As was rumored, Costco and American Express have reduced the cash back return on restaurant purchases on their TrueEarnings® Card from Costco and American Express. I received my statement last night and it contained this statement:
With billing periods starting in August 2011, we are reducing the reward percentage earned for eligible purchases at restaurants from 3% to 2%. However, if your account was opened between August 1, 2010 and July 31, 2011, you will continue to earn 3% on eligible purchases at restaurants until the start of your 13th billing period. You will then earn 2% on eligible purchases at restaurants as described in the agreement.
I have several thoughts on this as follows:
- Bummer. The 3% on restaurants was a great feature of this card -- and something that set it apart from the pack. Not many others (any others?) had 3% cash back on restaurants.
- That said, 2% is still decent for those of you that don't have a straight 2% cash back on everything card. FYI, it also gives 2% cash back on travel purchases.
- I do have a 2% cash back on everything card (the old Schwab card), so now the only real benefits of the Costco Amex for me are that it earns 3% cash back on gas (though Chase Freedom is offering 5% on gas for this quarter -- in addition to a $200 cash back bonus), earns 1% at Costco, and is a substitute for my Costco card (so I don't have to carry it separately.)
- I got my Costco card less than a year ago, so I'll have 3% cash back on restaurants for a few more months.
- I have to re-think having the TrueEarnings® Card from Costco and American Express card on my list of the best cash back credit cards. I'm thinking it's marginal at best -- especially for non-Costco members and those with a gasoline-specific cash back card (which often deliver 5% all the time.) For Costco members it's probably still a decent booster card for those using a multi-card strategy.
This is just another example of why you need to pay attention to your statements and what's going on in the marketplace when you're using cash back credit cards. Deals go up and down, bonuses go up and down, and you must keep up-to-date if you want to maximize your returns.
For those of you interested, I have created two new posts that will help you stay in touch. They are:
- Best Cash Back Credit Cards - A listing of what I think are the best cash back credit cards out there today.
- Best Credit Card Deals and Bonuses - What I think are the best credit card bonuses (like $500 cash back) out there today.
I will update these each month at a minimum and will let you all know when major changes occur. Otherwise, you can find links to them on the right sidebar.
I have one of the other Costco/Amex cash rebate cards and they also reduced their benefits this month -- in this case by increasing the spending amounts required before the higher tier rebates kick in.
Posted by: MonkeyMonk | July 07, 2011 at 10:55 AM
Chase Freedom 5% cash back is too hard to get. I usually get gas at Costco, and was excitied to start earning 5% cash back on gas purchases starting 7/1. After a few gas purchases, I noticed that Valero and another gas station that I got gas from were under "vehicle expenses" on my transaction details.
I emailed Chase, and it said the 5% cash back only applies to those gas stations that's coded under "gas" instead of "vehicle expenses". That is just crap and disappointing. I also noticed that Macy's is under "other" instead of "department store" which means I won't get 5% cash back in next quarter too. It just sucks.
Would be helpful to know what gas station is actually coded under "gas", and the price is not typically more expensive than other gas stations and dismiss the 5% cash back advantage.
Posted by: Kyle | July 07, 2011 at 11:06 AM
Kyle --
I know it doesn't help, but FYI I covered this issue here:
http://www.freemoneyfinance.com/2011/06/how-to-determine-a-stores-classification-for-cash-back-credit-card-rewards.html
So far, I haven't had any problem with the Chase Freedom card.
And, BTW, some readers have reported that their charges are showing up as "other" but they are still getting the 5%. Example: a reader had this happen last quarter when the 5% cash back was available on hardware store purchases. His Lowes charges showed up as "other" but he still received 5% cash back on them.
Posted by: FMF | July 07, 2011 at 12:29 PM
Big bummer! While MasterPo doesn't eat out much any more it was nice.
Kyle - Even with Costco Amex some stations show as grocery or food instead of gas.
Oh well. All good things...
Posted by: MasterPo | July 07, 2011 at 02:17 PM
I've never had a problem using my Fidelity AmEx at Costco and it gives you 2% cash on everything. That doesn't solve the issue of carrying your membership card though and the Fidelity AmEx is only worth it if you're going to invest with them anyway.
Posted by: No Debt MBA | July 07, 2011 at 03:23 PM
I prefer my 2% back on everything I purchase with AMEX. There is no one dominate item I purchase that could skew it one way or the other.
My sis in law just changed to the 3% for travel and scored $80 when she booked her cruise.
Posted by: Matt | July 07, 2011 at 05:55 PM
I still have a grandfathered Chase Professional MasterCard that gets me 3% back at restaurants. The Costco card loses all value given that my FIA (former Schwab) VISA is 2% across the board and the new Amex Blue Cash card (thanks again, FMF) gives me 3% back on gas--unlimited. Plus it gives me the same 1% back at Costco I'd be getting with TrueEarnings. And I don't have to wait a year to redeem it.
Posted by: MelMoitzen | July 07, 2011 at 07:53 PM
Well, nothing lasts forever, eh? At least they haven't changed the gas discount...yet. I buy all my gas at Costco, since the nearest store generally has the lowest or near the lowest prices in town. And I rarely eat out, so a percentage point won't make much difference. Betcha eventually all these blandishments go away. When that happens, there'll be no advantage to using credit cards, for those of us who pay off the balance each month. Wonder how many credit card users will switch to cash or debits card then.
Posted by: Funny about Money | July 07, 2011 at 10:44 PM
If your looking for a card to replace your restaurant purchases, go with the Citi Forward card. It pays 5% for restaurants and has about $85 in bonus money available right now for $250 of purchases in the first 3 months and signing up for paperless billing. It's not cash back but they have a $100 gift cards that doesn't cost a premium in points. And they are at places where it won't sit around gathering dust before it's used ... places like Walmart, Sunoco, Lowe's, Home Depot, CVS,and Kohl's.
Posted by: Stephen | July 08, 2011 at 10:53 PM
Since I last posted on this thread, I canceled my Chase card. Chase has THE WORST CUSTOMER SERVICE OF ANY FINANCIAL INSTITUTION I HAVE EVER DONE BUSINESS WITH! Sorry for yelling...yesterday I was so mad I couldn't even speak, so today I suppose I too much speaking energy left over.
I wouldn't have another card with Chase if they gave me a 10 percent kickback on every purchase I make. It just isn't worth the hassle and annoyance.
Posted by: Funny about Money | July 09, 2011 at 09:46 AM
Funny -
Try shopping at Sears. Then you will truly see the worst.
Posted by: FMF | July 09, 2011 at 10:45 AM
"Not many others (any others?) had 3% cash back on restaurants."
Citi Forward...
Posted by: TJ | July 09, 2011 at 05:14 PM
Just called Amex to express my dissatisfaction on the reduction of the restaurant cash back. They said the sent me a letter in June (which I don't recall seeing) that it goes from 3% to 2% after my August billing statement.
The CSR took my feedback and tried to get me to switch to the Blue Cash Preferred card ($75 annual fee). I declined. The CSR also said that there might be a new True Earnings program coming out to replace this one, but it would allow current members to retain this one.
Posted by: Larry | July 30, 2011 at 06:33 PM