Merry Christmas! Do you have holiday credit card debt? Or are you having the last laugh?

So being that it’s Christmas day 2011, I thought now would be a good time to talk about this (but in all honesty, I actually wrote this post before today).

Over the last few weeks I’ve seen a number of articles which seem to portray U.S. Christmas spending on credit cards to be out of control… but is that really an accurate representation of what’s going on?

Take this Associated Press article from December 7th which tells us that Americans charged more to their credit cards for the 2nd straight month, citing the Federal Reserve’s Consumer Credit statistics. From that, the article seems to infer card debt is increasing.

In reality, it’s tough to say whether that’s true.

The problem with this data is that is that it doesn’t decipher between long term revolving (credit card) debt and that which is paid off without interest. The result? Over-extrapolation of statistics.

Without a doubt, there are surely those who are using their cards to rake up debt from Christmas shopping. However on the flip side, there are those such as myself who are charging a lot more to their credit cards for holiday related expenses (gifts, travel, etc.) but it’s being paid in full.

Christmas credit card offers can be a curse or blessing

During the 4th quarter every year, you have probably noticed that your existing cards send you holiday promotions; extra points and cash back for spending a certain amount.

Obviously the intentions behind these offers are quite transparent… they know the average American will be spending more during the holidays and they want to get a piece of the action, which possibly leads to a hangover of high-interest debt.

However almost every forum member I’ve seen discussing these bonus reward offers aren’t using them as an excuse to spend more or rake up debt, but rather for strategic purposes to earn more rewards during the holidays on purchases they were going to be making anyway.

The lesson?

For many, credit card debt after Christmas truly is a real problem… and those people should stop using credit cards altogether.

However for the more savvy consumers (shameless plug: such as CreditCardForum members) the increased spending on cards is done for rewards, not debt or overspending. So attention media outlets: don’t automatically stereotype this trend – sometimes it’s the consumers getting the last laugh this time of year.

If you’re an American Express cardmember, then you’ve probably noticed that every once in a while (maybe once or twice per year) they will mail you out a promotion for some high-end restaurant.

Now Discover seems to be doing the same, stepping it up with this Morton’s Steakhouse coupon I received in the mail.

What do you get? A steak and seafood dinner for two at $109.99 – that’s over $90 off the normal price. To get it, just mention the coupon offer when you make your reservations (and obviously your Discover credit card must be used to pay).

This coupon/offer is valid through 3/31/12. It reminds me of a similar offer American Express was doing for $50 off at Ruth’s Chris a few years ago.

Even though Morton’s Steakhouse is not my type of food, it’s nice to see Discover stepping up the game with these types of promotions. It’s the little gestures like this which make me really appreciate my More card. Another improvement is that they are increasing the ceilings on the 5% cash back categories… woohoo!

For years there has been a big backlash lately against the credit card industry for terms and conditions which are just too complicated. But is the new BankAmericard Basic Visa actually a better deal or just clever marketing?

The Basics About “Basic”

Bank of America first launched the Basic card in 2009. The selling point was, well… it’s basic! The terms of the service agreement were touted as being only one page long. It has the same APR for everything – purchases, transfers, and cash advances. This interest rate is a fixed number of percentage points above the prime rate. They say they will never change the rate, even if your credit goes down the drain or there’s late payments.

However when I last reviewed the application in 2012, the TOS were longer than one page for sure. However my guess is the tighter credit card regulation now requires additional disclosures, so can’t fault BofA for it becoming more than one page.

But Look Closer…

Like they say, if it’s too good to be true, it probably is. I applaud B of A for coming out with one card that appears to be more straightforward and transparent to the consumer. But the APR is just way too high to make sense in my opinion.

Sure, it’s a “flat” rate, but that is calculated as the prime rate + 14%. At the time I’m writing this, that equals out to be 17.25%. Now that’s not exactly a APR, but then when you take into account the fact that the prime rate is at historical lows, that means during the “good times” you will probably be looking at something around 20% and up.

Oh yeah and rewards… what are those? Because apparently this credit card doesn’t know anything about them!

The Verdict

If you’re someone that doesn’t have the best credit, are chronically late with making payments, and don’t carry a balance, the BankAmericard Basic Visa might benefit you.

But for anyone that is responsible with their credit and makes payments on time, this probably just isn’t a good choice. You may not carry a balance now, but the bottom line is in the event of an emergency where you have to carry a balance, you don’t want to be held to an APR of 20%. Instead, check out our sponsored listing of the best credit cards which is constantly updated to get a better deal.

By the way, if you’re curious as to why BofA is going by the name BankAmericard on this card, check out Bank of America’s Visa card history for the answer.

Q: When I was younger I really messed up my credit big time and want to rebuild. Do you know if there is a SunTrust secured credit card and if it’s any good? Because I have my savings and checking account with them and figured they would be the best place to get a card since I already bank with them.

A: SunTrust Bank is known for being an extremely conservativein terms of offering credit. I know that normally, you need good credit to apply and get approved for one of their cards.

Now as far as a secured credit card, I’ve never heard of SunTrust offering one. I’m sure you’ve already look at their website and have seen these:

• Platinum Visa
• Platinum Visa with rewards
• Visa Signature with rewards

But these are all unsecured cards. I did a search on their site for the word “secured” and nothing came up. But I called their main customer service line (at 1.800.786.8787) and this is what the rep told me:

1. SunTrust has never offered a secured credit card before.
2. They reason why they haven’t is because their more conservative with lending (as mentioned above).
3. Now here’s the surprise – He said they will be issuing a secured card for the first time in the near future. I pressed him for details (whether it will be Visa or MasterCard, how much will the fees be, etc) and he didn’t have any of the info. Though he did say you can expect it later in 2012.

So there you have it… there’s not one right now, but will be in the future. However it’s impossible to know whether it will be a good deal or not, without hearing the details.

If you don’t want to wait around for the SunTrust Bank secured card then my recommendation would be you either go with another good secured card or one for fair credit. There are some reasonable offers that you can apply for today to start rebuilding your credit.

Last but not least, even if you do choose to go with the one from SunTrust, remember that having multiple lines of credit is important for your history. So my recommendation would be to get 2 cards, as long as the fees aren’t excessive.

Written or last updated November 2011

Recently I was booking my flight to see the family over Christmas. Although I normally buy my airline tickets far in advance, due to unknown work scheduling I didn’t have the luxury of doing that this time around.

After spending a good chunk of time scouring Expedia, Travelocity, Kayak, and a few airline websites directly, it turns out the best deal I could find for the times desired was on Delta Airlines. Being this is a Christmas flight, booked less than 2 months in advance, and multi-city with a small airport (translation: we gotcha!) the price was pretty painful…

So $705 and that’s without the baggage fees (which is why I would definitely have a SkyMiles credit card if I flew them more than once a year). Although I could have gotten something $100 to $150 cheaper, it would have involved multiple layovers and brutally early departures (and on a side note, there were no direct flights on any airline from DAY to LAX and hence, the only reason I’m stuck with a stop).

While I’m normally far too cheap to buy first class, the little yellow tick box was peddling a first-class upgrade for $213.25. Even that was a bit beyond my comfort level (+30%) but I clicked it out of curiosity and the price jumped dramatically more…

I checked and unchecked it several times and got the same result each try… was this an airline ticket pricing error? I immediately took screenshots and then called up Delta customer support.

For starters, it was refreshing to be greeted by American-based customer support, despite the fact I was calling at almost midnight PST. I explained that I was getting the wrong ticket price and was transferred to the support dept. specifically for their website.

So I re-explain it to the guy I was connected to and he went and checked it himself and sure enough, he was seeing the same thing. He said he saw that same pricing error a year ago with multi-flights but thought it had been fixed (surprise: apparently it’s still happening!).

I was asked what I wanted to do?

Well, being that I didn’t have Delta SkyMiles credit card to score me free checked luggage, if I were to upgrade to first-class that would save me $50 right off the bat (because first-class tickets get free checked bags).

When you look at it that way, it actually means the upgrade is only $163.50 ($213.25 minus the $50 I would have paid for my checked bag on both flights). I decided that was worth it and told the rep I would like that price honored.

Being that he saw the discrepancy himself, he was very nice and accommodating but now the issue was that honoring the price was exactly straightforward, because a new price would have to be created and apparently that’s not easy to do.

The final outcome

He warned me and apologized in advance it would take a while to do and I said that was okay so he put me on hold and got to work on it. Every few 5 mins or so he would check back with me to update me on the progress.

Fast forward about 30 mins later, the price is now ready and he starts reading it back to me to confirm…

Rep: The price is $874.35 and you will be departing LAX on December 19th at-
Me: I think I misheard, can you please repeat?

For one, I was expecting $918.50 ($705 + $213.50) and secondly, did he just say the wrong date?! He repeated and sure enough the the new fare was created for the wrong date- the 19th instead of the 21st.

He puts me back on hold and few minutes later comes back with the corrected date, but the price remains the same as it was for the 19th… $874.35 (which no surprise is a few bucks cheaper, since it’s earlier than most Christmas travel).

The outcome? A net premium of only $119.35 roundtrip for first-class ($169.35 minus the $50 savings from checked bags).

But when you think about it, the savings are even more considering the fact that I will be given meals and snacks in first. When you factor those in, the total savings will at least be $30 compared to what I normally would spend during my travel.

The final savings: Subtract the $30 from the $119.35 and I just scored first-class for a premium of $90 during some of the most expensive, most in-demand days for travel out of the entire year.

The lesson? If you’re on a travel website and stumble upon the incorrect price on an airline ticket, be persistent and have it honored. Furthermore, it sounds as if this problem with multi-city flights and first-class upgrades on Delta is ongoing, so keep that in mind if you’re in the market for a multi-stop trip

The other lesson? Without first-class, the credit cards for Delta Skymiles are a must if you fly their airline 2x or more per year.

Edit: Sky Club access is only for int’l first class, not domestic   Thanks for the reminder Jason!

Written or last updated November 2011