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“Doesn’t getting a card lower my credit score?”

Last month my sister was planning a rare international flight.  I recommended she pick up a travel rewards credit card.  The Chase Sapphire Preferred rewards 2 points per dollar spent on travel and gives a 40,000 point signing bonus if you spend $2,500 in the first 3 months.  The cost of an international flight alone is about $1,500 so hitting a bit over $300 a month in 3 months is easily attainable.  Minimally all the points could be applied directly to the statement to pay for her trip. Her reply was “Doesn’t getting a card lower my credit score?”

Theoretically, it could since inquiries do negatively impact your credit score.  However, using a smaller portion of your available credit has the opposite impact on your score.

For the past few years I have only had a few credit cards in my wallet.  My primary card was my Discover Card, which earns 5% cashback on revolving categories throughout the year.  All other spending earns 1% cashback which is not really a bad deal.  For gas, grocery and drugstore purchases I had an old credit card that rewards 5% in those categories.  In February, I called Discover about my account and customer service did very little to resolve my issue.  At that point I decided I would focus my spending on other cards.  When researching online I found a plethora of very great credit cards and companies competing for my business with nice bonuses.  I pulled a few credit reports and all of them put me in the low 700s range.  I have never missed a payment and nearly all of my spending is put on a reward credit card.

Since then I have applied for 4 different credit cards and been accepted for all of them.  Over the same time span my credit score has increased substantially.  All credit scores I have checked now put my credit score at over 750 and the only thing I have done is get more credit cards (more available credit) and paid off the balances in full with each statement.  In my personal experience, applying for credit cards actually helps to improve your credit as long as you are a responsible borrower.  In no way is this meant to condone applying for credit cards wrecklessly, but if you are dilligent with your finances your credit should not suffer.

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Walt Disney World on a Budget – Saving Money (Tickets) (Part 3)

Save Money at Walt Disney World

Save Money at Walt Disney World

 

Finding a place to stay and determining the best method of travel is only the beginning of the expense for a trip to Walt Disney World.  If you were just wanting to drive to Orlando, Florida and stay in a hotel the total outlay for such a trip would be quite low.  Unlike other Florida vacations, where your family relaxes carelessly (and cheaply) on the beach, you will find no beaches in Orlando.  This is where careful planning might pay off.

The last time I took a trip to Walt Disney World was in 2011.  We had actually thought about visiting Walt Disney World and Universal Studios.  I actually love Universal Studios and find it to be very fun.  However, due to the pricing structures of bothe Walt Disney World and Universal Studios the economics of visiting both parks is difficult to make work.  Both companies charge more for a single day ticket than they do for a multi-day ticket (on a per day basis). From a business perspective it’s a fantastic choice, but for a family wanting to enjoy both parks it can work be difficult to accomodate.  A 1 day ticket to WDW is $95 per adult and $88 per child 3-9.  A 7 day ticket, by comparison is $302 and $282, which breaks down to $43 and $40 per day.  Let’s imagine that on day 8 you wanted to go to Universal Studios for this extra day you would pay about $90 per adult and $85 per child.  Alternatively, you could spend your 8th day at a Disney Park again for an extra 10 bucks per person.  This really complicates the vacation math and in my case made us stay with Walt Disney World for the duration of our 6 day trip.

Ticket Inflation

When you are trying to vacation on a budget, the last thing you want to hear is for someone to recommend you buy in advance of your journey.  In 2011 2 adult tickets for 6 days were $242 each for my wife and me.  This same ticket in 2013 would cost me $296 through Disney.  This is a 18% increase in 2 years!  So one surefire way to save money on your tickets is to buy them early!  When’s the best time to plant a tree?  20 years ago.  When’s the best time to buy a ticket to Walt Disney World?  20 years ago.  If you cannot swing buying them years early definitely buy them before the yearly price increases.

Cheapest Tickets

When purchasing tickets outright the best company that I found was Undercover Tourist.  In 2011 their price was better after tax than Walt Disney World tickets were priced at before tax.  Remember that Undercover Tourist shows total price you pay while the Walt Disney World website just throws the tax in at the end.

Ticket Discounts

Although I purchased my tickets from Undercover Tourist in 2011 I do not know if they are truly the best choice today if you are willing to take a little extra time.  I used the ticket comparison calculator for 2 adults and 2 children on a 6 day ticket the total from Undercover Tourist would be $1,103 while the price through Disneyworld.com is $1,145.  Certainly Undercover Tourist is $42 cheaper which makes them 3.67% cheaper.  If you just want to buy tickets quickly, this is a good bet.

However, if you time your purchase right you can save more than this by paying with a gift card.  Sign up for an American Express Blue Cash Preferred (special offer through card match tool)which gives a $250 sign-up bonus 6% cashback at grocery stores and 0% interest for 15 months ($75 annual fee).  Let’s assume you only get this card for your Disney trip and that’s it.  At my local Kroger they offer an incentive of 2x fuel reward points on any gift card purchase.  During certain times of year they offer 4x fuel reward points on any gift card purchase.  What does that mean?  Every 100 points earned is good for 10 cents off per gallon.  I went to Kroger when they offered 4x fuel reward points and used my American Express card to buy gift cards to pay for Walt Disney World.  The price is $1,145 which will earn me $68.70 cashback and 4,580 fuel reward points.  The rule for gas points is you can redeem up to 1,000 points for $1.00 off 35 gallons of gas.  Purchasing tickets with this method would earn $68.70 (6% cashback) +$250 (sign up bonus) – $75 (annual fee) + $157.50 (gas savings) = $401.20 in total savings on a family of four.  That works out to 35% off which is better than the 3% off offered by Undercover Tourist.  Plus, the 0% interest means you can pay your card off slowly like a nice savings account.  If you really want to amp up the savings take all of your gas with you on the trip and you will be filling up on $1 off gas!  I would not condone, recommend or try this trick myself, you would be saving cash on gas.

Ticket Choices

I have read other advice in the past and have heard many people suggest that people buy Park Hopper,  No-Expiration and other more expensive tickets.  I found the incremental cost to purchase these tickets were not cost effective.  This just goes to show that there are no right answers if two people will recommend opposite things.  As adamant as I am to not get the Park Hopper option, other people suggest it’s “a must”.  I believe Disney is expensive enough and there is enough to do without worrying about such an option.  For instance, if you go to Magic Kingdom, you can leave in the middle of the day and go back to Magic Kingdom.  With a little extra planning you can easily get by without the Park Hopper.

Park Options

Just as opinions vary on what upgrade options should be added to your ticket there are many strong opinions on which parks to see.  I find Epcot to be quite boring when compared to the excitement of Magic Kingdom.  I believe that Animal Kingdom has promise, but currently there’s not enough to do in the park.  That being said, I have had people come up to me and say “Animal Kingdom is so great!” or “I could spend the whole week at Epcot”.  I think that spending a week in Orlando and wasting every day at Epcot would be a punishment.

When my family went we had 6 days.  We went to Magic Kingdom and Hollywood Studios twice and Epcot and Animal Kingdom once each.  I used touringplans.com and undercovertourist.com to plan my trip.  I actually made a spreadsheet and evaluated each day based on expected crowd levels.  I also looked at the calendar to be certain that we were in attendance during “must see” events.  We went to Hollywood Studios on at least one day when Fantasmic was showing.  Without good preparation we could have easily just gone to the park and not known what we missed.

 

 

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Walt Disney World on a Budget (Part 2 – Lodging)

Walt Disney World simplisticsaving.com

 

“You HAVE TO stay on site!”,  “You’ve GOTTA get the Disney Dining Plan”, “If you do not buy a souvenir at every shop you hate your kids”

As soon as you express plans to visit Walt Disney World you will get a myriad of advice on how to have a great trip.  If you follow every piece of advice you are obviously quite wealthy and I would suggest that you bring me along next time.  While many of these tidbits are excellent on an unlimited budget, they are quite unproductive when planning a trip on a realistic budget and salary.  My brother recently got the insider advice to stay at the “W” when visiting Washington D.C.  While this advice may be excellent I would assume that a $500 per night hotel room would be pretty good.  I can only assume that this local preferred the accommodations found at the “W” to what you might find at “The Lincoln Bedroom”.

Keeping in mind when reading advice that every family is different and we all enjoy different things.  Stating an opinion on lodging is even more divisive than most opinions. While some people might think a $20 motel is a great value another family would refuse to stay in such a place even if they were paid $20 (or $2,000) per night.  As I have stated before, I feel that maximizing value based on your own valuation is most important.  This also goes for time spent in planning such a trip.  I enjoy putting time into the planning stage and minimizing costs while maximizing my value.  Sometimes I have trouble pulling the trigger for fear of a better deal passing me.

Disney Resort Hotels

In 2011 we went to Orlando and I did all of the research online.  I first looked to stay onsite because the accommodations at Disney’s lodging options are excellent.  I visited my cousin staying at the Wilderness Lodge and it is gorgeous.  All of the options staying on the property are fantastic.  If money is no object we would stay at Disney World, in the future we will also likely stay at one of the resort options.  I think that staying at the resort is much more valuable when you fly to Orlando rather than drive.  Staying at a resort allows you free transportation to and from the airport, which also means no rental car is an option.  I have not done this myself, but the minimal research I have done thus far this seems like a viable option.

Off-Site Rankings

The first thing I did was to take a look at all of the hotels in the area.  I found many different “deals” around the area, but it’s really hard to evaluate a property that you have never seen.  One of my favorite ways to check out a property is Trip Advisor because their rating system is based on actual experiences by hotel guests.  Other rating systems sometimes have a vested interest in ranking certain properties higher than reality.  One problem with all of the available discount sites such as Hotwire, Priceline, etc. are the huge price differences between each hotel guest.  The price you pay on a hotel room will definitely influence your ranking.  If I pay $300 per night for a room my perspective will be different than if I only pay $300 for the week.  So even on Trip Advisor it will seem like some people will have higher or lower expectations.  Another flaw is that sometimes ratings might be different if there is a recent renovation.

List

On my list of things I needed in a hotel was pool, high ratings and free breakfast.  I figure if all other things are equal and one place offers breakfast I will pick that place. Since we are going to eat in the morning anyway, if we can get it included in the price of the room that’s added value.  For 3 people that saved at least $8 per day if we just went to McDonalds.  I then evaluated all of the hotels that met our needs.  After that I checked out which one had the lowest price.  After narrowing them down is when the fun begins.  I did not pick the cheapest hotel on my list of acceptable hotels because I estimate value differently than lowest dollar amount.  I like to get the most bang for my buck.  I finally decided on a Country Inn and Suites – Calypso Cay, the pictures online made it look like a five star destination resort.  I searched around and found the room for $55 per night through EasyClickTravel.com.

Price Match

When you find a great price online there are often ways to make the price better.  I found the discounted price of $55 per night online, but when I went to countryinns.com I found that the same room was going for $75 per night.  However, I saw on their site that they guarantee that booking through them will get you the lowest price or else they will match it then discount the lower rate 25%!  I called the hotel and let them know that I had found the lower rate and they told me that I had to book through them first and it would be adjusted.  Much like mail-in rebates I am skeptical of offers like this, but I believe the best protection is backing up any claim.  So I took multiple screenshots of the discounted rate through every step.  I then booked the room and then immediately put in the price match request.  The first time I sent over a basic email stating that I had found the lower price and been told it would be matched.  I received an email saying, “Unfortunately we are unable to process your request”.  I then sent over another email with the direct link to the page and about 10 screenshots.  I got an email back saying “We have confirmed your lower price and have beat it by 25% your new price will be $39.90 per night”.  That was about as easy as possible.  Took just a bit of time and minimal negotiation. Not only is booking with the hotel superior because they beat the price, but I was also able to get 6,600 Club Carlson Gold Points.  I still have not used them, but if I get the Club Carlson Visa card, which currently offers an 85,000 point bonus, These points might be nice.

Cashback 

If I were booking this hotel right now doing the same method I would save even more money.  Using Cashback portals is so easy and can be quite lucrative especially when used in conjunction with a cashback credit card.  First you would click through TopCashBack then type in Country Inn and Suites, then simply click through there and get 5% cashback on the booked rate of $526.50 so I would have gotten $26 into my TopCashBack account.  Even if I did not get the extra cashback, it would be worth it.  I also booked with a Discover Card which had travel as a 5% cashback category so I saved another $26 in Cashback.  Basically those two cashback amounts paid for at least one night.  It is possible that they would catch on that the cashback was calculated using the higher amount, but either way it’s a nice bonus.

Blind Pricing

Priceline famously has a “Name Your Own Price” option which can be very good or very bad.  I have had both experiences and it goes back to the rating systems I spoke about earlier.  In my experience it appears that Priceline inflates some of the substandard hotel ratings in order to offer a really low price on a hotel.  If you take a bit of time it’s sometimes possible to figure out which hotel is being offered by either Priceline or Hotwire.  You can also go to BetterBidding.com and get some help on how to purchase a hotel.

Credit Card Sign Up Bonus

There are some very lucrative hotel sign up bonuses that can really help in paying for your trip.  You can get a credit card such as the Chase Sapphire Preferred which gives a 40,000 point signing bonus.  Then use the $400 as a statement credit to cover your travel.  You could also sign up for different hotel reward cards.  For instance, if you plan on staying at a Starwood hotel you can sign up for a SPG card which gives 25,000 bonus points.  A husband and wife could both apply for the card and have 50,000 points by simply hitting the minimum spend amounts.

Conclusion

Take your time when booking a hotel and make your decision based on things important to you.  Keep looking for deals and remember that many hotel chains offer to beat a price offered by an online booking agency.  Take advantage of reward programs, reward credit cards and shopping portals to add more discount to your prices.

 

 

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Value Maximization and Quality

“A penny saved is a penny earned”, is a quote famously uttered by someone.  I like to think that the geyser who wrote this was a coupon fanatic or a general deal hunter of some sort.  I know that I have spent a great many hours at my laptop or cell phone pondering over the best way to make a purchase.  My brother actually called me out on this recently and said that from an economic perspective my time might be better spent elsewhere.  I still stand behind the fact that I enjoy maximizing my value.  However, I feel that I must stress there is quite a difference between buying cheap things and maximizing value.

I believe that anything you buy has an individual worth that is unrelated to the price that a company places on the item.  For instance, if I get a hotel at the Howard Johnson for $75, but their normal cost is $100 is this a deal?  I guess it depends on perspective.  An argument could be made that you “saved 25%”, but I tend to think paying $75 a night for a low quality hotel is overpaying by at least $25.  I would rather spend

My goal is to always maximize fiscal value without sacrificing quality.  This is a tactic that is lost on far too many people.  For example, car salesmen love to ask, “How much do you have budgeted for a payment?”.  I imagine the reason this is a common question is because it is effective.  From a psychological perspective it diminishes the true amount paid on a car, it also makes you feel good about staying within a budget.  Many people just want to know the price they pay per month and that’s it.  The most important thing to me is the total price I will pay as a function of the car’s value.   When I bought my current car 18 months ago we had not been actively looking.  We ended up getting our car for $4,000 even though Edmund’s and all the other car buying websites put its worth at about $6,500.  Even though I have driven it for over a year I am confident that I could still sell the car for 125% of the price we paid!  To me it’s not the price paid, but the value.  The last car guy that I talked to seemed utterly confused that I just wouldn’t give him the number I was trying to hit.  Once you do this you have lost all negotiation power with any salesman.  Now he knows your budget and can keep bringing out crappy cars until you take one.  Sticking too strictly to a budget keeps one from making good value investments.

 

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