12:14 PM - Feb. 15, 2007 - comments {0} - post comment

IRS actually STOPS taxing something

Ever reviewed your home telephone bill, cellular phone bill, or if you are a business owner, your company phone bill and wondered why each and every month you are being charged a "Federal Excise Tax"? More importantly, have you ever wondered if you could avoid the tax altogether or get a refund? Wonder no more...the IRS recently announced that it will stop collecting the Federal Excise Tax on long distance phone service, and taxpayers will actually be eligible to file for refunds of all excise tax paid on long distance service billed to them from February 28, 2003 through July 31, 2006. And believe it or not, the IRS will even pay you interest on these refunds! (Yet of course will tax you on the interest you are paid.) But before we jump into how you get your refund back, let's take a step back in time and look at the history of the Federal Excise Tax.

The tax was imposed in 1898, and was originally a tax on the affluent because phone service was a luxury back in 1898. The purpose of the tax was to help pay for the Spanish-American War which lasted six months. But after the war ended, the tax continued and consumers have paid well over $300 billion to pay for a war that cost only a tiny fraction of that amount. And with the current excise tax rate being 3% of the charges billed, that amount can be significant! For example, if your telephone bill is $100 the federal excise tax is only $3 a month but, if you are a business owner and your phone bill runs $10,000 that number is $300 a month. And with many consumers having more than one telephone service, the excise tax can add up pretty quickly.

So, how do you collect your cash?

The only way to obtain your refund is with your tax return. Tax forms will include a line for requesting the overpayment amount, and the refund can be claimed on 2006 returns due in 2007. To determine the amount of the refund, the IRS is working on a simplified method - similar to the sales tax deduction - which will allow you to use an IRS table amount to claim your refund. Or...similar to itemizing deductions on your return, you can gather up those old phone records dated after February 28, 2003 and add up the actual amount. For some, this could result in a larger refund and may be worth the effort. And although interest will be paid on the refund amount...don't forget that we're dealing with the IRS...the interest is taxable and will need to be reported on your 2007 income tax returns.

An interesting thought ......we all know that the IRS moves really, really slowly when it comes to change. But who would have thought that it would take over a century to repeal the federal excise tax?

12:13 PM - Feb. 15, 2007 - comments {0} - post comment

Pre-fab construction may be the wave of the future

After the devastation of Hurricane Katrina, Burst traveled to Germany to investigate various prefabricated construction practices. He met with a German engineer who patented an innovative and elaborate interlocking aluminum framing system. The process is typically used in commercial applications, but Burst decided to utilize the proprietary engineering and apply it to residential construction.

Burst is also taking the concept and adding ornate design aspects to the process: positioning the product and the method as "PreFab 2.0 Construction." Besides being extraordinarily structurally sound and easy to assemble, the cutting-edge process manufactures each section with the electrical and plumbing infrastructures already incorporated. So, when the homes are being constructed on site - whether on a mountaintop or a riverside ravine - the mechanical systems are already in place. The homes will be versatile yet rugged enough to stand up to the strictest U.S. earthquake and hurricane building codes. Not to mention comfortable and abundant in high-end, exotic materials and home living advancements.

Jeriko, with offices in Palm Beach, Florida and Beverly Hills, California, has an impressive team of over 30 architects, engineers and designers on staff: notably, Selin Maner, formerly of the prestigious Maya Lin Architectural Firm in New York. Jeriko also sets the bar high for superiority by using the likes of Poliform USA Kitchens and Koehler, along with other prominent interior designers, as well as exterior landscape architectural firms, to ensure excellence with every facet of the end product. With a global network of developers and design professionals, nothing is left to chance: plumbing, appliances, lighting, hardware, interior finishes and exterior cladding are all integrated into an advanced structural system that rivals the best home building techniques the world has to offer.

Recent research at MIT's Department of Architecture calls for future, environmentally friendly home construction standardization - with a focus on home buyers becoming the designers at the center of the process by receiving tailored information about blueprints, products and services at the point of purchase. This premise is the cornerstone of the Jeriko House business model. Jeriko House is the rapid-construction, "Smart House" of the future here now. They are made to order, made to last and made to tackle every detail and specifications for the home buyer. No cranes necessary, and easy to build, the Jeriko homes combine simplified jobsite management with high-end design demands. This concept will "address a major shift in outdated home construction practices," said Burst. "We plan to be on the cutting-edge of the green revolution in the residential home building sector."

Five major design models, with infinite configurations, the houses are completely customizable and virtually turnkey with no shortage of luxurious amenities. At a starting point of $175 per square foot, the prefabricated dwellings boast exotic Asian teak wood finishes, coconut skin walls, Indian rosewood door handles and stone, marble and ceramics from around the globe. But they are truly homes that merge fashion and form with function as they also incorporate intricate biometric systems and homeowner-friendly technologies.

Contrary to the negative "Prefab" stereotype, the process does not sacrifice quality or structural integrity. "In fact," says Burst, "prefab is not a bad word. When executed properly, it's actually an assurance of high quality, durability and luxury - affirming quality control, structural integrity and end-user comforts throughout the entire process."

12:10 PM - Feb. 13, 2007 - comments {0} - post comment

The market IS improving

Total existing-home sales - including single-family, townhomes, condominiums and co-ops - eased 0.8 percent to a seasonally adjusted annual rate of 6.22 million units in December from a level of 6.27 million in November. Sales were 7.9% lower than a 6.75 million-unit pace in December 2005.

There were 6,480,000 existing-home sales in all of 2006, down 8.4% from a record 7,075,000 in 2005. The second highest total was 6,779,000 in 2004; NAR began tracking home sales in 1968.

David Lereah, NAR's chief economist, said home sales remain historically high. "Despite all of the doom-and-gloom stories and dire predictions over the last year, 2006 was the third strongest year on record for existing-home sales," he said. "It looks like we're moving beyond the low for the housing cycle last fall, and buyers are responding to historically low interest rates and competitive pricing by home sellers. In addition, a tightening inventory of homes on the market is supporting prices."

Total housing inventory levels fell 7.9% at the end of December to 3.51 million existing homes available for sale, which represents a 6.8-month supply at the current sales pace - down from a 7.3-month supply in November.
The national median existing-home price for all housing types was $222,000 in December, which is unchanged from December 2005. The median is a typical market price where half of the homes sold for more and half sold for less. For all of 2006, the median price was also $222,000, up 1.1% from a median of $219,600 in 2005.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.14% in December, down from 6.24% in November. The December rate was the lowest since October 2005 when it averaged 6.07%.

NAR President Pat Vredevoogd Combs, from Grand Rapids, Mich., and vice president of Coldwell Banker-AJS-Schmidt, said the market has clearly settled with some minor monthly fluctuations. "We expect home sales to rise modestly over the course of this year," said Combs. "Although local markets vary, price appreciation will be below normal in most of the country this year, but we're looking for slow, steady gains in both home sales and prices through 2008."

Single-family home sales slipped 1.3% to a seasonally adjusted annual rate of 5.44 million in December from 5.51 million in November, and were 7.2% lower than the 5.86 million-unit pace in December 2005. In all of 2006, single-family sales declined 8.1% to 5.68 million, the third strongest total on record.

The median existing single-family home price was $221,600 in December, which was unchanged from a year ago. For all of 2006, the median single-family price was $222,000, up 1.4% from 2005.

Existing condominium and cooperative housing sales rose 2.1% to a seasonally adjusted annual rate of 777,000 units in December from an upwardly revised level of 761,000 in November. Last month's sales activity was 12.2% lower than the 885,000-unit pace in December 2005. After setting 10 consecutive annual records, condo sales for all of 2006 fell 10.4% to 803,000 units, the third highest year on record.

The median existing condo price was $227,000 in December, which was 0.3% above a year ago. In all of 2006, the median condo price was $221,800, down 0.9% from 2005.
Regionally, existing-home sales in the Midwest rose 4.3% in December to a level of 1.47 million, but were 5.8% lower than December 2005. The median price in the Midwest was $167,000, which is 2.9% below a year ago.

Existing-home sales in the South increased 0.8% to an annual sales rate of 2.49 million in December, but were 7.1% below a year ago. The median price in the South was $182,000, unchanged from December 2005.

Existing-home sales in the Northeast declined 2.8% to a level of 1.04 million in December, and were 5.5% below December 2005. The median existing-home price in the Northeast was $283,000, up 3.7% from a year earlier.
Existing-home sales in the West fell 9.1% to an annual pace of 1.20 million in December and were 15.5% lower than a year ago. The median price in the West was $349,000, up 1.5% from December 2005.

12:05 PM - Feb. 11, 2007 - comments {0} - post comment

Thanking of buying new construction?

Eric Bramlett, our favorite real estate writer and broker from Austin, has the following tips if new home construction is in your future.

New home communities are more popular than ever! With good reason - new home builders are using popular, open floor-plans, including appliances, sod, and blinds, and helping make it easier than ever to get into a new home with little or no money. New home transactions typically seem a lot easier, as well. If a buyer chose to, they could get through a new home transaction without contacting anyone except the on-site sales agent! However, this would open you up to HUGE losses. Take these simple steps to protect yourself in a new home transaction, and to ensure that yours is a success.

1. Use an Agent Who Has New Home Sales Experience

Many people think that they can save money by not using, or don't need the services of a Agent when buying a new construction home. This couldn't be further from the truth! New homebuilders typically try to monopolize a transaction - they only give you their attractive incentive packages if you agree, in writing, to use their lender, their title company, and sometimes even their insurance company! An Agent will walk you through the transaction and will make sure that you're protected every step of the way. If you've agreed to use the builder's lender, your Agent will make sure that you get a fair interest rate & fair closing costs. Your Agent will know what the industry standards are, and will make sure that the builder doesn't try and stretch beyond these. And best of all, an Agent with a lot of new home transactions under their belt will have established relationships with your homebuilder. Because of this, the homebuilder will be on their "best behavior." The homebuilder doesn't want to run the risk of getting a bad reputation in the Agent community, who can potentially bring the builder lots of homebuyers in the future.

2. Don't Sign ANYTHING Until You've Worked Out Every Detail of the Sale

Buying a home can be very emotional - and it should be. You're not simply picking out a house; you're picking out where you'll spend the holidays next year, where your parents will come visit you, and where you might raise your children. However, the on-site sales agent will try and play on this emotion and get you to "write up the contract so that no one else can get your house." That's just fine, as long as you understand what you're signing, and everything is okay with you. Just remember - no matter what is said, everything will be done as it is outlined in the contract.

3. GET A HOME INSPECTION!!!

Most people who buy new construction homes don't bother to get a home inspection. Most new homes come with a one year ?bumper to bumper? warranty that includes everything, and many homebuyers feel that they can find out if there are any construction flaws during those 12 months. The problem with this mindset is that many problems won't surface until well after the 12 months. Remember, your home was built by humans, and humans make mistakes. And, no matter how much experience and reputation a builder brings to the table, it's still next to impossible for that builder to double check every part of the job their subcontractors have completed. A licensed inspector will go through a very thorough checklist to make sure that everything has been accounted for. At the very least, get an inspection so that you can sleep soundly at night, knowing that an independent third party has given your new home their stamp of approval.

4. Don't Agree to Use Their Lender

Production builders (builders who can develop whole communities on their own) are now large corporations, many of them traded publicly. The corporations have realized that there is much more money to be made than simply selling you your new home - they'll also try and sell you a loan. Builders will offer HUGE incentives to get you into your new home, sometimes up to 15% of the value of the home. However, they will typically put one BIG stipulation on those incentives - that you use their lender. There are many problems that will come up when you pigeon-hole yourself to one lender - higher rates and higher closing costs are the two biggest. The on-site sales associates will typically tell you that their hands are tied, you have to use their lender to get the incentives. I can tell you, from experience, that this is seldom the case. Remember, the builder's job - first and foremost - is to sell homes. If you refuse to sign on the dotted line unless this stipulation is removed, you will be successful - most of the time. There are rare occasions when a builder will lose sight of the fact that they build and sell homes - and will absolutely insist that you use their in-house lender. In these circumstances, walk away, no house is worth taking a bad loan and paying THOUSANDS more for that house in the long run.

5. Research the Builder

Most builders are "good" builders. They take simple steps to protect their neighborhoods. Research your builder, or ask your Agent if your builder takes these simple steps to make sure that your neighborhood won't instantly go down in value:

1. Limit the # of investor purchases - this makes sure that the neighborhood doesn't turn into a "rental" neighborhood & allows the "pride of ownership" to shine through.
2. Continues to build equal or greater value homes in the same and surrounding neighborhoods. Builders who avoid doing this create a "vacuum" in home prices and instantly devalue new home purchases.

6. Choose Your Appraiser

You're going to pay for an appraisal one way or another! The lender will require that you have an appraisal in order to loan you the money for the home! Additionally, most appraisers charge about the same money for the service - so why not choose your appraiser? Ask around until you've been referred to a good appraiser and request that they perform the service. Ask for a copy of it and read it! Call your appraiser if you have any questions. This will give you an in-depth knowledge of the market area - and it's something you would pay for, regardless!

7. Research City Plans

New neighborhoods are typically on the outskirts of town - the land is readily available and less expensive, which means that you can buy a bigger house for the same amount of money. In these outskirt communities, it's very important to know what the city has in store in the way of roads, zoning, public transportation, parks, and schools. These factors will dictate whether your new neighborhood will become the next "big thing," or the next "cheap thing." If you've decided to use a reputable Agent, your job will be easy! Simply ask your Agent and he/she will be able to provide you with lots of information about city plans that have been approved, and city plans that are still being talked about.

11:52 AM - Feb. 9, 2007 - comments {0} - post comment

Here's how to make that move a little easier

Moving can be very exciting...but it can also be a bit of a pain as well. Besides packing and unpacking, there is a long list of details to be handled. Things like choosing a mover, connecting utilities, getting Internet and cable service, or subscribing to newspapers or magazines in a new area can be quite a chore. And if you forget to connect one of the utilities you could be stuck in your new home for several days without that much needed service. To ease the stress of moving and schedule new connections for all of the utilities in one convenient location, simply logon to www.whitefence.com.

You can quickly compare prices for movers, phone, electricity, television, or high-speed Internet. Just select the service you wish to compare (e.g., phone, cable, electric, etc.) or enter your address on the home page, hit search, and within seconds a list of services and prices available in that area will appear. Next, click on the service of your choice to view details and pricing or comparison shop by choosing three providers. Once you determine the provider, select the service plan, complete the requested information, enter the connection date, and within minutes a confirmation will be sent to you.

If you want to change your current provider, simply hit the icon for phone, cable, or internet, select "switch provider", complete the requested information and a list of providers in the local area will appear. Choose the new provider and the service will be changed.

Additionally, on the site you can complete a change of address form, subscribe to local newspapers, and order magazine subscriptions. Moving to a new home should be enjoyable and exciting. Using this tool can help remove a bit of the stress of moving and will also help save valuable time.

11:50 AM - Feb. 7, 2007 - comments {1} - post comment

What is that APR thing on my closing statement?

Tim Ray of Apollo Mortgage explains APR this way:

Annual Percentage Rate (APR) is a tool that consumers can use as a starting point to compare loan programs. However, it's important to keep in mind that APR is not a perfect system, and not all lenders calculate APR in the same way. While the Federal Truth-in-Lending Act does require any mortgage broker or lender to disclose APR to the consumer, there is no rule written in stone for calculating this number that each and every lender agrees upon.

The point of calculating APR is to let the consumer know what the actual cost of their financing is in the form of a yearly rate. APR factors in certain closing costs and fees associated with the loan, and spreads this total over the life of the loan along with the actual note rate. The objective is to give the consumer a clearer picture of what their actual costs are, and this inhibits lenders from hiding fees or upfront costs behind low interest rates in their advertising.

Fees that are generally included in the APR calculation are points, pre-paid interest, loan processing fees, underwriting fees, document preparation fees, and private mortgage insurance. On occasion, lenders will include a loan application fee and/or credit life insurance. Fees that are normally not included in the APR calculation are fees from Title, Escrow, attorney, notary, document preparation, home inspection, recording, transfer taxes, credit report and appraisal.

Remember, all lenders do not perform the calculation the same way. Moreover, APR does not consider the possibility of making pre-payments, moving or refinancing. Unless the interest rate is tied to a fixed instrument, APR is even more confusing. Calculating APRs on adjustable rate and balloon mortgages is more complex because we really have no way of knowing what future rates will be.

11:46 AM - Feb. 5, 2007 - comments {0} - post comment

Buying your first home

Eric Bramlet of One Souce Realty in Austin, Texas is one of our favorite authors on real estate related matters.  He has some super tips for first time homebuyers.

Purchasing your first home is a big step, that comes with some very serious decisions. Many homebuyers are intimidated by the process, and continue renting much longer than they should, or need to. However, if you break the homebuying process down into these simple steps, and follow these important tips, you will find the process less intimidating, and much more manageable.

1) Before You Begin, Ask Yourself One Question

Will you live in your next home for at least 3 years? If the answer is "Yes," you should probably purchase, rather than continue renting. With average appreciation, you'll break even on your closing costs after 2 years, and start making money at year three. Every year after that will put more money in your pocket! The most expensive aspect of real estate is buying & selling, so the longer you can live in the home the better. However, purchasing makes sense if you can make as little as a 36 month commitment.

2) You Don't Need a Down Payment!

It always surprises me how many people want to purchase a home, but don't because they believe that a hefty down payment is required. Zero down programs are very common, and are quickly becoming the norm, rather than the exception to the rule. Because your new home is collateral for the loan, there are many banks that will jump at the chance to loan you 100% of its value. Perfect credit isn't a requirement, either. Because real estate typically appreciates in value, it's often easier to be approved for a 100% mortgage than it is to borrow 100% for a car!

3) Get Pre-Qualified

Pre-qualification is a very important step, and the step that first time home buyers dread the most. Qualifying to buy a home is pretty easy and requires relatively little work for you. Pre-qualification is what gives you buying power and allows you to make an offer on your dream home when you've found it. More importantly, pre-qualification will let you know how much your new home will REALLY cost - in monthly payments. A $150,000 or $300,000 home doesn't mean a lot to most buyers - but $1200 per month and $2500 per month are tangibles that everyone can understand. After your lender pre-qualifies you, ask them for a "payment table" that shows you a rough estimate of TOTAL monthly payment based on purchase price. Pick your payment, and you know the price range to shop in.

4) Consult a Real Estate Professional ASAP

Many first time home buyers avoid contacting a Real Estate Agent because they dislike high pressure sales. However, Real Estate Agents have an advantage over traditional salespeople because they have access to the Multiple Listing Service, which is a database that lists roughly 99% of the homes for sale in a given market. This means that your Real Estate Agent doesn't have to sell - he/she merely presents your options. The most important qualities to look for in your Real Estate Agent are his/her knowledge of your specific market and their willingness to help. Interview a few agents and choose one that will help guide you through the process. You'll find the help & insight will be invaluable - and you'll be glad you contacted your Real Estate Agent sooner, rather than later.

5) Make a List of "Must Haves" & "Wants"

Many new home buyers mistakenly think that they will "just know" when they "walk into the one." While some buyers DO fall instantly in love with a home, this is not the norm. You'll find your search is easier, and you will be more confident in your decision, if you take a systematic approach to your search. The best way to organize your search is to make two lists: Your "must haves" and your "wants." Your "must haves" are the absolute necessities in your new home - in fact, you don't even need to view a home if it doesn't have every "must have." Great examples of your "must haves" are price, school district, size, etc... Your "wants" are the qualities that you would like for your new home to have, but it's not a necessity. Great examples of "wants" are color, flooring, kitchen appliances, surround sound, and type of exterior. By taking the time to articulate what you need and want in your new home, you will know exactly what to look for when viewing prospective homes.

6) Pick Your Favorite Neighborhoods

You can always make changes to your house, but you can never change its location. Most home buyers already have a good idea of where they would like to live because of school districts, work, or other factors. However, neighborhoods can be pretty different, even in the same area of the city. Ask your Real Estate Agent to email you a list of homes in the specific area of town you're interested in. Take a drive through the different neighborhoods on the list your Real Estate Agent sends you, and choose your favorites. Pay attention to area amenities, how well the yards & common areas are kept, and if you see a lot of "for lease" signs - which can be an indication of a heavy rental area, and lacking in "pride of ownership." After you have picked your favorite neighborhoods, and you know your "must haves" and "wants," you can literally make a list of EVERY home available that meets your criteria, and view those homes.

7) Make Your Decision!!!

Homebuyers often hesitate after they've found the right home because they're not confident about their decision, or their decision-making process. Your home is probably the largest investment of your life, and it's normal to feel butterflies in your stomach before putting your first home under contract. However, if you do your due diligence - and you have if you followed the steps above - then you will have your bases covered. If you've found a home that meets all of your "must haves," most of your "wants," is in the right neighborhood, and in your budget - it's the home for you! Don't wait and let another buyer take YOUR home!

Buying your first home can seem very intimidating, but can be extremely exciting. If you think that buying a home is right for you, it probably is. Make sure and follow these important tips and you'll know you made the right decision when you find your first home.

1:52 PM - Feb. 3, 2007 - comments {1} - post comment

Finding cheap gas

When gasoline was relatively cheap, few people bothered to seek out the best deals. Who wanted to run all over town or take a chance on a no-name station just to save a few bucks?

The reality is that, with a minimal amount of effort and knowing a few things about the gas business, the typical driver can easily save a couple of hundred bucks a year by seeking out cheaper gas.

The more you drive, the bigger your savings. Todd Larson of Shorewood, Minnesota, drives 800 to 1,000 miles a week covering a five-state territory for a rotisserie manufacturer. Given that gas prices can vary 25 cents or more a gallon in many areas, Larson can save $500 to $800 a year just by being a little savvier about where he buys.

"Even if you only save four or five cents, it adds up," Larson said.

Here are some easy places to look for savings:

Check the Internet

Sites such as MSN Autos, GasBuddy.com and GasPriceWatch.com rely on volunteer "spotters" or the stations themselves to post prices from around the country. Participation -and coverage-tends to wax and wane along with gas prices, but you may well be able to discover cheaper alternatives just a few blocks from your regular routes. While the lowest-priced station can change by the day, certain stations consistently charge less than their brethren, said Jason Toews, co-founder of GasBuddy.com. It can be profitable to you to know which ones.

A 25-cent difference means you pay $5 less for every fill-up of a 20-gallon tank, but sometimes the disparities are even greater. A recent check of major metropolitan areas on GasBuddy.com found the difference between the highest and lowest prices was 44 cents in Washington, D.C., 52 cents in New York, 67 cents in Chicago and 68 cents in Los Angeles.

Visit the other side of the tracks

Generally, the better the neighborhood, the more you'll pay for gas. The station owner's overhead tends to be higher, thanks to more expensive land and steeper property taxes. Refineries also may charge more because of something called "demand inelasticity," which basically translates as "they charge more because they can."

"People are less price-sensitive than they are in less affluent neighborhoods," Toews said.

A spot-check of Los Angeles gas prices certainly bore this out. The lowest price reported in the 90210 Beverly Hills ZIP code was 35 cents higher than the bottom rate in the decidedly more downscale Van Nuys area.

Get away from the freeway — and the service bays

Buying gas from a station you spot from the interstate almost qualifies as an "impulse buy," Toews said. Drivers pay for the convenience of being able to zip in and fill up. Continue just a few blocks "inland" from the off-ramp and you may find a significant price drop.

There's an example of this near my own neighborhood, where three name-brand stations share a one-mile stretch of a road paralleling a freeway. The two stations on off-ramps consistently charge 15 or 16 cents more than the one in the middle.

Gas also tends to cost more at stations that provide repair services.

Use a wholesale club

The big warehouse stores-Costco, Sam's Club, BJ's Wholesale Club-typically offer some of the lowest gas prices in town. The downsides: You may find lines at the pumps, and the cost of membership (typically $40 to $45) will offset some of your savings if all you do is buy gas.

If you shop at one of these outfits anyway, or you're a heavy gas user-you drive a lot or pilot an SUV, for example-you may still find the savings worthwhile.

Look for 'loss leaders'

Discount retailers (Wal-Mart, Kmart) and grocery stores that have pumps often charge less than the competition to get people on their lots, knowing that they'll probably spend enough inside to more than make up the difference.

You may find lines at the pumps, similar to those at the warehouse stores, but at least you don't have to pay a membership fee.

Check for local price wars

These can break out anywhere, but may be more common in areas where independent stations are struggling to survive.

Also check stations around the wholesale clubs and discount retailers that offer gas; you may find you're paying only a couple cents more per gallon while avoiding the lines.

Consider a gas rebate card

You'll get the most generous cash-back offers initially if you're brand-loyal. The Marathon Platinum MasterCard, for example, offers a 10% rebate on Marathon purchases for the first 60 days, with a 5% rebate thereafter.

The Hess Visa Platinum Card extends its 10% rebate for 90 days for purchases made at Hess or Wilco stations, while the Speedway SuperAmerica Platinum MasterCard has an 8% rebate for the first 60 days; as with the Marathon card, the rebates drop by half after the initial period. Another option: The Shell MasterCard from Citi Cards, with its 5% rebate. All the cards offer a 1% rebate on other purchases.

Or a general-purpose rebate card

If you want more flexibility to seek out the best deals, regardless of the station brand-and get good rebates on grocery and drugstore purchases, as well-then consider a general-purpose cash-back card that rewards gas purchases.

These cards typically offer 5% cash back on gas, grocery store and pharmacy purchases, said CardRatings.com's Curtis Arnold, and 1% rebates on all other purchases. Some of the options include Citi Dividend Platinum Select, Chase Rewards Plus Card, Chase Perfect Card (with a 6% initial cashback rate for gas that drops to 3% after 90 days), Discover Platinum Card with Cashback Bonus Plus, and Blue Cash from American Express.

Some caveats: Many of these cards cap the rewards you can earn in a month or a year, which could limit the savings of big spenders. The Citi card limits your annual rebate to $300, for example, while the Chase Perfect card has a $15 monthly cap. Also, some — like American Express' Blue or the Discover card — have a tiered system, which means you won't earn the top rewards until your spending reaches certain levels (making them a less-than-optimal choice for light spenders).

Finally, many cards offer their highest rebates to stand-alone stations only, Arnold said. Gas purchases at wholesale clubs and discount retailers may not qualify.

That's because the issuers tend to earn lower transaction fees at the discounters than at the stand-alone stations, and that makes them less willing to offer the biggest rebates. It's hard to know in advance when these restrictions might apply, Arnold said. Often, neither the card's phone reps nor the station's employees will know for sure. "You just have to make the charge," Arnold said, "and check your next statement to see what kind of rebate you got."

Keep cash handy

Some of the cheapest stations accept only cash or ATM or debit cards. (The stations save by not having to pay transaction fees to credit card companies.)

Be careful about using an ATM or debit card at an unfamiliar station, however. Fraud experts consider gas stations one of the riskier places to use these cards, because employee turnover is high and it's pretty easy for a dishonest worker to steal customers' bank-account information. When in doubt, use cash.

Use legitimate coupons

Gas stations with car washes may offer discount coupons; you can also check those coupon packets you get in the mail or the back of grocery-store receipts.

What you don't want to do is fall for one of those telemarketing scams that offers $200 or so in gas vouchers for a small handling fee, usually $4 to $5.

Once you've given up your bank account or credit card number, you'll find unauthorized charges cropping up like weeds. Regulators in states from Oregon to Maryland have warned consumers not to fall for these scams and to never give out financial information to solicitors, regardless of how great the deal seems.

1:48 PM - Feb. 1, 2007 - comments {0} - post comment