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Is this Plastic Fantastic? A Close Look at the Disney Visa

Is this Plastic Fantastic? A Close Look at the Disney Visa

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Hey, gang!

Happy Monday. Like a lot of you out there, I've been trying to decide whether it makes any sense to sign up for the new Disney Visa. Whether it's actually wise to take on a whole new credit card just so I can rack up some Disney Dream Reward Points. Whatever those are.

Thankfully, Paul Schnebelen (who -- some of you may recall -- contributed that great story for JHM back in December 2002 about the Magical Holiday Faire) has come forward with a new column. A piece that lists in detail the various pros and cons involved in signing up for the Disney Visa.

So, if you're currently on the fence about whether you want to get in on Disney's latest rewards, then you really owe it to yourself to read Paul's piece.

Enjoy, okay?
jrh

 

Like most people, I need another credit card like Mickey needs another pair of gloves, or Michael Eisner needs more stock options; if I get an offer for a credit card in the mail, the only place that sucker's going is straight into the trash can (after tearing it up, of course ... sorry, identity thieves). In spite of my usual wariness about credit card offers, Disney's announcement that it was working with Bank One to develop a Visa card caught my attention, especially when Disney mentioned there'd be a rewards program connected with the card. Considering all the money the Mouse has gotten out of me over the years, the thought of getting something back in return sounded too good to pass up. As the promotional juggernaut went into full swing and more details were released, I began to wonder if the Disney Visa would live up to the hype. Would it be something that I'd really want to "use for all your purchases - big and small," per the suggestion of the guide that came with the card, or would it be a sparkly little piece of plastic that would spend the rest of its days in my desk drawer? I decided to strain my eyes reading the mice type (no pun intended) of the credit card agreement and the promotional materials to find out.

I Wouldn't Want to be Part of any Club...
The Disney Visa is Disney's latest attempt to build a loyalty program for its customers, replacing the Disney Club; although some people loved the Club, a lot of others weren't thrilled by how stingy Disney was being with benefits for Club members, or weren't thrilled about having to shell out an annual fee to receive the same benefits that they got for free from the old Magic Kingdom Club. The good thing about the Disney Visa is that you won't have to shell out any money for fees to get some goodies; the bad thing about it is that since it IS a credit card, a lot of folks aren't going to be able to get any goodies at all. Do you live outside of the United States? Sorry, but the card's only available to U.S. residents. If you've had some financial problems that have made it tough for you to get credit in the past, it's probably going to be tough for you to get a Disney Visa. You also have to have a minimum annual income of $14,400 for an account, and you have to be at least 18. Last but not least, you're going to have to want to carry around and use another credit card if you want to get anything back from Disney -- and some people would prefer not to carry around any more plastic (or any at all) if they really don't have to.

Isn't Disney excluding a lot of fans here? I'm not suggesting that Disney and Bank One should hand out credit cards to anyone with a pulse, but there should at least be an option available for Disney fans outside the U.S., folks that don't want another credit card, or folks that can't get one for some reason but would still like to get special rewards or discounts for being a loyal Disney customer. In other words, maybe it's not quite time to put the Disney Club out of its misery, or better yet, maybe it's time to bring back the Magic Kingdom Club. Just a thought, Michael...

So, What About Those Rewards?
The main reason people are going to want to sign up for a Disney Visa is, of course, that you get something back for using it. Here's how the program, called the Disney Dream Reward Dollars program (jeez, could you guys come up with a longer name?) works: For every $100 you make in purchases during a billing cycle, you get one Disney Dream Reward Dollar (henceforth known as a DDRD to save the author a lot of typing). What happens if you don't spend in increments of $100? Well, if you spend $50 or more but not quite $100, Disney cuts you some slack and you get the DDRD; if you spend $49 or less, that portion of the balance doesn't count toward a DDRD. The DDRDs are posted in the billing cycle after you earn them, or later if there are some special conditions that have to be met (like rebates, I guess).

Please note that I said purchases count toward earning DDRDs; if you use the card for a cash advance or you do a balance transfer (which may be a bad idea on this card ... more on that later), you get nothing. You also don't get DDRDs for finance charges, convenience checks (those lovely little check-looking things you get from the credit card company every once in a while), or charges that you dispute or that are unauthorized. Disney promises that at some point there will be promotional offers where you can earn double or triple points on select purchases.

There are a few other things you should be aware as you try to earn rewards. Try to resist that urge to put your business trip on the Disney Visa -- DDRDs aren't supposed to be accrued for business or commercial transactions. Like most credit card issuers, Disney and Bank One consider such use grounds to cancel your card, and if you're disqualified from the program, you can lose some or all of your DDRDs -- even if you're in the process of redeeming them when your card is cancelled. If you haven't used your card at least once in two years, the card is cancelled and you lose your DDRDs. Make sure you make your payments on time; if you miss one, your DDRDs won't get credited until you pay the past due amount and the current minimum payment. Miss two payments and you forfeit the DDRDs you earned in those months. Bank One isn't messing around here, folks.

Last but not least, there are limits to how many DDRDs you can earn and how long you have to earn them. You can only earn up to 750 DDRDs in a year; of course, you'd have to spend $75,000 in a year to earn them -- if you're putting that much on your credit card in a year, you may have bigger problems than figuring out what you're going to do with all those DDRDs! You also have to redeem your DDRDs within 5 years of when you earn them, or they disappear.

Cash Me Out, Mickey!
As long as we're on the subject, how do you redeem your DDRDs? Once you've got at least 20 DDRDs credited (in other words, once you've made $2,000 in purchases on the card), you contact Bank One by phone or via the Disney Visa website and let them know how many DDRDs you want to cash in and how you'd like to use them. You can redeem DDRDs in 10 reward dollar increments for a rewards certificate good at WDW or on the Disney Cruise Line, a rewards certificate good at the Disneyland Resort, or a reward card good at U.S. Disney Stores or at DisneyStore.com. Sorry to start griping again, but I have a problem with this. I realize that Disney's various components don't always play together well, but why can't Disney figure out a way to provide a card or certificate that's good at any of these places? What if, say I wanted to use a few rewards dollars at the Disney Store and take the rest with me to Disneyland? I can't do that the way the program is set up right now. Let's work on this, guys.

Are There Any Other Goodies?
You betcha ... well, a couple to start out with, anyway. Right now, if you book a vacation package using the Disney Visa through Walt Disney Travel Company or the Disney Cruise Line, you pay no interest for 6 months. There is a catch, though ... to get the zero interest deal, you have to meet certain requirements as far as how you book your vacation (only through WDTC or DCL), the length of your stay (2 nights for DL, 3 nights for WDW), the location you stay (mostly at a Disney hotel or resort), and the park tickets you purchase (a 3-day Park Hopper at DL, an Ultimate Park Hopper at WDW). If you don't meet the requirements (for example, if you book a room at a Disney hotel but don't buy the tickets because you have an Annual Passport), you don't get a break on the interest. In addition to the zero-interest promotion, Disney is also offering a $50 shipboard credit per stateroom if you book a Disney Cruise Line vacation using the card and sail before the end of the year.

How is the Disney Visa as a Credit Card?
The current annual percentage rates on the Disney Visa aren't too bad; there's no interest for the first 6 months, and the interest rates for purchases and balance transfers are currently 11.15%, 13.15%, or 15.15% depending on your credit history. Keep in mind that those are variable rates; when the prime rate goes up, so will your APR. The amount you'll be charged is based on a two-cycle average daily balance method; what that means is that the charge is based on your average balance for the last two months instead of just the last month. Banks love this method because it results in higher interest charges; that's why consumer credit organizations recommend against getting cards that calculate your interest charges using this method.

As for the fees charged on the Disney Visa... well, like I said before, Bank One isn't messing around here; you're going to pay through the nose if you mess up. Some examples: Late fees run from $14.00 to $34.00, depending on your balance (if you've already missed a payment once in the past year, the fee is $34.00 regardless of your balance). If you go over your limit or they have to return your payment or a convenience check, it'll cost you 27 bucks. Need a copy of your merchant sales slip or another copy of your billing statement? Five dollars, please. All cash advances and balance transfers will cost you 3% of the amount of the transaction, with a $5.00 minimum. Well, at least there's no annual fee for the card.

A review of the fees is all very well and good, but a comparison with other credit cards would probably provide a better idea of how good or bad a deal the Disney Visa is when it comes to fees and interest. I decided to pull out the agreements of a couple of my credit cards and compare them to the Disney Visa; here's what I came up with. *


Disney Visa
Credit Union Visa
American Express Blue
Purchase APR 11.15% / 13.15% / 15.15% variable 11.5% fixed 10.99% variable
Minimum Payment $10.00 or 2% $20.00 or 2% $20.00 or 2%
Late Fees $14.00 / $28.00 / $34.00 None $29.00
Return Payment Fee $27.00 $20.00 $29.00
Over Limit Fee $27.00 $10.00 $29.00
Cash Advance Charge 3% ($5.00 min.) None 3% ($3.00 min.)
Grace Period 20 days 25 days 20 days

Based on this comparison, the Disney Visa's fees and rates are about average; you could probably get a card with better terms if you shop around a bit, but the rates are pretty close to what you'd get if you grabbed an application for a credit card from someplace other than the bank or credit union you have an account with.

Some of you might argue that the above comparison isn't fair, since the Disney Visa is a rewards card and the other two cards I listed don't offer a rewards program (well, Blue does offer AMEX Membership rewards, but it's optional). Fair enough; let's compare the Disney Visa with two credit cards that offer rewards. As it happens, Chase Bank has two cards that offer fairly similar rewards programs to the Disney Visa. Chase offers a Universal Entertainment MasterCard (yep, Universal offered a rewards card before Disney did!) that rewards users through a point system; you can use points to earn videos, movie and concert tickets, front-of-the-line theme park passes, and so on. Chase also offers a Toys R Us Visa that offers rebate certificates good at Toys R Us and its subsidiaries. Let's do a comparison of these three cards. *

 
Disney Visa
Universal MasterCard
Toys R Us Visa
Purchase APR 11.15% / 13.15% / 15.15% variable 12.24% / 14.24% variable 12.15% / 14.15% variable
Annual Fee None None None
Grace Period 25 days 22 days 22 days
Minimum Finance Charge $1.00 $0.50 $0.50
Rewards Accrual 1 point / $100; 750 points max. 1 point / $1; no maximum 1 point / $100 general purchases; 1 point / $20 Toys R Us purchases; no maximum
Rewards Given $10 certificates; minimum 20 points to redeem Reward depends on points redeemed (ex. 1000 points = movie ticket or video) $10 certificates, redeemed automatically

Again, Disney seems to be offering pretty much what everyone else is as far as rewards, fees, and APRs -- although Toys R Us gets brownie points from me for providing certificates automatically instead of you having to ask for them.

And the Verdict is...
If you're someone that pays your balance on time and in full every month, the Disney Visa isn't too bad a deal -- just be prepared to wait a while to earn enough points to get a certificate -- and don't plan on earning enough points to pay for that next trip to Walt Disney World unless you're an absolute shopaholic. If you want to get something back for using your credit card, you may want to shop around for a cashback card instead; if you put the kind of money on your credit card to earn Disney certificates, you'll probably get more back faster on a good cashback card than you'll earn in certificates using the Disney Visa. If you tend to carry a balance or you're the type that makes your payments late or misses a payment from time to time, you're going to pay for the privilege of carrying a Disney Visa, and you may have an even longer wait for points (assuming you don't forfeit any by not paying timely).

As far as whether or not I'd use the card: Unless Disney comes through with some great special offers, I probably wouldn't use the card enough to earn many reward certificates.

As far as the Disney Visa being a way to reward loyal Disney customers: Considering how many customers are excluded from participating in the Disney Visa's rewards program because they can't even get a card, and the unlikelihood that most people who have the card probably won't use the card enough to get much in the way of rewards, the Disney Visa is more about promising rewards than delivering them. I can't imagine that it's going to generate much more loyalty from the Mouse's biggest fans. It looks to me like the Mouse needs to build a better people trap than the Disney Visa.

 

*Credit card information in this article provided for comparison purposes only.
Please consult official bank literature for most current rates and information.

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