Archives for May 2018

Personal Capital Review 2018: Automatically Track Net Worth and Portfolio Asset Allocation

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Updated 2018. Personal Capital is free financial website and app that links all of your accounts to track your spending via bank and credit cards, investments, and net worth. You provide your login information, and they pull in the information for you automatically so you don’t have to type in your passwords every day on 7 different websites. Personal Capital’s strength is in investments, including portfolio tracking, performance benchmarking, and asset allocation analysis.

Net worth. You can add your home value, mortgage, checking/savings accounts, CDs, credit cards, brokerage, 401(k), and even stock options to build your customized Net Worth chart. You can also add investments manually if you’d prefer. I have a habit of accumulating bank and credit union accounts, so I find account aggregation quite helpful.

Cash flow. The Cash Flow section tracks your income and expenses by pulling in data from your bank accounts and credit cards. This chart compares where you are this month against the same time last month. If you hate budgeting, you may find it easier to view a real-time snapshot of your spending behavior. Their expense categorization tool is pretty accurate, and if it isn’t you can change it manually. However, it isn’t quite as advanced as Mint.com, where you for example you can make a rule to always classify “Time Warner Cable” as “Utilities” and not “Online Services”.

Portfolio. This is where Personal Capital is better than many competing services, by analyzing my overall asset allocation, holdings, and performance relative to benchmarks. If you’re like me, you have investments spread across multiple custodians. I now have investments at Vanguard, Fidelity (401k), Schwab, TransAmerica (401k), and Merrill Edge. It’s nice to be able to see everything together in one picture. They can also analyze your retirement accounts fees to see if you are quietly getting charged too much.

For comparison, Mint did not allow manual input of investments and it did not break down my asset allocation correctly based on my linked accounts. In fact, all it shows is a big orange pie chart with “99.9% Not Sure” and “0.00 Other”.

Personal Capital considers the major asset classes to be US stocks, International stocks, US Bonds, International Bonds, and Cash. The “Alternatives” classification includes Real Estate, Gold, Energy, and Commodities.

If you have one bank account, one credit card, and a 401(k), you may not need this type of account aggregation service. Life tends to get messy though, and this helps me maintain a high-level “big picture” view of things.

Security. As with most similar services, Personal Capital claims bank-level, military-grade security like AES 256-bit encryption. The background account data retrieval is run by Envestnet/Yodlee, which partners with other major financial institutions like Bank of America, Vanguard, and Morgan Stanley. Before you can access your account on any new device, you’ll receive an automated phone call, email, or SMS asking to confirm your identity. Their smartphone apps are compatible with Touch ID/Face ID on Apple and mobile PINs on Android devices.

In terms of the big picture, my opinion is that by making it more convenient, I am able to keep a closer eye on all my account and thus actually make myself less likely to be affected by a security issue.

How is this free? How does Personal Capital make money? Notice the lack of ads. Personal Capital makes money via an optional paid financial advisory service, and they are using this as a way to introduce themselves. (People who sign up for portfolio trackers tend to have money to manage…) They are a hybrid advisor, combining their online tools with real human access. Their management fees are 0.89% annually for the first $1 million, with slightly lowered pricing as you go past $1 million in assets. As an SEC-registered RIA fiduciary that now manages over $7 billion, I think this improves their credibility as a company built to handle sensitive information.

Note that if you give them your phone number, they will call you to offer a free financial consultation. If you answer the phone or e-mail them that you don’t want to be ed anymore, they will honor that request. Or you could ask them your hardest financial question and see how they respond. However, if you simply ignore the phone calls, they will keep calling. Now, you can keep using the portfolio software for free no matter what happens. But, if you aren’t interested, I would highly recommend simply being upfront with them. A simple “no thank you” and you’re good.

If you’re upfront with them, they’ll be upfront with you. I’m still a DIY guy when it comes to my money, and they have been happy to keep monitoring my accounts for free, without any additional phone calls over the last 5 years.

Bottom line. It’s not what you make, it’s what you keep that counts. The free financial dashboard software by Personal Capital helps you track your net worth, cash flow, and investments. I recommend it for tracking stock and mutual fund investments spread across different accounts. I’d link your accounts on the desktop site, but interact daily through their Android/iPhone/iPad apps for optimal convenience (log in with Touch ID or mobile-only PIN).

Groupon: Costco New Membership Deal

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Here’s a Groupon deal for a new Costco Gold Star Membership where for $60 you can get the following (Up to $144.98 value):

  • 1-year Gold Star membership ($60 normally), which includes a membership card for the primary cardholder as well as one free Household Card
  • $20 Costco Cash card
  • $64.98 value in free coupons – Free Kirkland Signature AA Batteries 72 ct ($19.99 value), Free Kirkland Signature Disinfecting Wipes Variety 4-Pack ($9.99 value), $10 off Fresh Meat (beef, chicken, pork, or fish; excludes deli items), $25 off an order of $250 on Costco.com.

Valid for new members only. For this new membership offer, an existing Costco member must be expired prior to February 1, 2018 to qualify.

Save even more on your Groupon with a cashback shopping portal. Many offer new customers bonuses if you make a qualifying purchase, including eBates ($10 bonus), TopCashBack (varies), and BeFrugal ($10 bonus). I have cashed out of all of these before.

How Much Do You Need To Save For College? Vanguard 529 Calculator

Thinking about 529 plans and like playing around with interactive calculators? This Vanguard tool helps you visualize how much you’ll need to save for college and how changing up a specific factor would affect your results. It adjusts for age, contributions, investment returns, tuition inflation, and even looks up the current cost of your favorite university. A formal report is spit out with lots of charts, just like a financial advisor might create for you. Here’s a sample screenshot:

Tuition inflation is something that I think is hard to predict. However, I couldn’t think of anything better than accepting the default assumptions that investment return will only barely outpace tuition inflation.

If you’d rather have a quick, simple scenario, check out this Vanguard article on the power of automatic savings. If you put away $130 a month automatically every month for 18 years, at a 6% return you’d end up with $50,000. Putting away $50 a month reliably would get you to $20,000.

Nearly half of your final amount would be due to investment growth, which thanks to the 529 plan can be tax-free when used towards qualified educational expenses.

I’m still in the camp that retirement should be prioritized over college savings, but I definitely understand the parental instinct to provide the best educational opportunity possible. I’m still pondering the idea of targeting funding college with 1/3rd savings, 1/3rd spending from current income, and 1/3rd grants/scholarships/loans.

Finally, here is another set of handy Vanguard tools, a 529 Plan Interactive Comparison Map and Tax Deduction Calculator.

List of 529 College Savings Plan Bonuses and Promotions

5/29 is “529 College Savings Day”, and several plans are offering promotions and/or giveaways through the end of the month. Here is a NY Times article with some helpful information and here is a interactive 50 state map listing promotions. Just putting in $50 every month could add up to nearly $20,000 at the end of 18 years (6% return).

Here are some sample promotions:

  • California Scholarshare 529 – Bonus expired 6/1/18.
  • Florida Prepaid – “Open a Florida 529 Savings Plan, from now through June 30, and we’ll seed your account with $25. Set up an automatic monthly contribution of $25 or more, and we’ll add another $25.”
  • Idaho Ideal – “Open an IDeal—Idaho College Savings Program account online between May 1-29, 2018. Make an initial contribution of $25 or more and we’ll add $25 to your account. To qualify for the $25 match, the beneficiary of the account MUST BE age 5 or younger. This special offer is limited to the first 150 accounts opened during this period.”
  • Nebraska NEST 529 – “Get a head start on college savings with a $100 bonus for opening a new NEST 529 College Savings Account. Be one of the first 100 individuals to open and contribute a minimum of $100 to a new account for a child who is eight years old or younger between May 15, 2018 and May 31, 2018 with the Promo Code provided, and receive a $100 Bonus contribution into your new account.”
  • Tennessee TNStars – “In celebration of 529 Day on 5/29, any Tennessee resident who opens a new TNStars account during the month of May will get a $25 match!”
  • Virginia 529 – “To commemorate this year’s special day, we’re contributing a $50 match reward to every new qualifying Invest529 account opened from now until May 31, 2018.”

Remember, you can open a plan from any state even if you are not a resident (although promotions and state tax deductions may be restricted). Also, you can do a rollover from one state plan into another state plan once every rolling 12 months.

Republic Wireless Review: New Phone + 3 Months Service $89 or Free SIM + Free 1st Month

rw2018freesimUpdated 2018. Republic Wireless is a T-Mobile MVNO that reduces costs by using WiFi for calls and texts whenever possible. They have settled into the simple pricing structure below, with no contracts.

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The best value plans allow a single user to pay $20/month for unlimited talk/text/1 GB LTE and $25/month for unlimited talk/text/2 GB LTE. The nice thing about these pay-for-what-you-use plans is that you save money on the months where you use very little data, as opposed to always buying the plan where you know you won’t pay for overages.

Buy new phone, get 3 free months of service (phones start at $89). Get 3 free months of service if you buy a new phone and activate a new line. This is with the Unlimited Talk/Text + 1 GB Data plan, so that’s $20 x 3 = $60 value for free. New phones start at only $89 for the Alcatel A30 Android phone. Moto E is $129.

Bring your own phone + Free SIM card + 1 free month of service. Right now, they are offering a Free SIM card + Free Shipping + Free 1st Month of Service. This is with the Unlimited Talk/Text + 1 GB Data plan ($20 value). If you use more data, you pay the difference. Taxes and telecom fees are not included. The idea is that you can swap out the SIM card in your phone and try them out with no obligation. You must activate by 6/30/18.

Phone options. You can either buy a phone from them or bring your GSM unlocked phone and use their SIM card. There are still no Apple phones on the list. Below is a partial list of eligible phones. The best thing to do is use their phone checker.

  • Google Pixel
  • Google Pixel XL
  • Google Pixel 2
  • Google Pixel 2 XL
  • Samsung Galaxy S8
  • Samsung Galaxy S9
  • Samsung Galaxy J7
  • Samsung Galaxy S7 Edge
  • Samsung Galaxy S7
  • Samsung Galaxy J3
  • Samsung Galaxy S6
  • Nexus 6P by Huawei
  • Nexus 6 by Motorola
  • Nexus 5X by LG
  • Moto X Pure Edition
  • Moto X4
  • Moto G5S Plus
  • Moto G5 Plus
  • Moto E4
  • Moto E4 Plus
  • Moto G4
  • Moto G4 Plus
  • Moto G4 Play
  • Moto Z
  • Moto Z Play

Bottom line. Republic Wireless now allows you to bring your own unlocked GSM phone for use on WiFi and T-Mobile LTE networks. Right now, they are offering a free SIM + free month of service to try them out for free. Apple phones are not eligible. The cost is straightforward: $15 for unlimited talk/text and $5 per GB of data used, making it best for modest data users.

If you are willing to buy several months of service at once (or have an Apple phone), also check out Mint Mobile (formerly MintSIM).

Plastiq Promotion: Pay Bills w/ No Fee with Masterpass ($250 Max Per Bill)

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New promo. Plastiq has a new promotion where you can pay a bill using a Mastercard in Masterpass with no fee. Expires 9/30/18. Thanks to readers Jon and Bill. Here are the restrictions and details:

From now until September 30, 2018, we will waive the Plastiq fee when you use Mastercard in Masterpass for the payment. This promotion applies to any bills or invoices up to a maximum of $250 each.

To qualify for this promotion, you must:

Use a Mastercard in Masterpass for the payments (read here on how to add a Mastercard in Masterpass to your Plastiq account).
Submit or schedule payments between June 1, 2018 12:00 a.m. ET and September 30, 2018 11:59 p.m. ET.
The payments’ delivery date must be before or on September 30, 2018.
There is no minimum or maximum amount required for the transaction.
If the amount is over $250, you will incur a Plastiq fee on the remaining amount over $250.
If you have signed up with a referral code, you will need to hit the required minimum of $500 in successful payments and receive the fee-free dollar credit in order to be eligible for this promotion.

To clarify, there is a $250 limit per payment, but no limit on the number of payments. You could split up a larger bill into $250 increments if the payee accepts that. You could convert a mortgage, home equity loan, student loan, tuition, or property tax payment into a credit card payment that earns rewards or fulfill a sign-up bonus. For example, with the Citi Double Cash Card, the 2% cash back means every $5,000 in purchases could earn $100 cash back.

Original post:

Plastiq.com lets you pay bills and invoices with a credit or debit card, even if they don’t usually accept them. The standard service fee is 2.5% for credit cards and 1% for Visa and MasterCard debit cards. However, they run limited-time promotion with lower fees. They will charge your card and send out a paper check to the payee (direct bank transfers to a few), so you’d want to plan ahead for any snail mail delays. They recommend 10 business days to be safe. More ideas from their site:

  • Rent or Mortgage
  • Homeowners Association (HOA) dues
  • Tuition
  • Childcare costs
  • Buying a car, RV, or ATV
  • Income or business taxes

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(Note: This was only an example given during a 1.5% fee promotion. The current fee may be higher or lower.) Why would I want to pay a 1.5% service fee?

Sign-up bonus spending requirements. Sign-up bonuses often having spending requirements. For example, you might get a $500 value bonus but need to spend $5,000. Well, that’s effectively 10% back so if you need a little help to get over that hurdle, it’s okay to pay a 1.5% fee. Here are some recent cards with big $500 value bonuses but also spending requirements:

2% cash back credit cards, or similar. If you have a rewards credit card that offers 2% cash back (or equivalent value in points), then you can still make a slight profit by putting them on your credit card. A simple example is the Citi Double Cash Card. For example, if you have a tuition bill or tax bill of $5,000 and you earned 2% cash back while paying a 1.5% fee, your net 0.5% is $25.

Combine a rewards card + 0% APR on purchases. Many credit cards offer 0% APR on purchases for an introductory period of 12 months or longer. If the card also has a half-decent rewards program on purchases, the combination of purchase rewards and spreading out the payments over a year at no interest could be attractive.

Referral program. Plastiq has a somewhat confusing referral program. If a new user signs up via a referral link and pays $500 worth of bills, they will then get $500 “fee-free dollars”. So first you’d have to pay the fee on a bill, and then on your next bill, $500 of it will be “fee-free” (at 2.5% that’s a $12.50 savings). The referrer will get $1,000 in fee-free dollars. If you take advantage of the promo above, that should trigger the bonus. Here’s my referral link. Thanks if you use it.

Google Express: 25% Off First Order, Free Google Mini for Existing ($125+ Order)

gexpressUpdated offers. Google Express has a couple more coupon codes that may be of interest.

  • 5RTC4Q545$10 credit towards your first order (i.e. $10 off $10). This is my referral code where you get $10 and I get $10 as well. After joining, you can also refer friends for $10 credits.
  • APPSPECIAL – 25% off your first order ($30 max). Supposedly must use Google Express App (iOS or Android). Use the best option between this one or the $10 off $10 above for your first order. Expires 5/27/18.
  • FREEMINI – Free Google Mini with $125+ purchase. Good for existing customers. Google Mini will appear in your cart after adding code. Does not stack with other codes. Expires 6/5/18 or while supplies last. Time order a lot of toilet paper?
  • $15 off any Target order. Good for existing customers. Must order through Google Express via Google Assistant. Expired.
  • SHOPCOSTCO25 – 25% off your Costco order, good for existing customers. Max discount $40. Expires 4/1/18. Expired.
  • APPFEB20 – 20% off for existing customers. Max discount $20. Must use Google Express app. Expires 2/27/18. Expired.
  • NEWYEAR20 – 20% off for existing customers. customers. Max discount $10. Expired.
  • APP20OFF – 20% off for existing customers. Max discount $20. Expires 2/11/18. Expired.

Google Express delivers things directly to your door from participating merchants like Costco, Wal-Mart, Home Depot, and Target. Free delivery is usually included above a certain amount that varies (i.e. $35). There is no longer an annual membership fee.

Note that some prices may be higher than from in-store. You will usually see a banner noting if this is the case. For Costco, there are reports that the “coupon book” items are still at the store price. Otherwise, a 20% off coupon may still offset the higher costs.

Homeowner’s Insurance: How Much Can You Save By Comparison Shopping?

In an ideal world, you would always comparison shop every product or service. But in the real world, that takes time and effort. Is is worth the bother? To estimate the potential benefit of shopping around, Priceonomics analyzed homeowner’s insurance premiums across 12 states (for a similar level of coverage).

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They ranked each state by taking the difference between quotes in the 25th and 75th percentiles.

We found that the difference between the premiums was substantial, and shopping around can lead to dramatic changes in pricing. Of all the states we looked at, Texas had the biggest discrepancy in prices — there was a $2,182 range in insurance prices between a 25th and 75th percentile quote. Even at the low end, in New Hampshire the price ranges between quotes at these percentiles was $363 per year.

The article does a deeper analysis for California and Texas:

It’s night and day between California and Texas. Texas is one of the most expensive states to get home insurance in the country, owing partly to the frequency of catastrophic weather events and partly due to higher insurer expenses. Not only does zip code 78521 in Brownsville have a 25th percentile of premium greater than San Francisco’s 75th percentile, but it’s 75th percentile is more than double that!

Basically, you should shop around everywhere as you could save hundreds per year at a minimum. But you should really shop around in Texas. You know, unless you don’t want to save potentially $2,000 a year.

Jack Bogle Profile & Vanguard Historical Chart in Barron’s Magazine

barr_boglecoverThe Barron’s magazine cover article* this week is a profile of Jack Bogle, founder of Vanguard. It covers a lot of things that Bogle fans may already know (origin story, dislike of ETFs), but there were several bits that were new to me. I look forward to reading his last book that includes an “anecdote-rich history of Vanguard” and personal reflections.

(*Barron’s has a paywall, but usually allows limited access to Google search visitors. Try searching “Jack Bogle’s Battle” in a private window.)

Here’s a chart of how Vanguard has changed since 1974:

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The article brings up the argument that index funds are becoming too popular and now bad for the world. I don’t worry about this at all. If inefficiencies become easy to take advantage of, things will naturally swing back. The loudest complainers always seem to be high-fee managers who are getting paid less lavishly for their services:

His favorite punching bag remains the mutual-fund industry. He likes to point out that closet indexing is pervasive with actively managed funds, and that traditional funds haven’t passed along economies of scale until pressured by Vanguard’s fees. There have been few casualties yet among asset managers, even as active stock funds suffered outflows nine of the past 10 years. And the industry has surely improved: Investor outcomes are better, costs are lower, information is better, thanks in part to Bogle.

Says Bogle, paraphrasing Martin Luther King Jr., “the arc of fiduciary duty is long, but moving in the right direction.” Bogle intends to see that it keeps doing so. “I have no corporate power,” he continues. “But I believe I still have more ethical and intellectual power. And that is good enough for me.”

Bogle is one of those rare authentic voices who say what they think and don’t care if others agree (even the rich and powerful). The adjective “cantankerous” is used – I hope to be called that eventually!

Chase Ink Business Unlimited Card Review: $500 Cash Bonus, 1.5% Flat Cash Back, No Annual Fee

inkunlimited2018Chase has freshened up their line-up of small business credit cards. The new Ink Business Unlimited Card is offering a $500 cash bonus after you spend $3,000 on purchases in the first 3 months after account opening. The special feature of this card is a flat, unlimited 1.5% cash back on every purchase. Here are the details:

  • $500 bonus cash back after you spend $3,000 on purchases in the first 3 months from account opening.
  • Flat 1.5% cash back on all purchases with no limit. Simple.
  • 0% introductory APR for 12 months on purchases and balance transfers.
  • Employee cards at no additional cost.
  • No annual fee.

Ultimate Rewards points. The cash sign-up bonus actually comes in the form of Ultimate Rewards points at 1 point = 1 cent in cash. 50,000 points = $500 cash. If you have one of the other annual fee cards that offer a boost in value like the Ink Business Preferred, Sapphire Preferred, or Sapphire Reserve, you can transfer your points between Ultimate Rewards accounts and redeem using that other card’s 25% travel bonus. This can increase the value of your points.

You could think of this card as the small business version of the Chase Freedom Unlimited card.

Prefer airline and/or hotel points? If you transfer over your Ultimate Rewards points to the Chase Sapphire Preferred® Card (or Ink Plus business card), then you can use that card to transfer into hotel and/or airline miles. If you value those miles/points at more than 1 cent per point, then your 1.5X rewards from this card can be significantly higher. Examples:

– You could earn 1.5 United miles per dollar spent.
– You could earn 1.5 Hyatt points per dollar spent.
– You could earn 1.5 British Airways Avios per dollar spent.
– You could earn 1.5 Southwest Rapid Rewards points per dollar spent.

For example, if you placed a perceived value of 1.5 cents on each United mile or Southwest Rapid Rewards point, then you’d receive 2.25 cents of perceived value per dollar spent with this card. Your actual numbers will depend on your own specific redemption choices.

Many people aren’t aware of the fact that they can apply for business credit cards, even if they are not a corporation or LLC. The business type is called a sole proprietorship, and these days many people are full-time or part-time consultants, freelancers, eBay/Amazon/Etsy sellers, or other one-person business owners. This is the simplest business entity, but it is fully legit and recognized by the IRS. On a business credit card application, you should use your own legal name as the business name, and your Social Security Number as the Tax ID.

Note that Chase has an unofficial rule that they will automatically deny approval on new credit cards if you have 5 or more new credit cards from any issuer on your credit report within the past 2 years (aka the 5/24 rule). This rule is designed to discourage folks that apply for high numbers of sign-up bonuses. This rule applies on a per-person basis, so in our household one applies to Chase while the other applies at other card issuers.

Bottom line. This Chase small business card has a large sign-up bonus and flat 1.5% cash back with no annual fee. If you have certain other Chase credit cards, you can transfer Ultimate Rewards points over to those cards and increase your value. Be sure to compare with other Chase small business cards – Ink Business Preferred and Ink Business Cash.

Chase Ink Business Preferred Card Review: 80,000 Point Bonus, Travel Rewards

inkpreferred2018Chase has freshened up their line-up of small business credit cards. The Ink Business Preferred Card is offering a 80,000 point bonus after you spend $5,000 on purchases in the first 3 months after account opening. This flavor is their “premium travel card” with 3X points on travel purchases and the ability to redeem points at a 25% premium through their travel portal. This feature makes 80,000 points worth $1,000 towards travel when redeemed through Chase Ultimate Rewards. Here are the details:

  • 80,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening.
  • Points are worth 25% more when you redeem for travel through Chase Ultimate Rewards.
  • 3X points per $1 on the first $150,000 spent on travel, shipping purchases, internet/cable/phone services, and advertising purchases with social media sites and search engines.
  • 1 point per $1 on all other purchases with no limit.
  • No foreign transaction fees.
  • Employee cards at no additional cost.
  • Primary rental car coverage when renting for business purposes.
  • $95 annual fee.

Ultimate Rewards points. This card offers a 25% bonus on travel redemptions made through the Ultimate Rewards travel website. 80,000 Ultimate Rewards = $1,000 in travel. Similar to Expedia or Travelocity, you can book flights on most major airlines and hotel chains. This makes it much more flexible to spend your points. You can even buy something more expensive and pay the difference.

If you have other Chase cards that earn Ultimate Rewards points like the Ink Business Cash or Ink Business Unlimited, you can transfer points into this card account and take advantage of the 25% premium. However, if you happen to have the Chase Sapphire Reserve, you could transfer your points out to grab the better 50% premium.

You could think of this card as the small business version of the Chase Sapphire Preferred card.

Prefer airline and/or hotel points? This card also allows you to transfer Ultimate Rewards points into hotel and/or airline miles. Transfer to United Airlines, British Airways, Singapore Airlines, Korean Air, Southwest, Hyatt Hotels, IHG Hotels, and Marriott Hotels at a ratio of 1 Ultimate Rewards point = 1 mile/hotel point. Miles redemption continue to offer great value for savvy travelers, especially for last-minute travel and business class seats.

Many people aren’t aware of the fact that they can apply for business credit cards, even if they are not a corporation or LLC. The business type is called a sole proprietorship, and these days many people are full-time or part-time consultants, freelancers, eBay/Amazon/Etsy sellers, or other one-person business owners. This is the simplest business entity, but it is fully legit and recognized by the IRS. On a business credit card application, you should use your own legal name as the business name, and your Social Security Number as the Tax ID.

Note that Chase has an unofficial rule that they will automatically deny approval on new credit cards if you have 5 or more new credit cards from any issuer on your credit report within the past 2 years (aka the 5/24 rule). This rule is designed to discourage folks that apply for high numbers of sign-up bonuses. This rule applies on a per-person basis, so in our household one applies to Chase while the other applies at other card issuers.

Bottom line. This Chase small business card has a large sign-up bonus and premium travel features with a $95 annual fee. You can transfer Ultimate Rewards points from other Chase cards to increase your value. Be sure to compare with other Chase small business cards – Ink Business Unlimited and Ink Business Cash.

Chase Ink Business Cash Card Review: $500 Cash Bonus, 5% Back Categories, No Annual Fee

inkcash2018Chase has freshened up their line-up of small business credit cards. The Ink Business Cash Card is offering a $500 cash bonus after you spend $3,000 on purchases in the first 3 months after account opening. The special feature of this card is are 5%/2% bonus categories targeted towards small business expenses. Here are the details:

  • $500 bonus cash back after you spend $3,000 on purchases in the first 3 months from account opening.
  • 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on cellular phone, landline, internet and cable TV services each account anniversary year.
  • 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year.
  • 1% cash back on all other card purchases with no limit to the amount you can earn.
  • 0% introductory APR for 12 months on purchases and balance transfers.
  • Employee cards at no additional cost.
  • No annual fee.

Ultimate Rewards points. The cash sign-up bonus actually comes in the form of Ultimate Rewards points at 1 point = 1 cent in cash. 50,000 points = $500 cash. If you have one of the other annual fee cards that offer a boost in value like the Ink Business Preferred, Sapphire Preferred, or Sapphire Reserve, you can transfer your points between Ultimate Rewards accounts and redeem using that other card’s 25% travel bonus. This can increase the value of your points.

You could think of this card as the small business version of the Chase Freedom card.

Leveraging the 5% back bonus categories. Putting all of your small business cell phone, landline, and internet bills on the card and getting 5% back is pretty handy. For example, even just $200 a month x 12 months x 5% back is $120 back a year without changing your spending habits. Now let’s take the office supply store category and the fact that you can buy gifts cards to Amazon.com and other retailers at such office supply stores like Staples and OfficeMax… now you can effectively discount many of your other purchasing needs by 5% as well. Putting those purchases on such gift cards upfront can also help you meet the spending requirement for the bonus.

Many people aren’t aware of the fact that they can apply for business credit cards, even if they are not a corporation or LLC. The business type is called a sole proprietorship, and these days many people are full-time or part-time consultants, freelancers, eBay/Amazon/Etsy sellers, or other one-person business owners. This is the simplest business entity, but it is fully legit and recognized by the IRS. On a business credit card application, you should use your own legal name as the business name, and your Social Security Number as the Tax ID.

Note that Chase has an unofficial rule that they will automatically deny approval on new credit cards if you have 5 or more new credit cards from any issuer on your credit report within the past 2 years (aka the 5/24 rule). This rule is designed to discourage folks that apply for high numbers of sign-up bonuses. This rule applies on a per-person basis, so in our household one applies to Chase while the other applies at other card issuers.

Bottom line. This Chase small business card has a large sign-up bonus and ongoing features of 5X/2X categories with no annual fee. If you have certain other Chase credit cards, you can transfer Ultimate Rewards points over to those cards and increase your value. Be sure to compare with other Chase small business cards – Ink Business Preferred and Ink Business Unlimited.

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