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The Carnival of Debt Reduction – Quotable Quotes Edition

By: Mr Credit Card
02/23/2009

Welcome to the Carnival of Debt Reduction – Quotable Quotes Edition at Ask Mr. Credit Card’s Blog. If you are new here, please feel free to have a look around, and grab our free RSS Feed.

We are featuring some excellent articles today, so grab a cup of coffee and relax while you check them out! I’ve included some quick quotes from the articles that I’ve chosen as my Editor’s Picks.

Enjoy!
Mr. CC

debt1

“Debt is the slavery of the free”
~Publilius Syrus

debt2

“Some debts are fun when you are acquiring them, but none are fun when you set about retiring them”
~Ogden Nash

debt3

“It is possible to pay another man’s debts on his behalf, but it is not possible to make a guilty man innocent by suffering in his place”
~Carl Lofmark

debt5

“Debts are nowadays like children; begot with pleasure, but brought forth in pain”
~Moliere

debt6

“Debt is the fatal disease of republics, the first thing and the mightiest to undermine governments and corrupt the people”
~Wendell Phillips

debt4

“If I owe you a pound, I have a problem; but if I owe you a million, the problem is yours.”
~John Maynard Keynes

That’s it for this edition of The Carnival of Debt Reduction! Thank you for your submission, I enjoyed reading them!

Top 5 Signs That It Is Time To Cancel Your Credit Card

By: Jason Steele
02/20/2009

Credit cards are kind of like teenage relationships. They really are casual and not meant to last a lifetime.

How can you tell when it is time to move on?

5. Your Rewards Are Not What They Used To Be

I am looking at you Citi Bank. The Consumerist has the scoop on Citi as well as other reward programs that have been hit by the “shrink ray”. Of course it would be nice if they merely reduced the number of points you receive in the future, allowing you to spend the points you have already accrued at the redemption rates that were in effect when you accrued them. In reality, it is always the other way around. If you are lucky, the devaluation occurs with a little bit of advance notice, allowing you to dispense with your points before they become worthless.

When that happens, it is really time to tell them how you feel by canceling your card. If you have good credit, there are still plenty of card issuers that want your business, even these days.

4. Customer Service Isn’t What It Should Be

Are you speaking with a poorly trained representative on the other side of the world every time you call? Are you constantly trying to sort out various miscommunications? Are they unwilling to waive any fees for any reason? Maybe it is time to find a company that values you as a customer. You should expect competent customer service agents, clear communication, and an occasional waived fee for when your best laid plans go south.

3. The Annual Fee Isn’t Paying It’s Way

The annual fee looked great when you were getting a sign up bonus worth four times as much. It even looked good when your rewards were delivering a great value per dollar spent. Now, you hardly ever use the card anymore, and your annual fee is due. It might be time to move on and cancel the card without paying the annual fee. If you are going to pay a fee you might as well get something in return. Before canceling, you might want to check to see if they would be willing to waive the fee. If not, so long!

2. Your Credit Limit Has Been Reduced Dramatically

More and more these days, I am reading stories of people who have had their credit limits sharply curtailed for seemingly no reason. At a certain point, they are just baiting you to go over your limit and incur some bogus “over the limit” fee on a charge that the credit card company approved. Lowering your credit limit is one way a credit card company is saying that they don’t trust you. Don’t they realize that relationships are built on trust? If you regularly use over half of your credit limit, maybe it’s time to cancel them and find a company that trusts you a bit more.

1. Your Credit Card Company Is Going To Pay You To Go Away!

Apparently American Express, despite their all of their recent efforts to piss off their best customers, is still unable to get rid of as many customers as it would like. In a truly unbelievable turn of events, they are now actually paying customers to cancel their credit cards. I know this sounds like a headline from The Onion, but it appears to actually be true. First, I read stories like this and this, but didn’t believe them. Finally, I actually went to the web site mentioned and it appears to be legit.

According to the site:

Pay off your entire balance between March 1, 2009 and April 30, 2009, and we will send you a $300 value prepaid card. to thank you2. Enrolling in this promotion will automatically cancel your account.

The prepaid card will arrive within 4 weeks of the end of the promotion. The prepaid card can be used to help you with your day-to-day expenses including purchases at your pharmacy, grocery store, or virtually anywhere
American Express Cards are excepted.

Wow. Who ever believed the financial crisis would come to this? Unknown is why Amex isn’t simply canceling it’s unwanted customers. I am praying that I will come home and find several of these offers in the mail.

Until then, I will try to “work it out” with some of my credit card companies that I have a less than perfect relationship with. The lesson here is that a relationship is a two way street. If you are not satisfied, there are plenty of other places to go. Your business IS valuable. Don’t let any company take advantage of you.

Delta Makes Good On Its Promotion, But……

By: Jason Steele
02/19/2009

Delta briefly offered a great promotion last year. They promised their SkyMiles program members a 150% bonus on top of most partner mileage earned or transfered from mid-November through the end of the year. Soon after they offered the promotion, they withdrew it, claiming (quite unbelievebly) that they actually never meant to offer it in the first place. After withdrawing the offer, they then promised their customers that they would abide by their offer for all those who registered for it before the offer was withdrawn.

Delta Makes Good

Thankfully, Delta has finally made good on the offer. I just noticed that as of February 14th (Valentines Day no less) Delta showed me and other frequent fliers the love and granted us the miles promised. What does that mean for me? My wife and I actually obtained several Delta Amexs for the bonus miles, and redeemed tens of thousands of Starwood Starpoints for SkyMiles. Three months ago, I had zero miles in my Delta account, and my wife didn’t even have one. Today, we have over 260,000 and 70,000 miles respectively. Wow, that sounds like a lot of miles.

Now For The Bad News

We had been hoping for 3 tickets to Israel next winter. As everyone knows, winter is not exactly the peak season for visiting there, and it is usually the time to find the best discounts and available frequent flier tickets. Not according to Delta. Delta now has a three tiered system. Reward tickets to the Middle east in the “low” tier are merely 80,000 miles for coach and 120,000 for Business. Fantastic! We are very flexible with our dates, and are booking way in advance, so this should work out fine. We should have almost enough for 3 business class tickets (360,000 SkyMiles), or at the very least, one business class ticket and two coach (280,000 Skymiles), right?

SkyMiles! Now Worthless!

Guess what? It turns out that the “low’ tier doesn’t exist in any real, practical sense. That is to say there are no “low” awards to Israel available to be booked in either coach or business class, on any flights next December or January. Their “mid” tier shows plenty of availability however. How much is the “mid” tier? You are looking at 190,000 for coach and 230,000 miles for business. At those prices, SkyMiles are worth less than a penny in coach, as Delta has regular fares on that route at $1,300 for coach. In fact, I am better off doing the “pay with miles” option, as SkyMiles have a fixed one cent per mile value off of a coach ticket. So Delta Miles are now worth 1 cent per mile for coach tickets, and only 1.7 cents per mile in business class. This is the worst value in the industry that I am aware of.

How Did The Big Promo Work For Me?

I got all of my SkyMiles from three sources; Amex sign up bonuses, StarPoint transfers, and a few, small miscelaneous promotions. For the Amex signup bonuses, the value proposition is clear. We paid no annual fees and received 50,000 SkyMiles. Of them, 30,000 were normal miles, and 20,000 were base miles. The 30,000 miles were multiplied by 2.5 to account for our 150% bonus. Therefore, we received 95,000 Delta SkyMiles for our credit card applications, worth about $950.

From our Starpoints, we transferred several blocks of 20,000 Starpoints for 25,000 SkyMiles. Multiplied by 2.5, that gave us 62,500 SkyMiles per 20,000 Starpoints, or 3.125 to one. Even with this promotion, this is merely a decent, but not exceptional use of my Starpoints. When used for coach, this translates directly into 3.125 cents per dollar spent on my Starwood Amex. I can occasionally get 4 cents per mile in value from a hotel redemtion, but three is not bad. When used in business class, I am getting something closer to 5 cents per mile. In short, I will be averaging an acceptable returns of 4 cents per dollar spent on my Starwood Amex, but certainly nothing as grand as one might hope if I were to find the non-existent “low” tier rewards on Delta.

Frankly, it isn’t all that bad for me. I wouldn’t really need to use my Starpoints for a week or two at a luxury hotel, as I just don’t have the time. It is just unfortunate to realize that hundreds of thousands of Delta SkyMiles really isn’t worth that much anymore. Certainly a Delta Skymiles card is hardly worth the effort, now that you know that your reward will never be worth more than one or two cents per dolllar spent.

You have been warned.

Reward Cards For Non Travelers

By: Jason Steele
02/18/2009

Perhaps you travel frequently for work and don’t need to spend any further time from home. Perhaps your journeys take you by car, train, or boat. Maybe you are the type that prefers a tent in Moab to a five star hotel in New York.

Most of the reward cards I use and recommend have something to do with travel. Besides my enjoyment of vacations, travel cards, when properly selected and utilized, can offer a tremendous value per dollar spent. I regularly see returns over 4 cents on the dollar. In fact, last weekend I purposely did not utilize some Starwood hotel points, as my utilization would only have returned about 2 cents per dollar.

Where Is The Best Value In Non-Travel Cards?

I like to divide all reward cards into two categories, cash and non-cash. Travel cards are just one type of non-cash reward cards you can obtain. Other non-cash reward cards typically allow you to obtain free or discounted merchandise from the cards sponsor, typically at a fixed rate. Often that rate is as little as one cent per mile. At those rates, these cards are generally not worth it, as almost all cash reward cards will give the flexibility and immediate value cash with the same or better rate of return.

When Should I Chose A Non-Cash Card?

The real value in non-cash cards comes on the purchase side. The way most of the these cards work, is that you get a small amount of points, usually 1 per dollar spent, on all purchases, yet you can get far more on purchases from the merchant offering the card. For example, the Sony card, which I hold, offers a single point per dollar spent anywhere. When I purchase Sony products from an authorized retailer, I get 3 points, and when I purchase directly from Sony, I get 5 points on the dollar. Sony, typical of these merchandise based programs, offers essentially 1 cent per point as a discount on Sony products. Therefore, it really isn’t in my interest to charge anything to my Sony card when there are cash back cards, that I will discuss, that return 2% back directly in the form of a check or a statement credit. At 3 points per dollar, it is a fairly good deal. At five points per dollar, I would always use my Sony card when purchasing merchandise directly from their website or their retail stores.

Of course, this may not be as good a deal as it seems. First, I might find the Sony products I am seeking elsewhere for a better price. Also, since there is a Sony store in the state I live in, Sony is legally required to charge me sales tax, which is %8 percent where I live in Colorado. If I were to order Sony merchandise from an out of state retailer, it would be shipped without sales tax.

Clearly, these merchant cards work best when you are making many purchases directly from the vendor sponsoring the card.

Finding The Right Cash Back Card

Among cash back cards, there are also two kinds of cards. There are the ones that provide a flat rate of cash return on all purchases, and there are ones that vary the return based on what type of spending you make. It turns out that the credit card merchants are categorized by the card companies in groups such as gas, home improvement, mobile telephone and others. For some reason, the credit card companies have been offering cards that vary the rate of return based on the spending category. Some cards even offer some flexibility to pick and chose the spending categories that you would like to receive the most return in.

Personally, I prefer to find one card with a single high rate of return. The Schwab card currently offers 2% cash back, trumping nearly all other flat rate cards. American Express Blue Cash offers up to 5% cash back on all spending, but only after you have met an annual spending floor. If you have one of those cards, that is probably the simplest way to go. As I explained, I have the Capitol One as my primary non-travel card, and the Amex Platinum Business for certain categories of spending such as gas and mobile phone service.

Balance Is The Key

Use a merchant based reward card at a particular store that you shop at frequently. For the rest of your transactions, you may want to use a high return cash back card at certain spending categories, and a flat rate return card at the rest. If you are not a very large spender, you probably need fewer cards. If you spend a lot of money for work, own a small business, or just have a higher income than most, cash back cards can provide a signicant return on your annual spending.

For example, if you earn $60,000 a year, you might easily spend $30,000 on reward cards annually. If you were to obtain %3 average cash back, that is $900 a year. Nothing to sneaze at until you realize that is in the form of a statement credit, essentially it is non-taxable income, worth well over $1000 of pre-tax income. All of the sudden a few percent starts to look like a nice raise!

More Screwball Tactics From The Credit Card Companies

By: Mr Credit Card

This time it’s raising interest rates, or doubling the monthly payments. One of our readers, Julie, wondered what she should do:

Hello.
In ’05 I used two personal credit cards as low interest loans for part of my business. They are locked in at 2.9 and 3.9 till there paid off.

My pay back was 2% of the balance. My business closed in July ’07 and I have been paying off the credit cards and have never been late.

In January they raised the payback from 2% to 5%. Making my payments go from $350 to $860 and the other card from $240 to $600. They also added an extra service charge-finance charge of $10.00 per month because I get charged a finance charge.

I called and told them that I could not pay this amount each month and they responded that if I increased my interest rate from 2.9 to 7.9 they would reduce it back down to 2% and drop the extra $10.00 fee. This 7.99 is just for 2 years and then they could charge me anything they wanted.

I owe 17,000 on one card and 12,000 on the other. I don’t want to increase my interest because that would add years to trying to pay this off. Is there anything I can do or say to make them keep the original 2% payback without changing my original interest rates? Thank you, Julie

Hi Julie, thanks for your question.

There are a couple of things you can do that will really help.

The first is to call your credit card company back and tell them you you refuse to agree to the new payment terms. This means that they will close out your accounts, but you might be able to keep the original repayment plan if you do that.

You will have to send your credit card companies something in writing in order to get this started. Send it certified mail with a return receipt so that you have proof they got your letter.

Now, this is an option that is usually used when your interest rate gets hiked for no reason, not when they raise your minimum payment. If there is no way for you to dispute the changes to your account, and your credit card company will not work with you, then you still have another option.

Debt negotiation experts like the one we just interviewed can negotiate on your behalf. This can be damaging to your credit (they will have to close your accounts too) but they can drastically reduce the amount you owe on your credit cards, and put you on a payment plan that will get your debt paid down faster.

It’s a real option – some of these companies are scams, but some of them really help people and I think that your situation is an excellent fit. You want to pay your bills off, you don’t want it to take forever, and you don’t want to pay any more in interest than you have to.

You can start investigating debt negotiation with this site here:

  • Debt Negotiation Associates

    • See what types of things they can do to help you, and make sure you understand the process, and how it will affect your credit. Having to do a little bit of credit repair is usually well worth the thousands of dollars a company like this can save you.

    CitiCards has been behaving badly too:

    A reader, Kevin, wrote in with his story:

    I was recently frustrated trying to contact Citicards regarding the security of my account.

    They sent unsolicited new cards and created a new account for me (gave me a new number) without any explanation.

    When I called to activate the new cards I heard a recorded message that my old account had been “compromised” or the number stolen. This was news to me!

    So I called Citicards and was tossed around from department to department, from India to Manilla, and from no one could I learn which merchant had their system hacked or how my number had been identified as at risk.

    As a consumer I wanted more information, but ran into a kind of wall that insulates consumers from anyone at Citicards who actually knows what is going on. Any ideas?

    Kevin,

    Thanks for your question. Unfortunately, this sort of stuff happens all the time, and it doesn’t surprise me that you’re getting te run-around. Shame on CitiCards for running you around. I would be just as angry as you are in your position. If your personal information was compromised because of them, then you deserve an explanation.

    Although, If I were in your shoes (and I have had my identity stolen) I wouldn’t wait on CitiCards for answers.

    My recommendation is for you to temporarily pick up a credit monitoring service with identity theft protection. There are several reasons I suggest this:

    Some people like LifeLock for this, but I prefer Identity Guard from Equifax. For one, it’s cheaper, and two, I think it does just as much – except that it doesn’t automatically freeze all of your credit reports.

    To my mind, freezing all of your credit reports is a hassle unless you know that your entire identity has been stolen. Identity Guard lets you freeze and unfreeze your reports with a click, but they give you the option instead of doing it automatically.

    Their identity theft insurance is excellent as well, it was actually fun to read the fine print. It’s about $15 / month, so it’s not outrageously expensive, and you get to monitor your credit report too.

    Whatever you do, make sure you pick up some sort of identity monitoring program, at least for the next three to six months. It’s bad enough that Citi gave you no warning – identity thieves will give you even less, and it could be devastating. Make sure you look out for yourself in this situation.

    Here’s the links you can check out:

  • LifeLock
  • Identity Guard (Click “Protect My Identity” to learn more about it.)

    • You might also want to check out this article, which has some really good advice:

  • 40 Precautions for Preventing Identity Theft

    • Thanks for your question!

    Have a question for us? Leave a comment below!

    Keep Reading:

    American Express Platinum Concierge Valentine Service

    By: Mr Credit Card

    Update – American Express is the midst of updating the features on the Platinum Card. Some features mentioned on this page may be outdated. We expect the new features and information to be available later today.

    Valentine’s Day is over now for 2009. But I’ll be honest to start, I’m not exactly a big valentine fan (after all, shouldn’t everyday – or at least once a week) be a valentine. It seems like more of an excuse for flower shops to make loads of cash over charging for roses!

    This year, I was quite late in booking a dinner place for Mrs Credit Card. It was Friday the 13th (yeah right). I called a few swanky places near where I lived. The first place I called was Flemming’s Steak House. “Mr Credit Card, the only slots we have available was is at 4pm or 10:30pm!”. No way. I next called Morton’s Steak House. Same answer, seats only available after 10pm! Next, I called Nectar. Same answer, only after 10:30pm.

    Next, I tried to call a few Spa’s as I thought it would be nice to get Mrs Credit Card a massage treatment. I called 2 places and was politely laughed at. “Sorry Sir, we are fully booked for massage therapy on Valentine’s Day!”.

    I then decided to call my American Express Platinum Concierge and see if they could make any reservations for me. It was 11:00am when I made the call. The concierge person (who was a lady) listened to my request. I told her I wanted to reserve a restaurant near where I lived and also told her the places I have called. I even pulled up a website with all the restaurants where I lived. She thanked me, took down the URL of the website but insist they have “diners specialist” to take care of things. She also commented that based on the places I have called, she gathered that I wanted a restaurant that was shall we say “quite high end”. She promised that Amex will call me back by 2:00pm EST.

    At precisely 2:00pm EST, I got a call from the folks at Platinum Concierge. They told me that a couple of places were available, but only at 9:15pm. So I decided to reserve the place at Trattoria San Nicola, a very homely Italian restaurant. She said she will call me back once the reservations were made.

    Five minutes later, she called back and gave me my reservation number.

    Now, I did all this behind Mrs Credit Card’s back. Now I have to find a baby sitter!

    In the evening, Mrs Credit Card told me that she had a baby sitter and that she had made a reservations at Nectar at 8:00pm! I then told her about Valentine’s Day dinner. But she said she did not want to have dinner so late at 9:15pm. So rather than having a Valentine’s Day dinner, we’d had ours on Valentine’s eve!

    On Saturday the 14th, our whole family had dinner at a restaurant at Chinatown!

    But coming back to this Amex Platinum Concierge service. I was actually quite pleased to have used them. They were polite and managed to save my precious time. The more I think about it, the more I’m utilizing this service. If I make use of them at least 10 times a year, I think that would easily cover my annual fee! But thumbs up to them for their great service.

    Rebuilding Credit Quickly

    By: Christina
    02/16/2009

    What should you do when you’re trying to raise your credit score and it isn’t working?

    A reader, Melissa, sent this question in:

    I have VERY bad credit – mostly from several years ago and some of the bad things are starting to fall off now. (including a judgment from 2002)

    In the last couple of years I have made sure that I pay everything on time and I am started to rebuild. I have a target store card (had for about 1 year) and car loan (about 2 years – will be paid off in 8 months) and a partially secured MasterCard (1 year) these accounts have never been late once. Everything before that was negative.

    The MasterCard that I have has a very high interest rate – monthly maintenance fees and annual fee and also charges me $5 just to make a payment. I recently paid off this account and closed it because the fees were too high to justify the small benefit of having it report to my credit ($375 limit)

    My Experian score is only 498 currently, which is significantly lower than the other 2 scores but I understand that it is most frequently used by creditors.

    My credit is bad because I never thought that it was important when I was younger and I didn’t take care of it. Now that I am trying to stabilize myself financially I am very frustrated because for the first time in my life I am paying everything on time and my score is no higher now than it ever was.

    I realize that my score is impacted by the fact that the credit that I do have are very small lines of credit and I sometimes max them out and only pay the minimum payment (not always – I sometimes pay much more) I just expected that my score would rise some from the fact that I have paid everything as agreed.

    My question is what would be the best way for me to expedite raising my score. It is not good enough to get new credit at this time. I have closed one cc account and I will now pay off the Target store card but keep it open (and not use it) Will this help?

    Since I can not get new credit right now I don’t know what else I can do. Ideally I would like to get a credit building card without insane fees and use it sparingly – just enough to report positively on my report – but I can’t justify paying the fees on the type of card that I can get approved for.

    Is my only option to continue paying my car and Target card on time and just wait for my score to go up eventually? If I go this route how long will it take for my score to increase significantly (without getting any new credit)? Thanks a lot for your input!

    Melissa

    Thanks for your question Melissa!

    There are faster ways to raise your credit than what you are doing, so you definitely have some options! Let’s take a look:

    Clean Up Your Credit Report:

    This is the first place you want to start when you’re trying to raise your credit score. You can challenge anything on your credit reports, but do not challenge too many items at once.

    Removing the negative items off of your credit reports will raise your score within about a month. (The challenge process takes time, and then all three credit bureaus have to update your reports.)

    For complete, step-by-step instructions on how to clean up the negative items on your credit reports, you can view our guide here:

  • How to Dispute An Item On Your Credit Report

    • Once you have cleaned up all three of your credit reports (especially Experian) you are ready to move on to the next step.

    Pay Down Your Existing Credit Cards:

    Having high revolving balances on low-limit cards kills your credit score. If you want your credit score to go up as quickly as possible then pay down those cards as fast as you can.

    Once you have them paid off, charge no more than 10 – 15% of your available balance each month, and pay it off in full.

    I’m talking order a pizza, or some shampoo at Target. No large purchases. The only way your score is going to go up is if you keep those credit lines open from month to month. You do want to make small purchases and pay the cards off monthly though. Otherwise you may not have a record of positive payment each month and your score won’t go up as fast.

    So, pay off the cards, charge $15 – $40 a month, and continue making your payments on time.

    Avoid the “Bad Credit” Credit Cards

    Some of the sub-prime credit cards are good deals, but not many of them. If you really want to raise your credit score, then your best bet is to get a secured credit card.

    I say this because with most secured credit cards you can raise your available credit any time you want to by making an additional security deposit. That will take care of not really having a large credit line. Start the card with $200 (or whatever you can afford) and regularly send in $100 a month as a deposit to build your available credit.

    Treat your secured credit card just like your existing accounts – you should charge very little and pay the balance in full each month. This is the fastest way to raise your credit score.

    Another benefit of secured credit cards is that they usually do not have all the insane fees that the other sub-prime cards do. You also get your deposits back once you convert the card to an unsecured credit card. (Usually 6 months to a year after you open the account.)

    As far as secured credit cards, go, I like HSBC (Orchard Bank’s) options. They have you fill out a standard credit application and then direct you to the card that fits your credit score. (Most likely secured in this case, but if you qualify for an unsecured credit card, they still have very good rates and terms.)

  • Orchard Bank Credit Card Reviews

    • These three tactics will raise your credit score as quickly as humanly possible – but they can be a lot of work. It’s very overwhelming to start from the bottom and work up as far as your credit score goes.

    My best advice is to set aside a little time each day to deal with these issues until you work through them all. Remember too, that your low credit scores won’t last forever. If you take these steps you’ll be in a completely different situation a year from now.

    Good Luck! Please feel free to come back and ask questions any time.

    Thanks,
    Mr. CC

    Have a question for us? Leave a comment below!

    Review of The Credit Book By Sam Sky

    By: Mr Credit Card
    02/15/2009

    It’s Sunday again and time for another book review. Today, I’m going to review “The Credit Book” which is written by Sam Sky. Sam Sky started Credit Restoration Brokers 7 years ago and he now also runs Debt Negotiations Associates. Sam helps consumers with debt consolidation and negotiations. In fact, I have known Sam for about 3 years I started reading the book and was actually impressed by it. The book contains 15 chapters but today, I will talk about the first 7 chapters in the first part of this review.

    Chapter 1 – Different types of consumer reports, D&B, MIB and Check Systems – In the first chapter, Sam goes through the different types of consumer reports available. Most of us are familiar with the three major credit bureaus – Experian, TransUnion and Equifax. What was more interesting was Sam talking about Dun & Bradstreet and Experian business reporting. He mentioned that in the past, credit card issuers and banks did not check on business credit bureaus. But with the economy it is now, they are starting to look at those. The Check Systems is also another consumer report which used among banks to protect themselves from individual with past bad check writing. He mentions a valuable gem which is that we ar ntitled to a free copy of our check system reports.

    The next gem in this chapter is the information about the Medical Information Bureau. This is like the medical version of the credit bureaus, where doctor can reports any medical claims. The book educates us on how inaccurate information may lead to someone being denied of medical insurance.

    Chapter 2 – Rebuilding Your Credit/Co-signers – In the next chapter, the book mentions a very little known fact. And that is that being an authorized user on a credit card (or having a co-signer) will not help your credit score. This used to be an effective strategy to improve your credit score but FICO has stopped using this as a criteria since last 2008.

    The book then also proceeds to talk about my using a secured credit card is the way to go if you are looking to build or rebuild your credit. I wholeheartedly agree with this.

    Chapter 3 – Revolving Credit and Installment Credit – This chapter actually talks more about the title of the chapter itself. But I liked the way the book explained the differences between a revolving credit and an installment credit. An installment credit is line your auto loan, mortgage or furniture loan. The outstanding principle can never go up but can only go down.

    Contrast this with a revolving credit like your credit card. You can have a balance of $1,000 one month and $10,000 the next. The book mentions the precise ration of these 2 types of credit to have.

    Chapter 4 – Bankruptcy – When to do it, when to avoid it and divorce debt – While the author is not a bankruptcy attorney, he gives enough information that drills home the point that you do not know a lot of things and that you should probably consult a BK attorney if you are thinking of filing for one. He briefly touches on Chapter 7 versus chapter 13 filing and briefly shares his thoughts on the circumstances when one should file or not. He also talks about what is dischargable debt and what is not.

    Chapter 5 – Credit Counseling with Credit/Debt Consolidation vs Debt Negotiations s credit repair – This highlights the main differences between a non-profit counseling service, debt consolidation vs debt negotiation. I like this chapter very much. It actually goes into quite a bit of detail on the little things you would not read elsewhere. The chapter spends quite a bit of time on debt negotiations as well. You should have a pretty clear idea on credit counseling, debt consolidation and debt negotiations after reading this book. Furthermore, the chapter also has some nifty tips to avoid collection calls.

    Chapter 6 & 7 – Chapter 6 and & are both very short chapters very sound information on rapid scoring and how having a co-signer is now redundant and useless.

    Next Sunday, we’ll conclude our review of “The Credit Book”.

    My Current Credit Card Portfolio

    By: Jason Steele
    02/13/2009

    creditcardsI have a lot of opinions on a lot of credit cards, so people ask me, “Which cards are you using right now?” Without disclosing my actual credit card numbers, I have no problem telling you, the reader, what I am using these days and why.
    Primary Card: American Express Starwood Personal.

    If the merchant accepts Amex, they will see this card. I use it often enough that it looks very worn. I have even memorized the number from typing it in for online purchases so many times. The reasons are simple. First Starwood points are the best. They have the fewest points for a hotel redemption, some of the best hotel properties, and best of all, no blackout dates on redemptions. If you can purhase a room at a Starwood with cash, you can purchase it with points. There are no “double points” requirements, no advance notice, and when something goes wrong, they treat your right. When I do not use the points at a hotel, I can redeem them for mile son one of a few dozen airline programs. Not only that, but redeeming 20,000 Starpoints earns you a 5,000 mile bonus. so the transfer rate on most airlines is actually 1.25:1, better than most airline branded cards.

    It is the flexibility that is key, as you can accumulate points for years, deciding in the future which program is best for your travel plans, i.e. which has been devalued the least.

    On the downside, there are not as many Starwood hotels out there as there are in other chains. The largest brands in the Starwood family are Westins and Sheretons. Great places, but there are Hiltons, Marriotts, or Intercontinental/Holiday Inns.

    I also hold their business card, but only for the sign up bonus.. I will probably cancel when the annual fee comes due.

    Secondary Card: Capitol One No Hassle Cash VISA

    As any Amex user knows, many places simply don’t accept American Express. You can blame the high merchant fees or whatever, but it is just a fact of life. For times when a situation calls for Visa or MasterCard, my Capitol One is ready for action. It is also ready when Amex decides that it’s “valuable customer” who always pays his bills on time and in full, is in need of a “financial review”.

    Finally, it is my go to card when I am overseas, as they have the smallest foreign transaction fees in the business. They only charge the 1% Visa fee, and no fees of their own. Compare that to the 2.7% fee that Amex recently went up to.

    Specialty Card: Amex Platinum Business Card

    When gas was over $4.00 a gallon last year, I couldn’t resist a card that offered 5% cash back on all gas and all wireless. Between the two, my wife and I we are spending over $500 a month on gas and phones, enough to earn $25 a month in cash back rewards, with no annual fee. That is what I call a good deal. Every time I did a $50 fill up of car this summer, I felt a little better knowing that my gas was 20 cents a gallon cheaper than the posted price. In fact, I am not sure I ever actually paid more than $4 a gallon, a price that might seem cheap some day in the future.

    Cash Card: I have my ATM/Debit card from First Internet Bank of Indiana. I don’t live in Indiana, however I have been using them for years as they have great customer service and no fees. They even refund fees charged by other bank’s ATMs, up to four a month. I use cash as little as possible, but occasionally I do need it, especially when out of the country.

    Other Cards: I have a Sony card that I got for the sign up bonus, a hefty $150 off of a camera I was going to . I have a Hawaiian Airlines Visa from Bank of America. The sign up bonus was good, and I dream of visiting Hawaii one day. I also got a couple Delta Amexs, also for the generous sign up bonus and the “Big Delta Promo” The likelyhood is that I will cancel most of these extra cards when the annual fee comes due.

    Every Person Is Different

    Just like I wouldn’t recommend the same car I drive here in Colorado to a reader in Florida, so too would I not necessarily recommend the same cards to all of my readers. Everyone has a different situation. Obviously, I am a reward card aficionado who likes to travel. That determines many of my choices. In most cases, I can get a reward valued at over 4 cents per dollar spent when I use my Starwood Amex. For situations where I can get the %5 cash back with the Business Platinum Amex, that trumps even the mighty Starpoint. For almost everything else there is the Capitol One card w/ 1%+ cash back.

    As they say over at Capitol One, What’s in Your Wallet?

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    Chase Balance Transfer Offer

    By: Mr Credit Card

    Most credit card issuers have got back into offering decent balance transfer offers now that credit card default rates are on the decline. Chase has also jumped into the game. Chase has reduced their vast credit card offerings to a more manageable number of cards and this is the card that they now offer their best 0% deal.

    Chase Freedom(SM) VisaThe Chase Freedom® Visa – $50 Bonus Cash Back offers a 0% Intro APR* on balance transfer for 12 months. That aside, they are also one of the best cash credit card around with the ability to earn 5% rebates on quarterly rotating categories and on their online shopping portal as well.

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