Thursday, October 19, 2017

Why I like credit cards

There are three reasons why I like credit cards. First, I don't have to pay multiple bills (at least, ideally). Seconds, I get to keep money in the bank account for longer thus earning interest. Third, I get rewards points.

When I was in Japan, I had two credit cards - EPOS and Rakuten; both VISA. The Rakuten card was the best because you could pay with Rakuten cards when shopping on Rakuten website and there were deals like 10% points on products sold there. But I had to use my brain a lot because it wasn't always beneficial to buy from Rakuten because Amazon was cheaper even after considering the points. Plus, I was anyway getting 1% points on every purchase I made using the card. I had earned over JPY15,000 in a couple of years I had it. It's a shame that I didn't get it sooner.

I earned some points from the EPOS card too, but the benefits were limited. The only useful thing we used them on was gift vouchers which we gave our friends when visiting them or use them for ourselves.

Now in Australia, I use an Amex Essentials Card. I get 1 point for every $1 I spend (normally), but the actual conversion is like $7.41 for every $1000 spent. And you can use these points to pay for the credit card bill itself, which is great. There are other offers like $xx off if you spend $xxx or more at a certain store. The most recent such spending was at a BP fuel station where they offered $10 back when spent over $40. They also credited me $50 when I spent more than $750 in the first 3 months of getting the card. I use the card as much as possible, but Amex is not widely accepted as VISA or MasterCard, which is a shame. But I have added it to PayPal and sometimes some shops allow PayPal but not Amex directly. Also, there are benefits for people who fly a lot, but that's not for me.

Today I was wondering if I could pay the bills using the card, but it doesn't look economical as they all charge a credit card processing fee. Optus charges 0.385% and ClickEnergy charges 0.6%. Technically they are both less than the points I earn ($7.41 per 1000 points or at 0.741%), but I found out that Amex awards only half the points when used on utility payments. So I would be only earning money at 0.37% which is less than what both Optus and ClickEnergy charges as fees.

Yarra Valley Water, which is the water company, does not even support Amex, but they don't seem to charge a processing fee. I could be wrong though.

The other thing I found weird is that Costco in Australia does not support Amex anymore. When we were in Japan, Costco accepted only Amex (or cash)! It's the other way round here. You can pay with VISA or MasterCard at Costco.

I guess I will just keep using it on grocery.

Oh btw, I forgot to tell that all these credit cards I mentioned in the post do not have an annual fee. And also I don't care what the interest rate is because I always pay the statement balance on the due date, and you should too.

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