May 24, 2009

Two Important Words : "up to"

Have you ever been driving along and had your eye catch a big sign for a sale with something like "50% off" in big giant letters? You think about stopping and checking it out. But then you read the full sign and notice the full text says "up to 50%". Cynically this automatically makes me conclude that its not really 50% off at all but its probably 10-20% off maybe on most things and then 1-2 token items at 50% off that nobody wants.

The words "up to" are very important words to throw in front of a number. Imagine other silly ways of using it:

"Americans make large salaries up to $50,000,000 per year." ... Ok yeah there are a few people making that much, but it says nothing about Americans as a whole.
"When playing blackjack my winnings were up to $5,000." ... But then I lost it all and tipped the dealer my last $10.

One company that uses the "up to" words in their literature is Discover Card. You can get a rebate of "up to 1%" back for most purchases with your Discover card. It takes a big of digging around on the Discover card site to find the exact meaning of "up to".

Personally I like Discover card as a company and have been happy with their service. But even with a good company you have to keep your eyes on the details.

From the terms and conditions of the Discover card below:

"You will earn up to 1% Cashback Bonus on all purchases other than Program Purchases. You will earn up to 1% Cashback Bonus on ShopDiscover purchases, unless otherwise specified on ShopDiscover. At the end of each billing period, we calculate your Cashback Bonus by multiplying the total amount you spent on all other purchases by the following:

When you have spent the amounts listed below in total annual purchases:You earn Cashback Bonus at the listed tier level:
$3,000.01+ (unlimited)
$0-$3,000
1.00% (.01)
0.25% (.0025)
All purchases made at select warehouse clubs, or discount stores, including grocery stores affiliated with these stores ("Warehouse Purchases"). Call 1-800-347-7896 for a complete list.0.25% (.0025)


So its not 1% but something below 1%.

If you charge less than $3000 a year on the Discover card then you will only end up making 0.25% on it.
If you charge $500 a month average on your card then you'll total $6000 in charges a year. You'd make 0.25% on the first $3000 and then 1% on the next $3000. That comes out to $37.50 or 0.625%.
If you charge $2000 a month then you will get closer to the 1% level. That would get you up to a net rebate of 0.9% on your $24,000 of purchases.


Paying attention to the words "up to" can make a significant difference.

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