Switching Purchases from MasterCard to Discover

For the next three months, I'll be switching over my purchases from MasterCard to Discover. Simply put, the next three months, Discover bumps up the cash back rate to 5% for the all important Home Improvement and Department Stores.

You have to sign up for the bonus after you login to your Discovercard account. Just click on the quarterly signup bonus and you should receive an email like:

Thank you for participating in our 5% Cashback Bonus program. We just wanted to remind you how easy it is to make your money worth More.

Just use your card at home improvement stores, department stores, and clothing stores from April 9, 2009 until June 30,2009, and get 5% Cashback Bonus on up to $400 in these purchases*. Remember, all your other purchases will earn up to 1% unlimited Cashback Bonus automatically.

Within one or two shopping trips, we'll hit the $400 limit, but it will be nice to save $20 (5%) on those purchases instead of the usual $4 (1%).

Somehow I missed the Warehouse Club 5% bonus in March, but since the only club we belong to is COSTCO -- and they only take American Express -- we would not have saved anything for that bonus.

July 1 is another important bonus that you need to sign up for. During July, August and September, you get a 5% bonus for purchasing gas on your Discover Card.

So for the next few months, I'll be pulling out my Discover Card instead of MasterCard to save an additional 5% of the purchase price.

Here's another Way to Save with Credit Cards

My wife received a really good credit card offer from American Express today. The Blue Sky is cash back rewards card where you accumulate one bonus point for each dollar you spend.

After you spend your first $500, American Express gives you 7,500 bonus points. This is equivalent to $100 off any airline ticket, hotel stay, and car rental or travel package. You must redeem the bonus points in blocks of 7,500.

Unlike Discover, you’re limited to the travel industry. But American Express pays you 1.3% ($100/$7,500) instead of 1% for Discover purchases.

Blue Sky has no annual fees; the APR for the first 6 months is 0%! Zero-percent loans are nice to have even if it’s only for 6 months. Just set aside what you spend and pay it off before they jack up the rate.

After six months, the rate goes up — at least in my wife’s case — to 12.24%. Your rate maybe higher or lower depending on your credit score. Since I pay off all my balances, I never get charged interest. But still, it’s nice to know that it’s a fairly reasonable rate as far as credit cards go.

Another thing I like about this card is that you’re not tied to any specific airline. I use my United Card to keep my miles alive, but I can’t even remember flying United. We mostly fly Delta or Alaska, so it’s a waste to carry the card and use it to save money. I would like to get Blue Sky, but I already have two American Express Cards, one for personal and one for business expenses.

Since my wife doesn’t have an American Express Card, this is the one she should apply for in her name to help her maintain her credit history. Plus, we can use the $100 American Express hands out to help offset the cost of our vacation next year!