AskDong

I didn’t lose my wallet, but my girlfriend did.  There are few things in life I hate more than replacing the content of a wallet.  I hate being without my cards (credit cards, debit cards, and ID), but what I hate even more is getting everything replaced.  I hate the uncertainty of not knowing if I will find the wallet or not.  Of course whenever I’ve actually do find a lost card, it’s always when I’ve already replaced it - sometimes that’s the most frustrating part of it all.

So, I didn’t lose my wallet, but I am directly affected beyond just being collateral damage.   My girlfriend has two credit cards that are mine that I’ve given her to use so she can buy groceries and such when I’m not there.  Her losing her wallet is a direct impact on my credit cards.

I called immediately to put holds on the accounts, and was disappointed to learn I could only place a hold my entire Chase account rather than on any single card.  Given that I use this card, and my parents carry another for emergencies, putting a hold on the entire account is less than ideal.

My American Express is another story.  I was able to individually put a hold on a specific card rather than the entire account.  Each card has a different number.   Given that this card is my primary credit card - the first card I plunk down to pay a bill - I really appreciate not having to put a hold on the entire account.  I am surprised to learn that not all credit cards would implement such a system for extra cards.  I guess it’s just another reason my American Express is my preferred credit card.

There is a common predicament that many people find themselves I’m. Save money or pay off debt. While this question can be coolly answered by crunching the numbers, it’s not really a question that that cool cold numbers can answer. This like many other financial questions is one that is really about precedent and emotion rather than the numbers.

Like most people I have debt. Luckily, my debt is good debt. Mortgages and student loans. However I am very aware that many people are burdened by not so good debt. Credit cards and even worse- pay day loans. These loans often sport egregious interest rates. Crunching the numbers almost always will tell you to pay that kind of debt first.

It’s a much easier argument to make that I should invest excess money instead of paying off either my mortgage or my student loans. The interest rates on those are less than 5.5% without even considering any tax advantages. There’s no guarantee that I could do better in the “Market,” but there’s a good chance that I can - just not these last few months. However, when you’re paying 20% on a credit card, it’s highly unlikely that you can earn any kind of return close to what you’re paying let alone beat that.

So why would you ever sock money away into a emergency fund, or into a savings account when you have credit card debt? I actually think for many people it does make sense, maybe not logical sense, but emotional sense. Just as studies have shown that people would be better off being auto-enrolled into 401ks, I believe the sooner someone is able to enroll into a savings plan the better off they are. The key is creating a savings, mutual fund, or brokerage account and turning the spigot a half turn. The savings should be more symbolic than anything else. It wouldn’t make sense to save $1000 a month and then making the minimum payment on the credit card payment. But for someone is doing a good job paying off the credit card in excess of the minimum, it can make sense to stash $25 away a month toward an emergency fund.

Today’s Post is from Heather Johnson who is contributor at contributor for Credit Card Lowdown

This is, without a doubt, a difficult time to try and sell your home. With so many recent foreclosures, your house will be competing with a lot of other houses. Also, there are far fewer people being approved for a home loan. Are you sure you want to do this? Some of you may have no other choice. Perhaps you are transferring for work or are in danger of foreclosing yourself.

If you really want to brave a home sale in this slumping market, please arm yourself with the following five tips:

1. Use a Realtor – Many of you may be tempted to sell a home yourself, as you feel you can make more money and/or price the house more competitively. While it’s true that you can save some money by going this route, here are some sobering statistics about For Sale by Owner (FSBO) homes:
   • 70 percent of all FSBO sellers eventually hire a realtor
   • The typical FSBO house sold for $145K, as opposed to $175K with a realtor
   • In a slow market, the price of advertising could be same as a professional realtor’s commission
2. Use the Right Realtor – Don’t go with the first realtor you speak with and don’t use a “family friend.” You need a hardened professional who will hustle for you. Speak with several realtors and get a home value estimate. If one of them is pricing the home much higher than the other two, cross him/her off your list immediately. You need someone who will not only actively market your home, but also reasonably price it.
3. Create Curb Appeal – You really need the competitive edge here, so make sure your house looks great as soon as people arrive. In fact, many potential buyers may discover your home by seeing the “For Sale” sign in the yard, rather than through any other advertisement. Keeping your yard trimmed and watered and planting some flowers can help tremendously.
4. Focus on the Kitchen – Do you have some money to invest in updates? Sprucing up the kitchen can be the most cost-effective way to make your home more attractive to buyers. A new backsplash, new countertops and new sink fixtures are just a few ways to add some substantial value to the home.
5. Stage the Home for Showing – You need to make your house look as open and inviting as possible. Make yourself unseen if you are using a realtor, take your pets out of the home if you can, and use proper lighting. You should also add a nice fragrance, such as a softly scented candle. Naturally, the home should be kept clean at all times while it is on the market.

Is it impossible to sell a home right now? No, nothing is impossible and spring is definitely the best time of year for both buyers and sellers. However, you need to conduct some careful research and make sure you do everything within your means to make your home as attractive as possible to buyers. Naturally, you want to sell for as close to your asking price as possible, so don’t settle out of desperation. The market may be slow, but you need to be savvy with what is probably your greatest personal investment.

Heather P. Johnson is a freelance writer, as well as a contributor for Credit Card Lowdown, a site for finding credit card reviews. Heather invites your comments and freelancing job opportunities at her email address: heatherjohnson2323@gmail.com.

Last week American Express awarded me 15,000 Starwood points.  It seems I crossed over the magical 15,000 line. When I signed up for the American Express Starwood card 5 months ago, I was under the gun. I had to spend $15,000 in six months to qualify for 15,000 point bonus that American Express was offering.  American Express credited Starwood points as soon as I was over threshold.  I didn’t even know I had spent so much so quickly.

As result my Starwood Preferred Guest stands at a robust 37,000 points, and I have points pending from my last two statements. Right now, I can book 3 nights at the W in Los Angeles which is $365/night where I have wedding to go to. Those three nights would cost me over $1100 if I had to pay.  Not too shabby. However the real steal is going to Europe. I can book 3 nights in Amsterdam at the Meridien for the same number of points as the W in Los Angeles. The Meredien is 290 Euros/night. 290 Euros at the current exchange rate is $427.  As a result 3 nights at the Meridien would cost nearly $1280. Starwood has adjusted the point for room conversion rates by country as result, using point is great way to arbitrage the U.S. Dollar. Spend dollars, earn points, and redeem European hotels.

Even without the starwood bonus points, the last 5 months of spending on my credit card has been great. Not because I got a ton of stuff. I didn’t. I had few big ticket items that put me through.  The biggest being travel related expenses for travel companions that I helped book. My spending didn’t increase, but it became much more accountable. I’ve got to the ATM machine to get cash exactly two times in the last 5 months. I’ve gotten cash out from my friends when I’ve paid entire dinner bills. More importantly, I’ve used my credit card in situations where in the past I would’ve used cash. I used the Amex for fast food and lunch at the neighborhood deli.  I’ve used the credit card at the Drugstore when I was only picking up a soda. I used my credit card for almost everything, and it’s been fantastic.  The credit card company tracks my expenses much better than I could or would ever track my cash expenditures.

I got a question the other day asking “what’s a good first credit card to get?” from acquaintance (we’ll call her Joan). A relativley straightforward question.  Joan is going to graduate school, and this will be her first credit card.  She plans on paying graduate school tuition on her card. She doesn’t plan on carrying a balance. What she does want to do is build her credit history and enjoy some of the benefits of having a credit card such as cash back rewards for expenses she already makes such as tuition. I realize that there are many individuals who shy away from all types credit instruments - mortgages, credit cards, you name it.  That works for them, but plenty of other people including myself have taken advantage of the benefits of credit cards including but not limited to: building good credit history, earning cash back, and getting free auto coverage on rental cars.  Responsible credit card users don’t carry balance and use a credit card for convenience, not to borrow money.

Joan will be putting her tuition on the card, but her school only accepts Visa and Mastercard. I tend to think if you’re only going to have one credit card (and don’t shop at Costco), A Visa and Mastercard does make the most sense. They are mostly widely accepted with American Express coming in next, and Discover a good half lap behind that. Joan’s priorities in picking either a Visa or Mastercard should be:

1. Cash Back Percentage
2. Interest rate. Given that Joan is not planning to carry a balance, and I believe her, the interest rate shouldn’t be that important. However everything else the same, it’s still better to have a credit card with a lower rate than a high rate
3. Credit Card Perks. Car rental insurance, travel insurance, special access, etc. Platinum cards generally have extra features.

I think the following three cards having pretty good reward programs. I’ve listed they payout percentages for each of the cards. Where I’ve included two percentages the higher percentage is for everyday purchases, gas and groceries. In the case of the Chase Freedom, it’s actually the top three most commonly used categories (amongst a predetermined list) whatever they may be.

• Chase Freedom Visa, 1%/3%. The Chase Freedom is one my favorite credit cards and is currently offering a $50 signup bonus.
• Capitol One No Hassle Cash Back Card, 1.25% - it’s actually 1% with a 25% annual bonus.
• Citi Diamond Preferred MasterCard, <1%/<5%. The 5% redemption rate applies for the 1st 12 months. Technically this Citbank card is not a pure cash back reward, but a point card. The points translate roughly to something less than 1%/5%

Typically I would pick the Chase Freedom above the rest. The 3% cash back rate on the most common purchases is hard to beat. However because it’s likely Joan’s single biggest charge on her card will be tuition, getting a better payout in the form of the Capitol One No Hassle might make more sense.  In the end, any three of those credit cards should be good bets.
The cards below are interesting but because they offer slightly less flexibility than a reward card that can be redeemed for cash outright.

• Capitol One No Hassle Miles Card for Professionals 2%. Redeemable only for airline tickets, and has annual fee of $39. However assuming that one does need to travel by air, the 2% payout ratio for ALL purchases is fantastic.
• Fidelity Signature Visa, 1.5% paid in the form a credit to a Fidelity investment account.

Because this is Joan’s first credit card, and may not have much of a credit history, it’s quite possible she won’t get approved for very much credit.  I’m hoping she get approved for enough so she can put her tuition on the card (and get a 1-2% effective rebate).  While having access to alot credit can be dangerous, building a good credit history is a great reason to get a credit card.