I am still amazed by the drastic change in the content of my wallet when I first hit mainland American soil in 2007. All of a sudden, the majority of the paper bills seemed to evaporate. And this was not a big deal either – I found myself not touching the remaining few for weeks at times. I have a habit of ordering my paper bills in the order of cleanness so I always get rid of the dirty ones first. My paper bills remained fresh for a long time. But this doesn’t mean I became poorer – the whole stack of paper was replaced by my only debit card at the time. I would have carried a credit card if I had owned one.
My first blog post covers the benefits or credit cards that are often ignored. I have also covered several features of credit cards in a variety of posts. I’ve always wanted to consolidate all these features in one post, and what better way is there than performing a hands-on analysis on a real credit card? Today’s post features Bank of America’s flagship BankAmericard Cash Rewards.
Traveling is one of my great hobbies. Each time I go somewhere far away from home, I get new inspirations and ideas, such as opening my first credit card and starting this blog. And I love air travels; the Wright brothers are among my favorite heroes, and it so happens that Seattle is the host of the famed Museum of Flight. It also helps that I have friends on the other side of the continent, and also on the other side of the Pacific Ocean. I don’t need excuses to travel, really. And I hope that you share with me my passion for flying.
Because if you do, you will find the information I present in this post very helpful. I am making this post the shortest I’ve ever written since I want to focus your attention on the 2 simple rules of flight booking: the Rule of 21, and the Rule of 34. Continue reading Flight booking: Rule of 21 and Rule of 34
There are so many myths surrounding the issue of credit card closing I thought it’d be helpful to dedicate a whole blog post to this topic.
Why should you close a credit card? Well, there are several reasons:
As I have explained in previous posts, credit cards have a large variety of benefits over debit cards and other methods of payments, such as credit profile building, warranty extension, delayed payment, and emergency fund. Apart from APR’s, credit cards are more or less the same with respect to most benefits. And of course, you should never carry a balance because a low credit card APR is still a ridiculously high interest rate. How, then, do you decide what credit cards to obtain?
Well, how about rewards, the most prominent feature of credit cards that are advertised these days on TV and newspapers, as well as brick-and-mortar banking locations? 1% cash back on every purchase. 5 points per dollar spent on honey. 2 miles per dollar spent on US Airways flights. I’m sure you’re familiar with these commercials already. What’s confusing about these reward systems is that they use different types of currencies which are sometimes hard to evaluate. I will attempt to decipher the most common credit card currency types for you below. Continue reading Credit card rewards: when miles, points, and cashback are not created equal
On Tuesday, February the 5th, I finally opened an investment account at Scottrade, after missing out on a lot of good deals from the stock market recovery from late 2011 through 2012. My 401(k) plan with my employer consists of mostly stock rather than fixed income, and sure enough my annual return in 2012 was almost 20%. But I was particularly confident about the revival of Bank of America when its stock price was around $5 a share, and even now I still believe I would have bought a lot of their shares and would have benefited from the 100% return had I known how to invest and had the determination to step into the investment world. Regrets are my life enemy, and to end this agony, I just had to open an investment account.
The first time I spent an extended stay in New York, I was amazed by a lot of things. In the mind of a recent college graduate with a bachelors’ degree in economics, New York was a finance kingdom, a prosperous land for financial institutions. This impression was enhanced by the presence of millions of banks and offices in tiny, packed Manhattan. It didn’t take long for me to realize though, that there is one bank that seems to have offices and ATM’s on every street corner? When I hang out with friends in New York and come out of a bar non-sober and see everything as patches of color like an impressionist painting, the most prominent color I observe is blue. It is the same kind of blue on emergency posts that I was used to at Colgate. It is the blue of Chase.
I have two principles in credit card management, one “hard” and one “soft.” The hard principle, never to be violated under any circumstances, is:
“Never miss a payment”
Failing to follow the hard principle would damage my credit profile to an unimaginable extent and therefore is not allowed to happen.
The soft principle goes:
“Avoid carrying a balance except under special circumstances”
The soft principle, serves the purpose of avoiding wasting money on interest payments. From time to time there will be a credit card promotion with an introductory 0% period offer, and in such a situation carrying a balance until the end of the promotional period doesn’t do any harm unless your balance is so high that it implies bankruptcy risk.
Anyhoo, you should never have to pay credit card interest, for the simple reason that it is too expensive. The lowest credit card annual interest rate, or APR (Annual Percentage Rate), that I have seen, is 9.99%. The highest I’ve seen? Around 30%. And worse yet, these rates do not reflect the actual interest you get charged. This blog post explains why, by showing you the math used to compute the APR.
If you have filled out an application for a credit card, you’d you know that one of the mandatory fields is ‘annual income’. Other than your credit profile, this is the single most important factor that creditors use to determine your eligibility for credit. But what if you’re going to school and not making any money? You still have money from your bank accounts or from family, but you don’t have a regular income. No worries: financial institutions will take care of that for you. Many creditors offer a student version of their cards, which is just about as good as the regular version. Continue reading Credit cards for credit builders: what are your options? – Part 4