Southwest AirTran Merger On Track For April-June

By: Jason Steele

02/24/2011

This just in:

The Southwest Airlines pilot’s union has just approved an agreement that will allow the two companies to merge their workforces. This is a major issue that infects every potential airline merger, and the fact that an agreement has been reached all but assure the merger will go through. You may remember that when Southwest last attempted to merge with Frontier Airlines, their pilots rejected the deal.

Some Background

If you are a pilot, the only thing that matters in your professional life is your seniority position. Every airline has a seniority list, and your rank on that list is used to determine where you are based, what aircraft and routes you fly, and whether or not you are a captain or a first officer. Ultimately, these factors determine your salary as well. The lowest ranking pilots, the ones hired last, are forced to do reserve duty as a first officer at an undesirable base. The undesirable bases are often ones with the highest living expenses, as contrary to popular belief, new pilots don’t make much money. Senior pilots do well, but that means working your way up over decades. In this industry, you are lucky if your airline does not merge, become acquired, or go out of business during that time. If that happens to you, you could be the highest ranking captain at your airline one day, and then be the lowest ranking first officer at another airline the next day. The fact that you have been flying as a captain for 30 years will be utterly irrelevant.

So you can just imagine a situation where you have two different seniority lists that have to be merged; you are going to get a lot of people pushed back on the list. This is why it is such a contentious issue. To further complicate matters, Southwest actually pays its pilots very well, so they are concerned that their pay and benefits might suffer. The Airtran pilots are naturally happy at the likelihood that their pay and benefits will rise to Southwest levels, so it is difficult to see them objecting.

Back To The Merger

Southwest shareholders must now approve the merger, along with regulators. Southwest anticipates the closing of the deal in the second quarter of 2011, a time that is fast approaching. If past mergers are any indication, I would expect the following: First, there will be the equivalent of a code share, where you could book flights on either airline from either website. Then, they might then start merging frequent flier programs. Merge might be too strong of a term; expect members of the Airtran program to be transitioned to the Southwest program just like people are being transitioned from the old Southwest program to the new one. The next step is cross fleeting, where you will see Southwest aircraft serving Airtran routes and the other way around. Gradually, the new carrier will start to share check in counter space and gate space as they re-brand to eliminate the Airtran name. Aircraft will get repainted, to the joy of aviation nerds everywhere. The final step is the merging of the operating certificates, so that there really isn’t an Airtran anymore as far as the FAA and air traffic control is concerned.

Somewhere along the way, sooner rather than later I hope, Airtran will compensate it’s fliers for the loss of first class by quickly granting free luggage and free ticket changes. This seems like the easiest thing to do from a technology and organization standpoint. It is always easier to eliminate a fee rather than to enact a new one. Once those fees are dropped, you will immediately be seeing me booking Airtran/Southwest for my trips to Atlanta, by far the largest market currently not served by Southwest.

Penn State Alumni Association Platinum Plus MasterCard Review

By: Mr Credit Card

Penn State Alumni may want to look into the Penn State Alumni Association Platinum Plus MasterCard from Bank of America. This card offers WorldPoints rewards and benefits as well as allowing you to show your Penn State Pride and help Bank of America support your school.

Fees

The Penn State Alumni Association Platinum Plus MasterCard has no annual fee and an introductory APR of 0% for the first 12 billing cycles. After that, the APR could be as low as 12.99%.

How to Earn and Redeem WorldPoints Rewards

Cardholders earn one point for each dollar spent on purchases. The rewards can be redeemed for cash, name brand merchandise, shopping and dining discounts, airfare on major U.S. airlines with no black dates and pre-game sideline passes and football tickets. You can also earn unlimited WorldPoints, but they do expire in 5 years.

Your rewards start at 1,500 points for cash and merchandise and 15,000 for air. Bonus Points are available when you shop through WorldPoints Mall. Some of the retailers that are currently offering bonus points are shown below.

Other Benefits

The Penn State Alumni Association Platinum Plus MasterCard also includes online account access, high credit limits (based upon your credit) and personalized services with MyConcierge Service.

The card is available in two designs. Choose between either the Nittany Lion design or the Joe Paterno design as shown.

Conclusion

The Penn State Alumni Association Platinum Plus MasterCard is a great way for Penn State Alumni to show their school pride while earning rewards from everyday purchases. Points can then be redeemed for a wide range of products and services through the WorldPoints Mall, or if you prefer, for cash or football tickets. The 0% APR on purchases for 12 billing cycles is also a great reason to carry this card.

Travelocity Has A Bombshell Reward Cards Deal

By: Jason Steele

02/23/2011

A lot of people scoff at reward cards because the rewards don’t seem all that great. I have to admin, one or two percent really doesn’t blow your mind, especially if you do not do a lot of spending on your credit card. Last week, I told you about the great card from AARP that offers an introductory cash back rate of 5%. I later told you how you could get in on the deal even if you are not old enough to be a regular member of AARP.

If five percent did not get your attention, how about 10%? Sure there are some cards that will give you 10% back on specific merchants. These are often flower shops or other specific retailers who have a really high margin.

Travelocity Amex Card Gives You 10% On Travel

Basically, this card will give you 5 Travelocity points for every purchase you make on….Travelocity. Each point is worth 2 cents as a credit towards more travel purchases. Since you can book hotels, rental cars, and airline travel there, you can essentially earn 10% cash back on any travel purchase. You need to redeem 20,000 points for a $400 statement credit against a Travelocity purchase. So you spend $4,000 on travel and get a $400 credit.

Who Can Use This

Here is who I see that would get the most advantage. If you are traveling frequently, and you are able to make your desired bookings on Travelocity, you can really make out like a bandit. 10% is light years ahead of a 2% card, and it is even better than using your airline card to book directly with the airline for 2 points per dollar.

What Are The Downsides

If you are the kind of person who likes to book all of your travel direct, this outstanding reward percentage might get you to change your mind. Unfortunately, there are many downsides to using an intermediary like Travelocity. First, they will charge you booking fees on hotels, unlike some sites. Secondly, when you book a hotel through a third party, there can be little or no disclosure of other, mandatory fees. You are always looking at a price that may or may not reflect what you will actually be paying when you arrive. At least when you book through a hotel’s own site, they have to disclose all of the fees. How they can legally sell you something and not disclose the total price until you arrive will surely be the subject of litigation at some point in the future.

Next, there is the problem of room preferences. Book though a hotel site, and they will guarantee you a smoking or non-smoking room. Book through Travelocity and you might not even be given the preference, and your choice may only be granted after all other guests who booked directly have received their choice. If you have to have a non-smoking room, the only way around this with Travelocity is to do your research on other sites to make sure the entire hotel is non-smoking. Finally, most hotel programs will not grant you credit towards status in their program when you book through an intermediary. Without 10% cash back, it boggles my mind why people would pay an extra fee to book travel on a site like this that doesn’t notify them of required fees and doesn’t guarantee or even accept room preferences, and doesn’t earn them credit.

Beyond hotels, I also have a problem with booking airline tickets through an intermediary. When something goes wrong, the airline will just tell you to contact your travel agent. For example, US Airways will charge you a fee to assist you with a booking made through a third party site. That they actually help you, but charge you a fee, may be the best case scenario. Here is an instance where travelers on US Airways (what is it with these clowns) were totally screwed when their booking on Expedia disappeared.

Call me crazy, but I would prefer to stick with direct bookings on air and hotel. In fact, I tend to find so many discounts that aren’t bookable with Travelocity, that even 10% back wouldn’t really do it for me. On the other hand, if I were traveling on business and I was, shall we say, a little less price sensitive, I would be more than happy to PUT 10% of all of my travel expenditures in my pocket.

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Maximizing Your Southwest Rapid Rewards

By: Jason Steele

Southwest’s Rapid Rewards program had been one of the simpler programs out there. By this time next week, they will have gone to Rapid Rewards 2.0 (RR2.0). While it is probably too late for most people to get an additional reward in the old system, there are still some steps you can take to maximize your rewards going forwards.

Split Your Old Awards

I still have a couple of old awards. I can still use them for the next year. The problem is that you still have to have availability to use them. Since I will be traveling as a group, this award space is even harder to find. One strategy that I will be using is to split my round trip awards into two one way tickets. Southwest will allow you to do this. In this way, I can use one of my awards to get two tickets on a particular flight that has award space. On the return, I have not been able to find award space under the old system, so I might use credits from the new system or, gasp, find another carrier for my return. Splitting carriers is an old trick that is becoming more popular as fewer tickets now require a round trip purchase. In my situation, the schedule is just as much of a concern as the ticket price is.

Save Your Old Awards For High Value Tickets

One of the problems I always had with Southwest’s old system was that it really only paid for itself when you are traveling great distances or at the last minute. Otherwise, their fares were so low that the awards rarely carried much value. To this day, I don’t think I have ever redeemed an award for a flight I would have had to pay more than $300 for. Going forward, if you have an award on the old system and points on the new system, save your award for a big trip or a last minute flight. Use your points for advance purchase or relatively short haul flights.

One of the problems I have with the new system is that they will only convert your old credits to the new system, not your old awards. I wish they had made it possible to, on request, convert awards into the new point system. In that way, one could take a round trip award and use it for multiple short haul flights. I don’t see why they are not offering this option, as it would be consistent with their claims,right or wrong, that the new system is better. Of course, if few people took advantage of it, it would certainly prove that the new system was not.

It is unfortunately that Southwest chose to go with a much more complicated system. Like any system, there will always be ways for savvy travelers to maximize their award utilization.

CARD Act Is Having The Effect Of Lower Fees And Fewer Interest Rate Hikes

By: Jason Steele

02/22/2011

Now that it is one year old, The CARD Act is continuing to produce results for consumers. According to the new Consumer Financial Protection Bureau, not only have many fees been going down or disappeared, but card holders are seeing fewer interest rate hikes as well. They have even released a factsheet outline the benefits consumers have realized.

Interest Rate Hikes Are Way Down

Unless you miss two consecutive payments, your interest rate on your existing balance will not change under CARD. If your rate is raised, it only affects future purchases, and even then, you have 45 days to pay your balance and close your account. The result has been that interest rate hikes have gone from 15% per year to less than 2%. Even then, banks are only looking to raise interest rates on people who have been delinquent, rather than blanket rate increases on everyone.

Fees Drop Dramatically

Bills are now due on the same day every month, and they have to give you 21 days to pay your bill. Late fees are capped at $25 for the first time, and $35 the next time. They also cannot be greater than the amount owed, although Barclay’s banks seems not to have gotten that memo. The result has been that late fees paid by consumers have gone from $901 million to $427 million, less than half the previous amount.

No More Over The Limit Fees

The practice of approving a charge beyond a cardholder’s limit, only to penalize the cardholder was one of the most hated of the “tricks and traps” eliminated or curtailed by the CARD Act. Naturally, banks claimed they were providing a valuable service that customers wanted. The CARD Act required that customers actually approve these over the limit transactions. In reality, very few people chose to accept these fees and they dropped from over 12% of cardholders to less than 1%. The CFPB sees them as being virtually eliminated.

Less Confusion

Their factsheet also highlights that most consumers now know that their bill is due on the same day every month, and they are noticing the new information about how long it will take them to pay their balance and what the total cost of their payments will be.

Is There A Downside?

Certainly, there were a rash of interest rate hikes imposed in advance of the CARD Act implementation. Furthermore, more cards are charging an annual fee while many others have raised theirs. I have argued that these costs are clearly communicated and shouldn’t surprise anyone, in contrast with the previous regime of tricks and traps.

Some people will always find some fault with CARD, but from where I am standing, it seems like this law has had dramatic benefits for all consumers who use credit cards.

Air New Zealand's Innovative New Economy Class Has Plenty Of Misses

By: Jason Steele

Air New Zealand got a lot of press out of their recent announcement that their latest aircraft would be delivered with an entirely new economy interior. Their new economy class would feature a “Sky Couch” that would turn an ordinary row of three seats into a single bed. This would be accomplished by folding the arm rests up and raising a padded section where one’s legs would normally be. I am sure you are probably thinking back to a time where you flew an uncrowded plane and were able to achieve this lie flat effect on your own. What Air New Zealand has done was to make this arrangement something they could sell, and good for them. The way it goes is that two people can the third seat for a reduced price.

Not All Is Good At The Back Of The Plane

While any improvement in economy class comfort is to be commended, there are some serious problems with other aspects of their new cabin. They have added a new, state of the art personal entertainment system to each seat in coach. Sadly, they have stuck hardware for these systems where your feet normally go. Even worse, this article describes the equipment as “enormous, sharp-edged boxes”. The first time I flew in an aircraft with entertainment equipment in the footwell, I was pissed. I value my space, and I felt like I got ripped off.

It gets worse from there. The aircraft that are receiving this new interior is their 777-300. Normally, economy class in a 777 has 9 across seating configured 3-3-3, or occasionally 2-5-2. Those dang Kiwis though it would be a good idea to go 3-4-3 for ten abreast seating normally seen in the wider 747. The result is both narrower seats and narrower aisles. Take a look at this picture. It appears as if many people will not be able to walk down the aisle without turning sideways, and forget rolling your carry-on! Even worse, anyone sitting on the aisle can expect to be bumped, rubbed, and elbowed by passengers squeezing by during the entire flight.

Who Else Is Doing This?

For the moment, there are not many carriers going to 10 abreast on the 777. Some are doing the equivalent on the 767 by going 8 abreast. The only real way to find out is by consulting Seat Guru. Air France and KLM are some of the offenders who have gone to 10 abreast on the 777.

So, as usual, smart travelers will consult a seat chart like the ones at Seat Guru before booking their tickets. Airlines are introducing more innovative products, but not all of these features are designed to increase passenger comfort.

Are You Dealing With A Compulsive Buying Disorder (Shopaholism)?

By: Mr Credit Card

02/20/2011

There is nothing worse than an empty bank account, right? But maybe there is: how about a mountain of debt and this unquenchable desire to just hoard more and more?

This is how oniomania, or shopaholism, works. Oniomania is a psychiatric term used to label the compulsion to keep ing things. If you think that you’re spending way too much time at Sears, maybe it’s time to check if you’re a shopaholic.

Compulsive Buying Disorder, or CBD, as defined by psychiatrist Donald W. Black, is characterized by excessive ing behavior that “leads to distress or impairment.” In his review of the disorder, he noted that shopaholics go through a four-phase process that involves:

Anticipation
Preparation
Shopping
Spending

Indeed, it is an obsession and a compulsion, as compulsive shoppers spend hours studying their shopping “conquests.” Then, according to Dr. Black, despite how the objectives of the shopaholic have been met when they finally get to what they want, they end up crashing when they realize that they lost control once more. But then, to feel better, they go back to the start of the cycle by plotting another shopping spree.

This may sound like a sick cycle to those who can’t relate to it, but it is a habit, an addiction that renders one powerless. That is why for those who know that they can’t overcome this on their own, it would help to see a professional.

Aside from seeing a professional, it could also be a good idea to take these self-help steps:

Wean yourself from overusing credit cards. You may think that using plastic that offers top credit card deals is a way of saving money, but if you’re not paying your balance in full, you could just be asking for trouble.
Switch to more manageable plastic. If you’re finding yourself misusing credit cards, then these may not be the right tool for you to use. If you’d like to have the convenience of using a card but want to allow yourself limits on what you spend, you may want to consider using something like these prepaid Visa cards instead. That way, you can only spend what you load into your cards.
Find support from someone you trust. This is ideally a responsible person — a spouse, a parent, or a sibling who can oversee your financial progress. If you have to do this on your own, then you may want to think about cutting up your cards and then changing some of the ways you use money. Only accountability helps people recover and stay on track better.
Change some ways you use money. You should draw up a budget and stick to it. Next, include a personal daily allowance. If you have a daily allowance, it would be easier to keep track of how money is spent to ensure that you won’t be using money intended for other things. Then see if you would be able to use cash for all your purchases. If you need to make online transactions, it may be best if you do it with someone to watch over you, or use debit cards. Up the ante by surrendering the debit card to your accountability partner right after the transaction. Also, you could try this: whenever you go out to groceries, work in a coffee shop, or just unwind, bring only ENOUGH money to use on that trip. This ensures that you won’t use money you’ve set aside for other items because you only have enough for that specific activity.

If you note that you are just spending too much money, you should be alarmed. However, don’t think that you can make things better by ing more, and neither should you let yourself get depressed without doing anything about it. There are always solutions. Try our tips to get started on the way to solvency!

This post is brought to you by The Digerati Life, a personal finance blog managed by a technologist and mom of two from Silicon Valley, CA.

Top Tips For Finding A Credit Card

By: Mr Credit Card

02/19/2011

This guest post comes from the NerdWallet.com team of credit card aficionados and personal finance writers.

This is for all the people who spend their money on gas and groceries – when “gas” means “shoes” and “groceries” means “I didn’t know you could spend that much money in one store.” If you find yourself using your credit card extensively in malls and department stores, here are seven tips to get the most out of your money.

Get a card with “return protection.”
If you find that the clothes you bought looked a lot better on the mannequin than they do on you, consider a card that steps in when the retailer won’t accept your return.

Return protection is a feature on all American Express cards ($300 per incident, up to $1,000 a year) as well as some MasterCard and Visa cards ($250 per incident, up to $1,000 a year). It’s that extra push you needed to get those shoes marked “final sale.”

Get a card with “purchase protection.”
For all the peace of mind that this feature delivers, it’s a surprise that it’s relatively obscure. Purchase protection insures your purchases against theft or accidental damage for 90 days.

Every AmEx card will give you $1,000 per incident, up to $50,000 a year, and the Visa Signature cards will guarantee $500 per incident, up to $50,000. MasterCard offers purchase protection on a selection of its cards.

Check your card’s “Bonus Point Mall” before you online.
Chances are, the website offers bonus points worth 5% or more.  For example, ing Bloomingdales merchandise via ShopDiscover or Chase Ultimate Rewards Mall effectively gets you 5% off, instead of your normal 1% back. We ran the numbers on how the malls stack up against each other, and in case you’re wondering, Discover came out a clear winner, with Chase a distant second.

Timing is everything
If you’re going to make a big purchase from a department or clothing store, wait for a bonus period. Chase and Discover offer 5% cash back bonuses that rotate quarterly. A significant purchase can reap a pretty hefty crop of rewards points.

Each has its own rewards schedule, but here’s the rundown for 2nd Quarter of 2011 (April – June):

Chase Freedom: home improvement & furnishings, lawn & garden

Discover More: home improvement, department stores, clothing

Never run up a balance, but if (when) you do, never use a rewards card.
We’re all human. Taking out a line of credit for your purchase is (almost) always a bad idea, but if you can’t help yourself, try to pay as little interest as possible.

Before you run up a balance: get a 0% introductory APR credit card.

After you run up a balance: get the best possible balance transfer card.

When you’re paying the bills: rewards cards generally have much higher APR’s, so pay them off first.

If you plan to splurge on a really big purchase (think Chanel and Louis Vuitton) get a free trip to Europe out of it.
Little-known fact: you get a tax refund when you overseas. Right now, ing an LV handbag in Paris effectively gets you a 30% discount versus ing in the US (as long as you don’t declare it at customs). The money you save can literally pay for your plane ticket.

Make sure to use a credit card with no foreign transaction fee. It’ll save you from the 2-3% fee that other cards tack on for foreign purchases.

If you’re a foodie, or if you just hate cooking, get yourself a Citi Forward.
Citi Forward gives you 5 points for every dollar you spend at a restaurant.   Next time you go out, put it on the card and collect the cash. 10,000 Citi ThankYou points yields a $100 Bloomingdale’s gift card, so treat your friends, too.

Managing a Budget With a Credit Card – 5 Online Tools To Consider

By: Mr Credit Card

We tend to think of credit cards as a tool to bust our personal budgets. After all, it’s tempting to use plastic to that fast-food lunch or morning coffee even when we don’t have any cash on hand. And those kind of discretionary purchases are a sure way to ruin even the most meticulous personal budget.

But it’s possible, too, to rely on credit cards to keep your spending on track. Several of the major credit card issuers — companies such as Discover, Chase and American Express — offer their own online budgeting tools. Members can access these tools, at no cost, to manage their own personal or family budgets.

These tools are usually easy to use. And because they are free, they remain some of the best credit card perks that many consumers have never heard of.

Discover’s Spend Analyzer Tool

Discover has a few of the highest rated rewards credit cards for 2011 in the industry, notably the Discover More card. Discover Card members can access the company’s online Spend Analyzer Tool. This online service helps customers track how they’re spending their money, how many purchases they’ve made with their Discover card in any given month and whether they’re overspending at grocery stores, gas stations, fast-food restaurants or any other type of retailer.

The site comes with a pie chart that shows you visually how much you’ve spent in such financial categories as supermarkets, medical services, gasoline, restaurants and retailers. There’s also a bar graph showing how much you charged during a given month. By holding the mouse over one of the months, you can instantly see how much you’ve spent in that month, the largest transaction you charged during it, the average transaction size and the total number of Discover card transactions that you made in those 30 or 31 days.

Finally, the site comes with a transactions list that shows your individual Discover Card transactions for the month.

Citi Forward Spend Tracker

It’s not nearly as comprehensive as the budgeting tool that Discover offers, but the Citi Forward Card Spend Tracker does have its uses. This online tool allows you to track your spending in as many as five categories that you input into the system. The neatest part? It shows you how your spending habits compare to consumers in a similar age bracket and income level.

On the down side? This tool doesn’t link to your credit card account. You’ll have to input your best estimates for how much you spend in each category every month.

Mint.com

Mint.com isn’t affiliated with any one credit card company. Instead, it allows you to track your spending across all of your credit cards and bank accounts. The biggest challenge with this tool is that it can take some time and effort to link your credit card and bank accounts to the online site. This is especially true if you have numerous accounts.

But once your accounts are linked, Mint.com proves to be a powerful budgeting tool. Not only does the site automatically track your spending, it will also send you e-mail warnings if your accounts are getting low. And if a payment due date is nearing, Mint.com will remind you of this, too.

Best of all, Mint.com is free.

American Express Money Manager

It’s no surprise that American Express, one of the industry’s credit giants, offers its own free online budgeting tool, too. Like the service offered by Mint.com, the American Express Money Manager program links to all of your accounts. When you access your personal Money Manager site, you’ll be able to view the balances in your bank accounts, on your credit cards and in your investment vehicles. The site also tracks the number of rewards points that you’ve earned from your various credit cards.

You an also use the site to track how you’re spending your money. You might find, for instance, that in one month alone you withdrew $2,000 from ATMs. By seeing clearly on the screen where you’re spending the most, you might be receiving the inspiration you need to change your negative spending habits.

Chase Blueprint

Chase’s Blueprint, the financial institution’s free online financial management program, not only allows you to view your monthly spending patterns, it assists you in paying off your debt. You simply enter either a date by which you want to eliminate a certain debt, and Blueprint will tell you how much you’ll have to spend each month to hit your target date. You can also tell Blueprint how much you want to pay each month to cut down on a specific date. The program will then tell you exactly when that particular debt will disappear.

FTFs Are Starting To Disappear

By: Jason Steele

02/18/2011

Of all bank fees, I find the Foreign Transaction Fee(FTF) to be perhaps the worst of all. This is an additional 1-3% tacked on to any foreign transaction for absolutely no reason. The fee is poorly disclosed, randomly set, and wholly unjustified. There used to be a very limited choice of cards that were offered without and FTF. Capital One was the only major bank that had no FTF on any card, while there were some credit unions that were FTF free as well.

In the past few months, there have been more and more cracks appearing the foreign transaction fee scam. As Chase and Amex dropped the fee on a select few of their cards. On Amex, they are planning on doing it with their very high end cards with the large annual fees that saw the FTF go away. At Chase, it was a few travel focused cards that shed the fee.

One of the biggest fee foes out there has been Ron Lieber of the New York Times. He reports today that Chase has added their Continental and United branded cards to the fee free party. As with previous moves, they appear to be targeting people who travel a lot. That makes sense. People with travel reward cards are getting smart to the “negative reward” perpetrated on them by their banks. I am sure that many, like me, are leaving their reward cards at home when they leave the country. I will only use my Capital One card since it has no FTF both because none of my rewards exceed the FTF and just on principal of not wanting to be ripped off.

By shedding these fees, I am sure that Chase and others are trying to get their internationally mobile, high spending customers to keep using their cards in other countries. Don’t forget that they also reap the normal transaction fees when you use your card out of the country.

Don’t Count Your Chickens With Amex

Lieber points out in a correction that Amex has not actually dropped their FTFs yet, as he says:

An earlier version of this post referred incorrectly to the status of foreign-exchange fees on American Express cards. While the company says it plans to drop the fees on some cards, it has not yet done so.

Nice job Amex. They announced that they would be dropping the fee, but hasn’t done so yet. Pretty sneaky.