Amplify Cash Flow by Maximizing Credit Card Rewards – Playing the Rewards Game

With a bit of planning and discipline, credit cards can provide users with real benefits.

These steps can help you maximize the available rewards:

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1. Reward types: Before you begin your search, determine the type of reward you are looking for: cash back, travel, gift cards, etc. Once you know what you are looking for, begin your search for the best card for each type of reward.

2. Strategy: After you review available cards and select one or more for the rewards you want, develop a strategy to use your cards to get the most out of their reward terms. You may find that some cards offer different rewards for different types of purchases. For example, a card my offer 6% back for food purchases, another may offer 3% for gas, while another may offer 2% back on all purchases. Develop your “credit card portfolio” based on what is being offered. Understand the cards’ rules and be prepared to play by them.

3. Fees: You want to avoid paying any late fees, which average $34, because these fees quickly undermine any rewards you may earn. On the other hand, annual fees may be worth paying depending on the rewards being offered. For example, if you earn 6% back on purchases, then a $75 annual fee may make sense. You can always call the company and try to have the fee waived. If you signing up just for the sign-up bonus, then you will probably want to cancel the card before the fee is incurred.

4. Apply: Once you have narrowed down the cards with the best offers for you, apply for the credit cards within a two day period to minimize the number of inquiries recorded on your credit report. Multiple inquiries may damage your score.

5. Tracking: Develop a method to ensure you are using the right card for the right purchases. This can be anything from notes, to an Excel workbook to using QuickBooks.

6. Card balances: Keep your credit usage to 20% to 30% of your available credit because your credit score is affected by the amount of credit you use.

7. Payments: Pay off your balance every month. If you allow yourself to carry a balance, the interest rates you incur will diminish or wipe out any rewards you earned.

If you try any of these ideas, let me know how they worked for you!

The news may be too much, but there are financial matters to review, if you just set aside time

Many people react to the bombardment of news on the economy, the European debt issues, the presidential campaign and legislative gridlock by wanting to shut it all off! That is understandable, but not often the best solution

It is one matter to just not open investment statements; it is a wholly different matter to postpone addressing financial issues

So, while you may not want to review re-balancing of your investments to match your long-term allocation or hear about the dismal returns on bonds, there is more that you can still address

We have suggested a list at: finance health day your own financial planning focus

It is like a “mental health day” but for your personal finances.
After you look at the list, let me know what you think, what you decide to do,
and if we can help you or anyone you know accomplish what is needed now. Thank you,

Steven

Web-Based Financial Planning Tools for College Students and others

In advising a senior going to study abroad, I learned that he did not know how to obtain his own credit card, how to set up banking before and during his trip and how to manage the entire process. This was a surprise, as some many web sites seem loaded with information.

However, the bank sites tell you some but not all of what you need to do. Similarly, college sites may mention ATMs without connecting to Handbooks may suggest Parents may have no clear understanding of

No single place gives you a complete road map, let alone telling you how to connect all the resources to get your answer, so you have to turn the web into your own tools.

The first step is contacting the overseas college for local banks, currency exchanges and connecting to close by ATMs and banks. The next step is getting your own credit card or a additional cars on your parent’s account. Then you get to finding a US bank into which your parents can deposit or from which they can wire so you have funds in you bank at college.

The key is to link all the information that is on the web to create a plan for your study abroad, using the web sites to answer and obtain all you need

Cash Management and Financial Planning – use your credit card for more than just purchasing

(This is a summary of a recent post by Kiplinger’s)

You may have selected a card for points or for cash back. However, there are many other benefits to keep in mind, from on-line purchase protection to vacation and travel insurance.

Prices
: many gold and platinum cards, and now the Citi premium card, will give you up $250 back if you find an item you purchased for a lower price within 60 days.
Warranties: several cards extend the manufacturer warranty for up to a year, ending the need to pay for an extended warranty that a sales clerk tries to get you to buy at check out or a company e-mails urging you to purchase after you buy on line. AMEX, Visa Signature, gold, and platinum MasterCards do this when used for purchases. Some add a 90-day protection for loss or breakage of a laptop or digital camera. Citi Premier and some replace the item.

Theft – Coverage on the road: If your laptop is stolen from your hotel room, MasterCard will reimburse you if you used a gold or platinum card to pay for the room. Likewise, if your luggage does not arrive when you do, MasterCard will reimburse you for the cost of replacing essential items. In addition, MasterCard will cover the cost to repair or replace damaged luggage. Use your Visa Signature card to buy your airline ticket and you can be reimbursed up to $3,000 for lost or stolen luggage.

Avoid checked-baggage fees. You can redeem points for an airline ticket with your U.S. Bank FlexPerks Travel Rewards Visa Signature card and receive a $25 credit toward the checked-bag fee. Gold Delta SkyMiles cards from American Express cover the cost of checked bags (up to $50 per person round-trip) for up to nine people on the same reservation. American Express’s platinum card offers a $200 annual credit for flight-change and baggage fees.

Free admissions: Bank of America and Merrill Lynch cardholders receive free admission to 150 museums in 85 cities on the first weekend of the month. Participating institutions include New York’s Metropolitan Museum of Art, Chicago’s Art Institute, Nashville’s Country Music Hall of Fame and the National Cowboy & Western Heritage Museum, in Oklahoma City.

Concierge services. The 24-hour service (available to Visa Signature and MasterCard World Elite cardholders) can help with restaurant reservations, party planning, travel arrangements and getting tickets to sold-out events. Visa cardholders can see what is available by visiting Visa’s Web site or by becoming a fan of Visa on Facebook.

Getting back home: Chase customers can call Global Lifeline (the number is on the back of their card) and get help with hotel and airline reservations and medical assistance. For example, Chase helped a cardholder stranded in the Dominican Republic get a flight back to New England this past winter after a massive snowstorm forced flight cancellations.

We added checking these benefits to the Finance Health Day page .

Let me know if you have questions or comments.

Keeping perspective while the debt ceiling “crisis” continues ….

While Congress and the President continue the political battle on the “debt crisis,” here is more for proper perspective:

First, the yield on Treasuries if falling, not rising. If there were a serious issue about the US ability to repay, then US bonds would see high rates. That is, unlike Greece, which is in real trouble, or even Spain or Portugal, the US is still able to borrow at very favorable rates. So, the markets in general, up to this point, believe that the “crisis” has nothing to do with the economy or the strength of the US relative to other nations.

Second, the debt issues have come about after the extended bull market ended in 2008. That is, high stock values and prosperous markets yielded high tax revenues. With this, there were years of budget surpluses, even after tax cuts were enacted. But, post 2008, that has changed. The change in the economy and stock values, even with some markets approaching their 2008 high points, has led to much lower tax revenues.

Finally, from Floyd Norris in the New York Times, we have this summary:

“If rationality does prevail, the debt ceiling will be raised. For that matter, there is no good reason to have a debt ceiling other than to give politicians a chance to grandstand. The important decisions for Congress and the White House concern spending and taxing. Borrowing, or paying back debt as happened for a couple of years before the Bush tax cuts, is a result of the interplay of those decisions and the state of the economy.”
And
“There is a risk that many analysts now are making the opposite mistake. Deficits have skyrocketed in recent years for reasons that are clearly temporary, or that will be temporary if the economy recovers. In some of the debate, the short-term problems are mixed up with longer-term demographic concerns caused by the aging and retirement of the baby boomers and the rising costs of Medicare, the health insurance program for Americans over the age of 65.”

So, with fingers crossed for the prevailing of rationality soon, that is my update. Let me know if you have questions or comments