Celebrating July 4, 2011

I celebrated the Fourth of July a little early. Here's how I did it:

That's right; I cut up a credit card.

Nothing to get excited about. This was my "spare" American Express card. I still have another one. I closed this account because I don't need two and spreading credit around like that isn't healthy for my credit rating.

Do you want to know what American Express' response was? They immediately doubled the credit limit on the one I didn't close. Yeah. Helpful, aren't they?

Obviously I don't have "problem credit." I pay off my monthly credit card bills in full. I never carry a balance and I don't want to go down that road.

So I invite you to join me. What's in YOUR wallet? Maybe it should be a little less? And look what I found online:

Bold letters and small mirrors, tastefully decorated in discarded American extravagance.
Perfect for any home or office! Have a good weekend!

The Tale of Two Credit Cards

This is a tale of two American Express cards.

This first is a Delta Airlines Mileage card.

I've had one of these cards for more than ten years. I've gotten a couple of free flights on it, but generally, for the last couple of years, it has been nothing but excess wallet weight. I stopped using it because it was hard to find a Delta flight I wanted and I don't care for "mileage" cards, but I didn't get rid of it because it was three-quarters of the way to the next flight.

So I carried it around.

This next card is a Costco American Express card. This card was a freebie which Costco pressed on me, and to be honest, I accepted. It seemed convenient to get out one card for entry to the membership warehouse store and then use it to pay. The Costco Executive Membership already cost me $100 per year, but the card itself bragged of "no charge."

When I lived in Los Angeles, the "Executive Membership" was a great thing to have because I could get into the Costco an hour early "before the riff-raff." And the Executive Membership paid me back in cash for the money I spent there.

Cash? Really? Well, it paid me in Costco dollars (to be spent only in Costco) and there were a few years where I actually got some sizable kickback checks because I was doing some catering on the side.

So I used it. And used it. And used it. And today, I was thinking about that.

Today, the most recent bill arrived and as with so many things right now, I started to think about the real cost of this card. The bill told me how much money I was getting back. The card pays back only when I spend at Costco or buy gas. But since the Executive Membership Account would pay me that anyway, that's not a real benefit, is it?

If I used the Delta card, I get the Costco bucks AND the miles accrued toward a Delta flight.

I figure it will take me about the same amount of time to get that next Delta flight (and figure out where I want to go) by using that card as it will to figure out which American Express card I should REALLY be using.

I'm sharing this with you so that if you have a "free" Costco American Express card with your executive account, you can wake up, cancel the Costco card which is actually stopping you from using another card which might give you benefits. Or keep it (which could potentially damage your credit rating, by the way), but start using another free American Express card and thereby double your benefits from using your credit cards.

Oh. Unless you don't pay them off every month. In which case, ain't nothing going to save you. Questions? Suggestions for better (cash back, NOT FLIGHTS) fee-free American Express cards are also welcome here.

More Recession....

I am so proud of how Americans are learning to watch their pennies. Not all of us. Not the ones still employed with top-dollar paychecks. But lots of people who didn't use to look at their credit card bills are now examining them closely. And people who seemed to think they were too good to ask why they were charged for three cans of soup when they only bought two, are starting to reconnect. They're actually paying attention to grocery prices and watching every move made by the friendly grocery clerk.

Yes, I still have some friends who can't be bothered to return expired dairy products or go over their checking accounts online, but they are further apart and fewer between these days.

The Washington Post this weekend delivers up this article on how to negotiate a severance package. That's what's called being "timely" on the weekend after the government reports the sky-high unemployment rate at 9.7% nationally.

It's time to think thin. Thin income. Thin wallets. Thinning savings accounts, if you are fortunate to have gone into the recession with a nest egg.

I'm sort of proud of the way some people are handling it all. After years of being lazy, snobbish, prissy and proud, they are starting to get it. They've told their kids "no" when they ask for the latest version of "Playstation," and stayed home for dinner more than one night per month. Who knows what's next? Possibly there's a market for classes on reintroducing conversation at American dinnertables.

Anyway, the same weekend editions also point out that nest eggs are taking a hit. Considering that the average American household began the recession with $11,000 in credit card debt (since I don't have any, I'm guessing there's a household in a lot of pain somewhere), these would be the better stories.

They say that signs of the recovery are being seen. But so far, it's a "jobless recovery," where employers aren't starting to hire back furloughed employees. Instead, they are asking the workers they have to do more. Sometimes for the same price; and sometimes, for less.

We're all going to learn to be very grateful for the good parts of our lives during this downturn. We're going to learn to be happy with what we have. That as I said in an earlier post, "three forks are enough." And that more than one, on many things, is just something to stash in the closet or dust down the line.

We will learn. And maybe sometime soon, we'll learn to smile again. Until then, it pays to learn to watch your wallet and negotiate. And to enjoy it.

Successful Credit Card Squabbling

I am going to divert from the usual "politics, media, pop culture" mix and talk about credit cards today. I want to help arm you with the information you need if you get into a squabble with your credit card issuer.

The current recession in our economy and resulting problems within the money and finance industries are causing credit card companies to act a bit desperate. They will smack you with fees when they can, unless you know the law and call them on it. You have to protect yourself in this area.

I hope you examine your credit card bill every month. But if you sometimes skip a month and then sit down to review a month or two in arrears, you are probably still going to come out okay. It's not a case of "once it's paid, it's gone." This is a credit card company, not a fly-by-night roof repair guy going door to door after a hurricane. (Although let me think about that metaphor. Recession? Hurricane? Hmmm.) If you have been using credit wisely, these companies will want a long term relationship with you. If you've used credit wisely, you are the Prom Queen.

In my particular case, I was reviewing a credit card bill today when I saw a late fee charge. That's what happens when you move around a bit as I have lately; occasionally, a helpful/unhelpful relative who is getting your bills decides that you don't need one of them immediately, and you get notified one day before the check is due. Ugh.

Here's my tip to avoiding such a charge: if you had returns on that same credit card during that month and the credit adjustments on your account are greater than the minimum payment, you should not face a late fee.

In my case, Discover Card socked me with a $39 late fee. (Which, by the way was nearly 20% of that month's entire amount charged.) I spotted it today, more than two months after the bill was paid.

Then I examined the rest of the bill. The minimum payment that month was $18. But I was looking for something else: a credit adjustment. I spotted a credit adjustment of $27.32 (larger than that month's minimum payment) and picked up the phone to call Discover. They immediately agreed to refund the late $39 fee.

You only get fee refunds on your credit card bill if you are watching it closely yourself. The credit card company will never call to say "Oh, I think this fee that we've charged you is sorta superfluous. Maybe we'll just give it back to you." It's simply not in their nature.

At the same time, I also saw some smaller charges: (2) for $2.77 and (1) $2.64 from GTC Telecommunications. GTC is a long distance company that provides service at .05 cents per minute, which used to be a great price for long distance phone services, but now is sort of "so-so." Since I disconnected the "land line" phone at my Los Angeles apartment in December, it seems inappropriate that I still pay charges beyond January.

I also asked Discover to dispute those charges. They said they would be happy to send me the forms.

I've "disputed" items before. If you haven't, please consider doing it. Credit card companies are required to allow you to dispute the services for things such as low quality, broken, or otherwise returned merchandise, things not ordered or received, and services not rendered. You contact the credit card company, request the dispute, and they will ask you "did you try to work this out with the merchant/vendor?" Ultimately, they will send you the dispute forms and they ask you to fill them out, sign the affidavit and return it within about a two week period.

I did have one credit card company several years back try to tell me that they couldn't refund the money because the merchant had already been paid. I contacted some friends in the public affairs office at the FTC for clarification, and then called the credit card company back. The money was refunded. Fortunately, most credit card companies don't try that bluff with consumers anymore. But if they do, federal law states you have 60 days from receipt of the credit card statement to file a dispute.

Some days, you may need more protection than that. I recently ordered a product. On arrival, the items were so poorly made that I felt cheated. I looked in the box, but there was no return form. I checked the website. No return form. I called the company and got a simple answer: they don't accept returns. I said "Some of your product is broken, but even so, none of it is acceptable. I am returning it."

They said they would send more product to replace the broken items, but they "do not ever accept returns and that they would not ever.... " (They were still yelling when I hung up.)

The fact is that they do accept returns, whether they want to admit it or not. You have the right to return merchandise that is not as shown or as ordered. You just put it in the mail and return it. You are well-advised to get both insurance and require a signature on the delivery, but that's easy enough.

Here's where the whole thing took a twist: when I contacted the credit card company to dispute this charge, they said "Ms. Johnson, you may want to close this account and re-open another one. Otherwise, this company will just re-bill you for the full amount next month. And the month after that. And the month after that." (The customer service person said the merchant had a history with them.) Result: that credit card number is gone.

The rule is: change the credit card account number when necessary to avoid being taken advantage of by unscrupulous merchants. And try not to deal with unscrupulous merchants ever again.

Credit card companies have a reputation for being difficult to deal with. But if you know what the laws state and take the time to review your statements carefully, you can have successful dealings with them.

Because as someone once told me, "Nobody takes care of baby like Mama herself." Go ahead and baby your credit. It may pay off for you, too.