Check Credit Card Rewards Bonuses Before Shopping - Bargaineering

Check Credit Card Rewards Bonuses Before Shopping

Posted: 23 Nov 2010 09:44 AM PST

When it comes to credit cards, I like to keep things simple. I only have three credit cards and each one is used for a very specific purpose. One is for when we eat at restaurants, go to the movies, or purchase something on Amazon.com (Citi mtvU). One is for everything else (American Express Costco TrueEarnings Card). For those keeping score at home, my third card is a business credit card.

This makes purchases very simple since most of the time I grab my Costco AMEX and use that. When I shop online, I usually use the American Express card unless it’s Amazon.com and I don’t usually review my decision rubric all too often. It turns out, especially this holiday season, I probably should.

One of the new things that many credit card companies are offering is higher rewards when you shop at one of their partner stores online. Some credit card issuers have been doing it for years, offering extra points when you buy through their online portal, but only recently have they started juicing up the points they offer. It wasn’t uncommon for you to see double or triple points at some retailers but nowadays you can see double digit bonuses. For example, I recently learned that my Capital One card gets much higher rewards over Black Friday (Nov 26-29) weekend when I shop at Omaha Steaks (18X) and Body Shop (16X). If you’re going to make an online purchase, check your cards’ rewards so you’re buying with the right one.

So the next time you go shopping online, check your credit card’s website to see if they’re offering a little “extra” to use their card or go through their website. It won’t be a big difference but every little bit counts.

Check Credit Card Rewards Bonuses Before Shopping from personal finance blog Bargaineering.com.

Why You Should Convert IRAs in 2010

Posted: 23 Nov 2010 04:05 AM PST

Nest Eggs! Can you believe it’s November already? As our thoughts go to preparing that gluttonous Thanksgiving meal and the feasts yet to come during the holidays, one thought you might want to spend a few cycles on is whether you want to convert your Traditional IRA to a Roth IRA in 2010, rather than 2011. If you’re unfamiliar with this whole subject, I invite you to check out this Roth IRA conversion mini-roundup to familiarize yourself with the process.

This post will discuss the idea of whether you should convert your IRA to a Roth IRA this year, in 2010, or if you should wait until next year.

Splitting the Tax Bill

If you convert in 2010, you have the option to pay all the tax at once on your 2010 return or you can split it in half to be paid on your 2011 and 2012 returns. The tricky part of this decision is that while we know what the tax brackets are for 2010, we aren’t entirely sure what they’ll be in 2011 and 2012. All the proposals on the table don’t really make it easier for us to guess, though if you earn under $250,000 a year you will probably see your taxes remain the same (all the proposals seem to favor that, unless they can’t reach an agreement… then everyone’s bill goes up).

So while the tax rates in 2011 and 2012 aren’t set in stone, the idea that you can put off taxes until then is probably appealing. The risk is that you will have to come up with the money to pay for the conversion in 2011 and 2012, which can be a good or a bad thing. You don’t want to be sideswiped with a huge tax bill in two years.

Useful tax planning tool: I discovered this Kiplinger Roth IRA conversion tax calculator that takes into account the various tax proposals.

Income Shaping

Now that you have the option of choosing, you might discover that 2010 is a good year to do the conversion because of your income. When you convert, you have to realize the conversion amount as income. This has the effect of pushing you up into higher tax brackets which can affect the rate of the tax as well as what other tax deductions and credits you may be eligible for. Many deductions and credits are phased out and eliminated at higher incomes, so this is something you want to consider.

If you have a large IRA to convert, you may want to take the hit all at once and eliminate a credit or deduction for just 2010, instead of eliminated it for 2011 and 2012.

Those are just two reasons why you might want to convert your IRA to a Roth IRA in 2010 and whether you should split the income into 2011 and 2012 or realize in 2010. If you elect to convert in 2011, you won’t have the option to split the bill.

(Photo: jkonig)

Why You Should Convert IRAs in 2010 from personal finance blog Bargaineering.com.