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 CNNThe 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.

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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!

Deal of the Day June 15, 2008

I ran across this great deal at MoneySavingMethods.com. McAfree Internet Security FREE after rebate.

Where was this offer when I was having to renew mine?

Check back tomorrow for another great deal!

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Deal of the Day April 19, 2008

This one is just because I love my cordless mouse.

Pick up a Logitech V220 Cordless Optical Laptop Mouse from Circuit City for just $7 (reg. $29.99). Here’s how: First apply coupon code BCAS9D4AZB for a 10% savings, receive $10 back via mail-in rebate, and then receive a second $10 back through mail-in rebate. Rebate offers end 04/19/2008.

Check back tomorrow for another great deal!

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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?

Deal of the Day March 22, 2008

It’s not often that you get something for nothing, at least something bigger than sample size.

Circuit City is currently selling the Uniden 2.4GHz Cordless Phone for $15 (reg. $24.96). Correctly complete and submit the $15 mail-in rebate and it’s free, less the cost of the stamp. Rebate offer ends 03/31/2008.

Check back tomorrow for another great deal!

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Show Nana the Money!

I found something out yesterday that I didn’t know, so I thought there might be others that don’t know, either.

My mother is retired and lives on Social Security. She has no other income, so we don’t file tax returns for her.

When I heard about President Bush’s Economic Stimulus package I was thrilled that we’ll be getting some hard-earned cash back. It never occurred to me that my mother, who hasn’t earned any income in over ten years, would also be able to collect. I’d never actually read the requirements, which are:

Individuals and families must have at least $3,000 of income from any combination of earned income, Social Security retirement or disability benefits, certain Railroad retirement benefits, or disability compensation, disability pension, or survivor benefits paid by the Veterans Affairs. The minimum economic stimulus payment is $300 for individuals and $600 for married couples.

So, Wahoo! Mom can participate. The only catch for her is that she has to file a tax return. And the IRS is making it easier for her and people like her. People who have no legal requirement to file a tax return but must file a return this year in order to receive a 2008 economic stimulus payment can participate in the Free File program and file their taxes online.

There is no charge for using IRS Free File. With just a few answers, people can complete a simple form and use IRS e-file. The IRS also urges all filers to use direct deposit, if they have a checking or savings account, because it is the fastest way to receive an economic stimulus payment. Some people feel funny about that, but really they can have access to your account any time they want, so you may as well get the money sooner, n’est pas?

Once people file a tax return, they don’t need to do anything more. The IRS will do the rest. They will begin issuing payments starting in May.

For my Mom this extra money will be like winning the lottery. I hope she’ll use it to pay for an airline ticket to come visit us, which would be lovely.

So, please go ask your parents or grandparents if they qualify. You may just have found them $300…

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!

Show Me The Money, Mr. President!

Wow!!!!!!!!!!

President Bush wants to send me $1600!!!!!!!!!!

In an effort to stave off a recession, he’s announced that he wants to give a tax rebate of up to $800 to singles or $1600 per household. He wants me to go spend it to jump-start the economy. He wants to throw it at us middle-classers, because we, as a class, are so well known for squandering any money we can get our over-manicured hands on. We’re so spendiferous!

Sorry, Mr. President.

I’d loooooooooove for you to send me $1600. Heck I might even vote for you! No, wait. Oh…….that’s right. Term limits suck, huh?

Well, if you do get around to sending me that $1600, be forewarned. I’m going to be doing the same thing with this rebate that I did with the last one. It’s going right into savings. And if I did have any debt besides mortgage, that’s where it would be going.

I’m not buying any iPods.

I’m not buying a new car.

I’m not buying a bigger house (dammit).

I’m not buying a Wii, a new nose or a pair of Manolo Blahniks.

Americans need to learn to live below their means, not just at it. That means not running out and spending all of the money we get, especially before we get it. Do you know how many people were already spending this, at least in their minds, as soon as the words left your mouth?

What? That’s what you were counting on????

Oy.

Well, I’m sure there are plenty of people who will do as you wish.

Just not me.

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