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So after my lengthy conversation about credit cards with Brandon, I decided to take the plunge and apply for one of the best rewards cards out there. At this time, I only have two main credit cards that I use. I primarily use my MBNA WorldPoints Platinum Plus Alumni Card, and that gives me 1 point for every $1 in net retail purchases. I can then use that for cashback, gift cards (like Amazon), airlines, etc. I just calculated it out — for 10,000 points I can get $80 in cash, which comes out to only 0.8% cashback! Truth be told, the only reason I got the card in the first place was because of the obnoxious gold color and kick-ass Sparky logo. I love showing off my pride for ASU everytime I buy something. =) Oh yeah, and as a sign-up bonus I got a cool bright gold ASU camping chair that is perfect for tailgating. My other card is a Capital One Platinum card, which has no rewards or special offers. I plan to replace that one soon. I did read, however, about Capital One being the best credit card for foreign purchases — if I ever decide to go overseas again and use a credit card, I may want to hold on to Capital One. Although, last time I was in the Philippines I took cash and never used a CC once.

My philosophy up to this point has always been the following: The best way to increase your net worth is by saving more (or making a higher salary, and then saving the same percentage as before). Other things like rewards from credit cards, etc, were all extras that I really didn’t think about. And besides, how much can an extra $200 or $300 a year really compare to an extra 5-10 grand that you could save from your paycheck? Well, now I’ve changed my philosophy. I still stand by my previous statement, and maintain that the best way to increase your net worth is to actually save more. But the extras really do add up =)

Anyways, there are a few rewards cards out there, and most give anywhere from 3-5% cash back on groceries, gas, and drugstore purchases. There is usually a cap on the amount that you can collect in a year, after which most people switch to another rewards card. Some people have other cards that give rewards for things like airline purchases, restaurants, hotels. But since I only eat out maybe once a week, and about 80% of my monthly expenses can be contributed to groceries and gas, I figured I should find a decent rewards card that would at least cover these items.

So I came across the following on one of my favorite money blogs:

HSBC Direct Rewards Card

Pros: 5% back at groceries, gas, and drugstores with $500 annual cap. 1% back on purchases over $3,000.

Cons: Rewards only paid out annually. Only 0.5% on first $3,000 of purchases. Relatively unknown card issuer. People report having FICOs of above 700 and still being denied.

And sure enough, most people complained about being denied. I figured, what the heck, so what if I’m denied, 5% back on groceries and gas is ALOT, and $500 is a high annual cap! And guess what? I got the “Congratulations Heather L. Stanfield, your application was approved!” So I guess I passed whatever hard credit pull they do.

I’m now looking forward to getting the card in the mail and getting started on that cashback!

4 Responses to “HSBC Direct Rewards Platinum MC — Approved!”

  1. stardo says:

    lol

    not quite what i intended. not sure anyone should take my advice, because i am still quite new at this. and so i will give this advice:

    i would use the new card for groceries, gas, and drug stores only, then maybe when you got to $3k in a year (if you do), use it for others. are the rewards from your other card paid out sooner than annually? because you could be getting interest on the cash back (hopefully 5% at some online bank).

    hsbc is not an unknown name, by the way. it is one of the top 5 banks in the world (http://en.wikipedia.org/wiki/HSBC)

    do you realize the “hard pull” will count against your credit? every time you open an account, it will count against your credit for roughly 2 years. i wouldn’t suggest opening cards randomly. i suggest monitoring your credit with some credit monitoring service (don’t spend too much!).

    i am no financial genius, i’m just a guy. i suggest reading many threads on sites like slickdeals, you will learn things like this and more.

  2. admin says:

    Re: lol

    Oh, don’t worry, I didn’t go into this without research. I have poured over SD and FW and a million financial blogs in recent months. It was between that card and the Chase Cash Plus Rewards Card (5% back, 0% 12mo + 0% BT — see FatWallet for a lengthy thread). The Chase card has a $300 cap, however, and you can’t even get it online anymore — it would have required calling someone up in India and using some special code. I figured it was better going for a card that is going to be around for a while, with a higher cap, vs. one that is being phased out. Although the $100 bonus on the Chase Cash Plus is a nice incentive.

    In order to reach the $500 cap on the HSBC card, I would have to spend $10K in groceries, gas, and drug stores. It’s very unlikely that I’ll surpass that. I can guarantee that I will reach $3k, however, and when I do, I will follow your advice and use it for other purchases. I’m not worried about the annual payout at this point. How I see it, I’m already getting 4.2% more money back then I have been receiving…

    Now if only I could find a card with 2% cashback on all other purchases! There is one, but it’s by invitation only, and it’s through the same company as the one I just signed up for (HSBC). It’s rather mysterious how anyone gets invited to sign up for the card…no one on FW seems to really know. I guess that’s the point, otherwise everyone and their brother would be signing up for it. There is one or two other options, and I’m looking into them. They involve Fidelity Investments.

    And don’t you worry, I know all about how the credit applications affect my score. I haven’t checked my score, but I’m not worried that it’s been majorly affected at all. It’s been years since I’ve applied for a credit card. Each credit application will hurt your FICO score, an estimated ~5 points each. This is only temporary, and it lasts about 6 months. I won’t be buying a house in 6 months or anything. And it’s not like I did an app-o-rama or anything.

  3. stardo says:

    Re: lol

    i would have preferred you do an app-o-rama as opposed to just applying for 1 card. you sound like you’ve read fatwallet, which is good, so you should know about how you could have gotten sign up bonus money + 0% BT money for signing up for more than a dozen cards at the same time.

    yeah the hsbc is invitation only, and i think that 2% is only for a limited time (1.5% after that? can’t remember exactly and too lazy to check it).

    as for not being able to get the chase cash plus rewards card, i have it and applied for it 2 months ago.

    sounds like you’re doing good for youself though. ;) keep reading the forums!

  4. admin says:

    Re: lol

    Yeah, but you have to pay a transfer fee on most every single card you sign up for these days. They usually charge a 3% BT fee…which to me isn’t worth playing the balance transfer game. There is currently only one card that you can sign up for, get 0% APY and 0%BT fee for initial BT only…and it’s a Discover card. Citi used to have quite a few cards with good BT deals, but as of September they started charging BT fees. They probably caught on to all the people using their cards to make money off BTs. There’s one guy online who has $30K of money borrowed from credit card companies just sitting in the bank making interest. You can do it still now, but it’s alot of hassle, you pay an extra fee upfront, and if you make a single mistake you’re out some serious dough.

    I didn’t say you couldnt get the chase cash plus rewards mastercard. I just said you couldn’t get it online (meaning their website), and I just think it’s likely that it will go extinct like the Citi Dividend Card. It’s still around though, you just have to do some serious hunting. According to the FW forum, the promotional $100 bonus is still alive and ticking.

    There are a couple reasons why I didn’t do an app-o-rama.

    1)Since you are applying for a bunch of cards (some people do 10-20 cards at a go), you are going to suffer one nasty hit which will last 6 months. This can have some varying effects. For one, you won’t be able to get another card for a while, even if one comes up with a nice signup bonus, as your credit is now totally shot.

    2) Some card issuers may freak out and close all your current cards. MBNA is one of the less-forgiving companies.

    Of course, the method works well for some people. I would just prefer to keep my score up around 700 and still be able to apply for offers that look appealing to me. Right now, I just ran my credit, and even after this application, it’s at 748. That’s satisfactory ;)

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