BusinessWeek is correct in predicting that a credit car war is imminent in its August 9 cover story. Actually, I can already feel it.

When I browsed FatWallet Finance Forum last week, a 10% instant rebate offer from MBNA caught my eyes. The exact offer is:

Bonus Rebate: 10% Instant rebate on many everday pruchases automatically (credit back to account in two days, limit $25 per month)until 6/05
Cash Back: unlimited 1% continuous cash back on purchase (no limit, request $25 credit once spend $2500) spend $100 before 6/05, get $10 (rebate credit) plus $0.9 (cash back earnings $90x1%), after that will be $1.
APR: 0% Introductory APR for cash advance checks and balance transfers until 6/05
No Annual Fee

5200--Home Supply Warehouse Stores
5251--Hardware Stores
5411--Grocery Stores, Supermarkets
5499--Miscellaneous Food Stores -- Specialty, Markets, Convenience
5812--Eating Places, Restaurants
5813--Drinking Places, Bars, Nightclubs, Discotheques
5814--Fast Food
5912--Drugstores and Pharmacies

This offer is apparently only advertised by mass mailing. I applied by dailing 1-800-437-0180 and was asked for a series of digits printed in the mail offer. I mentioned the offer code HGW4 and the CSR allowed me through. After providing the regular information like name, income, etc., I was referred to a credit specialist, who cheerfully and promptly approved my request. (As I already have three cards with MBNA, I asked to transfer $5,000 balance from another card.) I received the card yesterday and the offer is exactly as described above.

Now, I will basically see this card as restaurant-only card. Yes, the 10% offer is also applicable to grocery store purchases, but because there is a monthly cap of $25, and my monthly dining-out bill is around $250-$300, it's actually wise for me to reserve the $25 instant rebate for restaurant bills only and divert my grocery bills to the 5% Citi card. If I cannot come up with $250 total restaurant purchases, I will make some grocery purchases using this card, to get additional 5% benefits.

As the offer will expire in June 2005, I still have 10 billing periods, during which I expect to achieve full $250 savings. Adding the ~$30/month rebate from Citi on grocery shopping and gas purchases and ~$20/month rebate from 1.5%-cashback MBNA Fidelity Rewards on everything else, I am expecting $75/month cashback in the next 10 months just from carefully diverting my credit card purchases among my plastic portfolio.

If I can find this kind of easy and painless saving opportunities every week, my early retirement goal can be reached months or years earlier.

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