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June 08, 2011

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Nice find! I'm a big fan of cash back cards - this one and the chase sapphire sound great!

You need to spend $2,500 a year to break even (not including the $100, because it's a one time bonus) - or about $200 a month. We probably spend that, but I'm not sure that we're much over that. Probably not a great card for me.

Your math is incorrect I believe. If annual fee is $75 you would only need to spend $1250 in a year, or $100 a month.

Just curious FMF . . . are you getting the $75 referral fee from Amex from everyone who clicks through your link? I wouldn't personally have a problem if you were collecting a referral fee but it should probably be disclosed somewhere in the post.

@MonkeyMonk
I couldn't agree with you more. Without a full disclosure it seems highly unethical to me.

This is from the AMEX website
========================
Cash back you can rely on.
You can start earning cash back immediately. With the Blue Cash Preferred Card, you never have to worry about minimum spend or enrollment requirements, so you don't have to spend additional money to get cash back.

Enjoy premium rewards.
Enjoy all of the exclusive benefits of the Blue Cash Savings ProgramSM including discounts at a wide range of hotels and restaurants. Travel and shop with peace of mind.

It pays to refer a friend.
Earn a $75 Referral Bonus2 With the new Blue Cash Preferred for each friend or family member who is approved for the Card, so be sure to tell everyone you know about the great cash back rewards they can earn when they sign up.

Another thing I'm curious about, for those that jump from card to card to card based on who happens to be offering the best rewards at any moment in time - doesn't this negatively impact your credit score, which can negatively impact what you pay for a whole host of things?

Does this work at Meijer?

MonkeyMonk and Old Limey --

FYI, here's my ad and affiliate policy:

http://www.freemoneyfinance.com/2009/11/fmf-policy-on-ads-and-affiliate-programs.html

Instead of putting it on every post, ad, book listing, and everything else, I have it on every page, listed in my "about" section under "ad and affiliate policy."

Bad_Brad --

Great question -- I may need to post on that. ;-)

Money Beagle --

I do not know. You'd need to get it and do a test transaction (I actually have a post on this topic coming up) or refer to another card you have. If it gives credit for groceries when you shop at Meijer, this one should too.

FMF, I have to say I'm a bit disappointed in your response. Your credit card write-ups are neither an "ad" nor an "affiliate" as they're presented as editorial content on your blog. Your comments such as "Here's a GREAT, new cash back credit card" and "it's a winner" do start to seem a bit suspect when it looks like you're getting a referral bonus as high as $75 per card.

I'm not going to go as far as Old Limey and call it unethical but it does raise a red flag -- especially as you seem to want to skirt the issue in your response as well as your official blog policies. At the very least, I think you would be wise to address the issue of credit card referrals if you are indeed getting such referrals.

"Your math is incorrect I believe. If annual fee is $75 you would only need to spend $1250 in a year, or $100 a month."

That's assuming you're not getting any cash back if you don't have the $75/yr card. You need to do the calculation based on the alternative of getting 3% cash back, not 0% cash back.

I second the question as to whether switching cards frequently hurts your FICO. Also, I have worked up to a good credit limit on my Discover card. If I switch to another card, I'd hate to lose that amount of available credit. How can I prevent this?

I wish I could take advantage of this, but I buy most of my groceries directly from local farmers/butchers through farm-share programs. I get to invest in keeping a local farmer who uses sustainable agricultural processes solvent, and get fresh and seasonable produce. However, I give up the flexibility to use credit cards - I either pay cash, or write a check up front for the whole growing season (with the understanding that if some natural disaster happens to wipe out a crop I'm on the hook for that too). For me, the trade-off is worth it, but I wish more people saw supporting local farmers as a viable option in their grocery consumption choices.

I have to agree that it is unethical to post such strong opinions about a card, use referral links, and then not disclose that you are getting a kickback for each referral. While it might be a great card for many people, your review of the card becomes biased when you get an extra $75 for every person you can convince to get it! Putting a simple disclosure on your original post lets users know that you do have some incentive for them to purchase, and they can interpret that how they'd like.

Online shopping provides a lot of opportunities for saving money while shopping. Several cash back sites, coupon sites, rewards programs are available on the net that help shoppers saving online. Such facilities are not available in the brick and mortar stores. Moreover, online retailers provide special offers to the online buyers. Being a frugal online buyer, I always use cash back websites like ShopAtHome, FatWallet, AAfter Search and Ebates, and MrRebates.

You should absolutely feel free to beat up the author for a perceived or actual breach of ethics, while I enjoy the additional cash back from the great tip given in the editorial spirit of this blog. Thanks FMF, enjoy your $75.

This also means that purchases of gift cards bought at the supermarket for other retailers, restaurants, etc. greatly expands your range of the businesses to which the 6% will apply if you use those gift cards for your purchases. I read the fine print carefully, these aren't excluded.

Unfortunately our grocery store shows up in the 'wholesale stores' category rather than 'grocery'. So this won't work for us really. Make sure to check on this before hand. I'd be tempted to sign up otherwise.

Is the term 'ad and affiliate policy' not descriptive enough for people maybe? To me 'affiliate' means commission links, but maybe others don't realize that?

FMF isn't hiding anything or lying. His policy on affiliate links is clearly documented, (though it may not be where some people expect/want it to be). Most blogs have commission links like this but don't have a notice in every post about it. So this is common practice. Virtually every link to Amazon from a blogger is a commission link. Frankly you may as well assume that any link from anyone on the internet might lead to a commission.

FMF has been talking about Amex for a long time and he clearly uses it himself, so I don't think this is insincere shilling just for a commission.

I'm a blogger and I do the same thing, so you may consider me biased. But this does remind me that I should make my policy notice more promient.

I agree with the rest of the commenters. I am not a blogger, and I have always assumed that recomendations in the articles were not biased with kickbacks.

Although there is an Ad and Affiliate link on the side, it is not at all clear that this type of article is an affiliate link to me - seeing as I'm not in the blogging business.

I think such conflicts of interest should be clearly marked in the article - but I'm guessing doing so will lead to a decrease in revenue.

Jim - "Ad and Affiliate Policy" is definitely descriptive enough. I just would have expected a disclaimer in the original article stating that the author (FMF) is being compensated for writing and/or linking in the article, along with a link to the ad/affiliate policy for reference. A link to the policy in comments after the article is not visible to someone reading the article on the front page.

Tim, the Ad & Affiliate policy link is in the left hand column of every page so its as visible as anything else here.

But I get what people are saying. And I'm sure FMF does too, in fact in his Ad & Affiliate policy page he even says : "For the time being, I plan to use this post (which I'll link to from my sidebar) as my general ad notice and not list such on each and every post that has ad/affiliate links (it junks up the posts/site). That said, I may eventually need to include something on every post with an ad/affiliate link in it (which will get quite burdensome)."


Just to be clear FMF is not being paid by Amex up front for the article or the links. (As far as I know, but I'm pretty sure). So FMF is not being compensated for the article specifically. However he's using commission links from a 3rd party that will pay FMF is people sign up with Amex after following the link. Theres a little difference between those two things. Amex didn't approach FMF with payment. FMF took it upon humself to write this and then inserted commission links in case anyone signs up. Its more like an unsolicited referal than paid endorsement.

FMF donates all his earnings from this site to charity, so I'm happy to use his affiliate links. I don't think he purposely only chooses offers which provide a kickback, but if he is a proponent of one that offers an affiliate program, then why not get some extra money for it and give it to a worthy cause? I've been following FMF for several years, and I've never once thought his advice was based on his own personal gain.

Thanks, Shane, I appreciate your comments.

You are correct in saying that I only recommend what I use and/or think is a good deal for my readers. There's no amount that could get me to do otherwise. (unless it had seven 0's behind it.) ;-)

One caveat for this card - the $100 bonus is not available to people like me who convert their plain old Blue Cash card (which I've had for years) into the new preferred card. Not a big deal for me, my family spends about $500 per month on groceries and about $300 per month on gas, so I make up the difference vs. the FIA 2% cashback Visa fairly quickly. A year's worth of grocery/gas will net me $393 on the Blue Preferred (after annual fee), vs. $192 on the FIA 2% Visa. Sold.

Thanks for the heads-up, FMF!

Can someone help me understand something about this "cash back" card, please? Do you actually get cash back (ie. credit on your statement), or a "cash" rewards balance that you have to use to purchase merchandise or gift cards from Amex? The site reads like the latter, but since I've never had a "cash back" card before I need to ask. Thanks for any insights.

Mark --

Here's what their site says:

"You will receive Reward Dollars for eligible purchases. You can redeem Reward Dollars for statement credits, or, at our discretion, additional items like merchandise and gift cards, whenever your available Reward Dollar balance is 25 or more. The number of Reward Dollars you will receive each billing period is based on a percentage of the dollar amount of your eligible purchases made during the billing period. Each eligible purchase shall qualify for a reward of 6, 3, or 1% of the purchase amount as follows: 6% for eligible purchases at supermarkets (excluding superstores and warehouse clubs), 3% for eligible purchases at department stores and for automobile gasoline purchased at stand-alone gas stations, and 1% for all other eligible purchases posted to your account. Eligible Purchases means purchases for goods and services minus returns and other credits. Eligible purchases do NOT include fees or interest charges, balance transfers, cash advances, purchases of American Express Travelers Cheques, purchases or reloading of American Express prepaid cards or purchases of other cash equivalents. Additional terms and conditions apply."

So, you earn "Reward Dollars" that you can then either convert to cash (statement credit), gift cards, or merchandise -- your choice. Personally, I would take the cash unless they gave me a bump-up for taking a gift card I wanted, then I'd take it.

Thanks for that response! And so quickly. I have never had a cash back card, and 4 or 5 years ago got rid of ALL my credit cards as I started to pay cash only (it was more of a behavior modification thing more than anything else). Based on your original post I have been considering getting this cash back card. We already purposely shop at Giant Eagle and their Get&Go gas station so we get store / pump credit it both directions. Another 6%/3% on top of that would be excellent. (You might want to consider a post, if you haven't done one already, on these grocery store/ gas station deals. We think Giant Eagle is the best one, but there may be better ones). Thanks again.

Thanks for that response! And so quickly. I have never had a cash back card, and 4 or 5 years ago got rid of ALL my credit cards as I started to pay cash only (it was more of a behavior modification thing more than anything else). Based on your original post I have been considering getting this cash back card. We already purposely shop at Giant Eagle and their Get&Go gas station so we get store / pump credit it both directions. Another 6%/3% on top of that would be excellent. (You might want to consider a post, if you haven't done one already, on these grocery store/ gas station deals. We think Giant Eagle is the best one, but there may be better ones). Thanks again.

p.s. The only card I had kept from before was Amex. FYI - the $100 bonus fo the cash back card doesn't apply for existing Amex cardholders (I just learned).

As far as affiliate pricing goes, you get WAY more than $75 per approved application ;)

Mike --

Actually, you don't...

can I use the AMEX 6% cash back at costco???? and FRED MEYERS store???

ROCIO --

Not at Costco, no. It's a club store, not a grocery store.

As for Fred Meyers, you need to do a test charge to see how Amex treats charges there. Details here:

http://www.freemoneyfinance.com/2011/10/you-must-do-a-test-charge.html

As another blogger in the space, I would like to first defend the affiliate concept (that is pretty much the only way we can earn any revenue on these sites) and note that FMF does appear to be engaging in real editorial (there are a large number of sites that simply post fake editorials written by the credit card companies).

As to bias, one should always be on the look out. Look writers giving high prominence to cards that clearly aren't the best. Look for that simply don't mention entire companies (for example, many bloggers don't have access to compensation from Capital One, but you should expect to see CapOne reviews since they have some of the best cards in certain categories) or that skip known great offers (I don't believe anyone received compensation on the recently discontinued 75,000 point American Airline 'expired' offers -- though this would only relate to a blog discuss travel benefit cards).

My focus is on getting free travel from your credit cards. I look at cash back cards, but rank those dollars (that can buy travel) relative to the net value of travel received from the travel cards (which is inherently more subjective since it really depends how you use the points). I truly believe that my site is unbiased, but I welcome all of you to challenge that. Feel free to take a look (you should be able to click on "dave" below) and let me know what you think.

As to disclosure. In my blog, I try to make it extremely clear at the very bottom (footer) of each page, though I don't put it in the article's text. Am I doing enough? Do my rankings of cards appear biased to you? @FMF, maybe consider a rewrite of your disclaimer? While you and I perfectly understand what "affiliate programs" are, not all your readers do.

@Mike - different cards pay very different amounts. There are some (especially student or non-premium credit) that pay a fraction of that. Others may pay more. There is probably a correlation to the annual fee, but no where near a perfect one. I don't think the specifics are important so long as the reader knows that just about every (certainly everyone I have seen) blog or website that ranks credit cards has the potential for bias so that we have to work extra hard to retain your trust.

I realize these posts are old, but re: using bonus $$ for air miles. We got disgusted with Delta for taking us around our elbow to get from Birmingham to Paris De Gaulle so switched to American. We built 100,000 miles and in order to go that same trip next spring have to go BHM to Miami to London Heathrow to Paris Orly and then by train to Paris to De Gaulle. Then have to say the night at de Gaulle because we miss the train to south France. Also the taxes on the tickets were $800+. Now Amer. is jerking us around. Switched today to AMEX Blue Preferred. We will have enough in the pot with them each year to buy 2 tickets of our choice any time!

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