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Looking at Credit Card Offers

I wrote a guest post over 5 years ago, How I made $4000+ on a Cash Back Credit Card Offer. And I have to say, time sure does fly. That article got quite a few comments, a number of which were pretty critical. People have a tough time understanding how I could just move cash to gift cards, and somehow only spend it in my normal budget to take advantage of such a deal. People are also skeptical of how my wife and I have used a 2% cash back card to fund our daughter’s college account which just passed $40,000 in value. My answer is that when you budget and stick to that budget, you can execute the transactions with cash, a credit card, or quatloos, and your spending should be exactly the same.

Over the last few years, there haven’t been too many deals that I couldn’t refuse. I took advantage of the Amazon credit card. No fee, and 5% back. As a Prime member, I find enough value in my membership to justify the $99/yr. My nearest supermarket or drug store is 5 miles away, and instead of a special trip to grab an item, the savings and free shipping that Prime offers is worth it. In addition, the prime video has a few shows that also provide value. These all add up to making the membership and the card, worthwhile.

I considered the Amex Blue card. The 6% cash back at supermarkets got my attention. The downside is the reward was capped at $6000 in purchases. $95 annual fee to capture a $360 reward. Except, I already get 2% back, so it’s really an extra 4% or $240 less the $95. A $145 gain per year. After that math, I passed.

Here’s what got my attention. After my daughter left for college, we began flying JetBlue, as they had a good fare for our trips. The offer they had was for 60,000 bonus point for signing up for their card and charging $1000 within the first 90 days. The card carries a $99/yr fee, billed early on, but those points are worth about $900. Other perks (such as waived baggage fees) aside, they offer a 5000 point (value – $75) bonus for each year you have the card. AS long as I’m flying with them more than once a year, keeping the card will be worth it.

As with any card, it’s a matter of what your spending is with that company. If you are a weekly Target visitor, for example, their branded credit card might be a good deal for you. In the case of the JetBlue card, the perks in addition to the bonus points are worth more than those extra $25 in fees.

A warning is in order. Playing the reward game assumes a few things. First, you budget well and stick to it. The Amazon card comes after you realize you use this company often and the 5% back is money in your pocket. If the card will lure you into spending more, not just shift where your spending goes, I’d avoid the game altogether. You should also be very aware of your credit score. Some credit cards offer a look at your FICO score. You can also use online companies such as Credit Sesame or Credit Karma. It’s important if you have any large credit event on the horizon, such as a home or car purchase, as well as to be sure you are in good shape when applying for this new card. You should also be aware that getting a new card will result in a bit of a hit to your score. The inquiry on your report will cost a few points, and the new card will drop your total accounts’ average age which also is a few points.

For me, I’m not chasing every $100 bonus, I’ve set the bar far higher. Happy to grab a deal that’s worth $500+.

Are you playing the credit card reward game? Let me know what the last deal was that you took advantage of. Leave a comment!

2018 tax rates announced

The 2018 tax rates below are as proposed in the bill that will be voted on tomorrow.

The tables aren’t the actual tax you pay on gross income, but on taxable income which is gross less a number of items, including the standard deduction for single $12,000 or joint $24,000. You’ll note, there’s no mention of personal exemptions, the $4,050 per person, including dependents in your household, that’s gone, in favor of this higher standard deduction. Yes, this means that if you itemized in 2017, that (a) you might not be itemizing any longer, and (b) those who still itemize don’t see the benefit of the higher standard deduction, only the loss of exemptions.

Last, if the bill doesn’t pass, I’ll return and edit, so this page will accurately reflect the 2018 rates, once they are certain. Along with a follow up post discussing highlights of the rest of the bill and the impact of the new tax code details.

I’ll be referring back to this article over the next year whenever the tax table is part of the conversation. Check out the new rate table and start planning for 2018.

How to Quickly Fix Your Credit in 3 Months

As a licensed Realtor ™ I know how important your credit score is, so I am pleased to share today’s guest post with my readers –

Like many Americans, you’ve probably noticed that your credit score is a deciding factor in much of your life. Want a new job? Better have a good credit score. Looking for a better apartment? Not without stellar credit. Dreaming of a credit card with awesome rewards? Sorry, your credit is just too low.

Fortunately, quickly fixing your credit in three months is possible.

Pay off debt

Believe it or not, you credit score is partially determined by how much money you owe your creditors. A number, called your debt-to-credit ratio, is a big part of your credit score. If you owe $1,000 on a $5,000 credit card, your debt-to-credit ratio is 1000/5000 or 0.20. The closer your ratio gets to 1, the worse your credit will be.

Paying off as much debt as possible – even if you have to drain your savings temporarily to do so – is a great way to boost your credit score.

Similarly, if you have good enough credit to get a new credit card, or a credit limit increase, do so. Increasing your amount of available credit will lower your debt-to-credit ratio and can increase your credit score.

Remove errors

Next, order a copy of your credit report from all three credit bureaus (Equifax, TransUnion, and Experian). Once you’ve done so, comb through the reports to find any potential errors or omissions. Many Americans will find errors on their credit report and, unfortunately, these errors can have a negative impact on their credit score.

Fortunately, most errors are easy enough to fix. There are companies you can hire who will contact the credit bureaus directly to have these mistakes corrected. Although the companies can be pricey, it is definitely the easiest option to have the errors removed. Many credit repair companies will also teach you how to build credit once they’ve cleaned up your credit report, in a sort of two-for-one deal.

If you need to fix your credit quickly, you’ve got two options: The first is to improve your debt-to-credit ratio by paying off debt or increasing credit. The second is to remove errors from your credit report either through a credit repair company or by contacting each agency directly. Whichever you choose, you’ll be on your way to better credit in three months.

Buying Life Insurance

A guest post today, from Crystal –

A lot of things can affect your life insurance premiums. Your family health history, gender, age, and lifestyle choices can have an impact on the policies you are eligible for, and what you ultimately pay for them. Insurance laws and the rights of the insured vary from state to state. Of course, insurance can be a confusing quagmire for those shopping for a new policy.

Most states offer some wiggle room when it comes to late payments. State laws meant to protect consumers help reduce penalties for late or missed payments. This is important because state laws are one of the main forms of regulation and consumer protection. That is, state legislatures regulate and write many of the laws that insurance companies need to follow. This prevents the large insurance companies from running roughshod over the insured.

Whether you are shopping for a whole or term life insurance policy, you have to consider how these state laws might affect your policies. This is particularly important when moving from state to state. Certain aspects of an old policy could become null and void when carried out in a new state. Every state has its own website (like this one for Washington state) listing official insurance laws and regulations.

If you are in the market for a new policy and trying to educate yourself before making any final decisions, the Health IQ quiz will be very helpful. Take a few minutes to take this life insurance quiz, and you will definitely learn some vital info about how state laws can effect insurance policies.  Also, visit www.HealthIQ.com/quiz to find other financial health quizzes, such as Student Loan Refinancing or Loans: Debt Snowball or Avalanche.

Avoiding Taxes While Building Wealth For You and Your Family

Today, a guest post from my friend, Crystal.

It can be difficult to make confident financial plans when you have a family. Most of us find family life busy and challenging. Oftentimes money is in too short supply. If this is familiar to you, you may not find the time or purpose in thinking about building future wealth. After all, how would you start to make it happen?

Finding ways to avoid taxes is one of the best ways to build further wealth, especially when you have a family. Fortunately, there are a number of tax-protection methods made available by the government and various programs. By becoming aware of these and taking advantage of them, you’ll start to have more money to spend and save. This is by no means a complete list, but it’ll show you the kind of things to look for and practice.

  1. Life Insurance. Life insurance isn’t the first tax avoidance strategy that most people think of, but this doesn’t mean that it doesn’t have excellent potential. Whole life insurance programs may offer tax-protected investment opportunities, which can be of great service if you’ve already maxed out other plans. For term life, the death benefit of no exam life insurance policies is almost always paid out tax free. In either case, life insurance has positive tax implications, even as it provides security and peace of mind for the future.
  1. Using Real Estate Wisely. If you sell a home, you will have to pay a big tax bill…that is, unless you buy another house with that money right away. Another way to use a home to save on your tax bill is to write off the mortgage insurance that you’re required to have in most situations. The tax benefits of home ownership are not as juicy as they used to be, but you may be able to find some real savings when writing off renovations, home office space, some local taxes, and other areas.
  1. Take Advantage of Tax-Protected Investment Accounts. Roth and Traditional IRAs, 401(k) plans, and a variety of other tax-protected investment accounts are all made available by the government so that people can prepare for an independent financial future, without having to rely on the government for support down the road. People get quite sophisticated with accounts like these, finding ways to maximize the annual contribution limits far above what they may seem to be on the surface. Whether or not you go all the way like that, doing something simple like maxing out an IRA is a great place to start.

There are plenty of ways to avoid taxes legally, while using the money you’re sheltering to build a better financial future for you and your family. Pay attention to all government tax write-offs made available to parents with young children, and focus on ways to pass on your estate with minimal tax loss if you are older. In any case, becoming aware of the most efficient ways to pay and not pay taxes is one of the best ways to build wealth in the long run.

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