Chase. Making Your Money Work (Against You)

June 26th, 2010

I don’t have any horror stories about Chase, just some general advice. I have been with Chase for 10 years and starting January they started charging me 12 dollars a month for my checking account. They had changed their policies and said I needed to keep 1500 in the account or have a savings account tied to the checking account with 1500 dollars in it to wave the fee. I don’t mind this decision but Chase’s savings accounts are a joke. At the moment their return on investment is about .10 APY. I keep my savings account with Ally and earn 1.29 percent. While Chase is everywhere in the southern United States the addition of numerous branches and convenience doesn’t offset the loss in savings. I closed my account and moved my checking to Ally. Chase’s CDs are also simply terrible. A 12 month CD will net me about .25 – .75 percent depending on any specials they are running and the amount of my deposit. Unless you absolutely have to deal with them I would recommend you move to a credit union or other local institution or an online bank.

Chase is also pulling an interesting trick with their credit card division. They are lowering the credit lines on already existing accounts and making huge bonuses.

Here is how they do it:

Say you have a credit card with a 10 thousand dollar limit and 14.5 APR. You currently have 8 thousand dollars on the card and are making your payments as promised and have good credit. How can Chase make more off of you? Very easily unfortunately. They lower your credit line to 5 thousand dollars and then tell you that you have 45 days to pay the excess off or face an over limit fee and a rate hike. So assuming you don’t have 3000 dollars on hand to pay the difference you get slammed with a fee and a rate hike.

But it gets worse.

Say you DO have 3000 dollars on hand to pay the difference and don’t get a fee. When your credit line is cut your credit score takes a hit because your percentage of credit use versus credit availability goes up. In our hypothetical example we went from 80 percent credit use to 100 in one month. So now Chase runs your credit score and notices that it has gone down so they increase your rate because you are a greater risk. But the credit score only went down because Chase lowered your limit in the first place.

Darth Vader

I have altered the deal...

In the past decade Chase has moved from a large secure bank with quality investment tools to a third rate d-list organization. They chased after large returns in the 2000s throwing caution to the wind and closely aligned themselves with the housing market. Now that the market has gone bear they are squeezing their customers hard and punishing savers. Their addition of numerous hidden fees and their practically illegal insufficient fund fee reminds me more of a pay day loan business than a world wide bank.

Road Warrior – Part 1

April 2nd, 2010

If you are tired of looking for a job in your local job market, have few friends and family in the city you live in, no pets and enjoy travel and staying in hotels then a career as a road warrior might be for you. Imagine waking up in Denver, flying to Connecticut then catching the red eye to New Jersey all within a 24 hour period.

Flight Maps

You are only 24 hours away from anywhere.

Most companies have dedicated staff in the cities they operate in or they are able to use the internet to complete most of their operations. But while the age of the digital office has decreased most travel opportunities it hasn’t eliminated them altogether and the ones that still exist are the hardest to fill.

That’s because very few people are willing to travel 1 day a month for their job much less even contemplate traveling the 270 or more days a year that some companies would love to staff.

Busy Airport

Hello, welcome to hell.

Pros:

  • Lots of money.

I once worked at a large corporation and they had this guy who had to travel twice a week to update routers and check the condition of server rooms in Los Angeles. He quit after they refused to reduce his travel time and they started to look for his replacement. They first tried to sucker someone from the team but everyone was 30 year or older, had wives and girlfriends and kids and pets, so they started looking elsewhere. The went down to the server rooms and offered junior techs the job. One of them took it but quit shortly after. They put a posting on their website and on job boards but couldn’t find any takers. They then hired the sharks: headhunters. Job placement firms with zero ethics hunted the globe for someone dumb enough to take the job. And everyday the salary grew, tempting someone to take the bait. A year later the position had still not been filled even though the salary was at 99 thousand and the requirements had fallen to junior level standards.

I quit soon after that. I don’t think they ever found anyone.

Money

This is your god.

  • Lots of travel.

If a company discovers you like to travel and that you travel well they will start sending you for most of their travel needs. You will become their road-warrior, dispatched to every conceivable city at any time to solve whatever problem that can’t be handled remotely.

Cons:

  • Little to no upward mobility.

Being away from the office makes you almost invisible and immune from the office politics necessary to work your way up the corporate ladder. You might not even meet most of your co-workers for years. This separation makes it highly unlikely that you are going to be considered for a managerial position of any type. Also, in order for you to make a transition from traveler to office worker they will have to find someone to fill that travel job you currently occupy. That isn’t going to be easy or happen quickly.

  • High burn out rate.

The reason that these jobs pay so well is because most people are unable to stay in motion for months or years at a time. They quit or get fired because being away from their comfort zone makes the job very stressful.

Burn out

FUUUUUUUUUUUUUUUUUUUUUUUUUU!

So, lets begin.

Preparation:

  • A burner phone

Once you put your name and number out on the job boards as someone willing to travel you are going to get a lot of phone calls from recruiters and companies. These people will continue to call you until you are no longer active in their database. That can take months. Using a disposable phone allows you to separate your calls from your private cell phone and an makes for an easy way to ditch the number when you are done. You can use your own number if you wish but keep in mind that the number of calls can exceed five a day easily. Best to have a way to turn off the annoying phone calls without impacting your own private line.

  • A disposable email address

The number of contacts you are going to make through email is going to be staggering. You could potentially receive hundreds a day. A separate email address that doesn’t impact your private one is usually the best. I recommend gmail because it can be accessed worldwide and has a tremendous amount of space.

  • An internet connection

You are going to need access to dice.com and monster.com as well as any private job boards that contain potential jobs.

  • Patients and the desire to travel

Lastly you are going to want the desire to travel. If you don’t enjoy travel this job will be the worst decision you ever make. The large amounts of money will NOT make up for it and you will hate your job with a fiery passion.

Going Somewhere

Your new home!

What you will positively need:

  • All of your identification.

If you can’t leave home without it, or you need it to drive your car, bring it. That might include passport, drivers license, military ID card or anything else with your picture on it. When traveling out of country you will want any visas you might need to work.

  • Have bag will travel.

A travel bag if you are staying less than a week or a suitcase if the stay goes longer.

  • Communication.

You are going to be fairly mobile and while you might have a phone at the hotel or office the only way to stay in touch with everyone is a cell phone.

Survival

Everything you will need...skip the knife though.

What you might want to bring:

  • A book or anything to read.

Avoid hardbacks and stick to paperbacks. You don’t have to bring anything from your house or apartment, just pick one up at the airport and, if the flight is long enough, sell it at another bookstore when you land. The Amazon Kindle is a nice item. You can pick one up new if you have the cash lying around although used or previous version can be bought on eBay or craigslist.

  • A laptop or a netbook.

You might want to work on the plane or watch movies.

  • A portable music player.
  • Clothes.
  • The tools of your trade.
Business Class Seating

Just hang up pictures of your cat and it's just like your office on the ground!

What you can leave behind:

  • Everything else.

Update your resume and put it up on dice.com and monster.com making sure to specify that your willingness to travel is 100 percent. Log onto company private job boards for positions that you want and do the same. You also want to specify in your resume that travel is not an issue. Just a quick one line sentence to that effect is very helpful. No one reads your resume until scanners or other automated web crawlers bring it to their attention so key words like ‘travel’ will flag you very quickly. Once you are flagged as a travel candidate you will be moved to the top of the list. It will take a few days to be updated and scanned into everyone’s database, so just sit back and wait for calls.

Kamikaze Credit Card Method

April 2nd, 2010

The Kamikaze Method is a way to pay off your credit cards quickly and easily. It is a brutal full frontal attack that eliminates debt but it has a few caveats and it will not work for everyone. I will discuss several methods here and leave it for the readers to determine what, if any, are right for them.

How in debt are you?

If you are using your credit cards to pay for necessities and only paying the minimums then the problem is already critical and it is only a matter of time before you reach the maximum limit anyone is going to loan you and are fucked. Let’s go over the Nuclear Option first. Bankruptcy is something that everyone is going to tell you to consider last but I’m going to tell you to go for first. It will destroy your credit rating but, let’s face it, the last thing you need is more credit. You won’t be able to get a house or new car for many years, but you will be debt free. The only true negative here is that your credit rating can keep you from landing a job with employers that check for that. Still, if you are under a mountain of debt, it is an option. Get a bankruptcy lawyer and pay them with your credit card.

Let’s cover the most well known methods for eliminating credit card debt.

Debt

Is she using a mechanical paper calculator? What is she, Amish?

Debt Snowball Method:

The Pitch:

Pay off your accounts with the smaller balances first, proceeding to the larger ones later, causing a snowball effect. This is supposed to create a good mental attitude because as you pay off each account your spirits are lifted and all that good mental energy goes towards paying off the next one. Sounds easy, right?

The Reality:

If you believe that then I have a unicorns that shit gum drop trees and pixie dust for sale. It makes sense to tackle the smaller problem first because that one seems actually doable and the larger ones seem insurmountable. But as you are paying off the first card those big balances keep getting bigger. By the time you pay off the first card the interest on all of your other cards could be greater then the principal you just paid! Now I know you can swap debt from one card to another so that your smallest balance is on the card with the highest APR, then you pay off that card and then transfer a small amount from your lower APR cards onto your higher one and etc etc. But that isn’t what’s going to happen and you know it. You know you are bad with debt and now you think you can play duck-duck-goose with your cards and juggle all of that without incurring any fees? Have fun with that.

Snowball

Cherry flavored debt.

Snowflake Method:

The Pitch:

Take every small bit of money you can find and put it towards your credit card. Dig through your coach, have a yard sale! Every little bit helps!

The Reality:

How are you going to get that money to the credit card company? Are you going to dig through your couch, have a yard sale and then take that money to the bank and then send it to them? Are you going to take it to 7-11 and get a money order for 35 cents and then mail it to them for another 44 cents? Really? Most credit card companies have a maximum number of times they will accept payments in a month. Mine is 4. So 4 days into the snowflake method and I have paid 14 dollars and now I have to wait 17-26 more business days to make another payment. The snowflake method has the right idea but just like Vegas casinos noticing that people can kind-of win at blackjack and taking steps to prevent it your credit card companies are wise to smart-ass payment strategies and will actively move to prevent them.

Snowflakes

It's beginning to look a lot like Christmas Debt.

The Kamikaze Method:

This takes the Snowflake Method adds the Snowball Method effect and modernizes it. It also adds a batshit crazy mentality towards risk aversion as well. It works though. I paid off over 40 thousand dollars in debt in just over a year and I am debt free now.

  • Call them up

You can certainly try this. It won’t work, but go ahead and have fun. Call your credit card company and ask for a lower rate. Tell them a sob story and that you won’t be able to continue to be a loyal customer of theirs if your rate stays where it is. Really lay on the tears and pretend like this is your big performance for the Oscar! They will tell you to go suck a bag of dicks. You see, they don’t care. They are losing money hand over fist because they gave out all that cheap credit to anyone with a pulse for the past 2 decades and now that the jig is up they will not budge. They are awash in a sea of red ink and they have an army of phone operators trained to say “no” faster than your ex-girlfriend. Still, go ahead and give them a call. Maybe you are a better actor than me and can get a few percent removed.

Phone

Make your own 80s phone joke here.

  • Cancel everything

Why do you have a Netflix account and cable and an overdue Blockbuster rental? You can watch anything you want online and yet you want to flip through 1000 channels of nothing for over a hundred bucks a month. Cancel everything you don’t need. Cable, land lines, your maid, that mobile pet washing service that comes by once a month. If you can negotiate a cheaper deal for your cell phone then do it. Call up your insurance provider and get the cheapest rate you can. Starbucks coffee?! What are you, rich? Jesus Christ on a pogo stick go to 7-11 for your java or just get some at work. Take active steps to not spend one dime if you can.

  • Sell out

Take all of your possessions and sell them. Yard sale, ebay, whatever. Sell your books and then the bookshelves, sell your television and your DVDs. All of it. This is a going out of business sale. You’re Crazy Eddy and your prices are INSANE! Now take that money and apply it to your card.

Metallica

A metaphor for selling out. I'm being SUBTLE.

  • Allowance

Yay, you get to be 13 again! Lucky you, you get to re-experience the joys that youth has to offer. That means you also get an allowance and when that money is gone that’s it, the fun is over. Calculate what it takes for you to live for a month and that gets to be your allowance. This allowance is for the bare necessities and for entertainment. That’s gas, food, movies and cigarettes for me which amounted to 300 dollars a month. Yours may be more or less. The deal is to pick a number and stick with it until everything is paid off.

  • Bye bye savings

Take what you have in savings and dump it into that money hole you have at Citibank or Chase. You were saving it for a rainy day? Oh, guess what, it’s pouring outside. “But what about emergencies?” I hear you asking. This is an emergency, once those credit cards fill up and they won’t give you any more extensions what do you think is going to happen. They aren’t coming over to give you a prize. Besides, you were just going to blow it on something stupid anyway so into the credit card maw of doom it goes.

Shovel

You load 16k and what do you get?

  • Find the maximum payment count

Find out the maximum number of times you can pay in a month. Now multiple that by 1 because that’s how many times you are going to pay. See, I’m keeping the math simple. Credit card companies calculate the interest that you owe them on a daily basis and then apply it your bill at the end of the month. So it’s better to pay more often than just once. If Jill pays 100 dollars a week for 4 weeks and John pays 400 dollars once a month and their credit card debt is 1000 dollars who pays less in interest? I’ll give you a hint: the one with the vagina.

  • The bigger they are

Now you need to pick your highest interest account and move as much of the debt off of it to other lower interest cards. Take all of the money you have earned, subtract bills along with the minimum payments to all of your other cards and your allowance and that is the amount you are going to pay. You will want to divide it up and pay the maximum times you can that month. Repeat every month.

Kamikaze

A banzai of savings.

That’s it.

This method is simple and it works. The highest interest card falls first followed by the lower ones in a domino effect. As each card is eliminated their bills disappear and even greater amounts can be applied to the the remaining debt.