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Author: Transploration CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308858  
Subject: Poll: Which reward card fits best? Date: 10/20/2005 10:15 PM
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Airline (miles) card
Hotel card
Cash back/rebate card
Mortgage rebate card

Click here to see results so far.

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Author: Fuskie Big funky green star, 20000 posts Top Favorite Fools Old School Fool Ticker Guide SC1 Red Winner of the 2010 Rule Breakers Challenge Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 212936 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/21/2005 1:19 AM
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None of the above. My lifestyle is to not chase rewards.

Fuskie
Who's criteria for credit cards places a higher priority on lower rates than rewards redeemed at 1/100th in value...

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Author: DeltaOne81 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 212938 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/21/2005 1:42 AM
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Who's criteria for credit cards places a higher priority on lower rates than rewards redeemed at 1/100th in value...

What about those of us who never carry a balance? :)

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Author: 2gifts Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 212943 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/21/2005 8:15 AM
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Who's criteria for credit cards places a higher priority on lower rates than rewards redeemed at 1/100th in value...


Interest rate is nowhere on my priority list when getting a credit card. I want a card that has no annual fee, pays me the highest rebate, preferably with a high no limit, and has good service, in that order.

I cannot tell you what the interest rates are on any of my cards as it's just not important to me. We use our cards to charge virtually everything, and then pay off the entire balance each month. It's been like this for at least 25 years, and I see no reason to change my habits now.

As long as I have had a credit card, I've never paid any interest, and I know there are lots of others out there just like me.

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Author: PanemetCircenses Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 212948 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/21/2005 10:59 AM
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Who's criteria for credit cards places a higher priority on lower rates than rewards redeemed at 1/100th in value...

What does it matter if you don't pay interest?

--B+C, has received more than $1000 more in Reawrds off CC's in the last several years than he has paid in interest

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Author: PanemetCircenses Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 212949 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/21/2005 10:59 AM
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What about those of us who never carry a balance? :)

Beware, those tricksy CC Companies will force you to. Somehow. I guess.

In any case, it's their fault.

--B+C

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Author: bleplatt Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 212954 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/21/2005 12:11 PM
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Beware, those tricksy CC Companies will force you to. Somehow. I guess.


is anyone getting those "victim" commercials for debt reduction?: "Do you have credit card debt? A mortgage? If so, you might be a victim."

ARGHHHHHHHHHHH.

Ultimately, it's for debt reducation by LBYMs, but that whole victim thing makes me batty.

I really need to stop talking to the TV and radio.

b

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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 212959 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/21/2005 1:04 PM
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A have both cash and airline miles cards. The airline miles card has an annual fee, but even if it is unused the annual $50 companion ticket is worth more than the annual fee.

The first time I had the new rewards cards, it was strange to feel confused as to which credit card to use. Before I would randomly chose a credit card.

Debra

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Author: IndecisiveFool Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 212964 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/21/2005 1:54 PM
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What does it matter if you don't pay interest?

--B+C, has received more than $1000 more in Reawrds off CC's in the last several years than he has paid in interest


I was happy to see my $300 reward check show up in my mail last month.

IF



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Author: PanemetCircenses Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 212965 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/21/2005 2:07 PM
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I was happy to see my $300 reward check show up in my mail last month.

You do realize that because some study showed that some people spend more money when using CC's than when using cash, that that means that, inevitably, you, in particular, do so as well, so that you in particular, must have wasted at least that much using CC's.

--B+C, who does extra loads of laundry just because he can pay for it by CC at the laundromat


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Author: IndecisiveFool Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 212969 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/21/2005 2:22 PM
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--B+C, who does extra loads of laundry just because he can pay for it by CC at the laundromat


I bet you have the cleanest clothes in the neighborhood.

IF


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Author: PanemetCircenses Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 212970 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/21/2005 2:28 PM
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I bet you have the cleanest clothes in the neighborhood.

Well, I do have to keep up with all the other people who do the same thing because they pay with their credit card at the laundromat also.

--B+C

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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 212984 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/21/2005 4:16 PM
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You do realize that because some study showed that some people spend more money when using CC's than when using cash, that that means that, inevitably, you, in particular, do so as well, so that you in particular, must have wasted at least that much using CC's.

Some will spend more on a credit card because it isn't "real" money.

The other problem of the studies is that they are biased. I often pay for small purchases with cash. Depending on how much cash I have with me determines when I cross the limit to a debit/credit card. It is not a question of I can spend $20 instead of $10 because I am going to use a credit card, but I am here and not going to waste my time returning because I do not have enough cash with me to buy what I am there to buy. The self selecting result is that I use a credit/debit card when I intend to spend more and not that I spent more because I will use a credit/debit card.

Debra


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Author: dove29 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213002 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/22/2005 12:34 AM
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I go for the low interest rate. I'm not interested in stuff that will give me reasons to use the card a lot.

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Author: concordiadiscors Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213006 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/22/2005 8:22 AM
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Cash back and related, definitely. I don't buy what I don't need, never carry a balance, and since my current lifestyle involves a lot of driving and therefore frequent gasoline purchases, I sure as hell don't mind getting 5% on those expenditures. DH and I use, in the main, 2 card, one which gives 1%/5% in cash and one which does the equivalent in points, which we cash in regularly for Home Depot cards, since we're doing a lot of home improvement.

For those who are carrying debt, or fear that they might have to, a lower interest rate in preference to rewards makes sense. 5 years ago when I started paying off my accumulated grad school credit card debt, I was all about the low-interest balance transfers. But I haven't carried a balance for over 4 years, and really, those rewards I've been getting since kinda help fill the aching void in my heart where the credit card debt used to be. ;)


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Author: lanshark Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213029 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/22/2005 12:23 PM
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I'll make a comment about the "mortgage" rebate card. As far as useability, one might as well get a cash-back card, and then just earmark the cash to go towards the mortgage as a principal reduction payment.

Most of the mortgage rebate cards I've seen have offered rebates in the neighborhood of 1%. Heck, you can earn 1% from many cards that also offer special incentives such as 3-5% on gas, or groceries, or restaurants, etc.

- Lan

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Author: xraymd Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213077 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/23/2005 12:45 PM
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I'll make a comment about the "mortgage" rebate card. As far as useability, one might as well get a cash-back card, and then just earmark the cash to go towards the mortgage as a principal reduction payment.

Most of the mortgage rebate cards I've seen have offered rebates in the neighborhood of 1%. Heck, you can earn 1% from many cards that also offer special incentives such as 3-5% on gas, or groceries, or restaurants, etc.


Greetings, Lan, I MUST agree with you - I was thinking of converting an airmiles card to a mortgage rebate card BUT your logic is inescapable. I might as well go for the fattest return on money I would spend anyway rather than settle for a flat 1%.

That said, at the risk of repetition, please let me ask the board for suggestions on which cards have the tip-top highest flat-rate + incentive rate return on purchases. I will NEVER carry a balance (so that is off the table) and I am immune to spending on the card just because it is a rebate-earning device. It would be interesting to know if there are any such cards that do NOT have a maximum rebate that can be earned in a year (the Citibank mortgage rebate card has no maximum). But I am not too proud to hit the maximum on one card then switch to another, IF that's what my budgeted spending pattern results in. It would be worth knowing if anyone has done a mathematical analysis of any crossover points between earning a tiered rebate with boosts from special incentives (if I would be buying in those categories)- such as Discover offers - versus a flat rebate without special incentives - such as Citibank offers. So please remind me of good rebate-earning strategies. I would earmark the rebate towards more rapid mortgage retirement. Thanks!

xraymd



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Author: lanshark Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213089 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/24/2005 9:29 AM
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xraymd,

I compared the Citibank Dividend MC vs. the Amex Blue Cash/Amex Platinum Cash Rebate. With the revised rewards, the Amex Blue Cash now trumps the Platinum Cash Rebate. Basically, I think it was $18k was the "breakeven" point where the Amex Blue Cash earned the same reward and from that point on you saw a profit with the Blue Cash.

Ah, what about the wrinkle about 5% rewards? Use the Citi card whenever it guarantees the 5%. Use the Amex Blue Cash for everything else. Use Discover only when it's either the only payment option (ie, Sams), when you get a special reward (ie, restaurants right now), or when you're using the $50 cash-back feature at a grocery store for a smaller purchase.

Myself, I keep other cards around and just put minimal activity on them every so often to keep the account open and use them when they have special promotions that exceed the reward/rebate from the other card. (ie, 15% off of furniture purchase I was going to buy anyway, long term same-as-cash financing, etc.)

- Lan

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Author: Iggywine Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213319 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/27/2005 2:16 PM
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I'll still go with the airline miles... We've used our Southwest card between flying and spending enough to get over 30 free flights so far - and that has saved us quite a bundle. We pay the balance in full every month, but we do a lot of tricks such as paying property taxes with the credit card (sure, there's a 2 1/2% convenience fee, but when you're paying over $3K on Property taxes, that's not a bad "fee" for so many miles). We've used our tickets to fly cross-country or on longer flights, so I've been MORE than happy.

BTW. if you're not aware of it, Southwest free ticket expire after one year, but you can pay $50 to extend them for an additional year....

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Author: LaughingRaven Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213320 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/27/2005 2:19 PM
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bleplatt sez:

is anyone getting those "victim" commercials for debt reduction?: "Do you have credit card debt? A mortgage? If so, you might be a victim."

Sorry, but I'm busy being victimized by cortisol and gas prices. Credit cards will have to take a number.

I've seen some debt reduction commercials saying they'll help you if you have at least $2,000 in credit card debt. I'm sorry, but two grand really isn't worth losing sleep over. I'm guessing that these folks are pretty much the same, charging a few hundred dollars to tell you:
(1) try negotiating a lower credit card rate, and
(2) live within (or below) your means.

--
LaughingRaven

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Author: lpdcac Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213322 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/27/2005 2:25 PM
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Subject: Poll: Which reward card fits best?
Author: Transploration
Date: 10/20/05 10:15 PM
Number: 212929

Which credit card is a better fit for your lifestyle?


=======================================
No one card best fits our lifestyle. DW carries 3 cards (1 VISA and 2 MCard's). She alternates using these cards based almost solely on which one she pulls out of her purse. We pay her statements in full every month. None of her cards pays any bennys.

I carry a VISA, an MCard, and a Discovery card. I alternate the first two between purchases and use the DISC card for purchases at SAM's Club. All statements PIF every month.

The Discovery card pays cash rebates which don't amount to much. My AOL VISA card returns 1 Reward Point for every dollar charged. I cash these points to reduce or waive the monthly AOL charge for internet service. I use this card enough that I have not had to pay AOL's $29.95/month fees for the last 31 months. That's a real benefit!

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Author: sgreen555 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213335 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/27/2005 3:30 PM
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If you have State Farm auto insurance, you can get a State Farm Visa, which gives you 1% back toward your premiums. It's the most practical reward card I've found.

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Author: HookemHorns94 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213336 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/27/2005 3:35 PM
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Best Rewards Card I have found that I use for regular purchases and pay off each month:

Fidelity Investments 529 College Rewards Card

Gives 2% cash back into a Fidelity 529 account with no fee.

The only "catch" is that you need a Fidelity 529 account. You can open one with a minimum $50 per month auto-deposit.

I have had this card for almost 2 years and average $50 per month (paid quarterly) free money into my 529. Since I have 4 kids that I need to save money for college for anyway, this is a no brainer 500-foot home run for me.

Hook'Em

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Author: pearlwhitson Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213341 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/27/2005 3:49 PM
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my problem is that so-called rewards cards purport to give you something but the money for that something comes out of the pocket of the merchant and all the other purchasers as prices rise to accomodate the costs of giving you your "free" something. Can you really take that money and say to yourself, well, I got mine too bad for those who have to pay for it?

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Author: utahtea Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213342 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/27/2005 3:50 PM
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My lifestyle is to not chase rewards

My lifestyle is not to chase low interest rates!

I like the money that my no fee credit cards give me. Like 2Gifts, I have never paid interest on a credit card. I also only buy what I intend on buying. Using cash, check or credit card is all the same to me....it's my hard earned money I'm spending.

Utahtea

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Author: 2old4bs Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213344 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/27/2005 4:13 PM
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Can you really take that money and say to yourself, well, I got mine too bad for those who have to pay for it?

Yes

2old



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Author: JustWhoIAm Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213345 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/27/2005 4:17 PM
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Can you really take that money and say to yourself, well, I got mine too bad for those who have to pay for it?


Why not? Would you take a paycut at work so that they could hire another couple of employees? It's the same thing.

Keith

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Author: mz00m Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213346 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/27/2005 4:19 PM
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my problem is that so-called rewards cards purport to give you something but the money for that something comes out of the pocket of the merchant

Not sure exactly what you mean.

Merchant fees are somewhere in the neighborhood of 3% of a PROFITABLE transaction. The rewards are paid to you (smart consumer) by the profit the credit card company is making off of not only merchants but also debtors who maintain large high-rate balances and pay minimum payments.

Rewards cards can be a way to make money off of the Credit Card companies. CC Companies give rewards b/c they are incentivizing people to use their cards more in the hopes that people will not pay off their balances in full each month and they will reap huge returns on that reward "investment".



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Author: lkeeler Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213351 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/27/2005 4:50 PM
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How do you extend for a year by paying $50???????

I also have and love the Southwest Airlines Visa card. (Actually, we have 2 of the cards for some reason.) We earn enough to fly my family of 3 on one free (air is free) vacation per year, plus usually one extra ticket for something else. But, if we can't use them all in the year, we have a problem.

I've never heard of the extension.

I think the value of the free airfare is worth more than the rewards of the other cards.

And, the best thing about Southwest is that when you earn a free ticket(s), you can actually use them. Whereas, on other airlines, seats for frequent-flyer-mile travelers are limited. We have several hundred thousand American Airlines miles that we can never use because we don't plan far enough in advance (we figure we can use them after we retire in 15 years). On Southwest, if there is a seat available, you can reserve it just like a paying customer. There are a few blackout dates, but they've never bothered me.


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Author: PanemetCircenses Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213352 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/27/2005 4:52 PM
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Can you really take that money and say to yourself, well, I got mine too bad for those who have to pay for it?

Sure can.

I also didn't feel any guilt about stocking up on free stuff during the great E-Commerce giveaway of '98-'99.

I didn't set the terms but I feel no compunction about taking advantage of them while they last.

--B+C, drives around in circles because he gets 5% rebates for gasoline

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Author: sykesix Big gold star, 5000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213356 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/27/2005 5:18 PM
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Can you really take that money and say to yourself, well, I got mine too bad for those who have to pay for it?

Yep.


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Author: synchronicity Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213358 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/27/2005 5:39 PM
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My lifestyle is not to chase low interest rates!

Actually, I'm now regretting NOT taking a 20K cash advance (at 2.99% for the life of the balance) a card was offering me early in the year, which I could have dropped into an Emigrant account and taken advantage of that whole "interest rate arbitrage" thing.

-synchronicity


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Author: catwood One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213359 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/27/2005 5:43 PM
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This is reminding me of the recent crazy thread around using your credit card for small purchases. No one gets the short end of the stick because somebody is benefitting from a legitimate use of a rewards program!


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Author: sprexumn Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213361 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/27/2005 6:15 PM
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Can you really take that money and say to yourself, well, I got mine too bad for those who have to pay for it?

The question is whether not taking the rebate will significantly help the people that are getting abused by the credit card companies. In reality it won't. If you really are concerned, donate the rebate money to an organization that does something good with it, rather than donating it to the credit card company by leaving the rebate on the table.




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Author: DorMill Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213379 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/28/2005 12:13 AM
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AmerExpress plus Costco each give me cash rewards. Between them, they cover my membership at Costco plus. I don't keep a balance so the rate of the AmEx doesn't bother me. I don't shop Costco, or any other store, unless I need something there.

I also use Discover from time to time but their cash reward is much less so I only use it when I can't use AmEx. Discover won't even let you have your cash reward until it reaches a certain point.

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Author: ForestRangr One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213382 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/28/2005 7:51 AM
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Actually, I'm now regretting NOT taking a 20K cash advance (at 2.99% for the life of the balance) a card was offering me early in the year, which I could have dropped into an Emigrant account and taken advantage of that whole "interest rate arbitrage" thing.

Would the 1-time cash advance fee have spoiled the whole thing?

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Author: PuddinHead42 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213389 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/28/2005 9:00 AM
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Beware, those tricksy CC Companies will force you to. Somehow. I guess.

Here is my deal:

I use may credit card to simplify life and just pay it off every month -so in 20 years, the credit card companies have never "tricked" me into carrying a balance. I currently have the Chase Rewards card, which has no annual fee and pays back 1% cash.


BTW, I take responsibility for my actions, so if I get "tricked" into carrying a balance, it is my fault, not the credit card company's. I would also not blame McDonald's if I was fat.

PuddinHead.

Also, remember that holding onto a credit card for a long time helps your credit score, so get one without an annual fee and don't carry a balance. Somewhat paradoxically, having a large credit limit, but only using a small percent of it also helps your credit score.

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Author: synchronicity Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213402 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/28/2005 10:14 AM
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Would the 1-time cash advance fee have spoiled the whole thing?

Nope. It didn't have one.

Also, those that do usually (but not always) have a limit (X%, or max of $Y). A 20K cash advance with even a $50 fee works out to a 0.25% rate.

At the time I was thinking about cash flow issues, rather than thinking "ya know, I can just toss that into a MMF where the return is already almost the same as the fixed interest I'm paying out and will likely go higher in the near future. So I can increase my liquidity and play the arbitrage game."

Oh well, didn't do it.

I will mention (as various people have conniption fits reading this) that I would never recommend this sort of thing to someone with a bunch of CC debt who is just starting to get their spending habits in order. One has to have their financial house in order to do this.

That's one of the problems with this board, there are two large groups of people here. One is the "oh my god I got into a lot of debt and need to get out, how do I reduce my spending and handle my CC debt" crowd. I'm a disciplined person who has excellent saving habits and has my finances in order, how can I use CC's as a tool to help my savings and increase my net worth".

Having been in both groups, I understand the issues of both, and also understand that it's a slow transition from one to the other. The confusion comes when something intended for one group is looked at by the other group, and it's tough to figure out for each person when they can start looking at CC's as a tool for good rather than an icon of evil. For some people they can never do that, for others it's an easy transition. Go figure.

And some people never had debt problems in the first place, believe it or not.

-synchronicity

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Author: Mexmeme Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213417 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/28/2005 1:33 PM
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We are living in Mexico now and this is a totally cash society. There is no debt. No mortgages either. Everyone owns their own home free and clear. We haven't used our cards yet. I love it. The bill paying is so easy. No more credit cards. Hippee.

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Author: Booa Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213441 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/28/2005 4:51 PM
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We are living in Mexico now and this is a totally cash society. There is no debt. No mortgages either. Everyone owns their own home free and clear. We haven't used our cards yet. I love it. The bill paying is so easy. No more credit cards. Hippee.

And there are whole communities where people live in the finest homes you can make out of cardboard boxes and stuff other people threw away. You don't even have to leave the United States to see them, either--just look out your right window when you're going east on I-10, right by UTEP.

I'm not saying there aren't poor people in the U.S., but Mexico is not exactly perfect, either.


--Booa

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Author: gregpg2 Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213460 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/29/2005 6:04 AM
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I chase both rewards and low interest rates.

I've got a Chase Sony Rewards Visa card that I pay off in full every month and I'm not even sure what it's purchases rate is. The card offers 1%/3% cash back on purchases in the form of future rebates toward purchases of Sony products. I just used all three years of my rebate points to buy a 51" rear projection WEGA TV for less than half price and will probably now switch to a Chase BP card offering 1%/5% cash back and which I will also pay off in full every month. Neither of these cards have tiered rewards or require me to carry a balance to get the higher reward rate.

I've also got a Mastercard with a 0% 14 month introductory rate on balance transfers and purchases with no balance transfer fees. I maxed it out with transfers from the Sony card and have been paying it down by $100 per month. I invested the money saved in a 5% CD from a local credit union.

The Mastercard will go to a 7.9% interest rate in January but I already have a 2% 12 month introductory rate on balance transfers and purchases, again with no balance transfer fees, on a Bank of America Visa which will get the balance from the Mastercard in December.

The banks use these offers to take advantage of young folks who go spend crazy with no or low introductory rates and wind up saddled with large card balances when the teaser rates expire, so I see nothing wrong with taking advantage of the banks by flipping balances to my own profit.

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Author: UsuallyReasonabl Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213462 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/29/2005 8:58 AM
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Iggywine,

We've used our Southwest card between flying and spending enough to get over 30 free flights so far - and that has saved us quite a bundle. We pay the balance in full every month, but we do a lot of tricks such as paying property taxes with the credit card (sure, there's a 2 1/2% convenience fee, but when you're paying over $3K on Property taxes, that's not a bad "fee" for so many miles).

That doesn't sound true to me. Assuming you have the "Rapid Rewards" card . . .

Earn two (2) Reward Dollars for each $1 you spend on Southwest Airlines
Earn one (1) Reward Dollar for each $1 you spend on all other purchases
Accumulate 1,200 Reward Dollars to receive one (1) Rapid Rewards credit
16 credits within 24 consecutive months equals a roundtrip Award


OK, so you have to spend 16 * $1200 = $19,200 to earn a roundtrip award. At this point you have to pick your own number, but I'm going to say a typical Southwest round trip flight is $300. (Pick a different number if you want.) That means you're getting an effective rebate of about 1.56%. It cannot make sense to pay a 2.5% "convenience fee" to earn a rebate of 1.56%.

Running the calculation in reverse, you'd have to be flying on free flights with an average cost of $500 to justify paying a 2.5% convenience fee -- and note that at that point you are simply not losing money by doing this. You aren't actually gaining anything; you are simply prepaying for the flight via the convenience fee.

So I don't think those numbers work.

My philosophy on reward cards -- get as much cash back as possible, pay the balances when they come due. With Discover you can achieve a little more juice by rolling the rewards into Borders gift cards, if you're a heavy book buyer like I am.

UsuallyReasonable




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Author: sudonim Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213464 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/29/2005 11:48 AM
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I saw this thread and thought I should add my "Buyer Beware" note about Chase Circuit City credit cards. I recently bought my first home and saw 0% for 24 months on a nice TV at Circuit City. A great way to put the TV on the wall while being able to keep my expenses in check, I thought. I could have paid for it in full, but being 23, I dont exactly have the emergency fund full, so would rather keep that several thousand on hand.

The 'trick' that Chase / Circuit City uses is: If you have a balance from the previous month, any purchase you make accrues interest from the date of purchase. Even if you have promotional financing - 0% for 24 months, that constitutes a balance and is not separated from other purchases (as the circuit city employee assured me). The Chase Circuit City card has a 1% conversion rate to points redeemable at Circuit City so I used it for some purchases one month. At the end of the month, I was astounded to have accrued interest.

I only got burned by having to pay about $20 in interest, which Chase would not give me back when I explained that their terms were unreasonable and the Circuit City employee told me a different story. I subsequently closed my Checking, Savings and other credit card account with Chase and moved to Bank of America - which by the way is a much better bank.

I thought I was a savvy credit card user, and prior to this I have never paid a fee or interest on a card. I have however maintained my Chase Circuit City card, studied the terms diligently and will now milk them on their 24 month offer without paying them another cent more than I should

= Buyer Beware =

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Author: xraymd Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213466 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/29/2005 12:07 PM
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I only got burned by having to pay about $20 in interest, which Chase would not give me back when I explained that their terms were unreasonable and the Circuit City employee told me a different story. I subsequently closed my Checking, Savings and other credit card account with Chase and moved to Bank of America - which by the way is a much better bank.

Greetings, sudonim, and thanks for sharing your story - you have without doubt helped SAVE someone $20 or more today who may themselves have been induced to believe the salesclerk rather than to (tediously) double-check against the terms of the card! I know, I know - it's human nature to want to believe that someone both KNOWS and TELLS the truth, but what's that famous saying? "Trust but verify."

In the world of credit card offers, it is a rare thing to truly be able to protect your 0% by both borrowing and spending on the same card. I won't say it can NEVER be done but as you now know, at the price of the $20 admission fee to the theater of experience, it is far more likely that having both types of transactions on your card is a way of allowing the creditor to extract more money from you due to some byzantine terms that, under layers of teeny print, taketh away. Far safer to use a separate card for purchases and fight with all your might to protect your 0%. I also agree that Chase is notorious for being unforgiving (so far, I think Citibank is close to the top in having reasonable and flexible customer service yet I would not want to push even THEM too far!).

No matter what, you definitely seem savvy to me. Even the great among us can still get burned no matter how careful we are. I'm just glad it did not cost any more than $20 (though I certainly understand that even that is too steep). You've helped a lot of people today and thanks for that.

xraymd


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Author: yellowcard Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213482 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/30/2005 1:45 PM
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I subsequently closed my Checking, Savings and other credit card account with Chase and moved to Bank of America - which by the way is a much better bank.

Not to negate the rest of your fine story, sudonim, but I'd be surprised to find out that Bank of America was much better than Flat-Faced Louie's Loan Shark Emporium.

This is the same bank that at one time, for customers who were too poor to have a normal checking account, was charging basic checking account holders a $7 fee just for talking to a teller. They also started deducting a $2 fee to non-account holders who simply walked in to cash a BofA personal check.

Maybe they've backed off on some of that recently, but I remember hearing about someone filing a lawsuit against them because they failed to honor the full face value of the check they were trying to cash.

At any rate, I don't trust BofA's management and I would bend over backwards to avoid depositing one red cent of my billions of dollars (that I will one day have) at their financial institution.

yellowcard


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Author: MarkAlbert Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213498 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 10/31/2005 12:00 AM
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I wanted to add annother criterion to think about when selecting a credit card. Like 2gifts, I don't care much about interest rates because I pay my full balance every month, so I want to use a credit card with a good rewards program and no annual fee. But the other thing I want is a credit card I can set up so the full balance is automatically paid every month. I don't know about you, but sometimes I get busy and don't get around to sitting down to pay my bills as often as I should. This kind of sloppiness can result in outrageously large penalty fees that dwarf the interest charges--not to mention damage to one's credit rating. Automated bill payment eliminates the possiblilty of missing a payment and getting whacked with penalty fees.

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Author: Pitchoun Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213582 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 11/1/2005 2:52 PM
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You can also deposit the State Farm "dollars" in a State Farm mutual fund account. Unfortunately, their mutual funds carry a load. However, since I changed insurance carriers (from State Farm to AllState) but did not want to have to change CCs, this option was a welcomed choice for me.

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Author: jrr7 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213609 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 11/1/2005 7:36 PM
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Actually, I'm now regretting NOT taking a 20K cash advance (at 2.99% for the life of the balance) a card was offering me early in the year, which I could have dropped into an Emigrant account and taken advantage of that whole "interest rate arbitrage" thing.

Emigrant account interest is taxable.

Credit card interest is not deductible.

Be sure to consider the after-tax rates of the income when you are considering an "arbitrage" opportunity.

In my case, the "4%" emigrant account actually gets me around 2.76% after taxes. A 2.99% debt means I'm behind.

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Author: synchronicity Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213618 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 11/1/2005 9:19 PM
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Emigrant account interest is taxable.

Credit card interest is not deductible.

Be sure to consider the after-tax rates of the income when you are considering an "arbitrage" opportunity.


Good point, but FWIW, I do consider that.

In our case, the emigrant interest will be taxed at either 15% or 25% fed, and our state tax rate is 3%.

So, even at the 25% fed bracket, our after-tax return right now from Emigrant would be 2.91%*. So I'm losing 8 basis points currently, worst-case. (which works out to $16/yr cost on 20K borrowed). And since ST rates are continuing to go up, it's looking VERY likely that my after-tax return from Emigrant will beat the pre-tax cost within a month or two, and continue to be better for the foreseeable future.

Now, having said that, the reason for taking the 20K cash advance would be for general liquidity reasons as well as interest rate arbitrage (the money would sit at Emigrant), NOT to be spent on a big screen TV in 6 months or something like that.

-synchronicity

*-effective tax rate of 27.25%, as state tax is deductible

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Author: relrobber One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213703 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 11/3/2005 11:38 AM
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My USAA debit card gives 0.5% cashback for every "credit" (as opposed to atm) purchase. You can't beat cashback for spending actual money.

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Author: rabiddog6 Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213820 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 11/4/2005 3:41 PM
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I had a similar experience with BofA. They un-explicably upgraded my account and since I move money from my savings (which pays interest) to my checking (which doesn't) each month, I normally don't have a large amount in checking. Needless to say, they started charging me the 7.00 fee for calling in to check my account balance AND charged me 4.00 for not having the necessary balance in my account to qualify for the account upgrade.

When I called to inquire why they upgraded my account they couldn't provide an explaination but still flatly and rudely refused to refund the fees. If I could find a better bank..I'd move it it.

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Author: ashantiman Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 214035 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 11/8/2005 12:18 AM
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What town are you in? Sounds most interesting.
Bill Michael, dapperwill@yahoo.com

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Author: Hallatauer Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 214133 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 11/9/2005 4:08 PM
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We love to travel and scuba dive, mostly in the caribbean. After about 3 trips and charges on my CC, (I pay it off in full every month)I get a free r/t. Well, not free... about $50 in taxes/fees but it makes up for a $600 fare.

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Author: duke345432 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 214612 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 11/17/2005 11:17 PM
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>5 years ago when I started paying off my accumulated grad school credit card debt, I was all about the low-interest balance transfers. But I haven't carried a balance for over 4 years, and really, those rewards I've been getting since kinda help fill the aching void in my heart where the credit card debt used to be. ;)<


Glad to hear you have shed the debt load.

I was lucky in college. Got through in the late fifties on GI bill, active reserve pay and some photo sales. Ended with zero debt.

It is probably not possible now. Granddaughter now a in state university and pays more for books than I paid for the entire semester of room, tuition and board. Fortunately she has scholarship for tuition. Room, books and misc. are a huge amount. If books were included in the burden would be a lot less.

Before getting married I used cash. After, neither of us had any debt, so buying a house became the only debt we had. Paid it off when escrow exceeded balance due of principle amount. Twenty-five years of zero debt does wonders for net worth. So does the inflation of house sales prices.

duke

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Author: duke345432 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 214613 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 11/17/2005 11:24 PM
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I use this card enough that I have not had to pay AOL's $29.95/month fees for the last 31 months. That's a real benefit! <<<<<<<<<

I have DSL and pay $15 a month using the furnish your own connection option. That might help if you have to charge less to get free ride.




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Author: Transploration CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 216950 of 308858
Subject: Re: Poll: Which reward card fits best? Date: 12/31/2005 7:36 PM
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Since I started this, I might as well chime in again.

I previously had the AmEx SkyMiles Platinum card. I actually found it really helpful with the free companion ticket covering the high annual fee ($135).

Since Delta went into bankruptcy, I started thinking that it wasn't worth the miles for an airline that *might* not be able to honor them (yeah, it's along shot, but still). Also, Delta changed their "free companion ticket" to be buy a ticket at a specific set price, get one free. Rather than the previous by any ticket at any price, and get one free.

I actually ended up getting a Starwood AmEx card. With that, you can either get free hotel nights or exchange their points for miles on almost any airline. Plus the annual fee is $30 (waived the first year).

For me, I like the travel perks since I love to travel. (Well, that and I don't own a home - so the mortgage card isn't that helpful yet.)

I, too, pay my cards off each month, so the interest rate really isn't vital to me. Of the one card that carries a balance, it's 0.9% - so it's almost better to pay $50 above the minimum payment and leave my money in a money market that pays almost 4%.

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