My Two Dollars

American Express Launches Premier Rewards Card With 3X Points On Airlines, 2X On Gas & Groceries

American Express just launched a new Premier Rewards Gold Card that pays triple Membership Rewards points on airfare purchases, double points on gas and grocery purchases, and one point for all other purchases that you make. Card members can also earn 15,000 bonus points when they spend $30,000 on the Card per calendar year, an average of $2,500 per month. The new Card is available for an annual fee of $175, which is waived for new Card members the first year.

Now, you guys know my stance on paying annual fees, because I just wrote about it the other day. But for some people, the rewards (and how much you spend on the cards) are worth the cost of admission. And as long as you use credit wisely by paying off the balances every month, which Amex makes you do because they are a charge card and not a credit card, the rewards might be worth it to you. Shop wisely.

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By David

The Tax Extension Deadline Is October 15th.

Did you file an extension back in April so you could have more time to file your taxes? Well guess what – your due date is coming up next week. October 15th is the tax extension deadline, so be sure to file your taxes so you don’t get in any trouble with the IRS. While I have always filed and paid my taxes in April, when most people do, I have friends who file an extension every single year. There is nothing wrong with doing so, but you have to remember to file by October 15th so you don’t get in hot water with the government! My brother does my taxes for me, as he is a CPA, but you can either do them yourself or use a service like TurboTax – but either way, make sure you get them in by the 15th of October!

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By David

How To Get The Best Price On Airline Tickets.

While I mentioned the other day that I gave up flying a few years ago, many of you will be traveling by air for the holidays. And usually, air travel is the most expensive during this time of year – especially since the airlines just added a $10 surcharge for those flying on the busiest days. But there is a free service called Farecast (which now looks to be owned by Microsoft), which can help you decide exactly when you should buy your ticket by using airfare price predictions. I used this back in 2007 and it certainly did help us to get a lower-priced ticket. In what comes across as Greek to me, here is how they explain their system:

In order to test our predictive accuracy we have developed computer programs that simulate passengers buying airfares based upon prices from real data we process and store every day (sometimes referred to as “back testing”). We build sequences of models for each day we have data and simulate a distribution of passengers with different economic constraints purchasing tickets, similar to those found in the real world. Each simulated passenger receives a recommendation for the day and market they are shopping from the predictive models. We tally up the results of the outcomes of recommendations made to thousands of simulated passengers. This data tells us how accurate we are and how much money was saved or lost by our simulated customers. Although the simulations do not mimic real life exactly, they provide a close enough approximation for us to understand the efficacy of our technology.

If you are going to be traveling this holiday season, you might want to check this site out. Flying is getting more and more expensive, so if you can save a few bucks when buying a ticket, it’s definitely worth the effort.

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By David

Own A Home? You’re On Welfare.

Well, at least that’s what a columnist in Time magazine thinks. (It is in the current paper issue, so it’s not available online yet.) I never really thought about it that way, but he is kinda right – owning a home does provide the homeowner with a kind of welfare in several different ways. From the $8,000 tax credit that first-time homebuyers are receiving, to the 80% of mortgage loans owned (and subsidized by) Fannie Mae/Freddie Mac, to the income tax deductions for mortgage insurance paid, and to the deduction for property tax bills, homeowners do, in fact, benefit from a form of welfare directly from the government. All these credits and deductions add up to over a staggering $110 Billion dollars a year in government giveaways to people who own homes – which is 33% of what we spend on all entitlement programs combined (2006 numbers equal $354.3 billion and includes Medicaid, food stamps, family support assistance (AFDC), supplemental security income (SSI), child nutrition programs, refundable portions of earned income tax credits (EITC and HITC) and child tax credit, welfare contingency fund, child care entitlement to States, temporary assistance to needy families, foster care and adoption assistance, State children’s health insurance and veterans pensions.) Most of these tax benefits go to people in the upper end of the income spectrum, according to the article, and they also push us a people to buy houses we cannot afford, as we think that we’ll get some of it back on our taxes. I will never forget an old boss of mine telling me to look at houses WAY out of my price range, because “you can deduct the interest payments” each year. Yea, well, hey boss – I still have to make those 12 monthly payments to the mortgage company before I can get that interest back!

Many people call this kind of welfare the “hidden welfare state”, or welfare for the middle to upper class that doesn’t come in the form of food stamps. (See article on the hidden welfare state) The hidden welfare state “refers to tax expenditures (deductions) with social welfare objectives: tax deductions for retirement saving, charitable contributions, higher education, and the home mortgage interest deduction. All of these deductions benefit constituencies with considerable disposable income.”

While I do agree that it is obviously a form of welfare, as the author of the article states, I am not sure if it is a good or a bad thing for our society. And while I am not one to think the government has no place in our lives or our social make up, there are others who think the government should be out of our lives entirely – but that would remove all these subsidies that are handed out. So… I don’t know if I agree or disagree with the author, but thought it would make for an interesting discussion here on My Two Dollars, and I hope you weigh in with your thoughts.

Photo from Shutterstock

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By David

Going Against Popular Opinion And Closing A Credit Card Account.

Why? The $125 yearly fee, that’s why. I have been an American Express Business Gold customer for a few years now, and while they have been very good to me and I have collected many, many rewards points that I plan on cashing in any day now, I will be closing my account. The annual fee is just not worth what I actually use the card for each month, which is currently only my web hosting bill. It was worth it when I was charging everything each month to the card, as the rewards really added up, but now that I charge everything to my Amtrak Rewards Chase card each month, that $125 a year is looking pretty steep. Don’t you think?

I stopped paying the annual fee on my Citibank American Airlines reward card already, because I gave up flying over 2 years ago. And while I realize that the popular opinion about credit cards is that you shouldn’t close any accounts, I don’t necessarily subscribe wholeheartedly to that concept. For me, a few tiny dings on my credit report is worth the price of ditching 2 credit cards I no longer use. Granted, I have other cards and I don’t carry any debt, so canceling the cards is not going to increase my credit to debt ratio or anything like that. It will amount to a ding on my credit score and nothing more. But the positives far outweigh this little negative, in that…

– I will no longer have annual fees due to credit cards
– I will have less cards to maintain and keep track of
– My credit report will show less open credit, which could actually help the next time I need to borrow money

So if you feel the need or desire to cancel a credit card, it’s not necessarily as terrible as some “experts” will tell you. (In fact, some people think they have come up with a good use for paid-off cards) Your credit score will bounce back pretty quickly from any hit it takes while you are cleaning up your financial life by getting rid of accounts you no longer need or want. I have decided that from this point forward, I don’t think I am willing to pay annual fees on credit cards anymore, as I already have the 1 card I use for every single purchase every month. The rewards or benefits will have to be extremely beneficial to me or my business in order for me to pay for the privilege of using a credit card with a fee!

Photo from Shutterstock

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