Credit Card Processors Waive Interchange Fees For Japanese Relief Donations

By: Jason Steele

03/18/2011

As we saw with the Haiti earthquake, Visa, Mastercard, and American Express are now waiving their interchange fees for non-profit donations to relief organizations providing assistance to Japanese people. Visa and Mastercard are only doing this until March 31st, while Amex is continuing this program until May 15th.

Mixed Feelings

Yes, it is good that these companies are not profiting from this disaster, but their good will is only temporary. American Express should be commended for continuing its interchange fee waiver a month and a half beyond Visa and Mastercard. If you are not able to make a donation until next month, you should make it with your American Express card as the charity you donate to will receive the entire amount of your donation.

At the same time, why do they charge these fees at all? Earthquakes and other disasters occur too often all over the world. Every death is tragic, yet there seems to be some threshold that the number of deaths involved has to reach before these companies will stop skimming from charity donations in the form of interchange fees. In reality, the threshold is in how much publicity a disaster generates, and how much good PR they can expect from a temporary waiver.

I Support Interchange Fees

Ironically, I have always championed the right of credit card processors to charge merchants whatever interchange fees the market will bear. Merchants love to whine about these fees, and their propaganda would have you believe that these fees “are passed directly to the consumer”. To that line makes you wonder why they bother complaining so loudly. The ferocity of their complaints as well as all serious studies of the matter indicate it is in fact the merchant that is absorbing the fee. The fees are worth it to them, as we know by the fact that few of them have given up credit card acceptance in favor of cash or other payment methods.

I have no problem with the merchant paying a fee, but when it involves charitable donations, these processors should keep their hands off, before or after a major disaster. I think the industry needs to agree on a set of standards for which charities are entitled to the waiver. Clearly, every fringe organization that can barely qualify for non-profit tax status should not get this special treatment. For example, American Express is only granting this exemption to charities listed by USAID. Perhaps there is a role for Congress here in granting an anti-trust exemption so that these companies can directly discuss this or encouraging this practice in other ways.

Boeings Largest Every Airplane To Fly This Sunday

By: Jason Steele

Weather permitting, Boeing will attempt the first flight of its awesome new 747 this Sunday, March 20th. You can watch the first flight live via the Internet on or about 10:00 AM Pacific time.

What A First Flight Is Like

Being the aviation geek that I am, I tuned in for the first flights of the 787 and the freighter version of the new 747. The flight will take place at Paine Field airport in Everett Washington, site of Boeing’s wide body assembly plant. Expect really good overhead shots from news cameras. There will also be chase planes in the form of pair of antique jet fighters that Boeing owns.

If you are tuning in with the morbid hope to witness an unexpected disaster, you will be disappointed. While there are many risks in the flight testing program, first flights have an extremely good safety record. Expect the Boeing test pilots to take the airplane up and conduct a very conservative set of maneuvers in order to validate predicted performance.

Outlook For The New 747

The reason to tune in is not the potential for disaster, but to share in the glory of flight. This aircraft is longest commercial passenger airplane ever built, and it is the biggest one yet from Boeing. Yes, Airbus’s A380 is larger, but it has been a financial flop for the company. Years behind schedule, they are still having trouble meeting production goals. As a result, sales have been lackluster and most industry analysts doubt they the aircraft will ever be produced in quantities large enough to turn a profit.

In contrast, the passenger version of new 747 has sold even worse, but it is the freighter version that will guarantee Boeing a profit from this program for decades. Airbus could not sell a freighter version of its A380, leaving the entire large freighter market to Boeing. With freighters, bigger is generally better. Cargo doesn’t mind taking longer to load and unload, and companies simply want to deliver the goods for the lowest price per pound. In fact, the iconic hump of the 747’s was designed to accommodate cargo loaded through the nose of the aircraft. This is the only aircraft that was specifically designed to carry cargo from the beginning.

So if you love travel and aviation, be sure to tune in for a landmark broadcast. You can tell future generations that you “witnessed” the first flight of of the new Queen Of The Skies.

The Future Of Plastic

By: Jason Steele

03/17/2011

People are starting to notice that the credit card in their wallet hasn’t changed in a generation or two. It is still just a piece of plastic with a magnetic strip on the back. While the economic model of the credit card is not really under attack, its physical manifestation is.

Two Visions For The Future Of Your Credit Card

In one corner is the cell phone. A lot of people feel that this will be your form of electronic payment shortly. This post at the Extreme Tech website takes a very dim view of the idea of carrying around a piece of plastic in the future.� In their view, your cell phone can accomplish those functions. They cite some continuing innovations that are being rolled out in European credit cards as a last ditch effort to stay relevant.

I am not so sure that I agree.� I have a real problem with some of the payment systems being rolled out, like this one with the iPhone. It seems that if we get to a point where your payments are routed through a phone company, only bad things can result.� For example, you will have few of the protections that credit cards offer.� Worse, any problems with your payment will have consequences to your telephone service!

Another problem that I can foresee is the sheer practicality of it. Right now, I just whip out my card and swipe. If I were to somehow use my cell, I would probably have to enter some code or something, which sounds like a pain.

Maybe The Stripe Is Going To Go Away

This other article looks at credit cards from a different perspective. Ironically, they claim that the Europeans are not improving the magnetic strip, but eliminating it altogether.� They see the stripe as an invitation to fraud, and they look at Chip and Pin systems as a safeguard.

Again, I would really hate to have to enter a pin for every transaction.� I must also keep in mind that only banks are the victims of fraud, not cardholders.� At the same time, I am sure that people will be able to steal your pin and whatever information is being emitted by that chip in order to continue to defraud banks.

My View

Every few years, cities try to get rid of their parking meters and replace them with some new fangled technology.� The result is almost always a nightmare as a simple system devolves into a complex and inconvenient ordeal.� I fear the same will happen with credit cards.� The current system works, but can probably be slightly tweaked to more effectively deter fraud.� As the world becomes more globally integrated, what we don’t need is a situation where each continent has its own credit card standard.

Personally, I am ok with whatever system the world wants to go with, so long as they still let me use the cards I have in my wallet.

Some People Really Don't Like LAX

By: Jason Steele

I have written before about how some airport designs are superior to others. I favor the newer designs where all gates are accessible from each other without having to leave security. The worst of the worst actually require you to not only leave security, but to take some kind of shuttle bus to another terminal. At that point, it is almost as bad as changing airports all together.

LAX Is Not A Favorite Of People From San Francisco

I came across this post, “Top 5 Reasons To Demolish LAX” in the San Francisco Chronicle. I am sure a lot of the sentiment here can be attributed to the NorCal/SoCal rivalry that has nothing to do with airports. At the same time, I can totally envision all of the LAX horror stories that they describe. Certainly the unhelpful staff is something that seems to afflict large airports around the world.

While I have been through LAX a few times, I have never had to change planes there. I am waiting for a good reason to visit Asia before I have that privilege. Most of the authors comments are centered on the experience of changing planes there. The airport does seem somewhat adequate for local traffic.

At the same time, whenever someone asks me about booking a flight to “Los Angeles”, I immediately ask them to specify where in the Southern California area they are trying to get to after they land. When consider LA’ s legendary traffic, it is always wise to investigate one of the four other commercially served airports within 50 miles of LAX.

With the continued growth of point to point service, there are going to be fewer instances where people are forced to connect at a particular airport to get to their destination. While there will always be a need for connecting flights, we are seeing a greater number of choices of airports where people can chose to connect. Price and schedule will be a factor in any plans, you definitely want to consider the facilities of the airport you are connecting through.

That said, I am sure a bunch of Southern California travelers could write an equally compelling post about why SFO should dumped in the bay. I am sure the word “Fog” would figure prominently in such a parallel diatribe.

Taking Advantage Of The Capital One "Match My Miles" Offer

By: Jason Steele

03/16/2011

After a flurry of speculation in the online forums, I finally received my email regarding Capital One’s “Match My Miles” offer. It gave me a unique passcode and directed me towards their www.submitmymiles.com web site. There I had the choice of either emailing or faxing my airline statement to them. If you chose to email, you have to submit it as a .PDF file. I downloaded one of the many, free .PDF printer drivers out there, and generated the file by “printing” a page from my US Airways account. Since I easily had over 100,00 miles in that account, I am expecting the entire 100,000 mile match as soon as I spend the first $1,000 on my card.

Is This Urgent

As an existing Capital One customer, I jumped on the offer within minutes of hearing about it. I then submitted my miles immediately after getting the email. I did this because they had said that they are only extending the offer to the first billion miles are redeemed. That would mean that if everyone submitted the full 100,000 miles, only the first 10,000 customers would get the match. That said, this restriction has not been appearing in their tv ads, leading some to speculate that this is more of a marketing ploy than a hard cap. To look at it otherwise would make this much more of a lottery than a sign up bonus, something that has discouraged many others.

For myself being a long time customer of theirs, it was a no brainer to sign up as it wasn’t even a new account application.

What’s Next

I haven’t even received my card yet, but I know I will soon. It shouldn’t be too challenging to spend $1,000 on the card in 90 days and then I will have the “miles”. The next step will be to claim any travel related expenses towards those “miles”. This can be hotel, rental car, or airfare. I suppose trains, buses, and boats might count too. The key is to spend it before the year is over, as my understanding is that they must be used by then. If that information is somewhere on their website, it is deeply hidden.

The next step will be to decide if I want to stick with their Venture Rewards card or their lesser Venture One card. The difference is that the Venture Rewards card has a $59 annual fee and returns 2% back while the Venture One card has no annual fee and returns a mere 1.25% back. I really only use my Capital One card overseas and where Amex isn’t taken, so it is unclear if I will ever spend the $4,000 it would take to make up the annual fee in the form of increased rewards.

Travel Tip: Getting Hotel Discounts Out Of Expedia

By: Jason Steele

I book my air direct with the airline, and I use Hotwire for rental cars, but Expedia still provides some real value with hotels. I love doing best price guarantee matches with Expedia, as they had out $50 coupons when you are successful. I recently learned another great tip, if you call them, they will often give you discounts that are not available online.

I have enough contact with them over the phone when I call to do a best price guarantee. Their operators are friendly, but they are slow and can be difficult to understand. That said, they will often volunteer coupons that you can use for certain bookings.

Things To Look Out For With Expedia And Other Third Party Booking Sites

Pay careful attention to the fine print surrounding the room type. In many cases, they say that this is merely a requests and not a guarantee. This “request” may be smoking or non-smoking or it may be the number and size of the beds. The last thing you want to do is to check in and realize that you are in a smoking room when you don’t want one, or that you do not have the bed you wanted. Imagine being on your honeymoon and having two single beds!

The ways to avoid this are to only book hotels that are completely non-smoking, and to make sure the bed type is a guarantee, not a “preference”. Another strategy is contact the hotel directly and confirm your booking. This is especially important if you are planning on arriving late in the day. Hotels will just give you whatever they have left if you book through a third party.

They might not be able to guarantee you “room preference”, but perhaps a friendly person at the front desk can assign you the room you want.

You can get some great hotel deals through Expedia and other booking sites, you just have to do you diligence and read the fine print in order to ensure that you don’t get stuck with the room nobody wants.

Citi Amex Platinum Card Changed to Citi ThankYou Premier Card – Should I Cancel?

By: Mr Credit Card

One of our readers sent us the following email. The main point was that his citi card has been changed to the ThankYou Premier Card and he is asking if he should hold on or cancel it. Below is our email discussion and hopefully, you will learn something from this.

Hello, I was informed yesterday that my Citibank American Express Platinum card (which I received about a year ago) will soon be cancelled and automatically replaced with Citibanks ThankYou Premier Rewards Card, serviced by Mastercard. The $99 annual fee will remain unchanged. Meanwhile, the membership in

Citi’s Identity Monitoring Service, the whole reason I got the card in the first place and was able to justify the fee, will be cancelled.

I want to cancel this card because I no longer feel the fee is worth it. I would replace the card with either the Chase Sapphire or the AmEx SPG card. This card is 1 of 3 cards I have, but is the newest card and also serves as my primary card. I have a $0 balance on the card. Would cancelling it significantly hurt my credit score if I replaced it with one of the cards mentioned above, or both?

Also, do you think it is necessary/worthwhile to have at least 1 AmEx card these days? I wasn’t sure if the luster has worn off over the past few years.

Thank you for all of your help!!!

Adam

Mr Credit Card – need to know

how much you charge to your card a month?
what rewards are you looking for?

My average monthly bill is around $2,000. I’ve accumulated about 75,000 ThankYou points in the past year (which I would redeem if I closed this card) by purchasing things online and maximizing the rewards points. What I like about the card they are cancelling is that I can get more points by purchasing through certain online retailers, and I get 3 points for every dollar I spend on gas and groceries. I don’t travel too much but I’d like to have the option to accumulate more points that way if I end up traveling more in the future. Ideally, I’d like a card where points don’t expire so I can use them to redeem travel-related rewards (e.g. for international vacations). My amateur search has led me to the Chase Sapphire card, but the AmEx SPG card always seemed like a good way to go as well. I am going off of the assumption that Chase and AmEx offer good services/features for cardholders…

Mr Credit Card – For international travel – Starwood is probably the better way to go although you will need a couple of years to get the necessary points.

The Chase Sapphire card (no annual fee) version is ok as well.

But since you would like to earn more points by purchasing stuff online, I suggest you consider the Chase Freedom (which I have). Their online shopping portal has over 400 merchants. You can earn extra points with them. They have quarterly rotating categories which allow you to earn 5% rebates (gas and groceries included). They also allow you to redeem points for travel (their online booking site or you can call their agent). You can also exchange points for continental gift certs (and Continental has some decent international routes).

The problem with Citi now is that you cannot book american airlines through their travel site online because it is powered by expedia (and southwest is not on it as well). So, getting away from citi is probably the right move anyway.

But I think for you, the Chase Freedom might be a good card to get for earning points the way you want and also for travel. If you think you are more likely to use an international airline, then Starwood is probably the better card to get.

This is great insight. Thank you again. Would you expect my credit score to drop much if I cancelled my citigroup amex? That’s the only thing I’m stuck on now..

Mr Credit Card – probably not a lot cos it will be “terminated by you and not the card company”. But you never know FICO – depends on your credit line, length of history etc…But I would not be too fussed about it since you will save $99 if you go for the no annual fee options. Any drop (if there is any) should be temporary.

Q&A: Which Business Credit Card Just For Corporate Travel

By: Mr Credit Card

03/15/2011

I recently got an email from a company owner asking for advice for a business credit card for his travel expense. We went back and forth on emails a few times. This is a full reprint of our conversation. Hope you take something out of this. (He or she shall remain anonymous).

I am interested in options for acquiring a corporate credit card that our company would use to purchase airfare, which would also accumulate miles/points.

We spend about $100k per month in airfare.

My Credit Card – a few questions:

1. what is your company revenue? $1MM

2. what airlines do you/your employees fly? All major airlines US Air, Delta, American

3. which hotels do you/your employees normally stay at? Marriott, Hyatt, Embassy Suites

1. what is your company revenue? Answer – $1MM

2. what airlines do you/your employees fly? Answer – All major airlines US Air, Delta, American

3. which hotels do you/your employees normally stay at? Answer – Marriott, Hyatt, Embassy Suites

Mr Credit Card – Does your company pay the balance in full every month or do you carry a balance from time to time. And how many employees will be issued the card?

We pay balance in full. We have around 300 employees who travel.

We do not plan to issue cards to employees. We are going to set up the card # in out travel agent where all airfare will be charged to the card.

Mr Credit Card – Ok – here are my thoughts.

1. you would want to go for a charge card – since there is no guarantee you will get the credit that you need on a regular credit card.

2. Because of this, I would recommend Amex.

3. There are a couple of ways to do this. Firstly, you can try to get an Amex corporate card. But I believe that there minimum annual revenue requirements is $2mm. So your company may not qualify. The advantage of getting a “corporate card” is that the approval is based on your company revenue and profits and not your personal credit.

Amex also has a bunch of “small business” charge cards that will suit you. Bear in mind that when you apply for a small business charge card, your personal credit will be pulled (though payments are reported to business credit bureaus and not personal bureaus). The advantage of their “small business” cards is that they are linked to their network of merchants called OPEN. And you can get 5% discounts when you use their business OPEN cards with Marriott and AirTran (which can save you some money).

There are two cards to consider in this space. The first is the American Express Business Gold Card. The advantage with this card is that there is no preset spending limit and you get your 5% discounts with Marriott and AirTran and other merchants as well. The only issue I have with this is that Membership Rewards has less airline partners today than it did years ago – no AA, US Airways, Continental expires in Septemnber 2011and SouthWest will expire also. But there have Delta (among the major airlines). Having said that, you can use points to book flights with Amex Travel and if it is domestic flights you are looking to use points for, then redeeming points this way is actually better than converting into devalued miles.

The other card to consider is the Starwood Preferred Guest business Card. The reason is that Starwood allows you to transfer points to miles for a one for one ratio. And when you transfer 20,000 points into miles, you get 5,000 bonus miles! AA, Delta, US Airways are in the program. Continental and United are in also – but the conversion is 1:2. The drawback for Starwood is that you may not get the required credit line you need since it is a credit card and not a charge card with no preset spending limit. The Starwood Card is part of OPEN, so you get your 5% discounts at Marriott and Airtran.

4. But for your purpose, I think you should also consider one of American Express Personal Card – the Premier Rewards Gold Card. Reason is this is the only Amex Card (consumer, small business or corporate) that pays you three points for every dollar you spend on travel. And since you are using this card mainly for airline tickets and hotels, it would be great. The disadvantage is that you would not get discounts on Marriott or AirTran.

In light on this, I suggest you get the Premier Rewards Gold Card and earn triple points when your employees fly. Get the Starwood Credit Card also and ask your travel agent to charge any hotels to this card (especially Marriott and AirTran tickets – since you get a 5% discount).

Or if just want to keep things simple, the American Express Business Gold Card will do as well.

hope this helps. Let me know if you have any other questions.

Thank you for your thoughts.

Get Free Status On Star Alliance Carriers

By: Jason Steele

03/14/2011

I think the whole status thing is a little silly. Basically, a company is telling some customers they will treat them very well, and other customers that they won’t. It doesn’t seem like good business to me, but that is the way it is.

What is far worse is the government’s endorsement of this private class system in terms of allowing passengers with status priority access to security lines. Imagine if I could use my Blockbuster card to cut in line at the DMV or my supermaket rewards card to have my case heard first at small claims court. As many have pointed out, you do not even need to fly to gain status. For example, you just need to get a Delta Reserve card and get the MQM bonuses for spending $60,000 dollars in a year.

Free Status For Everyone!

Last year, took advantage of some promotion to get BMI Silver status. The promotion was a fluke, and while I was notified that my status was rescinded, I still had the card that got me into the priority security line in my home airport of Denver. Now, it looks like the same kind of promotion is back, and it looks legit. Just go to this link and fill out the form. You will immediately be able to add you BMI number to an existing reservation at United, Continental, US Airways or another Star Alliance member. Then, you will get to enjoy the privileges of status including a free checked bag allowance, priority standby, and priority boarding.

How To Use This

What I would do is to make a reservation with the BMI number. Once I have checked in, and checked any bags, I would then have them change my Frequent Flier number to credit my preferred account at the gate. If I was looking for priority standby, I might not even do that. Either way, offers like this allow savvy, but infrequent travelers to bypass the class system.

Things I Hate About Credit Cards

By: Jason Steele

03/11/2011

I generally do not bitch much about credit cards. I love the rewards and the protection they offer, and I never pay interest, so what’s not to like?

1. May I Please Have Your Account Information?

Yes, it is exactly the same information that I entered three seconds ago in response to your automated system. It hasn’t changed since then!@#$%$@

2. While I Activate Your Card, Allow Me To Recite Offers For All Sorts Of Scammy Add Ons.

Is scammy a word? It is now! I get it, outbound telemarketing is now illegal, so you have to wait until I call you to pitch your “payment protection service” under the pretense that your computers are hard at work activating my card. We both know that this process used to be automated, but now I have to listen to this inane spiel (that is a word, it is derived from Yiddish). The quickest way to end this call is to interrupt them and say, no thank you, I am in a big hurry and just need to activate my card.

3. Vague Rules For Rewards

Yes, I am all excited about the big Capital One promotion where they will match your miles. Sadly, the terms of the program are as clear as mud. Do you need to prove that the miles were earned from a credit card? The terms specify that you need to send in a single airline statement showing the miles you earned from your credit card. How can you do that without sending in multiple statements? Will they accept online statements? Do the miles have to come from the credit card, or can they just be any miles in your account? I could go on. I reached out to their PR contact, and we’ll see what they say. At the same time, maybe they should have taken a few of the dollars they paid Alec Baldwin, and spend a few minutes working on a focus group with the crowd at FlyerTalk or MilePoint.

4. Unsolicited Checks That Count As Cash Withdraws

If there was ever a mailing that was begging to be intercepted and used fraudulently, it are those stupid checks they send you. I am sure the bank would love for me to use them all over town incurring the highest interest rate on them, while starting to incur interest on all my other purchases that I intended to pay in full. Why do they need you to activate your credit card if they are just going to mail this crap to you all the time. I used to call each credit card company up and demand they don’t send these, but I just don’t have the time anymore. These days I just shred them and move on.

5. Really Lame Reward Programs

Not everyone reads this blog. How do I know? Because there are still tons of banks and retailers offering incredibly lame rewards cards. No, I do not want double worthless points when I use my grocery store affiliate card at the grocery store. The same with the department store, the hardware store, the gas station, and every other retailer who’s management was impressed by the pitch from some bank and decided to offer their own store card.

6. Promotional Mouseprint

0% APR ON BALANCE TRANSFERS! (not counting the 3% balance transfer fee). COMPLIMENTARY ACCESS TO AIRPORT LOUNGES (not counting the $29 fee for “complimentary” access). EARN 25,000 MILES, ENOUGH FOR A FREE AIRLINE TICKET (award space is limited to red-eye flights to Buffalo, NY in February and subject to our fees that we want you to think of as taxes but are not.)

7. We Provide Security!

I don’t care. The only one you are protecting is yourself, as cardholders are not liable for fraud.