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Approved for Wells Fargo 5%! Plus updates on the Citi AA 50K offer and the B of A Royal Caribbean cards

August 27, 2013 By pfdigest

WELLS FARGO 5% WATCH: Remember that Wells Fargo 5% card? According to the application hotline, yours truly was approved with a respectable credit limit! Has anybody else had any luck? To check your application status, the phone number is 1-800-967-9521.

There was speculation that approvals might be tied to having a current relationship with Wells Fargo, but I do not currently have any accounts with them. The closest I come in that department is having had a Wachovia checking account until 2003.

50,000 MILE AA OFFER IS BACK: Happy days are here again! And by “happy days” I mean “the 50,000 mile sign-up bonus for the American Airlines credit card.” Though according to the Flyertalk thread, the cards may no longer be repeatedly churned for the sign-up bonus. Citi giveth, and Citi taketh away. But mostly giveth. (H/T: Million Miles Secrets via View From The Wing)

NEW ROYAL CARIBBEAN CREDIT CARDS: After years of giving people nothing to write blog posts about, Bank of America’s Royal Caribbean credit card offerings made some changes and deserve at least a look. Marshall Jackson on Travel has a nice summary of what’s new:

The most interesting twist is that Royal Caribbean Cruises Ltd. has “tri-branded” it’s credit card product, each offered by Bank of America’s FIA Card Services. In other words, you can apply for a MyCruise® Rewards Program card product with the Royal Caribbean International, Celebrity Cruises, or Azamara Club Cruises brand and they share many of the same characteristics. The Royal Caribbean product is a no annual fee card, while the Celebrity product offers a no-fee and a premium version with a $69 annual fee. The Azamara card is only the $69 annual fee product.
The difference is that the annual fee cards offer some additional perks. For example, the Celebrity card with the $69 annual fee offers a two-for-one annual airfare, a $300 discount off a future cruise in a Concierge Class or greater stateroom after $5,000 in purchases in the first 60 days. Interestingly, it also offers a 10 percent discount on the purchase of premium beverage packages. That might sway me…. While the Azamara card lacks the beverage package discount (alcohol is generally included with Azamara), it offers 15,000 bonus points upon first purchase as opposed to 10,000 for the other cards. I understand a few kinks are still being worked out, but you can review the reward chart for the new combined program here.

MJ has promised more later this week on maximizing benefits from these cards, and I’m looking forward to it. If you’re curious, he’s got a series on elite status with cruise lines here.

SOCIAL CREDIT SCORE, THE NEW HOTNESS?: CNN Money has an article up about some new ventures hoping to improve upon the FICO score standard:

But some financial lending companies have found that social connections can be a good indicator of a person’s creditworthiness.
One such company, Lenddo, determines if you’re friends on Facebook (FB) with someone who was late paying back a loan to Lenddo. If so, that’s bad news for you. It’s even worse news if the delinquent friend is someone you frequently interact with.

Here’s another one:

A German company called Kreditech says that it uses up to 8,000 data points when assessing an application for a loan.
In addition to data from Facebook, eBay or Amazon (AMZN, Fortune 500) accounts. Kreditech also gathers information from the manner in which a customer fills out the online application. For example, your chances of getting a loan improve if you spend time reading information about the loan on Kreditech’s website. If you fill out the application typing in all-caps (or with no caps), you’re knocked down a couple pegs in Kreditech’s eyes.

The good news here is that somebody has finally found a way to penalize PEOPLE WHO TYPE IN ALL CAPS!!!! Though there is no mention of whether excessive exclamation points will also be penalized.

Note that these companies are active in emerging markets, not in the U.S. So is this stuff coming soon to a bank near you? Quoth the article:

Some in the financial industry are skeptical about social data and online behavior being used as a kind of credit score. John Ulzheimer, a credit expert at CreditSesame.com, says social data aren’t necessarily indicative of whether the borrower will pay back a loan on time.

I’m skeptical myself, but for different reasons. I think social data would probably add some predictive value, but the logistical considerations would be considerable. Off the top of my head: social network data may be more expensive to obtain, privacy issues could be a PR issue for the banks, the data could be gamed more easily than FICO data currently can, and there could potentially be compliance issues with fair lending laws.

It’s an interesting concept, but it will be tough to make it work here.

A new way to manufacture points!

August 22, 2013 By pfdigest

CTP FTW: Chasing The Points has discovered that you can use a certain type of ATM found at numerically named convenience stores to generate points and miles to your heart’s content. Some essential details:

Despite an option to reload a prepaid card, our experience is that you can not load a Bluebird or Serve account

Bill Pays cost $2

Nationwide Visa Buxx can’t be used at all

Gift cards with PIN can’t be used at all

Paypal debit card works

Max amount may be $1000/transaction

Go read the whole thing at CTP’s site, of course.

AN INTERESTING FACT ABOUT TRAVELOCITY AND EXPEDIA: Courtesy of Quora, I found this interesting tidbit:

The loading screens you see primarily on travel websites are artificial. Finding the cheapest flights, the best hotels, and whatever else you may be looking for takes less than a second. In fact, a lot of hard work goes into making all that information very easily accessible for the web app.
The loading screen exists because when the information is returned to the user as quickly as possible, he or she will often perceive it to be less valuable. It’s as if the server didn’t put much effort into really finding a great deal. No customer ever actually articulates that; but surveys, customer testing sessions, and most importantly conversion rates support the notion that when a seven or eight second loading screen tells the user that the numbers are being crunched just for this one query, the result is perceived to be more valuable.

CREDIT CARD FRAUD NO LONGER AS LUCRATIVE: Apparently social network fraud is more lucrative than credit card fraud. Who knew? Reuters reports:

In the latest twist, a computer virus widely used to steal credit card data, known as Zeus, has been modified to create bogus Instagram “likes” that can be used to generate buzz for a company or individual, according to cyber experts at RSA, the security division of EMC Corp.
These fake “likes” are sold in batches of 1,000 on Internet hacker forums, where cyber criminals also flog credit card numbers and other information stolen from PCs. According to RSA, 1,000 Instagram “followers” can be bought for $15 and 1,000 Instagram “likes” go for $30, whereas 1,000 credit card numbers cost as little as $6.

1,000 credit card numbers for $6? Even crime’s not personal anymore. You’re just a number to those crooks. Now criminals in my day, they cared about you as a person…

ANNUAL RETURNS ON LUXURY GOODS: From The Economist via The Big Picture… don’t you feel foolish for not going all in on luxury cars a few years ago?

https://www.youtube.com/watch?v=8PCoI_sfvlE

More details about the Wells Fargo 5% card

August 21, 2013 By pfdigest

EDIT: A few data points are trickling in… see the comment section below.

Following up on yesterday’s brief post about the new Wells Fargo credit card offer for 5% back on gas, grocery, and drugstores for 6 months, I wanted to mention a few things:

There are three different 5% offers. There’s the Wells Fargo Cash Back Card, which offers a flat 5% cash back on GGD purchases. This one seems to me like it’s the best deal, and in fact it’s the one I applied for.

There’s the Wells Fargo Home Rebate Card, which also gives you 5% cash back, but only to be applied toward your mortgage… and only Wells Fargo mortgages.

Finally there’s the Wells Fargo Rewards Card, which instead of giving you 5% back gives you 5X points. I’ve looked through the Wells Fargo redemption catalog and I don’t see anything that gives you more than one cent per point, except…

Business Card Customers can get 1.25 cents per point. The business card is not eligible for any 5% bonuses, so the big question is whether Wells separates business points and personal points, or whether business can redeem personal points at the business rates. I have no experience with the Wells rewards program and I can’t figure it out for certain from their website.

If you go to the Wells Fargo Rewards page, you’ll see three rewards catalog links on the right side of the page. The first is for personal accounts, where the rewards are no better than one cent per point as far as I can tell. The next two are for business customers, and if you look here for example you’ll see a $1,250 cash reward for 100,000 points.

Is 6.25% possible? If you scroll down this page a bit, you’ll see this: “Link your Business Card Rewards program to all your other eligible Wells Fargo Rewards programs and you can combine points at redemption.” BUT… there’s a footnote on that statement that says “Not all programs are eligible for linkage. Please refer to your program terms and conditions to determine eligibility.” Your guess is as good as mine. If anybody knows for certain, I’m all ears.

The Rewards Card (the one with points) is capped at 120,000 points per year. Thanks to commenter HikerT for reminding me of this. The terms and conditions state, “Annual Point Cap Maximums: Cardholders may earn a maximum of 120,000 points per calendar year.” However, the T&C for the cash back version state, “There are no annual cash reward maximums.” Which is another way of saying ‘unlimited’, of course. Let’s hope it’s the good kind of unlimited and not the Citibank kind.

Do you need to have a relationship with Wells Fargo before you apply? Commenter Carl at Frequent Miler wrote this:

Hmmm… I just got declined because I don’t “have a relationship with Wells Fargo.” I called and tried to be my most charming self as I told them this was a great way to start a relationship, but the CSR wasn’t charmed at all. She told me my credit (high 700s) “was not strong enough to override the lack of a relationship.” She told me if I’m serious about a relationship I should visit a branch and take steps to build a relationship (open accounts, take out loans, etc.) and after 30 days I can try again — but no promises.

That’s worrisome… my application is currently pending, though I’m less optimistic after seeing this post. Unfortunately, that’s all I’ve seen about this possible complication.

Can you get multiple 5% offers? Since Wells has been out of the credit card game for so long not much is known about their underwriting standards. Rapid Travel Chai has pushed the envelope of credit cards from one issuer in one app-o-rama, and perhaps some brave soul will do the same with Wells and advance society’s knowledge of this critical question.

How will all this play out? That’s what I’m really curious about. Several years ago Citi and Chase both had unlimited 5% cashback promos (CashReturns and AARP, respectively) and it took them a good 12-18 months to shut them down. Whereas now there are more people playing this game so the lifespan of a good deal can be pretty short, as we found out with Citi this year.

Spectacular flameout or slow, steady burn? You make the call!

Bye bye, PerkStreet! And how to break Experian’s credit score model

August 14, 2013 By pfdigest

$25 WALMART GIFT CARD WHEN YOU SEND $100: If you need to send money to a foreign country, there’s a Xoom/Walmart promotion right here. Limit one $25 gift card per customer. (Thanks to MaximizingMoney)

MEANWHILE: “Who’s to say what’s right these days, what with all our modern ideas and products?”-Homer Simpson

Who’s to say what’s right these days? Bloggers, that’s who! Specifically, this one, as recent events have taught us some important lessons. Let’s start with the closure of Perkstreet:

PerkStreet Financial, an upstart quasi-bank that aimed to offer generous cash-back debit-card rewards, announced Monday that it would cease operations next month because of a lack of financing
The company discontinued its perks cash-back rewards program and canceled all reward balances as of Monday; redemptions already requested will be processed, it said.
Customers could receive the rebate on gift cards, including Visa cards that could be used at any merchant. “Glad I cashed out my perks as I earned them,” a customer named Debra Barrett on Facebook said Monday. “This is a really bad way of treating your longtime customers.”

The moral of the story: don’t let your rewards sit for too long before cashing them out. (This was also the moral of the story with the Citi Preferred 5% debacle.) What happened with Perkstreet is an extreme example, but rewards can also be devalued, as most major hotel chains have shown us in the past year.

Did you realize that this was the only debit card endorsed by Dave Ramsey? The page has been taken down, but the cached version says, “With rewards like these for spending responsibly, it’s no wonder Dave Ramsey endorses PerkStreet.” I can’t fault Ramsey in this situation, as PerkStreet was a reputable company and I’m not sure that its demise could have been foreseen by Ramsey.

Nonetheless that brings us to another moral: The financial interests of Dave Ramsey, not to mention everybody else on TV and the interwebs, are not aligned with yours. (And yes, that also goes for obscure blogs that nobody reads!) Which is not to say he’s a bad guy, or a selfish guy, or anything like that–just that’s he’s not on your team. He plays for Team Dave.

Playing for Team Dave doesn’t mean he’ll give you bad advice, it just means that you have to consider the possibility that he stands to make a profit by giving sub-optimal advice. Likewise for other financial blogs and websites.

Find the sites that give good advice and don’t hype their affiliate links at the expense of providing good information. I’m always happy to put in a plug for Frequent Miler, who has plenty of affiliate links but doesn’t let that get in the way of doing the right thing for his readers. Hack My Trip and Rapid Travel Chai are consistently good as well.

For our next lesson, we turn to Rick, aka the Frugal Travel Guy. He writes:

Several months ago my credit score, as provided by CreditSesame, inexplicably dropped from my normal 730-780 range to a paltry 528 credit score. It seemed unusual as my long time credit monitoring service, Truecredit, still showed me with great credit. I have never been late with a payment.

Rick finally got an answer from CreditSesame. Here’s what they wrote:

Hello Richard,
We have been in contact with Experian’s resolution team and have just recently been updated as to the cause for your account not generating a score. We have come to a conclusion that the credit scoring model we use, the National Equivalency Score, has a system exclusion that restricts the maximum number of Trades, Inquiries and Public Records (TIP) to 99. You seem to be one individual of a very small group of users that exceeds this TIP limit seeing as most users do not have such an extensive credit history. This does not mean that you do not have a credit score, it just means that based on the credit model we use, Experian is unable to generate one for you at this time. We are currently working with Experian to figure out a resolution for users in your situation.

The lesson from this: if you can live within your means (and that is admittedly a very big if for a lot of people), there’s no such thing as too many credit cards. Why do I say that? Because Rick is succeeding in the metric that counts: credit card approvals:

I did my July credit card applications and got three out of five approvals, one that requested more info on my business and a NO for the Club Carlson card because of too many inquiries.

Not bad for a guy with so many lines and inquiries he broke the scoring model.

Approved for Wells Fargo 5%! Plus updates on the Citi AA 50K offer and the B of A Royal Caribbean cards

A new way to manufacture points!

More details about the Wells Fargo 5% card

Bye bye, PerkStreet! And how to break Experian’s credit score model

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