Last weeks winning tip goes to Scott.
” I just wanted to share a little tip with you that will save people money on phone calls when traveling outside the United States. Whenever I travel internationally, I shut off my cell phone to avoid roaming charges and data charges that could occur even if I don’t answer my phone. Then to call back to the U.S., I always bring along my MagicJack and a cheap $10 corded phone. I bring the $10 corded phone because I don’t want to mess up a hotel phone, and be accused of wrecking it. Since a lot of people have free internet access because of having elite status with hotels, or some people stay at international hotels that don’t charge for internet usage, this is great way to make unlimited phone calls back to the U.S. for free [assuming that your hotel has free internet] Sure, it’s $40 for your first year or service, and then $20+ sales tax every other year, but I easily made up the cost in one 30 minute phone call back to the U.S.I can say from personal experience that the MagicJack works perfectly fine in Hong Kong, the Bahamas, and Mexico, as those have been the only places I’ve traveled internationally since owninga MagicJack. One important tip to avoid major frustration; if your MagicJack isn’t working properly first while outside the U.S., simply unplug the device from your USB port, shut down the computer with the MagicJack device removed from your USB port, and then after Windows fully reboots, then reconnect the MagicJack device to your computer and it should probably work.”-Scott
Some of the most frequently asked questions around Frugal Travel Guy have to do with credit cards, and , I plan to answer those most common questions below.
The best way to get large amounts of bonus points/frequent flier miles is through credit card offers, in order to qualify for the deals and keep getting them you must have “good” credit and learn how to manage it. If done right, throughout the year you can sign up for multiple credit cards and bank hundreds of thousands of bonus points without really hurting your credit. Read on….
What is my Credit Score and How do I Improve it?
Your credit is one of your most important assets! The FICO score, or “credit score,” comes from the Fair Issac Corporation’s credit scoring system, which is used by around 90% of banks to determine a measure of one’s credit risk. The FICO score looks into various aspects of your financial history. These percentages are FICO rough numbers as FICO keeps its exact mathematical equations secret.
1. Payment history, 35% – Late payments on bills will drop your FICO score. Always pay on time.
2. Credit utilization, 30% – This is the ratio of revolving debt to the total amount of available revolving credit: In other words, how much you owe vs. how much existing credit you have. You never want to owe more than 50% of your available credit. Paying off debt will improve your FICO score. Closing existing credit accounts can also negatively affect your credit score by disrupting this number if you have limited accounts and credit limits. A way to improve your score using this system is to get increases in your credit limits while not increasing your debt.
3. Length of credit history, 15%- This is the reason we get a no-annual-fee (ever) credit card and keep it indefinitely. As your credit history gets longer, your credit score gets better!
4. Types of credit used, 10%- Managing an array of different types of credit (car loan, credit card, student loan, mortgage, etc.) benefits your credit score.
5. Recent searches for credit or New credit, 10% - Credit inquiries are recorded events and stay on your report for two years. Applying for a credit card, car loan, or mortgage are examples of credit inquiries. Credit inquiries made by an individual, your employer, or by companies pre-screening for offers or insurance do not hurt your credit score.
6. Know your Credit score. You can get a free credit report many different ways, look on the left hand column of the blog for links to free credit reports. As a result of the Fair and Accurate Credit Transactions Act, every legal U.S. citizen is entitled to a free copy of his or her credit report every year. (Check the right-hand column of the blog for links.) The FICO score ranges from 300-850, the higher the better The median falls around 723.
For Rookies: Look at no-annual-fee credit cards (with travel bonuses). Start there, keep it around forever, pay it off, and don’t carry more revolving debt than you have available credit. Eventually your score will increase and you will be deemed a “better risk” for the banks. Then you can start cashing in on the great travel-related bonuses on some of the harder cards to qualify for. You will eventually increase your annual limits while, hopefully, not increasing your revolving debt and your score will keep going up. Get an education, pay student loans on time, buy a car and eventually a home, and you will be managing many types of credit. Keep it all together, live within your means, and you should have no problems letting your FICO score work for you!
Basically How do I do a “credit card application day” and How often can I do them?
Look at the existing deals and the issuers who are offering them, pick a few cards which come from different card issuers. The big issuers are Barklays, Bank of America, Chase, American Express, and Citi. For example right now the applications would consist of the Starwood Preferred Guest® Credit Card from American Express, the Chase SapphireSM Preferred Card, the Citi ThankYouSM Premier Card – $500 in Gift Cards, Barclays US Airways Premier World Mastercard and The Bank of America Hawaiian Airlines Card. Pick one day and apply for all the Cards at once, that way competing card issuers cannot see your other inquiries. Traditionally the advice of many is that you can apply for a handful of credit cards every 90 days . Check the minimum spends and make sure you can meet them. All the best current cards are displayed throughout The Frugal Travel Blog and Rick posts frequently on this topic.
What you gain from this set of applications:
25,000 Starwood Preferred Guest Points ( there is also a 30K link good til December 12th elsewhere. Google is your friend here:)
50,000 Bonus Points from the Chase Sapphire Preferred
50,000 Citi Thank You Points
40,000 US Airways Miles
35,000 Hawaiian Airlines pints which can be converted into 70,000 Hilton Honors Points
A potential total of 200,000 Bonus points and if done by 2 family members 400,000 bonus points. Do this every 90 days and you could see millions of points per year! Seriously.
How much will all this hurt my credit score?
Every inquiry into your credit pulls your score down 2-5 points, which isn’t nearly as much as people think, and will fall off your report in 2 years. If you get denied a card it that has no effect on your credit score, and will not show up as a negative factor on your report. Credit scores should stay above 700 if you fall below stop until it comes up.
When do I cancel a card?
When the annual fee is approaching call the card issuer to notify them you will be canceling the card, if they do not offer you a retention bonus, statement credit, FF miles or waive the annual fee, cancel the card. New to this credit thing? Keep your first credit card open forever, even if you do not carry a balance on it. As I stated above the first card establishes your length of credit history, longer the better.
Can I Reapply for a card I’ve already had for a new bonus?
Note: In order to be considered a “new applicant” for a credit card you must have had that account closed for at least 2 years. So wait until then to reapply for the exact same card and avoid a denial. There are enough different cards to apply for over 2 years that you will not run short of points opportunities while still protecting your credit.
Looking Forward to hearing about your success!!! Email your stories and tips in!!!
Citi Thank You Premier Card, 50,000 Thank You Points!