Getting the Most from Your Amazon Purchases

If you are America’s largest online retailer, you don’t have to offer coupons or cash back deals to get people to buy from your web store. But if you are an Amazon customer, there are still ways to maximize the savings you get when making purchases on Amazon.com.

First, there’s Amazon Prime, which, for $79 offers 2-day shipping for an entire year on “millions of items” sold on Amazon, and, in my experience, almost all items shipped by Amazon itself. Students can get one year of Amazon Prime for free, and pay only $39 per year subsequently. If you shop a lot online, or are in the market for some bulky item with a high shipping charge, Amazon Prime may be a good deal.

But to get the most out of your Amazon purchases, look into double-dipping. Since August 2011, Hawaiian Airlines’ eMarket has been giving miles, now downgraded to 1 mile per dollar, for purchases made on Amazon.com. US Airways briefly also offered this deal, but has since pulled it down, making the eMarket currently the only portal worth a visit before an Amazon purchase.

earn miles on Amazon purchases through Hawaiian Airlines’ eMarket portal

To double-dip, take a peek in your wallet. This quarter, from January 1st to March 31st, 2012, Chase Freedom cardholders get 5% cash back on up to $1500 spent on gas and Amazon.com. Unless you spend over $100 on gas every week, the $1500 ceiling should be enough to let you effectively get up to 5% in savings when shopping on Amazon until the end of March.

If you don’t have the Chase Freedom card, the Citi Forward card may do the trick as well. Currently, the Citi Forward card, which gives 5 points per dollar on restaurants, books, music, and movies, seems to categorize purchases made on Amazon.com as “books,” effectively yielding 5% cash back when buying through the online retailer. However, unlike Chase Freedom’s deal, which explicitly includes Amazon.com in its 5% cash back category, Citi Forward does not offer a list of retailers eligible for earning 5 points per dollar. In other words, it’s a very sweet deal right now, but you should keep an eye on your statements since Citi can decide at any time that what you’re buying on Amazon doesn’t really count as a book.

On the other hand, if you’re looking to use points and save on cash when buying on Amazon, check your Discover balance instead. In October 2011, Discover announced a new redemption option for its cash back program: spend it on Amazon. The dollars are spent 1-to-1, but while statement credits and direct deposits can only be redeemed in increments of $50, the “pay with Cashback Bonus” option for Amazon allows Discover cardholders to redeem any amount of cash back on an Amazon purchase, which means you don’t have to wait as long to transform the cash back you earned into real cash. For this, all you have to do is link your Discover and Amazon accounts here.

But whether you use the Chase Freedom or Citi Forward card to earn more points, or Discover to redeem points, don’t forget to go through Hawaiian’s eMarket. Even though Amazon’s prices are often already a good deal, and there aren’t many coupons to be found, double-dipping can still maximize what you get out of your Amazon.com purchase.

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Discover More and Chase Freedom: 5% cash back is great and two ways to get it is even better

I am a huge fan of Discover’s credit card, and I am certainly not alone. Discover has ranked very well in several customer satisfaction surveys in recent years, receiving an award for best call center in the Credit Card Industry in 2010, and coming out on top in various areas directly related to consumers, including ease of online application and general customer satisfaction. Despite this, however, when I praise the Discover More credit card to friends or family, I often hear the same objection: “but no one takes Discover!”

I am guessing this response was probably the impetus for Chase’s launch of the revamped Chase Freedom card in March of last year. The Discover More card, which offers 5% cash back on purchase categories that rotate every quarter is clearly a good idea. Chase makes it even better by trading in the customer service but offering a card that is accepted almost everywhere.

If you are in the market for a credit card with a permanent place in your wallet, both of these cards are worth considering.  Although eligible purchase categories rotate quarterly, 5% cash back on a credit card is an amazing deal right now, especially when the cards come without an annual fee.

Notably, the rotating calendar for which you can earn 5% cash back is not identical between the two cards, so that owning one of the cards does not necessarily mean there’s no point to owning the other. Here are 5% cash back categories for 2010 Chase and Discover side by side:

Importantly, both of the cards cap the 5% cash back you can earn each quarter. Discover’s varies by quarter, such as $800 spent on the categories in the first quarter (effectively $40 cash back) and $300 in July –September ($15 cash back). The Chase Freedom card, on the other hand, caps the 5% cash back to $1500 spent ($75 cash back) on eligible categories each quarter. So if you are a big spender on the cash back credit card, the Chase Freedom card is probably a better option for you. But if you’re a big big spender, getting both cards is even better since you can charge purchases in the categories that overlap between the two cards to the Chase Freedom card, and then charge purchases in the other eligible categories to the respective card.

Excepting the 5% cash back categories and purchases made through the credit card portal, the Discover More card offers a standard .25% cash back on the first $3000 spent each year, and 1% thereafter. The Chase Freedom card is a step above, offering 1% cash back on every purchase not earning 5%. Nonetheless, you may be able to find cards that offer more value than 1% cash back (such as an airline credit card), making these two cards really good secondary cards, used mainly for purchases eligible for the 5% cash back. Besides, neither of the two cards has an annual fee, so you don’t have to reach any spend threshold to make owning either of the cards “worth it”.

Even though Discover’s card came out first, the Chase Freedom card is coming out ahead for now. Discover has the better customer service, but Chase uses the Visa network and is therefore accepted in many more places. Which card offers the better set of rotating categories will depend on your lifestyle, but Chase’s higher cap on purchases for which you can earn 5% cash back continues to push the Chase Freedom card ahead. And Chase’s current offering of $100 as a sign-up bonus only makes the deal sweeter.

If you are going to get only one of the two cards and are not one of those unlucky people who have to use customer service frequently, the Chase Freedom will probably be the one for you. But given the slight difference in 5% cash back categories between the two cards and the lack of annual fees on both, there may also be no harm in letting the Discover More share in your wallet real estate. If you need a nudge, try calling the Discover call center to sign up over the phone and you will see the difference.

Cash for a Clunker Appliance

Similar to last year’s cash for clunker program, the American Recovery and Reinvestment Act of 2009 has allocated $300 million for rebates to eligible residential consumers when they recycle their used appliances and purchase new energy-efficient ones (otherwise known as ENERGY STAR appliances).  Each state is in charge of designing  and implementing its own unique Appliance Rebate Program, and the Department of Energy (DOE) has already approved all of them.  A handful of states (Iowa, Kansas, Minnesota, Rhode Island) have started their programs, but most will launch theirs later this month.  Click here for details of the program available in your state. Continue reading

Start Lining Up Your Date Nights

For the last quarter of the year (October 1 to December 31, 2009), Discover is offering a 5% cashback bonus on up to $400 in purchases made at grocery stores, restaurants, movie theatres and video rental services.  If you make the maximum amount of $400 in eligibile purchases, you will get $20 in cashback, which can be turned into a $25 gift card from certain retailers such as Banana Republic and Brooks Brothers.  So remember to sign up.  Then get out there and start making plans for some great date nights!

Gas It Up, At Least for this Quarter

For those who carry the Discover More credit card in their wallet, remember to sign up for this quarter’s 5% cashback bonus award (if you haven’t yet).  From now until September 30, 2009, you can earn 5% from purchases at stand-alone gas stations, hotels (booked directly by you via the phone or the hotel’s website, not through other online travel websites), zoos, theme parks, and bookstores.  These are the perfect categories for your summer activities.  Just remember that Discover is capping the cash back bonus at $300 in purchases (or $15 in cash back).  After that, any more purchases made within these categories will only earn you 1% cash back.

Tip: Per our post yesterday, one way to triple dip, for example, is to use your Discover credit card with your Borders card and a Borders weekly coupon when you make purchases at Borders.  This week, Borders is offering a coupon for 25% off your entire store purchase.  Thus, you will be able to earn a discount off your purchase, Borders Bucks for future purchases, and 5%  cashback on whatever amount you pay.

A Peek into My Wallet, Part II

Whether you are searching for a new credit card or re-evaluating the credit cards you already have, keep in mind that there are very few reasons to have more than 1-2 credit cards.  Having too many revolving lines of credit might lower your credit score and might increase the amount of time it takes to redeem any sort of meaningful reward.  Here are the credit cards I keep in my wallet:

Citi Forward Visa – As mentioned in a post a few weeks ago, I got this card to replace my corporate credit card, which I have been using as my primary credit card for the past three years (more on this in a later post).  There is no annual fee and you get rewards for being a responsible cardholder, such as 100 ThankYou points each month and a 0.25% APR reduction every 3 months for staying under your credit limit and paying on time (These are things I have always done, and yet have never been rewarded for them before.  But your APR can only be reduced by up to 2%.).   Further, I get 5 ThankYou points for each $1 spent on books, music, movies, and restaurants.  These purchases make up the bulk of my spending anyway!  For all other purchases, I get 1 point for each $1 spent.  Last, I love Citi’s ThankYou Network rewards program, as I have already discussed in a previous post.

Discover More Credit Card – I also use this as my secondary credit card for the reasons mentioned in Part I.  Another reason I love this credit card is  the fact that I can order multiple cards for the same account, including one that can be put in my keyring.  Discover offers a variety of card designs, so you can choose the one (or several) to reflect your personality and to put them in different wallets.  Plus, the Discover card is the only card for which I have gotten compliments from waitresses and cashiers.  I can also purchase from retailers through ShopDiscover and get 5% cash back that way.

Let us know which credit cards are in your wallet and how they have worked for you.

A Peek into My Wallet, Part I

There is no right credit card for everyone – the best credit card for you will depend on how much you generally spend each month, the type of purchases you make, and what benefits are most relevant to you.  While you should definitely review other credit cards if you are looking for a new one (I found Ask Mr CreditCard to be a great place to start), here are the ones I have and why they work for me:

United Mileage Plus Student Visa – This was my first credit card.  I got it in college, and apparently it is not offered anymore.  There is no annual fee, but it only gives me one mile for every $2, half of what is given by most standard airline credit cards.  Because it is my oldest credit card, though, I still keep it to maintain my credit score, and have a monthly automatic payment for my cable bill set to it so that there is always activity on it and Chase does not close my account.

Citi Gold/ AAdvantage World MasterCard – I got this card to replace the United Visa as my primary credit card.  There is a $50 annual fee, but it gives me 1 mile per $1 I spend, so as long as I spend at least $5,000 per year, the annual fee is justified.  (The math: Considering the general standard conversion of 1 mile to 2 cents, I need to earn at least an extra 2,500 miles on this credit card every year to recuperate the $50 cost over the alternative, my United Visa card.  And if I spend $5,000 per year, I will earn 5,000 miles on American, or 2,500 more than I would have earned on United if I used my Visa card.)  And as a cardholder, I can also redeem miles at lower rates for certain domestic flights – 20,000 miles instead of the normal 25,000.

If you are interested in this card, or any other airline card, I suggest you sign up for the airline program first and wait for credit card offers to come in the mail (or at least that was the case during the better economic times).  Once I decided to get this credit card, I started checking my mail for better deals, and after 2 months I got one – it had the same terms and conditions as the offer available online, including the annual fee waiver for the first year, but with a bonus 25,000 miles for signing up (versus the 15,000 offer online)!

Discover More Credit Card – This Discover card is a really good deal as a secondary credit card.  It gives only up to 1% cash back on regular purchases – less than my Citi/American Airlines card, which, given the conversion rate, effectively gives me 2% – and is not accepted in all places, making it not-so-great to have as your sole/ primary credit card.  But every quarter it offers 5% cash back bonuses for certain purchase categories, and every so often there might be other bonuses too.  In the quarter ending this month, for example, this Discover card was giving a 5% cash back bonus on home improvement stores, department stores, and clothing stores, not to mention the bonus for restaurants in June I wrote about a few weeks ago.  And July to September, you can get a 5% cash back bonus on purchases (up to $300) at gas stations, hotels, theme parks, zoos, and bookstores.  That’s an extra $15 – not that much, but much better than the $3 you would get for spending $300 on a 1% cash back card.

5% cash back is probably one of the best deals on credit cards out there.  Having this Discover card as your secondary card, you should always remember to use it for purchases eligible for bonuses (remembering to check them every quarter), but go ahead and use your primary card for everything else (provided it gives you 1% or more in cash back).