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Delta Promo Update And A New Reward Debit and Checking Option

By: Jason Steele
02/13/2009

skymilesUpdate On The Big Delta Promo

Last November, I told you about the ‘Big Promo’ that Delta was offering. According to their web site, almost any partner activity before the end of the year was eligible for %150 bonus SkyMiles on top of what was received. Almost all SkyMiles partners were included, such as transfers to SkyMiles from your Starwood accounts and hotel loyalty programs. A notable exception was transfers from American Express’s Membership Rewards program.

Shortly after the promotion went live on Delta’s web site, it went dark. The registration page turned into the following message: “We’re sorry, this campaign is currently not active”.

From there, things only got weirder. A few days later the page for the promotion began to show the following message:

The More Miles You Earn, the Bigger the Bonus

The SkyMiles® multi-partner threshold promotion was in the development phase and not yet formally announced or launched when it was inadvertently published online. The landing page should not have been live and the content was subsequently removed.

However, Delta Air Lines will honor the bonus miles promotion for SkyMiles members who have already enrolled.

What Does This All Mean

People have been asking me, “What ever happened to that big Delta Promo, will I still get the reward bonus miles?”

First, let me translate this message a little. The “landing page” is web developer speak for a starting page for a promotion or any mini web site. Whether or not I am willing to believe that Delta accidentally published this web page, I can at least commend them for seemingly standing by their promotion, intentionally disclosed or not. To many, it seems as if Delta retracted it’s promotion in the face of an overwhelming response that would obligate them to flood users with SkyMiles.

That said, if we are to take Delta at it’s word, all of those who signed up for the promotion should receive their SkyMiles, in accordance with the terms, in 8-12 weeks follwing the end of the promotional period on December 31st, 2008. At this time, I have no reason to doubt that Delta will renig on both it’s originally posted terms, or it’s subsequent promise to abide by them.

Both my wife and I registered for the promotion. Actually, we registered twice, and saw a screen the second time saying that we had already registered. Unfortunately, Delta provides no way of confirming your registration. We then made several large transfers from our StarPoints accounts and applied for several Delta SkyMiles American Express cards. If, a month from now, we do not see the bonuses promised, we will be among many dissatisfied and litigious travelers and bloggers. I seriously doubt that Delta really wants to have that kind of legal and PR battle on its hands, especially considering the currently posted statement I quoted above.

A New Choice In Checking and Debit Card Rewards

I am really up on Capitol One these days. Their No Hassles slogan is at the very least, a symbolic gesture to consumers saying that they get it. We do not want endless junk mail or weaselly fine print obstructing our rewards. I was also left with a good feeling when they showed me the love by offering me an effective 2.25% reward rate, albeit temporarily.

Now, I have been made aware of a checking account that they offer with a rewards debit card. What stands out here is that both the checking account and the debit card offer rewards. Granted, the Capitol One reward points only translate into a mere 1 cent per point towards airfare, but this is a situation where you can get rewards merely for paying your bills electronically.

As readers know well, I am a big fan of electronic bill payment, especially when you are the one setting up the payment, not the recipient. Capitol One offers unlimited free bill pays, plus

Note, these “miles” are given per transaction, NOT per dollar spent. In that context, it doesn’t seem like much. Say you pay 10 bills online a month, that is 100 miles a month or 1200 a year, worth exactly $12.00. It is not much, but it is something.

Certainly I could foresee some reward junkee paying his bills online one penny at a time. What is better is that like most good banks, they guarantee their scheduled payments will be made on time, or they will compensate you for any late fees. Furthermore, they offer a “SmartSwitch” tool that claims to migrate your payments from your old online account to your new one, as well as to help you generate letters to various entities informing them of your new bank.

What’s the catch?

For now, you have to live in the states of Connecticut, New York, New Jersey, Texas, and Louisiana. The rest of you are out of luck.

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Economic Stimulus Package Parable and Fable

By: Mr Credit Card
02/12/2009

stimulusplanWhen I was young, I used to read Aesops’ fables. They are wonderful stories with lessons in each one. When I read the bible, Jesus also explains the principles of the Kingdom of Heaven in parables. So here is my attempt at putting together a simple story about the $800+ stimulus package.

Background and Characters – Years ago, there were 2 families, the Sams’ and the Lees’. Papa and Mama Sam worked hard through their working lives and provided for their 3 kids, Paris, Tommy and Ginger. At the age of 60, Papa and Mama Sam decided to stop working. They had worked hard for their entire lives and felt they deserved a break. They did not save a lot when they were working, so they made an arrangement with Paris, Tommy and Ginger, who were now adults.

They said, ” since we did such a great job bringing you up as good citizens and kids, you owe us something. Every month, we would like to take 10% of your income so that we can live comfortably and also in case we need to see the doctor. The 3 kids thought that this was a little outrageous since wasn’t it the duty of every parent to bring up their kids well? But so as not to start any squabble, they all agreed to give 10% of their paychecks to support their parents.

Over at their neighbors the Lees’, the Lees did not retire when they were 60. Instead, they still continued to work. Their 3 kids, Chin, Wee and Qing were all adults already and working. Because they were working, the Lees’ did not impose on their kids. But instead, they continued to provide for themselves. Their 3 kids also helped out financially if there is any need.

Life at Work – When the 3 Sams and 3 Lees entered the workforce as adults, they carried the same habits as their high school days. The Sams bought themselves nice designer clothes and stuff. The Lees were frugal. They got some basic clothes from sale and Sears and LandsEnd. They all share a rented apartment so they do not have to pay too much on rent.

The 3 Sams continued their party days from high school. After work, they like have dinner at hip restaurants and frequently partied every night at the night clubs. The Lees’ cooked at their shared rented apartment and just watched TV at night.

Sams discover Wonder Drug – Meanwhile, at around the corner where the Sam’s worked, there was a drug peddler called Jose. Jose showed the Sams’ his new wonderdrug at the night club. This drug was so potent that you could dance all night and still get to work the next morning. In fact, the drug also made you more alert at work!

The Sams started getting hooked on this new wonder drug. They would party all night, eat out everyday, sleep late. But they found they could still be alert and even more productive at work! Soon, all of Sam’s friends and the whole town were hooked on this wonder drug. More and more nightclubs sprung up because everyone was out partying till the early morning.

The Lee’s however, were as boring as ever, They stilled cooked their dinners at home. However, they saw what was going on in the night club scene and felt that there were opportunities. They started a company that made wine glasses. They figured that since more nightclubs were opening, selling wine glasses would be a good business.

And true enough, their wine glass business prospered as more night clubs opened. The Lee’s were working harder than usual. Demand for their wine glasses was simply booming. But being cautious as they were, they set aside 15% of their earnings aside in a rainy day fund.

Addicted to Wonder Drug – The Sam’s found out that as time went on, they needed more drugs to get the same “high” effect. So rather than taking one pill a day, they started taking 2 a day. So things were fine now. However, Jose now was making more money because he was selling more drugs!

However, for the Sams and all others who were now addicted to this wonder drug, things weren’t as great as they seem. Because they now had to pay more for drugs, they found out that they did not have any money left to pay for them. Their pay checks went to supporting their parents, dinners, drinks at the club and off course the wonder drug.

So they decided to borrow from the Lee’s. The Lee’s obliged. After all, they were neighbors. They weren’t best of friends but the relationship was cordial.

Wonder Drugs at work – Meanwhile at work, the Sams and others on drugs were really doing well. The wonder drug freed their minds and they were getting at things like advertising and marketing. With the drug working wonders on their minds, they became better accountants, thinking up of schemes to lower taxes! Attorneys who were on this wonder drug also became more eloquent in their arguments. Soon, the whole town wanted to do these “services type” jobs. Why slog so hard when with the wonder drug, you could be more creative and excel.

Soon, nobody wanted to be clerks and do any grunt work. There was another family who lived further down the street. They were the Krishnas. The Krishnas saw an opportunity amid the fiasco created by wonder drug phenomenon. The Krishnas created a company to do the work that the Sams and their friends did not want to do. Soon, all clerical, telephone support functions were taken over by the Krishnas.

That was not a problem for the Sams or their friends. The Wonder Drug was great and everyone was having a great time partying at night.

Papa and Mama Sam having problems – Soon however, Papa and Mama Sam were having some health problems. The money that their kids were giving them were not enough. Food prices were also going up because of all the great demand from all the new restaurants that were opening up near the night clubs. Papa and Mama Sam realize that they did not have enough money to live on. After talking about this, they decided that they definitely did not want to work. Instead, they decided to borrow money from Senior Lees (their neighbor).

The Lees obliged since it was not a big amount. The Sams have also been good neighbors. They also realize that the success of their kids Wine Glass company was in part due to all the partying of the Sams’ kids!

10 pills a day – As time went on, the Sams’ and their friends are taking more of the wonder drug a day. Their body had got used to the effects of the pills. They were now taking 10 pills a day to get the same effect that they used to get.

One day, Paris collapsed on the dance floor at the night club that she was partying. Everyone was concerned. The ambulance was called. Paris was in the hospital for a few days. Her siblings and friends thought it was due to fatigue. “Oh, Paris will be back dancing pretty soon” was what every one said.

Hospital reports came back a few days later saying that Paris had suffered an overdose and that taking 10 wonder drugs a day was simply unsustainable. She would be out for a few months to recuperate. News of this shocked everyone, because everyone else was also taking 10 wonder drugs a day. Soon, everyone realized that they cannot be partying all night and taking 10 pills a day. They slowly cut down on their wonder drugs – 10 to 9 to 8 to 7….. But as they cut down on their wonder drugs, everyone realized that they could not party all night and still go to work the next day.

Soon night clubs were empty. Restaurants and diners who set up shop close to the night clubs were also having much less customers. One by one, night clubs began to close. Restaurants closed too. Workers who worked for them were laid off.

Papa and Mama Sam also facing a crisis – Back home Papa and Mama Sam were also facing a crisis. Their 3 kids are in rehab. They are out of work because they are on medical leave. So Papa and Mama Sam have no money to live on. Mama Sam has also just returned from her medical check up and was told she had a condition that needed expensive treatment. They had no money. They did not save any. They were then forced to approach the Lee’s again.

Meanwhile, the Lee’s kids business suffered as a result of night clubs closing down as well. They were less wine glasses to sell to as they were less night clubs and restaurants. And yet, the Sam’s were approaching both themselves and their parents for money. The Lee’s have always been frugal and saved for the rainy day. They have always lent their money to the Sam’s to earn interest and also because the Sam’s lived next door. They would never run away? Or would they? The Lee’s began to feel really uneasy about lending to the Sam’s but knew that if they don’t lend the money, they may not even be paid back on their existing loans to them!

Everyone has the same problem – However, it turns out that everyone has the same problem and issues. All of Sam’s friends also have to pay 10% of their income to support their parents. Now, with everyone sick and not able to work as long, every senior citizen is getting less money for their daily living. It also turns out that the Lee’s having been lending money to all of Sam’s friends as well!

Uncle Bill – the new leader – Every one soon realized that they had a major problem in hand. They decided to choose a wise person among them to help solve the problem. They decided on a very charismatic community leader (let’s call him Uncle Bill). Uncle Bill had no economic experience. He had always worked in the non-profits area. But he was an optimist and a real cheer leader. He brought every one hope.

Diagnosis – Uncle Bill thinks the real problem is that right now, there is nobody on the dance floor. He thinks that the key is that we need to get people dancing again. As long as there were people dancing, the night clubs were in business and restaurants will be filled.

To get people dancing again, Uncle Bill decided that he needed to give the people more pills. If he could get them at least to the dance floor again, things will improve. So he decided to take the money he borrowed from the Lee’s and more pills to give everyone. Right now, everyone was suffering from withdrawal symptoms. If only, they took a couple of pills, they will feel much better. So one day, Uncle Bill forced everyone to take two pills of the wonder drug.

But everyone did not want to return to the dance floor. They were feeling dizzy. Each time they got out of bed, they would puke again. They was just too much toxic in their bodies.

Many people were also out of jobs because of the night club and restaurant closures. Uncle Bill decided that he “MUST” get them back to work. He decided to pass a bill to build more roads and more energy efficient street lamps by the night clubs. But where could Uncle Bill get the money to pay these workers. He decided that there was only one way. He approached the Lee’s and the Krishnas’ for more money.

The Lee’s and the Krishnas were getting frustrated. They realized that their business customer was not credit worthy. But yet, they could not pull the rug from under them (at least not yet). So they decided to lend them money but with higher interest rates.

Switching Directions – The Lee’s and Krishnas business have suffered. But fortunately for them, they had savings and they could survive this period. Rather than selling wine glasses to the night clubs, they decided to convert them into toy factories and began selling to the Krishnas. The Krishnas also being helping the Lee company with outsourcing.

More sick folks – Meanwhile, the senior citizens (Sam and friends) are all getting sick and need medical treatment. Their kids are all sick too and are providing no money. They have to borrow even more money from the Lee’s and the Krishnas. Everyone is hoping that the Lee’s and Krishnas’ will continue to be generous and lend to them.

Lee’s get Fed Up with the Sams – But while some workers were now building roads, the senior citizens expenses continued to rise because they were going to the hospital more. They were late on their bills. They had to borrow more from the Lee’s and Krishna’s again.

Finally, the Lee’s and Krishnas have had it. Though they were getting paid by the Sam’s and their friends, they realize that the Sam’s were borrowing money for hospital bills! Why lend to some old folks that may soon die and not repay their bills. They knew that their kids gave 10% of their income to them. But they could see that the kids were either building roads (which did not pay much), or themselves were in debt.

The Lee’s made a painful decision. They did not want to lend the Sam’s and their friends anymore. They would take a hit in their savings account. But they were now trading more with Krishnas anyway that it did not matter.

Broke – sell your house on the cheap – The Sam’s and their friends realize that they were broke now and had no choice. They had to sell their belongings simply to live. The looked into reverse mortgage and decided to do just that so that they can at least live in their homes. But nobody could even do that with them because nobody had money! So humbly they turned to the Lee’s and Krishnas’ again. This time the Lee’s and the Krishna’s low balled the Sam’s. They agreed on doing a reverse mortgage with Sam and also their many friends (who now have to sell their property to raise cash). The Lee’s got a bargain price and at the end, they will end up owning all of Sam’s and their friends’ properties free and clear someday.

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Credit Restoration Brokers – An Interview With Sam Sky

By: Mr Credit Card
02/10/2009

This is an interview with Mr. Sam Sky from Credit Restoration Brokers. I’ve known Sam for over three years, and he has just written a book called “The Credit Book”.

Sam and I are going to talk about:

and lots of other goodies.

Sam has been in the business of debt negotiation for seven years. He knows the in’s and out’s of the industry, and he’s helped thousands of people reduce their debt and restore their credit ratings. Today he gives us the truth behind settling your debts for less, and how it impacts your credit rating. He also discusses the different methods of debt reduction from lump sum payments to payment plans, and the advantages of the two.

So sit back, grab a cup of coffee and enjoy (this interview is an hour long)! Sam is going to give me a couple of contact forms if you wish to contact his company. I’ll post it up on this post later as soon as I get them.

You can also visit his websites here:

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Carnival Of Crazy Credit Card Companies

By: Jason Steele
02/09/2009

Ok, I am not a big blog carnival of links kind of guy, but everywhere I looked today, I saw variations on a theme, the credit card companies are out of control in how they are going after consumer’s money. Here is the scoop:

Credit Card Company Goes After Dead Woman’s Family, Blames Her For The Financial Crisis

The only thing that the current financial crisis is missing is an innocent scagegoat. This weekend, I was reading none other than one of my favorite political blogs, Talking Points Memo, when I cam across this story. Now, I don’t want to think about what I would do if one of my parents past away, but the last thing I would be concerned about is their credit card companies. Unfortunately, it appears that Bank of America is actually going after the families of deceased cardholders. They are using their standard bag of tricks including deception and even guilt. It is truly despicable.

Even weirder, is their claim that people like the deceased are responsible for the credit crisis!

Chase Acquires WaMu, Changes Your Automatic Payment Preferences To Encourage You To Pay The Minimum Payment.

WaMu fails and is acquired by Chase. You get a friendly letter welcoming you to the Chase Family or some similar nonsense. Yet, buried in the fine print is the following statement:

“If you are enrolled in automatic payments to your credit card with a fixed payment amount (e.g. $300 monthly), effective March 6, 2009, your automatic payment will be changed to your monthly minimum payment due.”

This according to a post in today’s Consumerist. As we all know, paying the minimum balance is probably one of the most self destructive practices in all of consumer finance. You could probably stop paying, default, declare bankruptcy, and rebuild your credit in less time than it would take to pay off a debt at the minimum balance. Even if you did pay it off, you would almost certainly spend more money on interest than on the original purchase.

For Chase to change people’s settings, and encourage people to pay the minimum payment, is a terribly consumer hostile action. If only they were the exception today.

Next, American Express Cancels Their Fan And Loyal Customer

Over at the nicely named blog: Diary of a Fab Black Woman, there is a post that is making the rounds about a traveler who has always relied on her American Express card. Only when she is traveling overseas and needs it most, does she discover that Amex had in fact canceled her account two days earlier!

Unfortunately, this woman has been a user and a fan of American Express since the old days of the Karl Malden’s “Don’t leave home without it” commercials.

Note to Amex, you will not be profitable by canceling all of your best customers.

And by the way, I still haven’t received a response to my letter about my bizarre “financial review”. Long story short, I passed, they failed.

Finally, Credit Bureaus Offer To Sell You Bogus Credit Scores

As if the whole credit scoring process wasn’t confusing enough and filled with scams to monitor your credit and provide you with your credit scores, it seems that the credit agencies now want to get down in the mud themselves.

Over at Consumer Reports, there is an article about credit scores that has an interesting, if bizarre and appalling footnote:

FICO is not the only credit score you can . VantageScore, available from Experian for $5.95 and TransUnion for $7.95, is touted as more consistent and simpler than FICO scores. But VantageScore carries this disclaimer: “Your credit score may be different from the score used by a lender.”

Experian also sells its proprietary PLUS scores along with its credit reports. The company says your score helps “lenders, landlords, and employers quickly gauge your credit history and decide what kind of risk they are taking if they approve your application.” But Experian’s terms of service tell a different story: “The PLUS Score is not currently sold to lenders and is not an endorsement or guarantee of your credit worthiness as seen by lenders.”

CR’s take. These credit scores probably aren’t worth your money.

So basically, these companies will sell you a worthless credit score that is not really a credit score that any lender actually uses. Great!

In other news, I will be happy to announce the sale of my new PowerScore. This credit score, while not actually used by any lenders, will be chosen at random by a team of monkeys in my basement. You can use it to impress your friends, family, lenders, and drinking buddies.

Best of all, it is free. To obtain this score, please send me your name and contact information as the return address attached to a brand new, 70″ Sony BRAVIA XBR LCD Flat Panel HDTV with Full HD 1080p, Motionflow 120Hz, BRAVIA Engine 2 PRO, 10-bit panel with 10-bit processor, ACE circuit, DMex capable, Live Color Creation technology, and piano gloss black finish.

More Than Enough By Dave Ramsey Book Review Part 4

By: Brooke Kaelin
02/08/2009

morethanenough2Every Sunday here at Ask Mr. Credit Card we review a personal finance book. This week concludes our review of “More Than Enough” by Dave Ramsey.

If you missed the first three parts of the review, you can read them here:


Good, Better, Best: Work, Discipline, Diligence

“Work keep us from the three evils: boredom, vice, and poverty.” Voltaire said.

Why do people believe they can build wealth or relationships without work? I am baffled when I meet so many people who appear intelligent, seem to have hope, and yet the idea of hard work does not even occur to them.

Work is doing it. Discipline is doing it every day. Diligence is doing it well every day. It all starts with work.

Work is another common denominator of people who win. You cannot be the best, you cannot build wealth, you cannot be or do anything of significance if you won’t work, and work hard.

The only lazy or slothful folks who are wealthy are folks who inherited oney or won it, and they are rare.

Of America’s millionaires, 80% are first generation rich. That means they got up, left the cave, killed something, and drug it home.

If you want to be wealthy and have fabulous relationships, work has to be a part of your life.

Well, it’ definitely true that hard work is pretty much the magic recipe for success – or at least the first building block!

Have you ever had someone say to you, “Oh you are so luck to have gotten that promotion / expensive object / opportunity?” Did it bother you?

If you are anything like me it did! The truth is, whatever we have, no matter how much or how little, we worked for it. Everyone works for it. And the Uber successful people often work longer and harder than their competition to get where they are. Successful people are driven to be successful. It’s an internal force that motivates you, and you can apply it to anything.

Hard work opens locked doors. The key to almost any locked door is hard work. Hard work seems to surround itself with friends: opportunity, luck, and solution to life’s greatest problems. The activity created by sheer movement stirs up wonderful things in your life.

Thomas Jefferson said “I am a great believer in luck, and the harder I work, the more I have of it.” When opportunity knocks you have to be ready not just to answer, but to apply tons of effort to making your chance happen. When opportunity knocks, don’t be surprised if it i wearing work clothes when you answer the door.

It has also been said that anything worth having in life is worth working for. Work is the difference between a much-loved pipe dream and a true reality.

Do you have dreams that could benefit from a little application of “work?” I sure do. Aside from a variety of personal goals, I’d like to have another book published, and a retirement account that I actually max my contributions to each year.

These things will all take a lot of work, and perseverance, but I am not going to give up on them. Day by day, I am going to put in the work, time and energy so that my dreams do become a reality.

Building wealth is almost imposible without discipline. I hate this because I too am human and discipline is not easy for me either. But facts are facts and most wealthy people get that way by living on a monthly spending plan, by saving money every month, and by investing money every month.

If Ben saves just $100 per month from age twenty-two to age seventy-two at 12% in a decent mutual fund he will have $3,905,833.

If he saves that amount into a Roth IRA this young man retires with almost $4 million tax free. For the price of a couple of pizzas and cable every month, $4 million seems like a deal. There is no excuse to retire broke in America today! But he has to do it every month. And so do you.

To be honest, I hate these sorts of examples. I would very much like for Mr. Ramsey to direct me to a mutual fund that earns 12% every year without fail.

However, the principle behind the math is sound. Investing a little money over a long period of time (and then leaving it alone to let it grow) is a good plan.

It’s not a “get rich quick” plan. It’s a slow, methodical, common sense method of planning your future.

Most of u aren’t in our early twenties either – but that doesn’t mean that we can’t still benefit from beginning, or increasing our retirement savings accounts.

Teach The Children:

Please teach your kids to work. You doom them toa life of frustration and mediocrity if they don’t learn a work ethic from you.

Work is a life skill, like bahting, or driving a car, and it must be taught.

Babies are cute, but let’s face it- they are little savages. Our nature at birth is not a nature that will lead us to prosperity. Our nature must be harnessed and taught.

There has never been a child born who gets up every morning, makes his bed, cleans his room and brushes his teeth – without instruction.

By removing work from a child’s life you cripple him. That child will enter into the world of adulthood without a clue as to what is coming.

Worse yet, some poor unsuspecting person may marry this spolied bum you have raised.

Work used to be necessary for survival in America’s rural past. You rose before the sun and did chores – hard ones – that brough value to the family, even if you were seven.

Character was built at an early age, and this was not child abuse.

Child abuse is a fat little boy with his butt in front of the Nintendo for hours on end eating yet another whole bag of Doritos. This child thinks of no one but himself and is in for a long and frustrating life because he has not learned the satisfaction, joy, and value of work.

That was a long quote, but I really wanted to include it here in it’s entirety. The more modern things get – the more mechanized, sterilized, homogenized, and any other “ized” types you can think of – the lazier we all get.

For many of us survival isn’t a challenge any more. We our food at the grocery store, drop off our laundry at the dry cleaner’s, and drive through for our dinners.

It is certainly nice that things which used to take hours can now take much less time or become someone else’s job entirely. The important thing is to make sure that we make the best use of the time that we are saving, and also, that we teach our children to do the very same thing.

No matter how many times I tell my young daughter to “pick up her toys” she will not. Until I get down in the floor and show her what to do. (She’s two). We are all either taught these things, or not taught these things.

Some people may not have had the benefit of learning these lessons as children. But that does not mean that we can’t pass the lessons we’ve already learned on to our children. No matter how young or old they are!

In Conclusion:

More Than Enough is an excellent personal finance book. It doesn’t deal with many concrete numbers, instead Ramsey chooses to dole out good old fashioned common sense with a little bit of humor mixed in.

If you ever find yourself fighting with your significant other about your money; if you are in debt and don’t know what to do; if you just can’t seem to make ends meet, then this book is an excellent place to start looking for help.

The answers in More than enough have been proven over and over again throughout the generations. There’s no real “new” material here, but it is an amazing and valuable book that gently reminds us all of what we already know to be true, but just can’t seem to do.

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Carnivals:

Thanks also go out to these carnivals which included our articles this week:

Denied A Secured Credit Card

By: Christina
02/07/2009

creditcard4What should you do if you’ve been denied a secured credit card? One of our readers, lterenzi, asked this question:

My wife and I completed our Chapter 13 plan! We are 8+ months out. Our scores have crept up slowly and I know with our new found financial knowledge we can feel confident about building an improved credit history.

We have several thousand saved up for emergencies and we have 500+ saved that I want to open some secured credit cards with to start rebuilding.

Our own bank (B of A) and Orchard turned us down for their secured card which blew my mind. I didn’t think you get get denied a secured card. I am not sure if I should head down to my branch and talk to them or look elsewhere…

Applied, New Millennium, Centennial?

If elsewhere – where? With this economy I am so scared of getting ripped off…

Also, is it worth it to take the hard pulls on our report and just apply, apply, apply?

Also should I get a secured card and my wife get one? Or will just one of applying and getting a spare card for the other do?

Thanks for your question, and congratulations on completing your chapter 13 plan!

Because you are taking steps to build up your savings, and your credit you should be able to rebuild everything in a very short period of time.

Unfortunately, Bank of America is a bit notorious for not dealing with people who have a previous bankruptcy – even with their secured credit cards. It’s near the very bottom of their fine print on credit applications.

Orchard bank on the other hand, usually there is no problem.

In your situation, I do have a couple of suggestions that my help.

It really surprises me that you were turned down for the secured cards. Either they are tightening up because of the current economic conditions, or your credit was very badly damaged before your bankruptcy.

Challenge The Negative Information On Your Credit Reports:

So, my first suggestion (if you haven’t already) is to challenge anything you reasonably can on your credit reports. You can challenge items on your credit report for pretty much any reason. If the company doesn’t verify the debt, then the account gets removed off of your credit report completely.

Do be careful not to challenge too many things at once since that can backfire and actually cause your credit reports to be frozen for a little while (until the challenges are resolved).

We have a complete guide for that here:

  • How to Dispute An Item On Your Credit Report

    • I would say, over the next few months just challenge a couple of things at a time until you get as many bad accounts off of your credit reports as you can. Your wife should do this as well. It takes some time, but it is well worth it.

    If you have already completed that step, and you still can’t get a secured credit card, you can consider this credit building trick:

    Use a CD as collateral for a personal loan.

    We also have a guide that tells how to do that, so I’ll just briefly go into it.

    You will need to open up a Certificate of Deposit (CD) at a new bank – not Bank of America. You may also have to open a checking account with the bank, a sales manager could answer that for you.

    Then, you use the CD to secure a small personal loan. You stick the loan amount into savings, and set up an auto withdrawal for the payments.

    Then the loan goes on record each month to the credit bureaus. It’s a “set it and forget it” credit repair trick. You end up out a little bit of money in interest, but it does raise your credit score.

    Also, make sure that you tell the sales manager at the bank what you are intending to do. Go ahead and be frank about your bankruptcy, and clear everything before you the CD. There is no sense in having your money tied up in a bank that can’t help you because of your bankruptcy.

    You can learn more about that in this guide:

  • Credit Repair Tricks: Using CD’s and Personal Loans to Raise Your Credit Score

    • Pre-Paid Credit Cards:

    Another option might be pre-paid credit cards. Most pre-paid credit card programs will report to all three credit bureaus for around $10 a month. That gives you another positive account going on your credit reports each month.

    You can learn more about pre-paid credit card programs here:

  • Guide to Prepaid Credit Cards

    • I would exhaust all three of these options before applying for a secured credit card again. It is not worth it to keep taking hard pulls against your credit at this point. There is something going on that is keeping you from getting these cards – either your score being too low, or the company is not willing to deal with a bankruptcy.

    You can’t change the company’s policy, but you can try these methods of raising your credit score first.

    Keep a close eye on your credit score as you try these tactics. Once you get near about 600 you shouldn’t have a problem getting a secured credit card. If your scores are that high already and you can’t get a secured credit card, then it’s the bankruptcy that’s the problem, and you can simply keep trying new cards at the rate of one application every couple of months. That will keep the damage from the inquiries to a minimum.

    Also, the first unsecured credit card that I got after my bankruptcy was actually from Target. (Retail stores often have more lenient policies on lending). So that might be an option for one of your trade lines.

    As far as you and your wife sharing credit accounts:

    My honest advice is don’t share your accounts. Authorized user accounts keep getting shifted around by FICO, first they counted, then they didn’t, then they did, then they didn’t. So I wouldn’t count on doing things that way.

    Having joint credit accounts while you are rebuilding credit can actually burn you too. If you charge too much on one card or make a late payment it hurts both people’s credit.

    Every step that you take individually to raise your credit score, your wife should take as well. Even if you decide to share one joint account, try to make sure that you have at least two individual credit accounts that are not shared.

    Now, obviously it will take time to establish these accounts, so don’t stress over it. Just mark the ideal dates on a calendar, and put in a new application at that time.

    It’s entirely possible to raise your credit score back up and never have a secured credit card, so please don’t be discouraged. Just keep doing what you are doing, saving, and learning. You will come out on top faster than you think!

    Good luck on everything. If you have any questions, please feel free to email, or come back and leave a comment.

    Have a question for us? Leave a comment below!

    American Express Platinum or Gold Card?

    By: Mr Credit Card
    02/06/2009

    Update – American Express is in the midst of updating their Platinum Card. We expect the new features and updates to be available later today. Please bear in mind that some information on this page regarding the card may be outdated at this moment.

    In this comparison review, we will look at the differences between the American Express Gold, Premier Rewards Gold and Platinum version. We’ll find out at the end that these cards (especially the Premier Rewards and Platinum) can be complimentary and many people have both (we’ll explain why). We’ll also highlight the circumstances where one is better than the other. Below is the chart highlighting key features.

    Earning Miles 1X – all purchases 3X – airline tickets
    2X – Groceries & Gas    		 1X – all purchases
    Gold Card Events Yes Yes Yes
    Hotel Booking Perks Gold Hotel Connections Gold Hotel Connections Fine Hotel & Resorts
    $200 Airline Credit No No Yes
    International Companion Ticket No No Yes
    Global Entry Membership No No Yes
    Cruise Credits No No Yes – $100 Onboard Credit

    Similarities

    The most basic similarity among these cards is that the reward program is the same (well, almost) for all cards. Membership Rewards allows you to transfer points to their airline partners and hotel partners. Platinum cardholders are entitled to MR First program (which simply means there are a few high end luxury rewards). But for all intents and purposes, all these cards have the same program. Furthermore,

    Differences

    Interview With An Insider, Part 3 and Conclusions

    By: Jason Steele
    02/05/2009

    Welcome to Part 3 of my interview with a credit card insider. The Insider agreed to speak with me on the condition of anonymity.

    Part 1 can be found here.

    Part 2 can be found here.

    JSteele: In the old days, people who paid their debts on time, and didn’t owe more than they could pay were guaranteed good credit. With the advent of credit scoring, we see situations where people who owe little and pay their bills on time do not necessarily have good credit. Not having enough credit credit cars (ironically) hurts their score and having too many inquiries hurts their score. Often the inquiries are essentially harmless, i.e., they do not actually represent an increase in risk. Such examples may include employer inquiries, shopping for a new insurance company, opening a new bank account, car shopping, or even looking up one’s own credit score. Heaven forbid one should get a job in a different part of the country as they might do all these things at once and (temporarily) ruin their credit! Are companies aware of these false indicators of risk that erroneously drive down credit scores? Do they care, or do they just blindly look at the score?

    Insider: Overall, companies blindly follow the credit score – they figure that for the most part, the scores will be correct and they don’t have the personnel to go out and speak with each applicant to determine why their score may be temporarily lower.

    JSteele: What long term changes to the credit card industry do you see as a result of the current fiscal crisis?

    Insider: Long-term changes – none. We may see changes briefly when the new rules are enacted, but the banks will find a way to make money – they have to – it’s a business. Instead of complaining about double cycle billing, universal default, payment allocation – we’ll find the “new” things they’ll enact even more onerous (i.e., we used to complain about $15 late fees and low credit lines).

    [I] Hope This Helps

    JSteele: Thank you again for your insight.

    Conclusions

    If there is one quote from this that summarizes the permanent state of the credit card industry it is this:

    “the banks will find a way to make money – they have to – it’s a business. “

    This should come as no surprise to anybody. In fact, most of the information provided by our insider makes sense and is consistent with what we know about credit card companies: The are greedy. They are careless. They will push and push until either the customers or the government take a stand.

    While both the Insider and I are applauding the new rules, the Insider is rightly skeptical that the rules will change any behavior other than those specifically addressed. It is depressing that the Insider predicts that, like the enemy in a protracted war, the banks will adapt to the new rules and change strategies.

    As a result of this interview, you should redouble your efforts to:

    1. Always pay your bills electronically. This is the only sure fire way to avoid late fees. When you initiate payment from your bank’s web site, you have a record of when payment is issued. No lost or delayed mail, no accidentally shredded checks, no stamps, no worries.

    2. Be fee-phobic. Knowing that the credit card companies are laughing at you for paying foreign transaction fees should make you get a Schwab, Capitol One, or some other foreign transaction fee free card before your next trip outside of the United States.

    3. Be Nice. People who work at credit card issuers are still people. They have spouses, parents, and children. If you are frustrated dealing with them for a few minutes a month, imagine how they feel having to deal with their company eight hours a day! If you don’t get what you want from your agent, don’t get mad. Politely ask for a supervisor or just call back and speak with someone else. Be nice both because it is the right thing to do and because you are more likely to get what you want from the person.

    4. Always ask for a break. It shouldn’t surprise you that reps are not allowed to offer to waive things. They can only do so if you ask. Remember, the worst they can say is no, so you have nothing to lose.

    Interview with Dan Nelson From BankVibe.com

    By: Mr Credit Card

    This is an interview with Dan Nelson from BankVibe.com. I came across this site recently and it has tons of information about CD Rates. If fact, if you are shopping around for the highest CD Rates, I would recommend this site. You can subscribe to Dan’s RSS Feed here.

    Mr Credit Card : Dan, just as an introduction, when did you start this site and what was your motivation?

    Dan : I started BankVibe.com in November of 2008 mainly because I have always been interested in sniffing out the best investments. Whether it be stocks and bonds, real estate, or bank deposits there is always research to be done before committing to any investment. Needless to say, stocks, bonds, and real estate investments have been out of favor recently and I have found that investing in FDIC insured bank deposits to be much more safe and economical as well as a cornerstone to a well-diversified portfolio. What makes investing in bank deposits, money market accounts, high interest savings accounts, and other banking products so fascinating is the nature of the competition between banks. Interest rates in which one can yield through these bank products is forever changing due to economical conditions and the overall state of the banking industry. That is why in-depth research and due diligence is of the utmost importance when researching bank rates. BankVibe strives to find the nations best savings rates on a daily basis and makes this information available to it’s viewers in a user friendly manner.

    Mr Credit Card : When one is looking for bank to invest in a CD, what are some of things to look out for (aside from the CD rates).

    Dan : There are several things to look out for before committing to any bank investment. Perhaps as important as APY rate is the financial stability of the bank. Until the recent collapse of the banking industry I believe this aspect of research was largely left out. Today, if you look-up virtually any well-known bank on the stock exchange you will probably find that this bank is now a penny stock or close to it. However, the federal government has stepped in to hedge against this liability by raising the FDIC amount to $250k for all bank deposits, making your investment virtually risk free.

    Mr Credit Card : With the financial crisis, many consumers are worried about whether their money is safe with banks. What sort of insurance does the FDIC provide?

    Dan: As I stated above the federal government insures bank depositors up to $250,000. This limit recently rose from $100,000 during the Fall of 2008. Therefore you can have confidence that, even if your bank goes under while you are investing there, the federal government will be responsible for making sure that you get up to $250k of your investment back.

    Mr Credit Card : Even though your deposit is guaranteed by FDIC (up to the limit), does it mean that you do not have to do due diligence on banks?

    Dan: Absolutely not. Although banks would like you to believe your deposits are “risk-free” they are not. No investment is ever risk free, but I would confidently say that out of all of the available investments on this planet, bank deposits are as close as it gets. On a side note, last week the Icelandic government/economy virtually collapsed and many people blamed Iceland’s banking industry for this. They were offering too high of rates for their deposits and thus, could no longer afford to payout the investors’ their principle plus interest earned. If our government/economy were to collapse in the same respect I wouldn’t hold much faith in an institution such as the FDIC.

    Mr Credit Card : Many investors about worried about our federal fiscal situation and that most of the proposed fiscal stimulus will be financed by foreign investors. Most investment bank’s research suggest the dollar will depreciate in the medium to long term. If someone wants to invest in a foreign currency CD or even deposit, how does one go about doing that? Are foreign currency deposits insured by the FDIC? And if so, what is the amount insured?

    Dan: Recently at BankVibe.com I have noticed through our comments a strong community of foreign bank investors whom absolutely swear by foreign CDs (cetificate of deposits). That being said, I would suggest using STRICT filters when investing in foreign banks. If the bank doesn’t have a 24 hour customer support team I would stay clear and if the bank doesn’t have a reputation of 100% timely and full payments I would stay clear as well. If you’re after above average interest rates but aren’t looking to invest a large sum of money (say $25k or less) I would suggest using a high interest checking account. Most local credit unions offer promotional rates yielding anywhere from 2-6% APY depending on your geographic location.

    Mr Credit Card : If a consumer wants to do some basic research on banks, where should he or she start? How would you go about doing it?

    Dan: If you have a decent amount of money that you would like to stash away I would start by looking through BankVibe’s top CD rates and CD Rate chart to get a feel for what type of returns to expect. If you’re looking for an investment with more liquidity I would search through BankVibe’s savings account rates and high interest checking account rates to compare bank rates. Once you have found a few banks with rates that you like you can search through BankVibe’s bank reviews to see what others have to say about that bank.

    Mr Credit Card : Dan, thanks for your time and insights into the world of CD investing.

    Dan: Thanks for having me!

    Once again, check out Dan’s site for CD Rates. If you have any questions about CD investing, you can also post your questions here and we can get Dan to answer them for you here with another post.

    Interview With An Insider, Part 2

    By: Jason Steele
    02/04/2009

    Welcome to part two of my interview with a credit card industry insider. The Insider agreed to speak with me on the condition of anonymity.

    Part one can be read here:

    JSteele: Do you have any advice on dealing with your credit card company.

    Insider: Hint – when faxing to your credit card company – put your name, contact information, acct # on every page and # it page x of y pages – that may help keep it clear for the reps. Don’t just fax in your statement, circle a charge and write, “not mine” on it. There are thousands of pages being faxed in every day and these machines are not next to someone’s desk – they are off in the middle of the floor – and they may not be checked for hours.

    CSRs are trained to not offer waiving an annual fee (or any other fees). If a cardholder “requests” this service, the CSRs can do it, but they cannot offer it. So if you want your annual fee (or any other fee) waived, you need to specifically request that the CSR do so – don’t hint around that they should “do something for you”. Tell them what you want. If they don’t do it, ask for their supervisor.

    Hint – treat your CSR with courtesy – yelling at CSRs, calling them “dopes” or threatening them is no way to have your problem solved. They will become defensive and refuse to help you. They are not paid well – they get 2 weeks of training which cannot teach them everything they need to know about every single possible situation. Turnover in that job is very high – it’s horribly stressful. A little kindness and compassion goes a very long way.

    JSteele: What is your take on the new rules? Do you think they will affect reward offerings? What rules do you think are missing?

    Insider: I have really only briefly read over the new rules and I think they’re great (from a personal perspective – industry wide I’m sure they will make plenty of waves). I am curious what a “reasonable” amount of time to make payments will be – will that be 10 days, 20 days, more?

    I am sure that the banks will find a way to keep profits high – after all – it is a business and they need to be profitable – but it would be nice if the rules were clearly spelled out for a cardholder when they applied for and got a card, and the rules were not then changed on the cardholder when you are in debt up to your credit line.

    I don’t know if reward offerings will be affected that much. I could see them charging a higher fee for participating in a reward product, but these products are money makers and I don’t see that potential going away.

    One thing I thought I had heard of them doing, but I haven’t seen anything definite about it, was that there would be clearly printed on the statement how long it would take you to pay off your balance if you made minimum payments. Some people are still just shocked to figure out that it can take them years to pay off their balance. Of course they don’t stop charging either – they make minimum payments, and then charge that amount right back on the card in the next month. It’s a never ending cycle.

    A credit card is a tremendous convenience and comes with some benefits that don’t come with cash (extended warranty, rewards points, cash back) but the cards needs to be used responsibly. The agreements that come with the cards spell out a lot of the rules but hardly anyone reads them – they toss them and start charging. When they find themselves in trouble, they want to blame the bank for upping their interest rate – but they agreed to these terms when they accepted the credit card.

    I think people need to be better educated about credit cards – and banks need to play a bit more fairly with their cardholders.

    JSteele: In my experience, there seems to be three kinds of credit card customers, 1. the “deadbeats” that I described (like myself) who always pay their balance in full, on time. 2. The trapped revolvers, who you described, who often pay the minimum, and sometimes late fees and over the limit fees. 3. A small number of people in between who occasionally carry a balance, but pay it off in a few months. Would you say this is accurate? Do you know what the approximate percentage of each is among Americans? Do you think these are lifetime habits, or are a significant number of people move between groups?

    Insider: I would believe that the 3 groups are basically lifetime habits, with some minor switching around on people’s part when their situation changes. FYI – I don’t carry a balance, but if we are out of work, I will have to carry a balance to make ends meet.

    My interview concludes with Part 3 tomorrow.

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