Credit Card Reward Gives Surprise Bonus!

I have had a Capital One Visa card for many years, and it’s one of the ones that mostly sits idle in my drawer.  I used it recently just to keep the card current, as it will hurt my credit score if they decide to close the card.

Today I read that Capital One is raising the interest rate on thousands of their customers, so I signed into my online account to see what my interest rate is.  For me it doesn’t really matter, as I always pay off my cards every month, but if I ever did need to carry a balance I want to make sure I do it smartly…

I couldn’t  find my interest rate, but I did notice a rewards section, and clicked on it just for giggles.  I do have rewards on my other credit cards, and I’m always very aware of how close I am to redeeming points – usually for cash.  After navigating the Capital One Rewards section for a few moments I saw that I had enough points (just over 20,000) to redeem then for a $100 gift certificate from one of numerous retail outlets, use it for travel, shopping, make a donation to charity, get a statement credit or have them send a check.

$100 buckeroos!

They must have offered a 20,000 bonus for signing up for the card, so this money has likely just been sitting there for years.  I’m kicking myself for not taking advantage of it before, but I’m thrilled that I’ll be getting a check for $100 of “found money” in just a few weeks.

Check your rewards programs, folks.

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Financial Instability Aftershocks Affect Your Credit, Too

In the wake of the ridiculous goings on in the financial world you could see some aftershocks right there on your credit card statement.

Credit card companies are tightening their belts, and reining us in, too.  Doesn’t matter how long you’ve been with them, how good your credit is, how many payments you’ve made on time.  According to the Wall Street Journal they are starting to reduce credit limits across the board.

If you’re like me you’ve seen a credit limit of $3,000 balloon to a limit of $25,000.  I’ve never paid much attention, as my strategy of paying of my balance each month has meant that I don’t pay a whole lot of attention to my limits and interest rates.

Many people are seeing their credit limits slashed with little notice, and those like me who are not diligent about checking those parts of their statement may find themselves dangerously close to their credit limit, and dangerously close to those over-the-limit fees.   When’s the last time you looked at your credit limits?  That would be a very, very nasty surprise, wouldn’t it?

Not only that, because your buying power is reduced your debt to income ratio goes up.   According to CNN “The debt-to-limit ratio is calculated by dividing what consumers spend each month by their credit limit, and it’s a key component of credit scores. If your limit drops to $1,000 from $2,000 and you continue spending $500 a month, your debt-to-limit ratio immediately jumps from a favorable 25% to an unfavorable 50%.” That means it’s harder to buy that car or that house, making your life less comfortable and making it harder for our economy as a whole to recover.

This just keeps getting better and better, doesn’t it?

What can you do?  The Wall Street Journal article had some great suggestions:

1.  Reduce your outstanding debt. Bigger balances make consumers prime targets for credit-card companies looking to reduce credit lines, since the banks worry that you may not be able to pay your tab.

2. Watch the mail. When credit-card issuers lower credit limits, they must notify you. Typically, that will be done by mail (unless you’ve agreed to online-only notification). You should also review your monthly statement for changes, including a lower credit limit, interest-rate spikes and new penalties.

3 Check your report. Credit-card issuers review consumers’ credit reports for red flags, like late payments to other credit cards, a sudden buildup of debt or high credit-utilization rates. Check your credit report for free online at AnnualCreditReport.com. If it includes any errors, report them to the three major credit bureaus, Equifax, Experian and TransUnion.

4 Get online alerts. Ask your credit-card issuers if they offer online alerts that notify cardholders when they’re nearing their limit.

5 Shop around. If your credit limit gets slashed, don’t cancel your credit card. That will decrease your credit score. Instead, shop around for more attractive credit-card offers.

I’m going to add a few of my own:

6.  Check your account online at least twice a week. This  way you can have the latest updates, keep track of your balances and limits and catch errors early.

7.  Curb spending. Stay home, don’t shop.  Just buy what you absolutely need to so you have less to pay back.

8.  Pray. Whether you believe in a Higher Being, the power of positive thinking or your faith is in humanity, put your positive energy out there and pray.

Shame on you, Citibank

Between 1992 and 2003, Citibank operated an “automatic sweeping” program that would without notice remove positive balances from customers’ credit card accounts—mainly those of the poor and the recently deceased—and pocketing the money. Now it’s been ordered to pay back $14 million dollars to the affected customers, plus another $3.5 million in penalties to California, thanks to California Attorney General Edmund G. Brown Jr..

According to the article, in July of 2001 a Citibank employee uncovered the practice and brought it to the attention of his superiors. The employee was later fired for discussing the credit sweeps with an internal audit team. Niiiiiiiiiiice.

In one of the most outrageous examples of gargantuan kahunas and at the same time an obvious effort to win the Biggest Asshat of the Year contest, one executive apparently said (according to the press release of the California Attorney General), “Stealing from our customers is a business decision, not a legal decision.” The same executive later said that the sweep program could not be stopped because it would reduce the executive bonus pool.

And we wonder why the average American hates corporations.

So now Citibank has to pay back the money (they say they’ve already started). And their penalty for stealing from their customers?

Well, the state gets $3.5 million. And they should.

The affected customers? They get the amount that was stolen plus 10% interest.

Ten percent?

This was a broad conspiracy to commit theft, and abuse of fiduciary responsibility! It wasn’t a corporation that made this decision, it was flesh and blood men and women who made a decision to abuse their position of trust for their own profit. The executives responsible should be prosecuted criminally for their deeds.

And the whistleblower should be compensated handsomely. Unlike Citibank customers.

A ten percent penalty? That’s barely interest on a loan, and this was no loan. This wasn’t punishment. Forget “slap on the wrist”. This is more like a light breeze, without even enough power to make the hair on their wrists move. Gee, that will make Citibank and others who have engaged in this same type of deception quiver. Methinks there is the sound of laughter, popping corks and the tinkle of champagne glasses being clinked going on in the Citibank boardroom this week.

Attorney General Bob Butterworth, are you listening? Did this happen here in Florida, too? If so, I hope you pursue it.

And I hope you make Citibank really pay.

Costco American Express Card Holders Can Get More Rebate Cash Back!

We got a lovely little piece of mail the other day that’s going to put money in my pocket, and money in yours if you took my advice and signed up for the TrueEarnings card from Costco and American Express.

Enroll in the program and spend $1,000 on non-Costco purchases and you will get an additional 1% cash back on every eligible purchase (up to $200 extra!) between September 1 and October 31st!

That means I’ll be getting 4% cash back on gas, 3% on travel and 2% for every other non-Costco purchase.

And you know what else? I don’t have to wait for my rebate check to receive the extra cash back. It comes as a statement credit to my account 6-8 weeks after the promotion ends.

You have to be invited to participate. If you’re worried that you may have mistakenly tossed your invitation go to http://www.americanexpress.com/costco1000 and you can enter your login and password to see if you’re invited.

There’s lots of fine print, so check that out, of course.

It’s a great deal for me. I hope you can take advantage, too!

My Personal Finance Confession Project – Credit Card Rates

I’m starting this project because I have a confession I wanted to make, and after I wrote it out I thought it would be great if others would share theirs so we can all learn something. Or point fingers and laugh.

So, please share your confession and any related thoughts, plans of action , justifications and/or consequences. Then tag 5 others to share theirs. You don’t have to link back here, but it would be nice. If you do I’ll post a link to yours… And if you don’t have a blog, please share your confession in the comments!

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I have a confession to make.

I have absolutely no idea what the finance rates are on my credit cards.

I know, that’s blasphemous in the personal finance community. Since I pay my credit cards off each month it’s never mattered before. Who cares if I have a 21% rate if there’s never a finance charge? All I ever cared about was that I had no membership fee for the card. The rate has always been irrelevant.

But in the wake of layoffs at Husband’s job and the continuing downturn in our economy I realize that anything can happen. Illness, loss of job, civil unrest could all be on our horizon.

So, even though I have a very healthy emergency fund and would not want to accrue any debt unless absolutely necessary, I should be prepared in case it becomes absolutely necessary.

That means I need one card with a really good rate, and it should be a Visa or Mastercard since they are accepted in more places than American Express or Discover.

So, first thing when I get back from my vacations I’m going to check out my credit card rates, and check them against the best available rates out there. I’m loathe to apply for a new credit card when we’re hoping to buy a home soon, so here’s hoping I have a good rate on at least one of my cards, or can call and negotiate a better one.

Gee, that felt good. Confession is good for the soul…

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I’d love if these wonderful bloggers would help start this off…

PaidTwice at I’ve Paid For This Twice Already…

Mrs. Micah at Finance for a Freelance Life

vh at Funny About Money

Anna at To Be Debt Free

Pinyo at Moolanomy

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Other Personal Finance Confessions:

1. The Personal Finance Confession Project: Do as I say… at Funny About Money
2. Confession at Done To Zen
3. Personal Finance Confession Project at Mrs. Micah
   

Linens-N-Things to Declare Bankruptcy, So Use That Gift Card Today!

Dadgummit.

Word on the street (okay, the internet) is that Linens-N-Things is going to declare bankruptcy Tuesday. And I have one of their gift cards.

I got it when I got my Dyson (the best vacuum cleaner ever!) in a frugal coup; in addition to it being on sale and using a 20% off coupon, I also got a $50 gift card as part of a promotion). I’ve been holding onto the gift card in hopes of using it in my new home, whenever I get one. Which I thought would have been by now, but that’s another story.

I’ve written about gift cards and bankruptcy before, in my post What to Know About Buying and Redeeming (Unless They Are from Sharper Image) Gift Cards. I don’t want to end up with a useless card. Unfortunately, holding a gift card/certificate makes me an unsecured creditor in the eyes of a bankruptcy court, and as such I’m pretty low on the pecking order when it comes to divvying up the money. Below ground level low. So if I don’t use it before they declare bankruptcy I will own a very nice $50 piece of plastic.

So guess what I’m doing tomorrow?

I think I’ll buy some new glasses. I’ve tossed most of my plastic ones, and as of this morning I have one casual glass left (seriously, I think they commit suicide in the dishwasher).

I wonder what else I’ll buy. Any suggestions?

What to Know About Buying and Redeeming (Unless They Are from Sharper Image) Gift Cards

Sharper Image has suspended acceptance of gift cards as it struggles through bankruptcy. I could write fifteen pages on how wrong and unjust I think this is. Suffice to say I’m thinking the same thing, in the same colorful verbiage, as you.

Why? Well, they need to raise cash to get out of bankruptcy, and in order to do that they need to take in cash. In the case of gift cards, the cash has already been “took in”. So the bankruptcy trustees nix them. Too bad, so sad.

They are saying that they will eventually start accepting them again, but who really knows…

Let us take this as a warning.

Here are a few other tips I’ve picked up as relates to gift cards:

1. Don’t buy gift cards from any company that seems to be struggling financially. Helloooooooo Sharper Image and Comp USA…

2. Check the terms and conditions before buying or as redeeming. My mother-in-law got us American Express Gift cards for Christmas a few years ago. She wanted us to use them to pay for a trip to visit them in North Carolina planned for New Year’s. My sister-in-law didn’t find out until she was on sitting at a gas station somewhere in rural north Florida that American Express Gift Cards cannot be used to pay for gas. It was a pickle.

3. Watch out for expiration dates. Some cards are only good for a certain amount of time, and some start charging non-usage fees if you don’t use them quickly enough. Bottom line? Redeem ones given to you as soon as possible. More than 20 states have passed regulations loosening restrictions on the use of gift cards.

4. Watch out for fee-for-purchase cards. I used to love giving and getting Simon Mall gift cards. You could shop any store in the mall, which really expanded the possibilities. I purchased them for local gift-giving regularly – until they started charging a fee to purchase the card. A $25 gift card cost $28. And that, my friends, was the end of that. American Express, Visa and Discover also charge fees. Beware!

5. Check your balance. Know your balance before you shop. No one wants to bring $100 worth of merchandise to the counter only to be reminded that you already used $65 to buy some rockin’ new shoes the month before. It’s embarrassing. Every card has a toll-free phone number and/or website where you can check y our balance, and sometimes register your card. It’s a good idea to register where available because if you lose the card they may send you a new one. Also, I write the balances on the front of each card with a Sharpie. Helps my old, feeble mind keep track.

6. Be careful with Rebate Gift Cards. We got some “free” new phones from AT&T, but we first had to pay for them and wait for the money to be rebated via Visa gift cards. What they don’t tell you is that they have to be redeemed pretty carefully. The cashier cannot just swipe the card like with a “normal” credit or gift card. They have to input the exact amount to be applied to the purchase (not to exceed the amount remaining on the card) and amount tender that. Not all cashiers know how to do this, so often a supervisor has to be called. The first time I used one, before I knew the trick, I had to pay another way because the cashier and I were both clueless. I’ll bet lots of people just get aggravated and let them languish in their wallets until they expire…

7. Just because the card is expired doesn’t mean you can’t use it. Call the corporate office and explain the situation. Often they will allow you to use the card anyway, or at least send you a nice coupon. It never hurts to ask…

Costco’s American Express Rebates Get Even Better

I’ve never applied for an American Express card. I refuse, on principle, to pay for the privilege of having a credit card. My agreement to carry a card means the issuer gets to charge the merchant a percentage of my total purchases. They don’t need – and won’t get – $50 a year from me, thankyouverymuch.

Husband, though, had no such principle. He already had a card when we got married, and after I explained my principle to him he agreed that we would cancel that card before renewal.

That isn’t what happened. Instead, American Express teamed up with Costco to offer a no-fee Costco American Express. As long as you were a Costco member you could switch your standard AMEX card over, get your annual AMEX fee waived and get up to 1.5% (it starts at .25% and increases in steps based on total purchases) back. Additionally, you no longer had to pay the card off every month (which is irrelevant to us, as another principle of mine is to never carry a balance). I can’t tell you the interest rate or how it compares to other cards (see never carry a balance principle).

It also gave me an opportunity to use a credit card at Costco, since the only card they accept is AMEX.

Switch the card over we did. We also added me as a user, and believe me when I tell you that mine sees much more action than Husband’s. Since we put everything (including cars) on our credit cards to take advantage of rewards, it’s a nice sum at the end of the year. The rebate is in the form of a check that you must use at Costco, but if you don’t use the entire amount they give you the cash back. Last Christmas’ purchase of Husband’s $4000 Mac gave us a nice bonus this year, which went directly into savings (well, after I bought us some nice steaks).

Today I went to Costco and discovered that now Costco and AMEX have an even better deal. Their TrueEarnings card, previously available only to business members, is now open to all. What’s so great about it? Well, it bumps up the rebate percentages on gas, restaurants and travel.

We’re all trying to save money at the pump. The new TrueEarnings card increases the cash back to 3% back on gas, adding even more value to a very good deal. Today’s Costco gas price was $3.09, a full ten cents cheaper per gallon than the other stations in my neighborhood. That 3% cash back means my true price per gallon will be $3.00. Horrible, but not as horrible as $3.19 …

They are also offering discounts of 3% for restaurant dining and 2% for travel. Another great difference: with the TrueEarnings card you get the maximum rebate from dollar one. That makes a big difference right there.

So, if you have a Costco American Express, or any American Express, call now to get switched over to TrueEarnings. If you don’t already have an American Express, call and get one.

And if you are one of the unlucky ones to not have a Costco within a reasonable driving distance (sorry, PaidTwice!), you might consider moving.

Update 8/29/08:  Check out my post about how you can possibly save even more through the end of October: Costco American Express Card Holders Can Get More Rebate Cash Back!

Called on the Carpet: January 30th Financial Goals Checkup

Uh oh. It’s January 30th and I am waaaaaaaaay behind schedule for the year.

PaidTwice over at I’ve Paid For This Twice Already wrote a post checking in on her 2008 financial goals, then asked me and two others how we were doing with ours. I’d entered a really great carnival with my post It’s About the Money, Honey where I outlined my financial goals for 2008. PaidTwice wants to know how I’m doing.

The answer is not great. I got waylaid for much of December with my son getting very sick, and then I had to deal with my own version of InfectionsRUs. Then vacation, and, and…

All of which is really irrelevant, because the real reason I’m behind is that I’ve got a serious case of the “I just don’t wanna!”s. I’ve always just had a loose budget in my head, and since we have no debt and considerable savings on a single, modest income, I’ve been doing okay so far.

But I could do better. Much better.

So, here it is. The good, the bad, and the ugly.

1. Draw up an actual budget by January 5, 2008. I’ve finally done one. Late. Very late. Okay, today. After I saw PaidTwice’s post. I’m sure it will need tweaking, but at least it’s done. Honestly, I’m abhorring the whole process, and the thought of entering my receipts has me, on January 30th, looking for just about any distraction. Still, I will persevere. Tomorrow. Hey, American Idol is on! Grade: C-

2. Install the Peachtree Accounting program (bought for $120 and then got a $140 rebate, thank you very much) by January 5, 2008. Um, yeah. Not done. It’s sitting here right by my computer. I’ve decided to wait on this and just start small, with simple software, so as not to overwhelm me even more than I already am. My new target date for this is July 1, 2008, but I may put it off longer, depending on how things go. Grade: Incomplete

3. Review all of our IRAs and other retirement and savings accounts by March 31, 2008. Well, finally one I’m not late on. As I get my tax info together I’ll get this stuff together, and make an appointment with…someone…to go over all this stuff. Grade: Incomplete

4. Pay ourselves first. Find at least $100 per month to put into our non-401k savings, and $20 per month to put into our son’s savings account per month. I have enough left in checking this month to do both things. Yahoo! Grade: A- (saving a full A for saving more than the goal amount)

5. Learn about the stock market. Read at least one book per quarter, and at least one online article per week. I haven’t read a book yet (suggestions, anyone?), but I have been reading lots of financial articles, and even a few on the market. Blech. Grade: B

6. Enter the stock market by the end of the year. Not a thing done yet. Grade: Incomplete

So, that’s one A-, a B, a C- and three incompletes.

Not a stellar start, but a start it is.

Sometimes one needs to get called on the carpet to get back on track. So, thanks PaidTwice. I take back all the things I said to my computer screen when I read your post. 😉

It’s About the Money, Honey

It’s the first day of December, and a good time to start thinking about our finances, and our goals for next year. I was inspired to do so by the folks over at Cash Money Life , who have set up a Carnival to encourage people to share their Financial Resolutions for 2008. Horefully we can learn something in the sharing.

We’re in pretty good shape financially. Even though we’ve been a single income household for the past three years we have no debt, besides our mortgage. We have credit cards, but we pay them off every month. We have a nice amount in savings. It’s not easy to live on one moderate income without accruing debt, but we feel blessed and grateful that we’ve been able to do it.

Still, we should be saving more money than we are, and we want to change that in 2008.

Here’s the plan.

1. Draw up an actual budget by January 5, 2008. This is something I have always resisted. I have a vague budget in my head, but nothing drawn up on paper. I’m not promising to use it for the whole year, but I do promise to try living by a budget for six months and see how it fits.

2. Install the Peachtree Accounting program (bought for $120 and then got a $140 rebate, thank you very much) by January 5, 2008. And start using it for budgeting and to keep track of receipts and expenses and such. My taxes will be soooo much easier to do next year!

3. Review all of our IRAs and other retirement and savings accounts by March 31, 2008. Consolidate and eliminate as needed to reduce fees and maximize profitability. Our biggest issue with this is not knowing who to trust with our money. Everyone seems to have an agenda. We may have to bite the bullet and just consult a financial planner – the kind that charges you an hourly rate but isn’t tied to any company, so hopefully they’ve no agenda of their own). Again, though – who to trust?

4. Pay ourselves first. Find at least $100 per month to put into our non-401k savings, and $20 per month to put into our son’s savings account per month. We haven’t been putting much into savings since I stopped working – we’ve just been maintaining the status quo. Note: These numbers may be adjusted once the budget is set.

5. Learn about the stock market. Read at least one book per quarter, and at least one online article per week.

6. Enter the stock market by the end of the year. Do the research, set a budget and jump in. Again – who to trust?

We also hope to sell our house and move out of state in 2008. I’m going to cry if that doesn’t happen. Cry a lot.

By reaching these goals our financial picture will be much more focused than it is the way it stands now. That’s a good thing.

See how I’m doing on my goals! Check out Called on the Carpet: January 30th Financial Goals Checkup!