Money Management Q&As

August 18, 2006

Saving on gas with rebate cards

Q. I'm tempted by gasoline rebate credit cards that promise to refund 5 or 10 percent of the amount charged, but they can't be as good as the ads make them sound. What's the catch?

A. Some cards give rebates only for gas purchased at stand-alone stations (not pumps offered by stores as a secondary service). You may also be limited to stations on highways. Other cards apply only to certain brands of gas. In some cases you may even have to pay directly at the pump rather than at an inside counter to get credit. Also, the advertised rebate percentage may just apply temporarily. The Hess Visa Platinum Card, for instance, offers a 10 percent rebate on Hess purchases for 90 days; after that, you get 5 percent back.

A tax break on a home improvement

Q. My elderly mother, who has severe arthritis, will be moving in with my husband and me. Since she can't climb steps easily, we're expanding the half bathroom downstairs into a larger full bathroom with a walk-in shower. Can we deduct the $15,000 cost as a medical expense?

A. No. You can deduct only the portion that exceeds the value the new bathroom adds to your home, and only if your mother qualifies as your dependent-meaning she's a resident of the US, Mexico, or Canada (or a US citizen or national) and you pay for more than half her support. You'd be wise to have a real estate appraiser figure the increase in market value, since the IRS may question the deduction. It's also best to get a letter from your mother's physician verifying that she can't climb stairs, to prove that the new bathroom was medically necessary. And keep in mind that medical expenses must top 7.5 percent of your adjusted gross income before you can begin deducting them.

This travel insurance casts a broad net

Q. I may take a three-week luxury tour abroad in early October, but since my home's in a hurricane belt I'm a little leery about leaving then. Would trip cancellation insurance reimburse me if a storm forces me to skip my vacation or cut it short?

A. The typical trip cancellation policy would cover you only if the storm renders your home uninhabitable. Even then, you won't be covered if you buy the insurance after the weather service identifies and forecasts the hurricane, because trip cancellation insurance protects against unforeseen events only. If you really want coverage, you'll need to buy a policy that will let you cancel your trip for any reason. Two companies that offer such insurance are TravelSafe (888-885-7233; http://www.travelsafe.com) and M.H. Ross (800-423-3632; see http://www.tripinsurance.com/insurance/certificate_enhanced.asp for coverage details). Both policies still involve certain requirements and exclusions, but assuming you meet them the insurers will repay you for 75 percent of your nonrefundable trip costs. "Any reason" coverage doesn't come cheap, though. The option boosts the cost of TravelSafe's trip cancellation coverage by about 40 percent and M. H. Ross' coverage by 50 percent.