Archives for September 2015

Fidelity 2% Cash Back Credit Cards At Risk?

Posted on September 10, 2015 // 21 Comments

fidoamexOne of my long-time favorite credit cards is a grandfathered Fidelity College Rewards MasterCard that gives me 2% flat cash back on all purchases. I’m not sure exactly when I first applied for this card, but it was in the early 2000s. The current Fidelity line-up as of September 2015 is still pretty good (if you have a Fidelity account):

All three of these cards, including my legacy MasterCard, are issued by FIA Card Services, which is a wholly-owned subsidiary of Bank of America.

But watch out, this Bloombers article says that Fidelity Investments is considering dropping AmEx, BofA as partners:

Fidelity Investments is considering dropping American Express Co. and Bank of America Corp. to find new partners and better terms for one of the top-rated cash-back credit cards in the U.S., according to people with knowledge of the matter.

Visa Inc. and MasterCard Inc. are in talks with Fidelity, vying to replace AmEx on a card that’s been amassing customers for more than six years, according to the people, who asked not to be identified because negotiations are private. AmEx is parting with Costco Wholesale Corp. and JetBlue Airways Corp., and losing the Fidelity deal would affect a key area of growth: facilitating transactions in which another bank is the lender.

Here’s my previous post on how Costco dropped American Express for its future co-branded credit cards.

Does dropping FIA as an issuer mean the Fidelity 2% cash back cards will also get the axe? The 2% cash back graveyard already includes Schwab, Priceline, and Sallie Mae co-branded cards. I’ve racked up thousand of dollars in 2% cash back rewards from Fidelity, which have grown even more my sitting in a tax-deferred Fido 529 account. I think this shows that the co-branding has encouraged me to keep assets with Fidelity, but if they kill the card I will probably roll my 529 funds into another plan like Utah.

Does “better terms” mean better for Fidelity’s profit margin, or better for their customers? By ending the relationship entirely, perhaps that would make it easier for Fidelity to say “sorry, we broke up, all existing cards must go”. On the other hand, maybe Fidelity has the negotiating power to get another issuer on board with 2% cash back? I really can’t see it going any higher than 2%.

If it does end, there will still be cards that can get you 2% in value, but as the article notes the only remaining 2% flat cash back card with no annual fee will be the Citi® Double Cash Card (review). I applied for this new Citi card is a back-up play, in case Citi also closes it to new customers but grandfathers existing users into the 2% cash back. After I paid my Citi bill using my bank account online twice, I can now get the full 2% cash back by requesting my rewards to be sent online back to that same bank account.

Filed Under: Credit Cards, Deals & Offers //

Ting GSM SIM Cards: Bring Your Own Phone + Referral Credit

Posted on September 8, 2015 // 35 Comments

Updated August 2016. Here’s the current status of things:

  • New Ting customers get a $25 credit with a referral link. Thanks in advance if you use it, you’ll be saving my parents some money on their bill, as I set them up with Ting service and an old iPhone.
  • GSM SIM cards currently cost $9 + free shipping via USPS Priority Mail.
  • You can bring over any used T-Mobile or unlocked GSM phone. Ting phone compatibility checker tool. .
  • You can buy a used iPhone 5 for about $109 now, or a used Samsung Galaxy S4 for $110.

tinglogTing provides mobile phone service with a “pay-only-for-what-you-use” structure. While their classic program required Sprint phones, their newer GSM program is compatible with nearly any phone that takes GSM sim cards. Supposedly 80% of smartphones now work with GSM service and have SIM card slots. My old Verizon iPhone 5 was GSM unlocked. Their GSM SIM card service uses the T-Mobile GSM MVNO network.

I’ve been customer of the Ting GSM program with my out-of-contract iPhone 5 for over a year now. Useful links:

  • Ting interactive rate calculator to see how much they would charge you. If you are not a power user or have a lot of variability in your usage, Ting can often save money over time. (Tip: You can set alerts or even hard usage caps, so you’ll never exceed a certain level.)
  • Ting phone compatibility checker tool. Bringing over a used GSM or Sprint phone is the best deal in my opinion. You can find a lot of good, cheap GSM phones on the secondary market now, like the Galaxy S series or iPhone 5 or 5S.

Here’s a screenshot of their NEW rate breakdown:

tingnewdata

Here’s a screenshot of their OLD rate breakdown. You can see that their data used to be much more expensive, working out to $19 for the first GB, $29 for 2GB tier, and then $15 per extra GB of data (billed pretty much down to the penny). As of 8/5/2016, the numbers are $16 for the first GB, $20 for 2 GB tier, and then $10 per extra GB of data (billed in $10 increments). Pretty much no matter what, the new data plan is cheaper than the old data plan.

Filed Under: Deals & Offers, Frugal Living //

Verizon Wireless New Plans August 2015: Existing Customers Should Compare Prices

Posted on September 7, 2015 // 7 Comments

In August 2015, Verizon Wireless announced that it was ending 2-year contracts for new customers. Before, you got a ~$450 discount on a new phone but also got locked into a 2-year contract with an inflated monthly plan price. Now, you have to buy your own phone, but the monthly plan is cheaper. The basic monthly breakdown is that you pick a shared data size below and add $20 per phone line. Unlimited talk and text. Data overages are $15 per GB.

verizon_new1

It was supposed to be simple, but there was still a bit of confusion. Here are some clarifications. Verizon customers with grandfathered or legacy plans can keep their plans if they want to. But if they switch to a new plan, they can’t switch back. Verizon customers currently in a 2-year contract can even keep and renew their existing plan with another 2-year contract if they want to (and get a subsidy).

With the previous structure, folks who finished their 2-year contracts and frugally kept their old phone were still stuck paying the inflated monthly plan price. Reader CJ tipped me off that such post-contract customers should try switching to the new plans with lower monthly prices:

Not sure if you saw it, but Verizon finally got rid of 2-year contracts, which means anyone not currently under contract should switch to the new “Verizon Plan” and save a bunch of $$ instantly. I just did, and for 3GB of data my plan went from around $140 for 2 phones down to $80.

If you are currently still under a Verizon contract, you can also switch over to the new plans. If you are currently under a 2-year contract you will have a $40 per phone access fee instead of the new $20 per phone access fee. (That $20 a month is the baked-in subsidy payback. Notice that $20 x 24 months is $480 and the upfront phone discount was ~$450.) Depending on your data plan size, most people will probably see not net change in price, but some may discover a semi-hidden discount.

Bottom line: Verizon has new plans. All customers (on or off contract) should check to see if switching over will save you money. You may or may not discover any savings, but Verizon won’t automatically check for you.

Filed Under: Deals & Offers, Frugal Living //

Free FICO Score from Chase Credit Cards

Posted on September 3, 2015 // 4 Comments

fico_chase_slate0This post provides updated information and instructions regarding the free FICO score that is available to select Chase credit card holders.

Background. Chase started offering free FICO® scores to select US cardholders in March 2015. In addition to your FICO® Score, their Credit Dashboard will provide a score history as well as detail the factors that go into calculating your score. Currently, only their Chase Slate® card offers this feature. There have been no announced plans to expand this feature to other Chase cards.

FICO Score details.

  • FICO Score version: FICO Score 8, or FICO 08. This is the most widely used of the many FICO flavors. Score version is based on various reports and their participation in the FICO Score Open Access Program.
  • Credit bureau: Experian
  • Update frequency: Monthly
  • Limitations: Available only to select Chase credit cards. The current list is only one card:

How to find the score. You can find the free FICO score on your online account access. If you cannot find it and you opened your account prior to April 2015, you may need to contact Chase Customer Service (secure online message is recommended) and specifically request access to the FICO score and Credit Dashboard feature. This feature was first rolled out to new customers and later existing customers.

I don’t have this card myself (anymore), but I did find some images provided by users on the myFICO forums. After logging in, look on your right sidebar for information regarding your “Credit Dashboard”. See screenshots below (click to enlarge):

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You will be shown your current FICO score, a historical score chart, and key factors impacting your score (click to enlarge):

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You will also be shown more detailed information based on your Experian credit report, such as your current credit utilization ratio:

fico_chase_slate3b

Fine print:

Your FICO® Score displayed is for your educational purposes and based on data from Experian. It may be different from other credit scores used by Chase and other lenders in making credit decisions. This information is available online only at Chase.com to primary cardmembers with an open account, provided Experian has sufficient credit history in a credit file for a FICO® Score to be generated. Once approved for the Slate card, it may take up to seven days for your FICO® Score and related information to be available on Chase.com. Chase reserves the right to make changes or discontinue this feature at any time. FICO® is a registered trademark of the Fair Isaac Corporation in the United States and other countries.

Filed Under: Credit Cards, Deals & Offers //

Free FICO Score from Barclaycard Credit Cards

Posted on September 3, 2015 // 1 Comment

fico_barc1This post provides updated information and instructions regarding the free FICO score that is available to Barclaycard US credit card holders.

Background. Barclaycard started offering free FICO® scores to select US cardholders in late 2013, gradually increasing the rollout over time. In addition to your FICO® Score, you’ll also see up to 2 factors affecting your score and a historical chart tracking your score after 3 months of history.

FICO Score details.

How to find the score. You can find the free FICO score on your online account access and via the Barclaycard mobile app. You must enroll by visiting the Account Summary page and clicking on the Tools link. You will be prompted to view some information about the complimentary program, and if you are okay with the terms click the “Accept” button. See screenshot below (click to enlarge):

fico_barc2

Here is the latest score, a score meter, and the top two factors impacting your score (click to enlarge):

fico_barc3

They also provide a score history. You can see that the score is not updated every month, but instead the update interval varies between approximately a month and three months (click to enlarge).

fico_barc4

Here is a screenshot from the Barclaycard smartphone app (click to enlarge):

fico_barc5

Fine print:

Barclaycard offers FICO® Score access at its own discretion. FICO® Score access is not a permanent feature of your account and may be removed at any time. To view your FICO® Score, your account with us must be open and active (having activity within the past 150 days). Not all accounts will have a FICO® Score to display including but not limited to, accounts without a United States address, accounts without charging privileges, and accounts opened for 30 days or less.

Your FICO® Score falls into a range from 300 to 850 and is calculated based on TransUnion credit data. Your FICO® Score is not an endorsement or a determination of your qualification for a loan or credit. Credit score models and score ranges may differ by lender.

Filed Under: Credit Cards, Deals & Offers //

Retirement Income Risks: Longevity, Sequence of Returns, and Stupidity

Posted on September 3, 2015 // 5 Comments

annuity_puzzleOne of the first things that pops up when doing research on retirement annuities is the “annuity puzzle”. Essentially, economists have done their calculations and shown that simple, immediate income annuities are theoretically the best fit for many people. You give up some things like liquidity and upside potential, but in exchange you get the most monthly income for the rest of your life. But in the real world, only a small fraction of such people actually go out and buy such annuities.

Bob Seawright wrote a nice article at ThinkAdvisor.com that lists three main risks with managing withdrawals from your own lump-sum portfolios. An income annuity can help address these risks. I’ve added my own comments as well.

Longevity risk. People are living longer on average. Enter your age(s) into this Vanguard longevity tool. Here is a short snippet from a previous longevity risk post:

For an individual that is 65 today, there is roughly a 50/50 chance they will reach age 80. For a couple both at 65, roughly a 50/50 chance that at least one person will reach age 90.

The extreme ages are getting higher as well; quote below taken from the Seawright post:

Moreover, the distribution of longevity is wide — a 22-year difference between the 10th and 90th percentiles of the distribution for men (dying at 70 versus 92) and a 23-year difference between the 10th and 90th percentiles of the distribution for women (dying at 72 versus 95).

Sequence of returns risk. Two retirees can start with the same initial portfolio balance and experience the same average return, but if one experiences highly negative returns in the first few years of withdrawals they can end up with very different outcomes. Here is a previous graphic illustrating the sequence of returns risk.

sor_risk

Stupidity risk. If you do-it-yourself, what if you aren’t very good? The idea of safe withdrawal rates is a starting point, but even that assumes a theoretical 60/40 you-didn’t-panic-when-stocks-dropped-50-percent portfolio. I like the idea of adding some robustness with more flexible dynamic safe withdrawal rates, but “safe” is still a relative term.

Eventually, I plan to put a portion of my money into a single premium immediate annuity (SPIA). I’ll probably wait until around age 65, with a joint life rider so that it will keep paying out as long as either my wife or I are alive. I like the idea of having enough guaranteed income to cover all basic needs like housing, food, and utilities. Considering that we have no mortgage and assuming no major cuts to Social Security, I am hoping that number is not too much in excess of state-specific insurance guaranty coverage limits.

Filed Under: Annuities, Retirement //

Amazon Prime: Download Shows and Movies, View Offline For Free

Posted on September 2, 2015 // 7 Comments

amz_sesame0

Amazon has announced that Amazon Prime members can download select movies and TV episodes for offline viewing, at no additional charge. This works on all Apple iPhones, iPads, and Android-based devices. You may need to update your apps to the most recent version to enable this feature (iOS / Android). Here is their announcement page and the official press release.

Most people agree that Amazon’s catalog is not as good as Netflix, but this is a perfect backup for all those times you don’t have access to WiFi or want to use up mobile data. This would include commutes on public transportation, airplane trips, car rides, or international travel. I always keep a bunch of videos for the kids on our phones and on their iPads.

Here are some sample movies that are eligible for download:

Anchorman 2: The Legend Continues, Jack Ryan: Shadow Recruit, Star Trek Into Darkness, The Captive, The Hunger Games: Catching Fire, and The Wolf of Wall Street, in addition to exclusives such as Life After Beth, Palo Alto, Starred Up, The Bling Ring, If I Stay, and The Spectacular Now

I am an Amazon Prime member and was happy to see that Sesame Street was eligible for download. This is much easier and cheaper than buying an episode on DVD and ripping it. I downloaded an episode and confirmed that it would play offline in Airplane mode. For the curious, a 1 hour episode at “Better” quality (the middle option) took up 600 mb of space. Here are some screenshots (click to enlarge):

amz_sesame1 amz_sesame2 amz_sesame3 amz_sesame4

One concern is that the videos that you download aren’t there “forever”. Thanks to commenters below for sharing this link and this link. Combining the information from both:

You’ll typically have 15 to 30 days to begin watching the video and once you start watching it, you’ll typically have 48 hours to finish watching it. We’ll usually notify you when the viewing period for a title is close to expiring.

You’ll need to connect to WiFi in order to reset that 48-hour clock. Some people report having trouble when in a foreign country, while others were able to reset without issue. I suspect it matters which country? In the end, it might not be as convenient for international travel or when you don’t have occasional WiFi access.

Filed Under: Deals & Offers //

Lifetime Income vs. Lump Sum Payouts: You May Live Longer Than You Think

Posted on September 1, 2015 // 10 Comments

My parents are in the midst of planning their retirement payout structure. I don’t know about everyone else, but in my mind I tend to plan to live to pretty much exactly age 80. Early death is depressing to think about (even though I have term life insurance), but what about the other end? The Statistical Ideas blog had a timely post about longevity risks and lump-sum payouts which contained a “death table” (horrible name) for people born in 1950. I’m going to paraphrase the explanation in a way that makes more sense to me.

1950longevity

  • Out of every 100 people born in 1950, roughly 1/3rd are expected to die by age 65. (Blue)
  • If you are in the group alive at 65, your life expectancy is now age 79. That is, half of that group will die before 79. (Green)
  • But, that also means you have a 50% chance of living past 79. If so, you will live to somewhere between 80 to 110. In other words, possibly a really long time! (Red)

If you are a couple, then the odds of at least one of you living a really long time is even higher. Let’s take a couple, one male and one female, who are both age 65. According to this Vanguard longevity calculator, there is an 89% chance at least one will reach age 80, and a 45% chance at last one will reach age 90. If you are younger, your life expectancy is even longer; enter your age(s) into the calculator.

Here’s my mental shortcut. For an individual that is 65 today, there is roughly a 50/50 chance they will reach age 80. For a couple both at 65, roughly a 50/50 chance that at least one person will reach age 90. Putting it this makes make either scenario equally likely and would push me to plan accordingly. On one side of the coin flip, you have to enjoy life now! On the other side, you need to be prepared.

This longevity risk needs to be accounted for when you give up pensions or annuities that offer you a guaranteed income for life. A lump sum payout may sound attractive, but be very careful. Have any annuity and pension buyout offers analyzed and checked by an unbiased third-party. It is a big decision and may be worth paying an expert for their time.

Here’s a sad story of lowball buyout offers for lead-paint victims. Not to say all lump-sum offers are this bad, but it serves as a warning to make sure you understand what you are giving up.

Filed Under: Investing, Retirement //
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