There is always a mystery in every home. What makes that weird noise in the middle of the night. Why is there a wall bump out there. How did that water stain get on the ceiling?
One question that has been plaguing me with our house ever since we moved in was our ‘fireplace’.
The first time we toured the house when we were shopping, I just thought, “cool it has a fireplace”. The listing said the house had a fireplace, so I took it at face value. The second or third time we walked through the house before buying, I inspected it a bit closer and found out it was a fake.
Where there should have been an opening or a door, there was wallpaper behind the metal faceplate. “Oh, okay, when they remodeled they must have sealed off the chimney”. It obviously did not affect our buying decision. We never had our hearts set on having a fireplace.
Still, thoughts about the ‘fireplace’ have always bothered me. The chimney was right there, so it was a logical place for a fireplace. It fit the room perfectly. Then there would be little clues here and there, like when our roof leaked in an epic freezing rain a month ago and I mentioned to my neighbor that maybe it would be better just to get rid of the entire chimney above the roof line, to which he replied that the previous owner had always hoped to restore the fireplace.
So, as I sat at my desk, 8 feet away from it today, I got the sneaking suspicion that maybe ‘blocking’ off the fireplace was more along the lines of “let’s drape some paper thin wallpaper across the opening and call it good”.
Getting up and really personal with it, I saw that the bottom trim wasn’t nailed into anything and could be removed by hand.
I could feel a draft of cold air emanate out from the sizable gap. Cob webs were whipping about as well. Uh oh. I remembered a different house that we tried to buy before this one, and it also had an open chimney with no damper to keep the cold air out. Would this be the same? The gap was too small to see with my own eyes, but I was able to squeeze my phone in to take some pictures.
That’s a chimney alright. I cannot see any daylight at the top of the picture, so there must be some sort of ventilation cap installed or maybe there is a damper. Now I have even more questions! First and foremost, are we losing 8% of our heating bill out a big hole in the middle of our house?
The days are slowly getting longer, but it is still very much winter here in Illinois. Last Friday night we decided to combat some of the wintery blues by making up our own version of the popular board game Qwirkle.
The game is like a cross between dominoes and scrabble. It will really test your brain as you try to lay your tiles down to score big points. Our homemade version was a bit rudimentary, but it was also free.
For the record, Shae kicked my butt. What do you do to keep busy on those long winter nights?
I have heard about credit card churning for several years now and it has never really interested me before. That began to change after our Mexico trip when the lights upstairs started to flicker on about ways to trim the fat on our next international trip.
What is Credit Card Churning?
Credit card churning is the act of signing up for credit cards for the sole purpose of collecting the, usually, large sign up bonus offer. As soon as one bonus is collected you move on to the next card. Some industrious, or foolhardy, individuals may open multiple cards at once to speed up the process.
Example Sign up Bonus
Here is another example sign up bonus. This one from Capital One’s Venture card.
If you do it right, and that is a very understated statement, you have a lot to gain and very little to lose. Take the Venture card for example. If both you and your spouse complete the necessary bonus steps, you stand to save $920 on travel. In the case of our Mexico trip, that would have nearly halved the trip cost!
What’s the Catch(es)?
Tons. We are talking about credit card companies who make money by taking advantage of uninformed or ill informed individuals. Here are just a few of the gotchas you have to consider.
Minimum Spending Requirement
In order to receive that big points bonus, you usually have to spend a certain amount with the card within a certain period of time from being approved. For Venture, that is $3k within 3 months of approval. If you only spend 2999, you are SOL. No bonus points for you. You might think, that will be a piece of cake. I’ll just go to the ATM and withdrawal three grand. WRONG! That counts as a cash advance and will generate 25% interest immediately. A big no-no. Serious churners who take out multiple cards at once often rely on manufactured spending, or MS for short. MS is the process of using the credit card to obtain some sort of cash equivalent and then figuring out a way to get that equivalent back into their bank account. There are many different strategies for doing this, and most of them are perfectly legal. The strategies are always changing however as loopholes are closed. I would strongly advise that you do plenty of research before going down this rabbit hole.
For myself, I am intending to avoid MS altogether and reach the minimum spending through normal usage. It is important to consider whether or not you can meet the minimum spending requirement.
With high sign up bonuses, come high annual fees. The Venture card and several others, waive the fee for the first year. The card companies hope that you’ll like the card so much or just forget about it that they will be able to milk the AF for years to come. You’ll need to have an exit strategy to deal with the annual fee. Sometimes you can downgrade the card to a $0 AF, or you may have to cancel the card outright. All of this needs to be taken into consideration BEFORE applying.
Your credit score will take a hit from doing this. Churning is not recommended for anyone with low credit or anyone that may need credit for something important (like a house or student loan). I am in a nice position where my credit score doesn’t really matter because I don’t need it for anything vital.
What are you going to spend those bonus points on? The more important question is, CAN you spend those bonus points on what you want? Each card company has its own rewards program and set of points. The rules vary widely on whether they can be cashed out, transferred, or with whom they can be redeemed against. Bonus point awards often take 6-8 weeks to post to your account after meeting the minimum spending, so if you are pressed for time, you may not be able to capitalize on those sweet bonuses. The moral of the story is, have a clear goal on what you want points for.
Who Should Absolutely NOT Churn
If you have ever carried a credit card balance, if you have ever been late on a payment, if your credit score is below 720, if you have ever had a library fine for returning a book late, credit card churning is NOT for you. You need to be meticulous!
Getting Our Toes Wet
We have plans to travel to Costa Rica later this year, so our goal is to reduce the cost of that trip with credit card churning.
This morning after doing plenty of research, I applied and was approved for the Capital One Venture card. I chose this card for several clear reasons.
The Venture card was one of the only cards that let you apply points retroactively (within 90 days) against transactions in your statement history. This is very important due to the timing of the trip we plan to take. If you add up the 3 months of spending to reach the min spend, and then an additional 2 months to have the bonus points post, you are already at five months from now to when you have points that you can use. Assuming that you book your airfare at the recommended 6 weeks pre-travel, you are looking at almost 7 months lead time from applying to a card to when your trip is going to be.
Another reason to go with Venture is the flexibility of using points. Any transaction that posts as travel can be redeemed against. You are not locked into a particular airline or hotel chain.
The minimum spend was within our capabilities. There are some fantastic business card sign up bonuses out there and some bigger personal bonuses, but they all have higher min spends. As a frugal family, we just don’t spend that much to meet those higher limits.
The 2x miles for every dollar spent means that the actual cash value will be ($3000 min spend * 2) + 40,000 bonus = 46,000 points = $460 in travel reimbursement. If Shae also signs up for a card that will be $920 of ‘free’ travel.
I applied online and was approved right away. Satisfyingly, my free account with Credit Karma sent me an email almost instantaneously informing me about the hard inquiry.
As expected, my credit score took a hit.
Keeping calendar reminders and detailed records is a must.
I will have to do a follow up post when/if we succeed in our first credit card churn. I am a bit concerned about meeting the min spend on two cards, but if we do some of the home improvement projects we have been considering, it shouldn’t be a problem.
Leave a comment if you have churned before or if you have a question about churning.
We just got back from a week long trip to Mexico’s Yucatan peninsula. If your geography is a bit rusty, it is situated right here.
The purpose of the trip was threefold.
Firstly, we wanted to have a good time and get away from the pressures of work and our daily routine.
Secondly, we wanted to expand our comfort zone by doing an international trip to a non English speaking country.
Finally, we want to see if geographic arbitrage, the act of living abroad to save money, is something that we can realistically cope with. An easy starter trip to the tourist heavy Riviera Maya seemed like a logical first step before visiting further afield places such as Ecuador, Panama, and Columbia (see here for Forbes top countries to retire to). If we can make trips to all of these places, we will be better suited to make geographic arbitrage a reality. Who wouldn’t want to spend six months of the year enjoying the beach and fresh seafood.
The timing of this trip was intended to capitalize on Frugal Boy’s age. Under two year olds have the option of flying as lap children on airlines. Considering each of our roundtrip adult tickets was $400, being able to save that amount helped to keep costs down. With some extreme luck, both of our flights to and from Cancún had 30-40 empty seats so Frugal Boy got his own seat even without paying for one. While most domestic flights you can book online with lap children, our international flight required calling the airline to book. While we didn’t have to pay the full $400, there was about $17 in taxes/fees that had to be paid for his fare. There were cheaper flight options available to us, but they involved multiple layovers and took about 3x as long. In the end, we are willing to sacrifice some money for sanity.
Frugal Boy sat very well for the four hour flight. The only mishap was a blowout diaper right when the seatbelt light came on. Shae was a saint and sat with the stench for almost an hour. I was two seats away and could not smell it, so I think our neighbors were spared. 🙂
We knew that we did not want to hang around Cancún for more than a night so we rented a car at the airport. The general path of travel was a giant triangle. We drove down the coast making stops at Playa del Carmen and Tulum, before heading inland to Valladolid.
Rental cars in Mexico are often a source of contention with new travelers. If you search on any of the travel aggregator websites (Kayak, Expedia, Travelocity, etc.) you will see week long rentals for under $10 total. Of course, that price is way to good to be true. The catch lies in insurance. Chances are very good that your USA auto insurance and credit card insurance is worthless in Mexico. [update] I looked up the Visa rental car insurance program and it does indeed cover CDW in Mexico (damage to the car) and many other international markets. You have to decline the rental agency’s CDW coverage and book with your Visa credit card in order to take advantage of this benefit. You still need to purchase liability coverage. Knowing this, we could have saved about $200 and still had the same amount of coverage.That means you will need to purchase a policy in Mexico to cover your travels. Liability insurance is mandatory and failure to have it in the case of an accident can mean jail time. Of course rental companies will be happy to sell you insurance, and that insurance can be pricey. We played it safe and loaded up the car with tons of optional insurances. The main benefit was that if we were in an accident, it would have been a $0 deductible out of our own pockets. The total rental cost was around $460 for a week. We could have trimmed costs by getting less insurance, renting from a non-airport location (avoids the airport taxes), or skipping the car altogether and using the ADO bus system (equivalent to Greyhound).
Once we had the car, driving was pretty much the same as in the states.
The two major differences are the use of Returnos, designated u-turn areas, and the abundance of giant speed bumps called topes. Most of the topes were made out of concrete and resembled the speed bumps we see in the states, but there was also metal versions.
Most topes required you to slow down to 2-3 mph to safely cross. Many of the streets are one way, so it is important to pay attention before making turns. Valladolid had some of the best signage as you can see.
Paying for Things
While most places accepted USD, the exchange rate fluctuated wildly from vendor to vendor. Our credit card charges a 3% transaction fee for international exchanges, so we only used it for the rental car and one night’s hotel stay (we simply didn’t have enough pesos on hand at the time). In general, you will get a better deal if you use the native currency. The easiest way to get pesos is to hit up an ATM.
The exchange rate at the ATMs were in the mid 17s. For every USD you would get 17.5 Mexican Pesos. For reference, most restaurants used 1:15, money changers used 1:16.5, grocery stores used 1:17 or even 1:18, and street side vendors used around 1:12. The US Dollar is extremely strong right now and makes traveling internationally an enjoyable experience.
Peso bills are logically sized from largest to smallest value and size.
The Language Barrier
We have been using Duolingo for just under 4 months. With 4 months of free spanish lessons, we were able to muddle our way through even the non touristy city of Valladolid. I also checked out three pocket phrase books from the library before we left. Why pay for a phrase book when your local library has them!
The tourist strips had a heavy bilingual population, but once we were out of those areas it was predominantly Spanish only. Signs were always easier to understand because you can take them at your own pace and they don’t have an accent.
The road signs followed many of the same image conventions as the USA ones, so it was easy to understand them and make timely decisions.
With all of that said, we certainly would like to improve our listening and speaking skills before the next trip.
Resting our Heads
For this trip, we decided to try out Airbnb for the first time. The tag line for the website is, “Rent unique places to stay from local hosts in 190+ countries.” We rented three separate apartments, one in Cancún, Tulum, and Valladolid. We also reserved two hotels, one for the return Cancún portion and one for Playa del Carmen. We really enjoyed our Airbnb rentals, much more than the hotels we stayed at. The accommodations were larger, more personal, with friendly faces, and cheaper prices. Often times, the hosts had great personal recommendations for things to do around the area.
All of the apartments we stayed at had WiFi that was fast enough to do video calls home. This was a big bonus for reassuring family that yes, we had not been taken hostage by a cartel. It was also nice because I could post pictures from our day online for friends and family to see.
I would heartily recommend Airbnb and am looking forward to using it for future trips.
Filling our Stomachs
If there was one thing that was noticeably cheaper in Mexico, it had to have been food. A sit down meal for two with drinks and tip was often around 5 USD. Even in the ‘expensive’ touristy places it was only around $10-$12.
None of us got Montezuma’s Revenge. We drank bottled water and brushed our teeth with bottled water. We even ate at a food truck one night and felt none the worse for it. In fact, it was Shae’s favorite food for the entire trip.
One of our favorite cultural experiences was the panaderias (bakeries). Armed with a silver platter and tongs, you could pick out individual pastries. Over the course of the week we sampled almost everything that the bakeries had to offer. Usually our breakfasts consisted of baked goods.
Traveling with a Little Kid
My brother asked me if traveling with Frugal Boy internationally was any harder than doing so domestically. I have to say no. Traveling around Mexico with Frugal Boy was no more challenging than carting him around the states.
In fact, I think that it may have improved our experience. Sure there were times when we wished we had left him with the grandparents, but that’s true of any trip. There were also times when locals, usually older women, would approach us or interact with us because of him. Little kids are great ice breakers and so far that seems to be a universal truth in my experiences.
Having the Boba carrier was a huge help, especially at the Mayan ruin sites we visited and in Valladolid were sidewalks were virtually non existent.
If you can handle traveling domestically with your children, you can do it internationally as well.
We had a great vacation. While none of the places we visited are places we would want to live for multiple months of the year, it was still interesting to see them and get a feel of what geographic arbitrage would be like. The total cost of the trip was around $2250.
Our goal was to have the trip cost what our monthly mortgage payment would have been, so in that regard we went over budget, but not terribly so.
Nothing bad happened to us and we never felt threatened or in danger. The Mexican people are friendly and just living out their lives like we do here in the states. They have families, jobs, homes, cars, cell phones, and generally greet you with a smile. We never had any trouble with the police or military. Just follow the law, don’t speed, and don’t act like an asshole and you’ll be okay.
I often joked with family that we were going to South Florida. For the most part, that felt true.
2016 is here. Hopefully it is not quite as much of a blur as 2015. We celebrated at home with grandparents and aunts. Frugal Boy got to open some more presents and was absolutely delighted with the tractor. Wheels need not apply.
Entertaining guests in the Midwest in the winter is always a bit of a challenge. We filled the time by going to a classic car dealer/showroom.
Then for lunch we went to the Bustaurant. It is a double decker bus that has been converted into a food truck. The kitchen and order counter are on the first floor and seating is on the second.
Well that was a fun diversion. Eh guvernor?
Back at home we played with blocks.
Some of us went to the local downtown game store and played games for free. I thought it was really neat that you could take almost any board or card game off the shelf and sit down at a table and play it. BFB, before frugal boy, Shae and I visited my brother and sister-in-law and they had a very similar game shop that let you try out games. One additional nicety that we discovered with our local game store was the ability to rent board games for the night.
For a total of $5 we rented two games, Tsuro and Munchkin Steampunk Edition for 5 days.
Tsuro ended up being very popular in our house. The easy to learn but difficult to master game had more than a few people engaged.
Nobody made it to midnight on new years eve. Maybe next year!