It’s easy to feel like a kid in a candy store when you start looking at cash back credit cards. There are so many options that you can almost feel your eyes getting huge and round. So many bright colors, so many options, so many tastes, and varieties of rewards. Like the other cash back cards on the market, the Citi Dividend Platinum Select has it’s own flavor. Sweet in some ways, and a little sour in others.
The sweetness of the Citi Dividend comes from the opportunity to earn up to 8% back (with no cap on earnings) when you shop through the Citi Bonus Cash Center. That’s basically Citi’s online shopping mall, and it includes retailers like Macy’s, Apple.com, Office Depot, QVC and many more. You can shop the bonus mall year-round and earn between 2% and 8% back depending on which store you choose.
You can also earn an extra 5% back on your purchases throughout the year (with a $300 cash-back cap), as long as you shop within Citi’s approved reward categories. The categories include things like drugstores, or home and garden stores and they change each quarter.
Citi does not announce what the new categories will be in advance, so that can make it hard to plan for major purchases. If you knew in advance that next quarter Citi would be offering 5% back at Home Depot, you could hold off on buying paint. But, since they keep it under wraps, it makes it hard to really work the system and maximize your cash back rewards.
If you want to throw caution to the wind, ignore the quarterly opportunities, and never use the Citi Bonus Mall, the card defaults to 1%. That’s 1% cash back on all your purchases, balance transfers and cash advances (again, up to $300 back per year). You can redeem your reward credits (called Dividend Dollars) $50 at a time by calling Citi to request a statement credit.
The Citi Dividend Platinum Select offers a 0% APR on new purchases and balance transfers for 12 months. Like most other cards, there is a balance transfer fee attached (3% of the balance you are sending over). Using the 0% balance transfer feature can save money if you’re carrying debt on a card that’s charging you any interest at all.
One of the sweeter features of this card is that it comes with a $100 signup bonus. Compared to some of the other bonuses on the market, it’s pretty easy to qualify for. All you have to do to get your first $100 back is to charge $500 on the card within the next three months.
There is no annual fee attached to the Citi Dividend, and it comes with all of the benefits you probably expect from a credit card by now. Things like free extended warranties, purchase protection and car rental insurance.
The Citi Dividend Platinum Select does stand out as a market leader in one area. The other cash back credit cards on the market have quarterly caps. The Citi Dividend has a yearly cap instead.
Take the Chase Freedom for example. It is also a 5% card with rotating quarterly categories. It also has a maximum return of $300 per year. Yet that quarterly cap means that no matter how much you spend on the card at one time, only the first $1,500 is going to qualify for reward points in any given quarter.
This is where the Citi Dividend outplays the Chase Freedom: large purchases.
Let’s say that you wanted to take advantage of Citi’s current 5% back offer at Home Depot. You decide to purchase new cabinets and counter-tops, and that runs you $3,000. That whole $3,000 will count towards your yearly reward limit with Citi, and you’ll get $150 back.
If you were to put that same purchase on the Chase Freedom, you’d only get $75 back. That’s because the Chase Freedom (like most of the other cash back cards on the market) caps your reward spending per quarter at $1,500.
To get the most use out of the Citi Dividend Platinum Select, make one or two large purchases per year with it, and make sure those purchases fit into the approved 5% back categories. Shop all year long with it at the Citi Bonus Cash Center and earn up to 8% back.
If you really want to maximize your rewards, you’ll need to carry more than one cash back card and put the correct purchases on each card. Carrying this card along with the Discover IT or Chase Freedom means that you will have more available options with a 5% return each month. It can be a pain to keep track of all those categories, but the savings definitely add up.
One caution though: never apply for multiple credit cards at the same time. This can really ding your credit score, and may even mean that you won’t get approved. It’s better to stagger your applications out over several months.