Starbucks Credit Card: Don’t Be Mislead!

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Starbucks Credit Card: Don’t Be Mislead!

Postby CreditCardGuru » Fri Mar 15, 2013 12:45 pm

The Starbucks credit card may sound like a great idea it you’re a coffee addict like me, but here’s why the Starbucks card is misleading in my opinion…

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March 2013 update: Starbucks no longer offers a credit card.
Earn 2x points at Starbucks using this rewards card instead.

The Starbucks Card:
Whether you want a caramel Frappuchino, a Chai Latte, or just a regular cup of Joe… they have you covered. With over 16,000 locations across the globe, Starbucks is the biggest coffeehouse in existence. In 2003 they launched the Duetto Visa, which was peddled as a credit card as well as Starbucks Card. Many avid fans instantly flocked to the card and today they still peddle it to customers, but is it actually going to benefit you? The answer may surprise you.

The Interest Rate:
Unfortunately the APR on this card is high. At the time of this Starbucks credit card review, it was 19.50% and the grace period was only 21 days. Therefore if you ever carry a balance this card probably isn’t a good idea.

The Rewards:
It’s hard to beat their Caramel Frappuchino, but at nearly five bucks a pop, it’s a indulgence that quickly adds up. Even their regular cup of Joe is a couple bucks. So whatever you’re buying there, if you do it frequently, you are going to be spending a lot over time. So the ideas of some sort of savings sounds like a must-have, right? Maybe not…

Duetto Dollars – This is what they call their rewards on your spending. However don’t be fooled by the fancy name… these are dollars worth the same amount as their face value, which can be used towards your purchases at Starbucks. So how many do you earn:
1% on purchases: On regular purchases you earn 1% that is credited to your Starbucks card account, which can be redeemed for Starbucks purchases. However when you think about it, basically every card today gives you at least 1% cash back, so this is nothing exciting. In fact, I prefer the flexibility of cold hard cash I can choose to use on whatever I want; whether that be coffee or something else!

3% at Starbucks (with a catch): They give 3% on Starbucks purchases, but with a big catch. You have to pre-pay for your purchases by setting your Duetto account to "auto-reload." This is where they automatically charge your credit card for a given value (like $100) and that amount is credited to your Starbucks card. You then have to make sure you specifically pay for coffee purchases with the Duetto account (instead of the regular credit card) and they then subtract the purchase from that amount.
Not only is this confusing, but the idea of subscribing to “auto-reload” kind of reminds me of those infomercial tricks where they auto-bill your credit card. Plus I don’t like the idea of pre-paying, when there are times I travel or am busy and will not visit Starbucks as often (and therefore won’t spend the expected amount).

The 1% is a big yawn and the auto-reload scheme which is required to get 3% at Starbucks is dubious, to say the least. Therefore, I would advise against the Starbucks credit card.

March 2013 update: This card has been discontinued. Currently Starbucks does not issue a credit card.

How To Save 5% At Starbucks... Without Their Credit Card! (sponsored)
This no annual fee credit card that gives 5% cashback at restaurants/fastfood for part of the year:
Here's how the 5% cash back program works
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