Since I can now get 5x ThankYou points on restaurants and Amazon.com purchases from my Citi Forward® Card, I have been looking into the best way to maximize my redemption value.

The goal is to get as close to making the 5x points equate to 5% cash back by making 100 points = $1. My standard option is to redeem 10,000 points for $100 gift cards to Target and Home Depot, but since the retailer list is getting a bit thinner here are some good alternatives.

Student Loan Rebate Check
Here we can achieve 100 points = $1, but in the form of a check written towards a student loan. From their website:

With the student loan program redemption, Customers can apply their points towards any student loan program -financial institution. Please call 1-800-THANKYOU for details.

You can redeem in increments as small as 2,500 points for a $25 check. You have to call them up, no online redemption. The CSR will ask you for your lender’s name, and they’ll mail you a check written out to your lender (i.e. Citi Student Loans). You are then supposed to add in your account number or whatever else is necessary, and then send it on to your lender. Reader Chris shared that he has a workaround if you lender doesn’t take third-party checks:

I just have the check written out to my bank, Chase, and then write my checking account number in the memo space. I drop it in an ATM and they have always deposited it into my checking account just fine. I’ve been doing this for years with no problem. I would just apply the money myself to my auto-payments and keep my 0.25% rate reduction.

Mortgage Payments
Here we can get up to about 100 points = $0.80. (5x = 4% cash back.) The increments are as low as $25 for 3,300 points, and the ratio gets slightly better with larger check amounts. From the website:

ThankYou Members who redeem will receive a letter with a check issued on behalf of ThankYou Network made out to the financial lending institution to be used towards their monthly mortgage payment. To redeem, members must contact our ThankYou Service Center (1-800-THANKYOU) and must provide the Agent with the name and correct spelling of your mortgage financial lending institution.

Again, you must confirm with your mortgage servicer that they will accept checks from a third-party. I would still prefer to just cash the check and apply it to the mortgage myself.

Expedia Travel Credit
This is another method that we can achieve 100 points = $1 by booking travel directly through the ThankYou/Expedia website. It’s basically Expedia.com, except that the flight costs are shown in ThankYou points. So instead of a $200 flight, it will ask for 20,000 points*.

One benefit of this system is that there are no blackout dates or seat availability issues. If you can find the flight on Expedia.com, you can book it with points. Also, all taxes, fees, and surcharges are included in the point total. In this way, the variable redemption is actually better than the old fixed point option, where the points only covered the base cost of the tickets and you had to pay the taxes and fees separately.

* I just checked this by testing out a SFO-LAS flight on both sites. It was either 12,700 points or $119, which is a little bit off. However, this is because Expedia.com is currently running a promotion until 5/31/09 which waives their booking fees. Otherwise, it should match up almost exactly.

I ended up applying for the Citi Forward® Card mentioned several days ago. It ends up being great card for those who want the best rewards on eating out at restaurant and buying anything at Amazon.com. Here’s why…

This card works off the same ThankYou points system as many other Citibank cards. 10,000 points = $100 gift card at stores like Sears, Macy’s, Staples, Old Navy, Gap, etc. 14,000 points = $100 prepaid Visa credit card. 16,000 points = $100 in straight cash (a check sent directly to you). If you can find a store where you can use a $100 gift card = 10,000 points, that basically a penny per point.

What makes this card unique is that you get 100 points for each month you paid on time and don’t exceed your credit limit, as well as a highly touted 0.25% interest rate reduction after 3 months in a row of making a purchase, staying within limit and paying on time (max reduction 2%).

You also get 5 points for every $1 you spend on restaurants, book stores, video rental stores and movie theaters. On everything else, you get the plain vanilla 1 reward point for every $1 spent. There is no annual fee for the card.

5x Rewards at Restaurants
Again, at 1 penny per point with gift cards, getting 5x points is like getting 5% back when eating out. At that rate, eating out $170 a month will get me a $100 gift card every year. Even if you convert to straight cash, that’s still 3.125% cash back at restaurants (5/1.6). Or 3.57% back if you are okay with prepaid Visa card, which I am since they are usable anywhere that takes credit cards.

5x Rewards on Books = 5% back at Amazon
Here’s an interesting question. Who’s the most popular bookstore? Amazon.com. With the Citi mtvU card for college students, the 5% back on books worked on all purchases at Amazon, even if it wasn’t 100% books, since they really have no way of telling. Update: I have verified 5x points at Amazon.com.

myFICO.com is offering a free credit score to members of their discussion forum. New visitors can register instantly and grab your score. No credit card or trial required. This is an official FICO score based on your Equifax credit file. Score only, no credit report. First 10,000 only – be quick!

Directions
Visit the main myFICO Forums page, register, make sure you’re logged in, and then go back to the main page and click on the link “Get your Free FICO score now!” in the top right. For some reason, you’ll have to re-enter all your info again.

My score was 744, down 10 points from their last free FICO offer. I blame the issuers who closed my inactive credit cards! 😛

Discover Card is again running their Holiday Mall Promotion, which gives you $20 back for every $200 that you spend at limited mall locations.

Get a $20 Discover® Gift Card when you make $200 in purchases with your Discover Card at a participating mall between 11/01/08–01/04/09, while supplies last. Original receipts and the Discover Card used to make the purchases must be presented to a participating mall’s Customer Service by 01/04/09. Limit 5 Gift Cards per account, while supplies last, during the promotion period. Gift Card is valid through July 31, 2009.

Basically, you can get up to 10% back if you spend an exact multiple of $200, with a maximum $100 off $1,000 per Discover card account. (Additional cardholders seem to count as a separate “account”.) Not a bad deal if you’re gonna spend that much anyways. Mmm… Macbook…

During a previous year, a reader happened upon a loophole: If you return your purchase, there is no requirement to return the gift cards. Maybe you found something cheaper elsewhere. This brought up some ethical problems. Keep them? Or try handing them back to the Customer Service clerk? But be careful, because if you end up deciding to buy more stuff again later, you won’t be able to participate again since they don’t have any official mechanism to return the gift cards.

New Discover Card Sign-Up Promotions: $50 to $100
This would go nicely with the Discover More Card which now offers 0% on balance transfers and purchases for 15 months. 1% cash back on most purchases, and 5% back on rotating special categories.

The Miles by Discover Card also offers 12,000 Miles (1,000 miles per month with any purchase for a year). This can be redeemed for $100 cash credit towards any travel purchase put on the card (air, hotel, car rental), or you can get a $50 gift card + $25 cash.

It looks like the credit crunch continues to trickle down to everything financial, including tightening up in the credit card industry. I have it on good authority that the $75 balance transfer fee cap on the Discover More card will end on October 31st. (Update: Yes, the cap is now gone.)

Why care? The Discover More Card – No Balance Transfer Fee* is just about the last credit card with a 0% APR balance transfer for 12 months, as well as a $75 balance transfer fee cap. This is important because you may have noticed that nearly all other 0% APR cards have an uncapped 3% fee. So if you transferred $10,000, the fee would be $300. On a $20,000 balance, that would be $600!. The cap saves you lots of money, and these offers have only gotten more scarce with time.

Even though I don’t carry a balance, I have used this card to make some extra money off credit card arbitrage.

Getting Your Money
You can usually request a balance transfer to be sent directly to a card with a balance on it. (Or you could send it to a Citibank card without a balance on it, and request a refund check.) However, a reader wrote in last week to say that you can also call them up afterward and request a balance transfer check to be sent to you directly from Discover.

If you’ve been thinking about applying but putting it off, now would be the time to do it! According a Discover CSR, if you apply now to lock in the offer, you have until February to request your balance transfer. (Update: There is now no cap.)