Hi everyone, a quick update on RadPad.
Unfortunately, not good news.
I just received the following email:
With the higher fees on MasterCard, the service no longer becomes viable for everyday spending. Again, RadPad may still be useful to hit a particularly high sign-up bonus, or for some kind of status bonus with high spend on a card, but for regular rent every month? I think not.
Let’s take a look at the two MasterCards in my wallet, the Citi AAdvantgae Executive and the Barclaycard Arrival+. Here are the numbers:
The Executive offering from Citi and AAdvantage earns just one AAdvantage mile on each dollar spent. I spend $1,900 on rent each month. With a 3.49% fee, that brings the total monthly charge to just under $1,966. I’ll earn 1,966 AAdvantage miles, valued at 1.7 cents apiece, My total mileage haul is worth $33.42, barely half the cost of the fee. Definitely not worth it.
If you remember the last post on RadPad, you’ll recall that the Arrival+ was the better call anyway. Let’s see if it still helps. The Arrival+ earns 2 points per dollar spent, and each point is valued at 1 cent. On a total monthly purchase price of $1,966, I’ll earn 3,932 points, worth $39.32. Better, but I still come out behind in the end. I don’t want to spend more money than those miles are worth, or else I might as well be throwing my money out the window…
Preferably the window of an American Airlines plane, or a bus paid for by Arrival+ points, but even then, not worth it. I’m not in this game to waste money away in the false hopes of a “free” trip here or there. I break even, I profit, or I ignore the offer.
I still maintain that RadPad could be a useful way to hit minimum spends, if you have no other options. A 3.49% fee isn’t unheard of in the manufactured spending world, so why not use the fee for some ‘real’ spend?
You could also use a debit card for this, just be wary. Debit cards don’t have the same consumer protections as credit cards, but arguably more than simply a written rent check. The biggest difference between the debit and credit, for me, is the float. Credit allows me to float the money for a few days, if my roommates haven’t gotten me their portion of the rent yet. I can’t do that with debit. If you have a debit card that earns rewards, RadPad may be the perfect fit for you! With no fees on debit up to $5,000 in rent/month, most folks with a rewards debit card could definitely take advantage of the offer.
I should mention that there are other services out there for rent payments via credit card, but usually with similar fees: 2.5% – 3.5%. Long story short, you have to earn more back than the fee, to make the transaction worth putting on your plastic. You’d be hard pressed to find a card that earns 4% or higher on regular transactions.
I’ll keep using RadPad for my rent due in May and June. I’m usually charged around the 28th of the month, so I’ve got these two months to take advantage of the lower 1.99% fee, and then I’m out. I think will stay on their email list, however, just in case they have a similar promotion in the future. I hope this doesn’t affect too many of you out there.
If you have been using RadPad, be sure to set a calendar reminder for June 1st, 2016! You do not want to be caught paying the higher fees after your June rent.