Capital One Guaranteed Secured MasterCard

By: Mr Credit Card

07/07/2010

Summary: The Capital One Guaranteed Secured MasterCard is a guaranteed approval card for those that live in Canada who may have had problems with their credit in the past. The purpose of this card is to assist those that would like to establish or re-establish their credit histories.

Features and Benefits: This is a secured card with an annual fee of $59 and an annual interest rate of 19.8%. Security funds are used as collateral and can be as low as $75 up to $300. The amount needed for is determined after you are approved for the card. The credit limit is $300 or more. The security funds are refundable if the account is closed in good standing.

Other features and benefits that are included are $0 fraud liability for unauthorized used, 24/7 customer service online and by phone, and your choice of card design. Cardholders also receive Master RoadAssist Service for 24 hour emergency road service and MasterCard Global Service which provides emergency card replacement and emergency cash advances.

Criteria for Guaranteed Approval:

You do not have an existing Capital One account
You have not had a Capital One account in bad standing within the last 12 months before applying
You have not applied for a Capital One account within the last 65 business days
You live in and are the age of majority in AB, BC, MB, NB, NL, NS, ON, PE or SK

Conclusion: The Capital One Guaranteed Secured MasterCard is ideal for those that are looking for a credit card but have had credit problems in the past. This card works almost the same as a standard credit card except that a security deposit is required. Making payments on time while following the guidelines of the card will help repair or re-establish problem credit or help establish credit for those who have no credit histories at all.

Costco Membership Review

By: Mr Credit Card

07/06/2010

Mrs Credit Card and myself took the plunge and got ourselves a Costco Membership. Costco essentially has two levels of membership. The Goldstar Membership cost $50 annually. The next level up is the Executive Membership which comes with a $100 annual fee. The advantage that the Executive Membership has over the regular membership level is that you can earn 2% rebates when you shop at Costco. The also have a standard Gold Star Membership for business at a $50 annual fee.

Additional benefits – Aside from the ability to access their wholesale warehouse and earning rebates from your purchases, Costco also has partnerships with a couple of business vendors and they claim to be able to give better rates. (To be honest, I’m not sure if there is anyone who signs up for Costco because of these reasons).

What is Costco Good For? – The key question folks will ask before they sign up for a membership is how good is Costco. From our experience, Costco is great for ing bulk items like cereals, drinks, toilet rolls, table napkins. We find that Rotteserie Chicken is also very good value.

Their fruits section also has very good value. We are able to get a large box of strawberries for example at a really good price.

Costco Deals and Coupons: – Not all merchandise bought in Costco is less expensive compared to supermarket or drug stores. For example, Kleenex tissues (280 ct.) bought in bulk at Costco are more expensive if there is a BOGO on Kleenex at the supermarket or drug stores. Only time worth ing Kleenex at Costco is when they have a coupon.

Costco members periodically receive coupons in the mail. The coupons for the time frame of May 13 to June 6 were used the following way.

Recommended s with the coupons:

Tires – Great prices and services – My neighbors had all 4 tires changed on my X5 SUV and saved over $200 from what the dealership was charging me. $70 off with coupon on any set of 4 Michelin Tires.
Dove Beauty Bars – 14 ct – $3 off with coupon.
Neutrogena Rainbath Bodywash – $4 off with coupon – great bodywash.
Off Bug Spray – $3 off with coupon.
Olay Regenerist Micosculpting Cream – $7 off with coupon. Again, cost lots less than drug store especially after the coupon.
Dixe Ultra Paper Plates – time for the summer BBQ – $2.25 off with coupon.

Is it worth it? – This, I guess, is the six million dollar question. So let’s look at the math.

Let’s start by actually looking at when it makes sense to join the Executive Level. If you purchase at least $5,000 worth of merchandise each year from Costco ($416.67 a month), I would highly recommend or suggest that you upgrade your membership to an Executive Membership. With an executive membership, you will earn a 2% reward (up to $500) each year on most of Costco purchases. Just purchasing at least $5,000 each year will help pay for the executive membership. With this reward, you may use it towards your Costco purchase, like cash, or the cashier will cash your reward for you and one would have some spending money.

But looking at it from this way does not measure the savings you would have gotten versus shopping at other supermarkets without the price discounts you get at Costco. When you get their affinity card (See review here), you can save even more money when you shop at Costco.

Given the math, it makes sense to get the Executive Level Membership (together with a Costco credit card) as long as you spend $278 a month there (which I think most folks will anyway). The normal Gold Star membership does not allow you to earn rebates and hence, I think it makes sense for most folks to get the Executive Level Membership program.

If you make use of Costco’s partner’s then, you could realize even more savings from being a member.

Other Costco Tips – Here are some other Costco tips that you may or may not have heard about.

Non-members can shop at Costco – Yes, non-members can shop at Costco. The way to do this is for a member to purchase a Costco Cash Card and simply give it to a non-member.

Non-members can at the Pharmacy – Simply tell the person at the front door that you are going to the pharmacy and they will let you in. In fact, if you are savvy, you can save quite a bit of money of Costco’s pharmacy.

Non-members can make purchases at Costco.com – Yes, non-members can even make purchases at Costco.com though you will have to pay a small surcharge. So it pays to do a little comparison shopping before doing this (though I doubt many non-members will actually do it).

Summary – If there is a Costco near your house (or at least within reasonable driving distance, then you should at least check it out and see if it makes sense for you to be a member. If you could to be a member, then I would recommend a Costco credit card to enable you to save more money. I would highly recommend getting the Executive Level membership together with a Costco credit card to get the most bang for the buck.

Cash Back Calculator

By: Mr Credit Card

07/01/2010

This page list the latest cash back card offerings on the market today. We have also included a calculator to estimate the amount of cash back that you can earn from each card based on your spending. You can click on the cards to read our reviews on them. Key in your spending and see which card might fit you the best.

[jazzy form=”cash_backcalculator”]

Which United Airlines Credit Card To Get?

By: Mr Credit Card

06/30/2010

Update: The United Explorer Card is no longer offered by us and the Continental Card mentioned in this post is no longer issued by Chase. We will be updating this post shortly

When I wrote this post a while ago, United had four different credit cards. They all had different fees. Some allowed you to double and even triple miles. A couple allowed you to earn EQMs as well. However, just recently, United consolidated these four credit cards into one card called the United Mileage Plus Explorer Card. But the question of which United Airlines credit card is still a relevant question because United and Continental have merged and their miles are transferable. Furthermore, the fact that Chase has a couple of card that allow you to transfer points to Continental makes it this question even more relevant because in today’s situation, a Continental OnePass Card can be considered a United credit card.

Let’s gather some facts before we go into deeper analysis.

Firstly, we know that the Continental OnePass Plus Card will still be issued this next. But according to the Continental United website, in 2012, it will be discontinued though existing holders can still use it. What this means is that if you do not have this card, this is a great opportunity to get it simply for the bonus miles.

The Chase Sapphire Preferred Card is now the only card that allows you to transfer points into Continental OnePass Miles for a one to one ratio (which can then be transferred to United miles).

Let’s Put All Relevant “United Credit Cards” side by side.

Card Image
Card Name	United MileagePlus&#174 Explorer	Continental Airlines OnePass&#174 Plus Card	Chase Sapphire Preferred(SM) Card	Ink Bold(SM) With Ultimate Rewards – 25,000 Bonus Points
Bonus Miles	40,000 Miles – 25,000 after first purchase, 5,000 after adding additional card member, 10,000 after annual spend of $25,000	40,000 Miles – 25,000 after first purchase, 5,000 after adding additional card member, 10,000 after annual spend of $25,000	50,000 Points after $3,000 spend within 3 months	25,000 Points after 1st purchase
Miles Formula	Double Miles For Continental & United Airfares	Double Miles For Continental & United Airfares	Double Points for booking Airfare & Hotels with Chase	Double Points For booking Airfare & Hotels with Chase
Baggage Fee waiver	First Baggage Free	First Baggage Free	n.a.	n.a.
Foreign Transaction Fee	3%	3%	No FX Transaction Fee	3%
Annual Fee	$95 – First Year Fee Waived	$95 – First Year Waived	$95 – First Year Waived	$95 – First Year Fee Waived
Airline & Hotel Partners	United & Continental	Continental & United	Continental, British Airways, Mariott, Hyatt, Priority Club, Amtrak	Continental, British Airways, Mariott, Hyatt, Priority Club, Amtrak

Given the United Continental merger and the fact that Continental will no longer be issuing their cards after 2011, the answer to the question of which United credit card really boils down to signing up for cards NOW for maximum sign up bonus. In the long run, you would want to use the United Mileage Plus Explorer Card. But for now, one should be getting your hands on all these cards over a period of months to rack up miles in your United or Continental account.

This is what I would do if I was a Continental or United Frequent Flier. Firstly, I would get the Chase Sapphire Preferred(SM) Card to get the 40,000 bonus points. Then at the same time, apply for the Chase Ink Bold(SM) with Ultimate Rewards – 55,000 Bonus Points (business card) as a sole proprietor. This one is even easier. You get 25,000 points after your first purchase and an additional 25,000 points after spending $10,000 after three months.. So after three months, you would have 90,000 points which can be transferred to 90,000 Continental miles (which can be transferred again to United).

Then I would get the Continental Airlines OnePass&#174 Plus Card next. After your first purchase, you get 25,000 miles. Add your spouse or partner as an additional user and you get an extra 5,000 miles. That is a total of 30,000 miles. When you combine that with the points you earn from the Chase Sapphire Preferred and Chase Ink Bold, that adds up to 105,000 miles. Then during your next calendar year, spend $25,000 on the card and you’ll get your 10,000 anniversary bonus. That rounds up the total to 115,000 bonus miles.

The lastly, get the United MileagePlus&#174 Explorer Card. Rinse and repeat the process to get the extra 40,000 miles. That will make a total of 155,000 bonus miles. If your spouse does the exact same thing, then you can earn a total of 310,000 miles together!

Perhaps you may already have one or even two of these cards. But even then, you should get the remaining two. (and I also forgot to mention that both Continental and United have business credit cards as well). That should be a source of additional miles.

To sum Up – Right now (and this looks to be the case going forward), United has only one credit card. This should be your main card if you are a United or Continental frequent flier. But in the mean time, you should get other cards that let’s you earn “Continental or United miles” and rack up your miles before the opportunities disappear.

Tax Consequences Of Durbin

By: Jason Steele

06/29/2010

I was listening to a report on NPR this morning about fisherman in Louisiana who are having trouble submitting a claim to BP. It turns out that in many of the rural areas of region, fisherman will sell their catch on the docks for cash, most of which is paid out, again in cash, as wages to crew and for fuel and supplies. Because few records exist, it is difficult to document their losses due to the BP oil spill. Normally, most businesses would have tax records that would be easy to produce, but the story indicated that “Cash is king in the fishing industry.”

Cash And Durbin

The Durbin Amendment to the financial reform act will have many consequences. When credit and debit card processors can no longer require their merchants to offer the same price for credit and debit as they do for cash, many are expected to offer a substantial cash discount. A inevitable side effect of so many people paying with cash is that we might see the rest of the country become more like the rural areas along the Gulf of Mexico. Small businesses will be especially prone to under reporting their revenue when it is in the form of cash.

One of the benefits of purchasing with credit and debit cards is the documentation produced by the accepting networks. For a merchant, this documentation may be one of the things that has traditionally kept them honest when it came time to submit their taxes. It is very possible that many small businesses might offer a significant cash discount, far greater than than the so called “swipe fees”, in the hopes that their real savings will come when they do not report their cash transactions.

Ultimately, if governments start seeing less and less tax revenue, they will have to cut services or raise taxes, a predicament currently facing most city, county and state governments due to the current recession.

It is not the purpose of credit and debit cards to act as a check against tax evaders, it just happens to be one of the side effects of the system. Now that we are throwing out the merchant supported system, and the incentive will be to pay with cash, it will be interesting to see how sales tax collection copes with a return to an influx of cash transactions not seen in the last fifty years.

How Does Bad Credit Affect My Spouse?

By: Christina

I owe a lot of money on credit cards. but they are all under my name can my husbands credit get bad if i dont pay the credit cards and can they come after me and take my house? – Adalid

ANSWER:

Adalid,

If all of your credit cards are solely in your name, not paying them or defaulting will not affect your husband’s credit score. Many people incorrectly believe that a spouse’s good or bad credit will make their own credit equally good or bad. The only way that not paying on your credit cards will affect your husband’s credit is if he is on your cards as a joint account holder or an authorized signer on the credit cards.

If you don’t pay your credit card bills it can affect you as a couple if you need to get a loan together or a house together as both credit reports will be pulled. A person with bad credit can result in loans with higher interest rates or sometimes even denial of the loan. Your husband would have to apply for everything himself.

To answer the second part of your question, credit card companies do not usually take people’s houses for not paying credit cards. Usually, depending upon the amount of the debt, it is sold to a collection agency which will attempt to collect the debt. Your credit score will drop and you will probably not be extended credit in the future, usually 7 years.

If it is a large amount of debt, the credit company may choose to sue to collect and if they win a judgment, can garnish your wages or levy bank accounts. They may also put a lien upon your house which would mean that if you ever decide to sell your home, you would need to pay the lien before you would receive any money from the sale of the house. In rare circumstances, the creditor can force the sale of the property or liquidation of assets. Although rare, the chance of this happening is higher if the debt is excessive.

Hope this helps.

Credit Cards And The Financial Reform Act

By: Jason Steele

06/28/2010

The financial reform act has not been signed into law yet. Nevertheless, it has come out of conference committee and will be voted on in the House and possibly filibustered in the Senate. For the last week, there has Now that some time has passed since the compromise regarding credit card reform has been announced, some details are starting to emerge about how the bill will affect credit cards in particular.

Consumer Financial Protection Bureau

The idea behind this new agency is to consolidate the regulatory powers of many agencies that have some authority over consumer financial products. This was originally designed to be the financial counterpart of the Consumer Product Safety Commission. This new commission will have the authority to regulate credit cards on an ongoing basis. This corrects a key fault in the CARD Act, the fact that banks will continue to “innovate” new tricks and traps subsequent to many of their traditional abuses being abolished by CARD. If this new agency works as designed, they will be able to ban unfair credit card industry practices as they are implemented, without an act of Congress.

Access To Your Credit Score

In the past, you could get a free copy of your credit report, but not the score. With this new law, you would be entitled to the score if you have been the result of any negative action resulting from your score. In practice, you will essentially be entitled to the score under almost any circumstance. It has always been a mystery to me why these scores are kept secret. It would seem to be in everyone’s interest that people monitor their credit score and actively try to improve it. It looks like Congress is finally getting around to dragging the industry kicking and screaming into the future.

Swipe Fees

It seems the entire credit card industry as well as the reward card junkies like myself have dodged a bullet in that the new act will not directly curtail swipe fees in credit cards.

Merchant Acceptance Of Credit Cards

Unfortunately, there is a real threat to the status quo of no fee cards with cash back. This bill specifically grants retailers the right to set a minimum purchase requirement of up to $10 for credit cards. It also specifically grants merchants the ability to set discounts for cash or debit cards. Technically, credit card companies have not forbid this in the past, but it was rarely used. Occasionally you would see a gas station offer a small cash discount. Based on past experiences, it will be interesting to see if cash discounts become commonplace. I sincerely hope not, as any cash discount of over one percent will kill the value in just about any reward scenario while making transactions more confusing.

Sorting Out The Details

Ron Lieber of the New York Times has a fairly detailed article about how the bill relates to credit cards and other important aspects of this legislation. As usual, he really cuts through the confusion that has surrounded this act and provides all the info that curious observers need to know.

Your Secret Weapon To Get Out of Credit Card Debt – Self Forgiveness

By: Mr Credit Card

06/27/2010

The following is a guest post by Neal Frankle. He’s a Certified Financial Planner and blogs at Wealth Pilgrim. Neal writes about taking action steps to improve clients’ financial situations and finding balance at the same time.

Your Secret “Get Out Of Credit Card Debt” Weapon

Believe it or not, there really is a secret to getting out of credit card debt. It’s something that very few people do. But when they do, things improve big time – and fast.

The secret isn’t a black-jack system or hot stock tip.

It’s simply forgiveness.

That’s right. If you want to change your financial (or any) situation, you have to forgive yourself for the mistakes you’ve made first. I say this because I understand the power of guilt. I’ll share a story that illustrates this point.

Steve is a disabled friend on a very limited income. He doesn’t live extravagantly but once in awhile, he goes on a spending binge. He does this, I think, to escape his loneliness. It’s not hard to understand and have sympathy for him.

But the piper has to be paid sooner or later, When that credit card bill comes in, Steve spirals down into a greater depression. He can’t believe he got himself into debt again.

The only remedy for those awful guilty feelings are spending… so off he goes. He feels better for awhile.

It’s a vicious cycle for Steve and lots of other people too. You might not face the same demons that Steve does, but you might find yourself overspending in order to get some relief. Even if it’s only a short term solution.

Rather than ignore this problem, let’s treat it at it’s core. For many of us, the guilt and other bad feelings are what’s behind our self destructive financial action. We have to get rid of the guilt if we want to stop that behavior once and for all.

How? – By forgiving ourselves.

If you are in a financial mess today, there is no good reason to continue to beat yourself up over it. In fact, there are only bad reasons to continue to do so. Now I realize that it’s very easy to say this and very difficult to do. I don’t have a magic wand that will help any of us forgive ourselves immediately…but I do have a few ideas that will help.

The number one best way to forgive yourself for the mistakes you’ve made is to get busy in action now. Do estimable acts. If you used to spend money without keeping track, start tracking your spending now.

If you have high credit card debt, take action to reduce the cost of your debt. There are plenty of ways to do this.

Whatever it is, map out a plan and take action. Don’t just stand there….do something. By taking positive action, you’ll be so busy you won’t have time to feel guilty or spend too much. At this point, you’ll have a choice – you can either focus on the positive action you are taking in the present or you can dwell in the past.

Right now, you may not have the choice….that’s why you might be stuck in the guilt which is a recipe for getting deeper in the hole.

Bankruptcy – Don't Let That Happen To You

By: Mr Credit Card

06/26/2010

Today’s weekend post comes from Financially Poor, who used to be a bankruptcy counselor. One of his most interesting post on his blog is the one question that will change your spending habits.

Bankruptcy isn’t an easy thing to go through emotionally. Having a crap load of debt isn’t easy either. Both of those choices aren’t good for anyone.

Being a bankruptcy counselor I hear a lot of different stories of how people got to the point of filing for bankruptcy. Sometimes it’s filled with sad stories about how they were diagnosed with cancer or lost a spouse. Those are very traumatic experiences that can cause you to get into bad situations or make bad decisions.

I also hear stories about people who just got out of control with money and had bad money management. Here are a few common threads that I’ve noticed in the majority of people that are filing bankruptcy.

Not expecting the unexpected

Things happen in life that you can’t always plan for. But that’s no excuse for taking life for granted and not expecting the possible. It’s very possible, especially in this day and age, to lose your job, or even get hurt or sick. I’m not saying it’s going to happen but you should have a plan in place in case you lose income in your household.

Here’s what you should have in place:

A plan of which expenses you can cut back

emergency fund with at least 6 months of expenses covered

Having just those two things can help you live a long time without any income.

Overextending

Credit is a tool used to things that are out of our immediate reach. Used reasonably it can be very helpful in acquiring things that can better our life. But if it’s used irresponsibly and more credit is extended to you than you can afford if something happens in your life, then you’ll be in trouble.

Make sure you:

Don’t use extra income (ex. commission, bonuses, etc.) in your budget for large purchases

Have a budget to make sure you can afford the extra credit payments

Control

This goes with the overextending, but it also needs its own mentioning. Learn to control yourself. You don’t always need the newest and best thing. Think about how kids love shiny things. That’s pretty much what it’s like when you have to have the newest and the best. Learn to live modestly and you will have more than you’ve ever wanted.

Hip Hop Executive Sees Durbin For What It Is

By: Jason Steele

06/24/2010

The Durbin amendment limiting interchange fees, or swipe fees has been getting a lot of contradictory press. On one hand, you have the retailers and merchants who overwhelmingly support the Durbin amendment for its regulation of swipe fees. They oppose swipe fees so strongly because they are the ones who pay them, despite their desperate attempt to convince gullible reporters otherwise. Even executives from home improvement stores like Home Depot and Lowes have admitted that the money saved by paying lower swipe fees will be used to “hire employees or build more stores,” not necessarily lower prices. You would have to be a complete fool to swallow the merchant’s claims that the cost of swipe fees are “passed directly to consumers in higher prices.” A far more persuasive argument would be that the swipe fees are actually passed remitted to consumers in the form of cash back and other rewards.

Jennifer Waters at MarketWatch gets it when she writes:

But it’s unlikely any savings will be passed on to consumers. A similar fee rule passed in Australia, but consumer prices didn’t fall, mainly because the banks found other ways to drum up the lost revenue.

“If a company saves money on its electric bill or rent, you don’t necessarily see a corresponding drop in prices,” said Gerri Detweiler, a credit adviser with Credit.com. “It remains to be seen how this will wash out.”

Enter A Hip Hop Executive

At first glance, it is really hard to see why Russell Simmons, the founder of Def Jam records has an opinion on this issue. It turns out that Mr. Simmons is also in the business of pre-paid debit cards that are being marketed to people who otherwise do not have access to banking resources such as credit cards and checking accounts. Simmons recognizes that the present system, where retailers pay debit card fees, allows companies like his to offer these financial products at no cost to the consumer. The retailers, who choose to accept debit cards pay the fees, so that the customers do not have to. If the banks had to pay the fees, they wouldn’t bother offering these products for free, and the costs would be levied against the consumers.

Simmons argues in this editorial at the Huffington Post:

No one has yet been able to tell me how Senator Durbin’s amendment will keep the under-served from being hurt by higher fees for the very basic service that debit cards provide or how the amendment will ensure lower prices for consumers instead of bigger profits for merchants. I can’t believe financial reform has come down to this: big retailers in a money grab on the backs of the poor and under-served.

While Simmons is referring to debit cards, the same argument holds true for credit card interchange fees, admittedly without the implications for the poor and under-served. According to the Washington Post, Simmons arguments are being heard.

I admit that the interests people like myself who take advantage of cash back and reward cards are not as important as the plight of the “poor and under-served”. Nevertheless, the same economics that Simmons sees affect both credit and debit card users. Debit card users benefit from the current system by getting free access to the Visa and Mastercard processing systems without the credentials necessary for a credit card and without any of the associated risk of debt. Likewise, credit card users get a competitive market of no-fee credit cards as well as cash back and other rewards.

Retailers could make an argument that cash back and other rewards are perversion of the system that hurts merchant’s profits. That would be an honest argument about the merits of how our payment system has evolved. What they cannot honestly argue is that credit and debit interchange fees are “like a tax on consumers” that merely “get passed on in the form of higher prices.”

It is even more ridiculous when convenience store owners argue that interchange fees are not proportional to the costs of the service being provided by the credit card networks. Think about that for a second. The entire business model of a convenience store is to charge people an enormous markup on inexpensive products in return for “convenience”. It is quite funny that they object to the credit and debit card industry doing the exact same thing.