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...