Are Credit Card Rewards and Frequent Flyer Miles Taxable?
February 13, 2012 by Charlie Stedman · Leave a Comment
Credit card rewards are very valuable, but does that mean you have to pay taxes on them? If you did, how would each mile or point be valued? These are the questions that some people have every year when it comes time to submit their income to the IRS. Interest is also peaked by stories like this one in the Los Angeles Times that reveal that Citibank has been sending out 1099-INT forms to some of its savings and checking account customers who received American Airlines miles. In response, many people are concerned that their credit card rewards in the form of cash back, miles, and points may be taxable.
The IRS has always considered cash back rewards from a credit card to be a discount on the purchase price of goods and services. They view these rewards much like a coupon where the original price is marked down, and a lower price is paid. In all of those instances, the value of the discount is not reported as taxable income.
If cash back is considered a discount on a purchase price, how are points and miles treated by the IRS?
Making Sure You Get Credit Card Reward Bonuses
January 13, 2012 by Charlie Stedman · Leave a Comment
It would be an understatement to say that the credit card industry is intensely competitive at the moment. Banks are trying absurdly hard to earn new business and are offering applicants some truly astounding sign up bonuses that range as high as $500. When advertising these bonuses, banks often specify that customers may earn “up to” a certain number of points or “as many as” a specific amount of miles. Nevertheless, these offers come with conditions that must be fulfilled in order to receive these bonuses. Therefore, cardholders must take several steps to ensure that they receive all of the bonus points and miles that they are entitled to.
First, customers should thoroughly read the terms and conditions of each offer. When doing so, it is important to explore all asterisks and footnotes in order to learn the complete set of conditions necessary to comply with the terms of the offer. In some instances, the entire sign up bonus is awarded upon the cardholder’s first purchase. In other
Hackers steal more than credit card data
January 8, 2012 by Charlie Stedman · Leave a Comment
Here’s a newsflash: Hackers can wreak havoc for credit card owners. As tales of identity theft and stolen credit cards become a seemingly almost everyday occurrence, you may be unclear what to do to protect yourself from high-tech thieves. And thieves thrive on your confusion.
I read about the Christmas Day attack on American think-tank Strategic Forecasting, a company that gives its clients political, economic and military analysis…all in the name of helping them reduce risk. The group that claimed responsibility was hacking group named Anonymous. The hack compromised the credit card numbers and personal information of more than 50,000 accounts of people who do business with Stratfor clients, such as Apple and the U.S. Air Force, according to CNET News.
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The reason for the attack depends on whom you ask; (a) to teach Stratfor a lesson for not encrypting the credit card information it held, or (b) to take funds from those cards and send as Christmas donations. Wh
Southwest Airlines Rapid Rewards® Plus Credit Card Review
December 8, 2011 by Charlie Stedman · Leave a Comment
Chase’s Southwest Airlines Rapid Rewards Plus credit card has undergone a number of makeovers during the past year. The latest rendition of the Southwest credit card provides applicants with a very respectable 25,000 Rapid Rewards point sign up bonus worth slightly more than $400 in Wanna Get Away Fares as well as all the standard reward features consumers have come to expect from airline credit cards.
Approved applicants who make a single purchase obtain the aforementioned 25,000 Rapid Rewards point bonus. The points have a value of 1.7 cents each when used for Wanna Get Away fares and can thus be used to purchase a round-trip flight comprised of two one way $200 tickets. Given that it is often possible to get Wanna Get Away fares for as low as $50, these points could theoretically be enough for four flights.
Apart from the sign-up bonus, card-members earn 2 Rapid Rewards points for every dollar spent on Southwest Airlines purchases in addition to rewards earned from flying. G
New United Credit Card: The MileagePlus Explorer Card with Free Checked Bags
July 18, 2011 by Laura Reveley · Leave a Comment
United frequent fliers concerned about how the Continental merger will impact the United credit card can breathe a sigh of relief. Chase revamped, renamed, and relaunched a vastly improved version of United’s Visa – the MileagePlus Explorer Card – and loaded it with benefits few other airline credit cards possess.
The new United MileagePlus Explorer card is exponentially better than its predecessor. Unlike the old card, the MileagePlus Explorer offers a waiver on bag check fees for all cardmembers and up to one guest. For a couple, this benefit is worth up to $100 per round trip. This perk alone more than offsets the cost of membership for any couple who flies United at least once a year.
A difficult to quantify, but nevertheless valuable feature that is unique to the new United credit card is priority boarding. Regardless of frequent flier status, cardmembers and companions can board immediately after first-class and elite travelers. This