Why not make money on your groceries?

First, Happy Bastille Day, here’s Raoul Dufy’s 1905 ‘July 14th at Le Havre’ (Fridart Foundation):

Dufy cropped

Why pay more if you don’t have to?

A friend of mine is travelling in Europe.  Before he left, we were discussing using credit cards while travelling. As it turns out, he has credit cards that charge foreign transaction fees.  Ouch, that’s pay to pay.  Not only that but the credit cards gave him zero cash back.   Let’s examine how to avoid that retirement (or pre-retirement) bad surprise and even turn it to our advantage.

As a retiree, you’ll want to stay within your budget and as a pre-retiree, who can still get raises, you’ll want to increase your retirement savings. Properly used, credit cards may be able to help with that by:
-paying you cash back when you make purchases
-not charging you foreign transaction fees when you travel
-providing other benefits like extended product warranties, travel emergency assistance, and your FICO score.

Not for credit card souvenir purchases – a gold marten head (Northern Italy, 1500’s) from the Musee de Cluny in Paris:

Early Famous Dave's.

Examine your credit

First, examine your credit.  Do you pay off your balance in full monthly?  Do you at least pay off all new charges in full monthly?  If yes, you’re a candidate for credit cards to pay you.  (If not, please Google techniques to pay off credit cards so you can avoid paying the bank before yourself.)

Check out your cards

Sign on to your card website(s) and look at your cards’ benefits. Are there fees that you are paying that you should not be – annual fee, foreign transaction fees?  Are you getting cash back for purchases?  If you’re paying fees or not getting cash back, it’s time to examine your cards, unless you really love the credit card issuer and want them to make more money.  Legitimately, you may have an affinity card (Friends of the Siamese Cat Foundation! spot cropped ) that has costs and they benefit – no problem as long as you have made an informed decision.

Does your card help you by providing:

  • cash back
  • no fees
  • product warranties
  • travel assistance
  • chip/chip and pin?

Look for card advantages

Cash back can be a big one. Capital One is 1.5% on everything.  Costco Visa gives 4% on gas, 3% on restaurants and travel (travel when purchased through their agency), 2% at Costco (makes that hotdog and pop $1.47 instead of $1.50!), and 1% on everything else.  Amazon Visa is 5% on Amazon purchases, 2% on gas, restaurants and drugstores, and 1% on everything else.  Discover has 1% on everything, but 5% on quarterly specials. USAA Visa has a chip/pin combo which can be helpful when traveling in Europe.

None of the above have foreign transaction fees.  Interesting fact, I ordered some delicious essential Waitrose sugar-free bitter lemon juice for Mrs. NoSurprisesRetirement from the British Corner Shop , used the wrong card and ended up with a foreign transaction fee. Ouch – that card is now gone.

The cards? You can’t handle the cards. (A play on An Officer and a Gentleman)

What can you handle? An extreme carder (is there such a word as carder?) would have:

  • Amazon card for 5% at Amazon and 2% at drugstores
  • Discover card for the 5% quarterly cash back special
  • Costco card for 4% on gas (anywhere!), 3% at restaurants, 2% at Costco
  • CapitalOne for 1.5% on anything not on the above
  • USAA for the chip/pin combo.

What’s in your wallet?

You’re probably not an extreme carder, so figure out what is most important to you and get cards that pay you for using them.  Even if you just had one paying you back 1% and not charging foreign transaction fees, that’s a win.  Remember, perfection is the enemy of the good.

Be careful

Even if you have cards with benefits, please do not get carried away. Stay within the budget, pay the balance off monthly, and enjoy that percent.

Actions you can take include:
-Review your budget and make sure you’re either not paying interest on credit cards every month or you have a plan to get to not paying interest.
-Examine your cards and see if you are getting benefits or paying fees that you don’t need to pay.
-Determine how much of a ‘carder’ you want to be and obtain cards to optimize your  percents back and no fees.  Cancel cards you will no longer use.
-Use the card website to check your FICO credit score monthly.

And if you have not seen the “Why you should read this blog…WIIFY” post, it’s here

Questions, comments, or suggestions for retirement surprise areas you want to know more about?
-Leave a comment
-Use ‘Contact’, above, to send an email.

It’s about time…

Retired or working, you have expenses.  Some are optional (coffee at the barista’s place, new pine tree air fresheners for the car) and some are required and non-negotiable (water, electricity, gas, property tax).  Good news, some expenses are mostly required but are negotiable, so you might be able to help yourself to a positive retirement (or even pre-retirement) surprise by negotiating!

My wife is full-blooded Dutch and the Netherlanders are noted for being careful with money.  A couple of years ago, she renegotiated many of our mostly required expenses and ‘It’s about time’ for her to do it again.

It all started when I noted that our satellite TV service bill increased, a lot (it might have been DirecTV at the end of the promotion period).  The service was fine, but competitors were offering pretty similar service with much better deals.  My wife called around and saved us 50% on a new service.  It required a new installation, but a couple of hours supervising the installation was well worth the savings.

Later while we were discussing retirement planning and expenses, I noted that we had monthly trash, insurance, and phone bills, too.  The Dutch culture kicked in and soon my wife was calling firms, stating, “We’ll be retiring soon and we’ll be on a fixed income, so I need to bring these expenses down…”  Before I knew it, she had us saving significant amounts on trash, insurance, and internet.  Like over $1,000/year in savings (in all fairness, we did have a Cadillac trash plan, we just were not generating unlimited trash weekly…12 years of that – ouch!)


You too, can take advantage of these savings, but as usual, TANSTAAFL*; it will require some work:
-Find your semi required bills.
-Determine alternatives (Dish and Comcast were TV alternatives for us.)
-Call some alternatives and see what they offer.
-Call your preferred provider (perhaps it’s the one you have now) and let them know you’re retired (or nearing retirement) and will be on a fixed income and need a better deal. Let them know what the competition offered.
-Make your choice – stay with the deal your preferred option offers, or switch to the new one.
-Count your savings and use the money for other things that are important to you.

Now, here’s one you may not know about – life insurance. Talk with your trusted financial professional, because if your health has improved since your whole life or UL policy was issued (blood pressure under control, quit smoking), you might be able to get re-rated to lower premiums without having to get a whole new policy. If you have a term life, you may be able to save by re-rating or by getting a new policy. Always have the new one in hand before cancelling the old!

Let us know in the comments section if I missed some savings opportunities.

* – TANSTAAFL – “There ain’t no such thing as a free lunch.”  It shows up in No Surprises Retirement fairly often.
* – WIIFY – “What’s in it for you?’

Actions you can take include:

Bills to consider negotiating:
-Internet (Cable or DSL)
-Homeowners insurance
-Auto insurance (is there a lizard in your future?)
-Landline phone
-Cell phone.

Look for the next update on Friday, September 8 at 12:30 PM.

Questions, comments, or suggestions for retirement surprise areas you want to know more about?
-Leave a comment
-Use ‘Contact’, above, to send an email.