Save Money Using Credit Cards

Credit Card Problems

2009-08-11T19:01:00.000-07:00

Never in my life have I had credit card problems. Perhaps I’ve been lucky, but it’s my frugal nature having the ability save and only use credit in emergencies or when short of cash. But with the economy in the toilet, Credit Card Companies are cutting back credit lines – even if you have great credit.

Some cards I just keep on hand for that occasional purchase, but my Chase Gold MasterCard was tucked away in a safe place and forgotten about over the years. Chase of course decided to cancel the account regardless of my outstanding history with them.

I was fond of that MasterCard. It was my first Gold Card which 25 years ago actually meant you were special. It had an annual fee of $25 that was quite reasonable for the time since most Gold Cards required a fee upwards in the $100 range. The interest rate never changed over the years and held steady at under 10% despite the interest fluctuations.

Eventually I tried to cancel the card due to the annual fee, but the Bank of NY – before they were bought out by Chase – convinced me to hold onto the card without any annual fees. Of course I decided to stay with them as a customer.

Time goes by and with one of the hundreds of credit card offers I’ve received over the years I picked up an airmiles card from FirstUSA and regularly use it to rack up miles on United for some nice domestic travel deals.

Between Discover and my FirstUSA card, my Gold MasterCard gets shelved without being used for years. Needless to say this, you need to make a purchase once and awhile to keep your account active even if you charge a Latte at StarBucks. Do this once or twice a year and the issuer will keep happy.

Eventually, Bank of NY and FirstUSA became Chase as a result of mergers and acquisitions and Chase forgot that I was a long time customer. My credit card problems could be worse, but for me my FICO went down and the price of credit went up if I never need it again.

Switching Purchases from MasterCard to Discover

2009-04-09T06:37:00.000-07:00

For the next three months, I'll be switching over my purchases from MasterCard to Discover. Simply put, the next three months, Discover bumps up the cash back rate to 5% for the all important Home Improvement and Department Stores.

You have to sign up for the bonus after you login to your Discovercard account. Just click on the quarterly signup bonus and you should receive an email like:

Thank you for participating in our 5% Cashback Bonus program. We just wanted to remind you how easy it is to make your money worth More.

Just use your card at home improvement stores, department stores, and clothing stores from April 9, 2009 until June 30,2009, and get 5% Cashback Bonus on up to $400 in these purchases*. Remember, all your other purchases will earn up to 1% unlimited Cashback Bonus automatically.

Within one or two shopping trips, we'll hit the $400 limit, but it will be nice to save $20 (5%) on those purchases instead of the usual $4 (1%).

Somehow I missed the Warehouse Club 5% bonus in March, but since the only club we belong to is COSTCO -- and they only take American Express -- we would not have saved anything for that bonus.

July 1 is another important bonus that you need to sign up for. During July, August and September, you get a 5% bonus for purchasing gas on your Discover Card.

So for the next few months, I'll be pulling out my Discover Card instead of MasterCard to save an additional 5% of the purchase price.

Chase Business Card with Premier Cash Rebate Saves You Money

2009-03-15T22:05:00.001-07:00

The Chase Business Card with Premier Cash Rebate is one of the best credit card offers I have received for my business in a long time. I must admit that it is very tempting to get the card to increase our credit line.

It's not like we need to extend our credit line, but there were several stories that many credit card companies are reeling in credit lines to reduce market exposure.

One of the best features of the Chase Business Card with Premier Cash Rebate is that you get 3% rebates on eligible business expenses. Basically, you get the 3% for most business related expenses except when purchased as superstores, warehouse clubs or discount stores.

So you have to do the math if you actually are going to save money with the extra 3% going somewhere else than a discount store. But even if you don't qualify, they still give you 1% back for unqualified purchases.

The card doesn't carry an annual fee so having this for emergency cash flow is good to have on your books. The first 6 months you have 0% APR, so it's free cash until the big payment is due.

They supply quarterly and annual reports which may help you. All I really care about is that I can download my transactions into Quickbooks for my accountant.

All in all, the Chase Business Card with Premier Cash Rebate is something worth looking into for managing your business expenses.

30000 Miles United Business Card

2009-02-26T08:02:00.000-08:00

For the second or third time this month, I received the "30000 Miles United Business Card" offer from Chase. For the second or third time this month, the credit card offer went into the shredder.

I like Airmiles credit cards, but they take a long time to accumulate enough miles to get any form of frequent flier benefits. Even though the first year's annual fee is waived, the $75 recurring fee real eats into your profit.

Just to break even on the next year, you would have to spend $7,500 on the United Business Card. That same amount charged on your Discover would saved you at least $75.

By the 5th year rolls around, the initial 30000 miles was paid for by you so it's not really free after all. After that, Chase is making a nice tidy profit of $75/year by collecting annual fees from you.

Sure, you can cancel the card, but how often do you cancel credit lines? I can't even remember the last time I canceled a card.

So, for now, they'll keep sending in the "30000 mile" offer and I'll keep shredding them because it's all about saving money whenever possible and I'll use my Discover Card to precisely do that.

Airmiles Credit Card Takes Us to S.F.

2009-02-23T15:50:00.000-08:00

We had a wonderful weekend trip to the Bay area with complements from our airmiles credit card. Even though the trip was relatively short, it was nice to get away for the weekend and not worry about the economy and just focus on the good things in life: love, eating, eating and more eating.

The free airline tickets saved us lots of money so we splurged on shopping without feeling too guilty. Plus we saved 5% on our rental and hotel by using Discover. However, it took a day to get over guilt of not working on our "save money online" site which getting close to launch, but it will get done when it's good and done.

It must have been over 20 years since we've been to China Town and the Wharf. The food was delicious and even the sand in the Clam chowder was good.

Now that most of the United Air miles are gone, I'm either going switch over to Delta or just use my cash back card more often. It's really hard to justify using United since we hardly fly them.

It will take a couple of more years before we accumulate enough frequent flier miles before we can take another free trip. With the bad economy, we had a sense of urgency to take this trip sooner than later. (Who knows if our miles will still be around or what shape the airline industry will be in a couple of years from now.) But it was a good trip to San Fransisco with thanks to our airmiles credit card.

Where to Get a Good Credit Financial Education

2009-02-10T07:08:00.000-08:00

Let’s face it; our public school system is broken. Even though credit and personal finance is one of the most important aspects of our daily living, basic financial knowledge is rarely taught in our schools. What little financial information learned is taught from our parents and that information is passed down from generation to generation. Unless your family has a business, it’s quite possible that you know very little about finance.

While this blog is about Saving Money Using Credit Cards, without a basic understanding of finance, you may not understand what I’m writing about. I was fortunate enough to be raised in a family that had a business that taught me how to balance the books, raise cash, and make a profit all at the early age of six. By the time I was in High School, I all ready worked 10 years when the kids my age were getting their first job at McDonalds.

Needless to say, the Los Angeles Unified School District did not contribute to my financial education.

But what about you, where are you in your financial education? My guess is that like everyone else, you have little financial knowledge and this, perhaps, is why you are reading this blog.

Regardless, you need to start somewhere and going back to High School may be your answer. I don’t imply that you physically attend classes, but picking up some financial reading material may help aid you in your education.

One of the best resources to get started with your financial education is What Every High Schooler Should Know about Credit and Finance, by Jarrod Williamson.

The reality is that many of the areas covered in this book are simply not taught to young people. Thus many people, including adults, don’t know the important and, in some cases, hidden and nearly secret information about the way financial things really work in American society.

– Thomas Mayhew, Publisher, CrimsonBooks.

I don’t think that I can sum it up better than what Thomas just did! You need a financial education that our public schools did not provide you.

Airmiles or Cashback Credit Card: Which is Better?

2009-01-26T07:03:00.000-08:00

Do really save money by using an Airmiles Credit Card or can you save more money using a Cashback Credit Card? I personally would vote for the later, but the American Exchange Blue Sky card is almost as good as cash.

Here's why.

The Blue Sky Card allows you to travel free of restrictions and blackout dates — fly on any airline, stay at any hotel, and sail on any cruise line. In my opinion, this is one of the best features that you have since most airmiles cards restrict you to a single airline.

The cardd has no annual fee which is so atypical of airline credit cards. You can find no annual fee cards for Delta and United, but they're hard to find. My United Mileage Plus Card has no annual fees and I'm very happy with it.

But I keep laughing at Chase which sends me pre-approved applications to upgrade to their United Platinum Business Card. In return for 30,000 miles, I get the honor of paying an annual fee of $75. Yeah right.
How much are your miles worth?

Miles that you earned through purchases or bonusus are worth one cent per mile. So for example, if you get an offer of 30,000 miles, it's worth $300 to you. The bank breaks even after 5 years (they wave the first year's annual fee) and starts making a nice profit of $75/year on each card holder thereafter.

Another way to look at it is that you get one mile for every dollar you spend. This is equavalent to 1% savings, the same savings you would have received using a cashback card.

The Blue Sky Card is a little better where you can receive discounts of up to $100 for every 7500 points you earn. This is the same as 1.33% cash back; however, you have to read the fine print, you can:

Use the points for any airline, any hotel, any cruise or any car rental - no blackout dates, advance purchase requirements, hotel room restrictions, or travel restrictions.

Although this is better than most airmiles cards, you are still restricted to the "travel industry." I still like my Discover card because your cash back is not restricted other than you can only take it in increments of $20. Plus if you sign up for the Jan - March 5% bonus, you can use your Discover Card as an Airmiles Card.

Use Your Discover as an Airmiles Card

2009-01-26T06:46:00.000-08:00

This quarter (January - March), remember to sign up for your 5% bonus at the Discover website and your card will be better than an Airmiles Card for purchases in the travel industry.

Every three months, Discover promotes different types of industries where you can increase your cashback bonus from 1% to 5%. If you book any hotel rooms, flights, car rentals using your card, you get a huge discount.

Typical discounts using your airmiles credit card are about 1%, but during the first three months of the year, your Discover card will pay you back 5x the amount.

The only catch is that you have to sign up for the bonus once you login to your account or just call the 1-800 number on the back of your card and ask for the bonus for January - March.

We're Using Our Airmiles Card for Vacation

2009-01-02T15:03:00.000-08:00

It's time for a vacation and the accumulated miles on our Airmiles Credit Card has enough to get us two round-trip tickets anywhere in the lower 48. Since we're planning a trip in February, we don't have much to worry about blackout dates.

I've often considered switching over to Delta for our airmiles card but I've been using the United Mileage Plus card for quite some time; hence, long enough to accumulate two tickets for vacation. I really like Delta Air and tend to use them as our choice air carrier.

Sometimes you don't have a choice of airlines and for a while I was flying United at least once a month and eventually they offered a card through Chase. The card had no annual fee, which is unheard of for airmiles cards so I grabbed one up. Delta and the other airlines have cards, but they're fee free the first year and the $75 thereafter. Not worth it if it takes 5 years to accumulate enough frequent flyer miles on purchases alone.

So for now we're stuck with United for our airmiels card until someone offers a better deal.

To really exploit your card, you need to use it whenever you book hotel or rent a car. You get 1 mile for every dollar you spend plus 500+ ff miles for your hotel stay. Our last trip to ATL, we used our Mileage Plus card to rent a Jeep Cherokee. Since it was a driving trip, we booked our hotel rooms with Hilton and got miles just about every night we checked-in.

We've never been to NYC and that should be a nice trip to take to spend on Valentines day or on our wedding anniversary. Now if I can keep it a suprise from my Wife...

Until next time, remember to pay off your credit cards each month to avoid those hefty interest rates those companys charge use to keep us in debt.

Fed Authorizes New Credit Card Rules in Favor of Consumers

2008-12-19T08:34:00.000-08:00

Good news for consumers holding a credit card balance:

According to CNN,

Regulators voted to rein in controversial credit card practices. But they'll have to wait another year and a half to get relief - the new rules won't take effect until July 1, 2010.

Consumers will also be given a reasonable amount of time to make payments, and payments will be applied to higher-rate balances first, to reduce interest penalties and fees.

Credit card statements will clearly list the time of day that a payment is due, and any changes to accounts will be in bold or listed separately.

One of the more important changes is the elimination of retroactive interest. This should help consumers pay off their credit card debt sooner by eliminating double billing cycles even if the monthly balance is payed off.

Can You Trust the Mail to Deliver Your Credit Card Payment?

2008-12-10T06:34:00.000-08:00

Can you trust the USPS to deliver your credit card payment on time? This is something that you really need to think about the next time when putting first-class stamp on envelope and dropping your payment into the mailbox.

Normally, it takes three business days to send a first class letter from coast to coast. An amazing trip of over 2,000 miles from start to finish. You drop it the box, it gets picked up, routed to the post office, then to the regional office for sorting and delivery to the next regional office. If the regional office is across the country, it gets bundled up with other postage and put on a commercial flight.

The the letter is unwound in the reverse from the commercial flight, to the regional office, and then to the local post office for delivery to its final destination. A very efficient process taking about 3 business days to deliver your credit card payment.

You would think that 3 business days is enough time for delivery of payment, but its not. I pay my credit cards off each month -- at least 7 days days in advance to take account of any fluctuations in delivery schedules -- so I save money on interest and late fees.

The majority of my cards are paid online so 1) I don't have to pay postage; and 2) I know that the payment arrives there. But I have one low-limit card where I authorized my son to use so he buy gas and school supplies while at college. Normally the bill is around $100 so I was little curious when it was $150. I read the statement: Gas, Gas, Late Fee $39, Interest $1.51; WTF!

Like I said, I pay the bill at least 7 days in advance to avoid this frustration. I mailed the payment on the 28th and it got posted 3 days late, 12 days latter. Absolutely nothing you can do. You can call the Credit Card Company and bitch until you're blue in the face and you're going to get the same answer.

I'm sure each and everyone of us has had this conversation

I'm sorry, the terms and conditions clearly state that your account is credited upon arrival of your payment before 12 PM on that business day... blah, blah, blah, .... Sorry, we do not keep a record of the payment envelope or when it was post marked... blah, blah, blah, .... But you would be happy to know that we do recycle your envelope to make our country a greener place.

So what can you do about it? If you pay off your credit card statement by mail each month, make sure that when the statement arrives, write a check for the entire balance, and put it in the mail the very next day. Or better yet, sign up for online payment with your bank or with the Credit Card Company so you can avoid fees and interest due to late payments.

Don't Abuse Your Credit to Get "Free Money"

2008-11-13T05:21:00.000-08:00

An interesting article on ArtWoo where the author makes some valid arguments that credit cards should be used only in times of emergency and living within our means is the prudent thing to do:

Credit cards make sense to use if you know and understand how to use them correctly. Americans abuse credit cards, mistaking them for "free money" and opening many different cards at the same time to satisfy their thirst for expensive things and, ironically, things they can't afford.

If you use your credit wisely, you can actually save money by purchasing on credit. This requires paying off your credit every month to avoid interest and fees. In this sense, the 30 day loan is "free money" since your money is increasing with interest while sitting in your savings account.

Also, if the credit card that you use is a "cash back" card, you're also discounting the purchase price from 1 to 5%.

Saving money to get "free money" is ultimately the plan you need to work at:

Pay everything in cash for two months.
Keep track of everything you purchase.
Use Quicken or MS Money to help you track and budget your expenses.
Accumulate enough savings for your monthly budget then start rotating monthly expenses on your card to get the cash back and interest free loans.

Remember the important thing is to save and budget. Use your credit cards wisely by paying off the balance each month.

5% October Cash Back Bonus Down the Drain

2008-11-02T17:30:00.000-08:00

I really screwed up big last month using my Discover Card. I forgot to sign up for the 5% cash back bonus which is something you need to do every 3 months by either login into the Discover account center or by calling Discover.

The last quarter of the year, the 5% cashback bonus includes purchases at grocery stores, restaurants, movie theaters and movie rentals.

A major portion of our expenses are eating so it's not unusual to spend $1000 on food for the month. With 5% cash back, we would have saved about $50 in October, but since I forgot to sign up the first of October, we only saved $10 under the normal 1%.

The rest of the year we should be able to save more especially when planning meals for Thanksgiving, Christmas and New Years.

If you haven't signed up already, give Discovery a call or apply your savings online in the account center. It's never too late to sign up for the extra cash back -- just make sure that you remind yourself to do it as early as possible in January, April, July and October to take advantage of the savings accumulated over three months.

Someone Gave Our Gov't a Credit Card

2008-09-30T06:49:00.000-07:00

It's been a while since my last "How to Save Money Using Credit Cards" post since I've been off trying to make sense of the financial markets this month. I can tell you that I'm running on empty trying to convince my representatives to do what is right for the country and not to bailout failed business men.

We Already Give You 5 Trillion

Another 700 billion to our deficit - on top of the 5 trillion added for the Freddy and Fanny GSE debt plus 85 billion for AIG - may be they straw that breaks the camel's back.

I've been a longtime advocate for reducing personal debt and simply opening our purses up to bailout the "world" will bankrupt our country. Personal insolvancy is a tragedy for a family; but, government insolvency is catastrophic for our nation and world.

Our Future is at Risk

While the media tries to fear monger you that your savings, 401k and pension is at risk, remember that these are always at risk if exposed to normal stock market fluctuations. You must preserve and protected your capital especially if you're near retirement age.

But the real risk is if our country becomes bankrupt and goes the way of Argentina or Zimbabwe and our dollar tanks. Personally, I would rather take a 20% loss in the stock market than 100% loss due to a worthless dollar.

Credit is Good But Debt is Bad

I'm not an economist nor will I pretend that I'm a financial expert, but I know that debt enslaves us and that paying off my debt frees me to save and invest in the future. I would recommend that you and our government to do likewise.

Credit Card Thief Held on One Million Dollar Bond

2008-08-30T10:21:00.000-07:00

It seems kind of excessive to hold a credit card thief on a million dollar bond, but apparently in the Covina, CA, a suspect was arrested for using stolen credit cards to purchase gas.

Sisak Khudaverdyan, 28, of Glendale drove up to a filling station in a Ford Econoline Van and started pumping gas. At gas stations, there is a $100 per charge limit when buying gas, or roughly 25 gallons. If you exceed that, you need to use a different card.

After the thief pulled out a third card, the gas station attendant called the police. When the LAPD arrived, the found two 50 gallon dumbs inside the van rigged to fill up from the external nozzle and dozens of stolen credit cards.

The suspect was out on bail for allegedly committing the identical crime in the Ventura County, and the bail was set for 1 million.

The Discover More Card - Tips to Reduce Your Credit Card Payments

2008-08-30T10:12:00.000-07:00

Credit cards are unsecured lines of credit giving you flexible spending accounts. The Discover More Card gives you the flexibility of cash while saving you money on purchases. The best way to take advantage of the Discover More Card is to eliminate the fees and interest which Discover will charge you.

Fees and interest payments will quickly diminish the 5% you earn towards every purchase. But with careful planning, budgeting and especially paying off monthly charges, you can save a substantial amount of money over extended periods use of Discover More Card.

Credit Card Fees

One can avoid fees by making a payment towards your account. However, if the balance is not paid in full, your account starts accruing interest on the balance and future purchases until the balance reaches zero. Discover can charge you from $19 to $39 even if your payment is only a day late.

Sometimes a simple call to Discover will reverse the late fee especially if the payment is due around a holiday. But the best way to avoid the fee is to mail your payment one week before it is due or schedule an online payment.

Cash Advance Fees

Most charge companies have a minimum transaction fee on top of the interest you incur at the time of the cash advance. If the cash advanced fees annualized, you may end up paying upwards to 30%. Thus, try to avoid taking out cash unless you need cash for an emergency.

Annual Percentage Rate (APR)

Credit companies charge various fees for using their credit card. You should make it a priority in avoiding late fees by making your monthly payment on time.. While annual fees were predominate several decades ago, there is no reason to carry a charge cards that have annual fees.

July 2008: Discover Saved Me $19.27

2008-08-10T14:34:00.000-07:00

Even though I saved about $20 this month using my Discover Credit Card, I think any savings were diminished by the jump in inflation. Can you say ouch?

Pinch me again. Ouch! Everything seems to be going higher and higher and even with a conscience decision to cut back on spending, we still managed to spend over $2000 last month; hence the 1% cash back savings of $20 from Discover.

I managed to run out of cash one week and was force to charge $8.12 for my lunch at Presto Pasta. That never happened before.

I have to be fair since we did have an emergency and took our Dachshund to an emergency clinic when her eye was all infected. Too bad we didn't have pet insurance to cover the cost.

July 2008 Charge Expenses

For this month, we managed to charge:

Merchandise: $350

Services: $600 ($590 in Vet bills)

Gas: $292

Groceries: $895

I'm fairly certain that our gasoline expense would have been a lot higher if we did our normal summer and daily driving, but we cut back on both. A little walking really did wonders on our pocket book gas consumption.

There's very little we could do about groceries since we do have to eat. Perhaps some of the increase in cost was due to eating out less but going over my statement, it seems that some of our grocery charges were approaching $200 when they normally are around $150.

Things are getting expensive so make sure you pay off you short-term debt every month and start saving more cause it's cool to be frugal.

Using Credit Cards Hurt Gas Station Owners

2008-06-20T06:28:00.000-07:00

Several Gas Station Owners have been hit hard by the rising gas prices, but not where you would expect. Credit card fees are eating into their profits and they're beginning to accept cash only.

This is how it works...

Credit card companies make it on both ends of the sale. First they collect merchant fees for every sale and then they collect interest on consumers who don't pay off their monthly short-term loan. Usually these fees run a few percent and sometimes as high as 5% for low volume merchants.

I can remember back when processing credit cards was a real pain in the butt. You had to look up the card in the "dead-beat" list that had a publication of thousands of cards that were stolen or over extended.

Then you called Visa or Mastercard to get approval for the sale. You talked to a live operator stating the facts about the card. The whole process took several minutes while angry customers wait in line behind them.

Sometimes you were instructed to cut up the card in half which was sometimes golden especially if the customer was a real prick. But as a merchant, you lose out on a sale and make your customer angry at you.

Today, you just swipe the card thru a card reader and you get back an approval in a few seconds. The process is all automated and hardly justifies the merchant fees they charge since there is no live operator anymore.

So are Gas Station Owners Justified in not Accepting Credit Cards?

Not really since the 2% merchant fee is built into the price. Eighty-percent of their customers are going to use credit and the other 20% will pay by cash. By using your gas card or cash back card, this price increase goes back to you in rebates.

Basically what they can do is lower the price of the gas to compete with other local gas stations. They will push their customers away, have lower sales and eventually go out of business.

Are You Addicted to Credit Cards?

2008-06-10T21:46:00.000-07:00

Jennifer Levitz wrote an interesting article in The Wall Street Journal about credit card addiction. She presented a view where consumers were overextending their credit cards to meet compulsive spending habits.

I would argue that the true addiction is not the credit cards but is actually an addiction to shopping.

While it’s not difficult to understand her point of view, overspending, not budgeting and simply paying interest is ultimately the culprit of overextension.

Of course there are shopaholics that continuously go shopping where it wouldn’t matter if they had an endless stream of cash or credit to satisfy some compulsive need.

There really is no addiction to credit cards, but an abuse — either by mismanagement or illness — that causes the ultimate problem.

Solution to Credit Card Addiction

So is there a way to overcome this problem? The answer might not surprise you since it’s as simple as paying off your credit card as soon as possible.

Each month pay off as much as possible. Double, triple your payment. Use cash to buy everything else until your cards are paid off.

Keep track of how much and what you are spending on each month. Try to eliminate unnecessary purchases.

Once you paid off your cards, a great burden of 20% in interest rates will be lifted off your shoulders.

If you decide to use your cards again, use them only for the monthly expenses and pay the entire credit card balance off each month avoiding late fees and interest.

Here's another Way to Save with Credit Cards

2008-06-10T09:23:00.000-07:00

My wife received a really good credit card offer from American Express today. The Blue Sky is cash back rewards card where you accumulate one bonus point for each dollar you spend.

After you spend your first $500, American Express gives you 7,500 bonus points. This is equivalent to $100 off any airline ticket, hotel stay, and car rental or travel package. You must redeem the bonus points in blocks of 7,500.

Unlike Discover, you’re limited to the travel industry. But American Express pays you 1.3% ($100/$7,500) instead of 1% for Discover purchases.

Blue Sky has no annual fees; the APR for the first 6 months is 0%! Zero-percent loans are nice to have even if it’s only for 6 months. Just set aside what you spend and pay it off before they jack up the rate.

After six months, the rate goes up — at least in my wife’s case — to 12.24%. Your rate maybe higher or lower depending on your credit score. Since I pay off all my balances, I never get charged interest. But still, it’s nice to know that it’s a fairly reasonable rate as far as credit cards go.

Another thing I like about this card is that you’re not tied to any specific airline. I use my United Card to keep my miles alive, but I can’t even remember flying United. We mostly fly Delta or Alaska, so it’s a waste to carry the card and use it to save money. I would like to get Blue Sky, but I already have two American Express Cards, one for personal and one for business expenses.

Since my wife doesn’t have an American Express Card, this is the one she should apply for in her name to help her maintain her credit history. Plus, we can use the $100 American Express hands out to help offset the cost of our vacation next year!

Alaska Air – My Favorite Airline but not my Favorite Credit Card

2008-06-07T11:06:00.000-07:00

Alaska Air ranks up there as one of my all time favorite airline carriers. Considering that I’ve racked up over 100,000 frequently flyer miles, my guess is that I’ve flown Alaska more than 50 times.

Despite the frequency, it takes a long time to accumulate miles since they pretty much dominate the LA/Seattle market and those are 2,000 round-trip miles.

Since it takes 20,000 miles to get a first class upgrade, I’ve been saving upgrades for longer flights. That is, vacation to Alaska where the 3,500 mile trip can take up to 7 hours of flight time with a stop in Seattle.

So does it make sense to get the Alaska Air Credit Card? The answer is yes if you live on the west coast and fly between Portland, Los Angeles or Seattle and take frequent trips between these cities. The benefits of moving up to first class are well worth the annual card fee.

If you’re planning to take a vacation or fishing trip to Alaska, and I highly recommend that you do, it’s worth enrolling in Alaska’s frequent flyer program to offset the first class ticket price. (It’s a long flight to Alaska, and believe me, you want to fly first class.)

With the miles you accumulate from your credit card purchases and enrollment bonuses, you should get enough to cover your vacation trip.

Other than frequent business use or one or two vacation trips to Alaska, I would not recommend the Alaska Air Credit Card.

May 2008: American Express Saved Me $0.13

2008-05-24T11:58:00.000-07:00

It was a big month for using my American Express Card. I saved a whopping $0.13. You read that right, thirteen cents. It doesn’t cover the postage for paying off the bill, but it does pay for the one cent postage increase this month. Since I pay off my bill scheduling ACH debits, I don’t worry about postage increases.

I pretty much use my American Express Card when I shop at Costco since Costco only takes cash, checks or American Express. Costco used to take all credit cards but they changed the policy a few years ago to only use one credit company.

The good thing about the card is that your annual card fee is waved when your Costco membership is charged on it. The net result is that the express card is free of annual fees. So if you like to save money by shopping wholesale at Costco, the card is worth it.

The other thing is that you get a rebate. Initially, you get ¼ percent back on what you buy. Then it increases (to what I don’t recall at this time).

So if you break down my 0.25% savings by shopping at Costco last month, I spent $52.10 buying groceries, and got refunded thirteen cents.

So, how much money did I save? Adding it up, I saved 0.13 in refund and 0.42 in postage by paying off my bill online for a total of 0.55. I’m so cheap. Or, would you call it thrifty?

According to TheStar.com, in the article Credit credit card rebate offers easy to miss, if you’re not careful, you may actually shred your rebate check.

“Instead of sending rebates separately, American Express prints them and embeds them in cardholders' statements.”

I found that the rebate check is not too obvious, but AMEX (NYSE:AXP) keeps on sending reminders that that you haven’t cashed your check yet.

In my case, I shredded my first rebate check from American Express. Now that I know this is how they issue the rebate, I look for it once a year around my anniversary.

Until next month, remember to pay off your balances. Schedule your payments online to save you both time money and postage!

May 2008: My Discover Card Paid Me $14.15

2008-05-24T06:37:00.000-07:00

One of the common themes in saving money by using credit cards is the cash back you get each month just by shopping. We pretty much use Discover to cover our expenses for the month and highly recommend the card.

Now I don’t go out and charge my card up to its limit, but pay off the balance each month to avoid the daily period rates credit card companies charge you. Also, remember to pay it off early so you don’t get chardged a late fee.

This month I saved $14.15 by spending $1,532.74. I was expecting to earn $15.33 back or 1% of the spending. I’m not exactly sure why I didn’t get the full month, but April is my anniversary so sometimes they reset the annual amount so the first 1,000 you spend, you get 0.5% back instead of the full amount. It’s only a dollar, so I’m not too concerned at this point.

Taking a look at what I bought:

Merchandise/Retail: 363.60 (23.7%)

Gasoline: 345.80 (22.6%)

Services: 12.88 (0.8%)

Supermarkets: 638.49 (41.7%)

Home Improvement: 171.97 (11.2%)

Almost 25% of my spending was in the Merchandise/Retail sector. Unfortunately Discover Card categorizes CVS perchases into this area. Thus, any pharmacy items that you use to charge on your credit card get lumped into Merchandise/Retail category.

I like to keep Merchandise and Retail down to about 15% of my spending budget $1,500 per month. With rising gas prices, it’s not too difficult to exceed my monthly credit card budget.

You Can Actually Save More Than 1%

Here just are a few examples you can save using your Discover Card by shopping online:

5% Circuit City
10% Nike
15% PetSmart
20% FTD.com

To get these discounts, you need to login to your Discover account and connect to the merchant sites.

On a final note for this month’s saving tip, always pay off your credit card and if you can’t pay as much as possible to get out of debt as soon as possible. Send out your payment a week earlier that it is due or login to your Discover Card to schedule your payment the day before it is due.

Discover Card Saved Me Over $4000

2008-05-15T08:12:00.000-07:00

I received my new Discover Card in the mail last week. Since I still had a month remaining before the old card expired, I set it aside until I had some time to call in to get it activated.

Normally you call the activation number on the sticker pasted on your credit card and enter your number and you’re all set. But this time, instead of a pre-recorded message, I got a live person.

“Hi, this is Jenna! Thank you for activating your card. I see that you’ve been a member since, ah, 1984. Wow you were one of the first members!”

Not that she was trying to make me feel old, but that was 24 years ago when credit was rather tight. Back then, Discover was owned by Sears — who extended me a whopping $200 credit line on their Sears Credit Card when I was a sophomore in College — and Sears offered their customers a new credit card that you could use at other retail stores.

For the first few years, not everyone took Discover so many times I had to pay with cash. (What a novel idea.)

Since I mostly charge my all my expenses using Discover, I get around $20 back every month. So for being one of the “first members,” Discover Card paid me around $4000!

Jenna continued, “Would you like to enroll up this summer for the 5% bonus payment for Gas and grocery purchases?”

“Does it cost anything?” I said.

“No. Just by saying you want to enroll, you qualify for the offer.”

“Thank you, please enroll me!” I buy all my gas and groceries using credit cards, so instead of the normal 1% kickback, I’m going to get 5%!

“Jenna, how can I automatically enroll in these offers?”

“You can’t. You have to enroll by calling us or by activating the offer using the internet.”

“Ok, I call back next month to enroll, thanks.”

Now the up-sell and why they want you to call in to activate the bonus payments: “Would you like to enroll in our privacy protection?”

“No thanks. Perhaps I’ll consider it sometime in the future.”

“Ok, you’re new card is activated. Please sign your card and remove the sticker. And thanks for using Discover!”

No. Thank you Discover! You’re a great credit card company that saved me thousands for being a valuable member.

Welcome to Save Money Using Credit Cards

2008-05-14T22:41:00.000-07:00

Hi, and welcome to Save Money Using Credit Cards. If you're like me, you probably get several credit card offers every week. I would like to share with you a few tips on how I actually save money, get free travel and best of all get paid for using my Discover, Visa and American Express.

First of all, I don't expect that you're going to save as much money as I have over the years. Perhaps that's because if you're starting out fresh with little or no credit experience and I've got a good 25 years on you. But I remember when I first started out with credit, I was earning enough to pay for the postage to pay off the balance for the month.

Even though I think I'm frugal, expenses still add up. And over time, you're going get a lot of cash back if you keep a zero balance. So far, I've earned more than $4,000 in rewards. Now that's nothing to sneeze at.

I'll be posting from time to time whenever I come up with an idea that can save you money.

- Howard