Get smart with your money
Today’s top story: How to have healthy finances. Also in the news: Credit cards to pack for your road trip, learning about a Solo 401(k), and ten ridiculously easy ways to save $300 a month.
Want Healthy Finances? Start Here
Getting your finances in shape.
Credit Card Perks to Pack for Your Road Trip
Getting the biggest bang for your buck.
What Is a Solo 401(k)?
A retirement plan for the self-employed.
10 ridiculously easy ways to save $300 a month
You can do it!
How to get the most out of your summer vacation, protecting yourself from medical identity theft, correcting financial myths and how to start saving for retirement.
3 Ways to Maximize Your Frequent Flier Miles This Summer
While holiday blackouts can make redeeming frequent flier miles difficult during the summer, there are still good deals to be had if you know where to look.
How to Protect Yourself from Fraud at the Hospital
Identity thieves are targeting victims at their most vulnerable. Find out what you can do to protect yourself.
Want More Time Off? Some Employers Let You Buy It
A novel approach to managing vacation time could allow you to purchase a day off or sell time you’re not going to use.
Financial Advisers Correct Common Personal Finance Myths
Meet the five common personal finance myths and how to avoid them.
How To Start Saving For Retirement
The good news is that it’s not too late. The bad news is that it will be if you wait any longer.
Rewards card ninjas have long loved hotel rewards cards because the associated loyalty programs tend to be a lot more generous and easy to use than airline cards.
That may be changing.
Brian Kelly at The Points Guy has an excellent series of posts on the coming changes in hotel rewards programs, and there’s not much good news. (You can start with his post “The State of Hotel Loyalty Programs: A Devaluation Story.”) Starwood and Marriott are diluting their programs, but some of the most dramatic changes are in the Hilton HHonors program, which will not only require more points for most stays but will upgrade a bunch of properties to higher, more expensive categories. Hotels like the Conrad Tokyo will go from 50,000 points per night to 80,000 to 95,000 points.
In a warning to hotel loyalty programs, Kelly says these changes could come back to haunt them:
As you hack away more and more of the value proposition, I think you’ll realize that consumers are actually pretty smart and will start shifting their spend towards chains that actually reward loyalty and not punish it. This may not come in the form of traditional points, but many boutique hotels offer far more enriching experiences with more amenities and at cheaper prices. This Hilton devaluation was so brazen that I do think it will hurt them dearly in the end when Amex and Citi cardholders reduce their spend or cancel their cards. In fact, if the impact is so negative, I could see those issuers coming after Hilton since there are likely clauses in the contracts that state that Hilton can’t materially change the program (since the credit card companies are buying millions of dollars worth of points that their cardholders can use at a later time and date). I’ll be complaining to both American Express and Citi about the Hilton changes and hope everyone else considers doing so as well if you don’t like the changes.
Even if you plan to stay loyal to your card, the program devaluations underscore what has always been true: you don’t want to hoard rewards. Earn ’em and burn ’em to make sure you get the most value.
Dear Liz: Should we get a rewards card? We have excellent credit scores. I’m a stay-at-home mom and my husband has a good, steady job. We spend about $6,000 a month with our debit card or automatic drafts from our checking account. I think our family should have a rewards card. My husband disagrees and says that for the amount we spend each month, we wouldn’t rack up any points. Is he right? If we should get a card, how do we pick the right one?
Answer: If you’re positive you’ll pay your credit card bill in full every month, you would be great candidates for a rewards card.
Right now, you’re passing up at least $720 in rewards annually. That assumes you’d be getting a card that rebates 1% of your purchases. With excellent credit scores, you could qualify for even richer rewards cards, since those are reserved for people with the best credit.
The simplest rewards cards are the cash-back cards, which rebate a portion of the purchases you make. Card comparison site NerdWallet recently named the Chase Freedom card as the best cash-back card with no annual fee. The card gives you a $200 sign-up bonus if you spend $500 in the first three months. All your purchases earn 1%, and you can earn a 5% rebate on certain categories of spending that change every three months.
NerdWallet also recommends American Express Blue Cash Preferred, which offers a $100 bonus if you spend $500 in the first two months. Supermarket purchases earn 6% cash back, and spending at gas stations and department stores earn 3%. Everything else earns 1%. “There is an annual fee of $75,” NerdWallet.com notes, “but your rewards easily offset the cost. In fact, $25 in groceries every week is enough to make up the difference.”
There are other types of rewards cards that earn points or miles for travel, or discounts on gas. You can learn more about these cards and shop for offers at NerdWallet or one of the other card comparison sites, including CardRatings.com, CreditCards.com and LowCards.com.
It’s important, once you get the card, to keep track of your spending so you never accumulate a balance you can’t pay in full. Always pay your account on time, since a single skipped payment can knock up to 110 points off those excellent scores.