Money Blue Book

This week, CNN Money posted an article that introduced a short list of what it believed to be the top 6 credit cards. Because the selection of credit cards is somewhat subjective and dependent on individual spending habits and desired balance of rewards and interest rate perks, CNN chose to limit its selection to the top card pick for 6 basic credit categories: the best balance transfer card, the best card for big spenders, the best card for low spenders, the best card for those who travel and fly a lot, the best card to help you save for retirement, and the best card for lazy people perhaps new to credit cards.

Personally I don’t think these categories are entirely representative of what consumers tend to apply for, but then again, I usually tend to ignore perks like low interest offers (I pay my entire balance every month) and usually go for more lucrative purchase rebates. I would have added more card categories broken down into particular types of purchase perks, like grocery rewards, dining rewards, and gas rebates. However, it was interesting to see what CNN viewed as the top six in the categories they delineated.

Here are the credit cards that CNN Money selected as their top card choices in the following six categories:

1) Balance Transfer Cards – Discover More Card – While touting the benefits of Discover More as the best balance transfer card, CNN Money makes the statement that not many issuers still offer 0% interest for 15 months on balance transfers. However, that statement is not entirely accurate.

2) Big Spender Cards – Blue Cash® From American Express – The Blue Cash Card has definitely grown in popularity as the best rebate card for those who make a lot of purchases each month, particular those who spend a lot of money in the bonus purchase categories of groceries, gas, and drugs. This Amex card starts out slow but the purchase rebates surge forward when your spending reaches $6,500 for the year. At that point the card transforms into a 5% cash back card for bonus category purchases and into a 1.25% cash back card for everything else. Another nice lazy person’s perk is that rewards are automatically credited to your account so you never have to worry about redeeming. For more info, check out my detailed Blue Cash credit card review, broken down according to spending habits.

3) Low Spender Cards – Chase Freedom Card – I can’t disagree with CNN Money’s assessment of the Chase Freedom Visa Signature Card. It’s definitely the best cash back rewards card for lower spenders. You earn 5% back each month in three out of 15 purchase categories (like groceries, gas, utilities, department stores, and pet stores). The rebate reward drops to 1% once you’ve made $600 in eligible purchases a month, but when you earn $200 in rewards, Chase chips in an additional $50 rebate. As mentioned in my Chase Freedom review, that translates to a nice 3.75%/1.25% rewards rate.  (Editor’s note:  this offer is no longer available.)

4) Big Flyers Cards – Citi Premier Pass Elite – This credit card offer, along with the Starwood Card from American Express are probably the two top tier travel cards available. The Citi Premier Pass Elite is definitely one of the best, if not the best airline miles card, particularly if you are a frequent flyer, a busy business traveler, or a fan of free airline tickets. With the points you earn for using it, you can redeem for plane tickets on any airline, with no blackout dates or seating restrictions. You earn 2 reward points for special category purchases, 1 reward point for every dollar spent on other purchases, plus 1 reward point for every mile you fly. With the Premier Elite card from Citibank, you can earn extra travel points fairly quickly via bonus purchases in everyday categories like groceries, gas, and transportation.

5) Top Savers For Retirement – Fidelity Investment Rewards Visa – I found it interesting that there was a card category for the best credit card to help you save for retirement since that’s not a priority of most card users. This program’s association with Fidelity Investments definitely encourages savings. It also earns the best reward rate for everyday purchases. This card earns you 1.5% reward back on everything with no category restriction. Once you earn 5,000 worth of rewards, you get $75 deposited into your Fidelity account – an effective 1.5% cash rebate. Although it doesn’t necessarily have to be for a retirement account, saving for the future by putting it towards your Fidelity Roth IRA is a smart way to save.

6) Low Fee, No Hassle Cards – A Local Bank or Credit Union Card – For consumers who live in fear of surprise fine print surcharges, high fees, or forgetting to pay on time, CNN Money advises you to apply for credit cards belonging to your local small bank or credit union since they supposedly offer the most flexible terms. They mention Commerce Bank by name as one that allows cardholders to pay late, penalty-free up to 31 days. In my opinion, if the cardholder has recurring issues with paying on time, then perhaps he or she should stick with using cash or debit cards. Credit cards are not advisable for those who practice risky payment habits or those who don’t like to bother with reading contractual fine print.

If you really want the best low interest credit card though, I would suggest something like the Capital One Platinum Prestige card. The card is currently offering a low 11.90% APR on purchases and balance transfers (no fee) that won’t increase simply because you pay late once or go over your credit limit.

One other mentionable low interest card offer is the Citi Platinum Select, which currently offers 0% intro APR on balance transfers for 18 months, with a 11.99-19.99% variable rate thereafter*. This APR will vary with the market based on the Prime Rate. Both the rate and duration of this offer will be based on your creditworthiness* and your credit score.

It’s that time of the year again and it’s looming large. April 15, tax day – the day we take our hard earned money and pay our annual emperor’s tribute to Uncle Sam and the United States government. For most working people, April 15 day is the deadline for filing our tax returns to claim the tax refunds that were withheld by the Internal Revenue Service (IRS) in excess for most of the year. This year is extra special since there’s an extra bonus and incentive twist waiting for us. This year we have the 2008 economic stimulus stimulus rebate qualification to contend with.

The IRS has already stated that taxpayers who wish to receive their tax rebate payment in timely accordance with the official tax rebate payment schedule must file by April 15, 2008. Currently, the economic stimulus rebate will be issued according to the last two digits of the primary tax filer’s Social Security Number. People who chose to receive their tax refunds via direct deposit will enjoy speedy priority and will be among the first to receive the payments starting May 2 and lasting until May 16. For those of you who chose the slower paper check option, your stimulus payment check won’t get to you until the direct deposit crowd have gotten theirs. Paper checks won’t be sent out until May 16, and lasting all the way into July 11.

How Do I Request An Extension To File My Federal Income Tax Return?

If for whatever reason you cannot file your 2007 return by the due date, you may be able to get an automatic 6 month extension of time to file. The official directions to filing for a tax return extension and information about related late filing penalties are located on the IRS website. Essentially, you must file Form 4868 Application For Automatic Extension Of Time To File U.S. Income Tax Return by the tax filing due date, usually April 15. A granted extension will allow you to file your income tax return by the later date of October 15, 2008. Note that special rules may apply if you are living outside the United States, or out of the country when the filing extension expires, or if you are serving in a combat zone such as Iraq or Afghanistan. Be sure to file on time or request a proper time extension. If you don’t, the IRS will slap interest and penalties on your unpaid tax liability.

However, you must be aware that any grant of extension of time to file your return does not grant you any extension of time to pay your tax liability. This means even if you are permitted to file past April 15, 2008, you must still pay your estimated tax liability by that date. Those who owe taxes must make reasonable payment when they file the extension either by mailing a check or by making an electronic money transfer. If you don’t make payment by April 15, beware the mighty wrath of the IRS. If you do not submit payment for at least 90% of your total tax bill, factoring all prior tax withholdings, estimated payments, and additional payments, the IRS will hit you with an interest and penalty stick – and it’s a big one. You will be charged late payment interest and late payment penalties for each month the unpaid tax liability remains outstanding, up to a whopping 25% penalty of the total unpaid tax liability!

For those of you who reasonably anticipate a tax refund, you don’t have to worry about penalties, although by dragging it out you are essentially giving the IRS an interest free loan.

When Will Those Who Request An Income Tax Filing Extension Receive Their Tax Rebate Checks?

Unlike most of the usual governmental knuckle and foot dragging we usually see, the IRS is actually under substantial pressure and governmental poking to get these tax rebate direct deposits and payment checks out as soon as possible. The whole point of the rebate is to get them into the hands of Americans so we can start pumping some fast cash into our battered economy that’s already showing sickly signs of a recession (yes I think we are already in one). As such, even if you were to request a filing extension, I don’t anticipate the IRS waiting too long to send you your economic stimulus payment.

However, as tax rebate checks will only be sent beginning in May to taxpayers who timely filed their income tax returns, filing for an extension will inevitably delay your rebate payment as the IRS will not issue rebate checks for a taxpayer unless and until a 2007 federal income tax return has been filed. The IRS has indicated that people who file income tax returns after April 15 and receive a refund can expect to receive their economic stimulus payments in about two weeks after receiving their tax refunds, but not before the date they would have received their payment if the return had been processed by April 15, 2008. Despite the IRS’ somewhat ambiguity on the timetable of tax rebates for extension filers, I think taking into consideration the urgency of these rebates, those who file their tax returns as post-April 15 extensions should expect to receive their tax rebates within a month after their returns have been filed.

Remember, if you want to receive your economic stimulus rebate payment before the end of the year, you must file your tax return by the 6 month extension deadline of Oct. 15, 2008 at the very latest. If you delay and file your tax return after the extension deadline, you may need to rely on the tax rebate amendment option when you file your 2008 income tax form on April 15, 2009.

The scenario I am about to paint is very real. Let’s say you are planning for a dream vacation. Or maybe it’s your honeymoon and you are eager to fly somewhere romantic and spend a week at some remote tropical destination. Or maybe you are splurging for an exciting few days on a luxury cruise ship. Either way, rather than booking your travel reservations through a traditional travel agent, you decide to do it yourself through an online discount travel broker such as Expedia, Travelocity, or Orbitz. You don’t like to use credit cards so you decide to pay your reservations using a debit card or even by check. A month passes and now it’s only a week before your scheduled trip. Suddenly you get a phone call or an email advising you that your travel plans have been halted indefinitely because the travel agency that scheduled your itinerary has declared bankruptcy or gone out of business. Maybe it’s not the travel agent but the airline or cruise ship company that has gone bankrupt. The chances of that happening may be slight, but the consequences can be financially disastrous. That’s why it’s important to protect your upfront reservation money by using credit card payment. Under the Fair Credit Billing Act (FCBA), credit card consumers who purchase with a Visa, Mastercard, or American Express card are afforded substantially more purchase protections then those who make payment using cash, money orders, or debit cards. These days, airline credit cards also offer a wide variety of free miles and travel rewards to encourage their use.

How To Get A Refund When Your Airline Or Travel Agency Goes Bankrupt

A few days ago, I read in the news that Aloha Airlines had filed for Chapter 11 bankruptcy protection. Shortly after that, low cost ATA airlines joined the bankruptcy bench as well. Around the same time, I checked my Facebook account and saw that one of my friends was freaking out about the recent ATA bankruptcy filing. Apparently she had purchased several tickets for a trip to Hawaii on ATA airlines and had received e-mail word from the bankrupt company that all flights were now being halted and canceled with no refunds being honored. The total amount in danger was in excess of a $1,000. Thankfully I later found out she had made payment using her trusty credit card instead of using her debit card like she normally did. Because she paid by credit, she was able to dispute the charge and fully recover her money through the credit company by calling on the charge back provision for services un-rendered. Thousands of other customers may not be so lucky and may ultimately lose their money. If my friend had purchased using cash or debit, she would have fallen into a long uncertain line of unsecured creditors hoping for a handout from the bankruptcy court. Even those who had purchased additional travel insurance would have been unable to rely on it as the vast majority of travel and flight insurance policies do not cover air carrier insolvency.

Assuming you made the right decision by purchasing your tickets with a credit card, the minute that you hear news of the demise of your airline or travel agency, you should immediately dispute your credit card charge. By doing so, you have a much higher chance of getting your money back. Don’t pin your hopes on a favorable resolution by calling your travel agent or contacting the airline company directly since they will probably be swamped with angry calls at that time. You are likely to encounter nothing but a newly installed automated refund phone line or website designed to deflect inquiries. Sometimes airlines will offer the ability to transfer your flight to a bigger codeshare partner airline, but that is not always the case. Most online discount travel sites such as Hotwire or Priceline are unlikely to issue refunds in the event your airline goes bankrupt.

To dispute a credit charge, contact your credit card issuer, whether it be Citibank, Chase, or American Express, and request a charge back pursuant to the Fair Credit Billing Act. Under the Act, open-end credit accounts such as credit cards are governed by a strict set of federally mandated dispute settlement procedures. Disputes regarding fraudulent credit card charges, unexplained transactions, and charges for goods and services you didn’t accept or weren’t delivered as agreed are all covered. Here are the steps you will need to take to guarantee your credit card purchase rights:

1. Write to the credit card issuer at the address given for billing inquiries or bill disputes (not the address for sending payment), and be sure to state your name, card account number, and address.
2. State that your airline or travel agency has declared bankruptcy and has ceased operations, that you will not receive the services that you charged to your account, and that you are requesting a billing error credit along with a charge back while the credit company is investigating the matter.
3. Enclose a photocopy of the ticket, itinerary or receipt if possible, and indicate the price of the transportation and the date it was purchased. Remember to keep the original copies. If the transportation was partially used, identify the used and unused segments.
4. You must send the dispute letter by U.S. postal service, preferably by certified mail, with a tracking number and return receipt requested.
5. You must also submit your billing dispute letter so that it reaches your credit card company within 60 days after the first bill containing the error was mailed to you.

Don’t Think That It Can’t Happen To You

The airline travel industry has been rocked by soaring jet fuel prices lately and lingering questions persist about the ability of certain airlines to remain operational. As such, airline companies have struggled to keep a lid on costs while still keeping airline ticket prices competitive. However, there are simply too many airlines out there competing for too few passengers, and the intense competition has caused some companies to drop out or engage in mergers. Even the big airlines are not immune. In the last few years, most of the major airlines have filed for Chapter 11 bankruptcy protection at some point or another, including U.S. Airways, United Airlines, Air Canada, Northwest Airlines, and Delta Airlines.

When a company files for Chapter 11 bankruptcy, passengers and customers who aren’t protected by third party payment protection lose everything. During a Chapter 11, the airline corporation continues to run its business operation as normal while it undergoes debt and contractual restructuring. However, during this time, it is not bound or required to honor prior purchase obligations under the grant of an automatic stay that prevents creditors from collecting unpaid debts while the bankruptcy protection is in force.

At the end of the restructuring period when the troubled company finally emerges from bankruptcy, which may take months or even years, the bankruptcy court usually gives the company a fresh start by granting a partial or full relief from all outstanding debts. If you were one of those unlucky few who purchased tickets using an unprotected method of payment, then you are out of luck and will likely end up with nothing. Consumers usually fall into the category of unsecured creditors. Under bankruptcy law, unsecured creditors have the lowest priority in terms of prevailing in their claims against the residual assets of a bankrupt company. This is one of the many reasons why I am such a staunch proponent of the use of reward credit cards by responsible consumers.

A quick visit to a few internet forums and online review sites and it’s evident that there is a common shared consensus when it comes to truck rental experiences from the U-Haul moving company – they’re all negative. You’re be hard pressed to find a company with more pissed off customers that enjoy griping about the company than U-Haul (except maybe Comcast). It’s rather hard to come to the defense of a company that has such a consistent history of delivering rickety equipment and bad customer service. Their cranky trucks are woefully under-maintained, driven well into old age, and their rental reservation policies are terribly unreliable. Even the media has targeted the company, accusing it of running an aging fleet of extremely high mileage and ill maintained trucks.

There’s only a few positive U-Haul attributes I can point to. Their moving truck rental fees and prices are definitely one of the cheapest around, if not the most inexpensive choice. Also, you don’t need to worry about being extra gentle or careful when using their vehicles. The dilapidated and run down condition of their trucks makes it easy for a beginner truck driver to break them in. You don’t have to worry about scratching up the vehicle’s paint or putting a stray dent in the fender. Even if you were to knock off a rear tail light by accident, who would notice? I’m joking of course – however, every U-Haul truck I’ve ever driven has always been covered with widespread dents and scratches, and equipped with barely working headlights and questionable dashboard electronics.

My U-Haul Do-It-Yourself Rental and Truck Driving Experiences

While I’ve never actually ended up upside down or in a traffic accident while driving a U-Haul truck, I’ve had several close calls and near missed due to faulty steering controls. Despite the mechanical troubles, what got me started with U-Haul originally was simply – affordability. Since college, I’ve moved frequently – more than six times. As a cash strapped student, I didn’t have much money to spend on moving so I had to do it frugally – thus most of my moving operations have been do-it-yourself jobs involving a beat up U-Haul and a small team of cheap labor buddies.

While I had other truck rental options such as Penske or Budget at my disposal, it’s hard to deny U-Haul’s lower prices. For most people, U-Haul is the only truck renting game in town as the company seems to have franchised locations everywhere. They also don’t seem particularly picky about maintaining uniform quality control or appearance among its franchisees. I’ve rented from U-Haul locations that looked more like abandoned gas stations or junkyard lots than a well oiled business establishment. They say you can’t tell a book by its cover – but with U-Haul you can. The appearance of their franchised stores and uncaring staff speak volumes.

The first time I ever made a reservation for a U-Haul truck, I showed up with my reservation paper in hand only to discover that the U-Haul franchisee no longer had my particular truck size on reserve. All they had left was a vehicle one size larger than I had requested. What was the point of making a reservation if they had no intention of honoring it I demanded? They offered to give me the larger rental truck as consolation. Rather than fight it out, I took it. For many, this might have been a great bonus, except in my case, I purposely ordered a smaller U-Haul size model because I did not have that much stuff to move. Ultimately, most of the extra space went to waste and I ended up paying more money for gas. U-Haul trucks are terrible gas guzzlers – the bigger they are, the more they consume. I literally could see the oil gauge creep slowly towards empty whenever I drove.

However, my most harrowing U-Haul renting experience happened during my busy weekend move from Washington D.C. to Baltimore for graduate school. The U-Haul truck I received was an ancient and disgusting mess. Half eaten potato chip packets, along with empty soda and water bottles littered the floor. The seats were dotted with cigarette burns and covered with mysterious grease stains. Not only that, the exterior shell of the vehicle was dented and scratched like it had been through an Iraqi war convoy. The radio and air condition were completely busted, and the side mirrors wobbled precariously and uncontrollably. The vehicle was simply a breakdown or blown tire waiting to happen. The worst part didn’t hit until I pulled the clanking U-Haul contraption off the lot. Immediately, I realized the power steering was shot. Without power steering I had to manually use both arms and hands to forcibly guide the steering wheel towards where I wanted to go. It was like trying to steer a bumper car or a go kart – not an easy task. Navigating the narrow and tight turns of local downtown streets was next to impossible but somehow I managed to bring the vehicle there and back in one piece, but not without a lot of sweat. I complained angrily to the manager afterwards but got nothing back except for a simple – “yeah we’ll have to look into it and fix that.”

The Only Reason Why I’ve Stuck With U-Haul – They’re Cheap

The greatest and perhaps the saddest reason why I’ve stuck with U-Haul over the years despite my experiences is because they help me save a lot of money on moving costs. I’ve compared their prices to that offered by their competitors such as Penske, Budget, Ryder, and Hertz, but U-Haul is still the more affordable choice. In the world of do-it-yourself truck rentals, U-haul is still the K-Mart choice. Even though the company sucks, if you want the cheapest of the cheap and don’t mind toughing it out, then U-Haul is your obvious death trap, I mean – low priced winner. Now that I’m working and no longer a student though, I can thankfully afford to go elsewhere.