Improved: Citi ThankYou Premier Card 50,000 Point Bonus = $500 in Gift Cards = $665 in Airfare

(Update: The Citi ThankYou Premier 50,000 point offer is back and improved, with a $2,500 spending requirement and also the annual fee is waived for the first year. In addition, you can now mix points and cash when redeeming ThankYou points at a 33% premium for travel.)

The Citi ThankYou Premier Card is now offering 50,000 bonus ThankYou Points after $2,500 in purchases within 3 months of account opening. That is enough to redeem for $500 in gift cards or $665 in airfare when you redeem through their ThankYou Travel Center. There is no annual fee for the first year, $125 after that. Let’s take a closer look at how this breaks down.

You can view your redemption options at ThankYou.com. In general, it takes 10,000 ThankYou (TY) points to redeem for a $100 gift card to retailers like Gap, Banana Republic, Barnes & Noble, Bath and Body Works, Bed Bath & Beyond, Cabelas, CVS Pharmacy, Kohl’s, Land’s End, LL Bean, Sears, Lowe’s, Home Depot, Staples, and Walmart. So with 50,000 TY points, you could get five $100 gift cards from different stores.

Want something closer to cash? For a check mailed to you, it costs 8,000 points for $50. For a statement credit, it’s 7,500 points for $75. A check mailed towards your mortgage payment or student loan (made out to your lender) costs 7,500 points for $75. You could also redeem your points for a Walmart gift card and then sell it for cash at a site like PlasticJungle.com that offers you 91 cents on the dollar. 50k points would net you $455 in cash.

Now let’s look at the advertised airplane ticket option. A good question is whether a flight booked through the ThankYou Travel Center costs the same as through any other travel site like Expedia, Orbitz, etc. I have some old ThankYou points laying around, so I went to the redemption site and found that the prices are very closely aligned to what is offered at sites like Expedia.com. I did a few quick searches for random flights, and the cost of the flight matched up with the cost in points in a 100:1 ratio. For example, the exact same flight below that cost $360 including taxes and fees on Expedia would cost 36,000 TY points.

ThankYou Travel Center screenshot:

Expedia.com screenshot:

So the pricing seems fair, no inflated prices or hidden fees. However, with this specific Premier card with the annual fee, you also get 33% more value when redeemed for airfare. Thus, 50,000 points can be redeemed for $665 in airfare, which would typically require 66,500 points. Since you can book any flight that can be found on Expedia, there are “no blackout dates”.

Update October 2011: Let’s say you found a ticket for $200 = 15,000 points, but only have 10,000 points in your account. Citi now lets you pay the difference, so in this case you can get your $200 ticket for 10,000 points and $67. This makes it much easier to use up all of your points at a 33% premium.

Some other highlights of the card:

No foreign transaction fee on purchases.Earn 1.2 ThankYou Points per $1 spent at gas stations, supermarkets, drugstores, commuter transportation and parking merchants. Earn 1 ThankYou Point for every $1 spent on all other purchases.No limits on earning points or expiration dates.Earn points for the miles you fly as well when you purchase a ticket with your Citi ThankYou Premier Card.Other smaller perks, like 200 bonus points for signing up for online account access, 200 points for paperless statements, and a 1-5% bonus on your existing point balance on your annual card anniversary.Annual complimentary domestic companion ticket. (Fees and taxes not included. Full details not available on application.)

Citi ThankYou Premier Rewards Card application link

Find more in Credit Cards, Deals & Offers | 10/21/11, 12:35am | Trackback

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Citi Checking Account Bonus $200/$400 in Gift Cards

Citibank is offering new checking account customers a bonus of either a 20,000 or 40,000 ThankYou points, worth $200 or $400 in gift cards. You must:

Open a new Citibank checking account in the Citigold or Citibank Account Package by 10/31/2011.Enroll the new checking account in Citi ThankYou Rewards.Within 45 days after account opening, initiate one direct deposit AND complete one electronic bill payment for two consecutive months.

ThankYou Point Value Recap
There are a decent number of options for these poitns. 10,000 ThankYou points = $100 Wal-mart Gift card, which you can sell for a $95.55 Amazon.com gift certificate or $91 cash at PlasticJungle.com. Alternatively, can be worth $100 towards Expedia travel, a student loan, or paying down your mortgage. More details in the Citi $500 ThankYou card post.

Citibank Account: 20,000 ThankYou Point Bonus (Easier)

$100 minimum opening deposit$6,000 minimum balance in linked accounts (checking, savings, personal, credit card balances) to avoid $20 monthly fee.

Citigold Account: 40,000 ThankYou Point Bonus (Harder)

$500 minimum opening depositThere’s no monthly service fee for the first 2 statement cycles. After that, in order to waive the $30 monthly service fee you need the combined average balance of your eligible linked accounts to be: $50,000 or more for all linked deposit and retirement accounts OR$100,000 or more across all your eligible linked Citi accounts, excluding a first mortgage with Citibank OR$250,000 or more if your Citibank first mortgage is included in the total relationship.

For most people, I think the 20,000 ThankYou point offer will be the easier one to qualify for if you have $6,000 to move over there instead of an online savings account earning only 1% APY. $6,000 would only earn $60 over an entire year, at that rate. Even it takes 6 months to get your $200 bonus, that’s a 6.67% annualized return.

I thought that the Citigold might be doable since the monthly fees are waived for the first two months, but I saw in the fine print that the points might take another 90 days to post and your account must be open until then. This option would only work well if you have a mortgage with Citi.

The bonus ThankYou Points will be credited to your ThankYou Member Account within 90 days from the end of the statement period in which you satisfy all offer requirements. New checking account must be open and in good standing at the time the bonus ThankYou Points are posted to your ThankYou Member Account.

Afterwards, if you wish, you can downgrade to the Basic Account which offers a way to avoid monthly fees with no minimum balance, if you make 5 “qualified transaction” activities per month (direct deposits, debit card purchase, bill payment, ACH payments, checks paid, ATM withdrawals).

Update: Citibank has updated their checking account to have different restrictions starting with statements ending on 12/9/2011.

Find more in Banking, Deals & Offers | 10/4/11, 5:09am | Trackback

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New: Citi ThankYou Preferred Card 50,000 Point Bonus = $500 in Gift Cards

Citi couldn’t stay way, given all the other $500 value offers still hanging around. I love that this is the new standard for a simple credit inquiry, and that basically my wife and I can score at least $2,000 in free money a year, exempt from taxes, with as little as two credit applications per year. (We actually do much better than this…) We just refinanced a mortgage and got a new homeowner’s insurance policy, so I know it’s not hurting us in other areas either.

The Citi ThankYou Preferred Card has upped their game with a 50,000 ThankYou Point bonus broken down into two parts: You get 25,000 bonus ThankYou Points after $5,000 in purchases within 6 months of account opening, and you get an additional 25,000 bonus points after another $5,000 in purchases are made within the next 6 months after that. You do not need to qualify for the first 25,000 points to be eligible to earn the second 25,000 points. See below for details on how this is worth $500 in gift cards, airfare, or a check towards your student loan or mortgage. No annual fee.

This offer is both better and worse from their last 50,000 point promo back in June. The required spending is higher, although spread out over a much longer period. You basically have to spend $5k within 6 months twice, for an average of $833 a month. However, the last offer was for the Premier card with a $125 annual fee. This Preferred version has no annual fee.

Here’s a summary of your best values for ThankYou points, in case you don’t want to slog through all the many redemption options at ThankYou.com. In general, it takes 10,000 ThankYou (TY) points to redeem for a $100 gift card to retailers like Gap, Banana Republic, Barnes & Noble, Bath and Body Works, Bed Bath & Beyond, Cabelas, CVS Pharmacy, Kohl’s, Land’s End, LL Bean, Sears, Lowe’s, Home Depot, Staples, and Walmart. Bolded are my favorites. So with 50,000 TY points, you could get five $100 gift cards from different stores.

Want something closer to cash? For a check mailed to you, it costs 8,000 points for $50. For a statement credit, it’s 7,500 points for $50. A check mailed towards your mortgage payment or student loan (made out to your lender) costs 2,500 points for $25. This works out to 1 cents per point. Otherwise, it may be better to redeem your points for a Walmart gift card and then sell it for cash at a site like PlasticJungle.com that offers you 90 cents+ on the dollar. I just checked, and a $500 Walmart gift card would net you $455 in cash or $477.75 in Amazon gift certificates.

Now let’s look at the advertised airplane ticket option. A good question is whether a flight booked through the ThankYou Travel Center costs the same as through any other travel site like Expedia, Orbitz, etc. I have some old ThankYou points lying around, so I went to the redemption site and found that the prices are very closely aligned to what is offered at sites like Expedia.com. I did a few quick searches for random flights, and the cost of the flight matched up with the cost in points in a 100:1 ratio. For example, the exact same flight below that cost $360 including taxes and fees on Expedia would cost 36,000 TY points. ThankYou Travel Center screenshot:

Expedia.com screenshot:

Quick recap. 50,000 ThankYou Points = $500 in gift cards, ($500 Walmart Gift can be easily sold for $450+ online), $500 to pay down your student loan, $500 to pay down your mortgage balance, or $500 in airfare at the same rates as available at Expedia.com.

Find more in Credit Cards, Deals & Offers | 9/23/11, 5:00am | Trackback

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The Money Diaries: The 29-year-old business student who’s juggling over 10 credit cards

Today is another post in the Money Diaries series, which is based off New York Magazine’s Sex Diaries. We’ve collected stories from real people about their spending habits over seven days, anonymized them, and posted them here.

11:38 a.m.: Wake up late. It’s nice to not have any work or school…yet. I just finished my summer internship the previous week, but my second year of business school starts in just 6 days. Yikes!
12:30 p.m.: Ate lunch at home and save some money. It’s a nice perk of living at home with the parents before I move back East.
1:00 p.m.: The Dow goes down 419 points. Lots of stocks are looking very cheap, it’s time like these I wish I had some cash still. Even though there’s a lot of uncertainty now, I’m confident in the fundamentals of the companies I invest in so this is a great opportunity to pick up some stocks on the cheap. I have about $75,000 in student loans which I plan on paying back once I graduate. The rates are so low now so I consider it a smart financial move to take on loans while I keep my savings invested in the market.
3:41 p.m.: Purchase roundtrip tickets back home for a wedding for $366.80 using Hipmunk, which is a pretty neat airfare comparison site. Even though the wedding means I’ll be returning home to the Bay Area only 9 days after I start school, I couldn’t imagine not attending. At least my Citi credit card has a promotion for 5% cash back on air travel. I have 10+ credit cards, but primarily use 3 depending on the cash back rewards (one for general purchases, one for eating out, and one for gas). I pay off my balances each month and watch them all like a hawk. (It’s kinda fun). I primarily use a credit union for my banking needs since it offers really great terms, but I keep most of my savings in my trading account.
4:00 p.m.: I consider getting my car professionally cleaned since a friend’s dog got carsick and threw up in the backseat of my car over the weekend. I reason that it’s not that bad so I clean it myself.
9:05 p.m.: Running a little late for a second date with a girl I just met. I originally wanted to take her out to dinner, but she’d already eaten so we go to some fancy bar on Sand Hill Road. A glass of wine for her and a martini for me (I was in a James Bond mood) set me back $40 ($30 + $10 tip). I’m not really a bar guy so I’m not really sure how much to tip, but I figure $10 is more than enough. If only they made $6 bills, that would have been ideal.
11:16 p.m.: After the date, I head over to Lucky to pick up some Jelly Bellies for $9.39. I have plans with a “friend” the next day and she mentioned her favorite flavor so I got her a bag of Green Apple. Dating can really add up.
11:26 p.m.: Even though I usually try to empty my tank before I leave the area for extended periods of time, I fill up my tank for $46.70. Good thing my American Express card gives me 3% cash back on gas.

10:46 am: Wake up to a text that my “friend” is too sick to meet up and she reschedules to the next day. Sigh.
11:57 a.m.: Call Dell about an email I had received about getting a $75 Gift Card for purchasing an extended warranty on my laptop. Even though I received the offer after I had already purchased the warranty, I’m a longtime IWTYTBR reader and was just trying to channel my inner Ramit to see if I could swing the gift card. It turns out you have to spend $200 to qualify and I only spent $180. That’s enough to deter me from pursuing it further.
4:30 p.m.: Saw a deal on Slickdeals.net for $65 off $100 ($20 off $50 when using AMEX, $20 off $50 for checking in on foursquare, and $25 off $100 Coupon) and I head over to Sports Authority to buy a tennis racket since I’m trying to take up tennis. At the store, I look up prices and ratings using the Amazon mobile app and end up getting a $140 racket for $84.48 after tax. Score!  My foursquare check-in gives me an additional $25 in cash cards which I plan to use in conjunction with another coupon I brought. I browse for more items and end up losing the cash cards. I look around everywhere for them, but they’re nowhere to be found. I share my plight with the manager and he rummages through a pile of coupons. He doesn’t find the cash cards, but gives me a $15 off $50 Coupon. Even though it’s a nice consolation, I still lament the loss of the cash cards. I use the $15 off Coupon to get 2 pairs of insoles ($20 each) and a 3-Pack of socks for $43.28.
6:00 p.m.: Go to Fry’s and return 2 HP Wifi I mice bought online for $32.45 in credit. I liked the idea of not having to plug a receiver into my laptop so much that I got two. Unfortunately, I didn’t like the feel of the mice in my hands so I had to return them. It’s just one of the perils of online shopping.
8:25 p.m.: I get a mouse I’m familiar with on Amazon for $18.79.
9:00 p.m.: My parents have left for Reno already, but my Mom has prepared food to sustain me over the weekend. It’s a quiet evening as I stay in and watch Hulu and Netflix and eat leftovers. Is that lame for a Friday night?

11:50 a.m.: Wake up and go to my local credit union to deposit the last paycheck from my internship. I look at the earnings summary and regret withholding so much since I only worked for 2 months and don’t anticipate paying much in taxes this year. That would have been a nice chunk of change to add to my trading account.
12:00 p.m.: Go to Chase to open an account for a $150 bonus. I know Ramit would probably advise against these money making schemes, but it would probably only take me about 30 minutes of hassle since I automate the process and would just close the account after I get the $150. I leave when it turns out it requires direct deposit for which I have none.
2:20 p.m.: I get the bright idea to try indoor skydiving. After confirming with bar girl that she can make it, I make reservations for 2 for $133.85.
3:05 p.m.: My friend texts me that she’s in the area and can help me shop for sunglasses which we’ve been meaning to do. I’m fashion-challenged so when it comes to stylish clothes and accessories, I have female friends pick those out for me. Even though the items they pick are usually not on sale, the value of their tasteful opinions is worth paying full price for the confidence it gives me. I end up getting Ray-Bans for $172.12. I buy her a snack at a fancy French bakery for $17.40 to thank her for her help.
6:30 p.m.: Jelly Belly girl is sick still and cancels on me again so I get a much-needed haircut instead. $15 including $3 tip.
7:15 p.m.: Another low-key night of Netflix at home.

11:33 a.m.: Bar girl calls and says she has to work later that night and won’t make it to indoor skydiving. We’ll meet up for dinner instead at a tapas place I mentioned to her earlier. I call the indoor skydiving place and put it on hold for an additional $20 charge.
12:30 p.m.: Eat lunch at home.
4:50 p.m.: Go to Walgreens and buy a gallon of water for $1.89 for an early evening basketball session. I usually buy 5-6 Arizona Iced Teas, but this will save me money and from consuming empty calories.
8:00 p.m.: Dinner with bar girl comes out to $90 ($18.01 tip). We have a nice time, but the wine clouds my mind and I probably tipped more than I intended. I use my Chase Ink card which gets 3% cash back on dining out.

10:20 a.m.: It’s my last day before I leave for school so I made some goodbye plans with friends. The first stop is Jamba Juice since I won’t have much chance to go when I’m in school. Nice, my friend pays for my Powersized Strawberries Wild with Immunity Boost. I am a Jamba Juice monster, and it only lasts 10 minutes.
10:35 a.m.: In-N-Out is another West Coast favorite that I will miss, and I pay $7.14 for myself and him to return the favor.
11:30 a.m.: We head over to a ramen place and meet with another friend. It’s cash only, and I’m the only one with cash (how convenient) so I have to pay for everyone ($44). Since I’m already full from In-N-Out, I get most of it to-go.
12:40 p.m.: Rush over to watch Conan the Barbarian. Since I paid for lunch, my friend pays for my ticket. Even though his lunch was probably twice the price of my movie ticket, what’s a few bucks between friends?  Conan is not very good.
3:50 pm: Return clothes I had bought online to Macy’s ($165.57) and Bloomingdale’s ($298.77). I purposely buy more when I shop online to make sure I get the right size (and qualify for free shipping).
7:25 pm: Rush over to a goodbye dinner with friends, $15. Show off my new sunglasses even though it’s indoors and nighttime.
11:45 pm: I guess I don’t want to leave California, and I miss my flight. I get it rescheduled to another airport which means I’ll have to rent a car to get to my final destination. Then I scramble to reschedule picking up my apartment keys and my appointment with movers at my new place. I make a makeshift pillow out of luggage to sleep on as I wait for my newly rescheduled flight.

4:00 a.m.: Check baggage ($60). It’s cheaper than shipping cross-country.
4:45 p.m.: Get an overpriced panini at the airport, $8.12. Then I rent a car even though they quote me $200. It seems there’s some NASCAR event that week that’s driven up all the prices.
8:40 p.m.: I get 3 value items ($3.87) at Arby’s. Then I maximize the use of the rental car by going to Walmart to pick up apartment supplies, $163.09, which I’ll split with my roommate. Then another $36.59 on fruit and snacks at the grocery store.

10:35 a.m.: When I return my rental car ($194.88), I find out they charged me for all the extra services (loss-damage, etc.). I wonder if that’s standard policy when you don’t return the car to the same location. I’ll have to look into that.
1:15 p.m.: I’ll sign up for the school dining card later to get a 13% discount on the cafeteria. For now, $3.99 for soup.
6:00 p.m.: Pay movers $185. It only takes 1 hour, but the minimum is 2. Tip $15 anyway since they were students and could probably use the money. I’m splitting the costs with 3 other people anyway.
08:00 p.m.: Splurge on dinner with new roommate at the best Indian restaurant in town, $24. Yum.

Total spent: $1,816.43
Total deposited: $3,032.94
Total returns: $496.79
Meals at home: 7
Meals out: 8
Dates: 2
Cancelled Dates: 2
Indoor skydiving: 0

Lots going on since I was meeting up with people before I left, dating and preparing to move back to school. I used to try to adhere to $10 of discretionary spending (including eating out), but now I’m comfortable with spending based on value derived from the good or service. My only regrets are not taking advantage of the market declines more and missing my flight since all that scrambling cost me a bit of money. Oh, and leaving California, the greatest place on Earth.

* * *

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Homemade Gift Series #8: Personalized Cards and Stationery

A few years ago, Rachel gave my wife Sarah a wonderful Christmas gift: some beautifully-constructed stationery with photos of her own choosing placed on the front of note cards, along with envelopes to mail them in. Here are three examples that Sarah has kept:

As you can see, there’s some variety in the cards – the border colors changed, some of the photos are in color and some are grayscale, some depict nature and others depict family. The full set, numbering about 25 or so, included a wide variety of pictures and colors.

Simply put, this was one of Sarah’s favorite gifts she’s ever received. Some of the cards are nice enough that they could easily be framed for home decorations. Others are so aesthetically pleasing to Sarah that she simply can’t bear to part with them.

When we first started thinking about doing homemade gifts for people this year, these cards were the first thing that Sarah mentioned. We should make a batch of them for a great gift for someone.

Our first step was finding the elements that we needed to pull this off. The things we needed most were the material for the cards themselves, some additional craft paper for the borders, and the photos we wanted to use.

For the card material and the craft paper, we simply checked flyers and waited patiently for a sale. We watched craft stores like Michael’s and Hobby Lobby, as well as art supply stores and paper stores. Eventually, we found some huge discounts on just the items we wanted, picking up big piles of both craft paper and cards for a pittance. However, even if you do buy them at face value, the cost for 20-30 cards’ worth of material is $10-15 if you shop around.

What about the pictures? This is something I’ve been dealing with lately and deserves a full post on its own. However, my rules of thumb are this:

If you need just a picture or two, home printing is probably worth it.
If you’re printing ten or fifteen, the local department store is probably the best place.
If you’re ordering a lot of pictures (enough to get free shipping – say, 100+), there are online sources that take the cake.

Now, what about assembling a card?

Here, I just chose a black and white snapshot of my youngest son (actually taken by my niece). The simplest thing to do, of course, would be to simply paste it to the front of a card without any border at all. It’s quite simple and works, but I want to add a bit more panache to it.

My next attempt was to add a brown frame to the picture, using craft paper and scissors. Since the card is 5? by 7? and the picture is 4? by 6?, I cut the paper at 4 2/3? by 6 2/3?, making a thick brown border and a thin white border around it.

Do you like that one? I did, but I wanted to keep going.

I then cut out a tan craft paper rectangle measuring 4 1/3? by 6 1/3?, then placed that between the dark brown rectangle and the photo, creating a “multi”-border effect that I quite liked.

As you can see, there are infinite options here and you can make whatever you like – different colored cards, different colored borders made out of craft paper, different photographs. They all result in different effects.

What pictures should you choose? I would suggest using prints that would have some personal meaning for the recipient: family members they care about, locations that have meaning to them, and things like that. You can also choose some of your best natural shots as well to give the card recipients some variety in the pictures.

Another note: I think the cards look better if the edges on your own work aren’t absolutely perfect, so don’t obsess on straight perfection. A little tiny bit of skewing adds a wonderful handmade flavor to the cards that can’t be duplicated.

One final thought: if you send out holiday cards to your family and friends, consider making some of these instead. They will really stand out from the pack.

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Credit Cards vs. Debit Cards: A Comprehensive Comparison

"Credit cards and debit cards have the exact same benefits."

I've heard this statement for a long time, but I wanted to test it out to see if it is true. Unfortunately, we often pass along information we received because we either assume it to be true, or we've heard it from a single reputable source.

When you use a credit card, the credit card company essentially extends you a loan for the amount purchased. You typically sign for the purchase, and when they send you a bill, you are obligated to pay your balance. If you do not, the credit card company will charge you interest rates and fees.

A debit card is associated with your bank account. When you make a purchase, that exact amount of money is taken out of your bank account within days. When you use a debit card, you typically use a PIN number.

The cards look the same, are scanned the same, but are very, very, different.

Which offers the best card protection benefits? Credit Cards.

Credit card purchases are covered under the Fair Credit Billing Act. The act states that when you purchase something with a credit card, you have no liability for fraudulent purchases, damaged goods, and products that were never delivered.

If you make a purchase with a debit card, the Electronic Transfer Act does provide some protection during a dispute or error. If you notify your bank within two days, your liability is limited to $50. However, between two days and six days your liability could increase to $500. Waiting more than six days could mean you have no coverage.

Currently, Visa and MasterCard do have policies in place to protect consumers. MSN reports:

Visa and MasterCard also offer zero liability for unauthorized transactions made over their networks.

But, Visa does have an exception for negligence, and MasterCard also has an exception for those with delinquent accounts or who have reported unauthorized use within the last two years.

Remember, debit cards rely on card policies for protection, while credit card liability is the law.

Which offers the most convenient way to resolve a problem with purchases? Credit cards.

In the case of debit cards, MSN Money claims

Consumers must try to resolve the dispute with a merchant on their own before they contact their debit card issuer. "The merchant may want to make some other arrangement like a store credit or a gift certificate or some other thing," says Hogarth, of the Fed. "That isn't exactly putting money back in your account."

My experience: I recently purchased a product online with my credit card. The item has a full 60-day money back guarantee, but after four emails were not returned, I made a call to my credit card company. Within a day, the money was put back into my account and the credit card company took full responsibility. It sounds like the process would not have been so simple with a debit card.

Which is better if you work for a company that uses a reimbursement system? Credit cards.

With a credit card you have the ability to delay or float payments. This is especially convenient when you use a reimbursement system with your employer. You can make the purchase today and you have 30-40 days until the payment is due. For anyone who makes purchases on behalf of their company, a credit card certainly carries the advantage.

Which is better when renting a car? Credit cards.

Most major credit cards offer an auto rental collision damage waiver. In addition, several major car rental companies do not accept debit cards as a form of payment.

My experience: Last year, our family was in Australia and I wanted to use a debit card to rent a car. In order for the company to accept my debit card, I would need to let them to put a $500 hold on our checking account. Since we planned to spend cash for purchases on our vacation, I wasn't sure that we had enough available balance for the hold so I used a credit card. When I returned the vehicle, they billed the charges on to the debit card. On that occasion I was glad to have a credit card in my wallet.

Which is better for avoiding credit card debt? No brainer — debit cards.

This, by far, is the strongest argument in favor of the debit card. If it helps you control your spending and helps you avoid credit card debt, then that one feature alone is as precious as gold. If you currently have credit card debt or are trying to get out of credit card debt, then cutting up the credit card and using a debt card is probably one of the smartest decisions you can make.

Which provides more rewards? Credit cards.

Credit card rewards are one of the primary reasons why people use credit cards. Anti-credit card people say that credit cards don't really offer valuable rewards, but I'll let you be the judge.

PerkStreet Financial is an example of a bank that is now also offering cash back for debit card purchases.

Which is best to use overseas? Depends on your particular bank and credit card.

Depending on your bank policy and your credit card foreign currency exchange rate, either one might be better. In my case, my ATM charges a 1% fee for use overseas, but I do have a Schwab Visa card that offers a 0% foreign currency exchange and 2% cash back. However, it is not uncommon to pay a 3% foreign currency exchange fee with a credit card. If you plan to travel overseas, you will need to explore the best way to exchange foreign currency before heading on your trip.

Which is more expensive? It depends on use.

Both debit cards and credit cards have associated fees. Looking at one of my credit card fees and finance charges, if I miss a payment, I'll pay between $15-$39. If I don't pay my balance in full, the default APR (annual percentage rate) is 23.99%. Yes, that is expensive.

ING Direct claims the average bank overdraft charge is $30. However, a bank can also manipulate overdraft fees so they really stack up. Debit cards can be expensive too.

A person who overcharges her account five times in the month and a person who pays a month of interest and late payments are probably paying a similar amount in fees.

Moral of the story: Both are extremely expensive to use if you don't plan to learn how to budget and properly manage your finances. If you don't track your spending well, both could mean a financial train wreck is waiting in your future.

Ultimately, it comes down to this last question.

Do debit cards feel more like real money? I'm undecided.

Creditcards.com reports

A recent TNS Financial Services Consumer Credit Card Program Study indicated that over 60 percent of consumers prefer using debit cards to credit cards as a payment vehicle, because debit feels more like "real money."

Ultimately, I'm yet to be convinced.

Does sliding a plastic ATM card feel more like money than a plastic credit card? I've personally never felt the difference. Do you?

Last year I totaled all my credit card purchases to find out if I really spend more with credit than cash. I was actually surprised by the results because I saved money by using a credit card. As such, I'm guessing we really can't answer this question until someone sits down and does some real research.

Choose whichever method best helps you manage your money, but realize credit cards do clearly have more benefits. The risk may outweigh the benefits, so I'm not suggesting you use a credit card. Also, you might consider comparing the cost of paying cash versus either a credit card or debit. Just understand the differences, and then make an informed decision.

What are your thoughts regarding the true differences between credit cards and debit cards?

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How to Build Credit Without Credit Cards

With fall approaching and students going to or returning to college, you'll start to see more credit card marketers talk about how it's important that students start building credit early. When the average household credit card debt in August 2010 was nearly eight thousand dollars and the average student loan at over $28,000, students are facing enough debt as it is.

How do you build credit without credit cards? The first step is to be added as an authorized user on your parents credit card account. You can piggyback on their credit performance for a short time, thus establishing something in the near term. It's not as good as establishing your own line but it's better than nothing.

Next, open a bank account or credit union account. This won't have any impact on your credit score, this information isn't reported to bureaus, but it will start a relationship with that bank or credit union so that it will be easier for you to get a loan from that bank later on. They can see a history of responsible behavior, even if it's not reported to the bureaus.

Get an installment account, such as a car loan, mortgage, or personal loan. These, and revolving accounts such as credit cards, are reported regularly to the bureaus and can be used to build credit. If you have no history, you may need a co-signer, such as your parents, as a way to get a better rate.

That being said, building credit is easiest when you have a credit card. If you can use a credit card responsibly, by paying it off each month on-time, then you should open one. If you aren't sure if you can take on that responsibility, don't. A good credit score isn't some magical key into a financial nirvana, it's just a number.

Jim writes about personal finance at Bargaineering.com.

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