New Credit Card

Last spring, the sponsor of my main credit card announced that it was increasing the annual fees from $20 to $30. This is an optional fee to raise the cash-back incentive from 0.5% to 1%, which made plenty of sense when I signed up for it years ago. I had already been thinking for a while about switching to a less costly credit card (there are now plenty of no-fee cash-back cards out there), but at the time it was only $20 a year, so laziness had won out. The increase pushed me over, but as other things happened, I did not follow through on this and the anniversary of my account passed, and I was billed $30 for the annual fees.

So this summer I called the company and asked them to reduce the fees. The agent told me they couldn't do that. I told her that I thought the fees were getting too high and I was thinking about moving my money elsewhere, so what were she suggesting to keep me with them? She proposed removing the option so to avoid paying the fees. This didn't make sense to me,since that would mean reducing the amount of cash I would receive back. I told her so, and asked again whether she could offer me something to keep me with them. To no avail. The conversation ended with me letting her know that the company was leaving me no other choice than to move my business to a different company.

Things went on unchanged for another couple of months. There were a few alternatives, but none were good enough to immediately grab my attention -- I had some time before I cut my current card lose. I had previously read about MBNA's Smart Cash credit card, which seemed the most interesting to me (3% back on grocery and gas, 1% on everything else, no annual fees). Only thing that bugged me was that this card was only being offered to existing clients, which I was not. I could have signed for another card with MBNA and then asked to be switched over, but that seemed a lot of hassle. So time passed.

About two weeks ago, I read a post from Million Dollar Journey about the new Scotia Momentum Cash Back Visa. This led me to read a thread on Red Flag Deals about the MBNA Smart Cash. And, wonder of wonders, apparently they had just announced that the card was now offered to new clients as well! I read everything that I could about the card, to make sure I wouldn't get dinged with unexpected fees. (There are no annual fees, but be aware that there are many other fees hidden away for non-purchase uses of the card -- balance transfers, fund advances, using the cheques, late payments, etc.) However, none of these were relevant to how I use my credit cards, so everything looked like a great deal to me. So I signed up for the card.

I received the card yesterday (it took only 12 days since signing up online). Activated it right away. (Told the agent that no, I don't want the balance protection. No, no need for a second card. Just activating, thank you.) So I now have my new card.

As a sign-up bonus, I will be getting 5% cash back on grocery and gas for the first 6 months (instead of the normal 3%). The maximum eligible amount in grocery and gas is $600 per month.

I usually spent about $1200 to $1500 per month using my main credit card. Of this amount, about $500 to $700 is for grocery and gas. With my previous card, I was getting just a bit less than $200 a year, and I had to pay the annual fees. With the new card, I should get about $216 back during the first 6 months; after that, I should get about $288 a year. What this cost me: 2 hours to document myself about the card, 15 minutes to sign up, 10 minutes to activate it.

That's what I call a deal.