Credit Cards
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Alliant Credit Union has a flat 2.5% visa. To qualify you have to keep a monthly average of $1k in an ACU checking account, have at least 1 transfer on that account per month, and use e statements. Makes for a good daily driver.
That sounds almost too good to be true. Does the CU have restrictive sign up criteria? All you have to do is park a small amount in the account, make one deposit a month (does it need to be direct deposit) and you get 2.5% everywhere???
It's good, but after crunching some numbers I find it to be less of the unicorn some folks make it out to be.
The Alliant checking account earns 0.25% interest, and right now SPAXX is paying out 4.75%, so there's a delta of 4.5%.
So now there's $45 in interest a year you give up, closer to $32 after taxes.
$32/0.005 = $6,400 <- This is the breakeven point versus a 2% card with no deposit requirement (WF ActiveCash, Fidelity Visa, Citi DC, PayPal MC, etc.).
That amount might be chump change to you if you have a lot of uncategorized spend, but it's worth taking into account when choosing the best card. This was kind of my wake-up call where I realized that churning will do much more for you than optimizing spend every will. Even if you spend the $6,400 to break even, and then spend another $20,000/year, you're netting an extra $100/year. It'd take you seven years to catch up to the sign up bonus for the Chase Sapphire Preferred.
Yes but Chase Sapphire Preferred has a $95 annual fee, so after 7 years you've spent $665 on the fee which pretty much negates the $750 bonus (if redeemed on travel).
Pretty much that easy. No restrictive signup criteria, though I think you need a good credit score. I have automatic ACH set up to transfer $1 out then back in to my account to ensure I meet the transfer criteria, though that's unnecessary.
Worst part imo is the card doesn't have tap to pay. Not that big if a deal though, can still tap to pay with a phone.