel categories. Assuming you’re trying to avoid annual fees, the Blue Cash Everyday card from American Express (a CreditCardForum advertising partner) gives 3 percent back on groceries, while the Barclaycard Arrival World MasterCard gives 2 percent back on travel.


-----
Editorial Disclosure: The editorial content on this page is not provided by any bank, credit card issuer, airline or hotel chain, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone, not those of the bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

American Express Bluebird Review: Still a Good Choice?

The Bluebird Card from American Express, a CreditCardForum advertising partner, has been the darling of rewards chasers since it was launched by AmEx and Wal-Mart in 2013. Because the account could be topped off via Vanilla Reloads, those chasing a sign-up bonus spending requirement could purchase reloads with a credit card, transfer those funds to Bluebird and then use Bluebird to pay bills.

That’s next to impossible these days, now that nearly all retailers that carry Vanilla Reloads have banned purchasing them with credit cards (including the last major holdout, CVS).

So does the Bluebird still have anything to offer? Yes – if you’re looking for an easy-to-use alternative for a checking account from a traditional bank or credit union. Like all prepaid debit cards it can function as a mobile transaction account, but without paper checks and bank branches. Here are some of the perks of this unique financial product – and some drawbacks to keep in mind:

Perk No. 1: It’s not just a prepaid card.

Bluebird is commonly referred to as the “Bluebird card,” but it’s really more of a debit card/checking account hybrid. You can get one by signing up for free online. Or, you can get a starter kit for $5 at Wal-Mart that allows you to load up to $500 (and then activate the card online to get all the Bluebird features).

The Bluebird card (which can be used at any merchant that accepts American Express) is tied to an account that you can fill via direct deposit from a paycheck, a transfer from a checking or savings account, a check (via the Bluebird mobile app or mail), cash at a Wal-Mart register or a Vanilla Reload. Bluebird AmEx

In addition to using your card to make purchases, you can use the account to pay bills online (just as you would with any checking account) or with the Bluebird checks that come with the account. If you’re using a check, you just need to preauthorize it with the mobile app or online before you write it, to make sure you have the funds to cover it.

Perk No. 2: Features for families and budgeting

Once your Bluebird account is set up, you can create up to four sub-accounts for others (family members, for example). Each sub-account holder then gets a card (in their name) – but you, as the primary account holder get to control how much money gets transferred into the sub accounts, how much the sub-account holder can spend each day and whether the sub-account holder can withdraw money at ATMs.

Bluebird also has a feature called SetAside, which mimics a savings account. You can move funds from your primary account into your SetAside account anytime (or set up automatic recurring transfers). The money in your SetAside account can’t be spent until you move it back into your main account, preventing it from trickling away through everyday spending.
You can also send money for free to anyone with a Bluebird account – or request money from any Bluebird-account holder.

Perk No. 3: Minimal fees

Bluebird does have fees. However, compared to other non-bank alternatives out there, the fees aren’t so bad. And many of the fees that do exist are avoidable if you use the card a certain way. Use this chart to compare the Bluebird’s fees to the fees charged by prepaid cards and other checking-account alternatives in the industry:

American Express Bluebird Fee Comparison
BluebirdOther similar products
Set-up feeFree online; $5 for Wal-Mart starter kit$0 to $9.95
Monthly fee$0$0 to $9.95
Fee to add money$0 (third-party fees apply when using Vanilla Reloads)$0 to $2.50 (not counting third-party fees)
Customer service fee$0$0 to $2 per call
ATM withdrawal fees$0 if you use a MoneyPass ATM and have received a direct deposit in the last 30 days – otherwise $2$1.95 to $2.50 (usually free within the card's ATM network)
Check order fee (50 checks)$0 for the first order with direct deposit. After that, $26 (waived until 6/1/2014)N/A
Foreign transaction fee$02% to 3.5%

As you can see, Bluebird waives some of the fees that often make alternative financial products so expensive – set-up fees and monthly maintenance fees.

Perk No. 4: Additional protections

Checking accounts generally don’t give you purchase protections and travel assistance. Those things are usually credit card territory. But Bluebird throws a few of these benefits in for free. You get:

  • Purchase protection: If an eligible purchase is stolen or damaged within 90 days, Bluebird can reimburse you (up to $1,000 per occurrence and $50,000 per year)
  • Global Assist: If you run into trouble more than 100 miles from home, you can call a number and get legal and medical assistance. This can be very useful if you’re in a place where you don’t understand the language. Of course you’ll have to pay for the help you receive, but AmEx will help you find it.
  • Roadside assistance: Call AmEx, and it will arrange for certain emergency services, including towing, winching, jump starts and tire changes. Again, you’ll have to pay for those services.

Now, here are a couple drawbacks to consider:

Drawback No. 1: ATM fees

Avoiding ATM fees may require extra effort – even in-network ATM withdrawals will cost you $2 each if you’re not signed up for direct deposit. If you don’t have a paycheck to deposit (or if you prefer to receive your paycheck another way), the costs of Bluebird can add up. Direct deposit is free, though, so if you can sign up for it, it makes Bluebird basically free.

Drawback No. 2: Small gap in FDIC insurance

When you deposit money in a bank, you do so with the confidence that, if the bank goes under, FDIC insurance protects your money. With Bluebird, it’s a bit more complicated because American Express is not a bank and therefore not FDIC insured.

You really don’t have much to worry about, though. AmEx places your money in a custodial account with FDIC-insured partner banks within one business day after you add money to your Bluebird account. During that brief window between when you deposit your funds and when AmEx moves your money, you’re vulnerable – but the chance that AmEx will implode at all, let alone during that short limbo, isn’t very likely.

However, if you’re using the temporary card you got from Wal-Mart and haven’t registered it online yet, American Express will NOT place your funds with FDIC-insured partner banks.

Is Bluebird still a good option in 2014?

Although rewards chasers may not find Bluebird as useful, those using it for its original intent (an alternative to a checking account) have a lot to gain with this product. It’s easy to sign up for online, nearly free to maintain and comes with perks that make it a useful bill-paying and savings tool.

Just remember this if you’re trying to build credit: Activity on your Bluebird account is not reported to the credit bureaus. While it will allow you the convenience of plastic and the ability to pay bills and shop online, it will not help you build credit. If credit building is what you’re after, consider a secured card:


-----
Editorial Disclosure: The editorial content on this page is not provided by any bank, credit card issuer, airline or hotel chain, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone, not those of the bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Should You be Excited about Wells Fargo’s Propel Cards?

Last summer, Wells Fargo promised it would be launching some new rewards cards as part of its partnership with American Express. And now those cards are here: The Propel 365 and the Propel World.

Our review will help you decide if there’s enough room in your wallet for either of these newcomers.

A step up?

Historically, Wells Fargo’s rewards cards have lagged behind offers from other issuers. For example, its Rewards card and Cash Back card offer bonus earnings for only the first six months and just 1 percent after that. That’s not the best deal in a world where cards are offering a permanent 2 percent to 6 percent back on certain static categories – and 5 percent back on rotating categories year round.wells fargo rewards card review

Another drawback: To apply online for Wells Fargo’s older rewards cards, you must already have a Wells Fargo Account. Otherwise, you have to apply at a branch.
The new cards allow you to earn bonus points in certain categories permanently – and there’s no need to have a preexisting relationship with Wells Fargo to apply online (although a preexisting relationship will benefit you, which we’ll get to in a moment).

What you’re earning and how much it’s worth

Both Propel cards will earn you points for the Wells Fargo Rewards Program. This is similar to Chase’s Ultimate Rewards and AmEx’s Membership Rewards, in that you can redeem your points for a variety of things, including:

  • Merchandise
  • Gift cards
  • A deposit into a Wells Fargo Account
  • Travel (booked via the Rewards Program website)
  • Digital rewards (including eBooks, games and music)

As with most rewards programs, how much your points are worth will depend on how you redeem. Because the value of merchandise can fluctuate, so will the redemption value if you choose to cash in your points that way. The amount of points you’ll need for digital rewards varies (currently music downloads start at 24 points, audio books start at 162 points and games start at 224 points). Find out how much those downloads cost elsewhere to see how much your points are worth.

As for all the other options, you’ll get a value of 1 cent per point, according to the Rewards Program site and the new cards’ terms and conditions. In other words, if you want an airline ticket that’s $200 in Wells Fargo’s Rewards Program portal, you’ll need 20,000 points. You can also redeem enough points for part of the ticket’s value and pay for the rest with your card.

What the cards offer

Both cards offer a suite of perks, benefits and protections, including:

  • No foreign transaction fees
  • Luxury travel perks and discounts at participating hotel properties, car rental programs and cruise lines
  • Auto rental collision and liability insurance
  • Travel accident insurance and emergency assistance
  • Extended warranty (up to a year on U.S. warranties of year or less)
  • Return protection: If a merchant won’t accept a return for an undamaged item, you can get refunded up to $300 per purchase within 90 days.
  • Concierge service

So what makes each card unique? Take a look:

Propel 365 ($45 annual fee, waived the first year)
Wells Fargo Propel 365This card lets you boost your earnings in two spending categories (gas and restaurants). Given those bonus categories, the card seems to be targeting the high-spending-road-warrior crowd.

 

Rewards:

  • 3X points at U.S. gas stations
  • 2X points at U.S. restaurants
  • 1X point on everything else

Annual fee: $45 (waived the first year)

Sign-up bonus: 20,000 points, worth up to $200 (after spending $3,000 on the card in the first three months)

Propel World ($175 fee waived the first year)

Propel WorldThe rewards structure of this card and the extra perks it provides are designed for travelers. The annual fee is pretty steep, but you might be able to earn some if it back if you use all the card’s perks.

 
Rewards:

  • 3X points on airlines
  • 2X points on hotels
  • 1X points on everything else

Annual fee: $175 (waived the first year)

Sign-up bonus: 40,000 points, worth up to $400 (after spending $3,000 in the first three months)

Extra perks: With the higher annual fee come some nice extras, including:

  • EMV chip
  • Annual $100 credit for qualifying airline charges (such as checked bag fees and in-flight purchases)
  • Complimentary room upgrades at participating properties
  • Additional travel protections (including trip cancellation insurance and travel inconvenience insurance)

Relationship bonus

Perhaps the most unique feature of the cards is what’s called the “relationship bonus.” If you have another account with Wells Fargo, you’ll get bonus points each year – a percentage of the points you earned. The only other national retail bank that offers a similar bonus reward feature if you have an existing account relationship is Bank of America. Technically, you earn the bonus points each month, based on whether you owned a Wells Fargo account during that month – but the points will be deposited the 13th month after the date your card was opened (and on every anniversary thereafter).

How many bonus points you earn depends on which kind of Wells Fargo account you have:

  • Checking account: 10 percent
  • PMA package (a Wells Fargo’s premier interest-earning checking account package) with a balance of less than $250,000: 25 percent
  • PMA package with a balance of $250,000 or more: 50 percent

There’s a slight catch with the relationship bonus, however: You won’t earn it on the extra points earned in the bonus categories. So, if you spend $500 on hotels with your World card, you will earn the relationship bonus only 500 points (a point per dollar spent) – not on the 2 extra bonus points per dollar you got from category spending.

The verdict

If you already have an account with Wells Fargo, either of these cards would be a good opportunity to get extra points via the relationship bonus – especially if you have a PMA package, which automatically gets you at least 25 percent. For comparison, Bank of America currently offers a yearly relationship bonus on its BankAmericard Travel Rewards card – but it’s capped at 10 percent.

The Propel cards also hit some bonus-category combinations that might be a perfect fit for you. Have a long commute and eschew groceries for meals out? The Propel 365 might be a rewards powerhouse for you (compared with other cards that pair gas and groceries). Travel frequently? Earning 2 points per dollar on hotel stays and 3 points on flights could get quite lucrative.

You might also notice that the Propel World seems to be gunning for AmEx Premier Rewards Gold Territory. The Premier Rewards Gold card is offered by American Express, a CreditCardForum advertising partner. The annual fee is the same, and you earn 3 points per dollar with airline purchases. But the Propel World gives you a $100 airport reimbursement credit (a mini version of the $200 credit the pricy AmEx Platinum gives you). Then again, the PRG gives you free roadside assistance. You’ll have to decide for yourself which you’re more likely to use.


… So are the Propel cards worth it once the annual fees kick in in year two?

Propel 365: The $45 annual fee on the Propel 365 is quite low. However, you can match its earnings with a combination of two no-annual-fee cards (for example, the BankAmericard Cash Rewards for 3 percent back on gas and the no-annual-fee Barclaycard Arrival for 2 percent back at restaurants). This may be an apples-to-oranges comparison, as the Propel 365 earns you points that can be redeemed for more than cash back — and that could potentially be worth more than 1 cent per dollar, depending on how you redeem. However, because most of the redemption options (including gift cards and airline tickets) get you a value of 1 cent per dollar anyway, you might get more value out of no-annual-fee card combo that earns you cash back – especially if you don’t have a Wells Fargo account earning you a relationship bonus. You also have a relatively steep $3,000 climb for a relatively small (20,000-point) sign-up bonus with this card.

Propel World: As for the Propel World and its $175 annual fee, remember that the $100 airline reimbursement credit knocks that down to $75 (assuming you use the entire credit). That means, for less than what you’d pay for the Chase Sapphire Preferred ($95 annual fee), you’re getting 3 points for every dollar spent on flights vs. the Sapphire Preferred’s 2 points. That said, you have to redeem through Wells Fargo’s travel portal – and you can’t convert your points to real frequent flier miles (which the Sapphire Preferred and Premier Rewards Gold both let you do).

Bottom line: The cards could be a good option for those who already have premium accounts with Wells Fargo. For others, the advantages are less clear cut.


-----
Editorial Disclosure: The editorial content on this page is not provided by any bank, credit card issuer, airline or hotel chain, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone, not those of the bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Citi ThankYou Preferred for College Students: 2014 Review

After discontinuing its Citi Forward Card for College students in March, 2014, Citi has a new offer – a student version of its ThankYou Preferred card. Like the regular preferred card, the student version has no annual fee.Citi ThankYou student card

For some student cards, the only reward is the ability to build your credit. But the Citi ThankYou Preferred for College Students kicks in some extra rewards as well. Our review will help you understand what the card offers – and help you compare it to other student credit card offers on the market.

While we don’t offer this card on our site currently we felt it was worth reviewing since it is the newest  product in the student credit card market.  Read below to see how it stacks up to the competition.

Rewards

The rewards structure of this card is identical to that of the regular Citi ThankYou Preferred:

  • 2 ThankYou points  per dollar on dining and entertainment (“entertainment” encompasses purchases from sports promoters, theatrical promoters, movie theaters, amusement parks, tourist attractions, video rental stores and record stores, according to the card’s terms and conditions)
  • 1 ThankYou point  per dollar for other purchases

There’s currently a sign-up bonus of 2,500 ThankYou points for cardholders who spend $500 in the first three months of opening the card.

So what are these ThankYou points? They’re currency in Citi’s ThankYou rewards system. They can be redeemed for cash back (in the form of a check or statement credit), gift cards, travel, online shopping, experiences and merchandise. A new option is the “Select and Credit” option, which allows you to get refunds for past purchases in select categories.

As you can see, there are tons of options to redeem your points – but how much value you get for your points varies. If you opt for cash back, your points are worth only half a cent each – with other cash-back cards (including the Discover it and Capital One Venture), your points go twice as far (they’re worth 1 cent when redeemed for cash back). Your points go a bit further if you use the “Select and Credit” option – they’re worth 0.75 cents each when redeemed that way.

Other redemption options give you a better return. For example, your points may be worth 1 cent each if you redeem for gift cards with Citi’s partner retailers and for travel. When it comes to merchandise, redemption value varies. Redeeming for both a NINJA Mega Kitchen System blender and a Samsung Galaxy Tab 3 (8GB) gets you a redemption value of 0.8 cents per point – better than redeeming for cash.

Application requirements

This is a student credit card, so you must be a currently enrolled college or graduate student and over 18 years of age, according to the card’s terms and conditions. Depending on your creditworthiness and income, the credit line may be as low as $500.

The real question with student cards is whether you have to be earning a steady income to get one. The CARD Act of 2009 required issuers of student cards to make sure applicants under 21 earn enough on their own to pay back charges. The application is vague when it comes to income requirements, saying only that it will review your annual income. What the application does make clear is that, if you’re under 21, the income you declare on your application must be your own. Only those over 21 can include income from others that they can access:

Citi ThankYou student income requirement

Protections and extras

Even if your credit limit is woefully low, you’ll still get some benefits from this card:

  • EMV chip
  • Rental car insurance
  • Travel protections (lost luggage, travel accident, trip cancellation/interruption, travel emergency assistance)
  • Extended warranty coverage
  • Citi Price Rewind

Such extras make this card a better deal than a debit card, which wouldn’t provide travel insurance or extended warranty protection.

How does it compare?

There are a few other student cards that offer rewards (and have no annual fee):

  • Discover it for Students: This card offers 5 percent cash back in rotating quarterly categories and 1 percent back on everything else.
  • Journey Student Rewards from Capital One:  This card lets you earn 1 percent cash back on all your purchases. If you pay your bill on time, you get a 25 percent bonus. In other words, you’re getting 1.25 percent back – a rate that’s pretty competitive even for non-student cards. Check out our review for more information.
  • Citi Dividend Platinum Select for College students: This card is similar to the Discover it for Students, as it offers 5 percent back in rotating categories and 1 percent on all other purchases.
  • Upromise World MasterCard: The cash back you earn on this card goes into a Upromise college savings account. You’ll earn 1 percent on most of your purchases, but you can earn more by making eligible online purchases through Upromise.com – or by making purchases at participating restaurants, gas stations or movie theaters. Check out our review to learn more.

As you’ll notice, some other student cards offer more cash back (up to 5 percent). However, you’ll get that higher rate only if you shop in the right categories each quarter –or shop with participating merchants. Some of the categories aren’t exactly student friendly. For example, gasoline, home furnishing stores and fitness clubs (all 5 percent categories offered by either the Citi Dividend or Discover it student cards) may not be that fruitful for a student who doesn’t have a car, lives in a furnished dorm and uses the campus gym.

The verdict

The no-longer-available Citi Forward card offered 5 percent in a variety of categories (including restaurants), so this new offer may look less enticing in comparison. Yet it’s still competitive, compared with other current student card offerings. It gives a steady 2 points per dollar on restaurant and entertainment purchases year round – that means you’re getting double points on two relatively easy-to-reach categories year round without having to keep track of rotating categories.

There are two important caveats, however.

  1. ThankYou points might not be the best fit for a student. Many students may find cash back most useful. It’s immediate and can be used toward pressing needs, whether they be books, pizza or caffeinated beverages. ThankYou points are a little less concrete. If you don’t have time to shop around the Citi ThankYou site for the best gift card and travel deals, you’re stuck redeeming cash for a less-than-stellar rate, as discussed above.
  2. If you’re a student without a co-signer, chances are your credit limit will be low. Unlike a globe-trotting executive who can route thousands of dollars in restaurant purchases through a card, you might be trapped within a $500 credit limit. Plus, if you have a campus meal plan or a tight budget, you might not even be spending regularly at restaurants – so there go those double points.

If you can maximize your ThankYou points and dine out frequently, though, this could be a good starter card to build your credit before you graduate to more lucrative rewards cards.


-----
Editorial Disclosure: The editorial content on this page is not provided by any bank, credit card issuer, airline or hotel chain, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone, not those of the bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.