Companion Airfare, Use It Or Loose It!

I was thinking about the subject of companion airfare deals lately.   I had received so many offers for free companion airfare that I finally had to take advantage of one.   It was an offer in which I ordered a subscription to Travel and Leisure magazine, and then received a “companion travel certificate”.    To make a long story short, the price I was quoted for a single ticket on my next trip with “free companion airfare” just happened to be exactly the same price as book two tickets on the same flight if purchased directly from theairline.   What a coincidence!  It also turns out I am not the first to discover that these particular certificates are nearly worthless.

On the other hand, American Express themselves offers companion tickets to it’s Platinum Card holders.  Apparently, these certificates do have value, however, I just discovered two interesting facts.   One, these certificates are only given to non-business card holders.   My Amex Simply Cash Business Platinum doesn’t count.   Two, they are discontinuing the program.   According to their web site,

“For those Card members with current reservations, your tickets will be honored by the airline on which you are ticketed. Card members can also request new reservations through the Domestic Companion Airfare Program until November 15, 2008. Please keep in mind that ticket availability is limited by inventory, program conditions and blackout dates.”

So find someplace to take someone soon!

Speaking Of Things That Are Cancelled

I found a great camcorder recently, but after I purchased it, I kept seeing the same model advertised for extremely low prices from other businesses.  Then I remembered that  Amex offered a “Best Value Guarantee” program.   Just to be sure, I checked their website, and sure enough, the program appeared to be worthwhile.   I thouroghly read through their program brochure to ensure that my purchase qualified.   With a print ad in hand from a retailer offering the same camera for a substantially lower price, I called to take advantage of their program.

Unfortunately, recording at the number currently given at their website informs callers that the program was discontinued in 2006.   I can only imagine that I must have received some notice of the program’s cancellation, buried in the fine print of a 10 page card holder agreement.   Shame on Amex for not updating their website to indicate the program no longer exists!

Amex still offers many great features and rewards, but the trend is now clear; expect Amex features to be disappearing like pillows and blankets in an airline.

Check Your Credit Limit

According to several threads at FlyerTalk, American Express has started to restrict people’s credit.   By some accounts these restrictions are arbitrary, and are affecting people who carry high balances, yet pay off their accounts in full every month.   It doesn’t take a lot of imagination to conclude that this has something to do with the global credit crunch.    My advice is to call Amex and double check on your current credit limit, especially if you are planning  extensive travel or large purchases.   During these times, you should always have at least one backup card if you are traveling.

Even worse, there are multiple stories of Amex asking it’s customers to undergo a “Financial Review”   It seems as if they want all sorts of documentation of your income as well as past tax records.   It is this request that has gotten many loyal Amex customers quite offended.    Aside from privacy concerns, many users are afraid that their accounts will be closed and their Membership Rewards points will be forfeited.

While I am thankful I have not been selected for such a Financial Review, I am a little concerned about my credit card company potentially auditing me as if they were the IRS (at least the IRS already has my tax returns!)     The situation seems to affect people who are spending tens of thousands of dollars a month, which unfortunately does not include me.  If you do find yourself in that situation, the best advice would be to redeem you Membership Reward points for frequent flier miles with your preffered carrier.   I guess it was only a matter of time until the global credit crunch started trickling down to cardholders like you and I.

In my previous article, “Repairing Your Credit After Bankruptcy Part One” I went into some detail about how we cleaned up our credit reports after our bankruptcy, and established new lines of credit. In this article I’ll dish some of the secrets of how we continued to raise our credit scores despite having a bad credit history.

After my husband and I established our new lines of credit (two credit cards each) there was still a long way to go. The most important thing to stress here is that credit scores take time to rebuild. We didn’t bounce back from our bankruptcy overnight. In fact, we still have not completely recovered as far as our credit scores go, but we are better off than we have ever been. In another couple of years, we should be able to pass all but the most stringent lending qualifications.

So, that said, here’s the rest of the story:

1) I accepted the fact that raising my credit score was not going to be cheap. See, the thing is, when you have great credit, you can save money. The worse your credit is, the more simple credit - any type of credit will cost you. Whether that is in increased interest rates, or fees tacked onto credit cards, it’s pricey.

2) I accepted the fact that in order to build my credit score, I was actually going to have to use credit, and use it responsibly. It is very, very common for people coming out of bankruptcy to stop using credit altogether. Especially if the credit cards are what led to their bankruptcy in the first place.

If you choose to do that (and it can sometimes be the right thing to do!) you will have to accept the fact that it will take 8-10 years, instead of 4-5 years to be able to get a reasonable home or car loan.

3) I began monitoring my credit reports and scores regularly - This is not cheap. At a minimum it’s $30 a month, and usually more depending on which scores and reports you want access to. I chose to do this because I wanted to know exactly what impact my actions were having on my credit score. There was no point in paying high interest, or yearly fees on a card if the card was not raising my score.

I will continue to monitor my credit, probably forever. Not just because we are in the process of repairing our credit, but because I will never have to worry about my identity being stolen, or about bad information being put onto my report. Heck, my credit report looks bad enough, I don’t need the credit bureaus making mistakes and lowering my score instead of raising it. Monitoring my credit score also lets me check up on my credit cards. Since they are cards designed for rebuilding credit, they are supposed to report my regular payments to all three credit bureaus. Since I do monitor my credit reports, I know when they do report, and when they don’t.

4) I worked hard to educate myself - Obviously, since I went through bankruptcy, I didn’t have the right knowledge or attitude. I didn’t know what I was doing financially, and worse, I developed a pattern of ignoring my finances over several years. (Bills came in, and into a drawer or the trash…sometimes not even opened because I just couldn’t stand to look at another bill we couldn’t afford to pay.) And yes, with that attitude, it’s no wonder we ended up bankrupt. I know that now - I couldn’t deal with it then.

So, I read every book on money or credit that I could get my hands on. I checked them out from our library, asked friends for recommendations, everything. I’m happy to say that some of it did stick with me, and moving forward got a lot easier.

I also looked into several “repair your credit after bankruptcy” seminars and such available online, but the only one I liked was over $500! Can you believe that? Charging newly bankrupt people $500 to learn how to repair their own credit?

Let me tell you honestly, that information is out there for free. Heck, most of it’s right here on this blog! Don’t pay for stuff like that, please. Do yourself a favor and spend some time reading instead. You can figure things out for far less than $500. Don’t let your misfortune make someone else rich any more!

5) I keep the balances on my cards low, and I make my payments on time, every time - This really is the secret to great credit. Don’t have more cards than you can manage, charge less than 20% on the card each month, and pay the full balance on time each month.

Now I realize that some of you out there cannot do this yet. I’ve been there, I understand, believe me. If you have cards which are charged up, and you cannot pay the full balance off yet - that’s ok. It really is. Just pay them down as quickly as you can. The sooner you get them under 30% of the available balance, the sooner your credit score will go up. There’s no race. You have all the time you need to do this - just set it as a priority, pay more than the minimum, and stop charging for now.

6) We purchased a proper amount of health insurance - since not having adequate health insurance was the biggest cause of our bankruptcy, it was one of the first things we changed once our bankruptcy was discharged. I never again want to be afraid to go to the hospital if I , or my husband needs to go. I never again want to be turned down for treatment because the physician knew I had no insurance.
Health care is expensive, there is no way around it. But it is far more expensive not to carry any sort of insurance at all!

We are only thirty - we thought we had plenty of years before health insurance deserved a place in our budget. We were wrong about that. And if you are out there, right now, with no insurance, please, do whatever you can to get some sort of coverage. No one can see the future.

And that, in a nutshell, is what we’re doing to rebuild our credit. It’s not hard. Nothing earth shattering. You can do it too, no matter what your credit score is.

The hardest part about repairing our lives after bankruptcy wasn’t getting the finances straightened out. That just required a little work and some education.

No, the hardest part is changing the mental attitudes my husband and I have. The “We deserve to be poor” attitude. The “I’ve always done things this way, so I’ll keep doing them this way” philosophy. Well, our past attitudes put us into debt. Put us into bankruptcy. No matter how well we might understand the physics of money management, the emotional side has been the hardest for us to change.

I do welcome your questions! Please feel free to leave me a comment below. Thanks!

Keep Reading:

• Repairing Your Credit After Bankruptcy Part 1
• Will Credit Counseling Hurt Your Credit Score?
• Bankruptcy Laws Are Changing on October 1, 2008

Healing Your Financial Soul was sent to me by one of our readers, David Hicks. David is a communications consultant, and an ordained minister. He wrote Healing Your Financial Soul to address the deep, underlying issues that force us to struggle with our money every day.

To me, this book is an excellent example of Teddy Roosevelt’s famous quote “Speak softy and carry a big stick“. This “big stick” in this book is the wealth of facts, and David’s excellent understanding of financial psychology. The “speak softly” part comes into play with the generous humor sprinkled throughout the book, and the realization that everyone has money problems, even the very wealthy.

Hicks gets right to the heart of the matter very quickly. In fact, I can honestly say that I learned a lot about myself in the very first chapter. Healing your financial soul is filled with exercises, and visualization tips, all of which have a proven track record in the field of psychology. It was during the first of these exercises that I learned something new about myself.

From the book:

Now, ask yourself this question:
What characteristic describes my heart’s desire specific to finances? What quality of word names it?

Well, the first word that sprung to my mind was greed. So, to fill in the second part of the book I wrote:

I am rich in greed.

Well, let me tell you I almost fell out of my chair laughing, because it’s so very, very true! I will say that the author clearly intended me to come up with something positive here, something good that could be reinforced. But, my mind sure had other ideas!

I am rich in greed, I want. And that wanting is at the heart of most of my major financial mistakes. I don’t think wanting is bad per se, but greed is, and I’ve certainly been hit badly by the greed bug lately. I do want to say, “Thank you David, for helping me to learn something about myself, so that I can freely admit it and stop letting it control me!”

See, that’s the kind of book this is - the sort that gets you thinking, deep down, about what’s really going on with your money. Now, I’m not suggesting y’all are greedy (I’m from Kentucky, I’m allowed to say y’all with impunity!) Just that greed is apparently one of the challenges I am facing. The beauty of this book, is that it helps you come up with your own answers - the ones that fit you specifically.

Let me pull a couple of gems from Chapter Two as well:

If you struggle financially, it’s because deep down,
you were taught,
and you agreed to believe,
and made countless decisions to prove
that you’re supposed to struggle.

While doing research for his book, David ran across an interview with a financial planner. The financial planner had something similar to say:

“I wish some [people] would just get the notion to at least put part of [their money] somewhere they can’t get to it for a while…I don’t want to get too Freudian or whatever about this, but it’s almost as if people feel like they have to get rid of the money because they don’t really feel like they deserve it.”

I love these examples because I believe they are true as well. Many of us watch our grandparents, parents, or friends struggle financially. Somehow, somewhere, we picked up the message that we should struggle too. That you have to struggle for money - you have to fight claw, scrape, scrimp and save just to make ends meet.

But what if that’s really not true? What if the reason we struggle is because we believe we have to?

Hicks believes that the money isn’t the problem, our capacity is.

He sums up the money / capacity issue by explaining that it’s like taking a cup out into the ocean to collect water. Now matter how deep you swim, or how many times the waves break over your cup, you can only carry one cup of water out of the ocean. There are oceans of wealth out there too - money is plentiful. Our capacity to gather it is what we have voluntarily restricted.

I love this book, I truly do. I think it says in 264 pages what multitudes of financial books have skipped, or never even touched on. The power to be wealthy, satisfied and happy is ours. The power to tear down success, fail, and fall into an endless pit of despair is ours too. The difference between the two is determined by our beliefs.

You should know that the examples I am giving, they are just tiny bits from the first two chapters. Healing your financial soul is filled with positive, thought provoking passages all the way to the end.

If I could stress any one thing about Healing your financial soul, it’s that it is a fun book. It’s a happy book to sit down and read. It gives you pause for thought more often that it gives you direct instructions, and with each realization you gain that much more control of your own money - your own life.

This is not just a book I will keep and re-read. This is a book I will share with others, and give as a gift at birthdays and holidays, over the next several years.

If you’re interested in finding out more about this book, you can check out the website here. David has also agreed to be around to answer any questions, so you can chat with him directly by leaving a comment below.

Keep Reading:

• Think and Grow Rich
• Debt is Slavery
• A Review of The Prosperous Peasant

As the reward card contributor to this blog, I receive many questions regarding the best reward strategies.   Here are a few of my most recent inquiries.

Every time I go to the store, I get an offer to save 10% by applying for their credit card.  Is this worth it?

In a perfect world where we had unlimited credit and we didn’t really care about our credit scores, the only downside would be the time and hassle filling out the application.    I was amazed the other day when I was offered a discount at Target if I filled out a credit application when I was only purchasing about a hundred dollars worth of merchandise.    As usual, I said “no thanks” and put the purchase on my Starwood American Express, where I hope to earn points towards hotel or travel rewards worth perhaps %5 of my purchase.   While tempting, I have to realize that if I were to apply for a card from every retailer I visit regularly, I might have a wallet that weighs a few pounds!   My strategy is to stick to cards where I get a large reward and a large sign up bonus.

For example,  I recently purchased a $600 digital camera from Sony’s online store.   They offered me a $150 purchase credit, essentially 25% off, plus 12 months free financing, plus enough “Sony Points” to earn a $25 off of my next purchase.   Since I will likely need additional lenses and accessories from Sony in the future, I felt that I was getting both a reasonable reward, and a large sign up bonus.   In addition,  the shipping costs were almost precisely offset by the lack of sales tax.

Ultimately, you do not want to risk your credit score by opening up too many cards or cancelling them too quickly.    You also do not want to become too overwhelmed by statements and offers from too many reward cards.

What Reward Cards Do You Currently Use?

My primary card these days is the aforementioned Starwood American Express.   This works for me and my family as it is flexible and offers a high rate of return of 5% or more when used for premium international airline travel and Starwood hotels.    I recently got a American Express Platinum Business card in response to an unbeatable offer I received.   It gives me 5% cash back off of gas, wireless bills, and office supplies, %3 off travel, and 1% off everything else.   So far, I have only used it in the 5% cash back categories.

Of course Amex is not accepted everywhere, that is why I have the Capitol One rewards Visa.  With it, I get about 1.5% cash back, which is not bad for a Visa/Mastercard.   I also take pride in the fact that I do not pay any foreign currency exchange fees when I make purchase in other countries.    While I would love to say that i am a jetsetter who spends big money across the globe, I am afraid my travels are more modest.   Nevertheless, I hate paying exchange fees as a matter of principal, even if they would not have added up to much.

I also have my Internet bank’s debit/ATM card.   This is great for cash and as a backup in case my other Visa is lost or stolen.  Finally, I guess I will soon be adding the Sony card to my collection as well.

These cards work for me and my wife, because of our particular travel and spending habits.   Everyone’s lifestyle is different, so don’t expect to maximize your rewards by replicating my wallet.

Can I get a business card, even though I do not own a business?

Of course you can.   Everyone is qualified as far as the card issuers are concerned.   My Amex Platinum Business card was no more difficult to receive than any other card.   Some people who really need the sign up bonuses will even apply for the business card in addition to the regular card.   In extreme cases, it might even make sense for a husband and wife to both get the standard and the business card, quadrupling their rewards!

You write a lot about Visa, Mastercard, and American Express.  What do you think of Discover and Diner’s Club?

I don’t hold either one, but I know some people who do.   I have seen some pretting good reward offers from them, but so far, I am not sold.   The problem is that they are not accepted at many merchants. Discover has a reasonable number of merchants that accept it, but it still trails even American Express by a wide marging.   Diner’s Club is even less accepted than Discover.   It is hard enough hearing that your Amex is not accepted as often as you do, and I just don’t want to flip out so many cards that I feel like a dealer in Vegas everytime I purchase something.     Until their networks increase, or their rewards become irresistable, I will be sticking with the big three.   I will keep my eyes open though.

It is easy to forget that there are other rewards cards out there offering returns besides travel and cash back.   Many gasoline retailers offer there own branded gas card.    With the dramatic increases in gas prices over the last year, it is tempting to consider getting a gas reward card.   Lets take a moment to see how these stack up.

What Is Their Value?

Take the BP Chase card for instance.  It offers 5% rebate on all gas purchases at BP, 2% on all travel and dining, and 1% nearly everywhere else.   Make no mistake, 5% is a fantastic return, but realistically, how much money will you save with it?    Suppose you have a long commute and you travel 20,000 miles a year with a vehicle that gets an average of 20 miles per gallon.    Even in the worst case scenario, if gas averages $4.00 per gallon over the next year, you will spend $4,000 on gas.  5% of that is $200.   If you drive less and/or have more fuel efficient vehicle, you will see substantially less rebate.    While that is nothing to sneeze at, it is hardly enough to take a vacation with.  2% on dining is very good too, but not an exceptional rate of return.

How They Sweeten The Pot

BP offers to double the reward for the first 90 days, however that is really only going to add up to about $60 addtional rebate for fuel purchases, even in the gas guzzling scenario I laid out above.

Why This Might Not Work For You

First of all, your 5% savings assumes that the retailer offering the card, in this case BP, is actually the place that you would have purchased gas.   If there is a less expensive retailer near you, such as Costco, your supermarket, or an independent station, you are not going to be saving much, if any, money using your reward card.   Finally, if you have to drive even a short distance out of your way to get to the station, you are also loosing both time and money.

In the end, there are several Visa, Mastercard, Amex, and Discover cards that offer varying degrees of rebates on gas.   These allow you to stay flexible, and always visit the station that happens to have the lowest price that week.   I suppose that residents of a small town who always know that a particular retailer will have the best price, might have a good reason to find a good gas reward card.   The rest of us should keep our gas expenditures in perspective while searching for a flexible rewards card.

Auto related purchases make up a surprisingly large percentage of most American’s personal expenditures.   Even if you only buy or lease a new car every five years, automobile sales, leases, parts, and service can easily comprise as much or more of our spending as gasoline.   Fortunately, there are a wide variety of reward credit cards available from many major manufacturers.

Your Mileage May Vary

Why airline reward cards nearly always offer an identical one point per dollar, there are vast differences in automotive cards when it comes to the value returned.  For example, the Subaru Card delivers 3% off your next purchase, while the BMW card essentially offers about 1% back.    Frankly, I would not bother with any card that offers me a mere 1% back as a merchandise credit, when just about any card out there will offer you the same or better in cash.

Other Pitfalls

Before going down the automotive reward card path, find out how the reward is redeemed.   If the reward does not apply to your best negotiated price, don’t even bother.   What is the point of overpaying for your car only to receive an award?    Also, check out the maximum annual credit and purchase limitations.   The Subaru card limits you to only $500 a year.    Therefore, you can only spend about $16,000 a year before your reward hits zero on subsequent purchases.   The Cadillac card limits how much you can use towards the purchase of their more popular vehicles.   Finally, the most obvious problem is that you are locking yourself into the purchase of a particular brand of vehicle, regardless of what the offerings of that company or its competitors will be in the future.

How This May Make Sense

If you are already leasing your car, and the manufacturer’s reward card’s credits can be applied to your existing lease payment, that is a good start.   If the card offers you a greater return than your cash back card, you should look closely at it.   Finally, vehicle owners who are anticipating large scheduled maintenance bills, or are contemplating expensive purchases of dealer accessories can earn greater rewards for dollars spent at their dealer while redeeming some credit towards their purchase.

New, from the people who brought you hundreds of different fares for the same seat, a gazillion more frequent flier reward redemtion levels!   You are now being rewarded for your loyalty with an every more complicated formula of award tiers, booking fees, and fuel surcharges.

What Will My Reward Cost Me?

This is a crucial question, as reward card holders are constantly looking to maximize their return per dollar spent.   In the old days, this was simply a matter of dividing their miles by the cost of the airline ticket.   The airline industry, not wanting to keep anything simple if they can help it, has made it so you will almost always be paying something for your “award”.

Know The Costs Ahead Of Time

The airlines will disclose these fees, in small type on page 46 of their membership guide.   Fortunately, airline travel guru Rick Seaney has put together this useful guide to the current state of airline frequent flier programs.  Among the low points are the American Airlines $5 fee for booking on the internet (I thought that saved them money!), and Delta/Northwest’s fuel surcharge for “award” redemptions.   You thought fuel would be included in your “award” when you were earning those miles?   Sucker!

Finally, before you go about accruing mile towards a trip with a specific airline, be sure to know how you will be charged for baggage.    What good is an award flight to your favorite ski slope if you have pay hundreds of dollars to bring your skis?

Travel reward cards make up the bulk of the most popular non-cash reward cards.  Let’s face it, there are two major costs when you travel, air and hotel.    The USA Today just published an article on how hotel loyalty plans are gaining traction against airline plans.

Why Hotel Programs Are Gaining In Popularity

The article states a fact that is becoming increasingly clear to anyone who has tried to redeem airline awards lately: “The [hotel] programs’ popularity grows as some travelers become increasingly disillusioned with airlines’ frequent-flier programs. Many airlines have instituted changes that make it more difficult for frequent fliers to earn free tickets.” I would say this is an understatement as many airlines have created de facto blackouts to many popular destinations.

The Advantages Of Hotel Programs

Hotel programs are still have fewer fees, restrictions, and blackouts compared to airline programs.   Most airlines are quickly “unbundling” all of their fares, forcing you to pay separately for luggage, food, seating, and even fuel.  Hotels, on the other hand, have not yet started charging extra for pillows and blankets.  Furthermore, a hotel may offer options such as a “staycation” near your home, or even putting up guests from out of town nearby.

The Ultimate

The best reward cards give you options for air and hotel rewards.   Cards like the American Express Starwood offer all sorts of flight redemption opportunities as well as fairly generous hotel reward options.   The key, as always, is to stay flexible and take a close look at your value returned per dollar spent.

We knew we needed to declare bankruptcy two years before we officially did it. We were struggling financially, and we barely had enough money to cover the bills and the gas at the end of the day - which didn’t count the nearly $30,000 in debt and medical bills that we owed.

But still, we struggled. We had been raise to pay our debts, plain and simple. My husband and I took odd jobs in the evening to earn as much extra as we could, and he started back to school through a plan at his work where they paid for it.

I think what finally did it for us wasn’t the vicious collection calls (which followed us everywhere) or the constant stream of overdue bills in the mailbox. It was the realization that at our current rate, it would take us nearly 15 years to pay down our debts in full.

The last straw was when one of the medical companies put another garnishment on my husband’s check. The money that they would be taking out meant that we couldn’t afford our rent, or food for the next 6 weeks.

So, we gathered all of our bills and paperwork together, and went to see a lawyer. The lawyer we used was human enough to take payment arrangements (It cost us just over $1000 to declare bankruptcy). I think he allowed us to make an arrangement with him as much because we were organized, as anything else. We only had $200 to offer him when we first walked into his office.

But, he did take our case, and he did stop the garnishment. Within two months we had received our bankruptcy discharge papers. The collection calls mostly stopped, (We still had to give some of them our bankruptcy information) the bills stopped coming, and we slept easier at night.

Now, several years later, I know that there were good and bad things about choosing to declare bankruptcy. For one thing, our credit is ruined. However, it was ruined before, and it would have been close to 15 years before we could have met our obligations and fixed our credit anyway. Truthfully, bankruptcy put us on the fast track to recovery. What little we had, we were able to save instead of giving to a bill collector.

We were able to go out and get secured credit cards immediately, which are helping to raise our credit score. After the bankruptcy was finalized, we began challenging accounts on our credit reports, and this also helped to raise our score.

I think there is a huge myth that declaring bankruptcy will ruin your life forever. It would be more appropriate to say that it will not ruin your life at all, just your credit, and only for about 4-5 years.

I do personally have some guilt that will probably always stay with me. I feel like we cheated. We shortchanged companies that we did owe money to, and did not pay them. We imploded financially. Because we did not carry any insurance, and because we were afraid to ask for help. We waited until things were so bad, that there really was no other way out.

It was a lot like what I imagine living in hell to be, and I know that there are others out there that have it far worse than I did, believe me. But for me it was a worst case scenario and not only I did live through it but I am better off for the experience.

The truth is, we started getting car loan offers before our bankruptcy was even discharged. Less than a year after bankruptcy I could get an unsecured credit card. Five years our of bankruptcy I expect that our credit will have rebounded enough for us to buy a house. The bankruptcy will remain on our credit report for the next ten years, but the effects of it so far are negligible.

The truth is, my bankruptcy hurt my credit far less than all of the revolving medical accounts did. When one company sold the debt to another, it opened up a new revolving account on my credit report. I had as many as forty revolving medical accounts listed as open on my credit report when we declared bankruptcy.

You know, the real truth is, our bankruptcy didn’t hurt us - it set us free. Free from a life of garnishments, collection calls to my job, friends and relatives, free from the prospect of overwhelming debt for the rest of my life. I would do it again tomorrow if I had to, and happily live with the guilt. Our bankruptcy gave me and my family the chance to have a normal life again.

We took that chance, and today we are far batter off than many of the people we know and work with every day. Because we have been very careful not to go into debt since our bankruptcy, our money is our own.

Do understand that bankruptcy is not for everyone. It takes a long serious look at your finances to decided whether or not it would be the best course of action. I can simply say that for us it was, and I will always be glad that we did it. No matter what the damage to our credit score was, the benefits of being debt free in one fell swoop (instead of 15 years!) were well worth it to me.

Have a question about bankruptcy? Leave a comment below!

Keep Reading:

• Can One Bad Account Ruin Your Credit Score?
• How to Dispute An Item On Your Credit Report
• Make A Statement (On Your Credit Report)

In a previous compare and contrast of United/Chase, I mentioned some of the rewards offered to customers who sign up for their cards.   These include a $25 United Discount Travel Certificate, a one-way, 1,000 mile, One-class Upgrade Certificate, and in the case of their Platinum card, a companion travel certificate.

What Are These Worth?

I can tell you from personal experience that the $25 Discount Certificate is an invitation to a bureaucratic nightmare.    Unbelievably, these certificates cannot be redeemed online, forcing you call United and incur their “telephone reservation fee”.   You are then instructed to mail your certificate to their processing center, where you risk it getting lost and/or incurring their “ticket by mail fee”.   Also, Platinum card holders loose the chance to earn elite qualifying miles through purchasing from United online.  The worst part is, that they do not even inform you at the time of reservation that they will apply this fee to your credit card.  It was only after I saw a separate line item on my credit card statement for “ticket by mail” that I contact United to express my outrage.   They apologized and offered me yet another travel certificate! I declined to accept their offer for fear of entering into causality loop that could rip apart the space time continuum.   Only by threatening a chargeback to my credit card, was I able to receive my money back.   In keeping with United’s philosophy of endless unnecessary paperwork, I received a check in the mail rather than a credit back to my card.  Ultimately, I wished I had never received the $25 certificate.

But I Can Get Upgraded, Right?

As for their one-way, 1,000 mile, One-class Upgrade Certificate, I found this to be nearly as useless.   The small print excludes reward flights and a host of discounted fares.   Upgrades can only be requested 24 hours in advance, and confirmed 20 minutes prior to boarding.    In short, you are at the bottom of their upgrade list, and you will probably be risking your available overhead luggage space just by attempting to use it.  Who knows if you will be forced to pay the checked baggage fee when that happens.  Finally, all of my eligible flights in the previous year had been greater than 1,000 miles, so I never even got a chance to use it.   Bicoastals beware!

Companion Certificate

The pattern is clear, United’s certificates are an invitation for frustration and disappointment, so why should their companion certificate be any different?   As one blogger notes, the certificate can only be redeemed over the telephone, and guess what, the price is often different on the phone than it is online.   You also have the pleasure of dealing with their poorly trained outsourced reservations agents who are frequently misinformed.   Finally, since the certificate cannot be redeemed online,  Platinum card again holders loose their chance to earn elite qualifying miles through purchasing from United online, one of the few benefits the Platinum card offers over their other cards.

How To Create Unhappy Customers

These practices give a bad name to the concept of credit card rewards, as well as the airline industry in general.    It is companies like United, and by implication Chase, that have created an alternative niche in the market for air travel and credit cards.   Fortunately, this void is being filled by Southwest Airlines with their Fees Don’t Fly campaign as well as Capitol One’s No Hassles reward cards.  It has been customer experiences like these that recently prompted Business Week magazine to declare about United that “Liquidating the carrier is the only way to fix its uniquely embedded problems.”     If you don’t agree, you probably have not tried to redeem their $25 “Discount Certificate.”