Netflix Review – To Netflix or Not to Netflix?

by Patrick on November 13, 2009

After a long hiatus from the online DVD rental game, my wife and I signed up for a Netflix trial and became subscribers again. Why? Because they offer the best value of all the online DVD rental companies and make a great substitute for renting movies from a brick and mortar store, buying movies, subscribing to premium movie channels, or even dropping cable or satellite TV altogether.

Netflix Review

Netflix-envelopeAs I’m sure you already know, Netflix pioneered the DVD rental by mail business with unlimited DVD rentals and no late fees. Netflix now offers several new features and price packages which make their plans a better deal than ever. Perhaps the most unique feature is the ability to rent DVDs via mail and stream movies over the internet.

How Netflix works

Netflix is easy to use – simply sign up for an account and start adding movies, documentaries, and TV episodes to your movie queue. You will receive movies in the order they are selected, and you can make changes at any time. Netflix also offers unlimited online video streaming with certain plans. You pay a monthly fee based on the number of disks you want to rent at a time, with free shipping both ways, and no late fees.

Online video streaming and other Netflix features

Netflix offers several price options, all but one of which are unlimited plans, which offer you unlimited DVDs sent to your home and unlimited online movie rentals via streaming.

Online movie streaming. Movie streaming is one of the best “new” features to Netflix. I say “new,” but it has been around for awhile now, just not since I last used Netflix. You will need a fast internet connection to truly enjoy the movie streaming, otherwise the picture and sound may be choppy. But that would more likely be due to the connection, and not from the Netflix side of the house. A great feature with online video streaming is the ability to pause, rewind, fast forward, and pick up where you left off. The $8.99 monthly price plan features unlimited online movie streaming, which is an excellent deal if you watch a lot of movies. The biggest downside to the online video streaming is the limited number of online movie choices, as not all new releases are available for video streaming (however, the selection of TV shows, documentaries, and other media is excellent). When used in conjunction with the DVDs by mail and your queue, you can make sure you’ve got great movies any time you want them.

Video game console integration and Netflix players. Right now the Microsoft XBox gaming console and the Sony PlayStation 3 have the ability to stream Netflix movies, and there are rumors that the Nintendo Wii will begin offering this ability next year. You can also stream online movie rentals through TiVo, a Roku player, which plays movies from Netflix and Amazon Video On Demand, through some Blu-Ray players, or directly through your computer or TV if it is connected to the internet.

Other Netflix features:

  • Blu-ray movies. Netflix offers a wide range of Blu-ray movies, and they are constantly adding more Blu-rays to their library. That’s good news if you have a Blu-ray player.
  • More distribution centers than the competition. Netflix has several distribution centers throughout the US, which minimizes the time it takes to process and mail your movies. So you should have a better turn around time, resulting in more movie rentals per month. As a side note, some DVD companies have admitted to throttling, which is limiting the number of new DVD releases or premium rentals their top users receive in any given month, but I have never experienced this.
  • Movie recommendations, reviews, and community. The Netflix software will automatically suggest movies based on your past movie rentals, and you can read ratings and reviews of each movie before adding it to your queue. The Netflix community allows you to share movie lists with other members, exchange e-mails, etc.
  • Vacation plan. you can put your subscription on a vacation hold while you are away so you don’t pay for a service you aren’t going to use.
  • No commitment. Netflix does not require an annual commitment – simply pay month to month and quit at any time.

Netflix Price Plans

Netflix pricing is actually very reasonable if you subscribe to the lower level plans, but it can get a little expensive with the higher tier plans. But let’s face it – with unlimited online streaming, most people won’t need to elect the higher plans if they have the components in place to stream online movies. The $4.99 price plan is the “Limited Plan,” which only offers 2 rentals per month and 2 hours of streaming – barely enough to watch average length films, and not long enough to watch many movies. That makes the $8.99 price plan the best value for most people. Here is a chart with the Netflix pricing plans.

Netflix Price Plans # of DVDs
per month		 Online movie
streaming		 Cost
1 DVD at a time 2 per month 2 hours $4.99
1 DVD at a time Unlimited Unlimited $8.99
2 DVDs at a time Unlimited Unlimited $13.99
3 DVDs at a time Unlimited Unlimited $16.99

*Blu-ray movies price plans. Netflix offers Blu-Ray movies for an added fee. Add $1 to the “limited plan,” and $2, $3, and $4 to each of the other plans. The Netflix Blu-ray inventory is continually growing, which is good news for those of you who prefer HD movies.

How Netflix compares to the competition

We chose Netflix for its convenience and variety of features. The main competitors fall in 3 categories: brick and mortar video rental stores (BlockBuster and Hollywood Video), online video rentals (BlockBuster Total Access), and one day DVD rentals from a kiosk (like RedBox and BlockBuster).

How Netflix compares:

  • Brick and Mortar: Netflix is hands down the winner – unlimited dvd rentals for less than the price of 2 rentals at a store, plus the ability to set movies in a queue and stream movies online.
  • Online DVD rentals: Netflix offers a wider variety of movie selections and online video streaming; BlockBuster offers in store trades (read full BlockBuster and Netflix comparison for more information).
  • DVD from a box: RedBox, BlockBuster, and others offer DVDs for a $1 a day, but they are usually limited to new releases and a few select classics. I would only use these as a supplement to Netflix if the movie I want is buried in my queue and it might take awhile before I receive it. Otherwise the selection and online movie streaming make Netflix a clear winner.

Can you save money with Netflix?

If you subscribe to multiple premium movie channels for the movies and not for their exclusive content, then absolutely. If you rent multiple movies each month from BlockBuster or Hollywood Video, then the answer is also yes. You can also save money if you are the type of person who buys several movies each month, watches them once, then doesn’t watch them again for several months, if ever. The key to saving money with Netflix is to change those old habits and drop the extra movie channels, stop renting from the store, and stop buying movies you won’t watch often.

You probably won’t save money if you only watch a couple movies each month, or prefer to borrow movies from the library, regardless of which movies are available (I fell into this last category for a long time; it was great to catch up on movies I had missed, but I was missing out on all the new releases!). I’m not really saving money with Netflix because we used the library for a long time, but this is a small luxury I am willing to pay for.

Free Two Week Netflix Trial

Netflix offers new customers a free two week trial to their service. If you like it, then you continue with the pricing plan you signed up for, and get to watch movies at your leisure. If you decide it’s not for you, then you can cancel at any time within the free trial period and you won’t be charged. All you do is sign up at http://www.netflix.com.

Photo credit: Urthstripe.

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Pros and Cons of Rewards Checking Accounts

by Patrick on November 12, 2009

As you have probably noticed, interest rates have plummeted over the last two years. Not long ago it was easy to find saving account interest rates in the 4-5% range, and CD rates slightly higher than that. Right now the best savings accounts are offering interest rates just under 2%, which is a far cry from what many people were used to. To take the place of the high rates that were so commonplace a year ago, many banks are now offering high interest checking accounts – some with interest rates more than double or triple what the best online savings accounts offer.

High yield checking accounts

High yield checking accounts are becoming more popular in banks across the nation, particularly the smaller regional banks that are vying for more customers and larger deposits. The biggest advantage these checking accounts offer is the high yield interest, but many of them offer other advantages such as free ATM withdrawals, no fees, and automatic bill pay.

How good are the interest rates? Rates vary of course, but a bank in our local area is currently offering a high yield savings account in the 4.5% range, which is over 3 times the interest rate that ING Direct savings account offers. While this seems like it would fall under the “sounds too good to be true” test, it is true – if you meet the conditions. And the terms and conditions are the biggest downfall to these types of accounts. Let’s look at some general requirements.

Common high yield checking account requirements

Banks are able to offer these high interest rates because these accounts are profitable for them when you meet the following criteria:

  • You live in the local area.
  • You sign up for direct deposit or automatic bill pay (or both).
  • You make a minimum of 10-12 debit card transactions per month.
  • You elect to receive electronic statements instead of paper statements.
  • Limit of $25,000 at highest interest rate (common limit, some banks may vary).

It’s important to meet these requirements because the bank will reduce your interest rate to the standard checking account interest rate in any month you don’t meet the requirements, usually down to 0.5% or lower. Again, this is a general representation, so be sure to read the fine print before opening an account.

Pros and cons of high yield checking accounts

Pros. A 4.5% interest rate is a stellar interest rate in this economy. Your funds will be guaranteed by the FDIC and the entire amount of your deposit, up to the limit, should be eligible for the high interest rates. Many banks also offer ATM fee reimbursements with a high yield checking account, which can save you money. (more on how to save money on ATM transactions).

Cons. Most high yield checking accounts have a long list of requirements which usually ends with a clause that states the terms can change at any time, or that they are only available to customers for a limited time. Making 10 or more debit card transactions per month can be a nuisance that many people would prefer to avoid and the $25,000 limit may also turn people off because it can be a hassle to switch your deposits from bank to bank. Finally, one slip up and you lose the higher interest rates and other benefits, potentially including the ATM fee reimbursements that you made under the impression they would be reimbursed.

How do banks make money from high yield checking accounts?

When you look at the terms and conditions you will notice a few requirements that are in the bank’s best interest – including electronic statements, automatic bill pay, direct deposit, and multiple debt card transactions. Banks spend a lot of money processing paper statements; electronic statements are a huge cost savings for them. They also spend a lot of money processing checks that are both deposited with them and are drawn against their accounts. Automatic deposit and bill pay substantially reduces the number of checks they process each year.

Banks receive a fee when you use your debit card and debit card use reduces the number of checks people write. You will also notice there is a limit on the amount of money on which they will pay the higher interest rates. That is because these accounts are only profitable up to a certain point, which is reflected in the limits.

Most importantly, the banks know how much it costs to find and retain new customers, and these deals work great to bring in new customers and create loyalty to their bank. Current customers are much more likely to use their current bank for loans, mortgages, IRAs, and other financial products that can be profitable for the banks.

Are high yield checking accounts worth it?

The answer is – it depends. From a mathematical standpoint, yes, higher interest rates are good. But the added hassles may not be worth it on a time/maintenance level. I personally haven’t opened one because I am happy with my current bank and I can’t be bothered by making a minimum of  10 debit card transactions per month and making sure I swipe the card as a credit card. I don’t have the patience to keep track of how many transactions I have made, and I don’t want to get in the habit of running to the gas station or Wal-Mart to make a series of transactions at the end of the month to ensure I continue to meet the account requirements.

On the other hand, the interest rates are very nice and I certainly understand why many people are attracted to these accounts. It’s not really that much work to maintain compliance – it’s just more than I am willing to do on a regular basis.

What are your thoughts? Do you have a high yield checking account, and is it worth it to you?

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2009 Veterans Day Deals and Discounts

by Patrick on November 11, 2009

Happy Veterans Day to all the veterans out there who served our country in the Armed Forces, and to those who supported veterans while they served – we couldn’t have done it without your support! Even though it may seem like some people only thank veterans once or twice a year on the major holidays, you should know  that your service is greatly appreciated year round!

Hopefully you can take some time today to relax and enjoy some of the Veterans Day deals and special offers that have been made available by many restaurants and businesses to thank veterans for their service.

2009 Veterans Day Discounts and Deals

There are a bunch of deals out there for veterans today – some are available nationally, and some are only available locally, so it pays to do a local search as well. For example, I was a few minutes late to work today because the car wash in between my house and office was offering free car washes for veterans. I’m glad I got there before my lunch break because I’m sure it will be crowded! I can’t list all the local deals, but I can share a few deals that should be available nationally. Feel free to add more in the comments section if you have additional information.

Nationally available Veterans Day deals:

Be sure to check out more military discounts over at Military Finance Network for more military discounts and special offers. And thanks for your service to our great country!

Photo Credit: cliff1066™.

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Qualifying Life Events

by Patrick on November 11, 2009

If your company is one of the many companies currently going through annual open enrollment period, then you have probably read the term “eligible life events” or “qualifying life events” a couple dozen times by now. It’s important to know and understand which life events qualify, because many people only have one chance per year to elect their health benefits unless they have a qualifying life event, which gives them an opportunity to change their benefits elections.

Why do qualifying life events matter?

Most companies negotiate group health insurance costs once per year, and it’s more cost efficient for both the insurance company and the employer to keep a relatively steady number of people in the plan they elect at the beginning of the year. Insurance companies agree to lock in rates for the year in exchange for keeping people from switching plans at will. However, it wouldn’t be fair for the insurance companies not to allow people to change plans when they have a major life event that changes their needs. So there is a built in clause that allows people to change their health care coverage when they experience certain qualifying life events.

What are qualifying life events?

As mentioned above, qualifying life events are major events in your life that qualify you to change your health care coverage outside of the open enrollment period. Major life events include:

  • Marriage, civil union, divorce, annulment, legal separation.
  • Birth, adoption, taking in a foster child, or becoming a legal guardian.
  • Change in spouse’s work status.
  • Death of spouse or dependent.
  • Change in status of dependent’s eligibility (e.g. change of student status or becoming too old for coverage).
  • Possibly more, depending on plan.

These are common qualifying life events, so be sure to read the fine print in your benefits enrollment package. Also keep in mind that you usually only have 30 days from the date of the qualifying life event in which to make a change in your health insurance plan. Insurance companies or your Human Resources department may also require proof of the qualifying life event, so be ready to fax a copy of a birth or marriage certificate, death certificate, adoption papers, etc. Specifics vary from plan to plan, so be sure to read your plan thoroughly before electing your benefits plan.

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What You Need to Know About Open Enrollment: Health Insurance Options

by Patrick on November 10, 2009

Open Enrollment is currently in season for thousands of employees. For most people, this is the only time of the year when they can make benefits elections for their health, dental, vision, and other company sponsored insurance plans. Most companies only give a two week window to make changes, so let’s take a look at the most common health insurance coverage options available to most employees.

Open enrollment health insurance options

There are several types of medical insurance, and we will cover the most common types – keep in mind that your company may offer variations, combinations, or something completely different than these listed here. This is general information only, and you should examine your policy options closely before making a decision on which health plan option to choose.

Fee for service health care plans

Fee for Service health care plans are the most flexible healthcare insurance plans available, as you can visit any doctor at any time, without a referral required by the insurance company. You do not need to worry about in or out of network providers and you can visit any hospital in the country. You also pay for this flexibility.

You are required to pay a health insurance deductible out of pocket before the insurance company will begin paying for any of your medical bills. Once you reach your deductible you pay coinsurance, which is when you share the health care costs with your insurance company, usually by a set percentage of the total bill. Some fee for service plans place a cap on the amount of out of pocket expenses you can incur within the course of a year. For example, in addition to your monthly premiums you may have a $500 deductible, and a $5,000 annual cap on your insurance. Be sure to read the plan thoroughly because there are often restrictions regarding which types of medical care are covered in this type of health insurance plan.

Pros and cons of fee for service health care plans:

  • Pros: Freedom to choose health care provider, Cap on annual expenses.
  • Cons: Restrictions on some plans, cost may be more than an HMO or PPO.

Health Maintenance Organization – HMO

With HMOs, health insurance companies negotiate fixed rates for health care with a select group of medical care specialists. Health care is limited to in-network health care providers who are a part of your HMO plan. To receive care, you are required to select a Primary Care Physician (PCP), usually a general care practitioner, who is your central point of contact for all medical care, including appointments, specialist referrals, and other medical care. You will need to visit your PCP for all medical inquiries or to get a referral to a specialist. You run the risk of paying out of pocket for using an out of network medical professional unless it is an emergency or your plan specifically gives permission. While there are limitations to HMO plans, they are often a low cost health insurance option because of the low rates the health insurance companies are able to negotiate.

Pros and cons of HMOs:

  • Pros: Lower premiums and deductibles, and higher coverage rates.
  • Cons: Required to select a PCP, must get specialist referrals, and are restricted to in-network health care providers.

Preferred Provider Prganization – PPO

Preferred Provider Organizations are generally a little more expensive than HMOs, but they offer more flexibility. PPOs have negotiated rates with their networks, but you are free to go out side the network for healthcare coverage, though you may have to pay more for it. Primary Care Physicians are not required and you can visit a specialist without a referral.

Pros and cons of PPOs:

  • Pros: PCP is not required, referrals are not required for specialists, and out of network providers are covered.
  • Cons: Premiums and deductibles are often higher than HMOs, percentage of coverage may vary.

Health Savings Accounts and High Deductible Health Insurance Plans

Health Savings Accounts (HSA) are gaining in popularity among both employers and employees – employers because they save money on group health insurance costs, and employees because they have more choice on how they use their medical coverage and they can save the money they don’t use in any given year and roll it over to the next year. HSAs are a tax-favored savings account that is combined with a high-deductible health insurance plan.

Contributions to your Health Savings Account are considered an “above the line” tax deduction and are considered a f ederal income tax deduction, regardless of whether or not you itemize your deductions. Some states also allow tax deductions for HSA contributions.

Pros and cons of HSAs and High-deductible plans:

  • Pros: Low monthly payment, money grows in a tax-deferred savings account until withdrawn for health care needs. This may be a good plan for healthy individuals with few medical care needs.
  • Cons: High deductibles and co-pays. limited coverage in some cases.

Other Health Savings Plans. There are several health savings plans available, including HSAs, Health Reimbursement Accounts (HRAs), and Flexible Spending Accounts (FSAs). You can read more to determine which Health Savings Plan is the best for your needs.

Terminology is important!

When comparing health insurance plans, it’s important to understand what you are getting. For example, “in-network” and “preferred providers” are often interchangeable. Co-pays are when you make a payment at the time of service, often a set rate that is clearly negotiated as part of you plan. Co-insurance is when you pay a percentage of the bill, usually in the 10-30% range. There is a HUGE difference in the meanings of co-pay and co-insurance when you are dealing with a major medical procedure!

Be sure to read your health coverage plan thoroughly, and call your Human Resources department or insurance company if you have any questions or if there is anything you are unsure of. Remember, cheap health insurance isn’t always the best health insurance. But with some research, you should be able to find affordable health insurance that meets your needs.

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