quietmint

How To Win At Credit Cards

2008-09-04T17:27:00.002-06:00

Credit cards are awesome. If you're not using a credit card for every purchase, you should be. Apart from the free benefits that pass many people by -- like automatically doubling your warranty up to an extra year on almost all purchases (including electronics) and refunds on prior purchases in the event of a price drop (remember the first iPhone?) -- credit cards allow you to earn cashback and other rewards. Of course you won't be able to quit your day job, but free money is free money. As long as you have some self control, you can make the system work for you instead of against you.

This post lays out how I run my credit cards. You should first familiarize yourself with the video clip Don't Buy Stuff You Cannot Afford. To make this work, you must never pay any fees and you must never pay any interest. With that in mind, let's get started.

Find a card with a rewards program that matches your spending habits
Finding the right card can be one of the most challenging parts of the whole process. Ask yourself basic questions about your spending to help you figure this out. Where is all your money going? What is it that you're buying all the time? Where are you shopping? If you don't use credit cards exclusively yet, you should first look for a good general-purpose cashback card (e.g., the highest reward amount you can find that is not dependent upon purchase amount, location, category, etc.). If you already have a general-purpose card like I do and are now looking to get some extra goodies, try to pinpoint an area of your spending for improvement (e.g., a certain category or certain store that gets a large share of your money) and find a card that gives higher rewards to this area.
- The best general-purpose card I've found was the Capital One No Hassle Cash Rewards card, but the version I have is no longer offered. It beat out the other cards because you could earn 1.25% on every purchase instead of just 1%, but Capital One is now charging an annual fee for cards with this option.
- The best gas card I've found is the Discover Open Road card. They offer 5% cashback on the first $100 of gas and automotive purchases each month. Since it's a Discover card, it's not specific to any particular gas station so you can use it anywhere. Another bonus is that you can use it at Sam's Club (which generally has the cheapest gas around) and still get the 5% discount. At $4/gallon, you save $0.20 on each gallon of gas purchased with the Discover Open Road card so you are effectively paying $3.80/gallon. Although you must redeed cashback in $20 increments, the rewards never expire as long as you use the card. Obviously, since you are only earning 5% on gas and since you stop earning 5% after the first $100 per month, you should only use this card to buy gas and only up to $100 per month! Any gas once you reach the $100 monthly limit as well as all non-gas purchases, should, of course, be purchased using your general-purpose cashback credit card (in either of these cases, the Discover card turns into a crappy tiered reward system starting at 0.25% -- yuck).
Double check for deal-breakers
- Anything with an annual fee is out, no questions asked. This generally means airline credit cards. You aren't going to spend enough each year to recover the cost of the annual fee. The idea here is to save money, not spend $59 a year on absolutely nothing.
- Stay away from tiered reward systems. This means you should avoid things like the Blue Cash card from American Express. You aren't a big spender, remember? If you need to spend $6,500 before you start earning decent rewards, you aren't winning.
- Avoid reward systems with expiration dates. You aren't going to be making money hand over fist (in fact, it's quite the opposite), so don't run the risk of losing your cashback because you didn't earn enough in X months.
Apply for the credit card online
I'm assuming you know how to use the Internet, so this should be self-explanitory. Since you probably aren't going to read all of the terms and conditions, make sure that you save a copy of everything you "agree" to during the application process.
Card activation and automatic payment request
When you receive your card in the mail, follow the activiation instructions (call the number on the front of the card from your home phone). You will be sent through an automated activation system, then transferred to a sales representative who will try to upsell you other products and services offered by the company. It is important that you refuse all of this value-added crap! Do not let them give you a free trial, you must outright refuse. Don't hang up, however, because you need to speak with someone about automatic payment. Most likely, the credit card company has an automatic monthly payment option that allows you to have your entire statement balance withdrawn from your bank account each month. Usually you must call customer service to have this activiated, which will result in a paper form being mailed to you. While you're on the phone with customer service, have them mail you this form (or have them transfer you to someone who can mail you the form) so you don't need to call again.
- Chase allows you to setup automatic payments online so you don't need to play snail mail tag.
Privacy policy opt-out
As soon as you've hung up with the activation line, you'll want to stop your credit card company from cashing out on your personal information. Look through the documents that accompany your credit card and find the privacy policy leaflet. Located in the middle of this leaflet will be a section titled "How Can You Limit Sharing of Information About You?" with a toll-free phone number or website. Call the phone number and opt out of both kinds of information sharing. You don't want your creidt card company sharing information with non-affiliated third parties or within their family of companies.
- Chase allows you to opt-out online.
Setup your online account
Of course you'll want to keep up with your credit card accounts online, so sign up for an online account. Enable paperless statements to stop your credit card company from mailing you a paper bill every month with your personal information written all over it.
Automatic Payment Setup
When you are signing up for automatic payments, make sure that you choose the option to have the entire statement balance automatically withdrawn from your bank account monthly. The key is that you must pay the entire balance every month! If you're paying any interest, you're not winning. Setting up automatic payments will ensure that you are never late on your payment, and that you never pay interest for carrying a balance.
- Mark the date that that automatic payment will be withdrawn on your calendar. Have your calendar notify you 3 - 4 days before the payment will be withdrawn so you can ensure sufficient funds are availble in your bank account.
Win
Use your credit cards for thier outlined rewards purposes. Never pay interst or fees and get cashback deposited to your bank account or applied as a statement credit. :)

Just Add Potato

2008-07-28T02:07:00.001-06:00

I was recently taken to a new low looking through this weekend's newspaper. I am now the shamed owner of a coupon for a product called Potato Finishers.

All-American Potato Finishers ("Great on baked and mashed potatoes!"). This is exactly what America needs. How have we been eating potatoes for all these years without this product? Basically, it is a bag containing cheese sauce, shredded cheese, and bacon bits. It's not like you could buy cheese sauce, shredded cheese, and bacon bits in already-prepared, individual packages and then apply all three items to a potato separately. Moreover, it's not like you could buy a chunk of cheese and shred it yourself, or buy packaged bacon and cook it yourself. The fact that the main ingredient is missing from the product should be your cue to run in the other direction. If that's not enough of a hint, seeing that the widely-publicized coupon allows the "savvy" shopper to "save" $1 on this item, the price should scare off the rest of you; I'd guess $3 - $4.

Perhaps even more disconcerting than the Potato Finishers themselves is the fact that a Google search for "potato finishers" returns eBay auctions for the very coupon to which I earlier referred as the first result. It's not enough that our planet is littered with this coupon in who knows how many newspapers across the country; people are now selling this same coupon for actual money. There are presently 8997 food coupons listed on eBay. You probably had no idea that there is such brisk trade in food coupons happening right under your nose. Is there really a market for mass quantites of useless food coupons? I am also unsettled by the fact that a single product line now merits its own domain registration (thank goodness sargentofinishers.com was available, imagine the horror if terrorists had snatched up the domain and our All-American Potato Finishers couldn't have their own website) and web design efforts. As the nutritional information and even the list of ingredients is conveniently absent from this special website (it's a food product, what else could the website legitimately have?), what does appear on the site is laughable. I'm not sure I'd agree that pictures of fake cheese mixtures on top of various degrees of fried potatoes qualifies as "exciting serving suggestions". Not to be outdone, the hidden nutrition facts are equally bothersome: 1/4 of the small pouch is considered a single serving and has 23% of your daily saturated fat intake and 25% of your daily sodium. Ah, America owes you a vote of thanks, Potato Finishers.

Who Need Socialized Medicine When We Have Socialized Oil?

2008-07-15T00:43:00.001-06:00

It has never occurred to me that I could call the government if I were to run out of gas.

Alan Peterson, Incident Management team leader for the Utah Department of Transportation, has been assisting drivers who have pushed their fuel tanks too far and run out of gasoline. In 2007 the team gave out about 721 gallons of gasoline to stranded people. This year so far, they have already given out about 524 gallons. [...] Last month, the team helped 150 motorists refuel.

If the end of the year sees double the current amount, that equates to 3 gallons of free gas every day. At the current price of $4.15/gallon, Utahns are [collectively] paying $12.45 every day because of a growing number of idiots (as of last month, we're now up to 5 per day!) who disregard their fuel gauges. Is it really that hard to put gas in a car? Even using the lower 2007 numbers, 721 gallons divided by 52 weeks is 14 gallons/week. Let's hear that again with gusto: The government is handing out a full tank of gas every week! My car doesn't even hold 14 gallons, but I'd still like to know how to submit my name into the drawing. ;-)

Frozen Bananas

2008-04-10T21:34:00.004-06:00

There are a few products in the marketplace that invoke a bizarre, nauseating reflex upon contact with our brains. These products, such as frozen bananas, are incredibly puzzling as the more they are contemplated, the more it becomes clear that their existence must solely be to invoke this bizarre, nauseating reaction. Why else could frozen bananas exist? Who could possibly be benefiting from crystallized precut chunks of curved yellow fruit? Worse still, who are the people being suckered into buying these bags of prepeeled, presliced, flash-frozen bananas? With fresh bananas readily available in all parts of the country and selling at retail for less than $0.39/lb., an amazing amount of labor in peeling bananas would be required before prepared frozen bananas would even remotely make economic sense. Has our society really deteriorated so much that we no longer have the time or patience to "pull tab here" on fresh bananas?

Netflix Account Hold Is A Scam

2008-03-05T20:58:00.007-07:00

Although I'm definitely a fan of the online DVD rental service Netflix, they have again disappointed me today. The website offers the option to put your memership "on hold", which will temporarily stop Netflix from billing and mailing movies to you. On the surface, it looks like Netflix really cares about its customers by offering this extra convenience. From my point of view, however, this is really a selfish policy whose only purpose is to boost the company's bottom line.

Let's say you are a Netflix member whose billing date is at the beginning of the month. You are about to go on a two-week vacation, so you place your account on hold today and set the service to resume in two week. You've already paid for movies for the two weeks of your vacation, but, by placing your account hold, have elected to stop their delivery. In order to actually give you what you've already paid for, Netflix should move your billing date two weeks ahead to make up for the time that you will not be receiving movies. Netflix doesn't do this. Unless your billing date is during your vacation, you gain nothing. The worst part is that you actually increase your risk of financial liabilities for the zero benefit you receive: Your account will be charged $20 per disc for any movies that aren't received by Netflix within seven days of placing your account on hold. So basically, if you try to be an organized person and place you account on hold but then forget to mail those three discs back before you go on vacation, you've just given Netflix $60 for absolutely nothing.

I telephoned Netflix customer service to verify I correctly understood the account hold policy, which I did. Confronted with this information, the representative couldn't tell me why I would want to place my account on hold.

Dear Military Personnel

2008-01-21T19:01:00.006-07:00

Poor CashAmerica. Let's feel sorry for them:

Dear Military Personnel,

Beginning October 1, 2007, we will no longer be able to serve military personnel or their spouses and dependents who seek short-term loans, commmonly referred to as payday loans. The Department of Defence Military Lending Act, which takes effect that day, requires such loans to be granted at 36% APR. We regret that our Company simply cannot offer a product at that rate restriction.

At a 36% APR, the total fee charged on a $100, two-week advance would be $1.38. We cannot cover the cost of originating a loan, let alone meet employee payroll and benefits and other fixed business expenses, at this rate.

When they can make loans to other customers at over 1140%, it's no wonder they are refusing a paltry 36%. It's just not profitable.

Seriously, though. Stay away from payday loans, kids.

Oct 31 6:55 AM is now the official start of the Christmas season

2007-10-31T22:21:00.004-06:00

Wal-Mart has decided to move the date of Black Friday, just like the government decided to move the date of Daylight Saving Time. Apparently I need to get a more important job so that I, too, can play with the calendar.

Wal-Mart has announced it will have its Black Friday "day after Thanksgiving" sales this Friday, November 2. A company press release issued on Halloween, October 31, 2007, at 6:55 AM MDT begins:

The nation's largest retailer officially kicks off the Christmas season today by granting a valuable holiday wish to its customers -- savings on the gifts they want to give.

Today? Look everybody, Halloween is the official start of the Christmas season now!

Later in the press release:

In-store, the experience for Wal-Mart shoppers will be fittingly festive. Christmas Shops offering holiday decor and gifts and onsite product demonstrations open this weekend. And, for the first time ever, Santa will visit all Wal-Mart Supercenters and discount stores. [...] The retailer will also literally wrap several stores across the nation in festive holiday style including 10 x 3.5 -foot bows to brighten the buildings.

Uhm, what? My Black Friday ~~"day after Thanksgiving"~~ "three days after Halloween" sales come with a Christmas shopping experience? A Santa line at Wal-Mart? Wrapping entire buildings with wrapping paper look-alike?

The sales were announced early Thursday morning (it is already Thursday in EDT) and are now online at http://www.walmart.com/secret. While I'm always up for a sale (one item being offered is an Acer laptop with 1 GB of memory for $348), I don't really want to be shopping in a Christmas "experience" two months before the holiday.