That’s going to get some attention from the national blogs if it hasn’t already - this is a great piece of info. 2.5% back in pure cash on all purchases with no-AF is best in class, as far as I’m aware. I suspect they will get overrun with interest, although they appear to be Florida only, so maybe that will tamp interest down a bit.
Other programs have higher offers, but they require redemptions against specific types of purchases (e.g. grandfathered Priceline Visa), have implemented significant restrictions on CB (e.g. Alliant Visa), or require transfers to other programs (Chase UR/AMEX MR). Most of those cards have annual fees as well.
Thank you for posting. A 2.5% reward with no annual fee is very interesting.
Midflorida does appear at first to be closed to those living outside its service territory . . . . and that might indeed be the case. However:
Midflorida is open to persons attending school in any one of a very large number of Florida counties. There are two ways you can attend school nowadays. You can be in physical attendance or you can attend online. Sometimes a credit union will demand physical attendance. You have to ask. If not:
You can enroll for an online course regardless where you live. How do I know this? I have done it in the past.
The bar has been 2% because of the interchange fees. On VISA signature cards, it’s usually 2.1-2.3%. So at 2% cashback, issuer bank/CU still makes a tiny bit of money on every purchase. At 2.5%, they are losing money with each transaction. They may make a ton more via charging interest of carried balances, cash advances, etc but still it’s hard to figure how a small CU manages. And if they do, why aren’t the other big banks following suit!
Some credit unions, even small ones, have it as a policy to reward members. Thing is, those rewards can take any number of forms.
As an example, PSECU last fall rewarded its members by making available high yielding certificates of deposit. In another instance, Empower FCU has a cash giveback scheme each year end where they reward members depending on how much business each member has done with the credit union that year.
The Alliant Visa Signature card, too, provides a “thank you” to members in the form of an out sized 2.5% reward. And I expect the same might be true for Midflorida where the perk is even more rewarding since there is no annual fee.
Of course not all members take advantage of this or that reward. It’s a personal decision whether or not to participate.
It’s true that CUs don’t have to operate at a large profit to satisfy shareholders so they tend to be more generous.
But I feel that for Alliant this was a case of them determining that the $99 AF would cover those small losses they incur on every transaction. They put a monthly cap of $10k (which 80% of their customers don’t reach according to their research) on how much would qualify for the 2.5% cashback. At 2.3% interchange fee they break even on transaction losses vs annual fee for annual spendings of beyond $50k. Probably below what a majority of their customers charge per month and at least caps their losses at $140/yr. But without annual fee at all, I think it’ll be harder to keep up. But it’s great for those who can partake for sure.
I was thinking that something was changing on the market leading to more higher reward percentages for reward cards. The way you put it, I better take advantage and use it as much as possible. It was a purchase every 6-12 months to keep it open. Will be using it instead of the Citi Double for most purchases.
I just applied for and got approved for the card but got an email saying I need to go to a branch to fill out paperwork to get it. I am confirming that is truly the case but, if it is, that limits who can get this card to those who can get to one of their 65 branches between Naples and Gainesville.
You can keep both cards and use whichever is higher in cashback while keeping the other one as backup.
And if you’re close to maxing out utilization, you can always ask for line of credit increase from the issuer of the better cashback card. If they see you churning $10k/month and paying it on time for months, they’ll likely allow it.
I did confirm that you have to be able to physically go to a branch, or already be a member, to get this card. That was fine for me since I live ten minutes from one, but it pretty drastically limits the pool of eligible people.
I am biased against the FinTech companies that aren’t actual banks and find that they are generally a waste of time.
They start out with a boatload of venture capital money, squander it on things like a 3% back card, and quickly change the terms to something more profitable. Sofi is the most recent bank that did this, but there are others as well.
2.5% back in pure cash on all purchases with no-AF is best in class, as far as I’m aware.
One reason to keep Citi DC might be a higher limit. That would be my hang-up with changing cards.
My Bank of America credit card - 2.625 % in all categories, 3.5% on travel & dining. Credited to checking account each month. Limit is 60k if I recall correctly. All I had to do was move 100k to a self directed IRA at MerrillEdge. No fees for brokerage account or for checking.
Yes, that’s it. I have one too. It’s their premium card which is why it is such a lovely shade of grey (which is OK, since the design – and B of A’s logo – look like a close-up shot of a tire or a highway). Seriously, though there is at the moment a 50,000-point ($500.00) bonus if you spend $3,000.00 in the first 90 days, which takes care of five years of the annual fee. Also TSA/Global Entry $100 credit every 4 years, and a $100 annual credit for airline expenses such as carry-on bag charges or upgrades or food. Easily spent on even 1 trip per year for one bag and one beer on the plane each way. They do it for getting your brokerage business, it is hard to see how the card itself is anything but break-even for them at this level. It’s a genuinely good deal if the brokerage deal with ML (ME or WM) is as good as you pay elsewhere.
Rewards explanation and multipliers are here:
Application and $500.00 bonus is here.
Thanks. Compared with a 2% general purpose card, I need to spend $15,200 to pay for the $95 annual fee, which should be easy with just federal tax alone. With a 2.6% card, paying state and property taxes (2.3%-2.5% fee) with credit card becomes profitable.
