Interest Rates: Dropping like they're hot.

Another couple weeks, another drop in interest rates.  The honeymoon with Dollar Savings Direct is over as they finally caved in and dropped the savings account APY from 4% to 3.5%.  Sadly, this was expected as they had already dropped the rate on their CDs weeks earlier to 3.5%.  Along with the drop in savings, they followed up with another drop in CDs to 3.25%.  So probably only a month or so before more cuts are coming.

DSD had stood out above the rest, but the pack is getting tight at the bottom.  Seems like its the cool thing for all banks to offer basically nothing on savings account.  What infuriates me is seeing ads like Citibank's "Earn More in Less Time with a Citibank 12-Month CD: You can feel confident with a short-term CD at a great rate. All from a bank you can trust."  Really? 2.40% is a great rate? Please don't patronize me.  And a bank you can trust?  Actually... Big Vik hasn't done much to salvage C from the ginormous death spiral its been on.  The government bailout wasn't enough and the rumors of nationalization persist.  So can I really trust you Citibank?  FDIC insurance my friend.  Thats what I trust (even then where is the FDIC getting all this money... something has to give).

Not many options out there.  You can still grab some great rates if you get into the whole High Yield Checking account thing, but that doesn't come without some effort.  They usually require auto-deposits, a # of debit card transactions, etc.  Is the hassle worth the rate?  Yes if you usually use your debit and are set up to auto-deposit in that bank already.  Since my banks don't offer that and I never use a debit card, I'll just grin and bear the low rates for now.  When I get desperate I might just have to take the plunge though... 5.01% at Provident.  So tempting....!  Good luck out there :) 

What an up-beat post.  Sorry!

BTW, my netbook rocks my socks.

One Love,
Look

Game Day at Shea

Went to the Mets vs. Cardinals game tonight, with the Amazin's coming out victorious of course. Of course it's the last season at Shea stadium (and at Yankee Stadium incidentally) and its a bit sad to see them tear down the stadium. Citi field looms in the background of Shea and beckons a new era for the Mets.

Its sad to see that sports are so often referred to as a business. Whatever happened to "for the love of the game?" Undoubtedly the new stadium will offer less seating and more luxury suites for those who can pay. That means more revenue for the team, but less accessibility for average fans.

What happens if the economy doesn't rebound in the coming years? Less luxury purchasers? Companies cutting back on client outings. Ill timed I suppose. Also how is Citibank feeling about paying all those millions for the naming rights to the new Mets stadium? After all the pain its been going through, wonder if the person responsible for that decision got the ax.

S'all for now.

One Love,
Look

Financial Crisis: The Broken American Dream

It's been quite some time since my last post and much has transpired. The housing market in the U.S. has collapsed with Countrywide Bank being bought by Bank of America, BearStearns the fifth-largest investment bank collapsed and was absorbed by J.P. Morgan, Freddie Mac & Fannie Mae have tumbled as a result of the housing debacle forcing government guarantees, IndyMac was taken over by the FDIC, Lehman Brothers is facing the way of BearStearns, S&L's like WaMu and Wachovia have had their balance sheets come into question. So where does this leave little investors like us?

They say don't panic. Easier said than done. Since the turmoil began last August, my portfolio has seen double-digit percentage declines and the bleeding has still not stopped. Following the "buy low, sell high" adage, I've bolstered these falling positions by purchasing additional shares. While I'm getting these shares at a "discount" this strategy will only bear fruit if a rebound occurs. So since I'm young I'm holding my breathe and blindly sticking to my guns. That's not to say I'm totally exposed to the market. I still have a considerable cash balance and just recently invested in a bond fund to diversify away from my stock exposure. Jumping ship and selling shares seems like the wrong thing to do. Interest rates are at all time lows so there leaves growth possibilities very low. I guess the only thing it would do is to stop the losses. This may be good for someone at/near retirement, but my time horizon is too long to have my money just sit and do nothing. No risk, no reward right?

So what happens if a rebound doesn't occur and we enter a prolonged bear market recession? Well the buy & hold strategies, the dollar cost-averaging and the long term views will end up destroying my retirement plan. No social security to count on, a fledgling 401k. What's a boy to do? Time will tell. I'll suck it up until I can take it no longer and decide what my next plan of action is.

So for those rate chasers, a mini-update. IndyMac failed so I wouldn't recommend pouring cash there (seeing that it might be a process to get it back), but here's the latest rates:

• HSBC - 3.5%
• WaMu - 3.3%
• ING Direct - 3.0%
• EmigrantDirect - 2.75%
• Citi - 2.65%

Good luck investors!

One Love,
Look

Chase Freedom: Free Money

So seeing that I need to build my credit history I decided to sign up for another credit card to add to my Citi Professional Card. I was waiting for a card to give me a signup reward and a worthwhile cash back program. Enter Chase Freedom.

While reading slickdeals.net @ work, I came across the post for a $250 signup reward when applying for the card. I was hesitant at first seeing that you only saw the signup on the landing page occasionally and on the application form there was no mention of the bonus. Regardless, some posters had detailed their success in getting the reward so I took the plunge.

Weeks passed and I was worried whether or not I'd actually get the card. I gave my email address and everything, but I'd had no word from Chase for a good two weeks or so. Eventally the card came but no mention of the rewards. I quickly signed up for the online account and scoured the pages for the reward. Nada.

So I thought I'd been screwed, but low and behold when checking my account balance one day the rewards showed up in my account. Clicked on "redeem" and received my $250 check in the mail about a week later.

So what's the good and the bad with the card?

Good:

• Accumulating $200 in rewards is good for a $250 check (Otherwise you can cash out $50 in rewards for $50). Effectively that's a 1.25% cash back instead of 1.00% if you can wait to accumulate $200.
• 3% on Gas, Grocery and Quick Service Restaurants. I rarely buy gas or groceries, so that really doesn't matter for me. I do go to places for lunch, but I've yet to see getting 3% back at the delis and sandwich shops I go to... I wonder if its only for fast food which I've been trying no to eat...
• Online account is easy to use. No hassles

Bad:

• Ridiculous APR. I pay my balances in full every month, but if you miss a payment on this baby you're screwed. So definitely sign up for the email reminders when your bill is due.
• No 3% back on regular restaurants.

All in all, I think I'll use the Freedom card over the Professional for everyday purchases and the like and reserve the Professional for restaurants. In the meantime I'll be on the lookout for possibly another card with a different type of reward.

One Love,
Look

The Incredible Shrinking Interest Rate... Citibank eSavings

If you've been paying attention to interest rates in the past few months, you've noticed they've leveled off after the Fed stopped raising its rate. Banks have quietly reduced the APYs offered on their accounts, with Citibank being the sneakiest (to me) of them all.

So without warning I've noticed the rates they offer have freefalled. From a high of 5.5% it decreased to 5.0% then 4.75% and now 4.65%. Having so many different webpages and different ways to access the site, I didn't even notice the decrease to the recent 4.65% rate until recently. I think they should show the rate on the login screen or at least show you the eSavings details including interest rate/APY when you log into your account.

As such, I've moved most of my money in the Citibank eSavings account to Emigrant Direct and locked in a CD at 5.20% APY. With its current trajectory Citibank will fall to a level of ING at which point I will take most of my money there out. The only reason I leave money in there is for bills and such. O wells. Citi, kiss my $$$ goodbye.

One Love,
Look

Citi Professional Card: Back in Business... (an update)

Back in the building, back on the map. My credit card rewards were corrected in fact.

So earlier I wrote about a troubles with my Citi Professional Card, as I had been shorted the 1% back on everything and the 3% back on restaurants. Recently I got my statement where my rewards were correctly adjusted and my new purchases correctly reflected my purchases.

Now although the rewards information was correct, the thing that worried me more was the balance of my bill. Ever since I got the card, it seems that my balances have slowly been climbing. Although there was a big jump this month, it was due to some Christmas shopping and a fancy dinner at Cafe Grey. That being said, I'm glad to have gotten 3% back on my near $300 bill from the feast at Cafe Grey. Who knew rabbit, fish, and all that stuff I never really eat could cost so much? Anywho, I think my balances will continue gradually rising as my girlfriend from Tampa has come back to NYC. She's definitely a food monster and I will continue to be greatful for the 3% back on restaurants.

In other news, I cannot express enough how much I enjoy this holiday season. Family, friends, food and just good times. Now if only work didn't get in the way...

One Love,
Look

CDs? Nah, stay liquid with online savings...

If you're lookin for a place to stash your holiday cash, you might want a traditional CD to get a guaranteed rate of return. In this day and age, however, look no further than online savings accounts. They offer comparable rates to traditional CDs, but lack the restrictions of being able to pull out your money. So if you need access to your dough asap, or are looking for a temporary place to stash your cash and get a decent return without the penalites, look at an online savings account.


Here are a look at some of the biggest names in this arena:







ING DIRECT

• 4.50% APY
• First big player on the market; interest rates have not kept pace with competitors
  
• $25 referral bonuses for recommending friends

Citibank E-Savings

• 5.00% APY
• Convenient transfers/set up if already have Citibank accounts
• Requires Citibank EZ-Checking account
  
  

EmigrantDirect

• 5.05% APY
• Big player offering one of the most competitive rates
• After peaking around 5.15%, interest rates have trailed off recently
  
  
  

E-LOAN

• 5.38% APY
• Newest big player on the market, started offering 5.50% APY but has trailed off recently
• Still offering one of the most competitive rates
• Require $5,000 minimum for accounts

These are only a small handful of the biggest players, but by doing your own research you may be able to find better deals for smaller, regional players. Either way, set up your account and start making your money work for you!

One Love,
Look

Citi Professional Card as Rewarding as it Claims?

To take advantage of the offers being handed out by credit card companies, I decided to sign myself up for the Citibank Professional Card (To find out more go to Citibank's site here: http://citicards.com/). The card rewards include 3% Cash Back on purchases made at restaurants, gas stations and some office supply stores and 1% Cash Back on all other purchases. Seeing that I've been spending TONS of money at the fine restaurants NYC has to offer, the feature that sold me on the card was the 3% Cash Back on restaurants. Add up all those lunch meals and dinner gatherings, the cash could definitely pile up in a hurry.

At first, the card was great and the rewards were given as advertised. I've had the card for about 3 months now and my experience with it is beginning to sour. I noticed last month that my rewards were lower than 1% of the balance on my card for the month. This was especially troubling seeing that over $300 was spent on restaurants. So not only was I not receiving the 1% Cash Back, I wasn't getting the 3% Cash Back on restaurants. I figured there must have been some mistake that was easily fixible so I emailed the support.

Their Response:

Customer Service Wrote:

To better assist you regarding rewards, we need to speak with you directly. Please contact us at 1-800-950-5114. We are available 24 hours a day, 7 days a week. Outside the U.S., call collect at 605-335-2222.

Thank you for using our website.

Well I thought that was annoying, but I went ahead and called the number. After being on hold for a good 7 minutes, I was finally connected with a rep. I thought it was a bit strange that I had to tell the rep my password to my account, but wanting to fix the problem I went ahead and disclosed that information. I told her about the problem and she assured me she would get it fixed. Pleased, I hung up and thought it would all be fixed.

Weeks later I checked my account again and the problem was still not fixed. Apparently the rep hadn't come through for me. I called the number again to complain and try to get the situation fixed. The new rep, while more helpful that the previous one, didn't seem to have a handle on how the whole rewards process worked. I went through the calculations with him, having to repeat slowly what I was calculating until he finally got it. He then said that the rewards were showing up correctly on his system, but I told him they were incorrect on the online statement. He proved to be little help as he said "I'm sorry I can only tell you what's on my screen and I don't know why the online statement shows something different." So I thanked him for his time and hung up. Currently, my rewards are still incorrect and its beginning to seriously annoy me. So I'll wait another week or two before I call them back and release an angry tirade on them.

That said, I think its time to start looking for another credit card. Any suggestions?

One Love,
Look