Despite what I wrote in Beware False Indicators of Bank Health, there is a certain amount of comfort in having a physical bank location to go to. A few years ago, a physical brick and mortar bank meant that you weren’t ever going to get close to a high yield saving account’s interest rates. However, several national brand name banks have begun offering high yield online savings accounts in order to compete for your deposits.

I used the list of the 20 largest banks, according to FDIC information current as of May 2008, and only found five banks that offered high yield savings accounts. I was surprised not to see Washington Mutual (3.75% APY) on the list of the largest 20 banks.

#1 Citigroup - 2.25% APY

This New York, N.Y. based bank had approximately $2,199,848M in deposit assets as of May of this year and Citigroup has a high yield online savings account, known as their Ultimate Savings Account, offering a pedestrian 2.25% APY (They have an MMA offering 2.65% APY with bill pay). They used to have a standalone e-Savings account offer but it appears that you are now required to have a linked checking account and the interest rate is a laughable 1.50% APY. (To find this, go to Citi, click on Banking near the top, then click on Savings in the left sidebar, and look for Ultimate Savings Account)

#7 HSBC North America Inc. - 3.50% APY

HSBC, located in Prospect Heights, Ill. with $493,010M in assets, is also the namesake of HSBC Direct - a high yield online savings bank offering a 3.50% APY interest rate on its savings account. I wrote a review on HSBC Direct recently and was surprised to find that I was able to link the account to other high yield savings accounts (ING Direct in that case).

#11 Citizens Financial Group, Inc. - 3.30% APY

Whoops! Citizens Bank Direct is a division of Citizens National Bank, not Citizens Bank. CNB Bank Direct is still a high yield bank but it’s not affiliate with a top 20 bank. (Thanks zashachic!)

Citizens Financial Group is the holding company for Citizens Bank and they just entered the high yield online savings game with Citizens Bank Direct, offering a 3.30% APY interest rate. I don’t know much else as their online offering is brand spanking new (CNB has been around since 1920) but I did find a brief review of CNB at Bank Deals.

#14 Capital One Financial Corp. - 3.50% APY

Not surprisingly, financial services company Capital One has an online savings account offering called the Capital One Online Savings Account (clever huh?) offering 3.50% APY on balances over $10,000 (you earn 2.50% APY if your balance is under $10,000).

#17 BB&T Corp. - 1.75% APY

It’s almost embarrassing to list this but BB&T offers a high interest online savings account that offers 1.75% APY with no minimum balance requirement and no monthly maintenance fees.

The Rest

These banks were on the list but didn’t have high yield savings accounts. Many had money market accounts but none were strictly high yield savings accounts: #2 Bank of America Corp., #3 J. P. Morgan Chase & Company, #4 Wachovia Corp., #5 Taunus Corp., #6 Wells Fargo & Company, #8 U.S. Bancorp, #9 Bank of the New York Mellon Corp., #10 Suntrust, Inc., #12 National City Bank, #13 State Street Corp., #15 Regions Financial Corp., #16 PNC Financial Services Group, Inc., #18 TD Bank North, INC., #19 Fifth Third Bankcorp, and #20 Keycorp.

List of 20 largest banks provided by infoplease.com (based on FDIC data), Photo by thetruthabout.

According to the Federal Reserve, report in a NYTimes article, Americans have nearly a trillion dollars of revolving debt (which includes credit card debt). That’s a lot of debt… oh yeah, total consumer debt is $2.57 trillion. Amazing right?

Those are two really big numbers huh? Well, if you were John Adams Kansas, President - Banking of Capital One Financial Corp., then that top number would be your total compensation package for 2007. If you were Richard D. Fairbank, Chairman, President and CEO of Capital One Financial Corp., then that bottom number would be your total compensation for 2007. In fact, if you were Richard D. Fairbank, you’d probably be upset about your number because it’s 45.5% less than what you got in 2006, which was nearly $37.5 million dollars.

Before people get all upset that they’re making so much money, their salaries are $0. Their bonuses are $0. It’s all in stock. I’m not pointing their salaries because I think it’s excessive, though they might be, I wanted to point out how ridiculous those numbers are. (Data taken from the July 2008 issue of Cards & Payments)

This is the most amazing debt story I’ve ever heard. When the story starts, Diane McLeod tells us that she has $286,000 in debt. Her story is one of misstep after misstep, from rolling her credit card debt (~$25k) into an adjustable rate mortgage ($10k in fees, plus it adjusted) to raiding her 401(k) (which cost $3k in taxes, paid in credit cards). Along the way, she was given shoddy advice from people with their own interests in mind. I’m not absolving her of responsibility but someone had to extend her this credit. She’s not drowning in debt, she’s halfway to the center of the Earth.

This figure is again from the New York Times series The Debt Trap (click on Start and then the lifetime link). The average household has thirteen credit cards. 40% of households carry a credit card balance. While having 13 cards doesn’t mean you’ll use them all, you can’t escape the 40% figure… especially when you couple it with that first number.

Guns won’t bring down America, debt will.

Credit card offers total value: $1,150.

Here is every credit card promotional offer I am aware of, listed in a handy table along with fulfillment requirements. The only rules about having a card appear on the list is that the promotional offer be worth at least $50 and it must be a mainstream brand like Citi, Discover, Capital One, American Express, etc. No offers available only to a small geographic region, these are all mainstream ones that are potentially available to everyone if you qualify.

They are listed in order of value and I will attempt to keep this list updated monthly. (this list does not include free airline miles promotions, i.e. those cards that give only miles as a promotions, but some of these cards allow you to convert points into miles) For the cards that have (pts) next to the dollar value, which currently is all of them, you will get your rewards in points (which can often be converted into gift cards) and the maximum value is displayed there. $100 in points is usually 10,000 points, but not always, so be sure to read the terms and conditions. Without further ado, here are the $1,300 in promotions!

Who is eligible for a business card? Anyone can be a sole proprietorship without filling out any additional paperwork. Put in your name as the business name, your social security number as the ID number, and you can apply as a business. You don’t pay extra taxes, you don’t have to fill out any extra paperwork, this is 100% legal and acceptable.

If you know of an offer that isn’t on the list, please leave it in the comments or email me, thanks!

(Fat stack photo taken by Refracted Moments™ on Flickr)

Credit card companies are just like every other business. There are essentially three concepts to understand when dealing with a business, especially credit cards:

• They exist to make as much money as possible,
• They have relatively well documented rules and operating procedures,
• They’re willing to break #2 in pursuit of #1.

So, to that end, here are 7 unwritten and often forgotten credit card tricks or “secrets” (I hate the term “secrets” because how much of a secret can they be if I know it?) that may save you a few bucks someday. If you don’t learn a single secret or you have a secret of your own, please let me know! Secrets are better when you tell everyone!

1. Just ask: Lower interest, reduce or eliminate fees

This is truly the best tip of the bunch, hence the top billing, and everything else looks like chopped liver compared to this bit (despite how popularized it’s been of late). The credit business is extremely competitive, take advantage of it by asking for what you want. If you made a late payment and were assessed a late payment fee, call them up and request that they take it off. If your interest rate is too high, call them up and request that they lower it. If they decline, simply tell them that you want to cancel the card or that you’ll take advantage of a new offer that you just received in the mail. They make so much money from you when you spend (they charge the merchants a processing fee) that the piddly late fee pales in comparison to the riches they will reap by keeping you as a customer. If they don’t budge, punish them by taking your business elsewhere.

2. Roll credit limits of the same issuer onto fewer cards

This is a popular one with 0% balance transfer junkies because Citi has a “not so often spoken” rule of limiting a cardholder to at most three lines of credit (without regard to the actual dollar limit). This stinks for balance transfer arbitragers because they want to keep rolling that 0% balance from card to card to card and that gets dicey if they can only have three. One way of getting around this rule is to ask that you roll the credit limits of one of the cards into another one of the cards. They are generally willing to do this because the alternative is that you cancel the card and they lose the business. Since they were willing to give you the total limit in the first place, putting it on two cards instead of three hardly makes a difference to them. This has an added benefit for you from a credit score perspective - you reduce the number of open lines of credit while keeping your credit utilization and total credit limit the same. Double win!

3. Request an increase to the credit limit without a credit pull

I’ve written about how you can request a credit limit increase in the past and not get a credit pull but I wanted to repeat it in a post like this because it’s something not a lot of folks know. What you basically do is, through your online account management portal, go through the normal process of requesting a credit limit or line of credit increase. Sometimes, based on how long you’ve been with the issuer and your credit worthiness, they may offer you an increase on the spot without a credit inquiry. Do not bother trying this within the first six months or first year with the card, they generally won’t offer this without a credit pull so you’d just be wasting your time.

4. Capital One & Discover don’t have a foreign transaction fee charge

When you purchase something overseas, your credit card will often charge you a foreign transaction fee to handle the foreign exchange process for you. In fact, part of that fee is imposed by Visa and MasterCard itself, so any Visa and MasterCard that charges you less than 1% is actually eating the fee. Capital One and Discover are the only two companies that do not charge a foreign transaction fee; Capital One actually pays the fee for you and Discover, since it’s not on the Visa or MasterCard network, just doesn’t charge for it. As I wrote in the other article, if you want to pick between the two then I’d go with Capital One because Discover isn’t as widely accepted overseas (Capital One cards are Visa or MC).

5. Change your card to a different type or rewards program

Do you have a Citi Platinum Select card and you would instead prefer to have a Citi Professional card? Just call up and ask; they’ll probably honor your request. If they don’t, just ask to cancel the card and retentions will probably do it for you. This will only work if they’re the same class of cards, so if you want to change from a Citi mtvU card (student) to a CitiBusiness card (business), that will probably be impossible (but still worth asking). They figure that you can always cancel and apply for the new card anyway so they might as well reduce their overhead by just shifting it over for you. It’s all about lowering costs for them and retaining the customer, converting cards is hardly a chore.

6. Most cards double manufacturer’s warranty

Most credit cards will cover purchases on that card to double the original manufacturer’s warranty, up to an additional year. This comes at absolutely no cost and it’s offered because most people never take advantage of it. Part of the reason is that you often forget this is something that is even offered in the first place (because most people think of manufacturer’s warranty first and then straight to repair or replace) and the credit cards only mention this when you’re buying.

7. Most cards offer auto rental liability insurance

This particular “secret” has been documented quite a bit lately, the fact that many credit cards offer some form of rental car insurance (collision and loss) if you use that card to pay for the rental. What it doesn’t cover your personal auto insurance may also cover so between the two you often don’t even need the insurance (really it’s a waiver) from the rental company in the first place. Some cards, such as American Express, have programs where you can pay extra to have additional coverage.

(Photo by mike hipple)

Do you have a Capital One credit card in your wallet? If you said yes, you’re probably in the minority (at least of the people that I know personally). I don’t have a Capital One credit card and those commercials with the barbarians aren’t really convincing me that I really want one of those credit cards in my pocket. Their flagship card, the Capital One No Hassle Rewards, really isn’t much to write home about!

What you get with that card is 1% cashback followed by a 25% annual cashback bonus. Don’t let the 25% number fool you, 25% added onto 1% is exactly a whopping 0.25%. There are no earn caps, the rewards don’t expire, and there is no-hassle. Whooopeee!

That’s awesome, except my current credit card system leaves Capital One in the dust. When I eat out or go to the movies, the Citi mtvU card gets me 5% cashback. When I buy gas, Discover Open Road gives me 5% cashback. When I make travel purchases, my Costco American Express TrueEarnings card gets me 3% and 1% on everything - no caps. Where does that leave a 1.25% cashback card? No where, I’m not slipping a fourth card into my wallet so I can get an extra 0.25% - even if it never expires.

The only advantage that I see with a Capital One card is the fact that Capital One does not charge foreign exchange fees (for when you use your card overseas) and they actually eat the 2% fee that Visa/MasterCard charges them, which is a nice gesture.

Capital One - Give better rewards if you want to be what’s in my wallet.

I just made a trip to China and one of the interesting things I learned before I left was that a credit card will often tack on a foreign currency transaction fee if you use your card abroad - this fee is tacked onto the cost of the purchase and is used to cover the foreign currency exchange, in theory. No matter what the reason, the fee still exists and it certainly would be helpful to know which card issuer charges the most and which charges the least right? So, check out the table below:

Visa and Mastercard automatically charge the card issuer 1% for the foreign currency transaction itself so a lot of the Visa/Mastercard cards will pass that onto the end user (which is included in the number above). Capital One is the lone exception, eating the fee, and Discover and American Express obviously aren’t on that network so don’t have that extra overhead.

It looks like Capital One and Discover are the best for this though I’d argue that you likely want to get a Capital One card because Discover isn’t as widely accepted overseas.

This month’s issue of SmartMoney magazine has a section all about credit cards and their picks and runner ups depending on what you’re spending on. As usual, I disagreed with some of their picks, you’ll probably disagree with their picks too, and I have pretty good reasons why they’re off-target. They broke their picks up into what you get as rewards from the card: Rewards (products), Travel, Cash-Back, and Low-Interest cards; which I think the wrong way to go about it. However, I’ll follow their paradigm in countering their picks.

Category: Rewards
SmartMoney Pick: American Express Preferred Rewards (Green)
SmartMoney Runner-Up: Citi Diamond Preferred Rewards
They picked the AMEX Preferred Rewards because the award values work out to be 1% of spending, so if you spend $10,000 then you’ll essentially get enough points to get a product worth $100 (that’s $100 retail by the way). The runner up is a card that my girlfriend uses, the Citi Diamond Preferred Rewards where you get rewards at a rate higher than 1%, there isn’t an annual fee and you get 5x that at supermarkets, gas stations, and drugstores. With the AMEX’s annual fee of $110, I don’t understand why they received top billing. I don’t see the point of a rewards card when there are cash-back cards available. It’s as if someone forced you to spend your cash-back, so you don’t actually get… cash… back.
Blueprint Pick: Citi Diamond Preferred Rewards

Category: Travel
SmartMoney Pick: Citi PremierPass Mastercard
SmartMoney Runner-Up: MBNA WorldPoints Visa
This category is for cards that let you convert points into generic airline frequent flyer miles you can apply to any airline. It’s a step above airline-branded reward cards but again you are dinged an annual fee and the rewards are still around 1%, with 3% on travel related expenses. Their runner up has no reward fee and earns a little more than 1%, but I suspect the manner in which you spend the points is more restricted.
Blueprint Pick: Bleach, no pick, I think these are worse than the rewards cards because you have to spend it on travel.

Category: Cash Back
SmartMoney Pick: Citi Dividend Platinum Select Mastercard
SmartMoney Runner-Up: Capital One No Hassle Cash Rewards Visa
These are the moneymakers - cashback! With the Citi Platinum Select, you get a minimum 1% with 5% at supermarkets, gas stations, and drugstores. The only downer is that there’s an annual cap of $300 in rewards (which is really $30,000 anywhere or $6,000 at supermarkets/gas/drugstores) but there isn’t an annual fee. This is the card that I use for my gasoline purchases which is crucial these days with skyrocketing prices, 5% back is a solid amount.
Blueprint Pick: Citi Dividend Platinum Select Mastercard

I skipped the Low-Interest category because I know nothing about it (I never carry a balance, never ever). However, if you’re interested their top pick is MBNA Motley Fool Low Purchase APR and the runner up is the Pulaski Bank of Little Rock Visa Classic. Check those out if you need a low interest credit card but you can usually find a 0% balance transfer if you’re lucky elsewhere, can’t beat 0%.

One of these days they should do an analysis of credit cards from the other side - what card to use on what kind of spending to get the maximum cashback. For me, that’s using an American Express True Earnings card for all travel expenses (3%) and at Costco (1%, but the only card other than a debit card that they accept); Citi Dividend Platinum Select card at supermarkets, gas stations and drugstores (5%), and my Southwest Rapid Rewards (read my analysis of it’s value here) for everything else.