Blog Entries

There is an interesting new gadget coming in the next few months that could replace up to 8 pieces of plastic in your wallet/purse. This invention is called Coin and I’m really excited to be on the list of early adopters to get one.

Of course, I prefer using one debit card to make life simple. However, I carry one debit card for my personal use and one for my small business. I also carry around a number of membership cards in my car for gas stations, restaurants, and even grocery stores. Top the list off with a few gift cards and I quickly reach a stack of at least a dozen little rectangles with magnetic stripes to keep track of.

Not Cash but Coin

Introducing Coin. Coin is an electronic payment card that stores up to 8 credit, debit, gift, or membership cards on one. It’s easy to use, allowing you to quickly jump from one stored number to another before swiping. This is sure to get a lot of attention when it launches this summer.

In those situations where paying with a debit card makes sense, such as filling my wife’s SUV with gas or when buying office supplies for my small business, I’d love a one-stop solution to carrying all those cards with me. Coin allows me to press a button until I see which card I want it to behave like and whaa-la – I’m ready to go.

What’s Coin’s Catch?

There are a couple less-than-desirable features with Coin. For instance, the battery is slated to last only 2 years under heavy use. The other is its $100 price tag (only $55 if you pre-order now).

What about security? I won’t bore you with the details, simply watch this short video to find out more about the cool security functions to prevent losing your card.

Want a Coin of your own? Order here

The biggest concern anyone should be concerned about is no different when using Coin over a debit card: Make sure you have enough money in your account to cover your purchase – this includes pre-authorizations. This isn’t a concern for someone living on a budget – they are prepared for these events and have earmarked money in their account for the purchase.

How I’m using Coin to Bust Myths

For years I have been busting the “you need to have a credit card” myth. I haven’t had a credit card in over 6 years – and we’ve doubled our net worth in the process!

There is one myth that Coin is going to help me prove wrong without the chance for objection: “You need a credit card to travel”.

Since 2008 I have made hotel reservations, car reservations, and even paid for two all-inclusive trips to Wyoming for my family without credit cards. There are a couple car rental companies that say they will not rent to you without using a credit card. Coin is going to help me get around their staunch rules!

I’m going to pay with my Coin, which nobody but me and my bank will know is only a debit card. When making reservations online I’ll simply enter my debit card’s 16 digit number. When checking in at the rental counter I’ll hand them my coin, which shows no differentiation between a credit or debit card. They won’t know the difference and I’ll enjoy all the benefits every other red-blooded American does without being forced to go into debt.

Yep, they can bite me for being unfair to responsible consumers!

Get 50% off Coin

Coin is available for pre-order at a 50% discount and will ship in just a couple of months. They are offering some other limited-time bonuses like added guarantees and affiliate sales but I’m most excited about using a piece of plastic that nobody can identify as a debit or credit card.

Visit http://MoneyPlanSOS.com/COIN to be an early adopter like me. It won’t change your life, but it can make your life easier.

I’ll let you know how uneventful my car reservation was when we get back from our summer vacation.

A debt-free advocate’s look at the American Express Enhanced Business Gold Rewards Card, a review

I discovered quite a few bloggers are paid to review credit cards and promote them on their websites. They believe themselves to be offering a needed service by educating consumers on the thousands of credit cards launched each year.

Being an anti-debt guy, I have to speak publicly about the dangers of credit cards. In fact, I am purposefully writing this article as a credit card review of the Enhanced Business Gold Rewards Card by American Express Open in hopes of reaching those who have not heard the message of debt freedom and could become the next victims of the debt slaughter.

What were they thinking?

I launched another website and American Express immediately sent me a pre-approved offer for their Enhanced Business Gold Rewards Card. Why a business card? They didn’t review my business plan because there wasn’t one. They didn’t look to see that I teach people to cut up their credit cards. I haven’t had a credit card since 2007 and am registered on the National OptOut registry. There was no reason for Amex to offer me this card over anybody else – they were just fishing.

Since they are going to put their trash into my mailbox then it’s only fair that I trash their 10 reasons for why I should get their flavor of plastic.

The American Express Enhanced Business Gold Rewards Card, a review of their 10 Reasons

Here are the 10 sales points in plain english with all the dangers exposed:

1) Power To Purchase

They say I’ll get business-sized spending power to help grow the business. They also have the audacity to suggest you “put every possible expense on the Card”. HOLY TOLEDO! Capital is hard to come by when starting a small business so someone taking Amex’s advice is about to get a harsh wake-up call from an affliction called “suffocating credit card debt”.

I’ll avoid the debt trap while maintaining complete control over the power of purchase by paying for the things I buy, not financing them through American Express’s OPEN card.

2) Membership Rewards Program

“Upon Card Membership, you’ll be automatically enrolled in the Membership Rewards program.” The idea is to lure me into purchasing things on their card, which charges the vendor for service and swipe fees, in order to earn rewards “that you can reinvest back into your business.”

Rewards programs sap millions of dollars out of our economy and into a PO Box in Utah. I would rather the vendor save the money from swipe charges by paying cash or at the very least support my local community by using a bank that is in my own County.

3) Rewards That Mean Business

They listed the same reason, the rewards program, only this time they detailed how many points you can earn from certain debt purchases (more commonly known as credit card purchases). Triple rewards for this type of purchase, double for that. Oh, and there are some limitations to how many rewards in the fine print.

I’m not impressed for the same reasons mentioned above 

4) A New Way To Earn Rewards

Um, this is the same thing as Reason 2 and 3. Instead of listing this as one of the Rewards That Mean Business items they created a separate reason for making U.S. purchases from “select computer hardware, software, and cloud computing providers.”

I won’t comment on this because it’s a duplicate of the two prior reasons.

5) Simplify The Way You Manage Receipts

This is an offer to store a digital image of your receipts.

That is kinda cool, but I can promise you that there is an app for that and it doesn’t require me to go into debt with an American Express Enhanced Business Gold Rewards Card.

6) Open Savings Benefit

“The OPEN Savings benefit is a built-in feature of your American Express Enhanced Business Gold Rewards Card designed to get you even more Membership Rewards points. Automatically get up to an extra 4 Membership Rewards points for every eligible dollar spent with OPEN Savings partners.”

Again with the points, but this time it sounds as if I am supposed to saving money this way.

It should be noted that the OPEN Savings partners consists of only 8 companies: Hyatt hotels, Carey and Hertz rentals, FedEx, HP, OfficeMax, 1-800-Flowers, and Barnes & Noble.

I’m beginning to think this is a snow job; “Hey, look over here at the rewards. Ignore the small print, we have a Membership Rewards program!”

7) Access To Benefits

“Operate your business confidently with Purchase Protection.” Amex is boasting their damage insurance and extended warranty services.

I can get many of the same protections and benefits from companies I already deal with like my car insurance company and the actual manufacturer of the thing I would want an extended warranty service for. No need to duplicate benefits, especially for a credit card.

8) Global Assist Hotline

“Whenever you travel more than 100 miles from home, you have security and added peace of mind 24/7 with medical, legal, financial, or other emergency assistance including lost luggage blah blah blah.”

When my luggage is lost I will be talking with the airline that has misplaced it, not an Amex rep that has little authority over a gate agent. That same school of thought can be applied to the other benefits mentioned in their flyer.

9) 24/7 Customer Service

Call anytime.

So does everyone else, don’t they? If a local bank doesn’t offer a 24 hour answering service then it likely can be handled during normal business hours.

10) Additional Cards For Employees

“Introductory annual fee for additional cards in the first year is $0, then $50 for the first additional card and no fee for other additional cards.”

In other words, the benefit is they will give you a free card for an employee and only charge you for the 2nd. This might be the only benefit that stands out from other cards, but only for business owners with employees.

Why you should (not) get this card

The Enhanced Business Gold Rewards Card from American Express OPEN is trying to sell me on reward points.

For spending more than $6,000 via their piece of plastic you can get:

• A polo shirt or backpack for 6,620 – 8,830 points
• A set of ice cream spoons, cake server, or spaghetti measure for 7,000 – 7,810 points
• A single golf club for 19,190 – 27,500 points
• Pots, pans, pearl earrings, headphones, and a plethora of other trinkets that you can buy at Amazon cheaper

Weigh the benefits with the $175 annual fee after the first year and the so-called “benefits” start to get washed away. Add a 70% risk of interest charges when there isn’t enough money to pay the balance in full and we quickly find ourselves in the debt slaughter.

Credit cards are dangerous to those who lose control and it happens to good people every day. Why play their games when cash and debit cards will do everything we need without the risk of debt?

When you hear what I have to say about being distracted by credit scores you might envision a guy standing at a busy street corner shouting that the world is coming to an end.

Many people misunderstand my position on building credit. Their impression is that I’m preaching about conspiracy theories.

However, once you understand the facts and have all the information you will think differently about this important financial topic and join me in drinking the Kool-aid.

Facts about FICO scores

Fair Isaac Corporation (FICO) is a publicly traded company on the NYSE that “provides analytics and decision making services intended to help financial service companies make complex, high-volume decisions”.

More specifically, one of the services FICO provides is consumer Credit Scoring. This simplifies the loan approval process for lenders and summarizes the information they want into a 3-digit number.

In short: FICO created credit scores.

You’ve never used your credit score

When was the last time you used your credit score? Think hard. You can’t remember can you because it has never happened. You have never used your credit score – only companies and lenders do.

What is really crazy is that people are super-secretive about their Social Security number and take steps to keep their home phone number from being listed but they WANT FICO to sell our personal banking information (allowing them to make a profit) to lenders who then turn around and try to sell us money (debt). That’s CRAZY to me!

Hate the score, love the consumer

You’ve heard the phrase: “Hate the sin, love the sinner”. I hate credit scores but love the consumer. If your idea of building wealth and being smart with your money is playing the “build your FICO score” game then I have bad news for you. You are being duped!

I hate what the credit scoring system is doing to the consumer. It is promoting the idea that borrowing money is the way to wealth and happiness. Debt is a more accurate name for borrowing money, and it leads to stress, feelings of inadequacy, and broken relationships because the money is tight. That doesn’t sound like happiness to me.

For this reason I can not promote the credit scoring system. Once I learned what credit cards and loans were doing to my neighborhood I found that debt is actually against my religion.

What makes up a credit score

• 35% from your payment history on debt products (loans, credit cards, etc)
• 30% is based on the amount of money you owe
• 15% comes from the length of history on those debt products
• 10% takes into consideration the types of credit you use
• 10% evaluates how much new credit you have

What should be completely obvious here is that each one of these items is based on debt and debt products. How much money you make or how much money you have saved has no effect on your credit score.

Also, the normal monthly bills that are not debts (electric bill, cell phone payment, rent) are not factored into your traditional credit score. It sounds to me like Fair Isaac really isn’t fair when it comes to evaluating our credit worthiness after all.

What credit scores are doing to your wealth

When you are contemplating ways to improve your credit score you are being distracted from building wealth. Instead of gaining riches you will end up paying interest on debt by playing the credit scoring game.

The interest you pay is a penalty for your future. No only is debt dipping its hand into your future paychecks but a good portion of your debt payments go towards interest. What does interest buy you? Answer: Instant gratification for a low monthly rate.

It is a rouse, it’s a distraction, it is the way “the system” gets us to spend our attention on them instead of our family and our own financial wellness.

What experts aren’t telling you

The traditional advice is that you need to have a credit card and a mix of other debt products in order to “build your credit score”. I’ve also heard that you should utilize 30% of your available credit in order to have the best credit score. Okay Mr. Wizard, let’s do the math:

• If I have three credit cards with $5,000 limits then my available credit is $15,000
• 30 percent of $15,000 is $4,995
• Pay off the balance every month in order to avoid interest charges

I don’t know about you but I would have a hard time paying off $4,995 a month to avoid interest charges. Follow this advice blindly and you will find yourself in the credit card debt cycle fast!

By the way – don’t be fooled by those telling you that improving your credit score will help you pay off your debt. I know of a guy selling his credit-building process and promises to teach you “how to raise your credit score, so you can pay off your debt”. How does a better score pay off debt? Does FICO cut you a check? Do you get a coupon or rebate voucher? This is simply just a lie to sell you his $1,000 program.

Why don’t people talk about Alternative Credit?

There is something the “experts” aren’t telling you: There are other ways to prove your credit worthiness that don’t involve being in debt! Good old fashion manual underwriting is one way you can prove your credit worthiness in order to get a mortgage at a good interest rate. It takes a lot more work for a lender to go through this process, so most of them don’t bother trying.

The good news is that there is a service called eCredable.com that helps banks get through this process more efficiently – and it would only cost you around $100. What eCredable does is verify the payments you have made to your electric company, your cable company, even your landlord to prove your eligible for a home mortgage at the best rates. That’s great news for a guy like me who has no consumer debt but might want to refinance my home mortgage while rates are low.

Pay attention, not interest

You see? One doesn’t need to borrow a bunch of money and pay a bunch of interest to prove their credit worthiness. One simply needs to pay for the things they buy.

Your current and future finances will greatly improve if you worry about paying off your debt and staying out of debt forever as we have. If a time comes when you need to qualify for a mortgage then you would likely have a better down-payment, resulting in lower monthly payments and a better chance of qualifying. If the bank is being stubborn about your nonexistent FICO score then have no fear: You have an alternative like eCredable to help.

It is my hope that your mindset about credit scores has changed. Join me in my mission of killing off soul-sucking debt and helping everyday Americans to pay attention, not interest.

We will all be better off by being focused on building wealth, not from being distracted by credit scores.

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