As featured in The Wall Street Journal, Money Magazine, and more!

Search: heat

British Airways Visa Signature Card from Chase Review

This article was written by in Credit. Add a comment.


If you’ve ever flown British Airways long-haul from the U.S. to London, you’ve probably lingered when walking past those sleeper seats in the “Club World” section. They don’t just recline, they lay fully flat. You won’t run the risk of a small child kicking the back of your chair for hours before you endure the endless escalator rides at Heathrow. Thanks to this spring’s special offer from Chase’s British Airways Visa Signature Card, you can treat yourself to this luxury for about the same price as a standard coach class ticket.

Right now, Chase offers a staggered signup bonus for new British Airways Visa Signature cardholders. British Airways calls their frequent flyer miles “Avios,” and you’ll earn 50,000 of them as soon as you use your new Visa card. Make $10,000 in purchases, and BA credits your Executive Club account with 25,000 more Avios.

Land your final bonus of 25,000 more Avios once you’ve cleared $20,000 in purchases during your first year. After that, you can spend 80,000 Avios and about $1,100 in upgrade fees to book yourself that luxury flight.

Saving Avios and flying on the cheap

You don’t always have to splurge on a sleeper chair, though. Your 100,000 bonus Avios are plenty to cover the cost of two “World Traveller” round trip base fares between London and any of BA’s stateside hubs in New York, Philadelphia, Chicago, and Washington, D.C. This isn’t a discount airline you’re flying, either. British Airways’ coach seats on these flights resemble other airlines’ business classes. You get a private entertainment system, hot meals, and impeccable service from a flight crew that only gets testy if you don’t give them the chance to serve you.

The special smart chip you won’t see on other travel credit cards

Only a handful of American credit cards include the embedded smart chip that you’ll need to make routine purchases in Europe. Chase puts that “EMV chip” front and center on the British Airways Visa, and you’ll appreciate it when your travels take you off the beaten track. To combat fraud, many European merchants won’t accept American magnetic stripe credit cards outside of common tourist areas. The EMV chip saves you time and hassle, especially if you want to use any automated parking meters or vending machines during your visit.

No foreign transaction fee

Your $95 annual fee buys you another important perk that you’ll find on few travel rewards cards: no foreign transaction fee. Chase makes the process easy for frequent U.K. visitors: charge your card in pounds sterling at no extra fee, while enjoying Chase’s best currency conversion rate for the day of your purchase.

Rewards and risks of airline credit cards

Of course, British Airways is still a traditional airline, with a typical frequent flyer system. Regular BA travelers say that the 2012 Olympics and London’s business boom have made reward seats scarce, unless you plan your free trip far in advance. You’ll also have to pay redemption fees, airport service fees, and other taxes on each reward ticket.

If you value flexibility in a travel credit card, consider the Capital One Venture Rewards Credit Card instead. You’ll earn as much as 2 percent back on your everyday purchases, in the form of statement credits that you can redeem against any of your travel expenses. Still, given the high price of transatlantic airfare, the British Airways Visa Signature offers tremendous value, if you’re willing to jump through a few hoops.

To take advantage of the 10,000 Avios offer, apply for the British Airways Visa Signature Card from Chase today. You will need excellent credit in order to be approved, and be aware of the $95 annual fee.

{ 0 comments }

Get to Work If You Want to Be Rich

This article was written by in Wealth and Affluence. 12 comments.

How much time do you spend in front of the television, socializing with friends, or watching movies? I freely admit that I spend too much time watching television. There are certain television programs that entertain me, and particularly during stressful times in my life, I need some type of outlet that makes me laugh, raising my spirits. As a single man living alone, I don’t have the opportunity right now to unwind at the end of the day by spending time with family.

This is, of course, an excuse or a rationalization of why I don’t just spend more time working. A new study, wherein the researchers’ intent was to reevaluate whether the consumption gap between the wealthy and the poor grew alongside the income gap between 1980 and 2010, also has indicated a correlation between education level and leisure time. The authors of the study then make the connection from education level to wealth, when asked by the Wall Street Journal.

Low-educated men saw their leisure hours grow to 39.1 hours in 2003-2007, from 36.6 hours in 1985. Highly-educated men saw their leisure hours shrink to 33.2 hours from 34.4 hours… Low-educated women saw their leisure time grow to 35.2 hours a week from 35 hours. High-educated women saw their leisure time decrease to 30.3 hours from 32.2 hours. Educated women, in other words, had the largest decline in leisure time of the four groups.

Movie marqueeThe higher a person’s level of education, the less time they spend on leisure activities like watching television, going out to see movies in a theater, socializing with friends, talking on the phone, and playing games. The study authors content that as unemployment has grown at a higher rate for lower-education individuals, that factor has contributed to about half of the change in leisure time for that segment of the sample.

How do we get from a measurement of education to a measurement of wealth? The study authors contend that education is a proxy for wealth, as level of education tends to correspond with income. There are probably some pieces missing in this leap from education to wealth in general, but if nothing else, a higher education opens more opportunities for traditional methods of earning income. (There are always counter-examples, with Ivy League dropouts forming companies that go onto being worth many billions of dollars, but that is exceedingly rare.)

No one is pointing to a causality — that working more and spending less time on leisure activities alone — will result in an increase of income. But if there is a correlation, it makes sense. There is, however, a perception that those at the top of the corporate ladder, earning more money, do not “work harder” than rank-and-file employees. On the job, employees during the grunt work may work just as hard or harder as an executive whose primary function seems to be attending meetings and farming out work to his or her underlings while consolidating reports and presenting reports to the Board of Directors, for example. This study doesn’t look at how hard one works at the workplace, but at how much leisure time is used outside of the office.

There is a message: get to work. Those with higher incomes spend less time on activities outside the office that aren’t productive. Family time is excluded, of course. Highly-educated individuals (who we’re assuming are also earning higher incomes) are more likely to spend time at home cooking and caring for children.

Do rich people work harder? Can less time wasted on leisure activities like watching television translate to higher income?

Photo: angeloangelo
Wall Street Journal, National Bureau of Economic Research

{ 12 comments }

Sprint in $300 Million Tax Fraud Lawsuit

This article was written by in Consumer. 4 comments.

In order to offer better prices to customers, Sprint has allegedly under-collected and underpaid New York State sales taxes by $100 million. If the Attorney General’s allegations are true, Sprint could end up owing the state government as much as $300 million or more due to underpayment penalties. Sprint is denying the charges, claiming they’ve paid all taxes as legally required to do so.

The Attorney General, Eric Schneiderman, recognizes that if the suit is successful and Sprint must pay the penalty, it would be difficult for customers to escape the downstream effects. Just like any business, if Sprint is faced with an unplanned expense, they’ll need to come up with the difference elsewhere. That’s where customers who pay for services can help. Schneiderman says he wants the company, not the customers, to cover the cost of paying the back taxes.

That money is going to have to come from somewhere, however, and it’s not going to come from a reduction in executive salaries. While the Attorney General might have good intentions and companies should not be able to get away with deliberately and knowingly cheating on tax reporting, collection, and payment, I don’t see any way where the “company” can be penalized without hurting customers, shareholders, and employees.

Shareholders are already hurting; as of writing this article, the stock price is already down more than 4 percent. $300 million is a significant expense, even for a company that earned a revenue of $33.7 billion last year. The company actually didn’t profit on paper in 2011, and that certainly makes a $300 million fine sting more.

If a company over-collected and overpaid taxes, customers would be calling for refunds. A class action lawsuit would demand restitution. In this hypothetical situation as well as the actual lawsuit Sprint faces for underpayment, the set of customers is the unintentional third party of fraud. In both cases, the customer ends up suffering in the long run. Class action lawsuits barely benefit customers. The lawyers seem to do well, though.

In Sprint’s statement, the company claims they’re protecting their customers:

… [W]ith this lawsuit, the attorney-general’s office is claiming New York consumers, who already pay some of the highest wireless taxes in the country, should pay even more. We intend to stand up for New York consumers’ rights and fight this suit.

I find it hard to believe that any for-profit company has any interest in “standing up for consumers’ rights.” If Sprint doesn’t like the tax laws, they should do what all companies do: lobby for tax law changes that benefit them more. Of course, that wouldn’t work, because then Verizon Wireless and AT&T could also benefit from lower taxes. If the allegations are true, the company’s actions have nothing to do with Sprint’s defense of lower taxes for consumers. It’s about using any tactic possible, even illegal, to fight in a competitive market.

Give me a break. Does anyone really believe corporate marketing-speak?

Are you a Sprint customer? If so, did you choose Sprint due to their lower monthly service fees? Would you remain a customer if the fees increased — a likely result of this lawsuit, whether successful or not?

Financial Times

{ 4 comments }

IRS Looking For Your Offshore Bank Accounts

This article was written by in Taxes. 7 comments.

The more money you have, the more likely you are to cheat on your taxes. The rich have more opportunities to try to hide assets and income from the Internal Revenue Service, particularly through offshore bank accounts. In the United States, banks are required to report income earned by their customers on savings and investments. Many taxpayers are familiar with the 1099-INT and 1099-DIV forms for interest earned and dividends respectively. The I.R.S. can somewhat easily match the 1099 forms provided by banks with the 1040 income tax return forms filed by taxpayers to find discrepancies.

Banks located outside the United States, depending on their local laws, may not be required to provide this information fully to the United States government. Thus, the I.R.S. might not know if a taxpayer is earning money in an offshore account, making it easy to “forget” to include that income when filing taxes. Of course, this is fraud, and a bad idea.

The government is getting better at convincing banks located in tax havens to comply with I.R.S. requests for information about customers who happen to be taxpaying citizens of the United States. UBS, the largest bank in Switzerland, has ended its offshore “secret” banking service in Switzerland as a result of a settlement of a federal investigation. And this year, the I.R.S. is requiring certain taxpayers to file a new tax form, Form 8938, disclosing offshore assets and income.

Here are the certain taxpayers who must file this form:

  • Unmarried taxpayers or married taxpayers filing separately living in the United States whose total offshore assets at the end of the year total at least $50,000 or whose offshore assets exceeded $75,000 any time during the year. Married taxpayers filing jointly living in the United States have thresholds that are double the amounts for unmarried taxpayers.
  • Taxpayers living abroad whose total offshore assets at the end of the year total at least $200,000 or whose offshore assets exceeded $300,000 any time during the year.

Taxpayers who are otherwise not required to file an income tax return are not required to complete this form, either. The guidelines for determining who must file Form 8938 and which assets to report can be a bit complicated, so it’s best to read the rules from the I.R.S. and speak to an accountant familiar with the new law for advice.

The penalties for incorrect information of Form 8938 are steep, and even small errors can result in significant fines. Failure to file the form when required to do so can result in a penalty of $10,000, and if you continue to ignore requests from the I.R.S. to file, the penalty can reach $50,000. Even if you live offshore and your country has a law preventing you from disclosing your financial information to the United States, you can’t avoid the reporting requirement and penalties. If you file the form but underpay your taxes even due to an error on Form 8938, you will be charged a penalty of 40 percent of your underpayment.

If the government can show you committed fraud in underpaying your tax, the penalty will increase from 40 percent to 75 percent of your underpayment. Those penalties are additional to paying what you do owe, according to the I.R.S., plus interest.

The I.R.S. is also threatening criminal penalties for taxpayers who fail to file Form 8938, fail to disclose all offshore assets, or underpay their taxes.

If you look at Form 8938, you will see that reporting requirements for offshore assets and income are different than requirements related domestic bank accounts and investments. In general, you only need to report income from domestic bank accounts and investments, but with offshore accounts, the I.R.S. wants to know the value of your assets, not just your income.

As David Jolly points out in The New York Times, the information you report to the I.R.S. on Form 8938 duplicates a separate reporting requirement. Taxpayers who have more than $10,000 in offshore bank accounts must already file a Report of Foreign Bank and Financial Accounts (FBAR). The FBAR is used by the United States Treasury to identify money laundering and terrorism funding, so the I.R.S. is already receiving some of the information it needs. Form 8938 ties this information to taxpayers’ income tax returns. If the government decides to use the information filed on the FBAR to cross-check the information included on Form 8938, it could potentially identify more income tax evaders.

New York Times

{ 7 comments }

When Your Friends Become Social Sellers and Multi-Level Marketers

by Flexo
4385857854_f4fdbab417_b[1]

I can’t completely fault companies like Amway, Mary Kay, and Lia Sophia. They know that friendship results in two important qualities: trust and guilt. These two qualities are important to companies because they make the process of selling products much easier. I find it relatively easy to politely decline — and hang up on if ... Continue reading this article…

51 comments Read the full article →

How to Invest in a Broadway Show

by Flexo
Broadway show

If you’re interested in theater and have money you don’t mind losing, you may consider expanding your horizons by investing in a Broadway or off-Broadway show. Be prepared to lose money, though, because according to a variety of producers, only one show in five breaks even. When a play or musical is in the planning ... Continue reading this article…

9 comments Read the full article →

Buy a Humidifier to Save Money

by Flexo

This weekend, I purchased a humidifier supposedly large enough to affect the relative humidity level throughout my apartment. I have a loft area, making heating and cooling my apartment evenly difficult, and I figured I’d need a large humidifier to affect the bulk of my square-footage. I purchased the humidifier mainly to reduce static electricity. ... Continue reading this article…

11 comments Read the full article →

The Best Cash Back Credit Cards, May 2012

by Flexo

Cash back credit cards can help consumers practice responsible spending while earning a little extra for their efforts when used properly. It wasn’t long ago that the best cash back credit cards were offering rewards as high as 5 percent for all purchases, but that is unfortunately no longer the case. Today’s cash back credit cards ... Continue reading this article…

135 comments Read the full article →
Page 1 of 2212345···Last »