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An ex-Prez doesn’t need credit cards, and another heartwarming arbitrage story from Venezuela!

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ON A PERSONAL NOTE: Mrs. PFDigest stopped by Wells Fargo yesterday to open a new checking account. As it turns out, she was pre-qualified for a new credit card–what luck! She graciously accepted their offer.

Since customer service reps at Wells–and I base this on reports I’ve read on the interwebs–doesn’t always seem to know what rewards they’re giving, and since they actually seem to be fond of sending customers welcome emails for products they didn’t get, I’m anxiously awaiting our first statement to see what our credit card rewards are!

WHAT’S BETTER THAN 5% REWARDS?: How about being a former President:

Does Bill Clinton have a credit card?

A friend of the former president told The New Republic that Clinton doesn’t carry one around because he never needs to pay for anything.

“He doesn’t care about money,” the friend said. “He doesn’t even have a credit card. When he wants to get something he says, ‘Wow, I love that,’ and whoever he’s with says, ‘Here it is!'”

NO MORE JOINT ACCOUNTS AT CHASE: It seems Chase will no longer issue joint credit cards:

Chase will no longer allow customers to open joint credit cards, a popular option for couples who want to share equal responsibility for payments.

The issuer recently pulled the plug on the option in order to “simplify” its offerings, according to a Chase spokesman. Instead of opening a joint credit card, customers will have to add their spouse, partner or anyone else they want as an authorized user to an account. Existing customers who already have joint accounts will not be impacted, however.

Most of you know that joint credit card accounts are usually a bad idea since you lose the opportunity to double your rewards and your credit line. They do have their uses though–when the aforementioned Mrs. PFDigest first came to this country, I added her to my credit card with the highest credit line. Six months later, her FICO was higher than mine.

ANOTHER HEARTWARMING STORY FROM VENEZUELA: There are deals to be had in the sweltering workers’ paradise known as Venezuela! You may remember the gasoline arbitrage story a while back, but there’s an even better opportunity now. Thanks to reader bluto for passing this along. Check it out:

CARACAS (Reuters) – If you live in Venezuela and want to fly abroad, get in line.

Flights are booked solid months in advance, not from a new interest in exotic destinations but because locals are profiting from a play on the nation’s tightly controlled currency market.

Details, please!

After a decade of currency controls set up by late socialist leader Hugo Chavez in 2003, the disparity between the official and black-market rates for the local bolivar currency is higher than ever. Greenbacks now sell on the illegal market at about seven times the government price of 6.3 to the dollar.

There are strict limits on the availability of dollars at the 6.3 rate, but Venezuelans are cashing in on a special currency provision for travelers. With a valid airline ticket, Venezuelans may exchange up to $3,000 at the government rate.

I’m no arbitrage expert, but if the illegal rate is seven times the official rate, and you can buy $3,000 at the official rate, does that mean you can profit $18,000 in a single transaction?

But wait, this gets even better:

Some Venezuelans do not even bother leaving the country, but merely send their credit cards to friends overseas, who swipe the cards and send the cash back to Venezuela.

It’s like Vanilla Reloads, but with foreign currency!

This is too big for me–let’s get others involved! Just imagine: Million Mile Secrets can draw a diagram to explain how to pull this off, while commenters from Flyertalk gripe about how he just ruined the Venezuelan economy. Mommy Points will show us how to entertain small children while we’re being held at gunpoint in Caracas. Frequent Miler and Chasing The Points will figure out some way to use Lands’ End gift cards to double the $18,000 profit to $36,000. The Points Guy will publish a list of the 38 most essential credit cards for a trip like this, and meanwhile some commenters from Frugal Travel Guy will get lost at the Miami airport.

Who’s in?

Why Choice Hotel points are actually useful, and how to mix credit cards with gift cards

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TESTING SOMETHING OUT HERE: Yesterday, as a joke, I tossed in an affiliate link along with some obviously false miraculous claims about credit cards healing the ill, and to my surprise it generated some clicks. So today I would like to remind you that GoFreeCredit.com masterminded the Carolina Panthers’ evisceration of the New York Giants on Sunday, plus they can also give you a free credit score.

APPARENTLY CHOICE HOTEL POINTS ARE USEFUL FOR SOMETHING: Thanks to Loyalty Traveler for teaching me something new! Today’s lesson learned is that Choice Hotel points are actually useful for something, namely European travel:

Thinking beyond the high end hotels in Starwood, Marriott, Hilton, Hyatt and InterContinental opens up the opportunity to book comfortable hotels at bargain rates if you expand your outlook to midscale chain hotels available for points in programs like Choice Privileges, Best Western Rewards and Wyndham Rewards. These are global hotel chains where the best values are often found outside the USA.

This was news to me as I’m much more familiar with the other big chains (and their credit cards, of course). During a recent promotion it was possible to buy 56,000 points for a couple hundred dollars, and those points can you get you a full 7 days in a number of hotels, such as the one immediately below (though 7 nights is too many to spend in Venice in one trip, but still) so you’re essentially getting a hotel room for 90% off.

Location, location, location

THE INS AND OUTS OF CREDIT CARD GUARANTEES: Thanks also to Frequent Miler for doing some legwork in figuring out whether standard credit card protections apply when you partially pay with gift cards. Bottom line: it depends. For example:

I checked the benefits guides of a few American Express cards and found mixed results.  Purchase Protection applies when any portion of the purchase is made with your card.  Return protection, though, only applies when the purchase is made entirely with your card.  The extended warranty is less clear about whether it applies to partial purchases, but I think it does.

Most of the cards FM looked at require the entire purchase to be made on the card in order for the protections to apply, so caveat emptor and give the article a look.

ANATOMY OF AN INVESTMENT DISASTER: Over at Oddball Stocks, Nate reviews what happened with First Bank of Delaware, one of his investments gone bad. Here’s the setup:

The bank was digging itself into a hole that seemed hard to recover from, that was until I found a news release on the bank’s website that explained they were looking into the possibility of winding down operations and liquidating.  Suddenly I was interested, here was a bank trading for $22m with a book value of $44m.  The trade seemed attractive, especially with such a large discount to book value, if the company’s book value was anywhere close to reality I had the chance to double my money.

The downside seemed somewhat limited as well, at 50% of book value what could possibly go wrong? What sort of event could destroy this investment?

Here’s what:

The First Bank of Delaware’s troubled past had finally caught up with them.  In their recent history they had been known as a subprime enabler, they were a clearing bank for subprime credit cards.  They were also involved in a supposed security incident where the bank processed a large number of fraudulent Visa and Mastercard transactions.  The bank was also involved in a check cashing company from California that was accused of lending at usurious rates.  And lastly the bank was involved in an online check cashing and payment system that was allegedly used to send fraudulent payments that they bank was aware of.

Read the gory details here.

PUBLIC SERVICE ANNOUNCEMENT: Crack is not an acceptable form of payment at your local government offices. Besides, it doesn’t even earn you points.

Wells Fargo Amex news, Priceline 2% Visa not 100% Dead, and a Hilton 50K offer

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A BLOG WORTH CHECKING OUT: I recently had the pleasure of discovering Travel Blogger Buzz, an enjoyable and occasionally hilarious collection of links and commentary from around the travel blogosphere. If you’re looking for new and interesting stuff, or if you just enjoy watching somebody call out bloggers for pimping credit card links, give it a look! And while you’re at it, you might want to consider the Barclaycard Arrival World MasterCard, a credit card which can heal the sick, give sight to the blind, AND give you 2% back on your purchases!

WELLS FARGO AMEX DETAILS: Over at FWF, somebody posted details of the forthcoming Wells Fargo Amex credit card. Quoting directly from the post, here’s the forecast:

$45 annual fee / no fee first year
10k points with $3k spend in 3 months
3x gas
2x restaurants
1x everywhere else

Annual relationship bonus:
10% with Wells Fargo checking and savings accounts
25% with PMA package *
50% with PMA package and balance of $250,000 or more

PMA stands for Portfolio Management Account, which is Wells Fargo’s hoity-toity mass affluent account. So the best case scenario with this card, assuming these details are verified, is that even if you have a whole bunch of money parked at Wells you pay an annual fee and in turn you’ll receive rewards that are no better than what you can get with no-fee credit cards. No thanks!

PRICELINE 2% VISA STILL ALIVE, SORT OF: This won’t really help anybody for now, but just thought I’d pass along that Barclays has an invitation-only application page for the 2% version of its Priceline card, which as you may recall was yanked a few months ago. The T&Cs are dated 8/1/2013. Does this herald the return of the 2% card? I have no idea. The Fidelity Amex could use some company, though.

50K HILTON OFFER: A large, New York-based bank is advertising a 40K offer on its site for the HHilton HHonors VVisa, but here’s a 50K link. After the recent Hilton devaluation, that bonus is worth approximately $3.50, but still, it’s the principle that’s important here.

CONGRATULATIONS, JP MORGAN CHASE!: I’d like to take a moment to congratulate JP Morgan Chase for having been fined $8 billion in little more than two years! As per Barry Ritholtz, here’s the breakdown:

$56 million (April 2011)
$153.6 million (June 2011)
$229 Million (July 2011)
$88.3 Million (August 2011)
$5.29 Billion (February 2012)
$110 million (February 2012)
$150 million (March 2012)
$296.9 million (November 2012)
X% of $8.5 billion (January 2013)
$100 million (March 2013)
$410 million FERC settlement (August 2013)
$900 million (September 19, 2013)

Says Ritholtz: “Its walls are made of lawyers, and its moat is made of burning money. Something is wrong with a board of directors that tolerates this sort of egregious incompetency and/or rampant illegality.” Then again, their incompetence is our 5% “unlimited” cash back AARP card, so let’s not get too judgmental…

Southwest 50,000 offer is back! Also: how do you negotiate a brokerage retention bonus?

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SOUTHWEST AIRLINES 50,000 OFFER IS BACK: Welcome back, Southwest Airlines 50,000 point sign-up bonus! This offer has been rotated in and out every few months for a couple of years now and it’s good to see it back as it’s a very good offer.

The timing is especially good as The Points Guy reminds us. You can get a companion pass after earning 110,000 points, and two sign-up bonuses would just about cover that. Once you qualify for the pass, it’s good through the remainder of the calendar year and the year after that. So if you time your spending right, you could bring along a friend for free on any Southwest trip through December 2015.

HOW TO NEGOTIATE A BROKERAGE RETENTION BONUS: Matt at Saverocity has an article on something that had never occurred to me before: negotiating a brokerage retention bonus. Has anybody else ever done this? According to the article, it doesn’t work all the time, but it does work at least some of the time.

HOW TO GET ALERTS FOR CHEAP AIRFARES: Frugal Travel Guy has some good suggestions here. Apparently it’s even possible to find mistake fares via fare alerts.

GAMING THE SYSTEM, WALL STREET STYLE: A lot of what passes for high finance these days is little more than gaming the system. Case in point: the recent ethanol credit debacle. The NYT reports:

It was supposed to help clean the air, reduce dependence on foreign oil and bolster agriculture. But a little known market in ethanol credits has also become a hot new game on Wall Street.

The federal government created the market in special credits tied to ethanol eight years ago when it required refiners to mix ethanol into gasoline or buy credits from companies that do so. The idea was to push refiners to use the cleaner, renewable fuel, or force them to buy the credits.

A few worried that Wall Street would set out to exploit this young market, fears the government dismissed. But many people believe that is what happened this year when the price of the ethanol credits skyrocketed 20-fold in just six months, according to an analysis of regulatory documents and interviews with more than 40 people involved in the market, including industry executives, brokers, traders and analysts.

I’d like to emphasize that the federal government was surprised by the fact that very smart, profit seeking bankers sought to game the system. Anybody who’s at all familiar with couponing, chasing credit card deals, and so forth wouldn’t be surprised, but apparently none of the powers-that-be are into that stuff.

So how’d the bankers do it?

Traders for big banks and other financial institutions, these people say, amassed millions of the credits just as refiners were looking to buy more of them to meet an expanding federal requirement. Industry executives familiar with JPMorgan Chase’s activities, for example, told The Times that the bank offered to sell them hundreds of millions of the credits earlier this summer.

If you’re not annoyed, read this:

But the activities, while legal, could have consequences for consumers. In the end, energy analysts say, the outcome will be felt at the gas pump — as the higher cost of the ethanol credits gets tacked onto the price of a gallon of gasoline. (The credits, which cost 7 cents each in January, peaked at $1.43 in July, and now are trading for 60 cents.)

If only there were some way for consumers to take back what JP Morgan Chase has stolen…

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