Wednesday, November 26, 2014

RIP Blue

Well, after a nice 10 month run, one of my father's favorite go-to credit cards was cancelled on him.

We've talked about the "old" American Express Blue card that would reward you with 5% back on all your drugstore, grocery and gas station spending. My mother actually applied for the card back in January this year, and we soon hit the required $6,500 spend to trigger the 5% bonus categories.

January -September
So for the past several months, we accumulated a nice chunk of Amex Reward Dollars (that could be used as statement credits). How much? Well, since I've never been a shy child, let's take a look at the exact numbers.

So from this graphic, we can see that my parents spent about $75,432 on Pharmacies with another $1,957 on Groceries. I'm not tracking their exact spending, but I'd say it was safe to say that the Groceries were actual 10 months of groceries, but the Pharmacy spend was inflated by a lot of Vanilla Reload, Paypal My Cash and other gift card products. Sure we do spend a few hundred dollars each month at CVS and Duane Reade (our local CVS sells beer cheaper than the grocery stores), but clearly, we don't drink enough to generate $75k of spend.

According to Amex, we earned about $2,475 of Amex Reward Dollars that we used to reduce our monthly credit card bill. That money that we "saved" then went into our "Travel Savings" account which would build up for upcoming travel spend. If you consider the fact these rebates are tax-free, then $2,475 after-tax could be equivalent of getting a surprise $4,000 bonus check from your job.

Because of this lucrative period when we were earning 4-5% cash back like this, it made a lot more sense to shift our other non-bonused spending from (a) a Points/Miles strategy to (b) a Cash strategy using this Amex Blue and a Paypal Debit card (see here for post on that).

Thanksgiving Surprise
Unfortunately, however, this morning, this came to a sudden halt. My father logged into the American Express account to see if his October rewards had posted, and he saw that the card account had been cancelled. This wasn't a complete surprise given that Flyertalk message boards have been very active when the first wave of closures happened a month ago, but we thought we had safely hidden below the Amex radar given we never went above our generous $20k credit limit in any given month.

The real disappointment was that Amex has a month lag from distributing the Reward Dollars for use. Meaning, Our October spend on the card was going to show up in this November 26th statement (today). And all the money we spent this month would show up next month when December ended.

Since the account was closed today, that means all the money we spent on the card in October and November didn't generate us any Reward Dollars. So we're kind of "out" approximately $1,000 of rewards given we already spent over $20,000 during the 2 months since October 1st.

It also is disappointing that we had 3 cards under this account registered for Small Business Saturday in a few days. That was $90 of additional free spend we'll miss out on.

But whenever my father gets upset, I always try to cheer him up with some ice cream.

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