Archive for the ‘Credit Rewards’ Category
Credit Cards Are Going Away
Developing Trend
I walked into work, groggy eyed and sleepy this morning. I was startled by my manager in his office yelling over the phone. After he was done, he showed me a statement he had received in the mail. The letter was from Citibank and announced a new $60 annual fee, to be instituted immediately. Both him and I were stunned. He had been a customer for 26 years. They said they were sorry to see him go and he would be getting a letter in the mail soon. He couldn’t believe his ears. Were they not going to wave the fee for such a great customer? In his case, Citibank wasn’t willing to make an exception. They were firing him as their customer, to put it lightly. They leave us no choice with these games.
The truth is that we were stunned, not because they instituted a charge, but that they were sending a clear message. It’s obvious that the banks want out of the credit card business, by making this move. While this will be better off for society in the long run, too many people are addicted to credit in the present. It’s going to feel a lot like trying to quit drinking, for these people to ween themselves off the easy money. Withdrawals can be painful for both parties.
In Case Of Emergency
As much as I don’t like credit cards, I advocate that everyone has one for emergencies. I don’t get too involved with the point schemes, unless it comes to gas rewards. At least with gas, I am only going to spend so much per month. However, credit cards are convenient for late night trips to get gas or an unexpected catastrophe. With such a powerful tool comes responsibilities. You are your own loan officer in a sense. You should know better than anyone how much you can borrow at one time.
If all credit cards begin instituting a fee, I would rethink my strategy on carrying one for emergencies. In this scenario, I would opt for a pre-paid card instead. They offer these at stores like Wal-Mart to use in lieu of cash. The Wal-Mart Money Card is easily re loadable and is used wherever Visa is accepted. Charging a couple of hundred as a substitute for a credit line would be a wise choice.
Closing a Card and Your FICO Score
You may think that closing a line would hurt your credit score and you would be right in certain circumstances. This exact scenario was on the Suze Orman Show, one night while I was watching TV. Suze made a great suggestion, when she told the customer what to do. This listener had no balance on the card and was only using it as a tool for credit building. Since she didn’t carry a balance, the card being closed had no effect on her FICO score. Chances are the FICO score itself will be drastically reformulated as credit cards start to phase out of existence.
A Return to Classical Banking
I’m not 100% certain that we will see an extinction of credit in the near future but the trend is obvious. The government is getting more involved with terms that banks allow. As we see the regulation intensify, we will see banks push more of the old fashioned loans. The effect on our economy will be absolutely devastating. As is the effect of these new fees being instituted. On the other hand it is a blessing in disguise, as we will be forced to live more frugally. Pretty soon frugal won’t just be a lifestyle for the minority, it will be a necessary way of life for many.
Save On Gas Without Changing Anything
I do a lot of driving. Between delivering pizzas and visiting my family across the state, there are frequent trips. I have to worry enough about keeping my clunker in working order. I shouldn’t have to worry about modifying parts of my car, to save at the pump as well. I am generally fairly lazy and don’t like fiddling with my tire pressure all the time. Fortunately, we won’t need to be a mechanic, to save a few bucks at the gas stations.
Before you do anything you should consider what gas stations you have around you and what sorts of rewards they offer. We have two major chains around here, that I am sure are in other parts of the country. For those of you who don’t have these two chains around and are still considering a gas card, I recommend the Discover Open Road Card. This will give you double cash back on your auto purchases including gas. For the avid driver, such as myself, the savings can really add up.
Comparing Rivals
As far as the larger rivals in my area, the two big ones are Super America and BP. This pair have been slamming down prices on each other in order to outmatch their competitor. This gives us a consumer advantage, that will allow the frugal people out there great savings. I have been comparing these competitor’s gas savings cards to each other and have been trying to reach a conclusion. First, we have the Super America MasterCard. This card has no annual fee and works on a point system. For each dollar you spend you get an additional 40 points added on to your Speedy Rewards card. The more points you accumulate the more prizes such as; gas discounts, free food, and car washes you can receive. I had this system down pretty good for a while. I also like the fact purchasing a $50 fuel card with my MasterCard allows me to obtain double points. It didn’t take long before I could get lots of 50 cents off coupons, I frequently used filling my tank. Utilizing all of the methods Super America offers for its consumers, I was able to save on average 5 cents off every gallon, for every fill up.
The BP card looks pretty exciting as well. I have several BP gas stations near where I work. I find myself filling up at these BP stations more and more. The BP Visa is controlled by Chase Bank. The first 60 days allow you to receive double points on the card which adds up to a whopping 10% off at the pump. After the initial 60 days you will continue saving 5% off. This is a very enticing offer. I especially like the use of incentives by Chase, to reel customers in with the initial offer.
The Winner Is
After comparing the cards I have to say BP is a hard offer to top. The two competitors offer the same 5% off per gallon, so the long term advantages are the same. However I am going to give the edge to BP. When I went through all the loopholes of using Super America’s Speedy Rewards system, I was able to edge out more than 5% on occasion. This came at a lost opportunity cost, with the amount of time wasted jumping through hoops. In the end I have to consider my time is also money.
