Little-Known Money-Saving Deals

Official figures say inflation is under control, but some of your regular expenses are rising steeply. You can beat many of these cost increases. You also can maximize savings on other expenses by doing some smart comparison shopping.

Auto insurance. There is a revolution taking place in automobile insurance, sparked by Progressive Insurance. Instead of using only the traditional four or five pieces of data to determine premiums, innovative insurers use considerably more information.

Key data now include credit reports. The better your credit report, the lower your premiums will be. Insurers also have more sophisticated ways of segmenting drivers by age, location, and type of vehicle. One surprising factor they use is the level of coverage requested on the previous auto policy. Insurers believe drivers who requested only the state-required minimum coverage are riskier drivers and should pay higher premiums.

The sophisticated insurers give lower prices to good risks than other insurers do. Drivers with good records and who are good risks should be sure to get quotes from Progressive, Allstate, Safeco, and GEICO. Other drivers should be sure to get quotes from insurers who aren’t using the latest pricing models. These are said to include State Farm and Nationwide.

It used to be a good practice to get three or four quotes before choosing a policy. Now, with more variety among factors the insurers use, you should check eight or nine insurers. This is easier through web sites such as www.insweb.com and www.insurance.com.

Long distance service. Traditional phone companies quietly are raising prices for their services, especially long distance service. The companies have decided that they no longer can afford the price wars of the last few years.

The new programs have higher per-minute charges and monthly fees. The goal of the phone companies is to increase the number of customers who sign up for feature-laden, one-rate plans that offer unlimited or high volume calling. The companies want heavy long distance users as customers and would like low volume long distance callers to use other services.

Even some of the reliably low-rate 10-10 services are increasing their long distance rates.

Telephone customers who won’t benefit from the new unlimited use, one-rate plans should consider other options.

Your local cable company likely is or soon will be offering both local and long distance telephone service. If you have a high-speed Internet connection, an Internet phone service also is a possibility. The leader is Vonage, which sells its software in some computers stores, and has plans starting as low as $14.99 per month. For details, visit www.vonage.com.

Many people drop traditional long distance plans and make long distance calls using their cellular phones, since many cell plans now offer a fixed number of minutes for a flat monthly fee. It doesn’t matter if the calls are local or long distance.

Another option is to use a calling card. The calling cards are available in many retail stores. Be sure to check the details of each card: per-minute charge, minimum per call charge or connection fee, and the billing increments (full minute, closest thirty seconds, etc.) The best deals usually are in discount stores, such as Costco.

Finally, consider shopping for the best calling plan or 10-10 plan. Comparison shopping is easy at web sites such as www.saveonphone.com and www.getconnected.com.

Credit card deals. The hottest thing in credit cards these days is the cash rebate program. For each eligible dollar charged on the card, the user gets a rebate. Sometimes the rebate is actual cash in the form of a check issued annually. Under other cards the rebate is credited against the balance due each month.

Of course, all rebate or cash-back cards are not equal. Many card users end up with lower benefits than they anticipated because they didn’t read the fine print.
The best cards offer rebates on everything you purchase. The Chase PerfectCard (www.chase.com), for example, has a 3% rebate for purchases at participating gas stations and a 1% rebate on all other purchases. The rebates earned are deducted monthly from the balance due. BankOne Free Cash Rewards Platinum offers a 1% rebate on all purchases. The rebate rates on these cards aren’t as high as others that are advertised, but they are real and straightforward.

Other cards offer higher rebates with catches. Sometimes only purchases at participating or qualifying retailers earned rebates. The cards often don’t offer lists of the participating retailers. You have to ask the retailer or call the card company before making a purchase.

Still other cards have rebate rates that depend on the amount of purchases made during the year. American Express Blue, for example, offers only a 0.25% rebate rate on the first $2,000 of purchases. The rebate rate doesn’t hit the top 1.5% rate until annual purchases exceed $6,000.

Some cards give rebate points for each purchase. The points can be cashed in only by purchasing items offered in a catalog from the card company. You generally will pay full retail price, or higher, for these items through the catalog. Most of the time you can find the items at lower prices by shopping around. Also, they might not be items you would choose to buy if it weren’t the only way to benefit from your rebate points.

There are other fine points to check before using a rebate card. Often, rebates stop accumulating if there is an outstanding balance. Interest rates on these cards might be higher than on standard cards or the rates soar with outstanding balances.

If you get a rebate cards, maximize its benefits. Some users charge almost everything they purchase on their rebate cards. They know that every dollar of purchases adds a few pennies to the rebate total. It is a good strategy if executed properly. Do not buy things you wouldn’t otherwise. Be careful to pay the balance off each month, because those credit card interest rates will far exceed the rebate benefits.