If you knew you could use a credit card to finally get out of debt forever, would you be interested in learning more about it?

The very thing that has cost you thousands in interest could end up being the lifeline that pulls you out of debt.

Whether you overspent for a recent celebration, have struggled to make ends meet due to the bad economy, or just recently had an unexpected emergency, your credit card currently has a balance. And there’s one thing we all know about credit card debt: it will cost you a fortune in interest.

Wouldn’t it be nice to get rid of it once and for all?

If you’ve decided to get your finances in order — to finally get out of debt! — you want to pay off your credit card balances as quickly as possible. There are three factors that impact this the most:

1. Your current credit card interest rate
2. Your current credit card balance
3. How much money you have to throw at the balance every month

If you’re staring a big holiday credit card bill in the face, you can take the strategy of transferring the balance to a 0% APR balance transfer credit card. You won’t remove the debt, but you will eliminate the interest for a period of time dictated by the new credit card agreement. During the months of 0% interest you can throw all of your payment money toward the balance in order to pay it down faster. You can also try using a balance transfer to give you time to build up an emergency fund.

Why We Like It:

• No balance transfer fee — for a limited time:  It is incredibly rare to find a credit card that won’t charge you to transfer your balance to the card. This mixed with the 0% offer make this an amazing card for helping you get out of debt. Note that the no balance transfer fee only applies to transfers completed within 30 days of opening your account. When you open the account go ahead and transfer your other balances here. After the first 30 days, you will pay the standard balance transfer fee of 3% of the transferred balance or $5, whichever is more.
• 0% APR on balance transfers and purchases for 15 months (up from 12 months!): As mentioned, you’re not paying a balance transfer fee and you’re also not paying any interest on your balance transfers and purchases for the first 15 months. You’re getting over a year free of interest to hammer away at your debt balances — don’t waste this chance! (This card used to only offer 12 months of 0% APR; Chase recently increased it to 15 months.)
• No annual fee: You will never pay an annual fee with this card. An annual fee would put a dent in appeal of this card, but you don’t have to worry about that.
• Access to Blueprint: Chase offers a fantastic program called Blueprint that will help you pay off your balances and reduce interest. This card comes with free access to the Blueprint program. (See our review of the Blueprint program.)

Why It Might Not Work for You:

• 0% on purchases only for best credit: No matter your credit rating you will get 0% APR on balance transfers. If you great credit, that will also be extended to purchases. If you only have average credit, it will just be on your balance transfer.
• Delaying your balance transfer: If you delay past 30 days to open the account, you’ll miss out on the free balance transfer and instead get dinged with a large fee.
• Late fees will kill your debt payoff plan: If you are late on making a payment your interest rate will automatically skyrocket to 29.99%. (Avoid this by setting up automatic payments.) You will also be assessed a late fee of $15 to $35 depending on your current balance.
• Other fees: You’ll pay a $10 (or 3%, whichever is greater) fee for cash advances. You will pay a $35 fee for going over your credit limit. When you transfer your balance you are usually given that amount as a credit line. If you decided to also swipe your credit card to buy something, you might go over the credit limit and get hit with the fee. Avoid this fate by cutting up the card as soon as you get it and just work on paying off the balance.

Final Thoughts:

You’re getting 0% interest for 15 months and you won’t pay a balance transfer fee in order to get set up. This card gives you a great opportunity to get rid of that credit card debt once and for all. If you can’t handle not putting additional purchases on the card you are opening yourself up to the risk of staying in debt. However, if you can handle the situation and simply pay down your balance it is a great choice for getting out of your current high interest rate credit cards.

This is a guest post from Doug Nordman the author of The Military Guide to Financial Independence and Retirement.

When Jeff posted 7 Financial Advisors I Would Like to Punch in the Face, I immediately thought of advisors who pretend to understand military pay & benefits.

These professionals may not lie, cheat, or steal– but they can still harm their clients. Instead of admitting ignorance or learning about the issues, these advisors try to shoehorn servicemembers into a generic profile.

They recommend asset allocations and products that may be appropriate for civilians, but those suggestions could be redundant or even harmful to the finances of military veterans & retirees. They give all financial advisors a bad reputation.

Military clients are a challenge.

Advisors have to know at least a little bit about nearly every financial topic, but military clients are a very small percentage of the population. Not only that, but Jeff is one of literally only a handful of financial advisors with military experience.

Servicemembers could manage their own investments, but it’s not easy to find reliable information. When you’re in the military then you’re busy with duty, career, family, and other high-priority concerns– like not getting shot. Your financial future is probably not even in the top ten of your To-Do list.

The Department of Defense wants military and their families to be financially responsible (“Troops, stay out of debt!”), but financial independence isn’t a high priority for them either. You’re unlikely to spend the time & energy learning how to do your own investing, and your chain of command won’t enlighten you either.

Not only are military pay and benefits more complicated for financial advisors, but their military clients may be even more blissfully ignorant than civilians.

These days I manage my own finances, but there were several critical transitions during my career where I would have appreciated the help of a knowledgeable advisor. Even a couple hours of fee-for-service discussion will help you tap-dance through the minefield of choices.

What to look for in an advisor

This is just my personal preference, but I’d want my financial advisor to have hands-on experience with military finances. It’d be great if they were a military retiree or a veteran, but maybe they grew up in a military family or have a spouse/relative in the service. So how do you find these professionals?

I’d be careful about referrals. Your wingmen may know someone who’s using a “great” financial advisor, but do your own due diligence (see below). There’s a huge difference between a financial advisor who encourages you to stay blissfully ignorant, and one who takes the time to teach you how to make your own decisions. You have to be able to detect whether advisors have a clue about your military financial jargon.

If you wander through the neighborhoods around military bases looking for financial advisers, I’m sure you’ll find one or two “specializing” in their local demographic. I wonder whether they really understand military finances or if they’re just one of Jeff’s “notorious seven” preying on ignorant servicemembers. I don’t think legitimate advisers with hundreds of happy clients will set up shop between the used-car dealer and the payday loan office.

(Warning: shameless plug alert!) You could seek out military financial advisors like Jeff. You’re probably going to move around the world during your career, so it might make more sense to start with one who’s comfortable using Internet tech to stay in touch. Better yet, he’s tapped into a network of advisors with similar backgrounds.

I’m no financial expert, but I know how to interview financial experts. Here’s a few questions to start with:

Don’t be overwhelmed by the following questions. (I’ve been retired for a decade and I’m still figuring out how to explain some of these issues.) You don’t need to know these answers, and you don’t even need to know most of the vocabulary. But you have to assess how your financial advisor answers these questions, and whether they really seem to know what they’re talking about. If they teach you then you’re probably going to be fine. If they dismiss these questions, or belittle your concerns, then you might need to keep searching.

Military pay and allowances:

• Do they know the different types of military pay and tax-free allowances?
• Do they understand you’re unlikely to be “laid off”and might not need a big emergency fund?
• Can they explain the military’s Thrift Savings Plan and help choose your asset allocation?
• Can they explain how to use both the Thrift Savings Plan and your IRA?
• Do they understand how to invest tax-free pay from combat duty?
• Do they know how to use the Savings Deposit Program when you’re in a combat zone?
• Can they explain how the new Roth TSP will work?
• Do they understand military life insurance and disability benefits?
• Can they discuss the risks of buying a home while you’re on active duty, and how to get a VA loan?

Leaving the service for a bridge career:

• Can they help you figure out how much money you’ll need to save for the job search?
• Can they review your separation benefits and tell you what to expect?
• Can they suggest how to use your military healthcare and insurance during the transition?
• Do they understand disability ratings and benefits?
• Can they help you assess the financial issues of a Reserve/Guard career?
• Can they optimize your GI Bill education benefits for you and your family?

Eligible for a military retirement:

• Do they understand that a military pension has an inflation-fighting cost of living allowance?
• Do they know how your retirement pay is taxed?
• Do they know that your civilian 401(k) or IRA might be able to be rolled into the TSP?
• Do they understand how to build your retirement asset allocation around your military pension? You might not need more “guaranteed income” or a big bond portfolio.
• Can they advise you (and your spouse) how to use the Survivor Benefits Plan?
• Can they advise you about Tricare and other health insurance?
• Can they discuss military and civilian life insurance?
• Can they advise you about the federal long-term care insurance program?

I’ve heard too many sad stories about servicemembers who don’t take advantage of all their military savings programs and benefits. Some might be getting out in a year but they don’t know how to prepare their finances. Others are told they’re going to retire in nine months and get led astray by unscrupulous advisors. A few are paralyzed by indecision and don’t even know who to turn to for help.

What are your next steps?

First, educate yourself. If you’re paying an advisor then learn enough to keep up.

Second, stay in touch. Advisors can only support you when they get regular updates.

And finally, keep pushing yourself for financial independence. Advisors can help you lay out the path, but you have to make the journey!

Doug Nordman is the author of The Military Guide to Financial Independence and Retirement. He and his spouse retired from active duty and the Reserves after more than 20 years of service, and their daughter is starting her own military career. You can read more at The-Military-Guide.com.

Credit Karma is well-known in the world of personal finance as one of the leaders in offering access to a free credit score.

Credit Karma offers an array of interesting information about your credit situation, based on your TransUnion credit report.

And now, Credit Karma is offering free daily credit monitoring.

Features of Free Daily Credit Monitoring

The idea behind the free daily credit monitoring offered by Credit Karma is that you can receive updates about what is happening with your credit profile. It’s pretty straightforward: All you have to do is sign up for Credit Karma — for free. Once you are signed up, you will be alerted, by email, when any of the following changes occur to your credit profile:

• New credit inquiry
• Improvement in payment history
• Missed payment
• New account opened

Any major changes to your credit report are sent to you. Each day, Credit Karma looks through your information and alerts you to changes that are likely to have an impact on your credit score. This means that you can be alerted about events that could indicate that your identity has been stolen, or that indicate errors in reporting. You won’t be inundated with emails, though; you’re only supposed to receive the emails if something changes.

Signing up is easy. All you have to do is sign up for Credit Karma. You will be asked for personal information, though, including your name and address, as well as Social Security Number, since Credit Karma will be accessing your TransUnion credit report. If you are already a member of Credit Karma, you will be asked if you want emailed alerts when you login. In the profile area, there is a “Credit Monitoring Preferences” option to the left. You can check the box, or un-check it, depending on whether or not you want to receive the updates. It’s very easy to opt in or opt out of the emails.

Remember, though, that the Credit Karma free monitoring isn’t going to cover all of your credit reports. Only the TransUnion credit report is reflected, so you will still need to check your other credit reports for a comprehensive look at your credit picture. You can visit www.annualcreditreport.com to get a free credit report from each of the bureaus each year. Additionally, there are sites like Quizzle and Credit Sesame that can provide you access to your Experian score and report.

Other Credit Features of Credit Karma

Credit Karma also features a number of other credit information and tools. Your performance is tracked over time so that you are able to identify trends in your credit and in your finances. You can also compare your situation to others’ situations, and see how you stack up. It’s very a helpful snapshot of what your financial habits look like.

It’s not a bad idea to sign up for free information about your credit score, and get access to free credit monitoring. Being able to review your credit information, and get a general idea of where you stand can be helpful as you plan your finances. However, remember that these free sites offer you their own scores, and it is not the same as a FICO score.

Are your friends planning a last minute Spring Break trip, but you aren’t sure how you’re going to be able to go?

Don’t be left behind at the dorms! Traveling over spring break on some crazy adventure is a rite of passage for college students. You simply haven’t lived if you’ve never booked a flight 24 hours before your spring break starts to travel to the Gulf Coast, Mexico, or New York City.

Or maybe you’re like me and you hate flying. Instead you’re going to be piling in with four of your friends into a suddenly very inadequately sized sedan to drive to the Grand Canyon and back in four days.

There’s only one problem… you blew all of your extra money playing beer pong last weekend. You won’t have extra cash until the week after Spring Break and by then it will be too late. Your friends will be waxing poetic as to the great time they had sleeping on the beach and how delightful the sunrise was that morning. You don’t want to be regaled with stories of the exotic fun they had — you want to be there!

But how? It’s simple: get a student credit card to cover you until you get paid.

What is a Student Credit Card?

Student credit cards are credit card programs targeted specifically at college students. The qualifications necessary to be approved for a card are lower than with other credit cards. The financing companies that issue the credit cards understand that you’re in college, you probably have uneven income from waiting tables, and you have a limited credit history. So they give you a small credit line so you can test the waters and see if you can handle responsible credit card use.

It’s basic math: lower requirements to get the credit card = lower credit score = minimal or no rewards program.

Aren’t Credit Cards Risky for College Students?

Are credit cards the worst thing that can happen to a student’s finances?

Yes and No. Credit cards are tools that allow you to float purchases for about 30 days before you have to pay for them.

I always compare credit cards to shovels. (Wait, what???)

How, exactly, are shovels like a piece of plastic that you swipe?

Both are tools that can be used for good and evil, for growth and destruction. A credit card is a financial tool that can help you build up your credit history, earn rewards, and teach responsible spending. Likewise a shovel can be used to dig a trench into the ground to plant seeds that later become your next meal.

On the other hand a shovel can be cause great damage to plants if used incorrectly. Roots can be cut and the plant withers and dies. Likewise irresponsible credit card use can lead to financial ruin with sky high balances, collections calls, and bankruptcy.

Traits of Horrible Student Credit Cards

If you’d like to make a mistake the leads to your eventual financial ruin, pick up a credit card with some of these traits:

• An annual fee. There is absolutely no reason a college student should fork out cash for the “right” to have a credit card. There are too many great student credit cards available to justify paying an annual fee of $25-50 just to have a credit card.
• Bad rewards program. Reward programs that encourage you to spend differently than you normally would are useless. It can be easy to be manipulated into spending at a certain store just to earn a few more reward points. Another trick is to offer you a lot of reward points, but force you to redeem them online where the rewards options are very limited.
• No rewards program. This isn’t a deal killer, but if you can get a student card with a rewards program (preferably cash back) then you should.

What is the Best Student Credit Card for Spring Break?

If you’re looking for a credit card for spring break, you have a few solid options:

Discover Student Card – With $25 in Free Cash Back for a Limited Time

One of the best cards currently available in this category is the Discover® Student Card with a $25 Cashback Bonus. You’ll not only get a student credit card, but Discover will give you $25 in cash back immediately following your first purchase on the card in the first 3 months.

The perks of this card include:

• 0% APR on your purchases during the first 6 months
• 5% cash back on rotating categories that college students use a lot of: gas stations, restaurants, and department stores
• Up to 1% cash back on every other purchase you make
• No annual fee
• No fee to redeem your cash back

Discover Student Card in Other Varieties

Discover also offers the Student Card in several other varieties that all share the same terms. The only difference is how the physical credit card that you put in your wallet looks. The varieties include: Clear, Tropical Beach, Monogrammed with your initials, Open Road, Original, and Mix Tape (which looks, as you guessed, like a mix tape from the 80s).

There are two main differences between these cards and the one above:

• There is no $25 cash back bonus for using your card once in the first three months.
• Your 0% APR offer for purchases is extended from 6 months to 9 months.

You are essentially trading $25 for 3 more months of 0% APR.

Everything else is the same: 5% cash back on specific categories, up to 1% cash back on other categories, no annual fees, and no fees to redeem the cash back you earn.

Chase Southwest Airlines Rapid Rewards Credit Card

It might be hard for students with limited credit history to get this card, but it is worth a shot. If you get into the program you’ll be credited with 25,000 points that can be redeemed for a roundtrip flight almost anywhere Southwest flies.

A free flight makes getting to your spring break destination a lot more affordable.

Capital One Journey Student Rewards Credit Card

Let me start by saying on the surface this looks like a good credit card for college students. However, be careful because Capital One doesn’t have the best reputation when it comes to customer service. As long as you maintain proper documentation to protect yourself you should be fine.

So what’s the card look like?

• 1% cash back on all purchases (plus an additional 25% bonus for paying on time).
• No annual fee.
• No fees to redeem cash back.

You know how much I love the Roth IRA.  Love, love, love it!!

I’m actually more in love with the Roth IRA than I am the 401k.

And you already know how I feel about target date mutual funds.  <blah!>

But what about the Traditional IRA?  Does it still have it’s place in your retirement plan? You betcha!!

If you are fortunate to work at a company that offers a match on your 401(k) deposits, don’t walk away from that free money. There, however, might be some instances where the traditional IRA has its place.

Here’s a closer look at some of the rules of the Traditional IRA Account.

1. Contribution Limits for 2012

If you are under the age of 50, the maximum amount of money you are allowed to contribute to a Traditional IRA in 2012 is $5,000 (which is the same level as 2011). You can contribute this amount regardless of whether you are eligible to claim a deduction for using a Traditional IRA.

But if you are over the age of 50, the IRS allows an additional contribution, often referred to as a “catch-up contribution,” up to $1,000. So if you already celebrated the big “5-0″, you can contribute a total of $6,000 to a Traditional IRA.

2. Traditional IRA Account Phaseout Limits

Now, let’s review the traditional IRA phaseout limits, the income levels at which you are allowed to take the deduction for an IRA. Note these limits kick in only if you have a retirement plan (401(k), 403(b), etc, but not a defined benefit plan) at work, whether or not you actually contribute to it.

If you are single, the 2012 phaseout is $58,000-$68,000, for married filing joint, $92,000-$112,000. Below the lower figure in that range, you may deduct the full amount $5,000 if you are under 50, $6000 if you turned 50 in or before 2012.

The amount you may deduct decreases linearly until the higher number of that range is reached. If you find you are just beyond these ranges, you’ll qualify to put money you can’t deduct into a Roth, instead of just putting after-tax money into the traditional IRA.

Next, I’ll discuss the potential advantages and disadvantages of using the IRA in favor of the (non-matched) 401(k).

3. 401k vs. Traditional IRA- Which one rules the roost?

The 401(k) can excel in two regards. If you separate from the company at 55 or older, you can take withdrawals penalty-free. Of course, taxes are still due, but no penalty, as with an early IRA withdrawal. The 401(k) also offers the ability to borrow from the account. This can be a mixed blessing, and potentially risky move, but an option nonetheless.

IRA advantages start with low cost and flexibility. The costs within a 401(k) account are often tough to understand and often multi-layered, a potential combination of management fees as well as expenses for the underlying investment. For small plans, fees can easily run above 1.5% and even over 2%.

Considering that your goal is to save money pre-tax at one rate and upon withdrawal, pay taxes at a lower rate. This advantage can disappear altogether in a decade with fees approaching 2% per year. With few limitations on what you may invest in within an IRA, you are free to choose from investments with very low expenses, many index based investments offer fees as low as .10%, a fraction of the average 401(k) expense.

The rules of the traditional IRA offer a penalty-free, but not tax-free withdrawal of up to $10,000 per person for the first time purchase of a new home. ‘New’ to the IRS just means that you didn’t own your principal residence during the prior two years, not that you never owned a home. You can also use this penalty-free withdrawal to help a child, grandchild, or parent.

A similar penalty-free withdrawal is also allowed for qualified higher education expenses for you, your children or grandchildren. Expenses include tuition, fees, room and board, books and supplies.

There is also an exception for withdrawal made to cover medical expenses exceeding 7.5% of your adjusted gross income.

If you are fortunate enough to be able to retire before age 59-1/2, you have an option called a Section 72(t) withdrawal. You are permitted to take withdrawals from your IRA that follows a

“Series of substantially equal periodic payments (SOSEPP)”.

Once you begin this process, you must continue this exact withdrawal amount for 5 years or until age 59-1/2, whichever comes later. The choices for calculating that periodic payment are minimum distribution, amortization, and annuitization. Further details on this is available at the IRS web site.

4. Beneficiary Check

When opening up an IRA, or if you already have one, be sure to specify your beneficiaries. An IRA that doesn’t not have a designated beneficiary will become part of your estate and regardless of who inherits it, has limited options to continue its tax-deferred status. By specifying a beneficiary, and ideally a contingent beneficiary, your heir(s) can take withdrawals over their remaining lifetimes.

The IRA has been around since 1974 and with good reason, it deserves a place in your finance as the core of your long term retirement planning.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Photo by Jason York Photography

“If you say you can’t, then you absolutely won’t”.
-My dad

My dad would always tell me that whenever I gave up on anything.

“Dad, I just can’t do it!”, I would often say.

It never failed that he would respond with some variation of the quote above. The first several times I heard it I was extremely annoyed, but didn’t have a good retort.

After a while those words started to sink in and I started to believe it.

Mindset is everything. Once you give up hope, you’ll never succeed. Period.

In my newsletter, I send out an email that shares the story about my Chevy Lumina (“The Lu”) and how a change a mindset will make me over $2,000,000. (You can read more about it here).

In the email, I asked my readers to share what pivotal point in their life forever changed their mindset.

Some of the responses were absolutely amazing and touching.

Then there was the one that was not.  In fact, I could tell that the person had given up hope.

When I read the email at first I was disappointed.

Here is their response:

You just want me to buy the book.

Tell me how a retired person with so little in bank from 401k can change that into millions, in a very small town , uneducated and very skeptical?
ATTITUDE IS EVERYTHING,

First a quick note…. with all the content that I put out, with all the newsletters that I do and all the videos that I record; I promise you it’s not all to sell a book.

Yes, of course I would love for you to buy a copy when it comes out, but if I did everything just to sell a book then this all would be for nothing. My passion is to help people, period.

Ironically, it wasn’t the accusation that upset me.  It was the persons mindset.

I could tell that they had given up hope.

And what is even more ironic?  How about how their closing:   “ATTITUDE IS EVERYTHING“.

For someone that signs that with each and every e-mail, it seems that they need to pay closer attention to what it really means.

• Once you have given up hope, you have failed.
• Once you truly believe that there is not better outcome for your life,  things will never improve.
• Once you make that mental shift into permanent negativity,  all is lost.

Your “ATTITUDE IS EVERYTHING”!!!

My response to this person was the following:

I want you to buy the book if you think it can help you or help someone you know. Period.

I live in a very small town (5500) and luckily time is on my side to save for retirement.

If you are retired with no additional income coming in, then you won’t be able to turn “so little” into millions. But what about your kids? What about younger people that you could influence to make sure they aren’t faced with the same dilemma.

My parents were horrible at managing money. My mom still is. She never learned the basics of personal finance and, in turn, was never able to teach me. Truth is, I’m very fortunate and blessed that I learned it when I did.

My book, my blog, my videos and my mission are to give people the tools to take care of themselves. The tools that I didn’t get.

That “attitude” is what inspires me each and every day.

Even it was too late for this person they didn’t have to be a victim. They could take this experience, take their failures, take their shortfalls and use that to encourage others.

So often times I see people that are selfish with their experiences.  If they took the time to share their story they could have a dramatic impact and truly help these people.

I am confident that with a positive attitude, their life could still be turned around.

“Do what you can where you are with what you have.”
~ Theodore Roosevelt

Who enjoys making 0.15% on your savings account?  Raise your hand…..

Didn’t think so.

Interest rates have been low for quite some time (too long for many), and finding the highest interest rate for your savings accounts is a must.

One viable option is the online bank Ally. If you’re looking for a competitive rate online, then you might want to check Ally out.

Here’s a review of Ally bank why they might be the best online bank for you.

Quick History and Terms

Ally bank is a product of what used to be GMAC bank. Whenever GM went through their PR nightmare, GMAC made the smart decision to rebrand and hence Ally was born.

ALLY bank is offering some of the highest yield accounts available that are also backed by the FDIC. Being backed by the FDIC simply insures up to $250,000 of your money by the Federal Government in case of an emergency. You can receive much more than $250,000 worth of coverage by opening an account with a death benefit to your spouse, or by opening an account for your child. With these extra accounts added, you can achieve total coverage of around 1.5 million depending upon your family structure.

Opening Your Account With Ally

Opening an ALLY bank account is similar in process to any typical bank, except for the precautions they will take because of no actual face to face contact. The one major difference is the use of your FICO score, other banks will check your FICO score as well, but ALLY could possibly deny you based upon your FICO score where other banks may take more variables into consideration. After opening your initial account whether it is savings or checking, it’s relatively simple to open another account simply using your login name and password.

Different Investment Tools

Ally bank offers a variety of options for your money to be invested in:

Ally Bank Review Conclusion

Overall, ALLY bank is a convenient option that offers competitive rates with no minimum balance, as well as being backed by the FDIC so you know that your money is safe. Beware that they will measure you based upon your FICO score when opening an account, as well as your initial deposit may take slightly longer than a local bank because of the processing time needed.

Most likely you will also be sending out of state checks to ALLY, so do not be surprised if it does take a couple of days longer for your check to show up on your statement. There customer service is easily accessible with 24 hour access via online as well as through telephone. I do not personally have an ALLY account but called their help line and was pleased to have no wait time associated with all of my attempts.

Have you opened an account with ALLY Bank?  If so, please share your experience.

The million  $5 billion dollar question of the week,

“How do I buy shares of Facebook’s IPO?”

I’ve literally have had a dozen people ask me how they can get in on the action. Ironically, none of the questions came from Facebook (random thought).

For those that want to know how to buy Facebook IPO, this video is for you:

Spoiler alert: The answer is probably not what you want to hear.

Wouldn’t it be nice to have someone else pay for the flight to your next vacation destination?

(And even better: what if that free flight was on the best airline in the country?)

You’ll get just that if you open up a Southwest Airlines Rapid Rewards® Plus Credit Card.

It might seem to be too good to be true. A credit card company will pay for a round trip flight for you? What’s the catch? (Yes, there is a very small catch. We’ll get to that in just a second.) But the bottom line is you actually can get a free flight on Southwest Airlines after you first use your Chase Southwest Airlines Rapid Rewards Plus Credit Card.

For the travel buffs (or business travelers) out there, this is a great travel rewards card.

How Does the Bonus Flight Points Work?

After you apply for the credit card and activate your account, you will qualify for the bonus points after your first purchase on the card. After that first swipe you’ll get 25,000 points applied to your account which is enough to claim two one-way flights that would normally cost you $208 each way. Those two flights will eat up 24,960 of those bonus points.

It’s really that simple.

But a free flight isn’t the only reward you will get. There are other great perks, too.

Earn Points for Your Spending

On top of the bonus points for your free roundtrip flight, you’ll also earn points for all of your spending on the card. Any spending with Southwest Airlines or Southwest’s Rapid Rewards hotel and car rental partners will generate 2 points per every $1 of spending.

Additionally all of your other spending will earn 1 point per every $1 that you charge to the card.

Better Than 2% Rewards

It is really difficult to find a great rewards card that will pay out more than 2% in rewards. At first glance the Southwest Airlines Rapid Rewards® Plus Credit Card looks like a standard 2% travel rewards card because of the 2 points for every dollar spent.

However, when you run the math the rewards are significantly better if all of your points come from traveling with Southwest.

Let’s check the math. You need 24,960 points to get two one-way tickets that cost $208 per flight. That’s $416 in rewards for 24,960. To earn those 24,960 points you could spend $24,960 on non-Southwest purchases (where your rewards would equate to 1.67%) or you could spend $12,480 on Southwest flights and Rapid Reward partners. If you do this your total reward jumps to 3.33% making this one of the best travel cards available.

3.33% rewards are great, but there’s one more trick to truly maximizing your rewards that leads to your more free flights, faster.

What is Southwest Airlines’ Rapid Rewards Program?

Here’s how you truly maximize the impact of this credit card. Not only will Chase credit you with points for your spending, but Southwest’s Rapid Rewards program rewards you for your flights on top of the points you get for using your Southwest Airlines Rapid Rewards® Plus Credit Card. The number of Rapid Rewards points depends on the type of flight you select:

• 12 points per dollar on Business Select flights
• 10 points per dollar on Anytime flights
• 6 points per dollar on Wanna Get Away flights

You would get this points by just being a Rapid Rewards member and booking a flight with Southwest. It has nothing to do with using this credit card. But when you combine the two, the rewards really start to pile up!

This means booking two of Southwest’s least expensive Wanna Get Away one-way flights for $200 each way will generate 400 points on your Chase card and 1,200 points directly with Southwest’s Rapid Rewards program. The 400 points on your Chase credit card equals an extra 33% in reward points over using any other credit card. The rewards can really add up by just taking a few flights and using your Chase credit card.

What’s the Catch?

There’s got to be some horrible catch that makes this great travel rewards credit card useless, right?

Not really. The Southwest Airlines Rapid Rewards® Plus Credit Card does have an annual fee of $69. That’s a bummer, but on every anniversary date of having the card you will be awarded 3,000 points. You could turn those 3,000 points into a $50 Wanna Get Away fare, so the card is only going to cost you $19 per year. When you can rack up as many free flights and Rapid Reward points that seems like a small price to pay for the rewards.

Also, hopefully this is clear, but you should only get this card if you have access to Southwest Airlines near your city. If you have to drive 6 hours to get to an airport that Southwest services, then this probably isn’t the best travel rewards card for you.

The only other catch is that of any other rewards credit card. If you get the card, make purchases, and then don’t pay them off in full before interest charges hit you, then you’ve made a mistake. Travel reward credit cards are only for those who can handle paying off their balance every month. If you essentially treat your credit card like a debit card instead of a free line of access to as much money as you want, you’ll be fine.

Apply for a Southwest Airlines Rapid Rewards® Plus Credit Card and earn a free flight today!

The holiday season is already behind us but that doesn’t mean you still can’t give the perfect gift.

In the financial world, the term gift has a whole new meaning as it pertains to estate planning. Many investors look to “gift” a portion of their estate to prevent having to pay a hefty estate tax down the road.

If you want the bottom line about the gifting tax here it is: If you make gifts to friends or family that is large enough, there is the possibility that you may owe the federal government some tax money.

Of course, you probably want more information about the current regulations of the federal gift tax. Keep reading and I’ll share a few of the major points for 2012 and beyond. Sorry if this isn’t as exciting as the Nutcracker.

First, and perhaps foremost for some, is the fact that you, as the giver, are not going to be taxed (unless you exceed the gift tax exemption). It is the recipients who will have to pay taxes. For taxes to figure into the equation at all, you will have to have given away in excess of $1 million in cash or other assets over the course of your life.

Plus, if you have a spouse they have their own separate exemption for the same amount. What this means is that most people will never have worry about the federal gift tax at all. (Currently $139,ooo up from $136,000 for 2011 tax year)

The gift tax also includes the annual gift tax exclusion. This exclusion allows you to gift up to $13,000 during a calendar year – without counting against that $1 million lifetime limit. Currently, the figure remains the same now for 2010 and there is every indication that this exclusion will remain the same for 2012. If you exceed $13,000 the difference is applied to your lifetime exemption.

Gift Splitting

Another important point is the capabilities of gift splitting. If the husband and wife are both living and one child (for example), the husband can gift $13,000 to the child and the wife can gift $13,000 to the same child and not affect your lifetime income limit. One other important point regarding gift splitting is that for it to work, each spouse must consent to splitting of the gift. This is done with the appropriate form which I’ll discuss next.

IRS Form 709 – Gift Tax Return

Another question that I get is: what paperwork do you have to file with the IRS if you do gift? The good news is that if you don’t exceed the $13,000 annual gifting amount, no paperwork is needed – how sweet is that! The two instances that do require the IRS Form 709 are:

You gave your spouse an interest in property that will be ended by some future event.

You can read more about the IRS Form 709 in IRS Publication 950.

Another regulation concerns the federal estate tax exemption.

This provision allows you to leave up to $3.5 million that is free of federal estate taxes. As with the lifetime federal gift tax exemption, if you have a spouse they are allowed a separate exemption. There are indications that this figure will change much for 2011. Additionally, any gifts that you make during your life will decrease your taxable estate. Those gifts that exceed the yearly exclusion will lower your estate tax exemption. The point here is that if you make annual gifts that fall within the constraints of the exclusion, you can actually reduce your taxable estate without suffering negative repercussions.
Gifting and 529 Plans

There a special provision in the federal gift tax guidelines that address 529 plan contributions. These are college saving plans that can be used by a future student to pay tuition and other educational expenses. The rule allows you to give lump sums as gifts that are then spread over a certain period of time (typically 5 years). This can be done without affecting the lifetime gift tax exemption or the estate tax exemption.

Gifts Can Be Tax Exempt

You will also find a listing of instances where your gifts can be considered tax-exempt. This means you can offer unlimited gifts in these areas without worrying about the gift tax or the estate tax. They include gifts given to spouses (assuming U.S. citizenship), to cover another person’s medical expenses, and someone else’s tuition expenses if paid directly to the college or university (some exceptions may apply).
There are also stipulations for filing a gift tax return.

This applies if you make a taxable gift that exceeds the annual exclusion rate. You would then be required a Form 709: U.S. Gift (and Generation-Skipping Transfer) Tax Return. You are required to fill it out even if you don’t owe taxes because of the $1 million exemption. There are certain filing rules based on your marital status and any gifts you want to claim on a return. Spouses will have to file their own returns, though some may choose to split gifts on the separate returns.

Gifting Deadline

If you’re planning on gifting assets held at a brokerage firm, I strongly suggest you check their policies regarding gifting certain securities. While you have until the end of the year to technically give the gift, certain firms may have sooner deadlines. Here’s an example of what you might see:

With the process and the desire for clients to complete gifting by year-end, Brokerage XYZ must receive client signed instructions in good order no later than December 17, 20xx, to ensure that the gifting of shares takes place and settles in the desired account. Any requests received on or after December 20, 2010, will be processed on a best efforts basis.

Gifting Strategy Right For You?

If you are considering gifting as part of your estate planning, I strongly encourage you to meet with a qualified estate planning attorney. Recently, I had a client that questions on gifting (more advanced case) and I placed a call to a local attorney. I was dumbfounded on how so many of the rules that I was familiar with had changed. Lesson learned: it pays to have someone on your side who knows what’s going on. Don’t go at it alone.

photo credit: wcn247