Getting a loan these days...

Unless you've been hiding under a rock, you're probably familiar with the current 'crisis' int he credit and banking systems, and I think we’ve all heard about how banks are failing and going bankrupt and how we're all going to suffer right? Hearing the presidential debates I was convinced I was never going to get another loan again.

Is it just me or does this remind anyone else of when the airlines were going under and the Government bailed them out? When that happened, it seemed like someone flipped a switch and a large percentage of airline employees became extraordinarily grumpy overnight. I assumed at the time it was because they were fearful or angry they were going to lose their jobs. It might be just me, but I’m certain I’m seeing something similar now with the banking industry.

Several weeks ago my 17-year old Suzuki motorcycle looked like it was gone – broken beyond [reasonable] repair. I, being the person I am, quickly ran through the five stages of grief and then bought a brand new 2009 Harley Davidson Sportster XL1200L. Yeah, it’s sweet.

In order not to drain my savings or the kid’s college money, I decided to shop around for a loan. My thinking was that looking for a measly $15,000 loan ought to be a piece of cake – heck I should have banks flocking to me right? Yeah, not so much.

I went to five places:

USAA - My trusted bank of most of my adult life. They offered me 6.74% interest, but they were dodgy about the paperwork requirements. Two weeks later I called to find out where the draft check was (supposed to be mailed) and the man on the other end snapped "It's just been sitting here waiting for you to call us back". Something about his tone turned me off - so I declined the loan and moved on.

Next I tried Capital One for a loan. I applied over the phone and the guy on the other end sounded nice enough, but seemed like he was annoyed to answer my questions and I had lots of questions. When I asked why I was offered 5.87% interest rate over the 5.47% rate listed on the web site, he point blank told me that rate was for people with better credit. Well excuse me! Turns out Capital One dosen't consider a motorcycle a vehicle - so that ended that search, but they would not have gotten my business either.

Next up was Navy Federal Credit Union. They approved my motorcycle loan for 6.5% APY, but right before I agreed to the deal, they dropped a bombshell - They would only approve my loan if I took my wife's name off the title. Apparently they had a problem that my wife did not have an income - even though her credit score is like 30 points higher than mine. I told them to pound sand and cancelled my Navy Federal membership n the spot.

Next up was Pentagon Federal Credit union and their offer was fair and the rate was 6.49%. Getting a loan was fairly straightforward and they mailed me a draft check within days. Overall they were fine, but the whole process was quite sterile. I don't think I ever talked to a real live person.

Then I went to the ‘Dark Side’ and checked out the State Department Federal Credit Union. Overall they were a good deal. The final interest rate was 5% (should have been 4% - I’ll go on a rant next week about my experience with SDFCU). Their customer service leaves a lot to be desired, which I'll go into on a later post, but in simple terms of who offered the cheapest loan - they won by a landslide.

Now I haven’t opened up any new credit cards since the credit crisis set in, and obviously I haven’t bought any houses – but to me it seems that if you’re a good credit risk and you shop around, then there are still decent loans to be given. I mean, SDFCU gave a loan to a guy buying a motorcycle over the phone from a quasi-dealer in New York, having it delivered to Houston and then shipped directly overseas without even registering the bike! If they’ll give me a loan, then they’ll give anyone a loan – right?

Happy Thanksgiving!

Typically we Americans think of Thanksgiving as a time to be thankful for all that we have – and we think of the day after Thanksgiving as the best day to get more stuff to be thankful for!

So Happy Turkey Day – Enjoy the stuffing – and to make you feel at home – check out some of the sites tomorrow for Christmas deals and bargains. Remember, nothing says I love you to your brother-in-law, like sending him a whole stack of $1 USB cables for Christmas!

Ben’s Bargains.net - This is one of my favorite sites for finding cheap crap I don’t need. I’ve been know to buy super sized race tracks, miniature Batmen, and completely useless network cables because they were all cheap.

XP Bargains and Tech Bargains - Both are similar websites that give deals on electronic equipments mostly. Extremely helpful if you know exactly what you want - otherwise a great time waster.

Retail-Me-Not is a great website for when you get to the checkout portion of a website and it asks you for a coupon code. Surf over to this site just to see if you can get any extra cash off - I've saved quite a bit using these guys.

Turns out there are a million websites like the one above - but someone recently sent me the link for CurrentCodes.com and that looks pretty promising as well.

And lastly - if you are looking for deals online to send to relatives in The States - don't wait until Black Friday (tomorrow) or Cyber Monday next week - Poke around today after you finish you turkey - Many of the best deals that you're going to find (until December) are posted today.

Happy hunting!

Where have all the good banks gone?

Do you remember how the airlines got after 9/11? Remember when the flight attendants all of the sudden became scared that their professions just got exponentially more dangerous and combined with the uncertainty about their jobs and their future became easily agitated and seemed a bit rude?

I think I'm seeing the same thing now that the credit crisis has really set in. In the last couple of weeks I've dealt with several different banks looking for a modest loan for another motorcycle at the house of the Thrifty Expat.

To my surprise the people at the banks that I’ve been dealing with are generally not friendly. I turned down a loan from my bank (who I have this insane loyalty to) because the guy on the other end was just a little rude. I turned down another with a lower interest rate because they refused to issue me a co-signed loan with my wife (who for the record, has a better credit score than I do).

This of course means very little in the grand scheme of things. The rates for borrowing are going up (one percent in the last 3 weeks that I have noticed) while the prime interest rate is going down. Someone explain that one to me! The Federal Government is infusing banks and lending institutions with money, but their standards for loaning out seem to be tightening up.

I'm not just talking about big banks - I'm talking about Credit Unions and member-only banks that appear to be circling their wagons and keeping their money to themselves. I just wonder exactly how long this is going to go on for.

The Language Tax

In the almost 11 years I’ve spent overseas, I've noticed a phenomenon that I haven't seen addressed anywhere else. For lack of a better term - I call it "The Language Tax".

The language tax is when you pay more for something because you don't know how to get the better deal because: You don’t speak the language!

As much as I'd like to think I'm cheap enough to always find the better deal, I know that I pay too much for some things, and I just don't know how to fix it.

It almost happened to me again at the mall a couple of weeks ago. My wife was buying matching clothes for this year’s family Christmas photo (I think I was pressed against the glass front of the store with a please-save-me look), and we racked up a fairly big bill. The lady behind the counter asked if we had a discount card to the store (all in Polish), and I answered no. No is one of the few words I do know in Polish. The nice lady then asked us if we wanted to be part of the discount club and I assumed that there was a charge... Luckily while she was checking us out, I looked up and was able to ask if there was a charge or not. She said no so I said “Sure - I'll take one of those cards.” End result: 2 minutes later I saved 25% off new clothes for six people.

This also happens with most of us who don't bother to get the Skarbonka Card at Auchan and the equivalent card at Real. I know that I can save money (although admittedly I have no idea how it actually works) but I just don’t have the motivation to ask and try to fill out the little card they have.

I mean, if you don't read the language, and you don't find someone who speaks English, it's easy to just mentally calculate the anticipated cost of the purchase, get your faktura and get the heck out of there.

The negative thing here is that I have no idea how you solve this. I had to ask someone else to figure out the Skarbonka thing. 5-a-sec has a frequent shopper's card that I never bought because it supposedly saves you money – but not on everything… I’m pretty sure I’d save the money over a year, but I can’t ask the questions I want to – ‘cause I don’t speak the language.

But my biggest problem is the lack of the good old boy's hardware store. Back in Texas, if I wanted to take on a household project, I'd go down to the hardware store (Preferably Andy’s Hardware off of FM 249) with a list, and find the first knowledgeable person I could and start peppering them with questions. By the time I left the store I knew that I could go home and figure out at least how to get started on whatever it is I was working on. Here I don't have that luxury - so instead of buying the parts needed to fix the hose - I'm pretty likely to just buy a new hose.

The other thing is finding the bargains. In the states I'd check out the newspaper ads or check out the internet ads and head out to the store – Here, I’m sure I could do the same but I don’t have a newspaper subscription, and I have no idea what the Polish equivalent of BensBargains.net is.

Again, this is the by-product of a stranger living in a strange land. It's not something that I'm going to fix unless I really learn the language.

My credit score is affected by what!?!?

In these times where credit is beginning to dry up, it almost comes as no surprise that it’s possible your credit score may be hurt by the types of transactions you make. But that doesn’t make it any less infuriating.

MSN reports that the Federal Trade Commission filed a law suit against card issuer CompuCredit for using purchasing patterns as a basis for cutting credit lines for card holders who visited certain establishments such as tire and retreading shops, massage parlors, bars, billiard halls and marriage counseling offices.

Most of us are familiar with the idea that our credit scores can be used for more and more things. If your credit history is bad, in many states you might pay more in auto insurance or worse, you might not qualify for a better job; my credit score been used as a qualifier for renting an apartment for as long as I can remember. But the thought that your card issuer may restrict your credit line because you shoot pool every Thursday night is a bit disturbing.

Possibly the biggest downer is that the FTC is not suing CompuCredit because they used purchases as a determinate of their credit line, but that they didn’t disclose that they were doing it. Has anyone ever really read through their Credit Card’s disclosure statements?

So depending on how frequently you visit the club – you might want to consider paying cash. I’m not sure how that works for our overseas purchases since half of the merchant categories for everything I buy are wrong or misleading to say the least. I know that my Mokpol on the corner of my street is listed as "Speciality Merchandise". One can only guess what U.S. merchants are also labeled as "Speciality Merchandise". Good luck.

Gift Cards –

I caught this on TV yesterday – one of these Sunday finance shows…

They speculated that anyone who has a gift card from a retail merchant needs to spend them. The crux that was for a lot of the smaller stores, they may have trouble staying open after the Christmas season.

I thought it was a bunch of baloney until they pointed out that Sharper Image filed for bankruptcy and left a lot of people with worthless gift cards. I was stunned.

So if you have friend or family that send you gift cards for the holidays, I’d spend them just as fast as humanly possible. I would never have thought this was a big deal, but apparently the companies have the right to just say no! Unbelievable right?

Hopefully if you have a gift card to Wal*Mart or Target there’s little chance those companies are gong to go bankrupt– but Sharper Image was a pretty big store – Caveat Emptor!

The End of Free Money

Today, November 13th, is a milestone for me. Today I am officially debt free! Again. Sort of...
The last time I had zero dollars in revolving credit card debt was June 2004. That was back in the days when free credit was rampant and I, like many Americans, got a bazillion offers in the mail for transferring my debt to zero interest credit cards… So being a red-blooded American when I was told that I could have free-money – well yeah, hell yeah I took it.

Since that was three PCSs ago, the extra cash came in handy and I floated the monthly balances for a while instead of paying it off – taking special care never to get saddled with interest charges. Since both my credit history and the economy could float that type of banking, I always thought it was win-win.

Now I do think I got the best end of the deal. Instead of paying off that debt (approx eight grand at its peak) I rolled the debt over to new credit cards and used my free cash to roll into my TSP, make sure I paid all my other balances in full, paid cash for a car along the way… and I spent what was left over on magic beans.

I must have taken up that last zero-percent offer November last year because the offers have stopped coming. Much to my ego’s relief, it’s not because of a down-turn in my credit history, it’s across the board in the banking industry.

Now over the last several years I’ve been planning for this day and today that last payment to that last credit card is easily absorbed in the family's budget. If it would be a problem though – would there be another chance? There are a few companies that are still giving out zero-percent offers but they are few and far between and only for six months at a time – and the vast majority are now charging a lot of balance transfer fees. So all in all, that ship seems to have sailed.

The Only Four Reasons That I Still Have a Capital One Card:

Since last friday was a rant against Capital One, I only thought it fair to say some nice things about them - I was going to list ten, but I could only think of four:

4. No foreign currency transaction fees. They’re the only bank that I found so far that really doesn’t charge you foreign currency transaction fees.

3. Premium rebate on gas and [most] groceries. 2% is better than 1% and with a family of six, we do buy a lot of groceries and gas.

2. I get to pick my own picture to put on the card. Do I put a picture of my lovely wife or darling children on my card? No, I put my Suzuki VX-800 motorcycle on the front of my card!

1. Military Discounts. Just for being Active Duty Military they reduced my interest rate (purchases and cash advance) to 6%. There are no membership/annual fees, pay-by-phone fees, cash advance fees, past-due fees, over-the-credit-limit fees or returned payment fees. Any fees that I would have had amassed while on active duty would have been retroactively credited back to my account. And they reduced my monthly payment to 2% or $10 (the higher of the two) when the rest of the industry is raising theirs (although I think that has just been changed again by federal law).

As far as I see, that last one makes the Capital One card by far a better deal than USAA, Navy Federal or the Pentagon Federal Credit Union – which is a little sad.

SDFCU

The five letter acronym in the title is not a misprint (or yet another spelling error). Its the affectionate nickname for the State Department Federal Credit Union.

More on these guys later, but I'm just curious - are they really difficult to deal with for everyone, or just for people who are not DoS who are trying to establish an account?

It took over two weeks for me to establish an account, but they had no problem taking my cash on day 1... I sense a future rant coming on these guys.

Election Day

Go out and Vote!

Or if you're an expat - sit back and celebrate one of the following:

a. You already mailed off your vote and you're happy you didn't have to stand in line!

b. You completely blew your county's six-month advance registration window and it doesn't really matter now anyway!


Either way - Happy election day! May your party win, and may the winning party raise our taxes the least!