This might seem like an aberration, but there really are times when we have to choose between the lesser of two … we’ll not call them evils … we’ll just go a little non-judgmental on you and examine two choices that might seem incongruous with other advice dispensed on Young and Thrifty.
Those choices are how to cover emergency expenses, those things that go beyond your available cash and might exceed your discretionary budget for any given month. Think about the emergency trip to visit your ailing grandfather. Or that nasty car problem that cost $800 after you hit a pothole (a literal pothole, a true bump in the road) and which caused a pothole (a figurative pothole) in your financial plans.
On one hand, you have the credit card. On the other hand, you have your last pay stub, which is identical to the next pay stub you should see in a week or two. These are your two choices.
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I wrote an emotional eulogy a little more than a year ago when I had to say goodbye the the MBNA Starwood Preferred Guest credit card. It was an amazing card (seriously, it was amazing. So pretty to look at. Since its demise, I’ve cut it up and even saved it because it’s so pretty).
Since then I succumbed to getting an American Express card, as the first year was free for previous MBNA Starwood Preferred Guest holders. I ended up getting the American Express Starwood Preferred Guest card and since then, have accumulated about 12,000 in points. It was much much more difficult to accumulate points with the American Express card, well, because it’s not accepted everywhere. I would ask each time I was about to make a transaction only to hear “nope, sorry only Visa or Mastercard”. I did like the American Express card, it earned me some points (valued 1:1 with airline points programs like British Airways, Asia Miles, etc.). The one year promotional rate ($0 annual fee for one year) was coming to an end, and I was experiencing some separation anxiety related to the possible loss of the Starwood Preferred Guest credit card for good.
I had called to check if they could waive the yearly fee (I think it was to the hefty tune of $150 a year or something ridonkulous like that). I tried my best negotiation tactics, I was as sweet as honey to the customer service reps, I told them that I pay off my credit card bill regularly and am never past due, but alas, to no avail. Apparently American Express is really strict with their fees, and they did not waive it. They suggested that I get another American Express credit card instead.
So I paid for my auto insurance ($1500) with my credit card, took the points, and bid one last goodbye before cutting up the card and canceling it.
Then I went ahead and applied for the American Express Gold Rewards Card. Yeah, that’s right, I’m a fickle credit card whore.
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January 19th, 2011 by
guest
This guest post was written by Michael, founder of Credit Card Forum, which is a portal for the discussion of credit card reviews and deals. The reason he loves credit cards so much is because he’s obsessed with earning rewards… probably too obsessed!
I came across Y&T’s post back from 2010, about her getting the Starwood credit card from AmEx (she got a pretty sweet signup deal between the bonus points and annual fee being waived). The Canadian version is slightly different than the U.S. version of the Starwood American Express card but two still share the most important benefit – the ability to transfer points to airline frequent flyer programs on a 1 for 1 basis.
That got me thinking… how do the other travel credit cards in Canada compare? I know the American versions inside and out but I have very limited knowledge of Canadian credit cards. So in this post I’m going to compare and contrast a few of them…
Note: Being that the U.S. and Canadian dollar are exactly equal right now (1 Canadian dollar = 1.0073 US dollars according to Google finance) we can compare the fees between the two countries on an apples to apples basis.
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Here’s a guest post article written a few weeks ago by Nickel of Five Cent Nickel, he’s been around the PF blogosphere since 2005 (that’s… like dinosaur ages in terms of blogging!) and he wanted to show you how to read your new credit card statement. Yes, in case you haven’t noticed, they have changed. The credit card companies are now (by law) supposed to disclose to you more than you used to, so you can actually realize (and have an “ah-ha!” moment) how much debt you’re getting yourself into if you don’t pay it off. Bad for credit card companies, good for you and your wallet.
Written by Nickel of Five Cent Nickel
Have you received a credit card statement yet this month? If so, did you notice anything different about it? I ask because, as of July 1, your credit card statement has to meet specific formatting guidelines laid out by the Federal Reserve. These requirements are part of a larger set of rules put into place by the Fed back in 2008. According to Randall Kroszner of the Federal Reserve, the goal is to: “…increase transparency and fairness in how credit card and deposit accounts operate, thereby enhancing competition and empowering consumers to better manage their accounts and avoid unnecessary costs. The rules represent a significant step forward in consumer protection. By ensuring fairness and making credit terms easier to understand, these safeguards should allow more consumers to benefit from using credit.” The new reporting requirements include a clear summary of your account activity and payment information, a late payment warning stating any fees or penalty rates that you might trigger, a warning as to how long it will take to pay off your balance (and how much it will cost) if you only make the minimum payments, clear disclosure of any account changes including those related to interest rates, and so on. To better illustrate these changes, we’ve assembled an infographic (below) that highlights the new requirements. Simply hover over a number for details. And if you’d like to see a larger version of the image, simply click on it.
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No, no, this isn’t one of those “get rich quick schemes”, as you had probably hoped for. There is one way to net an easy 19% to 21% return, and it’s probably not what you had in mind.
What I’m talking about is to get rid of that balance (if you have one) on your credit card(s).
If you have a credit card balance and are also setting aside some funds every month to your savings account or trying to invest the money in the stock market, then you’re going about it the wrong way, sorry to say!
In your savings account, you’re likely to get say… 1.6% interest on your investment. In the stock market, you may average 8% (if you’re lucky, these days!)… if you have a credit card that is carrying a balance, and you’re only paying the minimum $10 a month, then you are paying the credit card companies (and they love you for it, trust me) 19% interest per annum calculated per day.
What might this look like?
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