Arthur Frommer is a recognized travel expert.   I have relied on many of the travel books he has published, and I have conducted travel research on his website.    A friend of mine recently alerted me to an article he wrote about the potential for a fraud alert to be triggered by domestic travel.

What?

Everyone should know by now that when you are planning to travel outside of the United States, the smart thing to do is to notify all of your credit cards, as well as your bank when you are traveling and which countries you are scheduled to visit.  My wife and I discovered this five years ago on our honeymoon when, in all of the preparation for our wedding, we forgot to inform our bank.   We had a memorable dinner in Brazil in which we thought we might have to wash dishes to pay for our meal!

I even advise people to include countries where you might just be visiting briefly, including where you are changing planes.    You never know when a flight cancellation or another type of travel disruption will make it necessary to use your card, and that is the worst moment for your account to be placed on hold for a fraud alert.

According to this article, which was syndicated and ran in major newspapers like the Miami Herald, credit card companies may now be suspending accounts due to potential fraud based on domestic travel.   This is the way his victim describes the experience:

Halfway through my recent Florida trip, all three adults suddenly found their credit cards suddenly denied — two Visas and an AMEX card, all from different card issuers. It confused us, until I got a call from the fraud department of my Capital One Visa. Our crime? We were all from Pennsylvania and sought to spend money in Florida.

Is This For Real?

I am extremely skeptical of their conclusion that they had their cards frozen due to a fraud alert strictly because they were from out of state.   I travel all the time and have never had this problem.   The fact that multiple cards were on hold leads me to believe that there was some other reason for the fraud alert.   It seems more likely that all of their cards were used at the same merchant that was associated with some fraud.    Think about this for a second.  If credit card accounts were being frozen for out of state use, there would be complete chaos at major tourist sites.  Nobody would be able to buy an admission to Disney World or a lift ticket at Vail!   Residents who live on the border of several states, such as in the metropolitan areas of New York, Philadelphia, Washington D.C., Chicago, and other major cities would find their accounts frozen just for “travel” a few miles from their house.  This story simply does not pass the most basic smell test.

Paranoia

The Miami Herald version of the Frommer article ends this article with the plea:

Whether or not you agree with my friend’s speculation about the reason for the new policy, it’s clear that we all should now take added precautions before embarking on an out-of-state trip even within the United States. We must call our credit-card issuers and demand that they enter into their computers the fact that we will be in another state during a specified period of time.

It is surprising that such a noted travel expert as Arthur Frommer ran with this story.    It is even more bizarre that this story ran in so many major newspapers.   Consider me the first Credit Card expert to cry foul on this strange column.

For a limited time, TrueBlue members and cardholders of the JetBlue Business Card from American Express OPEN can earn triple points, equivalent to 12 points per dollar spent, on flights between LAX and New York’s JFK and between LAX and Boston’s Logan.

In order to earn triple TrueBlue Points with JetBlue, you just need to register and book a new flight between June 22 and October 31, 2010. The number of times you are able to earn triple points is unlimited.

We continue our series of PHR reviews with Vitalkey today. VitalKey is another provider of PHR solutions. It is a service that provides up-to-date medical records for you and gives you a USB that can be attached to your keychain which doctors can use to access your medical records in the event of an emergency. Here’s a closer look at this service.

Here is how it works – When you enroll for a VitalKey service, a medical specialist will talk to you about your medical records. He or she will essentially help you to organize them. They will first get information about things like your insurance contact number, your emergency contact number, your physicians’ contact number and details. He or she will then contact your doctors to get the information. Your records will be reviewed and organized in a simple to understand format.

Information that is recorded include:

Making sure your records are up-to-date – There are a couple of ways VitalKey makes sure your records are up to date. Firstly, your Doctor will be provided with a tool on your computer so that your medical records can be updated on VitalKey with just the push of a button. Secondly, you will be called periodically by your VitalKey medical specialist to make sure your records are up to date.

USB Drive – All members of VitalKey are given a small USB drive to carry with them (most likely in a keychain) where doctors can retrieve your records in the event of an emergency.

Fees and Subscription Plans – VitalKey comes in a variety of plans. There are plans for singles, couples, kids and a family plan. They also have plan to breast cancer survivors called “Pink Key”. Below is a screen shot of their fees.

Verdict – Like other PHR, VitalKey provides a pretty good service for those who feel the need to have their medical records with them (especially adventure travelers). Their subscription plan has fees that are typical of other similar services. The thing I like about this service is that you do not need to pay extra for the USB key that carries your information. They are not the cheapest but neither are they the most expensive. This is a service you would want to put on your comparison list.

This is a guest post from friend over at The DIgerati Life

Credit cards can be a big help but they can also be detrimental to your financial health. The key thing is to understand how to use them properly.

While most of us believe that it’s okay to pay off just the minimum for credit cards every month, it really is so much cheaper to pay off credit card debt as soon as possible. That’s why there’s a lot of sense in using credit cards that offer 0% interest rates for a specific period of time. It’s also no surprise why such cards tend to be in pretty high demand — who doesn’t want to get cheap financing this way? Still, it’s important to note that as a credit card holder, you’re in full control of your debt, such that even if you carried the perfect credit card, you can still get into trouble if you decide to use it indiscriminately. In other words, in the “wrong” hands, a credit card would still be as volatile as napalm is in the hands of a pyromaniac.

Thus, there are reasons why you should prefer credit cards like the Perkstreet Financial cash back debit card. There are a lot of these cards available in the market, and you should be able to find one with little effort. You may also want to beef up the benefits of a cash back card by making sure that it’s a credit card with a 0% intro APR, that way, you’ll get a chance to pay your debt off without having to rack up a lot in interest. But take note that when you get the opportunity to own such a card, paying down your balance as soon as possible prior to the expiration of the intro rate should be your priority in order to avoid the jump in rates that inevitably comes.

Now what about the subject of having your kids get started on credit cards — it’s a topic of debate for many families. I believe that using a credit card will depend highly on a child’s maturity level: sure, it’s good to be able to establish credit early, but if your kid is unable to manage their debt load, it’s wise to put off getting that card for them. The advice here is to stick with cash unless you are certain you can handle your balances each month.

At any rate, if your kid is ready, then take a look at student credit cards that reward students for being financially responsible, such as this Visa card for students. If your child is not ready for this, then have them stick to cash or a debit card.

When it comes to credit cards, financial responsibility is absolutely key. Unless you can assure yourself that you won’t abuse it, a credit card is something to avoid using and perhaps relegated to emergency use. Another good way to use a card is to dedicate it only to pay for existing ongoing expenses such as utilities or to cover existing, more expensive loans that you transfer over to your card.

Once there’s a record here for responsible card use, it makes sense for a cardholder to graduate to using rewards credit cards or cash back cards. It would actually be a wise move to use such cards in order to take advantage of the benefits of rewards points. If you have a travel card, and you were meaning to travel, it would be great if you used your travel credits.

On the whole, credit cards are NOT the epitome of evil. They actually help boost your credit score if you pay them on time, always. They’re also great to use for perks and rewards if you’re a cardholder who can maintain a good handle on your cards.

As with everything, moderation is key. And with credit cards, think of these three “good habits” in order to stay away from debt trouble: spend moderately, use responsibly, and pay diligently.

A reader asks:

“Is it ever an advantage to pay an annual fee for a card that pays increased rewards?”

My Answer

A qualified yes.   Many reward cards do have an annual fee, while some do not.   I currently hold a Capitol One Visa that has no annual fee.   I use it whenever a merchant does not accept my Starwood American Express, which does have an annual fee.   When I use it, I receive 1% cash back.    I also use my Capitol One card whenever I travel outside of the United States, as it is one of the few cards without an egregious foreign transaction fee.   (In comparison, all Amex cards have a 2.7% FTF that you can think of as a negative reward card whenever you use it for non-dollar transactions.)

It is worth paying the annual fee on my Starwood Amex because it’s rewards are so valuable.  I can get an average of 4 cents in value from each Starpoint I receive.   That means if I charge $30,000 a year on my Starwood Amex, I am receiving $1,200 a year in value when I redeem the award.   If I were to put all my spending on my Capitol One, I would only receive $300 in cash back.    The $900 difference easily makes up for the $45 annual fee on my Starwood Amex.

There are other factors to consider when you pay an annual fee.   First, most cards will waive the annual fee the first year, so it is easy to try the card out and just cancel it when the fee is due after one  year.   Another strategy is to simply call the company when the fee is due and ask them to waive it.    Sometimes they do, sometimes they don’t, but occasionally they might just offer you some extra points or miles.   It never hurts to ask.

The less you spend, the fewer rewards you will get, so paying an annual fee is probably not a good idea for people who spend very little on a particular card.    The key is to weigh the benefits of the expected rewards against the annual fee, and then compare it with cards that are available that do not have an annual fee.   It is not a simple equation, but it is worth doing in the long run.

This is a reminder that the 15% bonus Delta Skymiles you get when you transfer Membership Reward Points into Delta Skymiles will expire on 31st July 2010. If you are looking to get a free airline ticket with Delta Skymiles and are short of some miles, you might just want to check your Membership Reward points to see if you have enough to transfer over to get that free flight. Remember, the 15% bonus deal ends this Saturday.

This is reminder of this deal from Starwood Preferred Guest. St Regis is offering a free night stay if you stay for three consecutive nights. Below are the terms and conditions for this deal. This offer is still valid for stays booked and completed between now and March 31 2011

When you fly in an airplane, the altitude you are at puts you at around 40,000 feet. At these altitudes, the air pressure is equivalent to around 6,000 to 8,000 feet above sea level. At these pressure, the amount of oxygen in your blood is reduced and the gases within your body will expand. That is one of the reasons why your ears will pop! If you are flying long distance and sit too long, this can lead to the pooling of blood in the legs. Which can lead to the development of clot in your legs (called Deep-Vein Thrombosis). Lack of circulation decreases blood circulation back to the heart. Because the mechanism to circulating your blood back to your heart is decreased, your legs may swell.

DVT has been called the economy class syndrome (when you are squashed in the cattle class!). But this can also happen when you travel business class. So when you are flying, be sure to take a few steps to preven this from happening to you. And you will feel more comfortable as well.

Those more at risk – Some folks are also more at risk of developing DVT than others. Below is a list that you might want to be aware of:

* Personal or family history of DVT.
* Recent surgery or injury, especially to lower limbs or abdomen.
* Blood disorders leading to increased clotting tendency.
* Oestrogen hormone therapy, including oral contraceptives.
* Pregnancy.
* Tobacco smoking.
* Obesity.
* Dehydration.
* Heart failure.
* Varicose veins.

To sum up, walk often and do those little exercises in the plane to help prevent DVT. If you are more at risk, it is best to consult a doctor to see if you need any extra medication.

I am going to start a series of reviews for companies that store your Personal Health Records (PHR). These might be useful services especially when you travel abroad and meet an accident. These companies will take records of your medical records and store them in a USB drive and obviously on their website as well. Any doctor will be able to access your full medical record if you have the IBS drive with you or if they can access your records online. Today, we start with ER-Card, one of the many providers of PHR.

E-Card (www.e-card.com) is an online ePHR membership site that stores your medical records. The type of information that they store includes:

ER Card members will be able to do the following:

Accessories – Members will also get the following accessories that will come in handy.

1. Exclusive ER Card wallet Membership Card
2. Hard copies of their personal health record- With Customized Folder
3. ER Card Key Tags
4. Window decals, Refrigerator magnets
5. ER Card USB Flash Drive (credit card, key ring, or jelly bracelet style) (optional)
6. ICE (In Case of Emergency) ID necklace (optional)

Cost – Firstly, the USB flash drive will cost you $39.95. You have a choice of choosing a slim credit card, key ring or jelly bracelet style) design. An individual membership cost $8/per month. Additional members (two or more) will cost $6/per member per month. If you choose to pay your annual fee in one lump sum, you get a 5% discount. And you get a 10% discount if you pay for 2 years worth of membership fee at once.

Verdict – There are many PHR membership providers. Er-Card is by no means the cheapest.But it does offer a pretty comprehensive service in terms of what they provide. If you are a frequent traveler, you may just want to consider getting a PHR service in case there is a need to access your medical records. ER-Card is definitely a service that you should check out and do some comparison with other services.

It’s that time again.  Time to hear how evil reward credit cards are.    They are so evil that they act like a “Reverse Robin Hood”.   We all know Robin Hood, the guy who steals from the rich and gives to the poor.   What could be worse than a Reverse Robin Hood, something that steals from the poor and gives to the rich.   You Bastards!

The Federal Reserve Sells It

The geniuses at the Federal Reserve Bank of Boston came up with a study that claims that reward cards actually take money from the poor and give to the rich.   I do not use the term geniuses lightly, as they include plenty of math like this:

Hence indeed.   The last time we looked at the Reverse Robin Hood argument was in response to the merchants fight against interchange fees.   You can read My Rebuttal To The Case Against Swipe Fees here.    Fortunately, the authors of the Fed report do not rely on interchange fees to support their conclusion as they write; “Our analysis of the transfers among consumers requires only the merchant fee and reward rate and not the inclusion of the interchange fee” (pg. 15).

With merchant sponsored interchange fee propaganda off of the table, the authors can go on to show with great mathematical detail how those who receive reward card benefits tend to be well off, while those who pay with cash are not.    Therefore, they conclude, the poor are subsidizing the rich.  This is too much for even a liberal like myself to swallow.   As I wrote about the Reverse Robin Hood theory when it applied only to interchange fees, this is an argument against credit cards and virtually all financial instruments:

The poor generally pay more interest and fees than rich.    This is true for almost all financial products from car loans to mortgages.    The reasons are obvious; wealthier people are both more financially literate and are less likely to default.

To put it more simply, I call BS on the entire Reverse Robin Hood theory as it applies to both interchange fees and credit card rewards.    Society can guarantee equality of opportunity but not the equality of results.   There are plenty of poor people who still own credit cards (like me when I was in college), and plenty of rich people who pay with means other than plastic.      We each have the opportunity to take advantage of reward cards, even if the result is that some do and some don’t.   If the authors of the study are correct in their analysis of the data, they make a pretty strong argument for being one of the people on the receiving end of the reward subsidy.  Your only takeaway should be to ensure that you are maximizing your rewards from your credit card portfolio, while never paying credit card interest or fees.

Unfortunately, they also reach policy conclusions that would be pretty nasty for us reward card aficionados, and believers in the free market in general.    For example, they propose the regulation of both interchange fees and rewards.   In wording that will cause the brains of Joe The Plumber and his supporters to explode they actually suggest a policy of “redistribution” of rewards through “tax deductions for reward contributions” (pg. 35).      They may be math geniuses, but they are completely tone deaf politically.

The New York Times Buys It

The financial blog at the New York Times links to the report.   They are so taken with the plight of the poor who, by paying cash, tend to miss out on rewards that they suggest:  “some ideas for what consumers can do now to alleviate any guilt they may have about using their cards everywhere” such as “using cash for certain purchases or at certain retailers” and “donating some of rewards each year to nonprofit groups that help the poor or giving up the cards completely.”

I am all for charitable giving, but when I walk into a store to exchange my hard earned cash for goods and services, I am participating in a business transaction.  I will not be using cash instead of my reward card in order to support the merchant any more than I will be giving them an extra 10% above the price because I really like them.   Any suggestion that people act so far outside their best interest to “alleviate their guilt” when purchasing goods and services is just nonsense.