Why the Barnes & Noble MasterCard might be worth a look

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I don’t usually like department store credit cards.  They tend to have weak signup bonuses and weak rewards.  There are exceptions, though.  For example, if you spend a lot at Kohls, you need to have the Kohls charge card to qualify for their frequent 30% off coupons.  In November, PF Digest listed several retailer credit cards that may be worth having.  Barclaycard’s Barnes & Noble MasterCard is similar.  Under certain circumstances, this card could be a winner.

Here’s the marketing copy for the card:

Barnes & Noble MasterCard®

  • Earn a $25 Gift Card after your first purchase
  • Get an Extra 5% Back at Barnes & Noble
  • Earn 1 point per $1 spent on everything else
  • Every time you reach 2,500 points, you’ll automatically receive a $25 B&N Gift Card
  • No Annual Fee
  • See terms and conditions for complete details

This card is a strange beast because it offers two different types of rewards: cash back and points.  When you make a purchase at Barnes & Noble in person or online, the card awards you with 5% cash back, which is automatically posted to your MasterCard account.  This is the footnoted text at the bottom of the landing page:

When you use your Barnes & Noble MasterCard to make any purchase (other than the purchase of any discounted Barnes & Noble Gift Cards) online at www.bn.com and in any Barnes & Noble Store nationwide, a credit in the value of five percent (5%) of such eligible net purchases will be posted to your Barnes & Noble MasterCard account. The five percent (5%) credit will appear on the same billing statement as the charge for the related eligible purchase.

Purchases made outside of Barnes & Noble result in points at a rate of 1 point per dollar.  These points will be automatically converted into a Barnes & Noble gift card once you reach 2,500 points.  This is like getting a 1% cash back return, but it is not even that good since you just get a gift card, not cash.

My advice: Do not use this card outside of Barnes & Noble.  For Barnes & Noble purchases, this card is very good.  For all other purchases, it’s a dog.

Who its good for

Obviously, if you spend a lot of money at Barnes & Noble, getting 5% cash back is pretty good.  For everyone else, there are gift cards.  The terms explicitly say that you won’t get cash back for B&N discounted gift cards purchased online, so that implies that you will get cash back for all gift cards bought in-store.  In my experience, few B&N stores sell gift cards from other merchants, but Barnes & Noble Campus Book stores usually do.  So, you can use the B&N MasterCard to save 5% on the purchase of any gift card offered in-store.

An even better opportunity may be to use the B&N Mastercard to reload an American Express Campus Edition reloadable card.  Reloads cost $3.95 per $500 load.  If you pay for the reload with the B&N MasterCard, you should receive $25.20 back as a statement credit (5% of $503.95).  Your net cost to load $500 would be $478.75.  You could then use the Campus Edition Amex for day to day spend as a way to get an effective rate of 4.25% cash back on all purchases.  Please see my old post “American Express Campus Edition” for details about this reloadable card.  Note that you cannot exceed a balance of $1000 on the campus edition card.

Bottom line

I think that this card is best suited for those who live or work near a Barnes & Noble Campus Edition bookstore and would like to get an effective rate of 4.25% cash back on all purchases (where Amex is accepted) via the Amex Campus Edition card.  Personally, I’m happy with my Citi Forward card which is grandfathered in to the old 5X at bookstores benefit, so I don’t plan to get the Barnes & Noble card.  Also, even though the Campus Edition trick is pretty lucrative, its more work than I’m willing to invest right now especially given the $1K balance limit.

Anyway, in case anyone is interested, I’ve added the Barnes & Noble card to my Preparing for Miles page (scroll down to the section titled “Best Credit Cards for Saving Money”).

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