Nailed with Foreign Transaction Fees

As expected, CitiBank hit me on my latest statement with some Foreign Transaction Fees we unknowingly incurred while we were on vacation earlier this month.

On my last statement, they charged me $5 for one Canadian transaction that I made online to buy some CFL football tickets.

Naturally, though I’d made the initial purchase weeks in advance, they didn’t display that additional fee on my “latest transactions” until after I’d already made 6 more purchases while in Canada. Gee, thanks…

You see, the Metro Toronto Zoo was a pretty good deal and I enjoyed the meerkats, but had I known that it was costing me an additional $5 each time I pulled out my Citi MasterCard, I probably would have kept it in my pocket.

So on this latest statement that came out this morning, I was kind of expecting $30 in foreign transactions fees, you know, $5 multiplied by 6. That would make sense…

But I was incorrect.

The foreign transaction fee listed on my latest statement is $31.33.

No explanation of where that number comes from. It doesn’t even divide evenly?! Just some arbitrary number apparently…

I’m not going to call them on it. I’m just moving on and chalking it up as a learning experience: I won’t be using their card in Canada ever again.

Adding insult to injury, the transaction fee didn’t even get me reward points.

Posted on July 30th, 2008 at 7:54 am by Brainy Smurf
Credit Card, Rants, Vacation | 2 Comments »

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 »

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 »

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 »

Red Zone Finances

Sometimes I find myself going into a sort of “kill mode” when it comes to debt.

You know, when you stray from the steady payment plan and just recklessly throw every last penny at one specific balance…

Know what I’m talking about?

For me, that happens every time a balance falls below $4k. And when that happens, well, it’s game time.

I have quite a bit of experience at this sort of thing. Not something to be proud of, really… I mean, who wants to brag about having carried many, many, many $4k+ balances in recent years? (Me.)

But the one thing that it has is exposed is a debt repayment pattern of mine:

An old MBNA credit card’s balance fell to $3563 back in May of 2006 and two months later, it was gone.

My Bank of America credit card’s balance fell to $3267 in December of 2006. By January 2007, it was gone.

More recently, my Citi credit card balance was $4500 in December 2007. I wiped it out in January 2008. Wow.

And my last remaining credit card debt, the Chase account… Well, in February it had a balance of $3518. But by the April statement, it was holding steady at $0.

See what I mean?

But the last few months have been sort of ho-hum for me on the debt re-payment front. Things are moving, yes, but they’re not very exciting…

I thought I was making great strides in the past few weeks in my quest to eliminate PMI by knocking off an extra $6000 off of my mortgage balance over the year, only to find out that I need to knock off another $2500. And even that might not do it. Not happy about it.

But in the meantime, my auto loan balance has snuck through the $4k’s and now sits with a balance of $3986.

You know what that means?

Time for the red zone offense to take the field.

Yep, two months or less until Toyota mails me the title.

This is my red zone.

(Yeah, yeah… I know this is the wrong time of year to make football references… Go Bears!)

Posted on July 16th, 2008 at 7:43 am by Brainy Smurf
2008 Goals, Credit Card, Finance, Success | 6 Comments »

Reaching the Automatic PMI Cancellation Mark

According to the Federal Trade Commission, Private Mortgage Insurance (PMI) must be terminated automatically by the mortgage company when the borrower reaches 22 percent equity in the home based on the original property value — most often, the purchase price.

In my instance, the purchase price of my home was $141k. A bargain, really. Even back in 2002.

As of this morning, the remaining balance is $112,535.99. That works out to 20.187% equity based on the original property value.

To reach the 22% mark, I need to pay down an additional $2,555.99 in principle — preferably before October of this year when the mortgage company re-evaluates my escrow account (where the PMI payment is drawn from) and re-calculates my monthly mortgage payment for the following year.

If this is the first post you’ve read of mine on the subject of PMI cancellation, you may want to take a look at this earlier post where I was, in my opinion, wrongfully denied cancellation by Countrywide.

I plan to do this as soon as possible and am currently evaluating various promotional credit card offers I’ve received in the mail to be able to make the additional payment as soon at this week.

The most attractive offer so far is from Chase Bank. It’s 0% until April of 2009 with a 3% transaction fee capped at $199. In this scenario, I’d write a check to myself for $2555 and be charged with a $76.65 transaction fee (3 percent).

My new balance with Chase would be $2631.65 at 0% for 8 months. That works out to around a minimum of $330 per month to pay it off before any finance charges come along. That wouldn’t be a problem.

If this plan were successful, it would prevent paying $85.15 in PMI charges for at least 4 months (possibly more), a $130 appraisal fee, and loads of difficult to calculate interest.

So, for a cost of $76.65, I could save an absolute minimum of $470.60.

Sounds like a good plan.

Before any of this happens though, I first need to get in contact with Countrywide and ensure that reaching the 22% mark will indeed automatically cancel PMI without any additional effort (or $130 appraisals) from me.

My interpretation of the law (and I read it like 50 times over) indicates that automatic cancellation at 22% has nothing to do with an increase or decrease in the value of the home, only with how much the mortgage is paid down. I have my doubts, but we’ll see…

(In all actuality, my wife will probably make the confrontational phone call. She’s *way* better at that sort of thing than I am. That’s why I married her!)

Worst case, I knock off a lot more principle, save a bunch of money, file a complaint with the FTC, and then see where that takes me…

Posted on July 15th, 2008 at 1:13 pm by Brainy Smurf
2008 Goals, Credit Card, Finance, Mortgage, PMI - Mortgage Insurance, Rants | 5 Comments »

Fleeced by Credit Card Foreign Transaction Fees

Last month, I used my AT&T Universal credit card from Citi to buy some CFL football tickets online — the only available option from 500 miles away. It was a game that we were going to attend while on vacation.

Back when I bought them, I bemoaned all of TicketMaster’s surcharges that I was forced to pay. Something about “convenience”…

Little did I know that my credit card company would take a slice as well… just a few weeks after the fact.

Upon returning home from our vacation, I noticed that my credit card was carrying a balance. A nice and even $5.00 balance. Not something that I expected, so I logged in to see the details:

A foreign transaction fee. Okay, whatever. It’s just five bucks, right? Not that big of a deal. But buried in the fine print (yes, the fine print even exists on a computer screen), I came across this:

Your Card provides the convenience of transacting in foreign currencies worldwide wherever MasterCard is accepted without having to exchange and carry more foreign currency than you need for your transaction. Each purchase you make in a foreign currency is subject to a one-time transaction fee. The Annual Percentage Rate for Standard Purchases shown on this statement applies only to purchases made in a foreign currency.

There’s that magic word again: convenience.

I’m sorry, but if a vendor lists that Visa or MasterCard are accepted at their establishment, the consumer shouldn’t be paying any additional fee on their purchases.

Now, again, why am I making such a fuss about one $5 transaction fee? Well, because I used the card SIX more times while in Canada after this last statement came out.

My understanding of the line “each purchase you make in a foreign currency is subject to a one-time transaction fee” means that I’m going to get hit with another $30 in unexpected fees at the end of this month.

That’s a lot of money for “convenience”, don’t you think?

Now I realize that I used a MasterCard in this instance, but I looked up the terms and conditions on my Visa card through Bank of America, and they appear to be the same. Wouldn’t have mattered which card I chose.

Of course, neither discloses what the exact “convenience” fee will actually be in the fine print. Depends on the weather, I guess.

But in Visa’s case, I have a bit more of a problem with the whole idea of foreign transaction fees — especially in countries that they currently operate in and have operated in for years!?

(I target Visa here because I can’t recall a widespread MasterCard advertising campaign that involves non-domestic transactions.)

See, of late, you can’t watch more than 20 minutes of NBC programming without viewing a Visa commercial where they tout themselves as an official sponsor of next month’s Olympic Games in Beijing.

Going to their website, they boast:

Visa-branded ATMs have been installed in and around Beijing for your convenience.

As a Worldwide Partner, Visa is the only card accepted at any Olympic venue throughout China and for Olympic merchandise purchased online, in Olympic retail stores and by catalog.

Wow. There’s that word again. Convenience.

Odd how they “conveniently” fail to mention that if you use one of those Visa-branded ATMs in Beijing, you’re going to get dinged with an extra fee — from them and probably your bank back home too if you have a linked debit/credit account.

Convenient.

Posted on July 11th, 2008 at 12:41 pm by Brainy Smurf
Credit Card, Finance, Rants | 3 Comments »

Last Minute Pre-Vacation Financial Maneuvers

Just three more days until we go on vacation so it’s time to start tying off all of the loose ends that could be forgotten as we head out the door.

The first thing we did was stop mail delivery for the time we’re away. It’s super simple to do now over the internet. That’s done.

We’ve gotten all of our legal documents, passports, green cards, and birth certificates together and ready for the trip. Sure, we’re only going to Canada, but the border crossing rules seem to change on a daily basis these days.

Never hurts to have everything on hand but even with all of the documentation in the world, it’s probably not enough to prevent an overzealous border patrol agent from handing out a few one way tickets to Guantánamo Bay.

Yes, I think the Patriot Act is stupid. Always have, always will.

The next thing we did was initiate transfers from our ING accounts to our checking accounts. Because this can take 2-3 days to clear, today was the day to do it. We won’t necessarily need the money while on vacation, but it will be nice to have it readily available.

I also made sure that all of the bills are paid and for those that are expected to arrive while we’re away, I’ve set-up an auto-payment. That’s overkill to a certain degree as we’ll be back home long before they’re due anyway. Better safe than sorry, though.

And the last thing I did was make sure that all of my credit cards have a $0 balance. Not only will this make keeping track of our vacation expenses very easy, its just eases the mind.

For the trip, I’ll be carrying two personal credit cards and one business card. Why, you ask?

Well, I’m only planning on using one card for everything, but on a past vacation, while shopping, the one card I had in my wallet was denied by the credit card company’s fraud department.

Apparently I was making suspicious purchases that were out of line for my account, so they locked it up.

Understandable, really, we’d probably covered over 500 miles and two countries in the span of 24 hours with purchases all along the way. I can see how it might look fraudulent.

After the rather embarrassing denial, it was humiliating actually, I called the number on the back my credit card from my wife’s cell phone and sat on hold as the battery power began to fade. Anxious moments, let me tell you…

Anyway, you know how when you get a new credit card they always say that you need to activate it from your home phone number? Well, they mean it.

I spoke to a very helpful and sympathetic customer service rep but because I wasn’t calling from my home phone, they weren’t able to verify that I was indeed the true account holder.

“Sir, can you call back from your home phone?”

“Um, no.  I’m standing in a parking lot 300 miles from home… I’m on vacation…”

Again, it makes sense, I suppose, but I still wasn’t happy about it.

Thankfully we were only a day away from home and my wife’s debit card could cover the rest of the vacation’s expenses, but it taught me a lesson — always have an EXTRA credit card on hand when away from home.

Kinda like American Express’ old tag line — “Don’t leave home without it” — but without the fees… That’s the plan this time… multiplied by three.

Posted on June 23rd, 2008 at 1:05 pm by Brainy Smurf
Credit Card, Finance, Savings, Vacation | No Comments »