Money for the Rest of Us

I have never done a sponsored post before because I know that they are usually obnoxious and not beneficial for readers. However I was recently contacted and asked to write a review of a credit cards site. I was initially skeptical until I realized that it would fit in well with one of my recent posts about How to Choose a Rewards Card. Please let me know if you find this review and the way I’ve integrated it with my previous post helpful. It will help me decide if I would ever consider doing one again. (Of course, I will always inform you of any advertisements as I believe strongly in my disclosure policy (and to the new law which requires full disclosure)).

In my post yesterday I listed 7 ways to consider rewards cards and recommending Googling “credit card rewards” to get a comparison site. One such site is Credit Card Guide and it lists credit card offers in a way that someone can easily look to see if a card meets their criteria. For instance, if you need a low APR card you search by that on the site. Another benefit to this site is that it lists cards based on whether or not you have a good credit score.

One of the downsides of this site is that they list the “Best Credit Cards” on their main page, but some of the “better” cards aren’t listed at the top. For instance, I’ve long heard that American Express Blue Cash is an excellent card because they don’t have a limit on the amount of cash back you can get in a year. (I plan on applying for this card once I max out on my current rewards card’s yearly limits.) But you have to scroll down to the bottom of the page to find this card.

Overall, this is a good site to look at when comparing rewards cards. However, finding the right rewards card is a lot like shopping for airline tickets—you should look at a lot of sites to find the best deal. More importantly, it’s about choosing the right rewards card for you.

Last time I wasn’t sure how I felt about my free sample of Consumer Reports Money Adviser. At the end of this review I’ll let you know my final thoughts.

I really liked the advice they gave about how to hire a financial planner:

“Questions to ask:

Who are your typical clients?
What services do you provide and what should I expect to pay?
Could anyone besides me benefit from your recommendations?
Will you be the only person working with me? You don’t want to be handed off to someone less experienced…”
How often will you communicate with me, and how many meetings does your fee include?”

I specifically liked CR’s recommendation that you contact a long standing client of the financial planner and ask them some questions:

“How long does it take to get a response to a question?
Have you been through a bear market with this planner? If so how did this planner respond?
What does this adviser do best?
Has anything in your relationship disappointed you?

While the piece about the financial planner was helpful, I was really perturbed by their advice about wills/power of attorneys/living trusts.

They say that that you need a will and a durable power of attorney, but you DON’T need a living trust:

“Why? A living trust allows you to place assets in a trust and control them during your life. For most people, revocable living trusts are nothing more than a rip-off. Unfortunately, some salespeople and lawyers promise that these legal vehicles will solve pratically every estate and tax problem you ever thought about. They won’t.”

First of all, this piece of advice really aggrevates me because they say that they are explaining why you shouldn’t get one, but they don’t actually explain it. They say it’s a rip off because it doesn’t solve every estate and tax problem; but this is crap. Of course, it doesn’t solve EVERY problem. Nothing does. So don’t say you are telling me why I shouldn’t get one when you don’t end up giving me any beneficial information.

Second, I am no expert in these matters, but I disagree with this advice. Why? Suze Orman says to get a revocable living trust. Normally I wouldn’t just go with whatever Suze Orman says, but she provides a very convincing argument in her book The 9 Steps to Financial Freedom in the chapter “being responsible to those you love.” Personally, I don’t yet have a will/trust/etc. set up. I’m young, un-hitched, no-kids, and not really enough assets for anyone to fight over. Though, I imagine in the next 2 years I’ll have to set something up. And when I do I’m fairly certain it will be a living trust.

Here’s another blurb that really bothered me. (This was a “tip” that was set off from the page in a colored box):

“Want a 269% return on your investment? If you can afford to invest for 5 to 10 years consider emerging markets like Brazil and India. During a 5 year period these markets returned 269 percent.”

Wow, that’s quite a return. But this tip needs about 18 disclaimers. Yes, 5 to 10 years minimum as an investment. I’d say 10-20 years. But you also need to be able to absorb this risk. Any market that can go up that quickly can come down just as fast. If you are really interested in emerging markets look for an index fund like Vanguard’s Emerging Market’s Index Fund. But don’t go throwing all your money into just one pot- like Brazil or India, who knows what will happen.

Overall, it’s hard to decide based on a free sample whether or not to buy this product. I am getting a free issue (not a sample) and book for a trial period so I will let you know the verdict then. It’s just unfortunate that Consumer Reports is putting such dramatic advice into their “free sample”.

For some reason I get all of the Consumer Reports “Free Samples.” I’ve gotten a free sample of their main magazine, their health magazine, and now their money magazine. (Trust me, I’m not complaining here, but it just strikes me as odd seeing as how I’ve never subscribed.)

I like Consumer Reports and was very curious about the advice they would give in their new “Money Adviser.” I’ll run my review of this “sample Money Adviser” in 2 parts each time ranting and raving about different pieces of advice.

First, the raves: On the cover they have “21 ways to cut your bills.” They only list 7 of the ways in the sample but I liked two of them:

1. “Save on Gas: Fill up Early in the Week.” I have long known that Monday-Wednesday are the best days to buy cheap gas, but I never seem to remember to do this. Yes, it’s only a couple of dimes per tank that I would save, but those dimes could be going elsewhere.
2. Another good tip was “Save $30 on a Dozen Long-Stemmed Roses.” Money Adviser says that by buying roses directly from a grower’s website like montereyrose.com you can save $30 compared to 1-800Flowers.com

My advice on buying flowers one is to buy them on the street. In DC there are always people on the street corners selling flowers. Last year on Valentines Day I bought 12 roses for $12. (Usually you can get 12 for $10, but they were playing the holiday mark-up.)

Now for the ranting: Tip 7 and the entirety of page 5 was about how you can save money by applying for credit cards. They recommend signing up for a store card in order to get the 10% discount when buying a lot of clothes or major appliances.

I think this is a terrible idea. Consumer Reports Money Adviser should not be encouraging anyone to apply for a large number of credit cards just to get a 10% discount. This only promotes overspending. Honestly, a half of a page is “How the Cards Stack Up.” If you can’t afford to buy something without the 10% discount, you shouldn’t be buying it at all. I would agree that it is fine to apply for a credit card every once in awhile if you will save a lot of money (more than $50 or $100) and you will be able to pay off the bill at the end of the month. CR needs to warn their readers that applying for all of these cards could actually cause their credit scores to go down.

Thus far, I wouldn’t buy a subscription based on the pages I have reviewed. I’ll let you know what my final verdict is next time.