How Not To Improve Your Credit Score – AND Lower Your Self-Esteem!

Before this starts to sounds like a lot of whining, I should explain that recently I've been focused on improving my credit score.

I had fallen below the 760 level over the last six months because of a ton of new inquires and new accounts. So my goal was to prop my score back up to at least 760 - if not back into the 800 territory.

Why? Pure vanity. There is no other logical reason. I'm not buying a house anytime soon and I have all the consumer credit I could ever use. So since there are no dings on my credit history - why should I care right?

I'm a numbers guy, I get fixated. It's my vice.

So in looking through my cards I noticed that my Old Navy Card had a limit so low it was dragging my average card balance down substantially. It has a $600 limit.

So I called Old Navy and asked them to bump it up a little bit. I've been an account holder for years now and I've faithfully paid my bill in full every single month (average balance is like $60). I assumed they'd be falling over themselves to give me a $10,00 line of credit for board shirts and tank tees!

Wrong.

I was denied and I got this letter in the mail explaining their decision:

"Dear Thrifty Expat,

GE MONEY BANK has reviewed your recent request to increase the credit line on your Old Navy credit card account.

Your request has been denied for the following reason(s):

Insufficient information to determine bureau score

Our decision was based in part on a credit scoring system that was used to predict your creditworthiness. The reason(s) listed above indicate the credit characteristics where you did not score well in relation to other customers.

Some information used to make this decision was obtained from the credit reporting agency listed below. This reporting agency did not make this credit decision and is unable to provide you with the specific reason(s) for our action.

Equifax
1550 Peachtree Street
Maildrop H -13
Atlanta, GA 30309
1-800-685-1111

Sincerely,
GE MONEY BANK "

I have so many questions:

1. What does "Insufficient information to determine bureau score" mean and why is that my fault? Doesn't that sound like a computer glitch?

2. Why do they repeatedly write GE MONEY BANK in capital letters?

3. Why do I feel like I'm the last kid on the playground to get picked for kick-ball. I mean - I have an open offer for an American Express Platinum Card and Old Navy Credit won't give me more than $600 to spend in their stupid-store?

Bitter? Yes I am.

The sad part is I will keep this card because my wife keeps buying stuff from them once a month and they give $10-off coupons when I spend like a million* dollars - which is very very difficult to do $600 at a time.

* approximately

A Rant About Taxes and the Military

The below was a position paper that I wrote over a year ago that still has valid points. I assume that even in this economy, many of the below tax breaks will be extended, but that still doesn't mean that all military personnel shouldn't be monitoring this topic.

One of the single greatest monetary benefits to the American Service Member in the last 15 years is not any of the many targeted pay raises that have been enacted, but the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), that unless permanently enacted into law, will expire after the 2010 tax year. For many Service Members this act, while they may not have realized it, has reduced their federal income tax rates and created a new, lower, tax bracket while establishing (and subsequently increasing) the Child Tax Credit (Esenwein, 2005).

The creation of the 10 percent tax bracket for eligible tax payers has affected many Service Members by simply reducing their tax liability from 15 to 10 percent, particularly families with children. Prior to the EGTRRA, the lowest tax bracket for a taxpayer was 15 percent. Unless Congress acts to make these changes permanent, the tax brackets will revert to the 15 percent level in tax year 2011. For the tax year 2007, the 10 percent tax bracket will be applied to tax payers whose taxable income is less than $12,000 for the tax year 2007. That may seem like a very paltry sum, but one must keep in mind that the taxable income is derived from taking one’s adjusted gross income, subtracting either the standard deduction or itemized deduction, and then subtracting an additional amount derived by multiplying the total number of exemptions by a dollar figure given by the IRS ($3,400 in 2007). To put this in context, a CW2 in the Army stationed overseas, grossed just over $85,000 in income for the 2007 tax year (to include moving expenses and COLA for two locations) and ended the year with an AGI of $41,369. After the standard deduction and the deduction for the eligible exemptions, that CW2 has a taxable income of $10,269 which produced a tax due to the IRS of $1,024. Without this tax bracket, this CW2 would have faced a tax liability of about $500 more, and again, this tax bracket will disappear if not enacted by the 2011 tax year.

Possibly the most significant adjustment of the EGTRRA to military families, particularly large military families with more than two children, was the establishment of the Child Tax Credit. The Child Tax Credit was scheduled to fluctuate from $600 to $1,00 over nine years until Congress passed the Working Families Tax Relief Act of 2004 to set the Child Tax Credit at $1,000 per qualifying child through 2010 (The Child Tax Credit, 2007). Simply put, the Child Tax Credit reduces the amount of tax that a taxpayer owes by $1,000 per child. Many military members, particularly lower ranking officers and enlisted soldiers, have benefited tremendously by having this tax credit, but this law goes even further. If a taxpayer filing their tax return uses all of the amount allocated for their qualifying children as a tax credit, then the remaining amount is refunded to them in the form of the Additional Child Tax Credit. This IRS describes the Additional Child Tax Credit like this: “This credit is for certain individuals who get less than the full amount of the Child Tax Credit. The Additional Child Tax Credit may give you a refund even if you do not owe any tax.” (IRS Pub 972, 2007) While the amount being refunded is not colossal, it directly affects thousands of military families through the grade of E-5 and many above that. This is a way that the American Taxpayer, without even realizing it, helps to contribute to the income of Military Service Members. Just to emphasize the importance on military families, if we take the same CW2 used in the above example, after calculating in credits for education, his total tax for the 2007 tax year is zero dollars. The Additional Child Tax Credit will kick in and he will be refunded $1,000 for each qualifying child, plus he will be refunded all of the money that he contributed during the 2007 tax year. That comes to a total refund of over $4,500 for a family of six that had an adjusted gross income of greater than $45,000. Can you imagine in impact on a family of a young Sergeant or even a Specialist or below when the tax refund would be almost identical?

One of the most unpublicized benefits of the EGTRRA changed the definition of earned income and eliminated the use of modified adjusted gross income to measure eligibility for the earned income Tax Credit (Parker, 2002). In simpler terms, prior to the 2002 tax year when a Service Member sat down to calculate if they were qualified for the Earned Income Tax Credit, they needed to perform a separate calculation to include their housing allowance, clothing allowance, sustenance allowance, etc… That little known addition part of that one tax act made lives considerably easier for thousands of American Service Members and their families and was the right thing to do. Making the above changes permanent and keeping them at a minimum at their existing levels will benefit millions of Americans, but as a Soldier I am proud to say that it will affect many Service Members as well and that’s why Congress needs to do this.

Since these tax breaks do not apply specifically to the military and of course have far reaching effects, they are predicted to cost a substantial amount of money. In addition to helping a substantial number of military members, there were significant savings in the EGTRRA that benefited the top 1% of wage earners (Gale & Orszag, 2004). There needs to be a line and congress needs to find it. The benefit to those tax payers with taxable incomes of less than $12,000 should not be withdrawn. There are ways to make this happen and whoever is seeking the vote of any military members, whether they are running for congress or for the president of the United States, needs to be aware of how important these cuts are to the American Service Member.

Bibliography
Esenwein, G. (2005, Mar 4). CRS Report for Congress. Retrieved Mar 8, 2008, from kuhl.house.gov: kuhl.house.gov
Gale, W. G., & Orszag, P. R. (2004, Mar 8). Tax Analysts - Tax Break. Retrieved Mar 9, 2008, from Brookings.edu: https://www.brookings.edu/views/articles/gale/20040308.pdf
IRS Pub 972. (2007). Retrieved Mar 9, 2008, from IRS.gov: http://www.irs.gov/pub/irs-pdf/p972.pdf
Parker, C. A. (2002, Jun). Earned Income Credit: new rules could ease qualification - military taxpayers. Retrieved Mar 9, 2008, from BNET Business Network: http://findarticles.com/p/articles/mi_m6052/is_2002_June/ai_90926492/pg_1
The Child Tax Credit. (2007, Feb 10). Retrieved Mar 9, 2008, from About.com: http://financialplan.about.com/cs/taxes/a/ChildTaxCredit.htm

The Merit of Giving Out Teen Debit Cards

I remember when I got my first job and had to pay the bank $5 every other week to cash a check. Eventually I got sick of it ($5 was a hefty portion of my check back then) and started working on getting my own account. I was 16.

Being 16 I had to have a parent open the account and I distinctly remember that my Father was very hesitant about giving me this freedom. After all, he had to co-sign the account.

Fast-forward several years later and we arrive at the point where I recently set up an account for my not-quite-14-and-a-half-year-old daughter. Not just a checking account, but a checking Account with a Visa Debit Card.

At 14 my daughter has the power of plastic and the responsibility of a checking account. How far we have come.

We don't give her money - she has to earn it. So what started out as a an account with quite bit of Christmas money, quickly dwindled to nothing by Valentine's Day, but the lessons are still being learned.

Not only does my daughter check her account regularly to make sure she knows exactly how much she has, she also is learning a lesson or two about the international financial markets. In addition to checking her account balance, she also checks the currency rates before heading out to the store or the mall.

The only way I could be more proud is if she set up her own Microsoft Money Account.

We've also found other uses for this. When she recently went to London - we padded her account with some money and let her take that out as needed. What was left-over - we took back at the end of her trip.

I also ordered her an additional credit card for the credit card that I primarily use. That one stays locked up in the safe and hasn't been used yet, but the purpose will be for school trips and other times when she's not with us and might possibly need to buy something expensive. (Heaven forbid!)

For all the rest of her purchasing needs, she has a Visa Debit card and she got it years before I did. Hopefully she'll make better use of it than I did.

You know...

When she has money in it again.

A Letter From Capital One

What I once hailed as a great card for those of us overseas, has now turned ugly. I had written before about my good experiences with Capital One, my bad experiences with Capital One - and my frustrations.

On a previous post on Capital One I said that I was contesting what they meant by "The profitability of your account at your current purchase rate" as being a reason for denying me more credit.

And then I got this letter from Capital One:

"February 19, 2009

RE: Creditor: Capital One Bank (USA), N. A.

Dear [ThriftyExpat]:

Your recent correspondence requested additional information regarding a declined request for a credit limit increase. We are sorry to advise that we are upholding the decision on your account.

If you have any additional concerns that you would like to have addressed, you can contact the following credit reporting agencies directly:

<.....>

If you have questions regarding your account, please give us a call at <....>. Our Customer Service Representatives are available 24 hours a day. 7 days a week.

Sincerely,
Capital One Bank (USA), N.A."


Hell yeah I had questions. Really only one: "What do I need to do, and how long it will it take, to raise my credit limit with Capital One?"

Ok - that was two questions.

Truth be told, I ended up tossing this card towards the back of the desk drawer and I'm only using my Charles Schwab Bank Visa now. It's not worth the hassle using Capital One.

I have been getting zero percent transfer offers recently from Capital One, with no fees and at my current interest rate (which is the second lowest of 15 credit cards). Maybe they miss me?

More Ways To Avoid The Foreign Currency Transaction Fee

I found another card that claims to not charge any foreign currency transaction fees.

The card is the E*Trade Rewards Platinum Visa® Card but honestly the best feature it has looks to be the fact that it does not charge you a fee when you use the card outside the U.S.

Their interest rates look reasonable (although I counted 5 different possible interest rates they could charge you), there's no annual fee, and they have some sort of rewards program that lets you trade points for free brokerage trades using E*Trade, or travel rewards.

Yawn.

Except for the fact that they do not charge a foreign currency fee, I see very little other benefits.

But I would like to support them because I still believe that more cards should drop this fee.

The Charles Schwab Visa – Second Complaint

You get the bad with the good.

So far my only complaint about the Charles Schwab Visa was that it is not compatible with MS Money. (They say they are, but they’re really not.) I still really like this card because they don't charge you that foreign currency transaction fee that almost all other banks do.

Now I have a second complaint. I looked ahead and it looks like my first statement will cycle on March 5th. That gives me a payment due-date of 30 March. Since I get paid on the 31st of the month, I called Charles Schwab to see if they could move back my payment due date by one day.
I’ve done something similar to this before with other banks (USAA moved the due date by 15 days once) so I know it’s possible.

Chuck Schwab said “Sure – but it will take 2-3 billing cycles to take effect”.

I asked: “So I have to pay this bill on the 30th of March and I can’t pay it on the 31st?”

“That’s Right” she said.

“But in two months I can pay it on the 31st? Just not this month?”

“That’s correct.”

It’s not a big deal, and truth-be-told it’s almost not worth mentioning – other than in my mind it knocks their previously impeccable customer service rating down a notch. How hard would it have been to add one day to this one cycle? Even two cycles - I don't see the big deal.

But they are still better than Capital One.

UPDATE - 18 March:

Two weeks after I first asked them to move the due date - they did it. My new statement date is two weeks later (I was really only looking for two days) and it was effective my very first statement.

Why the lady gave me a hard time on the phone I'm not sure... Maybe she was managing expectations.

Anyway - I can take this off the complaint list. So far - only real complaint is Charles Schwab is not really compatible with MS Money's software. Which is just killing me.

Further Support for the Schwab Visa

Recently we were at Real buying phone cards (because when you purchase from Real, you get extra minutes for free with the Play cell phone service) and I decide to try out the exchange rates for my new Charles Schwab Visa. So I bought two cards at the same time - one with my trusty USAA MasterCard and one with my new Charles Schwab Visa.

This is what I found (I know it’s not scientific):

-The Exchange rate that I got for cash from the embassy (for government employees only) was 3.642.

-For the 50zl charge, USAA charged me $13.57 ($13.44 for the purchase plus a foreign currency fee of $0.13). Their ROE was 3.720 (plus $.13)

-For the 50zl charge, Schwab charged me $13.42 (vice $13.44 from USAA). Their ROE was 3.725 but with no extra fee.

For this transaction alone: USAA at the end of the year will give me 13 cents back – Schwab at the end of the month will give me 27 cents back.

Total end cost of the transaction shows USAA will give me that 50zl phone card for $13.44 whereas Schwab would give it to me for $13.15.

If I didn't lose you with the incredibly boring numbers - The Charles Schwab Visa is blowing away its closest competitor, IMHO. Their biggest flaw still is that they don't allow you to sync with MS Money... But if I'm paying less everytime I use the card- I guess I can take the trade-off.

Yet Again, Not Happy With Captial One

Several months ago my wife and I quit going to Oh-Sushi, our then-favorite restaurant for Sushi. The reason we quit going wasn’t the food, but the fact that every time I used my Capital One card, I was being charged in U.S. Dollars (at a really bad exchange rate) rather than being charged in Polish Zloty.

They claimed that the machine processed the transaction automatically and there was nothing they could do about it. While I would have liked to believe them, I never had a problem before – so I wrote about it and we just stopped going to that restaurant. We found another Sushi place that took my Capital One card and always charged me in PLN rather than USD.

I was ready to write it off as an uncooperative merchant, but recently I went with a big group of people to another restaurant in Wilanow called Castello’s. I paid for the whole bill with my Capital One card and imagine my shock when I went to sign for eh card and noticed that they had already converted the Exchange rate for me into USD – at a really terrible rate (3.25 vs. the rate of the day which was closer to 3.75).

I was a bit livid and tore into the guy for charging me in USD. He insisted (and I believe him) that the machine automatically calculated the amount, probably based on the fact it was a US Dollar-based credit card.

I started to see a pattern. So I went back to Castello's this past weekend and paid with my shiny new Charles Schwab card. There was no problem paying in Polish Zloty and I got the fair exchange rate and presumably I will get back the full 2% back in cash rebates.

I cannot find anything about this online, but it looks to me that Capital One and Polcard have an agreement that in some establishments (possibly limited to certain restaurants), the credit card will be charged in the base currency of card. Polcard makes a substantial profit from the crappy exchange rate, and I assume that somehow there is an incentive for Capital One because they do not charge a foreign currency transaction fee.

This is yet another reason to ditch my Capital One card. I unfairly blamed the restaurants, but now I see this is definitely a problem with the credit card company – specifically Capital One.

My advice - If you do use a Capital One card overseas - carefully monitor how you are being charged. If ever given the option select the local currency, and if not given the option - use another credit card.

My Take on the Charles Schwab Visa

Not too long ago I wrote about the new (at least new for me) Charles Schwab Bank Visa Card. It's two biggest advantages are that it does not charge that evil foreign currency transaction fee, and it will pay you 2% back on all purchases.

Right after I wrote about it - I applied for one. I couldn't resist.

Here's what I found:

-I applied for the card over the internet, but it told me that they would have to review my application and get back to me. I thought that was a nice way of saying that I had been declined, but a couple of weeks later I did get a shiny new card in the mail.

-8 months ago Capital One issued me a card with a ridiculously low credit limit. I feared that this was a reflection on my credit rating. It turns out Capital One just sucks - Charles Schwab gave me a credit limit 7 1/2 times that of what Capital One gave me no questions asked.

-When I got the card, I made multiple calls and the people on the other end were sooo friendly! They answered every question they could to my utmost satisfaction. One lady even recognized that I had called earlier. That was actually a nice touch.

-The interest rate is pretty high compared to other cards that I have, but I don't plan to carry a balance. They don't have any annual fees, and did I mention that they don't charge the foreign currency transaction fee?!?

My only disappointment came the first night when I was trying to sync with MS Money. When I was checking out the card I read on their website: "Users of Intuit's Quicken or Microsoft's Money can quickly download their Schwab Bank account information to their computers for more convenient management of their finances."

When I called and asked why I couldn't get my software to sync, the dude on the other end told me that I could only download once a month after the statement cycled through.

You have got to be kidding me...

This little detail is the only problem, that I have with the bank. This is extraordinarily painful to those of us that use MS Money as a part of our financial management - especially those of us who use different currencies where we don't know the exact amount charged until after it posts to our accounts.

The other side of the coin to this is that you have to sign up for a Charles Schwab Brokerage account to hold the 2% rebate. This process was a tad laborious and a just little bit painful. The folks on the brokerage side are not as friendly as the banking folks and going through the process is just too time consuming. Luckily, the brokerage side of the house is compatible with MS Money.

So aside from the really disappointing news that I have to enter my own transactions, this is going to be our card of choice. 2% back and no transaction fee is just awesome, and the fact that the money is returned monthly is just gravy. So far it looks like their exchange rate is at least as fair (if not slightly more-so) than other cards - so for now - this is the only one I use.

Still Looking for the Perfect Card

So at the bar the other night I met a very nice lady who told me about her Bank of America, Military Bank credit card that did not charge any foreign currency transaction fees.

Too good to be true I thought.

So I went to BOA's web site, and they did have a web site for military banking - but when I clicked on the terms and conditions of the credit card, their web site was non-operational and said I should call their 800-number. (The fact that their web sit was not working should have probably alerted me this was not going to easy).

So I called. The woman said "I have a great offer for you" and proceeded to offer me a card with 3% foreign currency transaction fee.

I thanked her and tried to hang up, but then she persisted and asked specifically what I was looking for. When I said I wanted a card that did not charge a foreign currency fee, she put me on hold for a couple of minutes more.

When she came back she told me "I have another great offer for you". Apparently Bank of America is full of great offers.

This offer I thought was very interesting - She offered me a "Bank Of America Military Preferred American Express" and insisted this card only carries a 1% foreign currency transaction fee.

There is no cash-back program with this card (only points that I'd never use) but the interesting part was this is the only American Express card I've ever heard of that charges only 1% for purchases in a different currency. Usually it's between 2.7 and 3% depending on the issuing bank.

I find this encouraging, because frankly I think this fee should be abolished. Visa, MasterCard and American Express already make a decent profit on every transaction charged to the vendor - there is no reason to bill the card member / traveler again for the same purchase.

There are banks that don't charge these fees. I'd just really like to see more of them.

Lucky Ducky

I have been assigned yet another label in my life - This time I'm not sure if it's flattering or not.

Apparently I'm a Lucky Ducky. The term in the financial world apparently refers to people who do have income, but are able to take advantage of incentives and tax credits in order to have zero taxable income; therefore, actually end up making money off of the income tax system.

Reading through a few sites, I see that many see this as an unfair situation. I happen to know quite a few young military families that have directly benefited from the tax cuts responsible for producing so many Lucky Duckies...

So say what you want - it's just water off a duck's back.

More Options in the Pursuit of Avoiding the Foreign Currency Fee

I've got my USAA MasterCard - Back when life was simple, that's all I thought I'd ever need.

Last week I was happy to brag that I found a new Credit Card that not only did not charge foreign currency transaction fees, but also gave you 2% cash back.

Well there's at least a third credit card that doesn't charge the fees. It's an HSBC Premier World MasterCard. The bad news- I've hear horror stories about HSBC and I don't see any other benefits in owning the card.

But I am on a crusade against this fee, and I'm really looking for a card with no hassles that allows me to buy things in Poland, the same way I buy them in the U.S. - without being penalized for it.

And by the way - AAA used to offer a Visa with no foreign currency transaction fees, but apparently starting 1 June 2009, they are going to start 2%. The search continues...

UPDATE: Apparently you have to maintain a $100,000 balance with HSBC to keep the premier status. Pass on this card after all - it's a dog.

Wonderful Warranties

I've been posting a lot about warranties lately, and I started making a mental list of the things that I've had serviced (or even replaced) under the manufacturer's warranty. The list started getting long.

These are some of my most recent warranty experiences:

-Kind of expensive surge protector - Mailed it in to get replaced

-Bose Earphones - Mailed in to get replaced

-iPod Touch - Took to the local Apple Serwis Shop where it was deemed to need replacement

-Wireless Keyboard - replaced free of charge by the store

-Memory Stick - replaced free of charge by the manufacturer

-Western Digital Hard Drive (2 times) - Replaced no questions asked by the Manufacturer

-Dell Computer - Had it serviced here in Poland - under warranty - no questions asked.

-Christmas gifts - One replaced by the website that sold it (no questions asked) and one that was a little more painful - but they still replaced it.

-Cast Iron Frying Pan - Bought 18 months ago and it cracked. The manufacturer sent a new one with no questions asked.

All-in-all we've had excellent luck lately with getting things serviced under warranty. Almost zero complaints. Now it might help when I'm contacting these places I explain that I'm stationed overseas and that I need assistance from afar, but whatever - I have a lot more faith that I'm getting my money's worth for the things I buy.

Of course the question becomes - what happens when the new/fixed items break again... I guess I'll end up doing exactly what the manufacturers hope that I do - buy new ones...

Capital One Kind of Sucks

This has me over the edge -

Not too long ago I wrote about my experiences with Capital One here and here.

In January I asked for a higher credit limit on my newly acquired card because my initial limit is painfully low. I was denied a second time for an increase and this is the text of the letter they sent me explaining why:

"Thank you for your recent request to increase your credit limit. We regret that we cannot approve the requested change. The reason(s) for our decision are as follows:

Insufficient length of Capital One relationship

The profitability of your account at your current purchase rate

Your Capital One account is too new "

The first and last bullet are the same thing essentially - I haven't been a customer long enough. I have been a customer for six months though - and faithfully paid my bill in full every time, but I could almost concede that point.

But to deny me because of profitability of my account at my current purchase rate!?! What does that mean?

These are the only things that I can even guess:

1. I charge (modestly lately) on my account and pay it off every month. I never carry a balance.

2. I did request Capital One's "Military Rate" which allows me a substantially lower interest rate and waives several fees - but I never take advantage because I pay it off every month. Even their military rate is higher than the regular interest rate that USAA gives me so if I ever need to carry a balance - it won't be on this card.

3. Because I use it overseas, and Capital One is the only card issuer that doesn't charge a foreign transaction fee, they feel like I'm taking advantage of them and don't want to give me the chance to spend more of their money.

Regardless of the reason - this is ridiculous. I seriously considered canceling the card, but instead, I've decided to maximize the damage I can do.

Since they give me back 2% on gas and grocery purchases and they don't charge that foreign currency transaction fee, I will use this card to purchase only gas and groceries - and only overseas. I will continue to pay it off every month and I will cash out on the cash rewards as soon as humanly possible. Possibly monthly with the way we go through gas and groceries.

The downside is that charging near the top of your spending limit (and in this case that is pretty easy to do) is actually bad for your credit score. But I'm not planning on making any major purchases in the next few months so I think I'll be okay. With the current exchange rate against the zloty - their meager exchange rate is probably enough for just our gas and groceries.

I think I'll be much happier with sticking it to Capital One (vice jsut cancelling the card) until they up my limit. I say beat 'em at their own game.

And of course the story is not over. I've sent a letter to Capital One under the Fair Credit Reporting Act, asking them to clarify the reasons for denial. I've specifically asked if the account is not profitable because I don't carry a balance or because of the low interest rate. I'll post any updates as I get them.

Octane Rating

Have you ever found yourself wondering "What's up with the octane ratings here?"

When I first got here, I really didn't know which gas to buy. The Shell station next to my house has unleaded with 91 and 95 octane. 91 octane for unleaded seems a lot higher than gas in the States. So does that mean regular gas here has a a higher octane rating than premium gas in the US?

No.

If you’re interested in the science check out the Wikipedia article.

Here’s the Reader’s Digest version: There are two methods to calculate Octane rating in gasoline: Motor Octane Number (MON) and Research Octane Number (RON).

What’s more important than what they are, is where they are used. In the states, the number on the pump is the average of these two ratings. Here in Poland (and much of the rest of the world) they just use the RON (or the larger) number.

Why do you care? If your car is American, check out the owner’s manual. It will tell you the minimum octane rating (most likely the average of RON and MON). For example my '07 Dodge Grand Caravan lists the rating at 87 Octane. Great - If I was in the States. For some reason the Dodge's owner's manual does not list the international RON rating. Probably because it would confuse people.

I dug through the Owner's manuals on my motorcycles and found a much clearer answer:

My '09 Harley takes the 95 Octane gas here; the equivalent to 91 octane on a Stateside pump.
My '91 Suzuki takes 91 Octane here; the equivalent of 87 Octane Stateside.

So that's how we roll now. For the Dodge and the Suzuki we get the 91 Octane, but not lower. Getting a lower octane is not so much a problem here in Poland, but be aware when you go to Germany because they do have the 90 RON there. That's probably not what you want to put in your car.

For the Harley - She takes premium - which as long as I get the 95 RON, I'm good.

Most mechanics will agree that unless your owner's manual specifically says otherwise - there is usually no need to put in more expensive gas than necessary. Certainly not on a regular basis.

Confused? Ask the attendant - Even if it's not marked - they can tell you what the octane rating is. It does help to be able to count to ten in Polish...

So the next time you're at the pump - make sure you're putting in only what you need. It could save you several bucks each time you go to the pump. Over a year (depending on the exchange rate) that could add up to some serious zlotys...

PayPal - The Forgotten Friend

I've found a renewed interest in PayPal lately.


PayPal, for those not familiar, is a service that allows to you send and receive money to just about anyone. Anyone with an email address and a bank account. Its kind of like Western Union for the 21st century.


Most people who have an account, use it for eBay. By design, eBay makes it easy to use Paypal and hard to use anything else.

Recently I paid for shipping my new motorcycle with an international company. They took my credit card, but charged me over $40 for the privilege of doing so. They said I could do a bank transfer, but that would mean bank fees. Turns out - they took PayPal. I could have sent the cash from my checking account for free and saved the $40. Ironically - I ended up paying their credit card fees with PayPal.

Lately I've also used it to send money for Girl Scout Cookies, paid a couple of bills and even entered a Scrapbooking Challenge (okay, that last one was for my wife).


The only reason that I even mention them is that I recently found out more about the other end of what they do (Collecting money rather than giving it). If you have a small business, their credit card rates are pretty good, and with one major exception - they are practically hassle-free.

So if you don't have an account - you can get one here.

Early Filers Beware

Ahh Tax season - My favorite time of the year.

I'm pretty sure you're legally supposed to have your 2008 tax documents by now - or at the least, most of the people providing them should be putting them in the mail by now. No mater how many documents you have already, it's never too early to get started.

And it appears that its never too early to get started making mistakes either.

My home-town newspaper recently published an article on tax rebate errors and it appears that 15% of tax filers are already messing up their tax returns by incorrectly filling out the section about the amount of the tax stimulus rebate that many of us got last year.

Rule of thumb - If you got stimulus money in 2008 - you probably don't qualify for an additional stimulus money. Sorry - consider yourself fully stimulated.

The good news is - it looks like if you did claim the refund accidentally- it only delays your total refund by a week. That could be worse...

Under Construction

To my loyal followers (all six of you - and you know who you are) -

You might have noticed that this site is undergoing a little bit of construction.

I'm trying to make it a bit easier on the eyes and more accessible.

Suggestions in the form of comments are always welcome, or you can email comments@thriftyexpat.com.

I hope to settle on a theme and a coherent flow to the site very soon. I'm also hopeful that we'll see a more professional look to the site in the coming weeks.

Thanks
Dylan

There's a New Card in Town

I just found a very interesting article in the New York Times about being a Frugal Traveler.

This guy thought it was novel to make arrangements before planning a big trip overseas.
This is my life.

He had some interesting points, and many that those of us who live overseas have already figured out how to navigate on our own. But do check out the article at the above link.

But the best thing I took away was that Charles Schwab Bank has a Visa credit card that will allow you to make purchases overseas without that dreaded foreign currency transaction fee.

Go to their website or click here for details about the card.

This is a Visa that will let you charge all you want overseas without paying transaction fees, and it will deposit 2% of your total purchases into a Schwab One® brokerage account. I assume that you could make deposits into the brokerage account and withdraw as needed - but on the other hand - Maybe it's a good idea to have a little slush fund that's gaining interest (like a money market account). It's not like you're using your cash back credit card as your major source of income - I'm guessing that you probably won't ever miss it.

I think I will check it out. Maybe not right now since I've still got 7 credit checks on my credit reports from buying my motorcycle, but within a few months. This would be what I need to justify cutting up my Capital One credit card. The only other card that doesn't charge a foreign currency transaction fee...

Duh - Get the iPod fixed here!

My daughter's iPod stopped working. We're ten months into the one-year warranty. I thought for sure that I'd have to send it back to the States, let them look at it and then send it back to me. My only hope was that the thing would get back to whatever service center it had to go to - before the warranty expires.

It turns out that less than 2 miles from the Embassy (on my way home no less) there is an authorized Apple Service Center. It's unassuming and you'd never know it, but you see the Apple trademark and the Serwis sign as you enter the building. The address is ul. Mangalia 4 and it's just off of Sobieskiego. There is more info listed on the Apple website under the Service tab - or by clicking here.

And the best part - they're completely linked up to the master Apple database. Since we bought that iPod through the Apple Store online, all the lady needed to do to verify the warranty, was type in the serial number. She took the iPod, gave me a receipt and said they would call me when its ready.

Of course nothing's perfect - she did drop large hints that the damage might not be covered by warranty (in which case I'll end up mailing it back to Apple after all) but if you have a MacBook, a Mac Computer or any other Apple Product that is still in its warranty period that needs serviced - check them out. It really was pretty easy.

And ultimately my review of them will completely depend on whether or not they fix my daughter's iPod or not...

UPDATE: - 29 January
Today I got a call from the Serwis Center here in Warsaw. They told me my iPod was ready.
Turns out they just replaced the iPod completely. Good in that my daughter has a working iPod Touch again. Bad in the sense that the engraved personalization that was on the iPod is gone. I suppose we could get it tricked out if we wanted - but I think we'll just live with having a new iPod instead.

Because we had such an easy experience - I don't image that we'll be buying any any other mp3 players other than an iPod for as long as we're in Poland. I was always a bit leery of the Apple customer service, but this has been a really positive experience.

Are Interest Rates Getting Better?

Is it just me, or are credit card interest rates getting better?

I admit, I don't keep constant tabs on the interest rates on my credit cards (at least not before now), but about every six months I try to take a look and make sure that I know what the rates are and what the maximum limits on my cards are. If I have to carry a balance (like in the post-holiday season), I carry it only on the lowest card.

But this time around I did notice that my interest rates (on most cards) have gone down. Out of 12 credit cards, my average rate is 9.78%. I haven't been keeping close track, but that's at least 1% to 2% less than the last time I did this.

Of course this is very unscientific. My Old Navy card is still at 21% and one MasterCard is bottomed 4%. Everything else is in between.

Also - every card of course is different. Some are a fixed rate, some are tied to the prime interest rate, and I swear that some are in tune with the lunar cycle of the third moon of Saturn.

Best I can tell, the current prime interest rate is 3.25%. If you've got a bank that uses a fixed rate (like 19% for example) might be time to find a new bank - especially if you carry a balance.

Oh - and that 4% on the MasterCard is better than any other deal on the market, but I think that's a special rate for long-term customers. If you have a bank that you've dealt with a long time - try asking them if they'll lower the rate. Seriously, what could it hurt?

A colleague told me that he called his bank recently and the guy mentioned to him that they could reduce his interest rate... If my colleague asked them to. But he had to ask. So my colleague said "Can I have a lower interest rate?" and the guy on the other end said "Of course, we're happy to lower that for you!" He was a good customer, but their policy is the customer has to ask. I don't remember what bank he had - but I'd assume all of them are like that...

How Far Does The Guarantee Go?

I showed up in Poland with a brand new 2007 Dodge Grand Caravan. It had 8 miles on it and I didn't see it until the day they delivered it from the port. That was about 15 months ago.

It's had a few more problems than I care to admit, but the latest one drove me nuts. There was a short in the factory radio that constantly drained the battery and left me stranded in the car-wash line in front of Sadyba Mall not too long ago.

After a jump from a kind friend that didn't live too far away, I took it to a Dodge Dealer who did fix the problem in the factory radio.

The problem is that he said the 36 month/36,000 mile warranty that came with the car is invalid and would not be honored. I thought that was a little cheesy because after all - the problem was clearly a manufacturer's defect in the installed factory radio. He said he felt me - but I still had to pay 127 zlotys.

Technically I think he's right, but in the Middle of West Africa I was able to get the Ford Dealer to honor the new-car warranty for a Ford Explorer. And that was Africa!

On the other hand, the Harley Davidson Dealer here in Warsaw says they are happy to honor my 2-year, unlimited mileage warranty on the new bike. No questions asked.

So if you have a car - and it's under the US warranty period - Ask! It can't hurt. And if that fails (and the problem looks bigger than a small short in the radio) try a different dealer. It just might work.

Oh yeah - Dell Too

In keeping with the theme of getting stuff fixed under warranty - I bought a Computer though the mail from Dell when I lived in Africa. Six months later I moved to Poland with a computer that had a broken piece on the motherboard (not related to the move).

I thought for sure I had to find a way to mail this back -

Turns out through the web site and a customer service technician, I was able to get Dell to honor the two-year warranty here in Poland.

The guy even came to the house to change out the Mother Board. Took less than 20 minutes and was completely free of charge. It was just too easy.

The only contact I have for these guys is a phone number (22-579-57-00) but I can confirm that if you do end up in Poland with a Dell and a warranty bought in a different country they will help you. At the very least this works if you bought the Dell in the U.S. originally.

And in case you're wondering - I usually just keep asking for someone to speak English - they almost always have someone who speaks Polish if you don't.

Soooooo Close

Okay, I got really excited there for a while.

I thought I found a site that would allow me to (essentially) convert money from my own living room without extra fees and charges. Allowing me to never have to make another trip to my Polish Bank to deposit Polish Zloty.

The site I found is actually an off-shoot of probably the most popular currency converter on Google (http://www.xe.com/fx/) and it has a pretty good set-up that will allow you to buy and sell currency for decent rates.

Previously I had avoided sites like this for a number of reasons - Mostly because it has been cheaper and easier for me to walk into a Polish Bank, use the ATM to get money from my American Bank account, and then deposit it into my Polish Bank Account (mostly for paying for preschool bills and the phone bills).

Well today I came across the site above and thought - this is perfect. I even used the the demo version to transfer money from a U.S. Dollar account to a Canadian Dollar account and it really seems like this would make my life easier. I can monitor the exchange rates and when it hits a point that I'm comfortable with - I can just hit the execute button. No extra fees, and the exchange rate seems to be consistently better than anything else I'd get.

A no-brainier right? All you need is a USD bank account and a local currency bank account - and I have both!

Yeah - Not so much. Turns out Polish Zloty is an "exotic" currency. So there are fees and costs associated with dealing in zloty.

Sooo close. If I'm ever lucky enough to be stationed in one of the 28 other countries on their list I'm coming back here. I like the concept and it fits in perfectly with how I bank in another country.

I'm Back - Kind of

Okay - that was bad netiquette to drop off the face of the earth without posting anything saying that I was going away.

I hope no one was worried.

I didn't disappear - but I was clearly a victim of the holiday season. Like a whirlwind it swept me away and occupied my every moment - Then I went back to Texas for a couple of weeks.

So now you know that I'm dead broke since I just got back from a two and a half week jaunt to the States and of course it was Christmas and I am guilty of what everyone else is guilty of this year - overindulgence.

So aside from running and sitting on committees, publishing my little newsletter articles, keeping up with my online classes, chasing (or being chased by) four kids and trying to keep my sanity - this blog has fallen behind - But my intent is still the same - to pass on secrets to living on the cheap.

In the coming weeks I'm going to stick very close to the moniker "Thrifty Expat". After all this excess, the wife and I have decided to live very modestly here in Warsaw for a month. Not to the extreme that other popular bloggers have done where they vow to live on $5 a day - or something like that - But we do plan to make extreme cutbacks for a month/plus and see how we keep our sanity. Stay tuned for that.

In the mean time - Stay well - and stay Cheap - and thanks for checking in.