Virtual Account Numbers

Wednesday, May 17th, 2006

Citibank has launched a service that I’ve wanted for a long time. You can now create a unique credit card number for each and every transaction that can only be used once. Perfect for those sites that want to charge you $9.95 for the first month and then rebill you every month until the second coming.

Bad Pricing: Epidemic or Fluke?

Thursday, February 16th, 2006

Twice in the last two days I’ve caught programmed cash registers scanning a different price than was clearly advertised. Once was in a fairly nice restaurant that added $2 to the price of a glass of Bourbon; once was in a sporting goods store that added a $1 to the price of a pair of rubber boots.

Maybe it’s just a fluke, and I only took note because it happened to me so close together in time; but maybe it’s an increasing problem as more pricing gets automated without effective checks and balances; and just maybe it’s not a mistake at all but a deliberate and dishonest way to raise prices.

Airline Miles Credit Cards

Wednesday, December 21st, 2005

Many people prefer airline miles credit cards such as the AAdvantage Mastercard or the Delta American Express card. However, these can be some of the most expensive cards out there. Annual fees range from $85-$135 a year, the terms are outrageous, the interest fees usurious, and the miles virtually unredeemable.

Airlines calculate the cost of each frequent flier mile as approximately 1.5 cents. You can buy miles (up to about 15000 miles per year for airline) for less than 3 cents per mile. Given the difficulty of redeeming miles as well as the likelihood the miles will expire or the airline go bankrupt before I use them, I generally round the value of a mile down to one penny per mile. When applying for such a card, keep these numbers in mind.

For instance, 15,000 miles is just barely worth it if the annual fee is $135 per year. Most cards offer no annual fee for the first year, so you can do better if you simply refuse to renew each card, and instead apply for a new card a month later. This also provides some additional protection from having your card number stolen, and from unscrupulous vendors and sites that automatically renew subscriptions for goods and services with or without permission. (I normally subscribe to a lot of onetime use sites in the last month of each card.)

All this applies only if you pay your balance in full each month. Interest rates on these cards are so high that if you keep any balance at all, you’d be better off using a low interest card from your credit union and just buying your airline tickets with the money you save.