Editor's ChoiceCategories Credit Type Issuers Blog

Don't Go Back

11/22/2010

I would like to digress from the intricacies of points and miles, and awards and upgrades.   I have vacationed in dozens of countries and nearly all of the 50 states, and I keep coming back to one of my central observations about why I travel.   I love the adventure and mystery of travel.  I want to explore new places and meet new people from different cultures.

Occasionally, I have an experience so magical, that I am tempted to return, as if I could repeat the experience again.    Of course, it is not possible.    When I return, the weather has changed, my favorite restaurant is no longer open, and the culture is neither new, nor familiar to me.

There are some who would into a timeshare, so they can repeat their vacation over and over again.   Others will enjoy taking a cruise on the same boat time after time.    I will never be one of them.

It is easy to rebook the same vacation.   You know the ins and outs, and there are few surprises.   You can avoid the pitfalls and that plagued your first trip and try to make everything right.  It is safe, secure, and comfortable.    I look for those qualities at home, not on vacation.   I travel for the surprises, to get out of my comfort zone and grow from new experiences.

One day, when I have seen the world, I may start over and re-visit the places I have been.   Hopefully I will be pleased with how they have grown and changed.   With the exception of family visits, which really aren’t vacations at all, I will be booking my leisure travel to destinations that I have never been to.  If it is true that you can never go home again, than the same is true of our vacations.   You can never go back.

Your Last Resorts In A Travel Dispute

11/19/2010

Your complaint was denied, your letters to the CEO have gone unanswered.   You know you are right, but the company has decided not to do anything and hope that you will just go away.

Don’t Go Away

Your next option is to request a chargeback from your credit card company.  Obviously, this is only possible if you charged the amount in dispute to your credit card.    This is a fairly good option for most disputes.  It is so good that you are well served by merely threatening a chargeback.   Companies have much to fear from a chargeback as each one is held against them when they negotiate their merchant fees.   An airline might accept billions of dollars a year by credit card, and an increase in their merchant fees of a thousandth of a percent can be very costly.

When you file a chargeback  documentation is important, and you really only get one shot to get it right.   Keep your story simple and concise, omitting anything not directly relevant to your dispute.   Your credit card company will try to determine whether you have been charged for goods and services you did not receive.    Ultimately, it can always go either way, but at least it is free.

Don’t Get Mad, Take Them To Court

Sometimes chargebacks are denied for one reason or another.  Other times, a dispute doesn’t fit into the boundaries of a chargeback, but it is still a fair claim.    In this case, your last resort is to file a case in small claims court.   This is a surprisingly easy process that typically requires a single form be filled out, and a minimal filing fee be paid, typically about $20.  Like the threatening a chargeback, threatening to file a case in small claims court might be enough to get the results you seek.   You may even send a copy of the paperwork to the company with a request to respond in two weeks, notifying them that you will file the case if you do not reach a settlement in that time.

The immediate result is that you will stop getting form letters from the customer relations department, as your situation will now be handled by their legal department.      A staff attorney, or one at a law firm on retainer will look at the case and attempt to evaluate what the outcome would be if the case went to court.   If the law is clearly on your side, and the attorney understands it, hopefully you will be offered a settlement.   That is what British Airways chose to do when a blogger filed a case in small claims court after the airline reneged on a sale fare it had offered.

Another possibility is that the company will simply fail to show up at the trial.   This is certainly more likely if you live far from the headquarters of the company, as they might decide it is just not worth their effort to send a lawyer out to your jurisdiction.     It is also true that large companies loose and misplace documents all the time, otherwise we probably would not have such a hard time dealing with them.  Normally, the customer is the victim when a company looses a document, but in this instance it guarantees victory.   When the other party doesn’t show up in court, for any reason, a default judgment is issued so long as you have the slightest proof to back up your claim.

The final possibility is that the company appears in court to defend itself.    While the workings of small claims court are beyond the scope of a travel blogger, my experience is that consumers tend to be treated fairly well when they can prove a company was at fault.   For example, in this instance, Delta Airlines lost a small claims case and was force to pay a passenger $4,140 after it lost their luggage.

The point is that you do not have to accept a company’s refusal to compensate you for it’s mistakes.   Between chargebacks and small claims court, we have more than one opportunity to receive justice.

Follow Up On CARD Act And Due Dates

11/18/2010

Does it surprise you to know that even someone who writes extensively for AskMrCreditCard still learns something new every now and then?

A few weeks ago, I wrote what I thought was a very definitive article on how the CARD Act pertains to credit card due dates on weekends and holidays. The idea was pretty simple.   The CARD Act says that due dates must be on the same day every month.   It also says that if that day is one in which mail is not accepted, such as a weekend or a holiday, that a payment received the next day should not be counted late.

My Experiment

With the actual text of the CARD Act in hand, I proceeded to pay my Amex balance electronically, setting a due date of November 12th.  My statement listed a due date of November 11th, but that was Veterans Day, a Federal Holiday during which no mail was delivered.   My reading of the CARD Act told me that Amex would not credit my payment on the 12th as being late.

The Results

Amex did in fact credit my payment as late, and assessed interest.    I called their customer service and, while they were happy to waive the interest, informed me that that law only applies to payments by mail, not electronic payments.   That explanation did not make much sense to me, as the text of the law doesn’t specify the method of payment, it just says that:

If the payment due date for a credit card account under an open end consumer credit plan is a day on which the creditor does not receive or accept payments by mail (including weekends and holidays), the creditor may not treat a payment received on the next business day as late for any purpose.’’

I even asked for a supervisor, just to be sure, and I got the same story; that law only counts for mailed payments, not electronic ones.

What Does The Government Say

I went to the web site HelpWithMyBank.gov where I found the following question in their FAQ:

My payment is due on the 4th of the month, however this month the 4th is a federal holiday. I generally mail my payments to the bank. Why don’t they change the due date on the bill?

The answer stunned me:

Effective February 22, 2010, the law will require that

* The due date must be the same day each month. The due date could be set as the last day of the month or it could be a specific date in the month, such as the 4th.
* The payment cut-off time generally cannot be earlier than 5 p.m. on the due date.
* If the payment due date falls on a weekend or a holiday when the bank does not accept or receive mailed payments, then any mailed payment received by the bank before the cut off time on the next business day would be considered an on-time payment.

Since you mail your payments, you would have until the cut-off time on the next business day to make your timely payment. However, if the bank accepts or receives payments on the due date by a method other than mail, such as electronic or telephone payments, and you make a payment using that other method, you would still need to make the payment by the due date.

If you followed the payment requirements and you were still charged a late payment fee, you can dispute the charge with the bank. Notify your bank in writing using the billing error notice instructions, which should be on the back of the periodic credit card statement. Be sure to use the address specified after “Send Billing Inquiries to:” on the back of the statement. This is usually not the same address where you send your payment.

Amex Was Right

My gut still tells me that the text of the law doesn’t distinguish between mail and electronic payments, but it seems as if the interpretation by the regulators does.  I did hear something from the Amex supervisor that they since receive electronic payments 365 days a year (never mind that most banks won’t issue electronic payments on weekends or holidays), the law does not apply to them.   They even went so far as to claim that the law does apply to Visa and Mastercard, but I am pretty sure they also accept payments electronically.

The moral of the story is that when my due date falls on a weekend or a holiday, I should go back to paying my credit cards electronically on the last business day before they are due.   There was no harm done as the interest fees were waived, and I guess we all learned something about how a seemingly clear law can be interpreted to a bank’s maximum benefit.

Is America Finally Getting On Board With Credit Card Processing Technology?

11/16/2010

We live in a highly technological country.  We can claim credit for inventing electricity, automobiles, airplanes, radio, television, computers and the Internet.   Yet when it comes to processing credit cards, our merchants are stuck somewhere in the mid-eighties when the manual credit card swipe machines gave way to the first electronic terminals.    In other countries around the world it is not uncommon to be presented a bill along with a portable, wireless credit card processor, yet here we have to hand over our card and wait.

Mobile Devices To The Rescue

Over at Creditshout, they have a review of a new product called Square titled “Is Square The Paypal of Mobile Payments for Merchants?” Basically, the Square product is both a product and a service.   The product is a small, credit card reading accessory that attaches to a mobile device such as iPhones, iPads, Droids and others.   The product isn’t for sale, it is given away free when you sign up for the service.   The service is accepting credit card payments.   Unlike traditional merchant agreements, there are no setup fees or monthly fees or other nuisance fees that most merchants accept as a cost of doing business.   In that sense, it is much more like a PayPal account in that anyone can accept credit cards.   Think of it more like an intermediary than a processor, again, like PayPal.

Beyond Merchants

Anyone who has ever sold their junk on E-Bay knows that you don’t have to have a store front to have the need to accept credit cards.   The idea is to democratize the acceptance of credit card payments.   Their website suggests this product is ideal for babysitters, instructors, and photographers.   The catch is that there is a fee of 2.75% plus 15 cents, which they consider to be slightly below average for credit card processing.   I am not an expert on the merchant side of the credit card market, so I can’t say, but it sounds about right.   For comparison sake, Paypal charges 2.9% plus 30 cents per transaction, so they are definitely undercutting them a bit.

Will It Work?

If they idea gains traction among the public, who knows.  They could become a standard application like PayPal, Facebook, or YouTube.   On the other hand, PayPal could just create their own card reading widget and muscle in on their market.   At the very least, I would love to see multiple PayPal competitors doing battle to see who has the lowest fees, just like the dozens of reward cards out there competing to offer your the best returns.

At the very least, we have a new way of thinking about and conducting credit card transactions.  The new millennium is now almost 11 years old, its about time.

Airborne Wi-Fi Promotions

There used to be a time when I configured computers for traveling users when I would refer to the disconnect state as “being on an airplane”, since traveling was synonymous with a complete lack of internet connectivity.  As you have probably heard, this is no longer the case, as airlines are tripping over themselves to offer Wi-Fi, wireless internet connectivity onboard aircraft.

Not Repeating The Same Mistakes

In the 90s, there was a similar scramble to provide telephone connectivity while onboard an aircraft.  We all remember those seat back telephones right?   The reason they have largely disappeared is because nobody used them.   Airlines paid a huge expense to install them across their fleets, and then seemed to think that people would spend several dollars a minute to make phone calls in the air.   It turned out that most people preferred to wait until they landed rather than spend a small fortune to make airborne phone calls.   The airlines screwed up royally on the pricing, something that their customers see all the time.

This time, they are taking a more conservative approach.    Unlike the telephone fiasco, airlines are getting the partnership of the providers when it comes to the install, and then sharing the revenue for use.   Prices are not outrageous, like the several dollars a minute phone calls, but it is still possible to spend more on a few hours of airborne internet than you spend on your monthly internet at home.

It is for that reason that it is unlikely that I will ever pay for in flight Internet.   Then again, I am not really the target market.   If I were a business traveler, and my company was willing to re-reimburse me for the expense, it might just be worth the hassle of printing a receipt and submitting it to the travel department.   If I am truly getting work done, it might be worth it to them to pay for my connectivity.  Realistically, I would still prefer to enjoy the flight and read a book, considering I spend eight hours a day working on a computer anyways.

Try In-Flight Internet For Free This Year

Another way the airlines are trying to avoid having this technology fail like seat back telephones is by giving it away for free.  There have been all sorts of promos since this technology was deployed.  The clear intention is to get people to try it out, and hopefully they will start paying once the bill comes due.

This year, there are a slew of promotions centered around the holidays.   The sponsor is Google Chrome, and there are several airlines participating.

For information on using this service with Airtran, check this out:
http://www.airtran.com/wifi/google.aspx

Delta is currently the largest airline particpating in in this promotion:

http://www.delta.com/traveling_checkin/inflight_services/products/google_chrome.jsp

Finally, you can also connect with the hip new upstart Virgin America:

http://google.virginamerica.com/

So bring your laptop, sign in to the Internet, and feel free to tune out your seatmate, crying baby, and the beautiful scenery outside your window.

Why The Capitol One Venture Rewards Card Is The Best New Card Of 2010

11/15/2010

It is not hard for a bank to grab the attention of credit card bloggers.   Just offer a new or existing card with a phenomenal sign up bonus.    We have seen this in the last year with cards co-branded with British Airways and American Airlines.   Travel and personal finance bloggers will write about these cards, and hard core credit card churners will all sign up.   12 months later, many of these new cards will be canceled, just before their first annual fee is due.   Somehow, I don’t think these are really the customers the banks are after.

Capitol One Offers A Great Card You Can Actually Use

The Venture Rewards card offers a mere 10,000 points at sign up.   The points translate to one penny each as a statement credit against any airline, hotel, or rental car purchase.   The real value is that your ongoing purchases earn two points per dollar.   That is pretty much the same as the Schwab bank card that offered 2% cash back, before being withdrawn from the market.    This reward is great for anyone except those who spend very little on travel.    Unlike most reward cards, you are not locked into a particular provider, and you even accrue frequent flier miles for your award travel.   You can even accrue elite qualifying miles and be upgraded on an award ticket, unlike most airline awards.

Who Would Be Better Off Without This Card

2% back is a great rate, but there are still some reward card aficionados that do better.    Most of the awards that are worth more than 2% are international airline awards in premium cabins, as well as some luxury hotel awards.    For those saving up for premium cabin awards, you are probably still better off with a Starwood Amex or an airline specific card.

Also, this card is only available to those with excellent credit, so people with a spotty history need not apply.

What Else Is Great About This Card

No mention of Capitol One is complete without recognizing that they are the only major credit card issuer that does not charge a foreign transaction fee.    These fees are a pure scam, and I am surprise Capitol One does not do more to advertise this industry leading policy.   That said, I do like their television ad that mocks the airlines for offering domestic awards for 25,000 miles that never exist.

There are no fancy gimmicks or headline grabbing bonuses with this card, just a great rate of return, a simple redemption system, and no foreign transaction fees.   That is enough for me to consider this the best new card offered this year.

Another Great Southwest Travel Experience

Last weekend, I was fortunate enough to visit Las Vegas for the Aviation Nation air show at Nellis Air Force Base.  Having booked this trip months ago, I was glad it was with Southwest when I ended up fracturing my shoulder blade last week.    With Southwest, I could have canceled or rebooked this trip, using the money paid as a credit towards future travel.   As it turned out, the pain was manageable, and I figured that my should would be just as broken in Vegas as it would be had I stayed home.   Nevertheless, it was nice to have the option of canceling my trip without penalty.

Broken Bones Are Your Ticket To The A-List

Sure, you could spend extra on the early check in option, in order to board first and choose your favorite seat, but that would be too easy.   You could even bring a small child with you, and board at the end of the A-listers.   I decided to break my should blade in a bicycle accident in order to board my flight first.  In my crippled condition, the Southwest gate agents were happy to give me a blue slip that allowed me to board the aircraft first.   I didn’t even have to worry about checking in exactly 24 hours before my flight, I just printed out a boarding pass at the airport, C-something, and picked up my blue ticket at the gate.   I was the first passenger who boarded, and the first to exit the aircraft on arrival.    I am sure that not every Southwest flight is on time, but I have flown them a dozen times and they have been perfect.   This weekend was no exception, as the flights operated with a precision that leads me to believe that not everything has to happen perfectly for the flight to leave on time.  It also helps that with free checked bags, there wasn’t chaos when people couldn’t fit all of their belongings in the overhead bins.

For someone who can’t stand the policies and attitudes at most airlines these days, I am always pleasantly surprised to fly Southwest.

What The Heck Is An Air Pocket?

11/12/2010

As I pilot, I have to tell you, there is no such thing as an “air pocket”.    That is just a term someone came up with to explain turbulence.   The sun heats the earths crust, hot air rises, cold air descents, and you get turbulence.    You can think of rising air as the bubbles in a lava lamp.   As your plane is flying through these masses of rising and falling air, the aircraft is shaken.

Turbulence Is Dangerous

Not a month goes by without hearing about sudden turbulence that caused injuries to passengers.   Sometimes pilots can anticipate turbulence, but other times it comes out of the blue.   This is called clear air turbulence.    The reason clear air turbulence is so dangerous is simply because the pilot is unable to turn on the seatbelt light, so that people are not seated.   All it takes is moderate turbulence to cause people and their belongings to go flying through the cabin.   The moral of the story is to always wear your seatbelt whenever possible.

The Problem With The Seat Belt Sign

Sadly, the seat belt sign has been increasingly used to manage the behavior of the passengers, rather than being employed for safety.   It seems like almost every flight I have been on in the last few years, the pilot has left the light on for most of the flight.    Worse, the cabin crew ignores the indication to wear your seatbelt and continues to perform cabin service.   Physics does not distinguish between cabin crew and passengers, and they are both equally likely to go flying through the cabin in the event of turbulence.    By turning the light on and leaving it on for most of the flight, the pilots probably think that they are doing a favor for the cabin crew, as the passengers are less likely to get up an interfere with the service.  What they are really doing is crying wolf.   While I keep my seatbelt on for safety when seated, I will get up to use the bathroom when the light has been on for an excessive amount of time.   The crew is merely required to inform me that I should return to my seat, but they have to let me go when I have to go.

Creating non-existent phenomenon like “air pockets” and using the seat belt sign to help the flight attendants serve meals are two of the ways airlines are loosing credibility and ultimately hurting the cause of safety.

Some Serious Thought On The TSA's New Image Or Grope Policy

11/11/2010

I, like most travelers, have many issues with the TSA.  I find the majority of their personnel to be uninterested, incompetent, and poorly trained.   Their policies often make little sense and are unevenly enforced.   That said, I have devoted some considerable thought to the recent controversy over backscatter imaging, and I am not completely opposed to it.  At this time, I am having a harder time swallowing the rationale of its opponents than the technology itself.

Problem Number One: It’s Dangerous

The idea is that passengers are subjected to radiation through this technology.   Recently, pilots have begun to protest their repeated exposure to the radiation received through these systems.  Brett Snyder over at the Cranky Flier does a good job of debunking the idea that this technology is subjecting passengers and pilots to a risky level of radiation.   He concludes,“Bottom line? If pilots are really concerned about radiation exposure, they should stop flying. The additional amount from the AIT machines is negligible when compared to what they get while in the air.”

This advice is familiar to me based on an experience I had a few months ago.    At that time, I took a tour of a nuclear reactor used for research.   The scientist giving the tour asked us to guess which people receive the least and the most radiation as part of their occupation.   The people who receive the most radiation are pilots and flight attendants, since they spend the most time outside (most of) the protective envelope of our atmosphere.   Ironically, the least radiation is received by crew members on a nuclear submarine, as they are shielded from natural background radiation by the surrounding sea water.

Cranky points out that the level of radiation received by those scanners is .05 microsieverts.   Just by living in Denver, Colorado, a place with naturally high background radiation, I receive 10 microsieverts of natural radiation a year, according to the Nuclear Regulatory Commission’s fact sheet on the biological effects on radiation.   I would have to go through these machines 200 times to receive the same dose I get from living in Denver.   By the way, there are no adverse risks associated with living in places like Denver with higher than average exposure to radiation.

Problem Number Two:  What Is The Point Of Subjecting The Pilots To These Scans

This is one of those questions that really makes the TSA look stupid.   Obviously, a pilot already has control of the aircraft and is in a position to do harm without possessing contraband.   So the TSA are idiots, right?

Not so fast.  It certainly isn’t beyond the realm of possibility that a pilot might use his or her position to smuggle contraband into a secure area only to pass it on to a non-pilot accomplice.    It is even possible that a pilot could plant an explosive device on his aircraft to be detonated at a later time.   As a pilot myself, I have a hard time imagining a fellow pilot would do such a thing, but at the same time I really do not understand why anyone would commit a terrorist attack either.

Problem Number Three: Why Bother With These Machines In The First Place?

If you really think about it, X-Rays can’t detect explosive very well.   One liquid or solid looks pretty much like another of the same density.  Likewise, metal detectors don’t really detect anything that is not metal, and there are plenty of things that a terrorist could use, such as explosives, that are not metal.  Frankly, even a pat down is not all that effective at turning up contraband, as any woman who has hidden something in her bra can attest.  Men who smuggle beverages in artificial beer bellies know that fact as well.   Think about drug mules, and you get an idea of what someone could smuggle on their body if they are really motivated to do so.   If a terrorist is determined to board an aircraft with a harmful device, these imaging systems may be the only way to detect it.

Problem Number Four: Privacy

This is the argument against these imagers that I find the most compelling.   I really don’t like the idea of someone looking at an image of me naked, let alone that of my family.   On the other hand, I used to work at a photo processing lab and you would be amazed at the images of themselves that people regularly turned over to strangers.   Given enough safeguards against the storage of these images, I think ultimately we as a society may have to overcome the idea of strangers looking at these images anonymously.    I wish we lived in a different world, but sadly , we don’t.

I am not trying to make the case for these imagers, but I would at least like you to believe that the issue is not nearly as simple as it would seem.

American Adds Rental Car Awards, Value Questionable

11/10/2010

Loyalty points are most commonly used for airline award tickets.     The next most common use is for a hotel award stay.   Rental car awards are becoming more common.  Now, American airlines is introducing hotel and rental car awards.     You can click on this link to check it out.

Should You Rent A Car With An Award?

While I do love award travel, I strongly recommend against using awards for rental cars.   There are two big reasons.   The first is the whole taxes and fees issue.   I went to make a reservation for a rental car award using American Airlines miles.   What I got seemed like a reasonable price, 2,300 AA miles for an economy car.     Knowing that economy cars are never, ever available,  I always book them anticipating a free upgrade.   The problem is that it says taxes and fees are extra, but of course, it doesn’t mention what they actually are.   Rental car companies have long since abandoned the idea of merely adding any mandatory taxes and fees, and have gone full speed ahead into adding mandatory fees for just about every normal business expense you can imagine.  Vehicle registration, shuttle bus service, and even cleaning the car are all now mandatory fees that are not included in the base rate.   The point is that your “free” award is anything but free, and you will never know the exact bill until you get there.  That is not how I am willing to travel.    As for rental cars, I will find the best coupon code out there, and I will only rent when I have a printout of all taxes and fees before I travel.

The next huge problem is liability insurance.   Your credit card is extremely valuable in that it provides rental car insurance.   The catch is that you must actually pay for the rental car with your credit card, merely securing the deposit is not sufficient.   Many people have presented their credit card when renting a car using an award, assuming that they are covered by the card’s policy.  This is a huge mistake, as they are completely liable for any damage to the car.   Of course, you could just purchase the optional insurance, but that often costs more than the car itself, making a rental car award be one of questionable value.   My advice is to save your miles for air travel and hotels.   The taxes and fees are largely known, and you won’t be personally on the hook if the airplane is damaged or the hotel catches fire.

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