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5 Secrets About Credit Cards Your Bank Would Not Tell You

5 Secrets About Credit Cards Your Bank Would Not Tell You

Credit cards be an enigma. Powerful tools if you use them right, but dangerous weapons if you’re not careful. On top of that, every card is loaded with tons of fine print you probably don’t know about (and your banks would rather you not know). Here’s a few secrets about your credit card that your bank won’t tell you.

Annual Fees Are Negotiable

Don’t feel like paying your card’s annual fee? Don’t do it. Call up your provider and ask nicely – and lots of times they’ll waive it. Use this script:

Customer Service [CS]: Hi, this is Mary with MasterCard. How can I help you?

You: Hi Mary, I’ve had this card for a while and I really like it. I’ve been a [Bank Name] customer for the last [number of years]. I’ve spent [$x] on this card and I’d really like to keep using it, but I didn’t realize there would be a fee. Is there anything you can do about that?

CS: Let me check.

A lot of times, they’ll say or act like they can’t do anything about it. This is where most people give up. Not you, stick around and be persistent.

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You: You said you’re not sure if you’re able to get the fee waived?

CS: Yes, that’s correct.

You: Well, can you check?

CS: I’m pretty sure we can’t waive the fee sir / ma’am.

You: Can you check with your manager please?

When the manager comes on, ask again with the first script. Be confident, but polite – they’re not going to want to do favors for jerks. When in doubt, be patient, polite and don’t give up until you get a direct answer from the manager in charge of the card. Often, they like to keep loyal customers and waiving the annual fee to keep one as a customer is a no-brainer. That said, it doesn’t work 100% of the time, so your mileage may vary, but it’s definitely worth trying. If they’re not going to waive the fee, then you can go on to the next tip.

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You Don’t Have To Cancel The Card

If you have an annual fee you don’t want to pay, but also don’t want to cancel the card (and want to keep your credit clean), you don’t have to cancel the card. Ideally, you’ve already had the conversation above. If so, continue on with this script:

You: Hi, well I’d really prefer not to pay an annual fee. Is there another version of this card without the fee?

CS: Oh, yes, there’s the _______ card.

You: Can you please confirm that there’s no annual fee with this card?

CS: Yes.

You: Can we do that?

CS: Sure, we’ll have that card out to you in the next 7-10 days.

You: Thanks for your help [their name].

Voila.

You Don’t Actually Have To Spend Money

If you want to hit the minimums on your card – you don’t have to spend tons of money to hit credit card bonuses for sign-ups and accrue lots of miles or points. The infamous buy $1,000 of coins from the US mint trick sadly no longer works – but there are other options out there. There are other techniques you can use to essentially spend money on your credit cards and accrue points or miles without having to pay tons of cash out of pocket.

The Vanilla Card Churn Strategy

Essentially, you load up vanilla reload cards at $500 each. Each one has a $3.95 sign up fee. You can typically load up to $5,000 on different cards. So basically, you’ve bought 5,000 miles for $39.50. That’s a mileage value of .008/mile – which is pretty darn good considering most miles are valued at about .002 each. You then transfer vanilla card balances to a bluebird debit card and use that money to pay off your credit card balance. There’s more in-depth information on this entire vanilla churn strategy here.

The Paypal Load Strategy

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This is similar to the vanilla, except you can use it in your Paypal account without paying the ridiculous Paypal credit card and international fees. If you have international employees – it’s often cheaper to load up a Paypal reload card and pay your employees with that balance than it is to pay an international + credit card fee if you tried to use your credit card directly on the site. There’s always more of these on the way as well. If you plug into the great community at flytertalk, you can get wind of when these types of opportunities pop up.

You Can Use Your Card To Travel For Free

If you start stacking up enough miles in your various mileage bank accounts, you can start to do pretty neat things as far as travel goes. Sure you can use those points and get cash back, but if you turn them into miles, you can book a RTW ticket like Steve did for just a few hundred bucks (which would normally cost thousands). Miles were also a huge way that Chris Guillebeau traveled to every country in the world.

Some of these trips start at just 140,000 miles – which is essentially 3 large signup bonuses for different cards. Even if traveling to the world’s ends isn’t your thing – you can still get a free flight or two out of strategically using your cards. Not too shabby.

You Can Use The Same Card Twice

If you have a card that gives you good perks, you can sign up for it twice. If you wait 9-18 months, you can re-apply and get the annual fee waived. This is great for mileage-accruing cards that give big signup bonuses. If you cycle the cards every 9-18 months, you can get 25,000-50,000 bonus points from each card (without paying the annual fee). Pretty cool!

Well there you have it – five credit card secrets your bank would rather you not know.

Do you have any secrets that you’ve found work magic with your bank?

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Featured photo credit: Bitzcelt via flickr.com

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Published on May 7, 2019

How to Invest for Retirement (The Smart and Stress-Free Way)

How to Invest for Retirement (The Smart and Stress-Free Way)

When it comes to stocks, I bet you feel like you have no idea what you’re doing.

Everyone who’s not a financial expert has been there. I’ve been there. But, time is passing and you need to be crystal clear with how you’re investing for your retirement.

Otherwise, it’s back to work until you can afford not to. So, how can you invest for retirement when you’re not a financial expert?

You take the time to learn the fundamentals well. If you do, you can grow your wealth and retire happy. The best part is that you don’t need to be a financial expert to make smart investment decisions.

Here’s how to invest for retirement the smart and stress-free way:

1. Know Clearly Why You Invest

Odds are you already know why should invest for retirement.

But, maybe you know the wrong reasons. It’s time you get clear on why you’d like to retire. Here are some questions to help you get started:

  • Will you spend more time with your family?
  • What does retirement mean to you?
  • Are you looking to launch that business you’ve been holding off for years?

Everyone wants to retire but not for the same reasons. Once you’re clear for why retirement is important for you, you’ll focus on making it happen.

Investing in the stock market allows you to take advantage of compound interest.[1] All this means is that your money earns money on top of its interest. A reason why investment in the stock market is one of the best ways to plan for retirement.

2. Figure out When to Invest

“The best time to plant a tree was 20 years ago. The second best time is now.”– Chinese Proverb

It’s true if you’d had started investing when you were 10 years old, you’d have a lot more money than you do today.

The reality is that most people don’t start investing until it’s too late. So, if you’re currently waiting for the perfect time to start an investment, it would be today. Open your calendar and block out 2 to 3 hours to choose how you’ll invest for retirement.

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A quick way to get a snapshot of where you stand is to use Personal Capital. Input all your personal information and spend some time setting your retirement goals. Once completed, you’ll know where you stand with your retirement.

Having a savings account for retirement isn’t planning for retirement. Why? Your money loses value when you factor in US inflation.[2]

3. Evaluate Your Risk Tolerance to Create the Perfect Portfolio

Investing your money well depends on your emotions.

Why?

Because when the market drops most people panic and withdraw their money. On average, the US stock market yields an annual 6% to 7% ROI (return on your investment.) But, this won’t happen if you’re worried about short-term loses.

Before you invest your next dollar, know your risk tolerance.[3] Your risk tolerance determines the number of risky and safe investments you’d have.

Regardless of your investing style, you need to view investing for retirement as a long term game. Know that some years you’ll lose money but recoup this in the long-term.

Avoid watching market-related new. Also, create a double authentication to log in your investment account. This way you’re less likely to withdraw your money.

4. Open a Reliable Retirement Account

Depending on your circumstance, you may need to open a new brokerage account. This is the account is where you’ll invest your money.

If you’re currently working for a company, odds are that they offer a 410K investing account. If so, here’s where you’ll invest most of your money. The only problem with this is that you’re limited to the stock options that are available.

You do have the option to open a separate IRA (individual retirement account.) Here are some of the best brokers:

  1. Vanguard
  2. TD Ameritrade
  3. Charles Schwab

5. Challenge Yourself to Invest Consistently

Committing to invest for retirement is hard, but continuing to do so is harder.

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Once you’ve started investment for your retirement, you run at risk from stopping. Often you’ll want to contribute less, so you’d have more money in your pocket.

That’s why it’s important that you create a budget that allows you to invest each month. If you’re working for a company, you can set a percentage for the amount you’d like to contribute each month. Most people by default contribute 1% but aim to contribute 10% to 15%.

Be the judge for how much you can afford to contribute after covering important expenses. To stay motivated, use Personal Capital to view your net worth.

A benefit to contributing money to your retirement account is not taxed. For example, if you earn $100 and invest 10%, you’d contribute $10, then get taxed on the remaining $90. As of 2019, the most you’re able to contribute towards your 401K is 19K but this can change.

6. Consider Where to Invest Your Money

The most common way to invest your money is in stocks, but it’s not the only way. Here are other ways to invest:

Robo Advisors

Robo-advisors[4] are fancy algorithms that’ll choose the best investments for you. Sites like Wealthfront make it easy for first-time investors to invest their money. You’d input information about yourself and set your risk tolerance.

Then, set your monthly contribution amount and your robo-advisor would do the rest. Robo-advisors charge a fee to manage your money, but less than regular advisors.

Bonds

Think of bonds as “IOUs” to whomever you buy them from.

Essentially, you’re lending money and charging interest. Like stocks, not all bonds are equal. Some will be riskier than others depending on their rating.

Here are the different types of bond categories:[5]

  1. Treasury bonds
  2. Government bonds
  3. Corporate bonds
  4. Foreign bonds
  5. Mortgage-backed bonds
  6. Municipal bonds

Mutual Funds

Picture a group of people dumping all their money in a jar that’s managed by a professional. This is how mutual funds work. The fund manager manages the money looking to earn capital gains (interest.)

One of the best types of mutual funds is index funds. Since these funds don’t try to beat the market and instead follow it, they need less research. Because of this they often charge the lowest fees and yield the best long-term results.

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Real Estate

Yes, buying a home is an investment when done correctly.

Imagine buying a home and using it as a rental property. After repairing it, you receive a monthly surplus check of $100 to $200.

This may not sound like a lot, but repeat this process enough times and you’d earn a large amount of passive income. That’s why real estate is one of the best investments to not only retire but become wealthy.

But, it requires a lot of money to start and you should expect losing money along the way as you learn the process.

Savings Accounts

Your money can still grow in a savings account. Nowadays most online banks offer a 2% annual return. Although the average inflation is higher your money will be available when you need it.

7. Master Disincline to Dodge Short Success

Investing for retirement is a long-term strategy. That’s why you need to master delayed gratification. All this means is delaying short-term pleasure for something bigger in the future. Research shows that those who have delayed gratification are more successful.[6]

So how can you master delayed gratification?

By building your discipline.

Think back to what retirement means to you. A clear purpose will help you avoid withdrawing your money during a market downturn. It’ll help you contribute more towards retirement when you’d want to waste it instead.

Your journey towards retirement will be long, so reward yourself along the way. Choose a reward that’s relevant and meaningful, so that you reinforce positive behavior. For example, after contributing more towards retirement, treat yourself to dinner.

8. Aggressively Invest on This One Investment

I’ve mentioned several types of investments but haven’t covered the most important one.

It sounds cliche but here’s why you’re your best investment towards retirement. The more you know, the more money you’ll be able to make. The more good habits you adopt, the more secure your retirement will be.

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More importantly, investing in yourself is an investment that no one can take away. There’s no market downturn nor tragic circumstance that’ll wipe your knowledge and experience.

But, how can you invest yourself?

Reading books, blogs, and anything that’ll help you learn new topics daily. Listen to podcasts and audiobooks on your commute to/from work.

Save money to buy courses and hire coaches. I used to believe hiring coaches was a waste of money when I could learn the subject alone.

But, coaches see your blind spots and hold you accountable. Hiring the right coach will help you achieve your goals faster than you would’ve alone.

Retire Happy with Excess Money

The key to a secure financial future doesn’t only belong to financial experts.

It’s possible for you and I. What if you were able to retire earlier than most people and weren’t a financial planner? What if you were able to focus on what you enjoy doing the most while your money was working hard for you?

I know this sounds impossible now, but the truth is you’re capable of taking charge of your retirement. I’m not a financial expert but I’ve learned how to invest my money by reading books and learning from others.

Investing your money is scary. So start small and invest a small amount of your money with a robo-advisor. Feel your money drop and rise for a month or two. Then, invest more and keep this up until you’re aggressively saving for retirement.

One day, you’ll wake up with a net worth you’re proud of – confident about your retirement. You now know a few strategies you can use to invest in your retirement. Will you take action to retire happy?

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Featured photo credit: Matthew Bennett via unsplash.com

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