Credit card saving plans

[fanning]

Apart from being a Peruvian since a year and a half, I deep down in my heart still am a true Dutchmen,
and as a good Dutch I like saving points doing my shopping.
On contrary to Holland, in Peru most of the Credit cards give you some sort of saving points. I made out a list of the ones that seem to be the most valuable.
I use credit cards in almost all my daily life here in Peru, but instead of actually using the credit ( which has a high interest on it, but I give some tricks to keep even those low .. )

Banco de Credito Lanpass:
For every spend dollar you get 1.5 Lanpass KM. When you rollin, you get around 1000 - 6000 KM for free.
And the have many '2 for 1' ofertas during the year. You can use the points to travel with LAN within Peru or outside ( and there are many ofertas for flying with them as well )
You get also points when you pay your taxes online to SUNAT ( I pay the company taxes with my credit card, and get a LOT of points for that, the company pays me back with a check, which I deposit on the credit card )
To fly within Peru, costs around 14,000 KM, so you need to spend $9300 to get a free ticket, which is worth around $100. So $1 spend, worths $0.011 in points.

Scotiabank.
For every dollar you get 1 Scotiapuntos. When you rollin and spend the first 3 months S/. 2000 a month, you get 20,000 points for free. Paying schools, you get double points. I took this card to pay school, and get the 20,000 points for rollin in ( and to get the VIP line in the bank, to be served a lot faster )
270 puntos, is S/. 10.00, meaning spending $1 is worth $0.012 slightly higher than BCP. As I basically only use it to pay school and get double points for that, $1 is worth $0.025.

Ripley
For every S/. 1 you get 1 ripleypunto, and 1000 ripley punto is worth S/. 10.00, meaning $1 is worth $0.01 ( lower than BCP and Scotiabank. You can shop and pay however in Makro, and do you company spending with Ripley, and get the points for yourself.

BanBif
For every $1 you get 1 punto Banbif, and 85 puntos is worth $1, which is deducted from your bill as cash, so you actually get cash for your puntos. This means $1 is worth $0.0118, comparable to Scotiabank, but if you manage to get there 'Signature' card, you get 1.5 points for every dollar, meaning $1 is $0.0176, and by that being the most profitable card. You can use it for paying in Makro.

So it looks Scotiabank gives, the best points, specially when you just enroll.

Then my tip for paying less interest ( you must have at least a Gold card, or Platinum card !)
Suppose you cannot pay all, and you end up with a debt of S/. 10.000 on your Ripley card ( on which you pay 4% a MONTH !!! ). You simply go to your other bank, let's say BCP, and you let BCP buy your debt, and then you pay only 0.99% a month.
Now suppose you owe S/. 10.000 on your BCP card, ( interest is 30% a year ). Then you take a 'Supercash' on your Ripley card ( interest 90% !! ), but you use that money to pay your debt on your BCP card. Now you 'only' owe S/. 10.000 on your Ripley card, (paying 90% interest), but you go straight back to BCP, and make them buy this debt at 0.99% a month. It really works !! and saves a lot of money if you actually need to borrow money in the Peruvian system.
( For some reason the banks in Peru give a lower interest on buying debt from other banks, than just keep their own interest low )

But the best is to use the credit card only for accumulating points as I just described. Anybody else have an even better 'point-saving-plan-while-using-credit-card' ?

[curlyguy18]

I simply do not let interest accrue on my credit card, so what I do is, I save money first. For instance, if I want o buy a computer, I save money for it first, then I buy my comp using my credit card and when I get my statement, I pay the whole thing off. Same thing when I buy plane tickets. I try to save as much as I can towards the ticket and then I pay my cc balance in full.

And I always make sure my credit card balance never exceeds 40% of my salary, otherwise you get in a vicious circle that might be hard to break. Of course I accumulate fewer points but I'd rather accumulate less than get in debt.

Remember these credit cards are not designed for your benefit but for the lender's so you must be pretty careful and disciplined.

[chi chi]

I always pay cash. That's far cheaper.
And if you have cash in hand, you can negotiate a much lower price.

[americorps]

I always pay cash. That's far cheaper.
And if you have cash in hand, you can negotiate a much lower price.

and in doing so you do not build up credit which is helpful if you want to make a major purchase such as a business or a home. It is your choice, but it is not always the best choice for people who have bigger plans.

[curlyguy18]

I doubt you can negotiate with an airline or at Ripley's. Remember we're talking about using a credit card to accumulate points.

But yes, cash is the way to go.

[fanning]

The trick is to use a credit card without actually using the credit. There are two important dates to take into consideration. The 'facturacion' date, and the 'ultima dia de pago'
If you pay all your debt before the facturacion date, you don't even get charged the 'mantenimiento' fee, which is between S/. 10 - 15. If you wait however until after this date, you have until the 'ultima dia de pago' to pay the card. If you pay the full amount as you had on the facturacion date, you don't pay ANY interest. So the trick is to pay at least before the 'ultima dia de pago' you don't pay interest. ( This is only the case if you buy all your shopping without 'cuotas', if you buy with 'cuotas' you always pay interest !! )

It works really well if you are disciplined and pay everything before the 'ultima dia de pago'. The risk however with this is if you DON'T pay the FULL amount, you get charged interest over the WHOLE amount. So if you consumed S/. 5000 and you pay only S/. 4800 you have to pay interest over the FULL S/. 5000. So be disciplined and pay all.

If you are disciplined you actually get a free credit without interest ! How ?
Suppose your dia de facturacion is the 10th of the month, and the 'ultima dia de pago' is the 30st.
If you consume something the 11th, you get billed for that the 10th the next month, and you have until the 30st of the next month to pay. If you pay before that date, you pay ZERO interest, so you got a free loan.

In my daily life there are many things it doesn't matter if I pay with a credit card or cash, like school of the children, company tax, petrol for the car, shopping in the supermarket, insurance, dining in restaurants, going to the cinema. All things there is no 'cash-discount'. And in reality I don't go to the market, as even shopping in Makro turns out cheaper than going to the market. ( I used to buy fruit in the mercado mayorista in La Victoria, but closer to home, I do cheaper shopping in Makro, and gaining points using my Ripley card.. )

The real trick in using credit cards is to pay ALL and punctual !

[curlyguy18]

I'm not sure if paying before the invoicing date applies to my credit card with BBVA. They said I'd have to pay the 14 sol maintenance fee if I use the card.

[chi chi]

I always pay cash. That's far cheaper.
And if you have cash in hand, you can negotiate a much lower price.

and in doing so you do not build up credit which is helpful if you want to make a major purchase such as a business or a home. It is your choice, but it is not always the best choice for people who have bigger plans.

If I want to buy a major purchase then I work and save for it. I bought my house cash, my motorbike cash and in the past I paid my cars cash too.

Once in debt, always in debt. Some people think that they can use their credit card for free. Banks know how to get your money one way or the other. There are always hidden extras.

And those points you can accumulate...ha ha ha Count how many points you need to buy something. This point system is used to glue people to using that card or spend loads of money at shops like Ripley, etc.
People will often make purchases that they actually don't need just to get some points.
And people will buy thing at the shop where they can get points just to get the points but they forget to shop around and look for a better price. Those 'free' things actually work out very expensive.

For your information: nothing in life is for free.

[Jimmy111]

Chi Chi.
For once you are right.
Since I bought my first house on credit in the 1970's and then lost it when I lost my job, I have never had a personal loan. Of any type. I save and pay cash and have grown a considerable portfolio of real estate. All paid for. Even my cars I pay for in cash.
People are just infatuated with instant gratification these days and cant seem to live without the best of the best. You got to suffer to get ahead. Live in a converted garage and work weekends instead of going to the newest in style place.
You would be surprised if you really knew how much money you pay to the banks for fees and interest.

[tomasb]

I have a US credit card and live in Peru. I set up the card electronically so my payment is made monthly and automatically so never a late payment fee or an interest charge if I forget. Very convenient if you are using a US card. It also proves frequent flier miles with United. When I signed up and made my first charge, I received 25k free miles. That is a free trip in the US!

I was wondering if LAN or TACA has such a credit card that offers miles or bonus miles with a South American bank? Also, can you pay electronically with a Peruvian credit card?

[curlyguy18]

People are just infatuated with instant gratification these days and cant seem to live without the best of the best.
You would be surprised if you really knew how much money you pay to the banks for fees and interest.

Cash is the way to go; that's all. Small loans are fine as long as you know you can pay the whole amount back. And yes, it is ridiculous how much banks make off you, at least here in Peru. I got an "offer" from BBVA Banco Continental saying I could get a cash advance of 3000 soles from my credit card and I could pay 170 soles a month for 2 years. First of all, why would I do that?? If you multiply 170 times 24, it's more than 1.000 soles I'd be paying the bank in interests!!!!!!!!!!!!!!!!!!!!!!!!!!

As I said before, these cards and loans are NOT designed for YOUR convenience but for the bank's. They wanted me to get a S/.21,000 credit line when my monthly salary is around a fifth of that amount. You're right, Jimmy111, when you say people become infatuated with instant gratification. They don't realise they can't afford it.

[tomsax]

You guys are confusing the question of whether these offers are good for everyone and whether they are good for us personnally. A lot of us have enough self discipline to take the advantages of points and free credit (where available) while keeping our wits about us and making sure we aren't exploited for any mistakes.

It's the same for many things. Shops sometimes overcharge people. That does not mean all shops are bad and people shouldn't use them. Some cards offer bad deals and overcharge people. That does not mean all cards are bad and people shouldn't use them.

[rama0929]

I always pay cash. That's far cheaper.
And if you have cash in hand, you can negotiate a much lower price.

and in doing so you do not build up credit which is helpful if you want to make a major purchase such as a business or a home. It is your choice, but it is not always the best choice for people who have bigger plans.

If I want to buy a major purchase then I work and save for it. I bought my house cash, my motorbike cash and in the past I paid my cars cash too.

You've also hit Wong for the free food and got a house through a Peruvian social program and you've constantly advocated taking shortcuts, or have mooched off of others...

Credit, as with anything else, is a resource. I'd rather walk around with a piece of plastic than with a wad of cash. It doesn't take much to be disciplined and pay off balances, or move money to the card once you're home or whatever.

[rama0929]

As I said before, these cards and loans are NOT designed for YOUR convenience but for the bank's.

It works both ways. Carrying a card is very convenient. Can't speak to a loan though I'd imagine they'd come in handy in times of emergencies or whatever. Those with a good history tend to pay better rates than those without.

[curlyguy18]

Yes, it works both ways, and as thomas said, it takes discipline and there are some banks that offer good deals. I also prefer carrying a card BUT I much prefer my debit card with my savings as it's pretty much like carrying cash around. If it weren't for the fact that I can accumulate points on my credit card, build up credit for future purchases like a house, etc (and because they can be useful in an emergency as you said, Rama) I wouldn't have one.

[Jimmy111]

The reality is that few people have the discipline to use credit cards responsibility. The banks are in business to make money. They are not interested in people who are responsible. It is the irresponsible people who they make money off of.
A perfect example of this was after the stock market collapse, the banks canceled the credit cards of people who WERE paying their balance to avoid interest and late charges while keeping the people who had $10,000 and $15,000 balances on theirs and paying late all the time.

You guys are confusing the question of whether these offers are good for everyone and whether they are good for us personnally. A lot of us have enough self discipline to take the advantages of points and free credit (where available) while keeping our wits about us and making sure we aren't exploited for any mistakes.

It's the same for many things. Shops sometimes overcharge people. That does not mean all shops are bad and people shouldn't use them. Some cards offer bad deals and overcharge people. That does not mean all cards are bad and people shouldn't use them.

[tomsax]

The reality is that few people have the discipline to use credit cards responsibility. The banks are in business to make money. They are not interested in people who are responsible. It is the irresponsible people who they make money off of.
A perfect example of this was after the stock market collapse, the banks canceled the credit cards of people who WERE paying their balance to avoid interest and late charges while keeping the people who had $10,000 and $15,000 balances on theirs and paying late all the time

Never happened to me. My credit card has remained uncancelled and I can't remember the last time I paid any interest on monthly credit as I always pay it off. I wonder if this is this a case of "only in America"?

[fanning]

Another advantage of using a credit card is to pay water/electricity and phone automatically.
I used to have this 'Debito automatico' with Sedapal, Luz del Sur and Movistar with my debit card, but as they tend to charge you the end of the month, and just around that time the money was used up, many times the charge bounced, and then you have to make those horrendous lines at Sedapal, Luz del Sur etc.

If you however have the Debito automatico with your credit card, it NEVER bounces, and never have to make those lines anymore..

I started this tread by the way more to find out what other credit card have BETTER saving plans, than the ones I mentioned. So anybody has a better savingplan for free points ?

( We just went by the way for FREE to Brazil with a family of four, just using for 1 year paying everything with a credit card with LANpass. )

[falconagain]

As long as you can take positive advantage of everything provided by one or more credit
card in Peru, its good. I tried to have a Peruvian credit card on 96, they wanted to charge
a lot for it, so I closed it down. I have a good credit rating in the US. Meaning that I am
able to buy many things with little or no interest. How banks are able to do this?
I do not know. But if we could have credit cards and cash(backed by gold) together combined with
an honest credit policy from the government, then we would have the best of the current economies.

[rama0929]

Banks make money every time you use the card. They get a cut of every transaction that is performed.

http://en.wikipedia.org/wiki/Interchange_fee

The reality is that few people have the discipline to use credit cards responsibility. The banks are in business to make money. They are not interested in people who are responsible. It is the irresponsible people who they make money off of.
A perfect example of this was after the stock market collapse, the banks canceled the credit cards of people who WERE paying their balance to avoid interest and late charges while keeping the people who had $10,000 and $15,000 balances on theirs and paying late all the time.

[rama0929]

Banks do this by assessing your ability to pay them back, using metrics such as the credit score. With good credit, you're able to buy with little to no interest on a card. With bad or no credit, you'll find that the rates aren't all that good.

As long as you can take positive advantage of everything provided by one or more credit
card in Peru, its good. I tried to have a Peruvian credit card on 96, they wanted to charge
a lot for it, so I closed it down. I have a good credit rating in the US. Meaning that I am
able to buy many things with little or no interest. How banks are able to do this?
I do not know. But if we could have credit cards and cash(backed by gold) together combined with
an honest credit policy from the government, then we would have the best of the current economies.

[fanning]

When I book airline ticket online, I pay by debit visa card. The money goes straight from my account so no interests and no chance to spend more money than I have.

When I buy an airline ticket, I pay with my credit card, and because then I straight transfer the money from my debit card to my credit card I pay zero interest, but do get the points.
Furthermore because I paid with the credit card I save on a travelinsurance, as my credit card gives that for free if I buy the ticket with the credit card.
Furthermore when I arrive in my destination and hire a car, I can hire the cheapest car available ( around $25 a day ), and NOT worry about the carinsurance ( CDW ) as it is insured without cost by Visa, because I rent the car with my credit card ( If you hire with cash or a debit card you can take that insurance for $20 - $25 a day extra !! ). Also I don't need to give them US$800 as a guarantee in cash, because they simply block that amount on my credit card.

And I don't even pay the membership fee of S/. 350 a year, because I use the card and it gets waived.
I never pay any interest on my cards, as I pay them straight away.

Somebody said that a transaction fee is charged on every transaction, that is right, but that is charged to the establishment, not by the user ! ( That fee is in Peru around 5-7%, and that is why they can afford to give you points back .. But as said, this is not paid by the user, but to the shop/restaurant etc )
And offcourse that is calculated in the price, but also when you pay with cash you pay the same price. ( And I don't talk about markets, or other cash-only places )
Sometimes there is a recharge for paying with a card, in those cases also I pay in cash, as it works out cheaper.

[love my pets]

I agree with Fanning 100% regarding the advantages of using credit cards (please note this doesn't mean the misuse of it) Here in the US just like in Peru the banks are coming with many clever ways to get you to use their cards and sucked you into debt, I guess the only suggestion to anybody ever considering having a credit card is know yourself, if you are not a responsible, discipline person to play the game the banks are playing you should not have a credit card.
I have always use credit cards to my advantage and never haved paid a cent in interest, as soon as the statement comes in the mail that debt is pay off. I have bought big items with their promotion of one or two years interest free if paid in full at the end of the term, but first I know I have the cash to pay it off immediatly if I want to but why ? Rather keep the money in the bank earning interest for a year or two and then when the time comes pay it off.
I am not advocating the use of plastic for everything I really wish we could go back to using cash and being honorable enough to seal a credit deal with a hand shake and your word of honoring the debt, well I guess those days are gone when YOUR WORD was the most important credit score you had, in the present time let's continue to beat the banks at their own game using their services but never allowing to make even a cent in interest from us.

[stuart]

Did someone mention a credit card that doesn't charge a monthly maintenance fee if the balance is always paid off? Not sure if I was dreaming or not.

[love my pets]

Amex, Discover, Visa/Master card use them all the time, paid off their balance on time, never paid any interest and never been charged any maintenance fee.

[americorps]

http://money.msn.com/credit-cards/a-lit ... snews.aspx

A link to an article about how to maximize credit card miles.

[Jimmy111]

Amex, Discover, Visa/Master card use them all the time, paid off their balance on time, never paid any interest and never been charged any maintenance fee.

You paid about 4-5% more on all the goods you bought.

[americorps]

most businesses have that included in the cost of doing business, so you pay the same price cash or credit. Since you are paying for that anyway, may as well get the points.

but again, this insistence to be holier than though about whether or not you think credit card use or miles is a good idea has spit little to do with the topic, which cards are better for airline miles, so does anyone have an actual answer to the question?

[stuart]

Amex, Discover, Visa/Master card use them all the time, paid off their balance on time, never paid any interest and never been charged any maintenance fee.

A Peruvian bank gave you an American Express, Discover, Visa and Mastercard where you don't pay any monthly maintenance fee? Which bank? What's the plan called?

[stuart]

I must have been thinking of something else when I remembered someone mentioning no maintenance. The lowest monthly fee I've found is S/.13. Every sol counts.

[fanning]

With most (Peruvian) banks, including Ripley you don't pay a maintenance fee if you pay BEFORE the facturacion day. That typically is 2 or 3 weeks before the 'ultima dia de pago'
If you pay before that date, than with some banks ( BCP ) you don't even get an 'estado de cuenta', but you don't pay the maintenance fee.