More and more of us are accumulating frequent flyer miles – not because we're flying all over the place, but because we get them as built-in perks when we use our credit cards. Of course, there are plenty of people who actually are frequent flyers, who rack up their piles of miles thanks to all the traveling they do. But these days, over half the miles we earn do not come from traveling. Instead, whether we'll use them or not, we get some every time we say, "Charge it."

I'm all for consumers choosing their credit cards to take advantage of this and other potentially valuable perks … assuming all other things are equal (interest rate, annual fee, terms, etc.). I think it's great that competition is so tough for card issuers, they're offering extra fringe benefits like this to woo and keep us!

According to  Randy Petersen, Publisher/Editor of Inside Flyer magazine, the airlines give out 20 million or so free tickets a year. Isn't that great? Even more astounding: There are over 9 trillion miles in "current liability" – that is, just sitting there, waiting to be transformed into free flights. At least they're not waiting out on the tarmac! But they're not being put to good use, either.

Give a Priceless Gift

If you've got piles of miles, how about donating some of them to benefit our troops? Congressman C.A. "Dutch" Ruppersberger created a program that makes it really easy for you to do just that: Operation Hero Miles, where you can donate miles in support of the troops in Afghanistan and Iraq. Already underpaid and stressed to the max, until 2004, members of the armed forces had to finance their own much-needed "R&R" trips. But by contacting Operation Hero Miles, they could fly for free.

Regardless of how you feel about the war, I hope you agree that Ruppersberger came up with a painless solution to a serious problem for the well-being of our troops. And once the Department of Defense finally began paying for the soldiers' travel, Operation Hero Miles switched its focus. The organization now gives free tickets to the families of wounded troops, so they can visit their loved ones in military hospitals.

I hope with all my heart that you and your Mom had a terrific Mother's Day, and that you won't ever need an Operation Hero Miles ticket. Unfortunately, there are many Moms out there –  as well as their soldiers and kids – who will be thrilled to find out that their journey is possible.

I can't think of a better gift than a contribution of frequent flyer miles to Operation Hero Miles. Click here for the details.

Have you done anything special with your frequent flyer miles or other credit card perks?  Please share them with us!

Curtis Arnold, is the Founder of CardRatings.com, a website that provides ratings and reviews of over 20,000 credit card offers.

Welcome to the Mother’s Day Edition of the Carnival of Debt Reduction. Today, you will not get any sales pitch on things to buy for Mother’s Day. But rather, we will pay tribute to good old Mama’s advice on money and life and for once, I will use pink in my post (tell me if it goes with my light blue!). I will always remember Mama’s advice given to me throughout the years. Personally, here are a few snippets of what my mom personally told me :

1. Always have your own bank account (this was actually what she told her daughter-in-law Mrs Credit Card!)

2. You do not have to ever support me when I’m old, but don’t you dare borrow money from me!

3. Always save…save…save.

4. If you ever lend money to your friends, do not expect to get a single cent back.

Well, today’s carnival will contain some age old Mama’s advice. So, pay attention and stay tuned.

There is no free lunch. If it’s too good to be true, something smells fishy

Search Light Crusade post resonated with me the most - Mortgage Loan Advertisements : Horrible and Getting Worse. I cannot agree more with this post. Worse of all, these ads appear on mainstream internet like Yahoo. Check out Yahoo and see if you cannot find the following ad : Mortgage rates fall again - $145,000 for $499 a month!

Me : Mommy, I heard that our principal will be leaving at the end of the year.
Mama : Well, uncle Harry works for the school commisioner. Let’s call him to find out what is going on !

Free Money Finance post on The Mortgage Mess : In the Eyes of An Account Executive will really make you angry at what is going on in the mortgage industry. This is an insider account of what is really going on in the subprime mortgage lending world. I recently attended a Dan Kennedy/Glazer meetup group. These folks are famous for their direct marketing. During the session I attended, there was this mortgage broker (who must have been about 25 years old) who stood up and presented on how he was using direct marketing tactics (newsletters etc) to get sub-prime clients. He makes about $15,000 per loan approval!

When Mama found out I was dating, she always asked me the following :

Who is she?
What is her name?
What is her major in school?
Can I see her picture?
Where does she live?

Uhhh!! I used to hate those questions! But when it comes to major decisions and purchases in life, you can never ask too many questions. Is Debt Management Plan Right For You? from BB Consumer Education contains 17 questions you should ask before you think about enrolling in a Debt Management Plan. The title should be 17 Questions To Ask Before You Enroll in a DMP. These are very good points though and anyone in this situation should definitely check this out.

When I was 13 years old, I asked Mama to get me the latest BMX ‘Diamond Black’ bike. Why do you need it? Just use your old bike!

PF Advice wrote about the 10 Reasons Why He ditched His Car. Let me guess - totally eliminate your auto loan debt? But seriously, this is a nice post. And you know it is nice when a comment is as long as the post! If you could really do without a car, you will definitely save a bundle from not paying any auto loans.

Mama says : First, you write your daily allowance on the right column. Then you add your expenses on the left. Then you subtract the left column from the right column. The difference is what you saved

Aside from teaching me about budgeting, Mama also taught me how to fry an egg, tie my shoe laces and many other stuff. She would approve of the next post. 5 Steps to Debt Management is a summary of steps that My Credit Score has developed to help you manage your debt.

How to Get Out of Debt Fast by Kennubo is a very brief summary of steps you can take to get out of debt. This post could use a little more detail and elaboration though.

Never owe anybody money or they control your lives

How I plan to help my children avoid the credit trap documents the steps No Credit Needed Blog is taking following Mama’s advice on teaching your kids about money. Unlike, most who believe their kids have to learn the value of money and figure things out themselves, No Credit Needed is thinking about helping their kids more generously to prevent them from getting into debt.

Finished your homework? Well, don’t just do nothing, find something useful to do!

Mama would never allow me to waste my time doing silly things. Even when I’m done with my homework, she’ll find something useful for me to do. Your Credit Cards are paid off. Now What? is a thought provoking question posed by Tricia from Blogging Away Debt. What do you do when you have eliminated your credit card debt. Listen to what Mama says : Don’t just do nothing, find another debt to eliminate (student loan? Mortgage?). Well, the answer I would say is to give yourself a pat on your back and then move on to reduce your other debt as soon as possible. Keep going and before you know it, you’ll be in financial nirvana. Find out what Tricia thinks.

Mama will always love you no matter what

My Two Dollars plays Dr Phil this week with this personal development type essay for those in debt - Having Debt Does Not Make You a Bad Person. If you have negative self image about yourself, then perhaps this Dr Phil type article will inject some postitive energy in you.

Mom Screams : Why did you have 3 lollipops? Have some self control !

Control Your Spending from John Place Online is a short satire of a woman he knows that has her spending out of control. Spending is not the only thing that people have no self control on. We sometimes spend too much time on the computer, TV etc. But when you actually spend too much money, your finances will suffer. Do not make the same mistakes as the person in the following post.

Confessions of a Compulsive Shopper from Newly Frugal is a true account of a shopperholic. Please read this account carefully. If you are like what this, then you’d better do something about it.

Momma said : Son, You’re a smart and a good boy. Don’t let anyone tell you otherwise.

Prosperity and Abundance is Your Birth Right from Abundant Lifestyle is certainly not about debt reduction. But I guess if you do not think enough about prosperity, then you may find your debt reduction efforts pretty tough mentally. I totally agree with this post. Too often, all we talk about and advice those in debt to focus around saving, budgeting etc, which are all good things. But that is only half the equation. Program your mindset to accept abundance is the other often neglected half.

Mama says : Son, I want you to form good habits. When you get up, change, brush your teeth, put your school bag at the front of the door. Before you do to bed, brush you teeth, prepare your clothes for tomorrow and read your book.

7 Habits of Highly Effective Managers from Edith Yeung is certainly not about debt reduction. But if you follow these habits, you probably would not be in debt anyway.

Mama says learn from other peoples’ mistakes. Don’t make the same mistakes again

Blunt Money has written a series of post on common financial mistakes. Common Financial Mistakes - Part Eight highlights a couple of interesting points.

Mama says : When I say be home by midnight, it means I want you in the house by MIDNIGHT! Not a minute or second later! In life, never be late for anything - meetings, paying your bills, ANYTHING.

Mama would be very unhappy with Frugal Law Student’s very late submission of his Book Review of Generation Debt. The post was submitted at 9:53pm EST. Fortunately for him, his FICO score will not be affected. But be warned. Never be late for your court hearings.

All right, that’s it for this week’s carnival. Happy Mothers’ Day to all pf bloggers who are Mommys.

Here are this week’s highlights in the world of personal finance and money. Money Matters and Musings hosted the 99th Carnival of Personal Finance. A couple of posts caught my attention. Lazy Man and Money wrote about how blogging has helped him. If you are thinking of starting any blog, perhaps this would be enough motivation. You should also check out Free Money Finances’ being paranoid over giving his credit card over the phone at the airport. But hey, precaution and prevention is better than cure.

For a good laugh, check out SVB’s post on 5 Money and Currency Facts your History Teacher did not teach you.

Money Smart Life did a unique thing with this week’s festival of frugality. Rather than coming with a fancy theme, he simply listed all the articles he accepted. It is a short post and festival, but you can see all the headlines at a glance. So to keep it simple, simply head over to his site.

Journey to Financial Freedom was the host of the 86th Carnival of Debt Reduction. A headline from a post Debt Free isn’t what it’s cracked up to be from Queercents caught my attention. I head to the site and realized that the post is actually about making sure you build a credit history. I thought that the headline was a little misleading because I have no credit card debt or any other debt except a mortgage and yet have good credit scores and I get tons of credit card offers. I think where this article’s advice would be useful is to those who have no credit history or those who have been bankrupt before and refuse to use a credit card again.

Please also head over to the 12th Carnival of Credit Card. Though this is a credit card carnival, I’m finding lots of non-credit card, but personal finance type post.

Finally, I will be hosting next week’s Carnival of Debt Reduction. Summit your post no later than 6pm EST here.

Most 100% financing packages involve putting together a First Mortgage for 80% of the purchase price and a Second Mortgage for the remaining 20%, what we call a piggy-back transaction.  Those who seek piggy-back Seconds today are going to face much tougher scrutiny. Here's why.

Separating the loans segregates the risk too.  The property value would have to decline 20% for the holder of the First Mortgage to take a loss. That is unlikely as home values in even the weakest areas of the country haven't declined that much. That means that even if a loan was poorly underwritten and even though the borrower was wildly unqualified, the owner of that loan would likely not take a loss in the event of foreclosure.

However, the Seconds would have to absorb most or all of the loss, but let's acknowledge that any holder of a Second would already understand that. They felt that a combination of high yield and the fact that most of them would be paid off in a timely fashion would compensate for that risk. If you owned one such loan, it’s all or nothing, but if you owned 10,000 loans, 85% of them might be perfectly OK and, on balance, you got what you wanted.

But when a lender has to buy back loans in bulk, the only reason is that the loans are already in default. That means that 100% of those loans are risky and it’s conceivable that 80% of them or more would be headed to foreclosure.

If you assume that a market declined 5% and that it took another 5% of the value to fix up the home to re-sell it, and if a 6% sales commission were paid to sell it, you can see that the holder of the Second would only net 4% of the original value, 20% of the face value of the note.  You can also make the assumption that if they were to stick it out, they would also have to keep the First Mortgage current, and that would wipe out that 4% in a heartbeat. In all likelihood the holder of the Second in this situation would just write off his loan in its entirety. 

You might recall that talked about the vultures circling around troubled sub-prime lenders to feast off the carcass.  In a deal just announced and approved by the bankruptcy court, an investment fund just bought $170 million of mortgages from New Century Financial for a paltry $58 million. Many will entail a complete loss, but when you pay 30 cents on the dollar for something, you can bet that they will probably earn a handsome return before the dust settles.

In a related note, you may recall that in an earlier blog – Are You Kidding Me? - April 27, 2007 – I noted that the seven top executives of this sub-prime juggernaut had asked the Bankruptcy Court for $3.5 million in bonuses even though the organization now seems to be worthless as an on-going enterprise. Over 2,000 more workers were laid off and it appears as if they also owe the IRS some $400 million in back taxes. Thus it was to my astonishment and dismay that the Court approved paying the bonuses! 

Maybe I'm in the wrong end of the business.

Money doesn't have to be boring! Each week, CreditBloggers.com takes a look at the lighter side of the personal finance world in a series called Funny Money Friday.

Super premium credit cards are the newest must have luxury for the wealthiest and most famous Americans. And leading the charge (pun intended) is the American Express Centurion Card. Made out of titanium, it's one of the most expensive credit cards in the world.

Commonly known as the "Black Card," this account is offered by invitation only to customers who spend more than $250,000 on their Amex cards each year. New cardholders pay an initiation fee of $5,000 and then $2,500 a year as an annual fee. The Black Card has no pre-set credit limit.

The Black Card has also made a name for itself in popular culture. It's received mentions by Kanye West, Bow Bow, Jay Z, Paris Hilton and Janet Jackson. It has also appeared in movies and  on TV. Of course, the card comes with a few perks beyond just bragging rights. Cardholders get airline rewards, personal shoppers, flight upgrades, club memberships, hotel bonuses and private events.

If the card works like other premium Amex accounts, there is not an APR on the Black Card. All purchases made with the Black Card would be due and payable when the cardholders receives their statement. So that $100,000 car you charged  yesterday would be due at the end of the month without finance charges.

What do you think of the Centurion Card? Share your feedback in the comments section below. Happy Friday!

I will be going to Atlanta at the end of May over the weekend with my friend Jim for a seminar. It also occurred to me that my American Express Platinum Card has a domestic airline companion ticket program that allowed me to get one free ticket. So I decided to see this works. This is my little story two days ago on how I saved money on two airline tickets :

I checked for flight availability from Philadelphia to Atlanta and it turns out that US Airways was the best choice. I then keyed in my preferred itinery into US Airways’ website and the total cost came up to $292, with taxes, it was about $312.18 (if I recall correctly).

So I called American Express Platinum’s 1-800 number. I selected travel and then chose the Domestic Companion flight menu and was taken to a travel agent. The company that runs this program for Amex is API (can’t remember what it stands for).

I was told that the minimum cost of an airline ticket (without the taxes) is $299. Hence for the flight that I wanted, I still had to pay $299 even though it was quoted at $292. But there were other taxes and fees as well. Here is the breakdown :

$41.18 - tax per ticket (multiplied by two since I was getting a companion ticket)
$15.00 - ticketing cost per ticket (ditto)
$411.36 - total cost

Being who I am and that fact that I wanted to blog about this experience, I asked the agent what the $41.18 tax consist of. This was the breakdown he read from his cheat sheet :

$20.38 - US Airways Tax - (huh! kinda like the ‘bogus tax’ that cell phone operators charge?)
$6.80 - airport tax
$5.00 - fuel tax
$9.00 - federal tax

If I had bought two seperate tickets, it would have cost $624.36. Hence, both Jim and myself saved $106.50 each. Had Mrs Credit Card been my companion, we would have saved $213.00. Given that the annual fee of the card is $395, I guess that a couple more free companion flights would cover the annual cost (By the way, you can use the companion ticket feature four times in one calendar year).

This was a very pleasant experience for me. I must say this feature is impressive because I can choose my own flights, unlike some other reward programs that only give you the flights if they have not sold out their ‘allocation’! I will using definitely be using this feature again later this year. It really looks like the $395 annual fee will be covered by my next trip with Mrs Credit Card.

P.S - this card is by invitation only and you have to first the American Express® Preferred Rewards Gold Card.

A few days ago, a reader sent me an email telling me about his experience with Citi ThankYou Network when he redeemed points for an airline ticket. He mentioned that rather than requiring just 25,000 points for a roundtrip flight from Salt Lake City to Miami, he had to cough up 38,000 points.

Well, I also got on to investigate whether Citi has made any changes to the program. It took a while, but I finally found some new information on the ThankYou website and after a few calls, I managed to clarify how the airline ticket rewards work. The new program allows you to redeem points in two ways : the Fixed Option (where you have to phone the Citi ThankYou Network agent) or the Flexible Option method, where you can book your flights online. The old program resembled more the fixed option method. This is how it now works.

Fixed Flight Options

The Fixed Flight Options is available to elite citi cardholders (which includes most of their reward cards). This option is the way most typical reward program (or at least the way they used to run it) are run. With this option, you require a fixed number of points to redeem for a free airline ticket. The number of points depends on your destinations. However with this option, you have to book your travel 14 days in advance, have a Saturday night stay and the tickets you get are restricted tickets.

Variable Flight Options

If you do not want to be bounded by the usual restrictions of having to book your tickets in advance and staying a Saturday night, then there is another option, called the Flexible Option. All of the ThankYou Online Booking and Variable Flight Options are run by Expedia (yes, the Expedia). With this option, you book your flights online and the points you need for your free airline ticket depends on the cost of your flight. So if you get a cheap flight, you may only need for example 18,000 points or 22,000 points rather than the usual 25,000 points for a standard US roundtrip flight. (But as in the case of our reader, he needed 38,000 points - I suspect that is because his flight must have cost more than $300). With this option, as long as the flight is available, you will get a seat. Hence, there are no blackout dates and no requirements to book in advance.

What if you do not get the flights you want?

As with most credit card reward program, you may not get the exact flights you want. That is because airline reserve their seats for different agents. They reserve some seats for ThankYou Network, some for Worldpoints, some for expedia and other travel agents. When ThankYou Network’s seat alottment is taken up, then you cannot use your thankyou points even though you can get that flight from another agent.

Citi claims that you can request the flight through the “Fullfill your wish” program where you can request a reward which is not presently available in the program. I have not tried this yet, so I cannot report on it’s effectiveness.

I just want to highlight this so that you are more aware of the finer details of the program. If you have Citi Reward Cards and have used ThankYou Network for free airline tickets, please share your experience.

Writers love irony — the more layers, the better. So despite its sometimes sodden prose, the report issued by the President's Identity Theft Task Force should have been a red-hot love fest for the wordsmiths among us.

After all, with the possible exception of world-class breachmeisters like the TJX Companies, the feds can pump out sensitive data with the best of them. From the VA to the USDA, federal agencies have exposed the identities of hundreds of thousands of U.S. citizens to loss, theft, or other abuse over the past decade. To tell you the truth, when I first heard that a federal task force had been formed to address the identity theft crisis, I had an unworthy thought: "Physician, heal thyself!"

In the best of all possible worlds, this report would have been a step in that healing process, offering a rigorous diagnosis, an unflinching prescription, and a definitive cure. In this world, not so much. It's not that it sets the wrong goals. It has no shortage of excellent intentions. But it's tough to imagine its mostly vague, high-minded recommendations even being heard, much less followed, in the pandemonium of real-world government agencies, each tendin