Money Blue Book

J.D. Roth From Get Rich Slowly posted an entry today on his blog in which he drew attention to those popular Visa ads that promote the use of credit cards as the new trendy and speedy way to make everyday purchases. In case you’ve been living in a cave with your fingers stuck in your ears, or you just don’t watch much television, here’s the commercial we are talking about:

The message is pretty self evident – Using credit cards is fun, fast, and everyone is doing it, so don’t get left out. Only those who aren’t hip or “with it” use cash. The spinning shoppers in the commercial represent the gears of everyday commerce that grinds to a halt when someone like the lone, meekly man at the end attempts to use cash to make his purchase. The gesture causes everyone to drop everything in their hands in stunned shock – food, drinks, and all.

Using Credit and Debit Cards Is Much More Efficient

J.D. seems to really dislike the commercial as he sees it as a misguided attempted to demonize the usage of cash. I personally like the commercial and must disagree with his views on this one. I find that credit cards are almost always exponentially faster than using cash. Every time I go grocery shopping, I always dread following after someone in the checkout line who plans on using cash or even worse, checks. Cash is cumbersome and there is always the inevitable pause as the sales clerk and customer fumble around for loose change, to the occasional rolling eyes of everyone else.

Credit card purchases do require customers to pause momentarily to swipe their card and sign the receipt, but each transaction is otherwise seamlessly efficient. With the growing trend towards phasing out the need to sign the receipt for certain types of credit card purchases such as for fast food, the usage of cash will continue to wane.

Cash is Old School and Will Eventually Be Replaced By New Advances In Card Payment Technology

There will always be those who insist on sticking by their old habits and familiar ways of doing things. I’m sure there are some who still use paper book maps, rather than sites like MapQuest, but I think new technology should be embraced. They’re designed to make our lives easier.

Not only that, cash is inherently very dirty to handle and you never know how many strange people have handled the bills and coins you are touching. Cash and checks also don’t provide any of the pluses that card payments provide. Many credit cards today offer great ways to earn cash back rewards for making everyday purchases, and ways to earn interest income from no fee 0% balance transfer offers. The money and rewards you can earn really do add up over time and should be a part of everyone’s financial planning.

Of course, not everyone can handle the responsibility of using credit cards. For those who have difficulty paying off their credit balance in full each month, there is always the option of using debit cards, which automatically withdrawals money from your checking account rather than using money on credit. Some companies like Citibank even offer reward points for using debit cards in the same you way you’d earn points for using credit. Either way, I just think card technology will only get better and quicker. Someday we might even have scanner technology that will allow us to pay without even having to take the card out of our wallet or purse!

I’m a big fan of Citibank and I really like the variety of financial products they offer. I like the fact that they have a national banking presence and that’s one of the reasons why I have my primary checking and savings account with them. I especially like their credit cards since many of them provide unique credit card offers not available with any other company. Citibank also has a nice website that offers many convenient features for its customers. One of the nice functions is the option to request an automatic credit limit increase online without the need for a hard credit pull. When you request automatic limit increase through your Citibank online account, only a soft inquiry is made of your credit report.

This a wonderful feature since not all credit card companies offer this automatically. Other issuers will increase your limit upon request, but the manual request usually involves a hard credit inquiry.

Why Would I Want to Increase My Credit Limit?

The most obvious reason you would want to increase your credit limit is to enhance your ability to make more monthly purchases or to purchase more expensive items using your card. If you started out with a low credit limit and find yourself frequently nearing or reaching your maximum limit, a credit increase would likely be beneficial. Another reason would be to improve your FICO credit score by lowering your overall credit utilization ratio. Credit utilization ratio is a major component used to compute your FICO credit score, and you can help to lower that ratio by increasing your maximum credit limit.

How Do I Do It?

Requesting an automatic credit limit increase through Citibank is very easy. Citibank routinely runs soft credit inquiries on your credit report that has no negative effect on your credit score. They run soft credit checks every few months to determine if you may be pre-approved for incremental credit limit increases. However, you need to formally request the increase to put the pre-approved raise into effect. Here is how you do it:

Log into your Citi credit card account and select the appropriate Citi card (if you have more than one Citi card like I do). Next, look at the horizontal menu bar. Under Manage My Account, select Credit Line Increase Request. At this point, either one of two things will be displayed on your screen. Either the system will congratulate you and automatically bump up your credit limit, or the system will request that you fill out additional financial information for a manual review. If you get the manual review option, it either means you have a shaky credit score and are unable to pre-approve, or it means that you requested an increase too recently ago.

If you are automatically approved, your credit score won’t be affected and you’ll get the automatic increase. But with the manual review, you’ll need to state your income and bank information so Citibank can run a manual credit check to see if you qualify for a limit increase. Unfortunately, with the manual review, they will make a hard credit check . Of course, you can always decline and nothing will happen.

I was listening to the radio this morning and came upon an interesting discussion about the upcoming U.S. elections. The question proposed was this – If you could give up your right to ever vote again in an election for a million dollars-tax free, would you do it?

The seemingly innocuous question brought up certain fascinating issues. Just how much do we value our constitutionally protected right to choose our own leaders? With the U.S. election coming next November in 2008, I have already sort of decided who I plan to cast my vote for to become the next president of the United States. But would I be willing to give up that right forever for a million dollars?

The radio show fielded numerous answers from callers and the overwhelming response was an emphatic – yes. The majority of callers indicated they would be willing to give up their right to vote for the money. About 70 percent said they would take the money and only 30 percent refused to give up their voting rights.

Just Show Me The Money

As an American, as much as I’d love to think or say that I cherish and value my right to vote so much that no amount of money could ever make me give up that right, I have to say that the reality is that we live in a “show me the money” society. I think, a million dollars would probably do more for my own personal life than the results of any election ever could. With a million dollars, I could buy a house, set myself up for life, and support my family and loved ones on a real and inescapably personal level. I could pay off my student loans, credit card debts, and invest the remaining amount for my future retirement.

Even if I were concerned that by giving up my right to vote that I would be permanently giving up my right to ever have my opinions heard, don’t forget that with a million dollars, I could easily buy television and radio airtime and have my views projected into the public forum more powerfully than my single vote ever could. My single vote is only one of many, but money is money. With money, I could buy political sway and affect greater change in society than I could with a single lonesome vote. But I do respect and understand those who feel they could never part with their right to vote for any amount of monetary gain.

Just for the record, I have voted in nearly every single significant election since I was eligible to do so when I hit 18. But frankly I don’t recall anytime in my life when a single vote truly made a difference in any election. The last time that happened probably was in high school.

Would anyone really forfeit a million dollars tax-free just to keep their right to vote? For real? Does the ultimate result of the election really impact how you live your day to day life on such a significant level for you to give up the possibly of living a more financially secure life? Not including those who are already very wealthy and don’t need the additional money anymore, I just find it hard to believe there really are people like that anymore.

It’s a Sign of the Times

Unfortunately, it’s also probably an indicator that we have turned into a more selfish and cynical society. I think many people, including myself, often feel that our vote really doesn’t make much of a difference anymore. Some feel that the media and special interest groups ultimately sway the course of elections anyway.

But I am curious to hear what others would do. Would you be willing to forfeit your vote permanently for the remainder of your life for a million tax-free dollars right now?

Side Note: The funniest call came from a woman who responded that as long as she was married she would probably take the money because her husband and her vote always canceled each other out every election anyway. But she added that if she were single, she might consider holding onto her vote and forsake the money because she is so opinionated and would want her opinion heard!

I live in the suburbs and commute into Washington D.C. for work every day. I actually have it comparatively easy since I don’t have to commute through the notoriously jammed packed Beltway every morning. I tried driving to work for a while, but the frustration of dealing with daily rush hour traffic finally broke me down. With gas prices soaring and with more cars piling onto the roads than the day before, it just didn’t make sense for me to commute by car anymore. So that’s why I decided a few years ago to commute solely by subway, and I’ve never looked back since.

In the D.C. area we have an extensively used subway system, called Metro. Many commuters, particularly federal government workers who live in the Maryland and North Virginia suburbs commute into D.C. using the Metrorail system. Over the years I’ve learned a few cost and time saving tips for commuting to work via subway:

1) Know the weekday times for regular and reduced fare. The rules may be different in other major cities like New York, Philadelphia, or Boston, but the D.C. Metro charges a reduced fare when you ride during off peak times. The D.C. Metro regular fare is in effect on weekdays from opening to 9:30 a.m., 3:00-7:00 p.m., and 2 a.m. to closing). All other times are reduced fares.

The fare that you are charged depends on the time that you cross the gate. I always keep the peak hour times in my mind when I plan my commute schedule. The one I am most cognizant about is 7:00 p.m., since this is when the evening off peak fare goes into effect.

I usually get off work a few minutes before 7:00 p.m. Because reduced fare starts at 7:00 p.m. sharp, if I arrive at the gate a bit early, I always wait for the clock to turn 7:00 p.m. before I cross the ticket gate. After all, why not wait a few more minutes and enjoy the reduced price? Sometimes I get there at 6:56 p.m. only to see people rushing past me through the gate and be charged the higher rate. If they waited a few more minuets, they could easily save upwards of $1.50. This may not seem like much but it does add up, particularly if you commute every weekday of the year.

2) Know the subway map and alternative train routes to get to work and home. I’m not sure how reliable the subway systems are in other cities like New York, but in D.C., our subway trains recently have had the tendency to break down and spark mini fires. When that happens, commuter rail traffic grinds to a halt while workers clear the smoke and patch up the malfunction. This type of stoppage causes major delays and forces people to find alternate paths home. While some resort to paying for expensive taxi rides costing in excess of $30, I prefer to get to the surface and walk to an alternate station to bypass the stoppage. The alternative route may require a few extra train transfers, but it beats waiting a few hours for the delay to clear.

3) Buy your subway pass denomination in bulk and pocket the savings. In D.C. we use SmarTrip magnetic cards to store our subway funds. Each card can hold upwards of $300 at a time. I usually buy these cards on sites like eBay where I can acquire them at a substantial discount (search for SmarTrip deals). I usually can get a fully loaded $300 card for only $200. Generally, the higher the denomination you’re willing to buy, the greater the savings you’ll get. Don’t expect to get much of a deal if you are only buying something like a $50 metro card.