How I Earn More on My Credit Card Than I can From a CD

(Note: None of the companies, credit cards, or investment strategies mentioned below constitutes an endorsement.)

                If you pay off your credit card balance each month, this article is for you. Otherwise, it’s best you move along to another article. I just heard a radio commercial for a bank that pays a “generous” return of 0.7 percent on its certificates of deposit (CDs). Say what?                 For years I used a Capital One Venture® Visa card as my primary charge card. And I charged all purchases greater than five dollars on it. Why? Capital One pays me 2 percent back on all my purchases. Get it? I was making three times as much on my credit card as a I could get from my bank (actually, my credit union). That money is usable for travel expenses, which means the cost of travel, like airfares, hotels, and meals. But I can also use it to payCredit Card - Captial One Venture for any expenses while traveling.                

You can search for other cards that match that deal. I have one that beats it and I’ll get to that in a moment.                

The catch? Capital One charges a $59 annual fee. So, do the math. If not, Capital One also offers a Quicksilver® Rewards card that pays 1.5% with no annual fee for those with excellent credit. If you charge enough to make the rebate exceed the annual fee, you’re in like Flynn with the Venture Card. Otherwise, you can go with Quicksilver, which has no fee.                

I invest with Fidelity Investments. It now has programs that beat even Capital One’s. Fidelity offers an AmerFideltiy American Express cardican Express card that pays 2 percent and a Visa card that rebates 1.5 percent. Neither levies an annual fee.                

My point? If you have a good credit rating and you pay your credit card bills in full each month, find yourself a suitable rebate card and charge away for on the purchases you would be making anyway. You’ll make a lot more with it than “investing” in CDs.

So-called “Convenience Checks” are Convenient . . . for the Banks

You know those “convenience checks” that come with your monthly credit card statement?

Convenience checks

Convenience check promotion with an low introductory rate

They’re for suckers. Here’s why. When you use them you’re usually charged the daily cash advance interest rate of 12, 15, or even 20 percent. Often they come with a 3-4 percent fee. When you make purchases with them you don’t usually accrue the benefits—like airline miles, cash back, and the extended warranty benefit —that come with credit card purchases.The low introductory interest rate may quickly disappear and if using one of these checks causes you to exceed your credit card limit, it could cause the check to bounce and to hurt your credit score.Shred any checks that you receive. Better yet, resist temptation, as I have done, by calling your card issuer and telling it to stop sending the checks.

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The Consumer Gal and I just had our book, Enough of Us – which deals with another realm – published. In order to concentrate on that project I will be suspending my semi-monthly Consumer Guy full-length blog posts and, instead, providing  a short consumer tip each week (I hope).

If you would like to learn more about our book that deals with issues of ethics and procreation, please visit our other website, www.enoughof.us. Many thanks for your interest.

 

A Couple of Controversies Concerning Conventional Car Care

Part 1

You are Probably Changing Your Oil too Frequently

How frequently do you change your motor oil? Every 3,000 miles? 4,000? 5,000? Your local oil change shop probably advises you to change your oil every 3,000 miles. They are so thoughtful they even put a transparent sticker on the corner of your windshield telling you to bring your car back in when the odometer hits certain mileage.

Listen to your manual, not your oil change retailer
Photo: Wikipedia

I used to do it every 4,000 miles because calculating 4,000 requires no brain power. But since the California Department of Resources, Recycling and Recovery launched its Check Your Number campaign, I have been reformed. Check Your Number urges drivers to go with manufacturers’ recommendations for oil changes. Many newer vehicles, in fact, have devices built in that calculate when your next oil change should take place. My 2007 Honda Element has an indicator in the odometer that tells me the amount of oil life remaining based on how I drive and how many miles I have gone. For me, it’s at about 5,000-mile intervals. If I did more long distance driving it would extend the oil life even more. My 2001 Toyota Solara does not have that feature. The manual allows me up to 7,500 miles, but that applies to ideal driving conditions. Since most of the Consumer Gal’s and my driving in that car is of distances ranging between one and seven miles, I recently switched to oil changes at 5,000 mile intervals.

Why is all this so important? There are three reasons.

1) Nearly 40 percent of the pollution in America’s waterways is from used motor oil. One gallon of used motor can pollute one million gallons of water.

2) Changing oil less frequently saves the consumer money. If you change your oil, as an example, every 5,000 miles instead of 3,000, you get two-thirds more for your money.

3) Consuming petroleum products adds to the demand for fossil fuels, which our country can ill afford for a variety of reasons.

So check your owner’s manual and follow its recommendations. For more information, go to the Check Your Number web site at www.checkyour number.org. It’s aimed at Californians but you most of it applies to you no matter where you live.

The ten states that prohibit credit card surcharges are :

California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

 

 Part 2

Credit Card Surcharges at Gas Statiions

How do gas stations get away with charging more for credit card purchases? Sloppily written laws, that’s how. Ten

Gas prices higher for credit cards
Photo: KPBS, San Diego (Glenn Batuyong)

states prohibit surcharges, also called checkout fees (see below). Under California law, for example, a retailer may not charge a fee for using credit cards. But with a loophole the size of the Van Allen radiation belt, they may offer discounts for using cash. This is what I call a scam, especially when the huge price sign required for gas stations in the Golden State sometimes show the discount price, with a tiny sign below showing the “full” (read “credit card”) price. Adding insult to injury, ARCO stations in California do not accept credit cards. They do, however, accept debit cards if the consumer pays a flat fee (35 cents the last time I looked) for using the debit card.

According to the California Department of Consumer Affairs, the National Association of Convenience Stores (NACSO) makes the case that credit card companies charge gas merchants about two percent for each transaction (Duh!), so they need to pass that cost along to their customers. The fallacy with this argument is that most gas stations, as well as printers, plumbers and pizza parlors, just figure the expense of credit cards into their prices without passing the costs along to just their credit card customers. Look at it this way; if you were to purchase a $500 TV set with a credit card at Best Buy, and the store were to charge you an additional 10 bucks for using the card, you’d be pretty ticked off. You might even leave in order to look around for a better deal. And, after all, credit cards bring more business into the stations and simplify their accounting by automating those purchases and generating computerized bookkeeping. On its web site, Visa explains that it does not allow its merchants to surcharge customers for using its card, but does not have a policy on cash discounts. My advice to you: skip retailers that charge extra for credit card usage and find stations that even the playing field. Here are the ten states that prohibit checkout fees: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

All that credit card info they ask for online keeps your account safe . . . NOT!

I had an agenda of topics laid out for this web site for months to come. But last week I had an eye-opening experience that taught me that as low as my esteem for big banks was, it still had a long way to drop.
I have a Chase Freedom Visa card. I haven’t used it in more than three years. I keep it as a backup in case I misplace my two primary cards (I lose a lot of stuff. In fact, the only thing I ever had trouble losing was my virginity – but that’s probably more than you need to know). When the card came up for renewal about a year and a half ago, I decided to not activate it.

Freedom from what?

But lo and behold – what does “lo” mean anyway? – I recently received a statement from Chase with a charge on it from Mutual of Enumclaw insurance company. I never made a payment to that company. How could I? I had never heard of it. I would remember if I had, since it’s the worst name for a company since Studebaker. And since I had never activated the card, it was unusable anyway. Or so I thought.
I called Chase and canceled the payment. Chase got back to me and informed me that the charge was a mistake. “How could that happen?” I inquired, since M of E had neither my three-digit security code nor the expiration date for the card. Furthermore, how could anything be charged to a card that was never activated?
The rep could not answer so she connected me to the fraud department. The guy at the fraud department told me that if a Chase customer doesn’t activate the card within 60 days, Chase activates it AUTOMATICALLY!  “Why would you do that?” I asked. “What if someone had stolen my card from the mail?”
“We don’t want to inconvenience our cardholders in case they forgot to activate,” was the explanation. “What about the failure to verify the expiration date and security code?” I parried. The fraud rep kicked me upstairs to his supervisor, Audrey. I repeated the question. “You’ll have to ask the merchant,” Audrey advised.
So I called M of E and found a person whose actual name is Sara. I use her real name because she was nice, solicitous, and a good listener. After diligent research she determined what had happened. One of M of E’s “insureds” (that’s what they call their customers in the insurance game) had mis-entered her card number when making a premium payment. The one-digit error meant she entered my unactivated card number. But what about the expiration date and the security code?
“You’ll have to ask your bank,” responded Sara. So I called Chase again. This time Dean was my fraud department supervisor. He explained that some vendors do not ask for the security codes and/or expiration dates for credit card charges and that’s how this charge got through. “How about the fact that the customer had a different name?” I challenged. I’m not sure what Dean said exactly, but it was something like, “Mhllf blah, sheboygan, phlegm.”
So I called Sara at M of E again. I asked if they request expiration dates and security codes for credit card payments.  “We do,” she averred.
So let’s review.
• The person who made her credit card payment to Mutual of Enumclaw, innocently entered my credit card number.
• The card had never been activated.
• She had the wrong name for my account number.
• The expiration date was incorrect.
• The security code was wrong.
• And still the charge went through.
Once again I chased down Chase’s fraud department. This time I got Elvira on the phone. Long story short: Elvira admitted that, “We dropped the ball on this one.” She agreed that the charge never should have gone through and should have been sent back to the merchant. “We use a variety of algorithms,” to verify charges, she claimed.
On behalf of Chase she took full blame for the screw-up, but reminded me that Chase never charges the customer for fraudulent charges and that anytime a cardholder brings a wrong charge to the bank’s attention, the bank makes it right.
What, I asked, if a person has a hundred charges on a monthly statement and, like so many consumers, they don’t check each item? This $385 charge would be paid as part of – let’s say – a $3,000 bill. The cardholder would pay it and never know they had been ripped off.
Elvira admitted that such instances do occur.
Upshot. Check your monthly credit card statements. Match the charges to your receipts. And if you think all those data that merchants ask for when taking your credit card number protect you, think again.