Cardholders of American Express’s Platinum Credit Card now can use the American Airlines Club Lounge at airports if they are an American Express Platinum Card holder and if they have bought an american airlines ticket.

If your spouse or children are travelling with you, they can also access the lounge. Alternatively, you can also bring two companion travellers with you.

Presently, cardholders of American Express Platinum Card have access to Continental Airlines Presidents Club, Delta Crown Room Club®, and Northwest Airlines WorldClubs. This is a welcome addition to the airport lounge perks.

This morning, I had a meeting with a someone I had recently met at a conference. We decided to meet a a Starbucks. I parked my car about a block away and was half an hour early. I decided to put two quarters in the parking meter. I thought of putting three quarters, but decided against it.

Half an hour later, my friend showed up. After buying our coffee, we sat down and had a great time chatting about various stuff. Well, time flew and before you know it, we had been chatting for forty five minutes. It was time to go and lo and behold, I found a parking ticket by my windshield.

I looked at the parking ticket and the fine was $26! Alright, it’s not too bad but I was really pissed at myself. Had I just put in another quarter, I would not have to pay this fine. A quarter is a lot better than a $26 fine.

It made me wonder what was going through my mind when I put that two quarters after I just parked. Why didn’t I put three quarters (or even four) just in case? Why did I want to take the risk? In analyzing the situation, I realized that what I did was irrational. There was a good chance that I will end up chatting with my friend and forget about the time. There was also a good chance of me getting a ticket. The fine was substantially more than a quarter. Yet, I found myself trying to save this quarter and it was really for no good reason. Because even if my friend did not show up, the worst I would have been was to lose a quarter. But looked what happened instead.

On hindsight, this is a classic example of being penny wise and pound foolish. Trying to save a few pennies, but end up losing much more. There are many examples in my life where this happened. Like trying to invest on my own for ten years without seeking help. I thought that I could be as good as Warren Buffet or investing was as easy as Peter Lynch said! How much did it cost me? A lot!

What examples of “penny wise pound foolish” mistakes have you made?

I have been working for over 14 years. For more than 10 years, I did not own a house. In fact, I have worked abroad for substantial periods and the companies I worked for took care of the “housing”. While we were having our rent paid for, we had great disposable income. In fact, one of the biggest regrets is not buying property when we were younger and missing the great bull market.

At the same time, both Mrs Credit Card and myself have never had any credit card debt. We always paid our credit card bills in full on our American Express Gold Card.

Two years ago, we bought our first house. We were pleased with our purchase. But along with that came a mortgage payment. Our mortgage payment was about close to 30% of our monthly income. I guess it was a little stretch but it was ok. One of the effects of having this mortgage was that all of a sudden, our disposble income declined dramtically. The upside is that we had invested in a property, an asset which is supposed to keep up with inflation historically. Our interest payments were tax deductible as well.

Despite that, I still do not feel good about the mortgage. It feels like a heavy burden. Though I have never had any credit card debt, I think having a mortgage is very much like having credit card debt. You always wonder when it will go away. And while you may eliminate your credit card debt in a few years, with a mortgage, we are talking many years.

You see tons of articles and websites giving advice on how to reduce credit card debt. Taking advantage of 0% APR Credit Cards, paying off the card with the highest interest, or paying off the card with the lowest balance, having a systematic payment plan. There are even many calculators to check how long you would take to reduce your credit card debt.

But when it comes to your mortgage, I do not see many post on whether you should have a systematic plan to eliminate your mortgage. Yes, there are mortgage calculators that tell you how your mortgage period can be reduced if you pay extra every month towards principal reduction. But, very few actually advice that. One rational is that the extra money could be reinvested for your retirement instead. Unlike a typical credit card debt where the interest is probably double digits, a typical mortgage rate these days is only about 5% to 7%.

But like I said, having a mortgage is like having credit card debt to me. So I will be investigating whether I should put extra money into my mortgage every month. Doing so involves me cutting back on my monthly expenditure.

What do you think about your mortgage? Does it feel like credit card debt to you? Share your thoughts with us.

Last week’s Carnivals

Carnival of Personal Finance #103 at Clever Dude

77th Festival of Frugality at My Two Dollars.

Carnival of Credit Card #15 at Credit Card Lowdown

Must Read Posts

David Bach’s Misleading Math on Real Estate Leverage by Money, Matters and Musings is a great piece by Golbguru. Finally, someone actually sits down and does the math on these ‘learn how to be rich books’. I never had great respect for David Bach after I attended a seminar by him which features pitch fest by salespeople selling their stock trading system, cookie cutter trust documents! $4000 courses on investing in real estate liens from information you can get free on the internet! To me, the book was just a means to get rich teaching people how to get rich in seminars! Well done Golbguru.

Massive Personal Finance Resource List by the Frugal Law Student is a very long list of resources that everyone will find helpful. The only quibble I have is that my blog is not included in the personal finance blog section!

Queercents had a very eye catching post on Miscellaneous Expenses - Where Did My Money Go?, which really resonated with me. The conveniece of putting everything that you cannot categorize into the miscellaneous section may not be such a good thing.

Pirates of the Credit Sea - Part 5 by The Investor Blog is summary of his continued with Citibank on his credit card. I won’t divulge all the details, but I must say this is one of the best post and saga I’ve read. Be sure to read this one. You’ll learn a lot from it.

A few months ago, I decided to embark on a project to create calculator that will help you choose the best cash back credit card. I sat down with a programmer two months ago and we thought that the project will simply take a couple of weeks. However, it turned out to be more complicated than we expected. Anyway, version 1.0 of the Ask Mr Credit Card Cash Back Credit Card Calculator is now officially released.

All you have to do is simply put in the your credit card expenses. You will see various categories like gas, supermarkets etc because some cards pay a higher rebate on these items. You have a choice of asking the calculator to find the best cash back credit card if you decide just to get one card. Alternatively, you can ask the calculator to calculate the best “combination of cards” that will give you the highest rebates.

The calculator has a database of all cash back credit cards (at least most) in the market including business credit cards. If you find that a cash back business credit card is recommended, you can apply for it because the credit card issuer simply treats you as a sole proprietor.

I hope you find this a useful tool. Feel free to give any feedback in the comments area.

Link : Cash Back Credit Card Calculator.

The Discover Open Road Card (former Discover Gas Card) will be changing it’s rebate policy slightly on gas purchases from October this year. At present, cardholders can earn 5% rebates on gasoline purchases at any station for up to the first $1,200 in annual gasoline purchases from with the card.

This will change in the following way from October 2007. You can still earn 5% rebates on gasoline purchase for the first $1,200 in gasoline spending. But each month, you can only earn 5% rebate for up to $100 in gasoline spending. Essentially, Discover is forcing cardholders to spread out the gasoline spending over 12 months. This will probably be difficult for many cardholders because it cost close to $50 to fill up many vehicles these days.

This is becoming an issue for credit card holders who want to earn 5% cash rebates for gasoline purchases. In the past, the Citi Dividend Platinum Select Card and the Chase Cash Plus Rewards Visa (now replaced by the Chase Freedom Card) gave cardholders a 5% rebates on gasoline purchases. The Citi® Dividend Platinum Select® Card now only pays 2% rebates on gasoline, supermarket and utility purchases, while the Chase Freedom^SM Cash Visa® Card pays 3% cash rebates. The other card that pays 5% rebates on gasoline is the Blue Cash® from American Express . But you have to spend above $6,500 (in annual spending) before you can earn 5% rebates.

The best card now that lets you earn unlimited 5% rebates on gasoline purchases (without any limits or tiers) is the American Express SimplyCash^SM Business Card. You not only 5% cash rebates on gasoline, but also on office supplies and wireless services. Yes, it is a business card. But you can apply for one as a sole proprietor. At present, this would be the card I would recommend to earn 5% rebates on gasoline spending.

Joseph Lau, the Hong Kong billionaire who holds stakes in Hong Kong property developer Chinese Estates Holdings Ltd. (0127.HK) and department store owner Lifestyle International Holdings Ltd has ordered a Boeing 787 for his personal use. According to Forbes, his net worth is a very cool $2.1 billion dollars.

The price tag on this machine is a cool $151mm (but I’m sure he’ll either get a discount or could end up paying more for customization). I guess when you are worth $2.1 bn, throwing away $151mm for a transport is OK. This is in contrast to most mere mortals (us) who actually take out a loan for our cars (most people have to invade their emergency fund if they fully paid their cars!).

Somehow, I am wondering how much does it cost to maintain this beauty. Rather than taking a speculative guess, I did some research into how much a fractional ownership on a much smaller plane will cost and arrived at a rough estimate.

To own a one-eight share in a Learjet 31A, you will roughly need to cough up about $700,000. Monthly fees are about $5,500 a month and you pay $1,500 per hour on the airplane. As far as maintenance goes, that means it cost $66,000 a year in maintenance fees. This is for a one-eighth ownership. Assuming you fully own the jet, that will work out to $528,000 for maintenance fees. Now, assuming you fly 500 hours a year, that will work out to $750,000 a year. Fractional Jet companies have to cover their cost and make a profit too. So let’s assume eight owners will pay $750,000 X 8 = $6 million. Total cost is $6.528 million to maintain a private jet. That is just an estimated cost of owning a small LearJet 31A. With a Boeing 787, I’d guess it probably runs to about $10mm ?

But since Joseph Lau is worth about $2.1 billion (though they are concentrated positions!), I guess $10 million a year is nothing to him. Look at it this way, if you have $500 million in tax free municipal bonds, then the interest you will get is about 3.8% or $19 million on a $500 million portfolio. So it looks like the aircraft maintenance is easily covered.

For someone who buys a private jet, I don’t think you can ever justify the cost based on hard numbers. But rather, you can only justify it by the time you save. How much is your time worth ? Presumably, Joseph is worth thousands of dollars an hour. As he is probably a frequent flyer, the time he saves, the ability to conduct business in his private jet will probably cover the cost of the plane and the maintenance cost as well.

How I wished I could fly a private jet !

P.S - Think of how much reward points he would rack up if he paid his aircraft loan with an American Express Card!

Welcome to the Mother’s Day Edition of the Carnival of Debt Reduction. Today, you will not get any sales pitch on things to buy for Mother’s Day. But rather, we will pay tribute to good old Mama’s advice on money and life and for once, I will use pink in my post (tell me if it goes with my light blue!). I will always remember Mama’s advice given to me throughout the years. Personally, here are a few snippets of what my mom personally told me :

1. Always have your own bank account (this was actually what she told her daughter-in-law Mrs Credit Card!)

2. You do not have to ever support me when I’m old, but don’t you dare borrow money from me!

3. Always save…save…save.

4. If you ever lend money to your friends, do not expect to get a single cent back.

Well, today’s carnival will contain some age old Mama’s advice. So, pay attention and stay tuned.

There is no free lunch. If it’s too good to be true, something smells fishy

Search Light Crusade post resonated with me the most - Mortgage Loan Advertisements : Horrible and Getting Worse. I cannot agree more with this post. Worse of all, these ads appear on mainstream internet like Yahoo. Check out Yahoo and see if you cannot find the following ad : Mortgage rates fall again - $145,000 for $499 a month!

Me : Mommy, I heard that our principal will be leaving at the end of the year.
Mama : Well, uncle Harry works for the school commisioner. Let’s call him to find out what is going on !

Free Money Finance post on The Mortgage Mess : In the Eyes of An Account Executive will really make you angry at what is going on in the mortgage industry. This is an insider account of what is really going on in the subprime mortgage lending world. I recently attended a Dan Kennedy/Glazer meetup group. These folks are famous for their direct marketing. During the session I attended, there was this mortgage broker (who must have been about 25 years old) who stood up and presented on how he was using direct marketing tactics (newsletters etc) to get sub-prime clients. He makes about $15,000 per loan approval!

When Mama found out I was dating, she always asked me the following :

Who is she?
What is her name?
What is her major in school?
Can I see her picture?
Where does she live?

Uhhh!! I used to hate those questions! But when it comes to major decisions and purchases in life, you can never ask too many questions. Is Debt Management Plan Right For You? from BB Consumer Education contains 17 questions you should ask before you think about enrolling in a Debt Management Plan. The title should be 17 Questions To Ask Before You Enroll in a DMP. These are very good points though and anyone in this situation should definitely check this out.

When I was 13 years old, I asked Mama to get me the latest BMX ‘Diamond Black’ bike. Why do you need it? Just use your old bike!

PF Advice wrote about the 10 Reasons Why He ditched His Car. Let me guess - totally eliminate your auto loan debt? But seriously, this is a nice post. And you know it is nice when a comment is as long as the post! If you could really do without a car, you will definitely save a bundle from not paying any auto loans.

Mama says : First, you write your daily allowance on the right column. Then you add your expenses on the left. Then you subtract the left column from the right column. The difference is what you saved

Aside from teaching me about budgeting, Mama also taught me how to fry an egg, tie my shoe laces and many other stuff. She would approve of the next post. 5 Steps to Debt Management is a summary of steps that My Credit Score has developed to help you manage your debt.

How to Get Out of Debt Fast by Kennubo is a very brief summary of steps you can take to get out of debt. This post could use a little more detail and elaboration though.

Never owe anybody money or they control your lives

How I plan to help my children avoid the credit trap documents the steps No Credit Needed Blog is taking following Mama’s advice on teaching your kids about money. Unlike, most who believe their kids have to learn the value of money and figure things out themselves, No Credit Needed is thinking about helping their kids more generously to prevent them from getting into debt.

Finished your homework? Well, don’t just do nothing, find something useful to do!

Mama would never allow me to waste my time doing silly things. Even when I’m done with my homework, she’ll find something useful for me to do. Your Credit Cards are paid off. Now What? is a thought provoking question posed by Tricia from Blogging Away Debt. What do you do when you have eliminated your credit card debt. Listen to what Mama says : Don’t just do nothing, find another debt to eliminate (student loan? Mortgage?). Well, the answer I would say is to give yourself a pat on your back and then move on to reduce your other debt as soon as possible. Keep going and before you know it, you’ll be in financial nirvana. Find out what Tricia thinks.

Mama will always love you no matter what

My Two Dollars plays Dr Phil this week with this personal development type essay for those in debt - Having Debt Does Not Make You a Bad Person. If you have negative self image about yourself, then perhaps this Dr Phil type article will inject some postitive energy in you.

Mom Screams : Why did you have 3 lollipops? Have some self control !

Control Your Spending from John Place Online is a short satire of a woman he knows that has her spending out of control. Spending is not the only thing that people have no self control on. We sometimes spend too much time on the computer, TV etc. But when you actually spend too much money, your finances will suffer. Do not make the same mistakes as the person in the following post.

Confessions of a Compulsive Shopper from Newly Frugal is a true account of a shopperholic. Please read this account carefully. If you are like what this, then you’d better do something about it.

Momma said : Son, You’re a smart and a good boy. Don’t let anyone tell you otherwise.

Prosperity and Abundance is Your Birth Right from Abundant Lifestyle is certainly not about debt reduction. But I guess if you do not think enough about prosperity, then you may find your debt reduction efforts pretty tough mentally. I totally agree with this post. Too often, all we talk about and advice those in debt to focus around saving, budgeting etc, which are all good things. But that is only half the equation. Program your mindset to accept abundance is the other often neglected half.

Mama says : Son, I want you to form good habits. When you get up, change, brush your teeth, put your school bag at the front of the door. Before you do to bed, brush you teeth, prepare your clothes for tomorrow and read your book.

7 Habits of Highly Effective Managers from Edith Yeung is certainly not about debt reduction. But if you follow these habits, you probably would not be in debt anyway.

Mama says learn from other peoples’ mistakes. Don’t make the same mistakes again

Blunt Money has written a series of post on common financial mistakes. Common Financial Mistakes - Part Eight highlights a couple of interesting points.

Mama says : When I say be home by midnight, it means I want you in the house by MIDNIGHT! Not a minute or second later! In life, never be late for anything - meetings, paying your bills, ANYTHING.

Mama would be very unhappy with Frugal Law Student’s very late submission of his Book Review of Generation Debt. The post was submitted at 9:53pm EST. Fortunately for him, his FICO score will not be affected. But be warned. Never be late for your court hearings.

All right, that’s it for this week’s carnival. Happy Mothers’ Day to all pf bloggers who are Mommys.

Citi® Dividend Platinum Select® Card is now offering a promotion. New cardholders can earn 5% rebates for six months on purchases made at gas stations, supermarkets and drug stores, convenience stores, and utilities including cable for 6 months. After the promotion period, you will earn the normal 2% cash rebates for these categories. For other regular purchases, you earn 1% rebates.

Just to recap : This card has no annual fee and comes with a teaser 0% apr for 12 months offer.

For those who were always thinking about getting this card, this promotion may just get you going!.

The Wall Street Journal on Friday published a story titled Breaking the Code - How Credit Card Data Went Out the Wireless Door. It reports on how a Marshall’s Discount store in St Paul, Minneapolis had sloppy wireless date security and allowed tons of credit card data to be stolen right under their noses.

Their wireless network had less security than many people have on their home networks. The hackers, who have not been found, downloaded at least 45.7 million credit- and debit-card numbers from about a year’s worth of records. Not only were credit card data lost, but also data like social security numbers, drivers license etc.

Once these credit card data was stolen, fake credit cards based on these data can be issued. The hackers can then use these cards and spend them as they please. Eventually, that is how these frauds are detected - when credit card holders start noticing bogus spending on their card. They people who use these cards with stolen identity also spend as much as they can away with.

What TJX (which owns Marshall’s) neglected was simply to encrypt their wireless data! (which you’d think would be a standard especially for a major company with an IT stuff). It enabled the hackers to simply hack into their system and created use passwords!

The article in the journal also touched upon the topic if companies should be legally responsible if they were sloppy and allowed your credit card data to be stolen. I personally think there should not be such legislation because sooner or later, the smart companies out their will realize that offer data security could be a competitive advantage.

What puzzles me is that big companies like TJX can be so sloppy. The big lesson here is that even when shopping at major retailers, your credit card data could be compromised and your identity stolen. I will be writting a post soon on identity theft prevention and steps to take when it happens.