British Airways VISA Promotion FAIL
At the end of 2010, British Airways was promoting a pretty incredible offer I was really tempted to jump on. New cardholders would receive a bonus of 100,000 British Airways miles — 50,000 miles after their first purchase and another 50,000 after spending at least $2,000 in the first three months. That's easily enough miles to do some big-time free travel. I pondered it a bit and the $95 fee and decided to stick with my tried and true 2% cashback model. It's not particularly sexy, but by sticking to cashback cards for the most part, I don't have to worry about points being whimsically re-valued or de-valued. So I felt OK with the decision.
Then I read the NY Times Haggler yesterday where a fellow had taken part in a similar (less lucrative) British Airways promotion. Listen to this experience:
"So I paid the $95 it cost to sign up for the card, charged $3,500 and, last month, booked two British Airways tickets to London. Not a bad deal, I thought. Until I learned that these tickets cost $527 in taxes and fees. Each. When I contacted customer service, they informed me that the promotion had stated that taxes and fees would be additional. I knew that, but $527?"
Blech. Big hassle factor and ridiculous fees. Yeah, it's still a discounted ticket, but totally not worth if from my perspective. No thanks British Airways.
Anyone else have a similar rewards experience?
Maximizing What’s in Your Wallet Q4 2011
Welcome to the Q4 edition of Maximizing What's in Your Wallet!
As a reminder, this post is for all the credit card deadbeats out there looking to maximize cashback rewards. So, if you never carry a balance on your credit cards, have them set to auto-pay in full every month, and want to make the most of Q4 2011, then read on.
Here's how you should allocate your spending:
Gas - This is a no-brainer. It's the same card year round. It is the PenFed VISA Platinum Gas / Cash Rewards Card. You'll get 5% back all the time on gas purchases. Just make sure you pay at the pump. I used to use this card for a lot more, but the rewards have been really scaled back such that only the 5% gas reward makes sense. However, as a gas card, it's a great choice.
Groceries - I have been very pleased with my new American Express Blue Cash Preferred Card which pays me 6% back on all grocery purchases. It also pays 3% on gas and 1% on everything else, but I only use it at the grocery store. The downside to the card is the card carries a $75 annual fee, but it's worth it.
Restaurants - Either use your Discover® More Card! (up to $300 in total rewards) or Chase Freedom (up to $1,500 in total rewards). Hopefully, you saw my post on Restaurant.com and took advantage of that amazing offer.
Home Improvement - I've got nothing. DIY or use your 2% card.
Department Stores, and Clothing Stores - Either use your Discover® More Card! (up to $300 in total rewards) or Chase Freedom (up to $1,500 in total rewards). There's an extra bonus of 5% if you use your Chase Freedom at Kohl's – that's 10% back!
Hotels and Airlines - Use your 2% card or your favorite hotel card (mine's the Marriott Rewards® Premier Credit Card).
Movies - Chase Freedom has the market cornered this quarter as the only card offering 5% back.
Gifts - For gifts I use the Amazon VISA year round. When you buy through Amazon with the Amazon VISA you get 3% back and the first time you sign up, they give you $40 off your purchase. It's well worth the sign up. I am tempted to use my new American Express Blue Cash Preferred Card to buy Amazon gift cards at a grocery store for the 6% cashback. If I can be more planful about such purchases, I will probably do this.
Charitable Organizations - For charities, again Chase Freedom has the market cornered this quarter as the only card offering 5% back so give liberally to your favorite charity!
Everything Else - Frequent readers know I love my 2% cashback Charles Schwab Invest First VISA card. Unfortunately, as I've chronicled ad nauseum, FIA has discontinued the program as of 10/31. Thus I will be transitioning to a roughly equivalent card in the Fidelity Retirement Rewards AMEX which also offers 2% cashback.
Two final thoughts: Please remember to sign up at Chase and Discover to be eligible for their 5% rewards, and remember this advice is ONLY for people who don't carry a balance…EVER.
Borrowing on Prosper
I've written a lot about my experience as a lender on Prosper. Since I first started, Prosper has made huge improvements in their interface and their ability to properly vet potential borrowers. Default rates have dropped and current investors in low risk loans seem pleased with their returns in the high single digits (Interested in becoming an investor?)
But what about the borrower side? Let me tell you a story. Read more
Always Look On the Bright Side of Life (PF Edition)
I thought I'd start your day with this video this morning, but it's more for me than for you because I've been lamenting all the crappy financials news I've been getting lately. It just seems to be piling on.
Here's a short list:
1) My precious primary credit card, the Schwab Invest First VISA is finally being discontinued. As far as I know it's the only 2% cashback on everything VISA or MC available.
2) The annual fee on my Marriott Premiere Rewards Credit Card jumped 30%.
3) I had to fire BB&T on principle due to their retarded fee structure.
4) NC SECU is terminating the bridge account I loved, reduced their money market rate from 1.25% to 1%, and sent me a nastygram for making too many transfers in my money market account which violates Regulation D.
5) And, my investment portfolio has dropped by about $10k in the last month alone.
6) Did I mention my employer was bought out so my job is dangling in the wind for the next few months too?
ARGH!!
I really wish I had more good news to share, but for now all I have to offer is a song. What do you do when all your financial news seems to be coming up rotten tomatoes?
Quest for a Million – Net Worth – 9/2011
Well another month has gone by and my net worth (ex-real estate) has taken another hit (-3%). Now most if not all of these losses are market driven paper losses that should be irrelevant over the long-term. In the short-term though, the future is a bit hazy. At least that's what it says when I look in my Magic 8 Ball. EU debt and Euro mismanagement coupled with a ridiculous, do-nothing US Congress should leave the markets mired in uncertainty for much of the rest of the year. With uncontrollable macroeconomic events controlling the markets, I'm focusing on making sure my own house is in order.
September promises to be an interesting month on the home front. It's the first month that we'll have no childcare expenses in about 3 years. That amounts to about $600-$700 in reduced liabilities which is most welcome. Thank you public school!
The other big news is that my wife returns to work this month after taking most of the last 5 years off. As a sole proprietor, we will need to invest in renting her an office and acquiring some furniture and other tools of the trade. I expect she'll run at a loss for at least a couple of months, but her business relies on building a base of clients. Once she starts building that base up there should be some significant upside for our family finances. I'm looking forward to watching this new dream unfold for her.
Additionally, reducing my 401k contribution in half is also contributing to a higher savings level resulting in a more liquid position in case anything goes wrong during my employer's merger. It's hard not knowing whether you'll have a job next month and what the salary and benefits will look like at the new combined company. There's nothing more to do about than networking, saving, and working hard though.
So, let's talk $$$. I could be SCREAMING about how I almost hit my $40k emergency fund since it's sitting at $39,996.40. I am proud of this number. However, I also know that it's fleeting because in less than 24 hours FIA Card Services will be taking $6k+ of that to pay my credit card bill. What I really want is $40k just sitting there unmolested gaining some paltry interest rate while I can still pay all the bills and max out the Roth's. Not. There. Yet.
Speaking of not there yet, all of the retirement and investment accounts paid the price associated with a large equity position in relation to bonds. I have decreased my cash position in these accounts over the past 2 months as there have been several opportunities to dollar cost average into index ETF's at what I believe are attractive prices. However, with so much uncertainty in the markets, I'm retaining the last portion of my cash to buy more in the case of a deeper crash which is entirely possible.
On the liabilities front, the story remains the same. I chip away at the debt. It's great to look and see that I've reduced my student loans by 8% this year. Likewise I'm still reveling in having less than $300k in mortgage debt. Small victories every single month.
Net Worth September 2011
| ASSETS | This Yr. | vs. Last Mth. | ||
|---|---|---|---|---|
| Real Estate | ||||
| My Home (Zillow) | $376,300 | -2% | 2% | |
| Savings | ||||
| All Accounts | $39,996 | 7% | 11% | |
| Retirement | ||||
| All Accounts | $216,997 | 8% | -5% | |
| Investments | ||||
| 529 Plan | $11,834 | 22% | -4% | |
| Brokerage | $4,808 | -2% | -12% | |
| Total Assets | $649,935 | 2% | 0% | |
| LIABILITIES | ||||
| Credit Cards* | ||||
| All Accounts | $12,434 | |||
| Student Loans | ||||
| All Accounts (1.5% and 2.5%) | $64,379 | -8% | -1% | |
| Mortgage Loans | ||||
| My Home (4.3875%; 30 yr fixed) | $297,309 | -2% | 0% | |
| Total Liabilities | $374,122 | -2% | 0% | |
| NET WORTH | $275,813 | 8.4% | -0.1% |
* Credit cards paid in full every month every time.
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