Bank rate returns and best credit cards

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Submitted by treehugger on June 1, 2009 - 8:48am

I am curious, I have been banking with Washington Mutual (now Chase) for years. I have the free platinum account. I used to get a return rate of nearly 4% (I think) I don't know what the rate is now, but it shows up as less than a dollar on my statements, where is used to be several dollars....I have more money and yet get less return.

I don't really understand this stuff (I am an environmental manager and numbers just confuse me), wondering where you folks bank and if there is anyplace (not an online bank) that is considered secure with better rates, that it might be worth my while to switch.

Also researching credit cards. I have excellent credit and use my credit card to pay for everything so I can get the points. I pay it off every month, so interest rate is not really a concern. I had a United Visa Signature, but did not want to pay the annual fee so I had it reduced to a gold card with no annual fee, yet still have perks. I have another signature card (Citi) card that I never use and has no annual fee. I was told for credit purposes I should not cancel my cards as the longer I have a card the better standing I am in.

Submitted by mwtosd on June 1, 2009 - 8:58am.

Correct do not cancel your Citi card because if you do you will lower your credit score for two main reasons. First you will potentially hurt the length of your credit history - the longer you have a credit history the better it is, especially if that was the first credit card account you opened.

But since you have so few cards, closing that account will hurt your debt/credit ratio because you will no longer have that amount as available credit:

for example

say both cards have $5,000 credit limit, giving you a $10,000 total, closing one will give you available credit limit $5,000.

But if you charge say $1,000 and pay off each month totally, you still have used 20% of available credit at the time vs 10%.

If for some unfortunate reason you need the credit card for expenses because of a jobless or illness you can use it, if it is closed you do not have that option anymore - especially losing a job since you can not apply for a new card without a job.

Submitted by Coronita on June 1, 2009 - 8:59am.

Bank accounts? Why not online banks?

As far as credit cards. The three cards that I carry are AmericanExpress/Costco card, the Citibank Dividend card, and the Citibank Shell Mastercard.

I use the Costco amex card as much as I can, use the shell mastercard only for gas (when I can't get gas at costco), and the dividend card for everything else.

If you do a lot of international travel, the only card company that I doesn't charge exchange fees is from Chase (so some have posted).

All the cards mentioned above don't have fees (the shell card fee is waved if you purchase 1 tank a gas per year from shell).

Submitted by UCGal on June 1, 2009 - 10:59am.

flu wrote:
Bank accounts? Why not online banks?
If you do a lot of international travel, the only card company that I doesn't charge exchange fees is from Chase (so some have posted).

Capital One doesn't charge for foreign currency exchange. I'm not sure about Chase. I got a C1 card specifically for a trip to Italy - I can verify that they gave me straight bank-rate exchange without any extra percent for Euro purchases. I haven't used the card since that trip.

Submitted by Coronita on June 1, 2009 - 11:15am.

UCGal wrote:
flu wrote:
Bank accounts? Why not online banks?
If you do a lot of international travel, the only card company that I doesn't charge exchange fees is from Chase (so some have posted).

Capital One doesn't charge for foreign currency exchange. I'm not sure about Chase. I got a C1 card specifically for a trip to Italy - I can verify that they gave me straight bank-rate exchange without any extra percent for Euro purchases. I haven't used the card since that trip.

My bad. I'm sorry. I meant capital one. I don't know why I posted chase. Grrr. We just covered this a few days ago.

Submitted by treehugger on June 1, 2009 - 11:51am.

flu wrote:
Bank accounts? Why not online banks?

The concept of putting my money in other than a "bricks and mortar business" is frankly frightening. Maybe it is safe, but really goes outside of my comfort zone....although I do use netflix.

As for credit cards, I don't do enough traveling to warrant that being a factor in my decision, but I will certainly look into the shell card.

Submitted by edna_mode on June 1, 2009 - 5:47pm.

Searching for the best banking deals:

http://bankdeals.blogspot.com/

Capital One and Chase are offering $50 and $100 bonuses for opening checking accounts there.

Best reward credit cards:

Fidelity offers an AmEx (2% back on everything, redeem into your Fidelity brokerage account) and a Visa (1.5% back on everything). Discover offers 5% back on certain things, depending on what kind of card you get. One of them is 5% on gas/automotive, the standard one rotates through "categories" quarterly, so that Q1 you get 5% on travel, Q2 "home" stuff, Q3 gas and theme parks...you get the idea. No annual fees, no inflatable "points" system, no problem.

I believe Charles Schwab is also offering a Visa with this good of a rebate, and is reported to not charge foreign currency transaction fees.

I can attest that Capital One's MC does NOT charge foreign currency fees as of my May statement. But for the great gory lowdown, go to flyerguide:

http://www.flyerguide.com/wiki/index.php...

Submitted by rogdog on June 1, 2009 - 5:50pm.

Most on-line banks are real bricks and mortar banks. You're doing business with their internet division. That doesn't make them more or less "safe" than any other bank but FDIC insurance does. You will not lose your money in an FDIC insured bank failure. I've had two in two years.

Netbank was actually First Bank of Atlanta. When it folded, I got a FDIC splash screen stating the bank was closed when I tried to log in one Saturday. It scared the snot out of me as my checking, savings and $30K in CD's were there but, they were back up and running Monday as Netbank, division of ING direct. (a big Dutch bank) Two months to convert everything over. No input on my part. Easy. Even kept the rate on the CD's.

Indymac bank was a "bricks and mortar" bank. I had a $40K CD with them held in my Smith Barney account. I got my $40K back but they terminated my CD early and I actually lost about two weeks'interest and had to find a new home for my money.

A couple on-liners that usually pay above average rates are Discover Bank (discover card), Eloan Bank, (Banco Popular New York, a branch of a Puerto Rican parent, both FDIC insured, Puerto Rico is America as far as banks are concerned)ING Direct (I use and like them.)

As far as your rate of return at the bank you're at. Interest rates are quite low everywhere. A 2.8% is the best you can do and that aint much. You'd probably need $50k to get that. Any money you have in any bank is losing value fast anyway. A dollar you had in the bank on January 1st is today worth only ninty three cents. If you're looking for an investment, look elsewhere. If this is the loose cash in your checking account. You pretty much just got to take it. Last year cash was the place to be as the stock market and bonds and real estate plumeted all at the same time. This year, low rates and rapid currency devaluation make that probably the worst place to keep your money.

There currently is NO SAFE PLACE to keep money. There is huge market risk, default risk and inflation risk everywhere you look. A bold player that makes the right play will become wealthy. Everybody else will get fleeced. This is the nature of major economic and political shifts.

Think Ammo and canned goods. (just kidding, but not much.)

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