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Credit Cards

Is the Disney Inspire Visa worth it? What I saved at Disney World

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Cinderella Castle at Walt Disney World’s Magic Kingdom

Disclaimer: This post contains an affiliate/referral link to the Disney Inspire Visa. If you apply through my link and are approved, I may receive a reward from Chase at no extra cost to you. Thanks for supporting my blog!

In February, I pounced on a “buy four, get two free” deal at Walt Disney World. This unusual promotion gave our family two free hotel nights and two free theme park days when we purchased a four-night, four-day vacation package.

Not long afterward, Chase announced three new Disney-affiliated credit cards: the Disney Inspire Visa with a $149 annual fee, the Disney Premier Visa with a $49 annual fee and the no-annual-fee Disney Visa. I opted for the Disney Inspire Visa, which came with a collection of benefits that seemed tailor-made for our trip, such as:

  • A $300 Disney gift card upon approval
  • A $300 statement credit after spending $1,000 (since reduced to $200 for new applicants)
  • 200 Disney Rewards Dollars after spending $2,000 on eligible U.S. Disney resort stays and Disney Cruise Line bookings
  • 10% off at many Disney resort restaurants and merchandise locations
  • 3% in rewards on Disney purchases and gas
  • 2% on groceries and 1% on other purchases

The card also offers a $100 statement credit after spending $200 on U.S. Disney theme park tickets and annual passes, plus a $10 monthly streaming credit for eligible purchases at DisneyPlus.com, Hulu.com or Stream.ESPN.com.

I got the card primarily for the sign-up bonuses and the 200 rewards dollars we could earn on our resort stay. But the 10% discount on dining and merchandise turned out to be an unexpectedly nice perk. It knocked about $30 off our souvenir purchases and $76.52 off our sit-down meals. (Bonus tip for meat eaters: Do not miss the phenomenal filet mignon at the Brown Derby in Hollywood Studios.)

The 3% rewards rate on Disney purchases also added up faster than I expected. So far, those rewards have generated statement credits worth over $200. If you add it all up, that’s more than $1,000 in savings.

I suspect the card will continue to earn its place in my wallet even if we don’t spring for another Disney resort or cruise vacation anytime soon. We’re annual passholders at Disneyland, so the $100 statement credit for eligible ticket and annual-pass purchases, the 10% discounts on many restaurant and merchandise purchases and the 3% rewards rate on Disney spending should more than offset the $149 annual fee.

If you’re planning a Disney vacation, have good credit and pay off your cards in full every month, the Disney Inspire could be worth considering. Of course, no credit card can make a Walt Disney World vacation cheap.

Six-night packages for a family of four typically start around $3,600 at Disney’s budget hotels and $6,300 at premium resorts such as Animal Kingdom Lodge, where we stayed. The “buy four, get two free” promotion, which is no longer offered, reduced our package cost to $4,859 for our family of three. The trade-off was traveling in late August, when we had to contend with considerable heat, humidity and afternoon thunderstorms that occasionally disrupted our plans.

I used frequent-flier miles for our plane tickets and a free-night award from a Hyatt credit card for an overnight stay at the Orlando airport. Disney’s extensive bus system helped keep our transportation costs down, but we still spent about $250 on rideshares, which was cheaper for us than renting a car and paying for parking. We spent about $2,000 on meals and snacks, more than $300 on souvenirs and about $620 on Lightning Lane passes that dramatically reduced our waits for rides and attractions.

So even with the deals, miles and other savings, this was a pricey trip. That made every discount, reward and sign-up bonus from the Disney Inspire card that much more welcome.

 

Q&A: Are credit card surcharges a tax windfall for businesses?

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Dear Liz: Regarding the fees charged to use credit cards. Aren’t the fees charged by the credit card companies considered deductible expenses on the businesses’ taxes? It seems that if the customer pays the surcharge then the business claims a deduction on its taxes, the business is getting a big benefit. It’s nothing but a scam. If I’m paying the fee, then the business shouldn’t be able to deduct it.

Answer: You don’t have the accounting quite right. The surcharge you pay to use a credit card is generally considered income to the business. The deduction isn’t a windfall but prevents the business from being taxed on money it collected and then paid to the credit-card processor.

The surcharge allows the business to pass some or all of its processing costs onto the customers that cause it to incur the costs, rather than simply absorbing the expense. Of course, some customers will take their business elsewhere because of the surcharge, so the ultimate effect on profits is in question.

Q&A: Are businesses allowed to charge me to use my credit card?

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Dear Liz: Lately, I’ve encountered businesses charging a fee to use a credit card either online or at the point of service. This practice seems to be steadily increasing, as I have been hit with fees to use my credit card at my car repair shop, gym and restaurants. Gas stations have been doing this for years. The IRS also has a fee to pay taxes online with a credit card. Is there a federal or state law that prohibits this? Is it the banks that are reaping these fees from the consumers who use their credit cards to pay for goods and services? The fees are 1.5% to 3% of the total amount paid, but it is starting to add up.

Answer: Federal law doesn’t prohibit credit card surcharges. Some states do, including California, but California’s law was found to be unconstitutional and so is not enforced.

(Visa and MasterCard used to ban surcharges in their merchant agreements, but the card networks dropped that restriction in 2013 as part of a lawsuit settlement.)

These fees aren’t a profit grab by the banks but a way for merchants to recoup the costs of accepting credit cards. Merchants have to pay interchange fees to the bank that issued the card as well as payments to the credit card network and the company processing the transaction. Those costs typically equal 1.5% to 3.5% of the transaction.

Federal law does prohibit surcharges on cash, prepaid and debit card transactions, however. If you want to avoid the fees, you can opt for one of those methods or look for businesses that don’t add such surcharges.

Q&A: What exchange rate do credit cards use?

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Dear Liz: Are the card companies required to use a certain exchange rate for foreign transactions? I’ve used two different cards for purchases abroad, and the one that charges a fee used a better exchange rate so the total cost to me, including the fee, was less. How can I find out what exchange rates are used?

Answer: Credit card issuers can choose the exchange rates they use, although many employ the rates selected by their payment networks, such as Visa or MasterCard. These rates are typically close to the wholesale interbank rate.

Issuers can also choose when to make the exchange. The issuer may use the rate in effect when the transaction is processed, for example, which may be different from the time of purchase. So even if you used the two cards the same day, you might not get comparable exchange rates.

You can find more information about how your cards process foreign transactions in the cardmember agreement you received when you got the card. If you no longer have that document, you can request the issuer mail it to you or check the Consumer Financial Protection Bureau’s credit card agreement database.

Since most issuers use near-wholesale exchange rates, travel experts typically recommend using credit cards without foreign transaction fees to save money. You should also be wary of “dynamic conversion” — the offer you often get at the point of sale to have the transaction processed in your home currency rather than the local currency. Dynamic conversion rates are typically terrible with big markups, so always choose the local currency.

Q&A: Should I close paid-off, high-rate credit cards?

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Dear Liz: I paid off my high-interest credit cards. Should I close the accounts or leave them open? I heard a long time ago that closing the accounts will affect my credit score because less credit is available to me. But I don’t want to use these credit cards anymore because they have a high interest rate.

Answer: A card’s interest rate is irrelevant if you pay off your balances in full each month, which is the best way to use credit cards.

Closing a bunch of your credit cards at once can have a negative impact on your credit scores. That’s why the general advice is to leave cards open if possible, making a small charge once in a while so the issuer doesn’t close them.

If you can’t trust yourself to use the cards responsibly, though, closing them may be the best option. Or you can ask the issuers for a “product change” to a lower interest card.

Q&A: Closing credit accounts doesn’t need to be a big deal

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Dear Liz: Your recent response to the person giving bad advice about closing credit accounts was truly a public service. Over the years, I have opened and closed many credit accounts. Only once was a credit card closed for non-usage by the issuer and there was no major degradation of my credit score. Never has one of my actions altered my score by more than a few points or for more than a few months at a time. Misinformed statements such as those made by that individual can confuse people who are new to the world of credit or unfamiliar with how it works.

Answer: Before the advent of credit scoring, your ability to get a new loan or credit card may have been affected by a notation on your credit reports that a previous account was closed by the issuer. Today, though, it doesn’t matter who closes an account and there’s no need to add a notation that you were the one requesting the closure. If you mishandled the account, that will be evident from the missed payments that would show up on your credit reports (and be incorporated into your scores). If you handled the account responsibly, that will also be evident on your reports.

As mentioned in previous columns, closing credit accounts can have a significant impact on your scores if you have a few accounts or major blemishes on your credit. Closing a card with a high limit can ding your scores more than closing one with a lower limit.

But people with multiple credit accounts and a history of managing credit responsibly aren’t likely to suffer significant or lasting damage to their scores when they close an account.