Citi Double Cash Purchase Tracker — Revealed!

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The Citi Double Cash is, at face value, a no-annual-fee, 2% cash back credit card. But rather than awarding 2% cash back on purchases, the geniuses in Citi's credit card division came up with a way to drag out their cash back awards over the life of a balance (compare to Barclaycard's practice of awarding Arrival+ miles as soon as purchases move to posted from pending status). 

According to the card's terms and conditions, there are two ways to earn cash back:

"Cash Back on Purchases: Unless you are participating in a limited time promotional offer, you will earn 1% cash back based upon eligible purchases appearing on your current month's billing statement. Eligible purchases you make will be accumulated in the 'Purchase Tracker' shown on your billing statement. The Purchase Tracker shows the balance eligible to earn cash back on payments each billing cycle.

"Cash Back on Payments: You will also earn 1% cash back on payments you make that appear on your current month's billing statement as long as the amount paid is at least the Minimum Payment Due that is printed on your billing statement and there is a balance in the Purchase Tracker. The balance in the Purchase Tracker is reduced by eligible payments you make. When the Purchase Tracker reaches $0, you won't earn cash back on payments until more eligible purchases are made."

This Rube Goldberg contraption raised a few obvious questions: what's a "Purchase Tracker?" How often is it updated? Most importantly, would payments made against purchases in the same billing cycle award all 2% in cash back when the statement closed, or would cardholders have to wait for a second statement to close before they earned the second 1% cash back?

Now that my first Citi Double Cash statement has closed, I'm prepared to reveal all.

What does a Purchase Tracker look like?

There are two versions of the Purchase Tracker: the one that appears on your billing statement, and the one that appears online. They reflect the same information, but in slightly different ways. Here's the Purchase Tracker that appears on my billing statement:

And here's my online Purchase Tracker:

As you can see, my Purchase Tracker reflects all the purchases and all the payments I made during my first billing statement, and I received 1% cash back on each.

The Purchase Tracker is not updated in real time

The online Purchase Tracker only reflects purchases and payments on your last billing statement; it is not updated in real time, and my best guess it that it's unnecessary to wait for your purchases to post before making payments against them.

In other words, all your purchases in the current billing cycle are added to your previous Purchase Tracker balance, and all your payments during the current billing cycle are compared to that new total. If your total payments are less than that new Purchase Tracker balance, you'll receive 1% cash back on the total payments amount.

Statement credit redemptions are not payments and are not supposed to reduce the Purchase Tracker

When redeeming your Double Cash cash back balance as a statement credit, you're informed that the redemption will not reduce the amount in your Purchase Tracker, since statement credit redemptions are not treated as payments.

On the one hand, that means you won't earn cash back on the amount of your statement credit redemption. On the other hand, that means that even when you pay off your entire remaining balance, you will still have a balance in your purchase tracker.

Direct Deposit redemptions aren't immediately available

While you can redeem your Double Cash cash back for statement credits immediately, you cannot redeem your balance as cash back deposited into a bank account until you initiate two ACH "pull" payments from that bank account. Since my "payments" were balance transfers from my new Chase Slate card, I did not have any eligible linked bank accounts, and made a statement credit redemption instead.

Conclusion

If you pay off your entire Citi balance before your statement closes each month, the Citi Double Cash card is a true 2% cash back card. If you instead take advantage of its 15-month 0% introductory APR by paying off your balance as slowly as possible, you won't receive the entirety of your second percent of cash back until you pay off your balance in your 15th month of card membership.

Manufacturing Chase Freedom's second quarter bonus categories

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A reader recently wrote to me asking if there were any super-secret hush-hush methods of manufacturing the $1,500 in 5% cash back offered by this quarter's Chase Freedom bonus categories. As a reminder, those bonus categories are "Restaurants, Bed Bath & Beyond, H&M, and overstock.com."

I sent along to that reader, but also wanted to share with any other readers who may have missed Tagging Miles' post that Bed Bath and Beyond sells $200, PIN-enabled Visa gift cards with an activation fee of $6.95.

As I explained in a guest post at Doctor of Credit's website back in December, earning 5 Ultimate Rewards points per dollar on $200 PIN-enabled Visa gift cards isn't a great deal in terms of outlay ($6.95) versus income ($10.35). Rather, it's a good deal precisely because they're $200 Visa gift cards, so you can cram a lot more of them into a Bluebird or Serve card's $5,000 monthly load limit, or into a bank or credit union's without worrying about a high-volume "fraud" tripwire.

My experience at Bed Bath & Beyond roughly mirrors Tagging Miles': not all stores carry Visa gift cards, not all stores carry $200 cards, and stores that do may be extremely reluctant to sell large volumes. Yesterday I had trouble buying just $600 in gift cards, requiring a manager to slowly walk the cashier through the process, since she was sure she would be fired for letting so many cards walk out the door!

In any case, while I know many of my readers won't have any trouble spending $1,500 at restaurants this quarter, I'm as a rule extremely reluctant to use cards for both manufactured spend and "real" purchases. So if you're like me, go ahead and take 3 trips per Chase Freedom card down to your local Bed Bath & Beyond and buy no more than $600 per visit. Then you can get back to putting your actual restaurant charges on a 2% or 2.22% cash back card.

Confirmed: Chase Freedom bonus excludes Walmart (and probably Target)

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Back on January 2, I reminded readers to register for their first quarter category bonuses, including the Chase Freedom 5% cash back bonus at grocery stores. While the registration page for that bonus says Walmart and Target stores are excluded from the promotion, I mentioned that I wasn't sure whether or how that would be enforced. It was possible, I thought, that they included that language because while some Walmart and Target store locations are coded as grocery stores, others are coded as discount stores and they didn't want to open that can of worms with their customers.

I don't like to let questions like that linger for long, so before taking off for Italy I swung by my local Walmart, coded as a grocery store by Visa and MasterCard, and picked up an international plug adapter (I'm always leaving them in hotel room outlets), paying with my newest Freedom card. After waiting for the transaction to post, I was able to confirm that I earned just 1 Ultimate Rewards point per dollar spent, according to my online account activity:

So now you know: Chase really did code their first quarter promotion to exclude transactions made at Walmart, and I presume at Target as well, so you'll need to keep your eyes open for actual grocery stores where you can make your $1,500 in purchases this quarter.

Buy Uber credit in "redeemable" chunks

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Back in October, Uber and American Express were offering a $10 credit when you spent $10 or more on Uber using a linked American Express card. That was great if you were planning to take one (or many more) eligible Uber rides by December 31, but it was also possible to prepay future Uber rides at a steep discount by using linked American Express cards to buy Uber gift credit (and applying it to your own account).

The catch was that Uber only allows gift credit to be purchased in increments of $25. While that was enough to trigger the American Express statement credit, Uber doesn't let you split payment for gift credit, meaning you were still stuck paying $15 out of pocket for your $25 in Uber credit.

Last weekend in San Antonio I ended up taking quite a few Uber rides, and was glad that I had "overpaid" for my Uber credits. Why? Because my Uber rides in San Antonio were cheap:

Two of my rides fell under $10, and wouldn't have triggered the $10 statement credit if I'd paid with an American Express card. Interestingly, another fell below $25, meaning it wouldn't even have been eligible for redemption if I'd paid with my Barclaycard Arrival+ MasterCard. As it turned out, my Uber balance (after referral credits) was applied dollar-for-dollar to those fares, and I was able to capture the entire 40% discount by prepaying.

Prepay your Uber rides, $25 at a time

By now readers can no doubt see where this is going. By pre-funding your Uber account with $25 gift credit, purchased with the Arrival+ MasterCard, you can guarantee that every ride you take – no matter how short – is eligible for Arrival+ redemption. Since each credit card transaction will be exactly $25, the minimum Arrival+ redemption, you can squeeze the maximum value from an Arrival+ balance of any size.

Conclusion

Before my faithful readers flood the comments to chastise me for passing over the myriad ways Uber has invited its service to be "gamed" by travel hackers willing to color outside the lines, let me assure you that I am fully aware of this. This post is not about those techniques: it's for folks who use Uber, pay for their rides, and want to do so in the most efficient method possible.

Oh, and here's the obligatory Uber referral link.

Breaking: Discover It has removed cash back redemption thresholds

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[update 11/25/14: Twitter follower @jlazarev pointed out this morning that he was unable to redeem the $15.22 in his Discover cash back balance. It seems I overstated the change that Discover had made: they didn't remove the redemption threshold, which remains at $50, but now allow cardholders to redeem cash back in any amount over $50. This is not as good as removing the redemption threshold entirely, but is still a big improvement in the war against "orphaned" cash back.]

If you follow this blog, you know I'm fond of the Discover It (previously Discover More) cash back card, which has revolving 5% cash back categories, occasional bonuses (targeted and not-so-targeted), no foreign transaction fees, and gives access to ShopDiscover, an online shopping portals which typically has among the highest payouts for many online merchants.

The card's principle drawback has always been its cruel redemption thresholds: while a cardmember's rewards balance is denominated in "dollars" of cash back, that balance could only be redeemed for statement credits or bank account direct deposits in increments of $50. While bloggers like Frequent Miler did the Lord's work finding creative redemptions for odd-sized balances, there's no escaping the fact that cash is king, and Discover has historically made it as hard as possible for cardholders to get our hands on that crown.

Discover cash back can now be redeemed for cash in increments of 1 cent

Imagine my shock when I logged into the Discover app this evening to see that Discover is now allowing cardholders' cash back balances to be redeemed for statement credits or direct deposits in any amount. I don't know for sure when this change went into effect, but I have not seen it reported anywhere yet.

I don't want to overstate the magnitude of this change: it's long been possible to redeem Discover cash back balances for Amazon.com purchases (and Amazon "gift" credit) in any amount, so orphaned balances haven't necessarily been a problem, as long as you're content with Amazon credit in lieu of cash.

But Amazon.com credits aren't cash, while direct deposits are and statement credits are close. This is a huge improvement in the value proposition of the card, and is going to get me to direct even more of my portal shopping to ShopDiscover, which frequently has among the highest merchant payouts at face value, but whose payouts have always had to be discounted by the inconvenience and inflexibility of Discover cash back redemptions.