Budget Freak

Turns out I did miss the extra $50 sign up bonus from Citibank. I wrote Citibank to see if they could apply the better offer, but they said they couldn’t. Oh well. An extra $50 would have been nice, but I’m still happy with the $50 they will be giving me.

If YOU want to take advantage of the $100 offer, you must be a new Citibank customer, and USE THIS LINK.

Last night, I decided to take advantage of the $50 sign up bonus that I talked about yesterday on a Citibank Savings Account. I don’t think there’s much harm in having too many savings accounts, and it’s hard to pass up a free $50.

Well, less than 12 hours later, when I was checking the Morning Deals on Consumerist, I found another promotion for the exact same Citibank savings account, this one with a $100 sign up bonus!! (Link: Citibank $100 sign up bonus) D’OH!

So by signing up last night, I made $50, but if I had waited until this morning, I could have made $100! What a cruel, cruel world. I sent Citibank a nice email telling them about my dilemma and asking if I was eligible for the $100 sign up bonus. Maybe I’ll get lucky and get another $50. Fingers are crossed.

I got an email this morning for Citibank Direct, asking me to open an online savings account with them. In doing so, I’d get a $50 sign up bonus. There are no fees, no minimum balances, and a 4.65% APY. Sounds great right?

My only concern is the number of accounts I have open right now. Currently, a checking and savings account at ING and two more checking and another savings over at WaMu. I think that’s even a little overboard.

So my question, then, is having too many banking accounts dangerous? Is there a magic number? Anybody know?

Then again, fifty bucks is fifty bucks, and I guess I could always close the account once I get the bonus.

A friend of mine recently complained because she received a $25 service charge from her bank for transferring money from her savings account to her checking account. Not many people know, but you are limited to 6 electronic withdrawals from a savings account per month. This is Federal Regulation D, not just a limit imposed by your bank. Transactions that count against the limit include Internet and telephone transfers. You can still use an ATM, go into a branch, or transfer money by mail as much as you want. Those transfers won’t count against your limit.

I hadn’t heard of these regulations either, until a few months ago. This is not something the banks do a good job of letting customers know about. I’ve had to be especially careful when shuffling money around between my different accounts to avoid penalties myself. Consider yourself warned!!!

My Mint has a couple other banking regulations you should know about, including Check 21 and reporting bank errors.

My experiment with earning free money from 0% balance transfers is going just fine. I got my first interest payout a couple weeks ago, $26 for about a week and a half’s worth of interest. Right on target with what I expected. I paid my first monthly minimum payment on the Citi Premier card this week. I linked my credit card to my checking account, so it transfers the money electronically. I also decided to make the payments from another checking account, not the account the 0% money is in. My reasoning being the more money is in the high interest account, the more money it will make. The minimum payment was $102 for the balance of $6,800, or 1.5% of the balance. I also just recieved my first statement for the Citi Professional card, with a minimum payment of $150, for a $10,000 balance. Who knew you could borrow $16,800 for a mere $252 per month?!?! I’m expecting my next interest payout to be around $70 on the 26th, so stay tuned.

It’s now been two months since I’ve started BudgetFreak. In those two months, I’ve written 45 posts, and have received 70 comments. I’ve gotten about 1,000 unique visitors, 3,000 visits, and about 9,000 page views. I’m not breaking any records, but still much more than I was expecting.

If you’ve missed anything in the past two months, here’s what I’ve done to help myself out financially:

• Saved $75 using coupons
• Saved $300 canceling my gym membership
• Opened up an interest earning checking account at ING
• Lowered my credit card interest rates and increased my credit limits
• Started earning interest borrowing $16,800 from credit card companies for FREE, taking advantage of 0% balance transfers
• Checked my free credit report
• Opened a ROTH IRA and maxed out my 2006 contribution
• Opened a Washington Mutual Savings Account earning 5% interest
• Will save $500 a year by driving slower
• Participated in my first Blog Carnival
• Will save about $400 a year by shopping around for car insurance
• Managed to grow my net worth by 33%

I’d say I’m off to a pretty good start. So thank you all for reading and commenting, and here’s to many months to come!

Washington Mutual is offering a 5.0% APY savings account if you sign up for a free checking account online. (Direct Link to sign up page: here) There’s a $1 minimum to open and no monthly fees. I decided to apply for an account last week to hold my 0% balance transfer money. Even though I already had a Washington Mutual Checking account, I still needed to apply for a new one to get the savings account offer. Unfortunately, this means they’ll be sending me an ATM card for the savings account, a MasterCard Debit Card for the checking, and two books of checks. I’m pretty sure I’ll never use them, but I guess that’s the price you pay for 5% interest rate. The application took about 10 minutes to fill out, and the account was created immediately. I transferred $50 from my old checking account to the new one to take care of the minimum balance.

The next day, after my balance transfer checks cleared, I moved the $16,800 into the new savings account and started earning some interest. I had originally planned to move the money to my ING savings account, but after some thought, opened the wamu account instead. One reason was the interest rate. The extra half percent over ING will work out to about $85 extra throughout the year. Also, after the headache trying to cash the checks, I figured it would be easier and quicker to transfer within Washington Mutual accounts. The transfer from checking to savings was immediate, where if I transferred to ING, it would have taken 2-3 days. Not a huge deal, but it would have cost me another $5-$8 in interest waiting for the transfer to take place. I really enjoy my ING accounts, but it just made more sense to stick with Washington Mutual.

All is well with the world again. After depositing the checks on Monday and being told they would take 11 days to clear, I was a little ticked. I called the Washington Mutual Branch today to see if I could expedite the checks clearing. The conversation went something like this…

WaMu: It’s our policy to hold credit card checks for 11 days because most of them bounce due to insufficient funds. It’s also an out of state check so we have to hold it for 11 days. The best I can do is release $4,900 tomorrow, and the rest of it in 11 days.
Me: That’s not good enough. Let me talk to your manager.
WaMu: Hi sir, as a courtesy to you, I can release $2,000 right now, $5,000 tomorrow, and the rest in 11 days.
Me: That’s not a courtesy. I don’t want any courtesies. I gave you two checks for $16,800, and I want my money.
WaMu: Well, how much to you want right now?
Me: I want all of it right now.
WaMu: I’m sorry I can’t do that.
Me: You’re holding my money hostage. Please stop treating me like a criminal and assuming my checks won’t cash. I’ve been a customer for 8 years and never had a problem.
WaMu: I can try and call the credit card company to check the funds. Do you have a copy of the check?
Me: No, I don’t have a copy of the checks, I gave them to YOU to cash!
WaMu: Hold on a second, let me talk to the teller.
(On hold for 5 Minutes)
WaMu: I found a copy of your check, I’ll call them and then call you right back.
Me: Thank you.
(15 minutes later)
WaMu: I got a hold of the credit card company and the checks are OK. You’re money is available.
Me: THANK YOU!

And just like that, all $16,800 was available immediately. It’s important to note I never got mad or yelled at the supervisor, that wouldn’t have gotten me anywhere. I stayed calm and they eventually were able to help me out. My faith is now restored in Washington Mutual. I can now rest a little easier knowing my money isn’t in limbo and I’m finally earning some interest.

My two 0% balance transfer checks came in the mail over the weekend. $16,800. My mind was racing thinking about what I could buy with all this money, but luckily, I had a little self control. The plan was to deposit the checks to my WaMu checking account, and then transfer over to ING to start earning interest. I went to the WaMu yesterday to make the deposit, and ran into a bit trouble. The funds wouldn’t be available for 11 business days!! I couldn’t believe it. I’d never heard of a check taking 11 days to clear.

They gave me a whole list of reasons for this: the balance of my account (I only had $150 or so since I switched over to ING checking), I’d never deposited this much money before, the checks were out of state (Citi is based in South Dakota), all checks over $5,000 have to be put on hold. Needless to say, I was a bit upset. I could maybe understand a 48 hour delay while they check with Citi Bank, but 11 days?? This is 2007, is it not?? I felt like they were treating me like a criminal trying to cash bogus checks.

I talked to a supervisor at the branch, and then called their customer service line when I got home, but both gave me the same story. The only hope I have to getting the money any earlier is to plead with the branch manager. They told me to call back in 2 days to check on the status of the checks, and then they could possibly expedite things.

I think my mistake was trying to go through Washington Mutual. I should have just mailed the checks direct to ING to cash. Even if they had to hold the checks, the money would be in the right place. I guess that is the problem with an online bank: there’s no easy way to deposit money. By my calculations, I’m losing just over $2.00 a day waiting for the checks to clear.

As one of my goals for this year (a post I swear I’ll write someday), I decided to give credit card arbitrage a try. A couple months ago, I had no idea what that term even meant, but thanks to posts at Blueprint for Financial Prosperity, Five Cent Nickel, and most importantly the tutorial at My Money Blog, I decided to go for it.

Simply put, credit card arbitrage is borrowing money from a credit card company using a 0% balance transfer offer, putting that money into a high yield savings account for the length of the 0% promotion, then paying off the original loan and pocketing the interest. Taking out $10,000 with 0% interest for a year and putting that into an account earning 4.5% APY, you’ll earn (before taxes) about $450. Now, there are a TON of issues to consider, and this scheme is NOT FOR EVERYBODY.

First, for the length of the 0% promotion, you must still pay your minimum payments every month. If you miss a payment or are late, you can kiss the 0% APR goodbye and you’ll start paying around a 30% APR. It’s VERY important to stay on top of payments. It’s also important to pay off the entire balance before the end of your promotional terms. Any interest you gain could quickly get eaten up with finance charges at a regular interest rate. Also, the other major drawback is your credit score. Opening up the cards, plus maxing out your limits will put a strain on your credit score that could potentially impact any loans in the near future. In my case, I’m not looking to take out any new loans in the next 12-18 months, so it’s not an issue.

That said, if you’re on top of your finances and don’t mind a dent in your credit score, there’s a pretty easy way to earn some free money. I’ve applied for a couple cards and have requested some balance transfers already, so please stay tuned as I’ll give you all the details along the way.

You know I love ING’s Electric Orange Checking Account, but now, I love it just a little bit more. I just recieved this email…

Great news! The rate on Electric Orange balances up to $50,000 has increased to 4.00% Annual Percentage Yield.

4.00% on a checking account with no minimum balance? Just to compare, you need a $250,000 balance at WaMu to get a 4.00% APR, and you need a $10,000 balance at WaMu to get a 0.5% APR with no monthly fees. Crazy!

As promised, here’s a little background on me.

Personal
I’m 25 years old and live in Los Angeles. I graduated from UCSB in 2003 with a BS in computer science. Now almost 4 years out of college, I’m in my 4th job in a data management consulting company. I don’t like the fact I’ve had to switch jobs so many times, but I suppose I’m still at that age where I’m trying to find where I best fit in.

Right after college, I moved back home with my parents. I didn’t have a job right away, so it was really the only option I had. I was there for more than 2 years, and it really allowed me to save some money (although my spending habits were much worse so I didn’t save as much as I could have). This past September, I finally moved out on my own. I switched jobs and my commute was too long from where I was living. Now, I’m renting an apartment with a good friend and having to deal with grocery shopping and cooking once again.

Financial
Here’s a quick rundown of my personal finances. I have a WaMu checking account (which is slowly being phased out), an ING Savings account, and the incredible ING Electric Orange Checking account. In a nutshell, paychecks are deposited to the ING Checking, bills are paid, and whatever is left (hopefully) goes into the ING Savings.

I have an employee matched (50% match, up to 3% of income) 401(k) program, to which I currently contribute 12% of my pre-tax income. I have an IRA account through Smith Barney with a few thousand dollars I’ve rolled in from my previous employers 401(k) programs.

I have 5 credit cards: Discover, Capital One Visa, Sears Card, Express Card, and a Gap Card. It seems like a lot, but I’ve never carried a balance (a balance that earned interest anyway) on any of my cards. I like the cashback program at Discover, so that’s my main card. I just switched to their Gas Card, which earns 5% back on all gas purchases. The rewards are nice, in that a lot of times you can turn $20 worth of rewards into a $25-$40 gift card. I few months back, I turned $180 cash back into a $225 Crutchfield gift card and bought a digital camera. My Capital One Visa is only used when businesses don’t take Discover. The specialty cards are strictly used at their respective locations. By having those cards, I routinely get invitations to 10-50% off or 0% financing events.

That should give you a little background on where I’m coming from. Soon, I’ll be posting my goals for the upcoming months and quarters to hopefully give you an idea of where I’d like to go. Thanks for reading!

I have a savings account at Ing Direct. It’s great. My money’s earning 4.50% APY, it was easy to set up, has a great web interface, and it’s easy enough to take money in and out (even though it takes a few days). In my last statement they sent me a flyer introducting their new checking account, Electric Orange. The checking account offers no fees, a 3.0% APY, free bill pay, and a Mastercard Debit card for instant access to your cash (via the Allpoint network of ATMs). One catch is they don’t give you any actual paper checks. You can still request paper checks by filling out the name and address of the check recipient via their website, and they’ll send the check in 2-3 days. You can also send an electronic check immediately if you have the person’s checking information (more on this later). Another issue is depositing money. Since there is no bank branches, you can’t exactly go in and deposit a paper check. You can mail in your checks and they’ll be deposited in a couple days, but it still could be a hassle if you need that money right away.

At first, I sort of dismissed the idea, but the more I thought about it, the more it grew on me. I hardly ever write paper checks anymore (maybe 1 a month). Nearly all my banking is done online. I have a Washington Mutual checking account right now that’s earning exactly 0% interest. I decided to give it a try. I filled out the easy application online and transferred $100 from my savings account to my new Electric Orange Checking Account, just to test it out. They sent me a cool looking Debit card 3 days later and I was all set, finally earning interest in a checking account.

Now, let me tell you why this account rocks. My roommate and I split the bills and rent every month. He usually pays the full rent, I pay the bills, and then we reconcile at the end of the month. I usually end up oweing him a couple hundred dollars a month. Before I would just cut him a check, but now, I wanted to try the electronic check route. Last night, we calculated all the bills, and I ended up oweing him $530. I logged into ING’s website, checked my available balance, and… uh-oh… I only had $100 available! I transferred a big chunk of money from my wamu account to my ING checking, but the transfer was still pending. My money was in limbo, and wouldn’t be available for another 2 days. Ordinarily, he’d have to wait, but, the great best part about the ING accounts is that you can transfer money immediately between your savings and checking. I quickly transferred $500 from my savings to checking, and that money was immediately available.

Filling out the electronic check form was pretty easy. It just asks for an email address and routing and account numbers for the person you’re transferring money to. This might be an issue for the person recieving the money, as your account information is sensitive information, but then again, it’s printed on every paper check you have, so how sensitive is it really? Anyways, filled out the quick form, put in the dollar amount and clicked send. My roommate got the email a minute later, verified his account information, and the money was transferred. It still takes 2 days for the transfer, but the whole process took about 2 minutes from sending to recieving. It’s much quicker and easier than writing a paper check and a trip to the bank. Plus, my roommate is now saved as a contact through ING website, so next time I need to send money, I just have to enter the amount and press go.

I’m so impressed with the Electric Orange Checking Account, that I switched my direct deposit at work over from Washington Mutual. I’m thrilled I can actually earn a decent amount of interest on a checking account. I’ll still keep my WaMu account, but only as an emergency account if I quickly need to cash a check or visit a branch. But for now, all my banking will be done through ING.

Edit: The ATM network is Allpoint Network, which, among thousands of other locations, are in most Rite Aids, Targets, and Costcos.