Category: Financial

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Household Bank Credit Card

So a few weeks back, I was reading SlickDeals and apparently there’s a new credit card that may interest you folks: Household Bank Credit Card

Household Bank 2% Cash Back Cards

The Household Bank 2% Cash Back Cards are great for people who need to continue establishing credit with a brand they can trust. These cards offer 2% cash back on card purchases, value and built in benefits you can use every day and everywhere you shop.

It’s a credit card with 2% cash back on ALL purchases. Previously the winner was Fidelity Investments Rewards Card giving back 1.5% cash back on ALL purchases.

Of course I only recommend this as a fall back card for all those purchases that don’t qualify for 3-5% cash back and you’re only making 1-1.5% cash back on those purchases.

At first, I was like great deal, but who is Household Bank exactly. It appears that they’re own by HSBC, giving me a lot more assurance of this credit card company.

You can view more detailed terms and conditions:

You will receive 2% earnings redeemable for cash (with a maximum of $400 annually) on new net retail purchases charged to this credit card. Cash redemptions can be claimed in increments of $25 USD only. Upon approval, you will receive the Rewards Terms and Conditions.

$400 cash back annually equates to having to spend $20,000 to max out on their cash back, much more than enough. Unlike Advanta which has capped rewards to $60 annually, which I hit in a month or 2.

Unfortunately, they’re only starting me with a $2,000 credit limit. I’ve requested a credit limit increase immediately after applying, but I got a post card in the mail that said:

… we are unable to grand a credit limit increase at this time for the following reason(s):

THIS ACCOUNT HAS NOT BEEN ACTIVATED.

Guess I was a bit too impatient. I got my card and activated it today, and of course submitted a new credit limit increase request.

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Safeway Gasoline Visa $75 Limit

safeway gasoline visa limit So I was pumping gas at my local Safeway gas station and I noticed the sign to the left. I’ve seen limits before, but they generally have 1 single cap for any type of credit cards. I found it extremely peculiar that ONLY Visa had a lower cap of $75 when all others had a higher cap at $100.

I’m not sure if this is true at other gas stations, if it’s just a Safeway thing, or maybe these limits are set by the credit card companies themselves. Maybe it’s just this particular Safeway. Typically Visa and MasterCard are neck to neck on these policies.

Update: Thanks to Ungsunghero for pointing me to this article: $75 limit on credit card charges at gas pump causes frustration:

Station owners say they simply are passing through policies of Visa and MasterCard, which won’t reimburse them more than $75 per transaction at the pump if there’s a disputed charge or a fraudulent card is used.

However, this article does state that both Visa and MasterCard has a $75 per transaction limit. Ungsunghero’s guess is that since Visa is the most common credit card out there, making it the most common one to commit fraud with, Safeway may be trying to lower their risk, which I can agree with.

Update #2: The thing as Ungsunghero later pointed out (which I also already knew) is that profit margins are very slim for gasoline. Before they would make 10 cents in profit per gallon and if you used your credit card, half of that probably goes to paying the transaction fees. And the thing with credit card fees is that there’s a base fee per transaction + a percentage of the total transaction. So as gas prices go up, so do the fees. If I recall correctly, the fees have now gone over the 10 cent profit margin.

“It’s the merchants’ decision to limit purchases,” says Visa spokesman Paul Wilke. He adds: “Customers always have the option of paying with the card at the cash register” where its policy differs from the pump.

[…]

Station owners say they don’t like the limits. If customers reswipe their card to fill up, it forces retailers to pay the card issuers more transaction fees. If they drive off without a full tank, the station lost revenue.

The reason why everyone swipes at the pump is because it’s more convenient. Who really wants to go into the convenience store, wait in line, pay a set limit, and then walk all the way back?

What I find completely ridiculous is that credit card companies are only covering a set limit per transaction, but they’re allowing customers to reswipe their cards multiple times?!?! I have to side with the gas stations on this one. Why not only allow the customer to swipe once and give a higher protection limit. I know the answer, you don’t have to tell me. Credit card companies are greedy bastards.

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High Risk Credit Card Holders Logic?

Not sure if you caught my recent entry on how Consumerist Banned Me From Commenting, but Consumerist just posted their The Consumerist Comments Code, which I’m not sure if I have a factor in causing or not.

The first point they make is: No junk comments:

Your comment should be a meaningful response to the issue raised in the post. Objections to an editor’s headlines or writing style should be emailed directly to the post’s author. Verboten: “Why is this on Consumerist?“, “tldr”, “Why did they even shop there in the first place?”, “This is a non-issue”, “Slow news day?” “Pwnd” “Yawn”, “First”, “People still ______” (use dialup, eat fast food, breathe air, and so forth), “Old news”, “lol”, “This is why I don’t shop there,” etc.

My comments aren’t exactly “Why is this on Consumerist?”. Usually I provide one or more reasons why it should not be on Consumerist.

What happens if I break these rules?

You may be banned. We might warn you in the comments. We also might not. If you ignore a warning, you will probably be banned. If you feel your ban is unwarranted, email your appeal to moderator@consumerist.com and we’ll see if we can work it out.

I find it quite useless to try to warn users inside the comment section. Often times I would post a comment and never return to see the story again. I wonder why they don’t just email the user giving him the warning.

Anyway, Consumerist recently posted this article: Risk-Based Pricing Is A Myth and I have long wondered a very similar question.

How exactly does increasing interest rates or charging late fees help you in getting money from someone who’s already late paying the bill? Logically, I’d try to make it easier for them so they actually can pay you.

As noted in the article, late fees and high interests rates don’t mitigate risk, they just make credit card companies filthy rich. I like the idea of how if you’re late on a payment or if your financial situation has changed (loss a job), decreasing your credit limit sounds like a good way to mitigate risk. If someone can’t ever make enough money to utilize their full credit line, I don’t see how increasing interest rates is going to make it work any better.

Though I do have to say, thanks to all you “high-risk” credit card holders, “low-risk” credit card users like myself can reap the benefit of rewards and cash back. For that, I thank you.

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TransUnion Settlement To Provide Free Credit Monitoring and Scores

So awhile back I read about on SlickDeals and Consumerist that there was a lawsuit involving TransUnion and they’ve agreed to give 6 or 9 month free credit monitoring and a bunch of other perks to basically every American, but you were only allowed to sign up on June 16th, 2008 or later.

June 16th came and went and I forgot about it, but thanks to WordPress drafts, I knew I had wanted to blog about it.

For a brief overview, you can read this MSN article: Consumers win free credit scores:

Any consumer who had a credit card or a mortgage, auto or student loan, or other open credit account or credit line in the U.S. anytime from 1987 to May 28 of this year will be able to choose from two free TransUnion services for a limited time, according to the terms of a settlement, which likely sets a record in affecting the largest number of people.

The lawsuit, filed in federal court in Chicago, claimed that TransUnion had violated the Fair Credit Reporting Act when it sold consumer information to businesses for their targeted marketing efforts.

[…]

Seeking to end a class-action lawsuit that’s been pending for almost a decade, TransUnion agreed to offer consumers one of two options:

  • Six months of TransUnion’s credit-monitoring service for free, giving consumers unlimited access to their credit reports and scores, and e-mail notifications when changes occur on their credit reports. The settlement values this service at $59.75.
  • Nine months of the credit-monitoring service, plus access to the credit scores used in insurance decisions, and TransUnion’s mortgage simulator service, by which consumers can see how their credit score affects their mortgage rate. Value: $115.50.

Consumers who choose the first option sacrifice their rights to enter a class-action claim against TransUnion, though they might still bring an individual case, while those who choose the second option sacrifice any further legal claims of any kind in the matter. Consumers will not need to provide a credit card to sign up for either service, and both services will simply end — that is, TransUnion will not automatically sign people up for a paid service, according to the settlement agreement.

There is a third option: Consumers can sign up for a cash payment instead of the free services, but any such payments won’t be made for two years — and they’ll be paid only if there’s money left after any other “post-settlement claims” have been paid out of a $75 million fund set up by TransUnion for the purpose, according to the settlement.

[…]

Eligible consumers will be able to choose their free service as of June 16 by going to ListClassAction.com or calling 1-866-416-3470.

Personally I don’t really have much use for this service. I already can get daily credit scores from Credit Karma (which is based on data provided by TransUnion). I also get monthly TransUnion credit scores from my Wamu Credit Card.

The credit monitoring service is nice, but if it’s only going to last 6 or 9 months, then I really don’t have a use for it.

The best part of this settlement is the fact once your free service period ends, you don’t automatically get signed up to a paid service. The service will automatically terminate and if you want to continue using it, you probably have to call in and request so. There’s probably a way to do it online too.

I’m actually contemplating on the 3rd option: cash payment, even though there’s a risk of me getting nothing, but the services that are being offered to me has pretty much 0 value to me.

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401K Loan

So a few days ago, Chokoboii and I were discussing about credit cards and loans and one thing he said that really irked me was: borrowing from CC is always the first choice, it’s the most convenient

I counter with credit cards loans should only be used as a last resort: interest rates are high, fees are high, and convenience is how people end up in the cyclic credit card debt. I asked if he was referring to 0% intro APRs, but his response was: I’m a fan of convenience, so opening an account…waiting for that card to come in..transfer balance..then closing the other one is kinda a waste of time

Somewhere down the road, I found out he owned a condo and then introduced him to HELOC (home equity line of credit), which is more similar to borrowing from a credit card than taking a loan out from a bank. Your HELOC is based off the value of your house and sits there with no fees. You only have to start paying interest once you take money out of it, and once you pay back the whole amount, the interest fees stop. According to Bankrate.com, a $30K HELOC is currently around 4.8% and a $50K is currently around 4.3%, which is a lot cheaper than typical credit card APRs which are at 10%+.

Anyway, what does all this have to do with a 401K loan? After talking to Chokoboii, in an unrelated incident, I was checking out my 401K to see if I should readjust what to invest in. That’s when I noticed there was this Loans or Withdrawals link. Clicking on it, I found out I had the following options:

  • LOAN – PREAPPROVED | $1,000.00 – $15,800.00 | 6.00%
  • PURCHASE OF PRIMARY RESIDENCE LN | $1,000.00 – $15,800.00 | 6.97%

The amount I could borrow looked close to half of my current 401K portfolio. I did a little more research and found this article: 401k Loans and 401k Hardship Withdrawals.

Some interesting things to note:

  • The primary benefit of 401k loans is that the proceeds are not subject to taxes or the ten-percent penalty fee except in the event of default.
  • The government does not set guidelines or restrictions on the uses for 401k loans.
  • In most cases, an employee can borrow up to fifty-percent of their vested account balance up to a maximum of $50,000.
  • Even though you’re borrowing from yourself, you still have to pay interest!
  • unlike interest paid to a bank, you will eventually get this money back in the form of qualified disbursements at or near retirement
  • the interest you pay back into your 401k plan is tax-sheltered.
  • Another consideration is employment stability; if an employee quits or is terminated, the 401k loan must be repaid in full, normally within sixty days.

Very interesting… Basically, there is no restrictions on what I use the loan for. The loan isn’t subject to taxes nor penalty for early withdrawal (since it’s not really a withdrawal). You have to pay interest on this loan, but you’re not paying the company nor the bank, you’re paying yourself. Since that money would have been accumulating interest or dividends, I assume that’s what your interest is compensating for. The interest you pay back is also tax-free until you withdraw it.

I talked to Derek a bit about this and he said the major drawback is the fact you’re tied to the company until you pay back this loan, because once you quit or get fired, you have to pay back the loan in 60 days, or else the loan would be declared in default and you’ll have to pay taxes + penalty fee for early withdrawal.

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As an Amazon.com Seller

Not sure if you’ve noticed, but I’ve added an Amazon.com Store link on my side bar, which currently lists the items I’m selling on Amazon.com. I began to buy and sell stuff on Amazon.com a long time back, but only recently (a few months ago) began to push a lot more volume (instead of 4 or 5 items a month, I am now pushing 30+ items a month). And it’s bringing in quite a shiny penny. Actually, I’m not too sure how shiny the penny is as in I haven’t really done any bookkeeping besides knowing that I’m selling items for more than what I purchased it for, which can range from a few dollars to over a hundred dollars per item.

I’m not going to go too deep into how this all works and what my “secrets” are, but if you’re interested in anything I’m selling and I personally know you, I can probably sell it to you at cost. Also ignore anything that’s listed as $2,000 as that just means I’m currently not selling it, probably due to insufficient stock or the pricing isn’t at what I want to sell it for.

I’ve also been maximizing my earnings by using my Amazon.com credit card and directing people to purchase under my affiliates account. The credit card gives me 3% back on all Amazon.com purchases, which has netted me $75 worth of Amazon.com gift certificate rewards for each of the last 2 months. The affiliates account started with only $90 earnings a few months ago, but just last month, I’ve broken $200.

Concurrently, I also list the items in my Half.com Shop, which gets me purchases once in awhile, but they don’t really have that high of an audience as Amazon.com. I’m currently also thinking of becoming a merchant on Buy.com Marketplace, but they have a bit more requirements to join.

All in all, I’m happy with the results.

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Chase Freedom Credit Card + Chase Checking Account

Some time earlier this week, we had a discussion over dinner about credit card with rewards. Chase Freedom was mentioned to be one of the better cards to use overall since it gives you 3% cash back on the top 3 categories on your bill. Today I saw this thread: Chase Freedom Credit Card Holders! 3% Rewards in TOP 5 w/ Chase checking account

The Chase Freedom credit card rewards 3% cash back or 3 points per $1 on the first $600 in purchases in the top 3 of 15 Everyday categories where you spend the most each month. Chase checking account customers will earn 3% cash back or 3 points per $1 on the first $600 in purchases in the top 5 of 15 Everyday categories. That’s 2 additional Everyday categories. If you are an existing Chase Freedom credit cardmember and a Chase checking customer, your account will be upgraded to these new benefits; a confirmation letter will be mailed when this takes place in June, 2008. To apply for Chase Freedom with the exclusive benefits for Chase checking customers, or to learn more including pricing and reward program terms, see a Chase branch banker. Restrictions apply. Subject to credit approval. Chase credit cards are issued by Chase Bank USA, N.A. There are 15 Everyday categories consisting of grocery stores (that are not affiliated with or departments of superstores, warehouse clubs or discount stores), gas & convenience stores, quick service payment/fast food restaurants, telecommunications, cable/satellite TV/Internet Service Providers, video rentals, department stores, dry cleaners, drug stores, movie theatres, local and suburban commuter passenger transportation (including ferries, bridges, tolls, parking garages, taxis/limos), pet supply stores and veterinary services, utilities, beauty shops (salons and spas), or gym/recreation memberships. Benefits will no longer apply if, at any time, the checking account is closed.

For more details, visit Chase Exclusives.

Do note, there is a cap on the amount of 3% rewards you get per month (currently capped at $600, which translates to $18 worth of 3% rewards). After which, all remaining purchases will be rewarded at the 1% tier for the remainder of the month. That equates to $7,200 in purchases eligible at the 3% tier which translates to a maximum of $216 of cash back per year.

If you want to try out the Chase Freedom credit card, currently there’s a $100 sign up bonus: Chase Freedom Application

If you want to try out Chase checking account, currently there’s a $125 sign up bonus: Chase Checking Application (requires you to be logged into any Chase account)

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HSBC Direct Increases Interest Rate: 3.50%

I just got this email:

The last time I wrote to you, I told you how committed we are to helping you get the most from your money and reach your savings goals faster.

Well, even as the economy continues to prove challenging and the Federal Reserve reduces rates, we have some good news to kick off your summer.

Your Online Savings Account rate has increased to 3.50% APY*, effective June 2, 2008. That’s up from 3.05% APY. And it’s 9x the national savings average.** This at a time when some other savings rates have been falling.

This great new rate will be available through August 15, 2008. After which, you’ll continue to get our great everyday rate. So the faster you deposit, the faster your money will grow.

And you can feel confident knowing that we’re part of the global HSBC Group ranked number one by Forbes magazine in their annual Global 2000 ranking issued on April 21, 2008.

Once again, I sincerely appreciate that you have chosen HSBC Direct as the place to make your money grow.

Sweet! While other banks are hovering between 2.75% and 3.15% (HSBC Direct was at 3.05% if I recall correctly) and when interest rates continue to drop, this is a sweet interest rate! Too bad it’s only going to last 2.5 months. I doubt others are going to follow suit, but who knows.

If you don’t already have an HSBC Direct account, you can get more information here: Online Savings, Online Payment and Online CD Accounts, HSBC Direct.

Not really worth opening a new account if you don’t already have one, but for those who do, it might be worth it to temporarily hold you savings in HSBC and get the extra 0.5% of interest. Best of all, it applies to your whole balance and not just new deposits like some banks (*cough* INGDirect *cough*).

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Kashmiri v. Regents Student Fee Lawsuit

So MsticAzn sends me this link a few weeks ago: Kashmiri lawsuit refund information

Kashmiri lawsuit refund information

Date: 2008-01-30
Contact: University of California Office of the President
Phone: (510) 987-9200
Email:

On Jan. 23, 2008, the California Supreme Court denied the University of California’s petition for review of the judgment in favor of plaintiffs in the Kashmiri v. Regents student fee lawsuit. The San Francisco Superior Court will now approve a formula for determining the amount of each class member’s refund and a process for distributing refunds. Refund distributions will be handled by an outside claims administrator, not the university. Class members are encouraged to send their current email and postal addresses to the class action administrator for this case at: lnelson@rustconsulting.com. Any other questions should be directed to the attorneys representing the plaintiff class at: info@browngold.com.

Not having much clue what exactly the lawsuit was, I awaited MsticAzn to get more information.

However yesterday, SkyLancer brings up this same topic and apparently it had to do with UC Regents raising fees after students were enrolled back in 2003. Talking it over with Ungsunghero, he found the lawsuit documentation and apparently only applies to the following group:

  1. Current and former University of California (“UC”) students who enrolled in a UC professional degree program prior to December 16, 2000, and whose professional degree fees were raised after that date.
  2. Students who attended any UC school on a semester system during the Spring 2003 semester, whose fees for that semester increased after they had already enrolled in classes and received bills for the semester.
  3. Students who attended Summer 2003 session at UC Berkeley or UCLA, whose fees for that summer session increased after they had already enrolled and received bills for the session.

So I sent an email to Rust Consulting to find out how to determine if I was eligible for the refund and promptly received a reply back this morning:

Dear Mr. Hon,

Our records indicate that you are included in the Kashmiri v. The Regents of the University of California class. A notification was emailed to all class members to update them on the status of the settlement and to request that contact information be provided to update our records for future mailings. This notification was emailed to you at ********@berkeley.edu as that was the most current information that was available to us. I have included the notification in this email for your information in case you did not receive the previous email.

There is nothing further you need to do other than to keep us notified of any changes to your contact information. The case has been decided in favor of the students; however the trial court must still approve an allocation of recovery. Therefore, we are not certain when you will receive a refund, although it is likely to occur by the end of 2008. The students have created a website, www.educationisaright.org, that should post updates as they become available.

Sincerely,

Linda Nelson
Class Action Administrator
lnelson@rustconsulting.com

My ********@berkeley.edu email account was pretty much deactivated the day I graduated. I wonder if there’s some place I can go and update that email.

Anyway, here was the original email that was sent out to people:

IMPORTANT NOTICE ABOUT STEPS TO TAKE TO ENSURE YOU RECEIVE INFORMATION ABOUT YOUR POTENTIAL SHARE OF THE UNIVERSITY OF CALIFORNIA FEE OVERCHARGE JUDGMENT

You have been identified by the University of California as a member of the plaintiff class in the class action lawsuit known as Kashmiri v. The Regents of the University of California, which challenged certain fee increases at the University. The $33.8 million judgment in favor of the plaintiffs has been affirmed on appeal and is now final.

You will receive additional information about the distribution of the funds recovered from the University. As we begin this process, we need current e-mail and postal addresses for all class members so that we can send you additional notices and, eventually, a check if you are entitled to one. If you have changed your name, please provide both names. Please provide any updated contact information as soon as you can and if possible by April 21, 2008, by (1) replying to this e-mail (if you are the addressee), (2) sending an e-mail to ucfees@rustconsulting.com, or (3) mailing the information to Kashmiri v. Regents Class Action, P.O. Box 1931, Faribault MN 55021-7186. The information you provide will not be used for any other purpose.

Also, please forward this email to any of your classmates who may be members of the plaintiff class and encourage them to update their contact information. The plaintiffs consist of three subclasses:

1. Current and former University of California (“UC”) students who enrolled in a UC professional degree program prior to December 16, 2002, and whose professional degree fees were raised after that date.

2. Students who attended any UC school on a semester system during the Spring 2003 semester, whose fees for that semester increased after they had already enrolled in classes and received bills for the semester.

3. Students who attended the Summer 2003 session at UC Berkeley or UCLA, whose fees for that summer session increased after they had already enrolled and received bills for the session.

Thank you.

Rust Consulting
Class Action Administrator

If you believe you qualify for the refund but did not receive an email from them, you should email Rust Consulting to verify if they have your updated information. I’m not sure how the refund is going to be split or how much each person will get, but I assume we’ll find out shortly.