Call about annual fees to get bonuses

My annual fee hit for my United Visa card this weekend. I decided to call Chase to see if they can give me some sort of incentive to keep the card. Otherwise I was going to close the account to avoid paying the fee.

It took them all of 5 minutes to offer me a credit to my account for the fee or 10,000 miles. I took the miles since I value them well above $60. I essentially just bought those 10,000 miles for $60. Under normal buy mile prices $60 would have gotten me 2,000.

So my cost is $0.006 per mile which is an excellent deal any time!

Never hurts to ask!

Cost / Benefit Analysis of my Delta Skymiles American Express Card

I already know for a fact that I get a LOT more value than the annual fee that I pay for my Delta American Express card. I have had some difficulty convincing others that it is worth it. This post will describe in detail how much I get from the card versus what I pay for having it in my wallet!

First the numbers:

Annual Fee: $150 per year

1 Delta Skymile earned for each $1 spent. 2 miles per dollar on Delta purchase. (plus various bonuses)

The Analysis:

Benefits:

• 1 Free domestic (exclude HI) companion ticket per year. Value: $200-$500.
• Free checked bag for having card. Value: $25 per flight ($50 per round trip!)
• Discounted SkyClub Acess. Value $25 (normal visit for public is $50)
• Miles earned. Value: varies but well more than $150 (up to $2000 in my case!)
• Bonus Offers. Value: varies. Lots of double miles and Elite Status offers

The free domestic companion ticket (1 person flying the exact same round trip route as you) alone is worth more than the annual fee. The waived baggage fee adds up too. You only need 3 round trips in a year on Delta to break even. The SkyClub Lounge discounted access can be well worth the $25 if you are delayed severely. Having a comfortable seat, open bar, free snacks, less crowds, nice bathrooms, free internet, and a business area can be well worth it.

In my case the miles I earn alone far exceed $150 in fees. For the past 2 years I have scored award flights to Asia and back. This would not have been possible without using this card for all of my purchases. If I had bought the tickets with cash it would have cost me a total of $3,800 for both. Using miles I only pay taxes. Even if you add in the annual fees I only paid $555 out of pocket. I got great experiences, a cheaper vacation, and saved a lot of money too!

As you can see if you take full advantage of all the travel benefits associated with an airline miles card you can get a lot for $150 per year. Having this card has also helped me to maintain my elite status with Delta which comes with it's own benefits in addition to the ones list here. I get free upgrades to first class, can book an exit row seat, and so on. Be sure to fully analyzed your reward options and get the most for your money!

International Travel: Eliminate ATM and Foreign Transaction fees!

I really wish I found this last year for my vacation Thailand!!!

While doing some research online I stumbled across Charles Schwab. They offer a "side-by-side" interest checking and brokerage account with $0 minimum and $0 maintenance fees. I looked at all the benefits, made a call to Schwab, and confirmed that they reimburse and unlimited amount of ATM fees (monthly) from any ATM worldwide. On top they do not charge the 3% foreign exchange fee that is very common these days in the USA.

I am going to try this out myself while I am away. I will be going through South Korea briefly and into Cambodia. Research tells me that Cambodia now charges a $4 ATM winthdrawal fee for all foreign cards. After some quick and dirty math I should save roughly $30 in fees by using the Schwab account. They also offer free basic checks too boot!

If this works out well Schwab may get a lot more of my business. Their mutual funds offer good expense ratios on the index funds and $0 transaction fees to trade their mutual funds or their ETF's. This has come a long way from the old Schwab that used to charge a lot more. I think they realized discount is what people ultimately want. This works out for all!

If you have any planned trips I strongly suggest looking into using Schwab while you are away. The fee savings alone can really pay off. They offer a lot of other great services for investing and are much more competitive these days. Being able to use margin as overdraft ($0 fees there too!) and instantly transfer between brokerage and checking are 2 features I really like. Have a look for yourself: schwab.com

(Some) Mortgage Fees are Negotiable!

Everyone knows that mortgages are expensive. Closing costs can add up really fast and you normally have to come up with the money in the case of a refinance. I have been working with a local credit union and I am negotiating the closing costs a bit.

I recently got a home equity line of credit on my house to repay family for borrowed remodel money. It had $0 closing costs and a good interest rate of 4%. It is a variable rate and I believe rates will begin to rise in a couple years. Fixed rates are low too so a refinance in my case makes sense as my current mortgage is at 6% (FHA).

I have to get the appraisal on my house updated as a result. Appraisals are costly and normally are $325. I got them down to $225 since I had one done 3 months ago and nothing has changed much. That's $100 in my pocket!

I am now working on getting them to remove the points on the mortgage. As I do intend to sell the house one day and not live out the entire 30 year term of the loan I am OK with a little higher interest rate as it will save me $720 right now. Points are expensive (and pure profit to the lender)!

It is also good to thoroughly check the good faith estimate. People make mistakes, including mortgage underwriters, and that happened to me. They had me set up for escrow of my insurance and taxes and I had it removed (it is optional in my case). I would rather earn the interest myself thank you very much! That brought down my closing costs since I don't have to maintain a surplus in an escrow account!

As always with a mortgage it is best to shop around. I suggest getting 3 good faith estimates from the institutions in your area offering the best rates. Bankrate.com is a great place to start looking!

Passport Fees to Increase!

A friend on twitter posted this and I was shocked at the large increase in fees. They go into effect on July 13 so if you need a passport or need to renew NOW is the time!

Here is a summary of fees from this article:

• Age 16+ New Passport: $135 (was $100)
• Age 16+ Renewal: $110 (was $75)
• Adult Passport Card (for land/sea crossing into Canada, Mexico, Caribbean): $55 (was $45)
• Add more pages to a passport: $82 (was free!)

I am glad I caught this in time. I have a few friends who need to renew and should do it now. Get the word out! Time is money in this case!

Credit Card Balance Transfer Pitfalls

Credit card companies are currently slowing down on the balance transfer offers due to the high rate of default and the current economy. I have used them in the past to save me a lot of money in interest over the years. I was a fan of the 0% offers but they have now all but dried up.

I find that a lot people see a great rate advertised in balance transfer offers but fail to read the fine print. They then become victim of the change in terms and get hit with high rates, fees, and possibly end up worse off than they started. I personally believe this deceptive practice by the credit card companies is at least partially part of why they are in this mess to begin with!

What to look out for in a balance transfer offer:

• Teaser rates: This was big with the 0% offers. It would be 0% for 12 months and then jump to a much higher rate. As high as 25%! Make sure you don't do the transfer if you cannot pay it off within the allotted time. I call this the "bait and switch" method.
  
• Balance transfer fees: Most of the companies charge for doing the transfer. I have seen as high as 5% of the balance. I personally will not pay more than 3% (for a 0% rate). You are best doing a transfer that has no transfer fee attached but these are rare these days.
• Convenience Checks: A lot of the direct mail offers give you checks (if you already have an account open). SOME of them are for the rate offer. Others are for cash advances which charge the highest interest rates. Be sure you use the correct checks!
• Protection Plans: If you are not careful you will get signed up for the "protection plans" which cover your payments if you lose your job or some other financial disaster occurs. They charge a lot of money and are best avoided. This is typically offered over the phone by customer service reps at the company. "No" is your best word of choice!

Balance transfers can be useful, money-saving tools if utilized properly. As long as you do your homework and avoid the above pitfalls you will be on the road to becoming debt free. As with any other credit card offer you have to be sure to read the terms and understand them. If in doubt go without.

Dealing with foreign currency while traveling abroad

As an avid traveler of 35 countries (and counting!) I have dealt with a lot of foreign currency. If you are not careful you can pay hefty exchange commissions and fees when you try to get local money. I have a system that combats this as much as possible.

The absolute best way to get local money in any country is to use an ATM. Most of our debit cards have either a Visa or Mastercard logo on them and will work worldwide. Just look for the same logo on the ATM itself and you are usually good to go. Getting money from the ATM almost always gets you the best exchange rate.

I also carry about $100 - $200 in small US Dollar bills (no larger than $20). They are the easiest to exchange overseas and are the most widely accepted. I do not use this money unless their is no ATM within a reasonable distance or if your card is not working for some reason. You usually have to exchange the dollars for local money (at usually a not-so-good rate) at a bank or change house. NEVER exchange in an airport as you will always get the worst rates there. Banks are best! Only exchange the amount you need to limit the damage.

Traveler's checks are almost useless these days. With ATM's in nearly every country and our handy debit cards there is really no need for them. I also feel it is silly to pay someone to hold my money as they usually charge a fee for them. I have never used them and don't plan too. They also get worse exchange rates than cash most of the time. These are best avoided!

Dealing with local money while traveling is not a complicated process and if you following my system you will never be stuck. Just go to the ATM like you would at home and get the money for a couple of day's worth of activities. Check with your bank to see if they charge foreign transaction or ATM fees. It is best to change banks if they do as it is silly to pay these fees. ING Direct only charges a small commission (less than changing money!) on the foreign ATM transaction, for example.

If you follow this guide you will have a great time and not have to worry about getting local money!

Where do I bank and why?

I have done some writing about finding the best rates and what I think the best banks are and so on. I decided to share who I use to do my own banking and why. It will give you insight into how to choose a bank based on fees and features that best fits you. Here are my accounts and why I have them:

• Bank of America: Free checking. I use this to deposit checks and cash to transfer over to ING Direct.
• ING Direct: This is my primary checking account. I get direct deposit from work. I love the ability to electronically deposit to anyone's account and any bank. They do not allow a checkbook at all which is wonderful. Checks are paper and cost money anyway! I also have a "Bills Escrow" savings account and some 4% CD's from a while back.
  
• HSBC Direct: I have my emergency fund here. They currently offer a better rate than ING on savings.
• Assoicated Credit Union (local): I just joined and will use them for my home equity loan to fund my remodel. They also offer a special savings account that pays 6% (!) on the first $500. That is like having a perpetual CD that I can tap any time and has a great rate!

Some may argue that this is a little complicated. It can be but it works for me. If I were to cut anything out it would be HSBC direct if/when ING got their rates in line. Some people like doing business all with one bank and that is fine. I tend to go for the best rates for savings no matter what bank and also the lowest fees. ING charges me nothing for my accounts and I even have a $1000 overdraft just in case (I have never used it).

I like having 2 checking accounts as added security. I travel abroad as often as I can and it is very handy to have ATM/Debit cards from the two major issuers. Bank of America gives Visa debit cards and ING gives Mastercard. As long as I have cash in both accounts one or the other will work at an ATM somewhere. Also if one card is damaged or stolen you have a backup ready to go. This makes life on (and off) the road a lot easier!

No matter which bank or credit union you decide to use I believe everyone should have online savings accounts and/or CD's. It puts an extra step between you and your savings so if you want to spend it on something you have to think about it and go through a deliberate process. This will eliminate 90% of your impulse buys which can kill your savings!

Tip: Use E-mail / Text Message alerts from banks

A lot of banks and credit card companies are offering email and/or text message alerts for their customers. You can customize them for transactions over a certain amount, payments due, payments posted, statement ready, and many more. This is a great way to stay on top of things!

I personally use them so I don't have to (try) to remember each one's due date and amount. I get emails from them and go online to pay as needed. This helps avoid late fees, interest, and headaches each month. You can also do similar alerts for your bank account so you don't overdraw it. This is usually a free service from your institution.

I use the following institutions that already have this service in place: Chase, American Express, ING Direct, and others. The added bonus of getting email on a smart phone, such as my iPhone, allows me to stay on top of things all the time. This has also helped me catch fraudulent large transactions on my credit cards that I don't even use any more!

This free service can save us all time, money, and hassle down the road. You always know where you stand without having to log into each account separately (in most cases). It does take a little time to set up in the beginning but is time well spent. The peace of mind and useful information it provides makes life easier!

Top bank fees and how to avoid them

Banks these days are piling on the fees. Some are hidden and some are obvious. We can all do our part to avoid them. I despise bank fees unless I get more than that value back from it. With a little research and planning we can save hundreds of dollars per year. Here is the list:

• Monthly Service Fee: Some banks charge you monthly just for having the account. This is ridiculous. Solution: Switch your account to a free account or change to a bank that offers one. Average Savings: $10/month ($120 per year)!
• Overdraft Fee: All banks have this fee. They make a fortune off of them too. The average is $30 per transaction. Solution: Use automatic payments, online bill pay. STOP USING CHECKS! Online bill pay can send checks to any person or business and it is free. No envelopes or stamps needed. Having and overdraft line of credit is a good idea too!
• Overlimit Fee: This applies to credit cards. You get hit with a fee of up to $39 if you go over the spending limit even if it is only $1! Solution: Set up email and/or text message alerts for when you get within $100 of your limit. See my post about setting this up here. There is no need to pay this junk fee!
• Late Payment Fee: This applies to loans and credit cards. Also includes utility bills. Solution: Set up automatic payments or online bill pay so that they are all paid on time. This also saves you interest in the long run!
• Annual Fee: This applies to credit cards. They are a lot less common these days but are still in existence. You must gain a tangible benefit that is worth more than the fee in order to justify it. Solution: Most credit card companies have a card that does not carry an annual fee. Switch to that type of card by calling them. This can save $50-100 per year or more!

Most bank fees are needless profit centers for them. They rely on laziness and ignorance to make lots of money off of people. Everyone should evaluate the fees they pay each year as part of a comprehensive annual personal financial review. Are you spending needlessly on bank fees?