Citi Platinum 3% cashback

James_H

I have a Citi Platinum card, and received the usual letter through offering a balance transfer deal with cheques that normally goes into the shredder. However, this time there is also a cashback offer if you do the transfer, which I had not seen before.

If I do a £500+ balance transfer this month, I get 3% cashback on all purchases between 14 April and 1 September.

I have no need for a 5.85%pa life of balance transfer with 3% fee. And of course, it would break the golden rule to actually keep this transfer on the card then be wowed by the cashback and buy something, because of being stung for full interest on the purchase.

Instead, I had the following thought: write a £500 cheque to myself, pay it plus the fee back almost straight away, then enjoy 3% back on most of my purchases this summer.

The break-even point for me is to make £750 of non-fuel purchases over the April-Sep period, not just £500. I already have a Shell Citi card paying 3% (at last) on Shell purchases so there is no benefit for changing those purchases. The same card gives 1% back for everything else, so I only make 2% net extra cashback from using the Platinum card instead of the Shell one. It takes £750 at 2% to overcome the initial £15 fee plus about £1 interest.

Note I've missed off interest on the BT. That could be avoided by paying £515 to the card before doing the transfer (provided it does not invalidate the offer). Alternatively, just under a fortnight's interest could be about £1 and take the break-even up to £800.

Is it worth it? Only just about. If my non-fuel, non-overseas spend would be around £500 a month, over 3.5 months that makes £1,750, of which I make an extra £20 (i.e. 2%) from the £1,000 in excess of the break-even. I can squeeze a bit more from things like car tax that incurs a 2% fee where I would otherwise just use a debit card.

Not much to get excited about, but free money only for the effort of paying a cheque, making an online payment, then remembering to use the right card (and its PIN). Oh, and writing this post, which has taken more time than all of the above .

There are always better short term cashback deals in Martin's guide, but it seems a reasonable idea for me to take this offer while it's here and save using up those better deals for another time.

Hope this helps anyone else, although this is only for existing customers and then only those who have been sent the letter.

Bokkens

Well I read all of it and it was refreashing to get the impression you have read up on articles and done your homework.
I would say that the BT fee is the critical point in this as it could wipe out your gains.If you could make your annual spend higher it would be more worthwhile as Martin and others have stated "DO NOT" buy extra items just to boost your cashback at the end of the year as this is likely to create debt.
Stick with what you have got and look at it again next year and perhaps swop to another card with as good or better offer.
Good luck.

michaels

Hmm - I got the cheques and dodgy offer BT offer and binned it straight away - I wonder if I also got the cashback offer and didn't notice it - I spend 1000-1500 pm so it would be well worth it for me if I do qualify, only problem may be paying off the BT quickly successfully - I clear the account each month so would ideally want the BT to hit just after the payment when the running balance is smallest and I could then clear the whole amount

Bokkens

Give Customer Services a ring and ask them if they have any offers on you card and then suggest a 0% rate for say 12mths as other cards are presently offering this like Virgin,Barclaycard Nat West etc and see what they offer you.

shaf00uk

No no no no no no no!!! I have not looked at this in detail but be careful and read all the small print.

This is new technique employed by the credit card companies to entice you to part with your cash.

1. They get the BT fee. Already you are on a loser.

2. Once you have transferred the balance you can't spend on purchases anymore. If you do you will be paying interest on the the purchases until the balance is completed paid off.

Basically, for a balance transfers stick on one one card and never touch it. For other purchases have another credit card. Never combine them as you will always be worse off.

Hope this helps and thank me.

LongTermLurker

shaf00uk wrote: »

No no no no no no no!!! I have not looked at this in detail but be careful and read all the small print.

This is new technique employed by the credit card companies to entice you to part with your cash.

1. They get the BT fee. Already you are on a loser.

2. Once you have transferred the balance you can't spend on purchases anymore. If you do you will be paying interest on the the purchases until the balance is completed paid off.

Basically, for a balance transfers stick on one one card and never touch it. For other purchases have another credit card. Never combine them as you will always be worse off.

You didn't read the OP did you? :rolleyes:

Instead, I had the following thought: write a £500 cheque to myself, pay it plus the fee back almost straight away, then enjoy 3% back on most of my purchases this summer.

Also, I'm guessing that as this was posted 5 months ago, you may be a little late...

Generally speaking, your concerns are correct, but this looks like someone who has read a bit deeper into the offer and isn't just following generic rules.

Hope this helps and thank me.

OMG

Money_Man_Steve

I was recently offered this deal (3% cashback on spending from 14/11/08 to 01/04/09, if I made a balance transfer of at least £500 by the end of October 08).

I wrote myself a £500 balance transfer cheque at the end of October (3% fee = £15), will pay this back in full with the rest of my purchases balance (as I always pay in full every month by DD) at the end of November.

By my calculations, I only need to spend around £800 (an additional 2% cashback on this spend = £16) to recover the fee plus a month's interest on the £500 BT (at 5.85% APR), and so any further cashback I receive at 3% is extra profit!

I usually spend £700-£1000 per month on the card anyway, so it won't be difficult to achieve this. :T