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Roadfly Magazine
Issue Seven
Table of Contents

Past Issues Index
Roadfly Magazine
G. Gordon Liddy
Issue Seven
May 27, 2003
G. Gordon Liddy
Credit Card Rewards Programs
Frozen Rotors
Bentley Continental GT
Porter Cable Buffer
Coming Next Issue
Jay Leno
Hot Rod Tour
Paint Film
Porter Cable Rotary

Plastic Promises: What you need to know about credit card rewards programs, cont.
BMW VISA: Sinfully confusing and unrewarding.

BMWFS claims that by signing up for their "No Annual Fee BMW Platinum Visa Card" users will be able to easily accumulate rewards points. They further claim that there's "no annual fee" and that with your points, you'll be driving a new BMW for pennies on the dollar thanks to your smart shopping and charging habits.

Now for the fine print:

- Yes, the card is truly "annual fee free", however, if you want to claim your BMW rewards points, you have to PAY an annual fee of $50 for the BMW Rewards Package.

- Yes, you do earn rewards points good toward the purchase of a new BMW vehicle, however, in order to claim the maximum $5,000 rebate, you'd need to spend $500,000 on your BMW card first. Points are earned at a rate of approximately 1% - spend $10,000 on your card, earn $100 in rebates. Not the best rate of return on an investment. $10,000 in a modest savings account would net four times the return.

- Yes, you can earn mileage credit, but in order to get an extra $1,000 worth of mileage credit, you'd need to spend $25,000 to earn the 25,000 points. For $25,000, chances are you could pay off the remaining lease monies.

- Spend $15,000 and BMWFS will give you a $100 credit toward their BMW merchandise including apparel and accessories. If you've ever seen "The Jerk" with Steve Martin, you'll know that this is "a profit deal" - they "take in $15 and give away 50 cents worth of crap" (quoting Frosty from The Jerk).

- Spend $12,500 and BMWFS will send you a check for $100 worth of maintenance work. Now, you're earning less than 1% for each dollar you spend, just like if you were to use your points to buy their merchandise (see above).

- BMWFS goes to great lengths to list 10 "benefits" of their Travel and Emergency Assistance program, but here's where the fine print really becomes important. The services are nothing more than "concierge" services. In other words, if you thought that the bold-faced title "MEDICAL REFERRAL ASSISTANCE" would help you with your medical problems while on vacation, you guessed wrong. BMWFS will simply give you a list of medical facilities in the surrounding area.

- In fact, most of the 10 "services" could easily be obtained with a 30-second search of the yellow pages or the internet.

What about the stuff that really matters - the late fees, the service charges, and so on? Well, things don't get much better. Here's the skinny on what happens once the honeymoon is over and BMWFS has you in their clutches:

- Maximum reward rate: 1% of each dollar spent (1 point for every dollar). Winner: GM by 400%.

- 10.25% APR (this is a best case rate; your rate may be higher contingent upon your credit rating, history, risk, etc). Winner: GM

- Cash advances: 12.25% APR (as of 12/3/02) plus a 2.5% or $5.00 advance fee, whichever is greater. Winner: Tie - depends on the APR you receive from GM.

- Annual fee: No annual fee, UNLESS you want to use the rewards. Enrolling in the rewards program carries an annual fee of $50. Winner: GM.

- Late payment: $29, over-the-limit-fee: $29, returned payment: $29, copies of old receipts/slips: $5 each + $15 document delivery fee. Winner: Tie.

So, as you can see, the card isn't all that it's made out to be. Earning less than 1% in rewards for every dollar spent is not what we'd consider to be a smart financial move. And, these few pages of information only scratch the surface of what is and what isn't covered or provided as a part of the BMWFS Visa - we printed more than 30 pages of "fine print" associated with the card and its programs. Hope you like reading legal disclaimers!

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