To Borrow, or not to Borrow…

The idea of taking advantage of the 0% offer Chase is dangling at my nose is really getting to me.

I’ve put together all kinds of charts plotting out how much I’d save if I did this or if I did that.

Eh, let’s borrow an extra $4k and just wipe out the car loan at the same time. That’s the most recent variation.

Grant over at Clever Dude recently took the bait offered him by Citibank.

His offer was a 0% balance transfer offer with a 3% fee capped at $75.

I’d have probably taken that deal too — even if it isn’t for a full 12 months.

Logging into my own Citi account, my offer isn’t really comparable. Not only do I have a lower credit limit on that card, but my fee isn’t capped… at all.

Um, no thanks.

So it’s back to Chase. $19,200 available, 0% for 12 months, and a 3% transaction fee capped at $199.

Hmmmmm…

A little over a year ago now, I did the arbitrage thing and I didn’t get burned.

But it didn’t work out exactly as planned either. I didn’t exploit the fact that I’d borrowed money at 0% by earning a nice (at the time 4-plus percent) rate of return in some savings account.

I’d planned to do that, I just didn’t.

Instead, I ended up using most of it to finance home improvement projects.

It wasn’t a complete backfire, but not really a success either. Yeah, I saved a little money, but I certainly didn’t make any.

Clever Dude had the same problem last time he tried to pull off one of these arbitrage moves. He ended up paying off a car instead and, well, probably saved some money but didn’t actually make any.

He’s in a different position now — he CAN make money because he doesn’t have funds tabbed for anything. Yeah, he still has an auto loan but, well, you can read his entire post…

As for me, I’m not there yet. I’ve still got a car loan at 5.35% and the ever-annoying PMI issue to deal with.

To eliminate both of those, I’d have to take up my 0% offer for at least $6k.

Borrowing that little, my 3% transaction fee would be $180 — doesn’t even hit the $199 cap. To me, that means I should borrow more, you know, to at least take some advantage of the cap…

But at the same time, I’ve started to grow accustomed to not carrying any credit card debt. Do I really want to dig myself into that hole again?

Sure, if I borrowed, say $10k, I’d send $2k to the mortgage, $4k to Toyota, and then put the remaining $4k in my ING account to accrue interest.

At the current rate, that $4k in savings would “earn” me around $120. That doesn’t even cover the transaction fee.

And is a “free” $120 worth going back to carrying a credit card balance for another year? Not to me…

And technically, factoring the $60 or so of interest saved by paying off the car, it really works out to a complete wash…

$180 transaction fee - $120 ING interest earned - $60 Auto Loan interest saved = $0

So now I’m leaning the direction of NOT borrowing and just staying the course…

Posted on July 26th, 2008 at 7:04 am by Brainy Smurf
Credit Card, Finance, Savings | 1 Comment »

Two Tiered Pricing: Cash or Charge?

Remember when it was routine to be asked, “Cash or charge?”

I’m too young to have ever been asked that question. Or so I thought…

Around a month ago, a Hess station not too far from my house went retro. They started asking that question again because they started selling gas for two different prices. Paying cash got you a 10-cent/gallon discount.

Within 24 hours, it was like 1979 again with lines of cars waiting patiently (or not so patiently) to fill up.

But just at that Hess station.

Down the street, the Exxon station was all but empty. Same thing at Shell. Valero too.

Before long, other Hess stations followed suit.

It was about this time that the Attorney General stepped in saying that it was illegal for Hess to be charging customers more for using credit.

In response, Hess argued that they weren’t charging more for those using credit. Rather, they were discounting the price for customers paying cash.

Wow, how’d the lawmakers miss THAT loop hole? Apparently, they did…

So, a few weeks ago on my way home from work, I had to fill up. The Hess station closest to my house is right next door to a Citgo — they practically share a parking lot — but they had a difference of 15-cents for the price of a gallon.

As I’ve said before, I’m not one to price-shop for gas. I’ll go where ever is the most convenient, but as these two stations are right next door to one another, well, I pulled up to the pump at Hess.

I unscrewed my gas cap, turned around to face the pump, dug out my wallet and only then remembered that I don’t usually carry cash. Oh well, I thought, I’ll just charge it.

Turns out, I couldn’t. They had duct tape over the card reader. I looked at the other seven pumps. They had duct tape too.

Then I saw the handwritten note on the pumps, “Prices are for cash only. Sorry, no debit or credit.”

Wow.

I pulled through and filled up at Citgo. On credit. Using pay-at-the-pump.

The next time I had to fill up I bypassed Hess and went straight to Citgo. Their price was now competitive with the Hess next door but guess what?

They’d taped over their card readers too. “Cash only.”

What the hell?

So I come to find out that it’s a technology issue.

Modern gas pumps aren’t able to dispense the same product for two different prices. In addition, most gas station signs aren’t large enough to display two prices (or technically, 8 prices for all of the different octane levels and diesel) like they used to be, so now some gas stations are just going “all cash”.

Thankfully, this issue only seems to become a problem near select Hess stations, but now that one Citgo has followed suit, the other Citgo across town is probably growing jealous. How long before they do the same thing?

Am I going to have to start carrying cash?

As I think I’ve said before here on PIAC, I’ve only paid cash for gas once in my life. Once. And that was also the only time I’ve ever been inside a gas station after filling up.

No, I’m not that young, but I was fortunate to have grown up in a town where Mobil test marketed “Pay-at-the-Pump” and even a very early version of the SpeedPass. With my mother’s credit card in hand, it was often my job to fill up the family minivan. I never had to venture inside. Not once.

But now, well, I just might be forced to fall victim to all of that eye catching cigarette advertising inside!!! Oh my!

Sometimes it feels like we’re going backwards technologically.

But really, I guess what upsets me the most about a two-tier price structure is that it’s going to make the average (ignorant) consumer think that MasterCard and VISA are to blame for high gas prices and, well, that couldn’t be farther from the truth…

Posted on July 25th, 2008 at 5:14 am by Brainy Smurf
Current Events, Cutting Costs | No Comments »

Intriguing Credit Card Offer: The 0% Offer Makes a Return

I’ve been looking over all of the credit card offers that have been coming in the mail for the past few weeks with a fine tooth comb to possibly use to finance reaching the magic 78% number on my mortgage balance (to eliminate PMI) sooner rather than later.

None have really peaked my interest since that first mailing a few weeks ago from Chase that I noticed offering 0% until April 2009, along with a 3% transaction fee capped at $199.

In fact, none have really come close. A few 1.99% offers until paid in full from Bank of America, which isn’t bad, but nothing lower than that. Citi’s recent offers have been terrible, just terrible, like their rewards.

This morning, though, I logged into my Chase account and scoped out their current “Balance Transfer Offers” and here’s what it displayed:

No explanation of the attached fees — those will likely be displayed only after I select an offer.

Either way, it will likely be the standard 3% with a cap of $199 so that’s what I’ll base my assumptions on.

The duplicated 0% for 12 months offers are obviously more attractive than the April 2009 offer that I received in the mail.

This is also the first time in a long time that I’ve noticed a 0% offer lasting for more than 3-4 billing cycles.

I’m also seeing another additional bonus to this offer — that it’s from Chase.

Unlike CitiBank, Chase allows you to make as many payments per billing cycle as you like. At one point during my big debt paydown, my statement would list over 20 credits each month. That was very convenient. Any day that I had a few extra bucks, I could log in to my Chase account and make a payment.

With Citi, you’re allowed 4 payments per cycle. That would be fine for most, but it doesn’t work real well for me.

Bank of America isn’t great when it comes to making payments either. Even though my checking account is also with Bank of America, for whatever reason, when I make a payment to a Bank of America credit card, it takes a few days for the transaction to appear on the credit card balance.

Of course, on the other side of the transaction, they withdraw from my checking account immediately. Love that.

I’m very close to pulling the trigger.

Of course, though, I need to wait on a response from Countrywide to see if it’s even worth doing.

The entire idea hinges on their answer…

Posted on July 24th, 2008 at 7:25 am by Brainy Smurf
Credit Card, Finance | 2 Comments »

Customer Service, or Lack Thereof : Revisited

So apparently my second inquiry online with Countrywide regarding my Mortgage Insurance got some notice.

I received a reply! I received a reply! And it only took a few hours! How about that?

Here’s my original inquiry from July 16 that they never responded to:

Hello!

I’m wondering if my PMI will be dropped automatically when my Loan to Value percentage reaches 78%.

I recently broke the 80% threshold and requested that PMI be cancelled, but received a letter asking for me to pay for an appraisal to make that happen. I didn’t find that an acceptable offer so now I plan to hit the 78% mark.

The law states that once the 78% mark is reached, the mortgage company is required to cancel PMI and I just wanted to make certain and verify that that is the case — without me having to schedule an appraisal or spend additional money out of pocket to make it happen.

Thanks very much!

Never got a response. So yesterday, as detailed here, I tried again:

Just thought I’d try this again since it’s been more than 1-2 business days and I haven’t yet received a response.

I’m wondering if my PMI will be dropped automatically when my Loan to Value percentage reaches 78%.

I recently broke the 80% threshold and requested that PMI be cancelled, but received a letter asking for me to pay for an appraisal to make that happen. I didn’t find that an acceptable offer so now I plan to hit the 78% mark.

The law states that once the 78% mark is reached, the mortgage company is required to cancel PMI and I just wanted to make certain and verify that that is the case — without me having to schedule an appraisal or spend additional money out of pocket to make it happen.

Thanks very much!

A couple of hours pass, and wham, they respond with:

Posted 07/22/2008

Reply : Dear Brainy Smurf:

Thank you for your recent Internet inquiry addressed to the Customer Service Department.

As per our records a PMI deletion letter has been mailed to you on July 09, 2008 asking for the Certificate of Value to confirm Market Value and LTV Ratio. You are requested to either fax or mail the appraisal report for further research.

You can fax the Certificate of Value at (805) 520-5019 or mail it to:

Address:
Countrywide Home Loans
SV-314B
P.O. Box 5170
Simi Valley, CA 93062-5170

Thank you for communicating with us electronically; we appreciate the opportunity to be of assistance.

OMFG! Thank you, Captain Obvious…

Yep, that is true that I requested PMI deletion on July 9.

See, the thing is, I KNEW THAT ALREADY!

I even went so far to predict that this was going to be a long drawn out hassle.

So, I respond with:

Hello again!

The response I received today didn’t actually answer my question — just stated what I already knew. I am fully aware that I requested PMI deletion on July 9 when I reached the 80% threshold.

The PMI deletion letter arrived and asked that I schedule and pay for an appraisal of my home. To me, this was unacceptable, so I will not be taking that route. More hassle than it’s worth — even though $130 is a very reasonable fee for an appraisal.

My question now regards whether or not the PMI will be dropped when I reach the 78% LTV ratio. As I understand it, at that point, the law requires that the PMI be dropped based 100% on the original value of the home — NOT the current market value, which is obviously higher anyway — I just don’t want to pay any extra to prove it.

I’m asking now if that is indeed the case — when my mortgage balance dips below $109980, will the PMI will be dropped without any appraisal fee required?

Thanks much!

Seems pretty simple, right? Just looking for a yes or no answer. Right?

Overnight, they responded (I’m now impressed with their response time — though it took them awhile to get going…)

Posted 07/22/2008

Reply : Dear Brainy Smurf:

Thank you for your recent Internet inquiry addressed to the Customer Service Department.

Our records indicate that we have requested the escrow review department to mail you the list of requirements if it is eligible for PMI deletion. Please allow 7-10 business days for receipt. If you should require any additional assistance, please contact our PMI Department at (800) 669-9092.

Thank you for communicating with us electronically, we appreciate the opportunity to be of assistance.

So much for a simple yes or no answer… This is like a Presidential debate. They totally dodged my question. Sheesh…

I’m all but certain that this apparently too-confidential-to-have-online “list of requirements” that they’re mailing me *still* won’t answer my question simple yes/no question.

In fact, I’d bet it’s the exact same letter they mailed me back on July 9.

Looks like I’ll be camping out at the mailbox waiting, again, for Countrywide to respond (and swindle another $85.15 from my account).

Sigh…

(Oh, some may wonder why I don’t just pick up the phone and ask a customer service rep… Reason is, I want this in writing, or email, or online on THEIR message center. In the past, this has saved me a lot of trouble when it comes to billing disputes. Playing he-said/she-said has *never* gotten me far. And if I do pursue this all the way up to a complaint with FTC, I want all of Countrywide’s claims in writing.)

Posted on July 23rd, 2008 at 7:48 am by Brainy Smurf
PMI - Mortgage Insurance, Rants | 3 Comments »

Customer Service, or Lack Thereof…

Still awaiting an online response from Countrywide regarding my PMI situation.

Their website claims a 1-2 business day response time because they need to individually research each inquiry or some such nonsense.

Thing is, my first inquiry was on July 16.

Not even including that specific day, it’s now been 3+ business days.

I just submitted another long-winded and slightly more obnoxious inquiry with essentially the same question, “Will you drop my PMI at 78% like you’re supposed to?”

I’m almost to the point where I’ll pick up the phone, but chances are, that won’t result in a real solid answer either.

I’m pretty familiar with how call centers operate and, sadly, I’m already quite aware that my inquiry is not a question that level one support will be able to answer.

Level two (or three) will likely just tell me what I want to hear just to get me off the phone and out of their ear.

That’s probably why I haven’t received any answer at all online. Ignore the customer — they’ll go away on their own eventually…

Customer service is truly wonderful these days…

Posted on July 22nd, 2008 at 8:17 pm by Brainy Smurf
Life, PMI - Mortgage Insurance, Rants | 1 Comment »

Credit Card Rewards are a Complete Joke

I’ve often read about people taking advantage of these “rewards” that their credit cards offer and how wonderful they can be, but I’d never actually taken advantage of one.

Having charged over $2k on my Citi Rewards card — my only card with rewards — during vacation a few weeks ago, I see that my statement has been handsomely rewarded with a sizable number of “ThankYou” points.

So I went over to see what kind of rewards my “ThankYou” points could get me.

Turns out, not much.

Let’s see… A cash-back check for $50 would cost me 8000 ThankYou points…

Now I know that a few of my purchases earned double and sometimes even triple the ThankYou points, but technically, the big reward is a mere $50 for spending $8000 dollars.

Think about that.

What it really says is, “Spend $8k with us and we’ll give you $50 back!”

Frankly, I’m insulted.

But, wait, there’s more! Spend $16k and they’ll throw you a Benjamin! Wow, such a deal.

Really… that works out to just five-eighths of a percent back.

Not much to get excited about, huh?

So, since I’ve only spent a few thousand dollars (over $5k), the only thing I really qualify for is a subscription to an assortment of magazines that I don’t really want anyway. They’re also magazines that I could get for free countless other places too…

Gee, thanks… That’s an awesome reward.

Posted on July 22nd, 2008 at 4:28 pm by Brainy Smurf
Credit Card, Rants | 6 Comments »

Batmania Sweeps the Nation but I’m Not Buying It…

Batman this, Batman that…

Where’d all of this hype come from? Who’s responsible? And how many times can they make the same movie over again and still generate this much hype?

I don’t understand it.

I can’t claim to have seen the latest movie or even the previous 3 Batman movies.

That one with Danny DeVito as the Penguin sealed it for me — Batman movies from there on out would a complete waste of time.

(Perhaps I should have more accurately said that Tim Burton movies are a waste of time… Waste of money too…)

The original Batman television series from the 1960’s was easily the best. Even the 1966 full length movie ranks right up there, even though it just felt like a really long episode.

Adam West was the best Batman ever. No doubt in my mind. He made the character fun.

“Some days you just can’t get rid of a bomb.“

To this day, while watching Family Guy, I can’t help but think of Batman every time Mayor West speaks. Adam West didn’t just play Batman four decades ago. Adam West *is* Batman.

I remember when the first (but actually the second) Batman movie came out in 1989. You know, the one with Kim Basinger?

I was pretty excited (there was HUGE hype then too!), but then disappointed to see the, well, new and supposedly improved Batman. First off, his Batmobile sucked.

And since when did Batman wear all black?

Where did those washboard abs come from?

Why wasn’t anything labeled in the Batcave?

And really, who decided that Batman should now where more eyeliner than a crack whore? Tim Burton?

And, lastly, was it just me or was it hard not to just keep seeing Mr. Mom or Beetlejuice in that movie?

In the end, I thought Michael Keaton was an alright Batman. A terrible Bruce Wayne though. Jack Nicholson was also a decent Joker. Not as great as Cesar Romero, but still, pretty good.

I watched the 1989 movie this past weekend on ABC Family. At the same time, TNT was showing “Batman and Robin”. See what I mean about the hype? You couldn’t escape it this past weekend.

Remember when movie hype actually lasted for almost and entire summer? I’m thinking about movies like Independence Day, Terminator 2, and even Ghostbusters…

Every fast food restaurant had some sort of collectible glass available, I mean, the movie was a big deal. There were arcade games that were actually good — not just commercials for the movie. They even made action figures that people actually wanted. I don’t know — it was like they actually put some effort into marketing the movie.

Now though, as much as they’ve been making of this Dark Knight movie lately, in another week, it’ll be old news. No one will care.

Some Martin Lawrence in drag movie will come along and knock it off the top and the poor Dark Knight will be forgotten, the action figures will be in dollar stores across the country, the related video game will be in the bargain bin at BestBuy, and Heath Ledger will go back to just being that guy from the gay cowboy movie that OD’ed or something.

Anyone remember that Indiana Jones movie that came out earlier this summer with much fanfare?

Yeah, I didn’t think so…

Of course, this is all just my opinion.

I could be wrong.

Posted on July 22nd, 2008 at 8:08 am by Brainy Smurf
Current Events, Movies, Rants, Retro, Television | 2 Comments »

Debt Payment: Check | Savings: Um, Maybe Next Year…

I’ve just updated my side bar progress for my
2008 goals and so far, I’m well ahead of pace.

My financial goals added up to $30846 this year. To date, I’m right around $21k of the way there or just under 70%.

We’re just over the half way point of the year, so things should be looking great, right?

Well…

Starting at the top, I have finally conquered the credit card monster. I’ll never again approach my all time high of around $28k. I’m done with that forever and by “that”, I mean carrying a high interest balance.

Since paying it off in full, I’ve run up around over $1k every now and then, only to pay it off in full before the statement is issued.

Moving down to my savings goal, I dunno, lately I’m just having a hard time imagining this goal coming to fruition in the next 5 months. Simple math tells me that it can be done (at the rate of $2k per month).

That number seems crazy-high to me, but it’s right around the amount that I’ve been throwing towards debt for years now. With the debt gone (just around the corner), it shouldn’t be a problem but for some reason, I just can’t imagine throwing that kind of money towards savings on a monthly basis…

Ahhh, the PMI…

While I’ve reached the goal I set back in December, I can’t yet claim that I’ve eliminated PMI. It’s been an on-going process and I’m still sending additional money towards my mortgage to make it finally happen. (please?) So, while this goal may appear to have been completed, it continues to suck up a large portion of my monthly budget which would otherwise go elsewhere…

The last goal is my auto loan — listed last because it has *always* been the lowest priority.

That’s about to change though as I’ve already initiated a payment plan that will see it drop a minimum of $900 per month starting this week and being in my “Red Zone“, it will be done and over with by mid-September and possibly even sooner.

In the end, three out of four isn’t bad. I’ve mastered debt repayment already, but getting the hang of saving is still a work in progress…

Maybe next year…

(I know, I know… It’s only July…)

Posted on July 21st, 2008 at 10:16 am by Brainy Smurf
2008 Goals, Finance, Life, Savings, Success | 1 Comment »