Credit Cards

Credit Card + Church = Hell?

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Okay, it is quite possible that I may have actually ended up in hell for using my credit card. You can check out yesterday’s post (directly below this one) to see where this thought started. I know this is my third article this week about credit cards so I promise to write about a different topic, like pickles or jellyfish or something cool, on Monday. But try and stick with me one last time will ya?

As you may be aware, I tithe each month at my local church and donate to a non-profit radio station I support (I know you probably didn’t think I went to church after having two posts this week refer to the woman’s breasts). I wasn’t raised to give away a percentage of my income. I didn’t start to form this habit until I graduated college. I’m just gonna be honest with you all, I give that tithe each month with a semi-clenched fist. It still hasn’t gotten “easy” to give that money away. I know in my tiny little heart that I should have no problem giving away such a small percentage of my total income, but I still find myself coming up with reasons why I need to hold off on the charity this month (need more in savings, contribute to retirement, have a car expense coming up, etc). It was because I lacked the discipline in writing a check or putting cash in the bucket as it went by, that many months, I didn’t meet my tithing goal.

This is where my credit card, and potential future in hell, come in to play. For some reason, I don’t have the psychological pain giving money on my credit card. I have set up auto-deductions each month for the radio station I support and I hardly notice the charge when it comes. That’s when I decided I would start making my monthly tithe via credit card. Good deal right?

Well, after conversations with some much wiser individuals, I realized my credit card tithing is costing the church a hell of a lot of money (no pun intended, okay maybe the pun was intended). I was talking with my girlfriend’s dad and he is an active member at his church. He told me the congregation had lost out on about $50,000 last year because of all the fees associated with the credit card tithes. That’s a crap load of money that could have been used to do a lot more effective things, but instead it’s going to those A-hole banks.

I’ve decided I need to buckle down and cut a check each month. It costs me the same amount of money, but gives the church so much more. Remember, the average fee for credit card transactions is about 2%. Two percent may not seem like a lot, when looked at under a microscope, but when that multiplies by hundreds of people over the course of the year it’s tens of thousands of dollars. This time the voice of reason yelled in my ear “Quit being such a douche bag and tithe with cash or a check.”

Don’t get me wrong, if you tithe via your credit card, I got no issues with that. I think this is something that should be dealt with on a personal basis. There are definitely advantages to using the CC, easily tracks all contributions, can schedule auto-payments, don’t have to remember to write a check or get cash out. I personally just want every dollar I give to serve a purpose, and chillin’ in some bankers pocket is not the plan I had for it.

Where do you all stand? Have you thought about this before? I got a lot of great feedback on yesterday’s post, so I’m hoping you wise individuals can throw in your 2 cents!

Am I going to Hell for using my credit card?

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I’ve blogged about it many times before so I will try to minimize redundancy. I use my credit card for every purchase I make . I do this for two reasons 1) It consolidates all my payments in to one big payment 2) I earn reward miles for every dollar I spend. Not too long ago I wrote about the perks of credit card incentives . Well a month later, I’m wondering if I am going to hell for taking advantage of these perks.

I’ve heard it argued that it is unethical to take advantage of CC perks. Why? Because the only reason the banks can offer these sweet deals is because they are charging the bajeezez out of those that are only making minimum payments. As one that takes advantage of my airline offers I feel obligated to lay my case for why using incentives is okay.

1) I have no internal debate as to wether or not I am hurting someone else by using these incentives. When I was in high school I cheated on a few tests (shhhh don’t tell anyone). When I was cheating I had that internal conflict that went something like “Ninja, you know this is wrong…Why are you doing this?” Obviously I told the voice of reason to shut it and I cheated anyways. In that situation I felt that what I was doing was wrong, but ignored those feelings. I have never felt like I was doing something wrong by cashing in my airline miles.

2) There are two types of credit card owners out there. Those that pay their bills in full each month, and those that don’t. We are both doing the same thing though, we borrow money with an intention to pay it back. Why should I feel bad about being rewarded for being a responsible borrower? The answer: I shouldn’t. As long as I follow through on my end of the deal, Why can’t I be rewarded?

3) At the end of the day, let’s be honest…it’s the credit card companies that are going to hell. They make a ton of money from sketchy lending, jacking up interest rates, and charging people five buttloads of money in late fees. Think about it like this. I’m actually screwing the banks by paying my balance in full each month. All I do is cost them money (via my redeemed rewards). They get no interest charges or late fees from me. Either way the banks are getting a crapload of money, so this is just one way it’s coming back to the people.

So peeps what’s your call on this two-sided debate? Am I going to hell? I see arguments from both sides, but as of this moment don’t feel compelled to change my ways.

p.s. for further education on how the banks bring in the bling check out this post by The Weakonomist.

Bank of America, You sneaky ba$tard

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I’ve been with Bank of America for a little over a year now, as they are the bank that manages my Alaska Airlines Credit Card . I’ve wrote about it many times before, but I will reiterate: I use my credit card for every purchase  I possibly can. I even used it once for a 47 cent purchase for garlic at a grocery store (I know it’s pathetic). I’d pay my student loans and my rent on the card if I could.

Stacking up all my purchases over a one month time period usually means I have a nice $1,000 to $1,500 bill to be paid off…and you better believe I alwyas pay that balance in full. I often chuckle when I see “$15” as my minimum monthly payment. Although it would be nice to only fork out 15 bucks and keep the rest in my savings, I know that is the stupidest financial move one can make. I have learned to cope with the pain of parting with “four figures” each month.

I’ve had the card for 18 months now, and every time I go to make a payment, Bank of America tries to pull a fast one on me. Wanna know how? When I click on the “Pay Now” button to make my big payment, all of the information is pre-populated for me. That’s right, B of A decides that my payment will be made on the latest possible date and that payment will ONLY be the minimum balance. Instead of leaving all the fields blank, they subliminally try to trick you in to making only a minimum payment. There have been a few times where I wasn’t really paying attention and I processed on to the next page. Luckily, I always noticed on the “confirm payment” page that I was only paying $15 when I meant to pay $1,500 and quickly corrected the action.

Accident? I think not! They know exactly what they are doing. I think they have two goals in pre-populating the payment field. The lazy will think “Oh that’s nice B of A suggests I make the minimum payment. I guess that sounds good.” I’m willing to bet a ton of people don’t pay more on their credit cards because of the conveinence of submitting the auto-populated form (It’s kinda like “one click” shopping).  And even for those of us with the best intentions, I’m sure some don’t realize they make a minimum payment, when they intended to pay the full balance. Thus, the bank collects interest on their remaining balance for at least a few days before that action can be corrected.

Moral of the story…. I love my credit card, but I also know it should be registered as a lethal weapon. You have to know you what you’re dealing with and learn to suffer the consequences of any unintentional mistakes. Anyone else notice their CC companies do the same thing? Is this just a B of A thing? Or even worse, have you ever fell victim to one of these devilish tricks?

Credit Card Incentives: Should you sign up?

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I was prompted to write this article by my dear old young, mom, I’ll call her Mama Ninja. She thought it would be valuable to explain the benefits and risks associated credit card incentives. I have blogged about credit cards a few times before, here, and here. But never really hit on the point Mama Ninja raised: “Is using a credit card with incentives a good idea?”

For those that don’t know much about credit cards, certain banks offer incentives with their cards to customers who purchase from merchants who accept credit card payments online, ultimately hoping it brings in more business for them. Some of the most typical offers are: 1%-3% cash back on all purchases or one frequent flier mile administered for each dollar spent.  If you’re still a little confused…you’re dumb….just kidding (kind of). Basically, if you charge $10K to your card over the course of one year and you have a credit card that offers 1% rebates on all purchases, the credit card company will credit your account with $100 by the end of the year. If you have a credit card and it doesn’t have incentives you might want to consider tracking a good offer down and signing up, after all, it is free money.

So why would the credit card companies want to give money back to you? The answer is simple. Most people with a credit card carry a balance from month to month and that makes the banks filthy stinkin’ rich. *Side Note: If you have credit card debt, pay that ‘ish off ASAP, sell a kidney if you have to, because the interest rate on credit cards is ridiculous.* They offer incentives to entice new customers, with the hope that they will not pay off their balance each month. Think about it like this, if you carry a balance on your credit card, they win. If you pay your balance in full each month you win.

So why did I recommend you sign up for using an incentives card? I would only make that recommendation if you have a proven track record (6 months or greater) of paying off your full balances EVERY SINGLE MONTH or if you posses crazy amounts of discipline. If you can’t do that, don’t sign up for any more credit cards!

I personally have a card that rewards me one frequent flier mile for each dollar I spend. I have had the card for two years and have always paid the full balance before the end of the billing cycle. I pay $75 each year to Bank of America to hold their Alaska Airlines Credit Card. I would almost always recommend that you only use credit card incentives if there are no strings attached…like an annual fee.

Why do I deviate from my own advice? Although I pay $75 each year for the card, I not only receive the miles on each purchase I make, but I also receive one $50 companion ticket each year. The companion ticket just means if someone I know flies Alaska Airlines to any destination I can get a ticket with them for just $50. I used it a couple months ago when I flew to Seattle with a friend and paid $50 for the ticket, when it would have cost me $225 if I purchased the ticket solo. So for me, the cost of being a member $75 is worth it to get a $50 dollar flight. I basically paid a total of $125 for my plane ticket ($75 annual fee plus $50 ticket fee). I could get a variety of different credit cards that offered similar mileage plans, but none can compete with the companion ticket offered through Alaska. The incentives offered with my credit card are perfect for my situation. If your preferences differ, consider going with a cash back card, but at the end of the day, never forget…Credit card companies wouldn’t offer these incentives if they thought you were going to pay your balance on time. 

If you do chose to sign up for an incentives card it is imperative you pay the full balance every month, on time. Now that I have bestowed wisdom upon you (actually you probably knew all of this) go forth and do great things.

…and in case you are wondering, I drew the plane up top…pretty good right?

I love learning about finances….and I love my Credit Card!

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So I got a Credit Card that awards one airline mile for every dollar I spend. I know most people recommend cutting all credit cards up to avoid high interest on any consumer debt, but I am quite a fan of my card. I have never needed to use the “credit” aspect of my credit card. I treat it like a debit card and pay the full balance every month. If I don’t have the money, I don’t buy it. There are two BIG advantages to using my credit card for EVERY purchase I make.

The first is that I get one airline mile for every one dollar I spend. I put everything from a $1 pack of gum to my $1,000 laptop on my credit card. Just by using my credit (instead of debit) card for ALL my purchases I basically rack up enough points to earn a free flight every year. I don’t know about you, but I’ll take a free ticket any day!

The second advantage to using my credit card is basically free money for one month. This allows me to make purchases before my paycheck gets auto-deposited in to my account. For example, I bought my laptop for $1,000 dollars on the 10th of Jan. At that time I only had $900 saved for my new laptop, but since I charged it to my credit card I was able to walk out the door with it before I had the full $1K saved. I got my paycheck two weeks later and took my “$100 a month laptop fund” added that to the $900 I had already saved and paid off my credit card balance in full. The laptop didn’t cost me any more then it would have if I used my debit card, but I was able to get it two weeks earlier.

I’m fully aware of the dangers of owning a credit card. It takes discipline, but as long as you don’t spend money you don’t have, I’m convinced that credit cards  are an asset to my financial success. I have plenty more to say about credit cards and I would love to hear what you all think about them. Keep looking for more of my financial habits and advice.

What do you think?