UPDATE: RadPad

Hi everyone!  I have exciting news for those of you looking to increase your ability for monthly spend.  You know how I just posted about RadPad?  You already forgot?!  Sheesh, it was only last night..

Well, I should have waited another day, because I just heard news about RadPad, explaining some new information:

Using a MasterCard credit card now only incurs a 1.99% fee.

I know it doesn’t sound like much, but this is a big deal!  Hear me out:

The Numbers

Say I start putting the monthly rent on my Citi AAdvantage Executive World Elite MasterCard.  Let’s see how this plays out.

I’ll earn 1 AAdvantage mile for each $1 spent.  My rent is $1,900.  With the processing fee of 1.99%, this brings my total monthly rent cost to just over $1,937.  Which means I’ll earn 1,937 AAdvantage miles.  So, for RadPad to make financial sense, the dollar value of the miles earned needs to be equal to or greater than the extra fee charged by RadPad.

Still with me?  Good.

Using The Points Guy’s latest valuations, those 1,937 AA miles should be worth about $32.93.  As you can see, I’m still $5 short.  Personally, I’m confident I can get more than the 1.7 cent rate out of my miles, by using them with specific airline partners, and flying within American Airlines’ seasonal award chart.  (15,000 miles to South America anyone?)  Regardless, from a conservative estimate, this move doesn’t make financial sense.

Round 2:  My BarclayCard Arrival+ earns 2 points on every purchase.  These points are worth about 1 cent apiece, by the same table.  So, on a $1,938 purchase, I’ll earn 3,876 points, worth $38.76.  There it is, this plan makes perfect financial sense!  The dollar value of the Arrival+ points ($38.76) is worth more than the processing fee of $38!  Not by much, but hey, who doesn’t like free money miles?

If I lost you on that last bit…

So, if I put the rent on my Citi AAdvantage Executive, I’d be getting almost 2,000 miles for $5.  Which means my miles are costing me about 4 cents per mile.  On the Barclaycard Arrival+, I’m getting a cash value of $38 fro nothing.  Only putting my rent on the card, rather than writing a physical check.

The deal gets even sweeter if you have roommates that pay you, and then you pay the landlord!  You get mileage on their portions of the monthly rent too.  Or say you mail your rent in a physical check every month.  You’r saving postage, checks, paper, and your most valuable asset of all:  time!  Your own mileage may vary on this method (pun intended) so be sure to crunch some numbers before committing to anything.

If numbers aren’t really your thing, let me know and I can help calculate it for you in the comments!

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