Welcome to Mound of Money

iBankBonus has compiled a list of bank bonuses. The list is particularly helpful, because you can view bonuses available by state, as well as see a brief overview of the terms of the bonus. I tend to sort by bank bonus value.

Some terms include:

• Initiate ACH transfers
• Set up recurring payments
• Set up direct deposit
• Complete forex transactions
• Account minimums

Just remember to take screen shots of all the confirmation pages, and offer pages so the banks don’t make a ‘mistake’ crediting your account with these bonuses.

Here’s how the deal works: Buy coins from the US mint at face value online using your credit card. The mint is quite generous, and is offering free shipping on direct ship orders. Since these coins are actual currency, they can then be turned in at your bank. Pay off the credit card with the coins, and repeat. There are some credit cards offering 2% cash back on purchases, which on a $5,000 would net you $100 in credit card cash back (Charles Schwab, Fidelity Retirement Rewards cards). Rinse and repeat for a nice income stream.

All good things must come to an end. For those of you who made money on this deal, congratulations. However, be careful. Some credit card issuers are now classifying this as a “cash equivalent” transaction, in which cash advance fees and rates apply. The fees and lack of a grace period are likely a deal breaker. Don’t call the credit card company to find out how the purchase will be categorized. Test the waters with a small initial purchase, where any possible fees will be small. Then, look at your account ledger to see if the transaction posted as a purchase or cash advance.

David Bach was on the today show this morning. He was touted as a financial expert. What?!? He is proof that financial advice on TV is a disaster waiting to happen. This guy published a book in 2006 titled “The Automatic Millionaire Homeowner.” In 2006! Anyone remember anything about 2006? It was a turning point for the housing market. He was a cheerleader – encouraging folks to purchase a home at the height of the housing bubble.

David Bach is probably the last person you should be taking advice from – unless you’re trying to sell a book.

I’ve been using App-o-Ramas and Bumpage along with credit card churning and selective credit freezes to turn a profit – and I have profited significantly from these practices. There are a small group of folks who know about these tactics and use them to their advantage. These ‘credit hackers’ take on the big banks with their legalese and beat them at their own game. These ‘credit hackers’ have done a good job prying profit from the giant monster mega-banks, but thanks to a recent paper (which I refuse to link ) and a speech at the Defcon hacker conference, banks might decide now is a good time to change the rules of the game.

A (creepy looking) Harvard student fellow, Christopher Soghoian, thinks these practices should be eliminated. Why? Because they might be a tool in the hands of identity thieves and it costs the banks money. I believe he wanted to publish a paper about ‘credit hacking’ (Which isnt hacking at all. It’s using the rules of the game against those who wrote them), then earn big bucks doing consulting work.

Guess what Chris… The banks already know. They’ve known for quite some time. They’ve made a deliberate decision not to do anything about it because the costs of eliminating the loopholes are greater than the benefits. Don’t you know anything about cost/benefit analysis? Or, are you too busy printing fake boarding passes to learn anything finance related?

The good thing about the nature of the community of ‘credit hackers’  is if their current methods no longer work, they’ll find a new way to beat the system. Thats what hackers do.

If you’re already using the ‘bumping‘ strategy of pulling your credit report regularly to eliminate hard inquiries, then you may have noticed this process takes a LONG time. It can take three months to see any results from pulling your credit report once a day.

Why not pull several times a day? All it takes is using multiple services to pull your credit score daily, and you can bump your hard inquiries in a fraction of the time. Here is a list of credit monitoring services that allow daily pulls:

• Service…………………………………………………..Pulls from………………………….Cost
• National City Identity Protect ………………..(Pulls all 3 bureaus)……………..$9/month
• Credit Karma ………………………………………(Pulls Trans Union only)………..Free
• Privacy Matters 123 …………………………….(Pulls all 3 bureaus)………………$30/year
• Truecredit ………………………………………….(Pulls all 3 bureaus)……………..$15/month

This list is not comprehensive, and is subject to change, but you get the idea, for about $55, you can remove hard inquiries from your credit report in 30 days or less.  Again, this does not work with Experian, but does work with Trans Union and Equifax.

Viva la bumpage.

A few days ago, when I was talking about bumping hard inquiries off your credit report, I mentioned choppage. Choppage is when soft inquiries are cut off of your credit report (usually in a large block). The soft inquiries are good, because they fill the spaces of your hard inquiries. So, you can see why choppage can harm your efforts to bump hard inquiries.

Choppage typically happens when there is a long line of identical pulls on your credit report. So, if you’ve been using national city, like mentioned in the bumpage post, and you have 60 days worth of pulls with nothing in between, your credit file may get chopped.

One potential way to avoid a chopped credit profile (and speed up the bumping process) is to pull from a few sources. CreditKarma pulls Trans Union, you can update daily, and best of all, its free. Truecredit.com allows daily pulls (all 3 bureaus), and is $15/month. Privacymatters123 allows daily pulls (all 3 bureaus), and is $30/year.

Probably the best way to avoid choppage is to take a break from pulling your credit report every once in a while.

Note: Deal is EXPIRED as of July 3, 2009.

If you’re truly a cheapskate, you’ll maintain your own vehicle. I try to do as much as i can like spark plugs, wires, electrical , etc. Why pay an independant mechanic shop $40-$100 (depending on location) an hour to work on your car? If you’re making $100 an hour (after taxes), I guess its worth it to take your car to the shop. Here’s a coupon for “Auzozone Friends and Family”.  Save 20% on pretty much everything except online purchases and fluids. Enjoy!

Autozone Friends and Family Coupon Save 20%

ING Direct is one of my favorite banks becaues of the free ACH transfers, relatively high rates, and ease of use. It also has a very low instance of account fraud – an important aspect of any online bank.

I have lots of bank accounts because I keep my eye out for low hanging fruit like account opening bonuses. In 2008, I earned $1000+ in account opening bonuses.  Here’s one for you:

ING Direct Electric Orange $50 Bonus

As always, be familiar with the fine print, and enter reference code EM287 when prompted for the $50. If you don’t already have an ING direct savings account, you’ll need to open one first.

1. Click ‘Apply Now’
2. Open your Electric Orange
3. Activate your Electric Orange MasterCard® Debit Card
4. Use your Electric Orange Card to make at least 3 signature-based purchases in the first 45 days after your account has been opened
5. Your $50 bonus will be automatically deposited into your Electric Orange 50 days after your account has been opened

Beware: This will result in a hard pull on your credit report. Also read my post: ‘Bumping Hard Inquiries’

Remember that car you were thinking about buying? Credit inquiry. New cell phone? Credit inquiry. What about that store credit card to get a lousy 10% off? Credit inquiry.

Soft inquiries (inquries you initiate not for credit)  such as pulling your credit report do not harm your score. Credit inquiries resulting from you requesting credit hurt your score. These are “hard inquiries” and most people think they won’t go away until they naturally fall off your credit report (2 years by law). There is a way to get the inquries off sooner.

Each credit reporting agency (CRA) such as Equifax (EQ) Trans Union (TU) or Experian (EX) has slots in wich they put your inquiries, hard or soft. Basically bumpage is filling all the slots for credit inquries with soft inquiries. The new soft inquiries “bump” off the hard inquiries and raise your credit score.  NOTE: This will not work with Experian.

Don’t worry if you only have a couple of hard inquiries on your report. Use bumpage if you have MANY inquiries you’d like to get off relatively soon. If you pull every day, it should take about 90 days to bump your hard inquiries. It takes a little determination, but 90 days is a lot better than two years. I used this tactic after my App-O-Rama (signed up for 20-30 credit cards at once for 0% offers and bonuses), and healed my score in short order.

A cheap way to pull your credit report is using National City Identity Protect. They allow one pull every 24 hours.

Watch out for “choppage” and “splittage.” They’re beyond the scope of what we’re talking about here, but learn more by reading this post.

In an effort to stimulate the wallets of car makers and dealerships, congress passed ‘Cash for Clunkers’.  ‘Cash for Clunkers’ will give between 3500 and 4500 toward the purcahse of a new vehicle. Qualification for ‘Cash for Clunkers’ is based on the age of your trade in vehicle, and its NEW EPA estimated combined fuel economy. Passenger cars must be 25 years old or newer, and get 18MPG or less according to the NEW EPA estimates. To qualify for the full ‘Cash for Clunkers’ credit, the new car must get 10MPG better than your old car. To prove you aren’t trying to game the system, ‘Cash for Clunkers’ requires that the vehicle be continuously registered and insured by YOU for the previous 12 months.  Note, there are slightly different rules if you’d like to purchase a truck.

What does this mean for the consumer? Time will tell, but I imagine the deep discounts being offered for the purchase of new cars will dwindle. The dealerships know ‘Cash for Clunkers’ will drive in new customers, and they know the customers will have at least 4500 to put towards a new car. Armed with this information, the dealerships may be able to raise their prices a little.

Is ‘Cash for Clunkers’ actually a good deal? It depends. Do you have a car that is essentially worthless? Is the replacement vehicle you are looking at a super economy car?

As an example, my  Toyota Camry gets 18MPG according to the EPA. It’s kind of falling apart (What can I say? Its paid for!) and wouldn’t fetch much on the open market….maybe $1200. If I were to buy a 2009 Nissan Versa for $7800 and use ‘cash for clunkers’ to trade in my Camry, the ‘Cash for Clunkers’ transaction would break down like this:

Stripped downVersa      +7800
‘Cash for clunkers’         -4500
Taxes & Registration     +800 (varies by state)
Total =                             4100

This is simplified, because it doesn’t take into account the current value of my car, the savings of gas, and any differences in insurance costs. Is 4100 a good deal on a new car with a warranty? (Reminder: my Camry has many expensive repairs needed regularly). I think its a great deal. But will the majority of americans buy a stripped down economy car with their ‘cash for clunkers’ money? I doubt it. Folks will want to drop at least 20K on a new car.

One thing I see as sorely lacking is the ability for consumers to purchase a used car with better gas mileage. Is the intent to incentivise better gas mileage, or is the intent to line the pockets of the auto industry?