Because getting a prescription for your typical over-the-counter drugs is more trouble than its worth, this effectively ends the small tax break of paying for these drugs with pre-tax money. That by itself isn’t a big deal but it also takes away a tool for managing the use-it-or-lose-it problem in an FSA. Under the current rules, if you are getting to the end of the year (or March 15 in some plans) and you still have some money in your FSA, you can spend it down on some OTC drugs. Starting in 2011, you won’t be able to do that.

The use-it-or-lose-it rule for the FSA is really a pain. They should really get rid of it.

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Making the perfect decision requires a crystal ball. Will the mortgage rate go down in the future? When and by how much? How long are you going to keep this loan? Note I didn’t ask how long you are going to stay in the house, because you can still stay in the house and refinance the loan again if the rate goes down.

The good thing is we have some calculators to help us make this decision. I will use a hypothetical loan as an example. Say I want a $200,000 loan in Missouri with a 30-year fixed rate, I see these choices from a lender’s website:

Kalotay Calculator

First I use the Andrew Kalotay Associates’ Optimum Mortgage Refinancing Calculator. I wrote about this calculator in a previous post. I like this calculator because it takes into consideration the possibility to refinance again if rates goes down in the future.

I enter the no closing cost loan as my current mortgage. This is very important. Forget about the real current mortgage if it has a higher rate. I know at a minimum I can refinance to 4.5% with no cost. Therefore the no cost loan is my baseline.

Then I enter 4.375% with $1,269 closing cost as my proposed new mortgage. The calculator tells me "Not Yet!" which means I shouldn’t pay $1,269 to take the rate down from 4.5% to 4.375%. The calculator also says Not Yet for the other two scenarios.

Neat, huh?

Mortgage Professor Calculator

To double check the calculation, I use Mortgage Professor’s Calculator 3a for refinancing one fixed rate loan to another fixed rate loan. Once again, I enter the no cost loan as my current loan.

Mortgage Professor’s calculator asks more questions. I provide some reasonable answers. For my three alternatives to the no cost loan, it tells me:

Rate	Total Closing Cost	Savings over 10 years	Breakeven Period
4.375%	$1,269	$431	7 years 6 months
4.250%	$2,669	$703	7 years 11 months
4.125%	$4,241	$770	8 years 6 months

Paying a higher closing cost will give me some savings over 10 years, although really small. The breakeven period, i.e. the time I have to keep the loan in order to benefit from the refinance is really long.

For my hypothetical example, both calculators tell me it’s really not worth it to pay the closing cost for a slightly lower rate. When it’s time to evaluate your tradeoff between rate and closing cost, try these two calculators.

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My previous two refi’s were done through National Mortgage Alliance (NMA). NMA did the jobs well both times. My last one finished in 2 weeks from application to closing.

So why change? Lower cost for the same rate and term. Is it worth it? I think so. Let me explain how I chose the lender in this post.

It Doesn’t Have to be Local

Right now 90% of the loans end up being sold to Fannie Mae or Freddie Mac. As long as the rate and fees are low, which bank does the loan origination doesn’t matter that much. It certainly doesn’t have to be local.

Small banks like NMA or First IB are just fronts for larger banks, which are in turn fronts for Fannie and Freddie.

A small bank originates the loan and sells the loan to a larger bank after the loan closes. The larger bank keeps the servicing and then sells the loan to Fannie or Freddie. Fannie and Freddie borrow from the global financial market. The government pays Fannie and Freddie for their losses. Everybody is happy! Well maybe not the government and taxpayers, after losing some $200 billion on Fannie and Freddie.

Insist On Pricing Transparency

Many lenders, including some otherwise good credit unions, still don’t quote the total cost online. They will quote a rate but you’ll have to call to get the total cost. That way they can quote different prices to different people. They can quote a low price when you are shopping, then give you a high price when you decide to pull the trigger. Classic bait and switch.

I’m not saying every lender will cheat the customers, but the opportunity is there if pricing isn’t transparent. You will more likely get a better deal if you get transparent pricing.

Rate and Closing Cost Are Equally Important

Rate and closing cost are related. You can get a low rate by paying a high closing cost. Or you can get a low closing cost by paying a high rate. A low rate by itself isn’t the whole picture. Lender A offering a lower rate with a higher closing cost isn’t necessarily giving you a better deal than lender B offering a higher rate with a lower closing cost.

When you compare offers, keep one variable constant. Because rates usually go by 0.125% increments, it’s easier to keep the rate constant and compare the total closing cost. Get two quotes from each lender: one with a higher rate but no or minimal total closing cost, another with a lower rate but a higher total closing cost. You will need these for calculating the rate versus closing cost tradeoff later.

Compare Total Cost Apples to Apples

Rates change every day, often more than once a day. You can’t compare a quote from lender A yesterday to a quote from lender B today or even one quote in the morning to another quote in the afternoon. For this reason, I only consider lenders who update quotes on their website at least daily. If you go to a lender’s site on two different days and the quotes are the same, you are not getting the most current information.

By closing cost, I mean total closing cost. That includes points, origination fee, appraisal, title, settlement, processing, recording, and whatever else they call it,  everything except:

• first month interest
• homeowners insurance
• property tax
• escrow account deposit

Although I have to bring cash to pay for these last four items at closing, they are not really a cost. Everything else should be included in the total closing cost.

Go Shopping

When I shopped for this refi, I also looked at another low cost lender AmeriSave. Like NMA, AmeriSave is an upfront mortgage lender certified by the Mortgage Professor.

I monitored the rate and total closing costs from First IB, NMA, and AmeriSave daily. Every day at around 11:00 am Eastern Time I got a quote from all three lenders. Here’s a chart showing the all-in closing cost for the loan I wanted over five days:

As you see, the cost difference was consistent. First IB was the lowest, AmeriSave a close second, NMA much higher than the other two. Of course for a different loan in a different state at different times the order can be completely different. It’s good to check the rate and total costs for your own loan.

Besides the slightly lower total closing cost, I chose First IB over AmeriSave because I don’t like how AmeriSave tries to make its rates and fees look lower than they really are.

The super low rates on the left hand of AmeriSave’s home page require a very high up front cost. You have to use the quote box on the right. Then the rates and fees they show you require a 800+ credit score. If your credit score isn’t 800 or above, you will have to change the credit score in the quote box on the results page and re-quote. The fees will go up by hundreds of dollars if your credit score is 780, then hundreds more if it’s 760.

I know of no other lender that charges more for a 780 credit score than for a 800 credit score. According to a mortgage banker by the name of MMNJ on FatWallet, the typical credit score cutoffs for the best rate and fees are 700-740. By creating finer pricing tiers, AmeriSave is able to show offers it won’t really give to many customers.

After taking into account the credit score, AmeriSave’s rate and fees are still competitive and way lower than most other places. You just have to wade through the lowball offers and get a realistic quote if your credit score isn’t 800 or above.

What You See Is What You Get?

In addition to low cost, it’s also important to be able to lock in the rate and the total closing cost you see on the website. A good offer you can’t lock is of no use to you.

In this regard, NMA is the best among the three lenders I considered. If you see a good rate at NMA’s website, apply online. If your credit score passes, you can lock the rate on the same day after you pay a $300 deposit.

AmeriSave requires an upfront payment, income documentation, and maybe completing the appraisal before you can lock the rate. When those are done, rates and fees will have changed but you’ve already paid a few hundred dollars.

First IB is somewhere in the middle. I wasn’t offered a chance to lock the rate when I submitted the online application. After I faxed paystubs and W-2, I was allowed to lock the rate but the rate went up. So I waited. I locked the rate a few days later when the rate came down. I didn’t have to pay anything before I locked.

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Banks

If the prospective lender is a bank, you can try finding it in FDIC’s directory. For example I’m using First Internet Bank of Indiana. I see it in FDIC’s directory. It’s been FDIC insured since 1998. Previously I used National Mortgage Alliance, which is a division of Georgia Banking Company. Georgia Banking Company is also a FDIC-insured bank.

After you find the bank in FDIC’s directory, you can see many links to other data about the bank. The Summary of Deposits link shows you how big the bank is. The latest report shows First Internet Bank of Indiana had $454 million in deposits. Georgia Banking Company had $182 million in deposits. By comparison Bank of America had $914 billion in deposits, some 2,000 to 5,000 times the size of the two small banks I used respectively.

Credit Unions

You can verify a credit union similarly using NCUA’s Find a Credit Union webpage. Fellow blogger indexfundfan used Star One Credit Union. I see it’s been insured by NCUA since 1971 and it has $5 billion in assets.

Mortgage Companies

The lender can be just a mortgage company, not a bank or credit union. These companies report their mortgage activities to Federal Financial Institutions Examination Council (FFIEC) under the Home Mortgage Disclosure Act (HMDA). You can find mortgage companies (and banks and credit unions) in FFIEC’s HMDA disclosure database.

When I shopped my mortgage refinance, I also considered a company called AmeriSave, officially AmeriSave Mortgage Corporation. From the HMDA reports, I see in 2008 it originated 505 conventional purchase loans and 3,100 conventional refinances for 1-4 family units. It’s legit.

Mortgage Brokers

If you are considering a mortgage broker, you can see if they are a member of National Association of Mortgage Brokers (NAMB). NAMB has a find a NAMB broker listing. I’m able to find the mortgage broker I worked with in the past.

Department of Real Estate in your state licenses mortgage brokers. You can verify the broker’s status on your state’s Department of Real Estate website. I can see from my state’s Department of Real Estate website that the broker I used before has been licensed since 1988. There were no disciplinary actions against him.

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Both Financial Times (FT) and Wall Street Journal (WSJ) cover business news. I like FT better. Let me explain why using last Friday’s papers as an example.

Fewer pages. Friday’s FT had 22 pages in two sections; WSJ had 46 pages in four sections. FT had one full ad page and two pages of market data; WSJ had six full ad pages and four pages of market data and legal notice. FT is more concentrated, with less fluff. 22 pages are plenty to go through already.

Tighter business focus. FT is tightly centered around business news, whereas WSJ also goes more into general news. Compare the front page headlines in last Friday’s papers:

FT:

• Surpirse slowdown in credit card losses
• SEC pledges more high-profile actions
• Banks sell switch to renminbi payments for trade with China

WSJ:

• Tech Titans in Bidding War [HP and Dell bid for 3Par]
• Iraqis Face Uncertain Future As U.S. Ends Combat Mission
• Canada Thwarts Bombing Attempt

For a business newspaper, FT’s headlines are more on topic.

More international coverage. FT’s headquarters is in London. The paper it distributes here is the US edition. It has more coverage for international business news. Compare the front page headlines in the corporate news section in last Friday’s papers:

FT (Companies & Markets section):

• HP fires fresh 3Par bid salvo
• BHP faces potash cartel backlash
• Glencore plans to list gold unit in move that could value it at $5bn [Glencore is a commodities company in Switzerland]

WSJ (Marketplace section):

• J&J’s Latest Recall: Hip-Repair Implants
• American Will Fight Record FAA Fine
• Nestlé Plans Ground Attack Over Coffee Beans
• Buyers Circle Net Security Company [ArcSight Inc in California]

WSJ feels like a home paper for Americans. FT has a lot more international coverage. It bills itself as a "World Business Newspaper."

No sob stories. FT is straight economic and corporate news. WSJ often includes stories with a personal connection, like the story about the parents still having to pay a deceased child’s student loan (because the parents are co-signers), or this story about consumers’ outrage against credit card companies for cutting their credit lines. I’m so glad Frank at Bad Money Advice came back from his short hiatus so I don’t have to raise my hand every time. I have a weak point for sob stories.

No page jumps. I hate reading half of a story and then told to go to page A14. WSJ does that a lot; FT doesn’t do it at all. FT does point to a related article at the end some articles, but the related article is a completely stand-alone article, not a continuation of another article. All articles on FT finish on the same page where they started unless a long article can’t fit the whole page.

Less expensive. The best deal to get either FT or WSJ is by using airline miles. For FT, it’s 2,000 miles for 305 issues (one year). At a value of 2 cents per mile, it’s only $40/year. You can use American, Delta, or United miles. WSJ subscription is 2,100 United miles for 254 issues or 2,100 American miles for 190 issues. You get a longer subscription with FT for about the same number of miles.

After working all day staring at a computer, I prefer reading a physical newspaper. Higher quality at lower cost — that’s why I like FT better than WSJ.

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Who’s on the Board

The board is largely non-political. Besides Paul Volcker, the Board has as its members a former SEC chairman, a venture capitalist, a representative from AFL-CIO, corporate executives, endowment fund manager David Swensen, university professors, and Obama’s economic advisor Austan Goolsbee.

Scope of the Report

The board was asked to consider ideas that pertain to tax simplification, closing loopholes, and corporate tax reform. The board was specifically asked to exclude ideas that would raise taxes on families with income less than $250,000. So raising taxes broadly to reduce the deficit is off the table. That’s the job of a different commission, National Commission on Fiscal Responsibility and Reform, whose members are mostly elected House Representatives and Senators.

Ideas

Because the Volcker advisory board was asked not to consider any grand scheme tax reform such as flat tax or introducing a VAT, the ideas are only within the framework of the current tax system. I read the entire report (95 pages). I’m in favor of most of the ideas. I list some of the ideas on individual taxation with my comments.

1. Consolidate child related benefits (pp. 8-9)

The child tax credit, dependent exemptions, EITC, and dependent care credit are too complex. Bundling them is a good idea.

2. Consolidate education related benefits (pp. 10-15)

There are 18 education related tax benefits. Who understands them all? Give one benefit and be done with it.

3. Simplify kiddie tax (pp. 15-16)

If a child earns income from wages, I’m in favor of giving the child a larger standard deduction and not withholding taxes from wages. Investment income, however, should be taxed at the parents’ rate from the first dollar. There’s no reason to create complexity with three tiers: first $950 free, next $950 at child’s rate, anything over at parents’ rate.

4. Consolidate retirement accounts (pp. 24-28)

Yes! See previous post Retirement Plans Galore: 401(a), 401(k), 403(b), 457, SEP, SIMPLE.

5. Make everyone eligible for a deductible IRA (p. 28)

Right now whether one can take a deduction for a contribution to an IRA depends on one’s income and coverage by a retirement plan at work. The proposal makes everyone eligible for a deductible IRA but the combined limit for both IRA and employer sponsored retirement plan will stay under the $16,500 limit, meanwhile the IRA itself still has the $5,000 limit.

The proposal didn’t go far enough. It should give a combined limit to all plans and IRAs and that’s it. That’ll be simple, elegant, and it frees people from bad plans at work or not having a plan at all.

6. Consolidate non-retirement savings plans (p. 29)

Here we are talking about FSA, HSA, MSA, 529, and Coverdell. One account for health and another for college seems reasonable.

7. Simplify Social Security taxation (pp. 34-36)

The Board proposed small simplification on taxing Social Security benefits: use two tiers instead of three; not count Social Security benefits in MAGI. It’s too timid. Income is income. Just make Social Security fully taxable.

8. Indexing principal residence exclusion for capital gains (p. 41)

Bad proposal! The exclusion should be eliminated. Treat capital gains the same whether it’s from securities or real estate.

9. A pre-filled return from the IRS for taxpayers with simple returns (p. 43)

It can serve as a good starting point for many. Verify, update, and send. I won’t use it until all the tax complexities are eliminated but it’ll probably help some.

10. Limit itemized deductions and give a larger standard deduction (pp. 44-46)

The proposal only limits itemized deductions. It should eliminate them. It’s already done this way in AMT. It’s much cleaner. The majority of itemized deductions can be eliminated in exchange for a larger standard deduction.

11. Eliminate the AMT (p. 50)

When most of the itemized deductions are eliminated, we can also eliminate the AMT. Calculating taxes twice is insane.

Will these ideas be implemented? I’m not holding my breath. One can always dream, right?

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This time, instead of going to my twice favorite National Mortgage Alliance (NMA), I’m using a different bank: First Internet Bank of Indiana ("First IB"). Don’t laugh; it’s a real bank (FDIC cert. # 34607). It just has a name from the dot com era because it was established during the dot com boom in 1998. It still does business primarily through the Internet without a physical branch, just like ING Direct.

The reason for going with First IB is of course its lower fees. For the same rate and term, First IB’s fees are much lower than NMA’s. I heard about First IB from the FatWallet Finance forum. Several people there posted positive experience with First IB.

I just locked my rate. The all-in closing cost comes to about $100. It’s close enough to call it a no cost refi. Even though every time it feels like the rate can’t go any lower, I’m still going with a no cost refi to preserve my option for another round down the road. Who knows, maybe someday the mortgage rate will go down to 2%.

As usual, I will update the progress of this refi as it moves along. They will be under the "refi 2010" tag.

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Unfortunately the arguments put forward by Vanguard are not 100% logical. The short story is that investors should still beware of a bond bubble.

Before I continue, I should define what a bond bubble is. I see the bursting of a bond bubble as "substantial rise in interest rate causing losses in bonds." As you must know, bond values are mathematically determined by the prevailing interest rate. If interest rates go up, bond values go down.

Now let’s look at some of the arguments in Vanguard’s articles.

"There is no bond bubble."

Denial is always the first line of defense. Vanguard wrote in its recent article Should you beware of a bond bubble?

Investors should be skeptical, according to Joe Davis, Ph.D., Vanguard’s chief economist. "A bond bubble would imply not only that U.S. interest rates have to rise dramatically in a short period of time (as if dictated by some law of gravity or reversion to the mean) but also that the increased demand we have seen for Treasuries has been irrational and unsupported by market fundamentals," Mr. Davis said. "I take some issue with both points."

Investors driven by poor performance of the stock market seek safety in bonds, especially US Treasury bonds. This has pushed down the bond yields to historical lows. The chart below shows yield on 10-year Treasury since 1962 (source: St. Louis Fed). It’s at a 50-year low except a few weeks in early 2009.

Saying there is no bond bubble is like saying interest rates will stay low and never go up again. Maybe, maybe not. Although it’s possible the United States will have another two decades of slow growth and low interest rates, like Japan since the 1990s, it’s also possible that growth will resume when we get out of the recession. 10-year Treasury yield is 2.6% now in August 2010. It was 4.0% in April 2010, just four months ago. Can it go back to 4.0%? Absolutely. 4.0% is still quite low. If it goes back to 4.0%, bond investors will suffer a loss.

Interest rates going up is a risk for bond investors. We should not dismiss it as if the risk doesn’t exist.

"There may be a bond bubble but it’s not going to burst any time soon."

Vanguard also wrote in the same article (emphasis mine):

"According to recent Vanguard research, the rise in the U.S. household savings rate has been another important factor in lowering U.S. interest rates, a recent development that could persist for some time given the current economic backdrop."

This is like saying playing chicken is OK because the train isn’t coming yet. Not a good strategy in my opinion.

"A bond bubble is not as bad as a stock bubble."

Vanguard’s article continued with:

"Mr. Davis also stressed that if a bond bear market caused by some future rising-rate environment does occur, most diversified, long-term investors should not regard it with the same level of apprehension as they would an equity bear market, where short-term portfolio losses can be more severe."

I get it. Cutting a finger off is not as bad as cutting an arm off. So? Although it’s true that a bond bubble is not as bad as a stock bubble, investors still lose money when a bond bubble bursts.

"You will make more money in bond funds over the long term if interest rates go up."

When interest rates go up, bond interest and matured bonds can be reinvested at a higher rate. Eventually you will make more money than if the interest rates didn’t go up. This argument is more subtle and confusing. It’s another one of those true-but-irrelevant logic traps.

Vanguard has shown this table in a few articles, including one published in February 2010, Bonds and rates: The reality behind the headlines:

The table shows that if interest rate goes up from 4% to 6% over two years, a bond fund with a duration of 5.8 years will earn 4.7% per year over ten years versus just 4.0% if the rates stayed at 4%.

You might be convinced until you understand what the table is really comparing. The fact that you will make more money over the long term if interest rates go up is not relevant to the question at hand: whether you should buy or stay in bonds today. All the higher returns are earned after the rates go up, not during the time the rates go up. You will be able to benefit from the higher interest rates anyway if you buy bonds after the interest rates go up.

If we back out the higher returns you will get after the rates go up (because they are the same whether you buy or don’t buy bonds today), we are left with the period of time during which the rates go up. Suppose interest rates go up from 2.6% to 4.0% in the next two years, a bond fund with a duration of 6 years will lose 1.4% * 6 = 8.4% on the principal. That will more than offset the interest payments during the two years and give the investors a net negative return. Clearly an investor is better off putting money in a 2-year CD paying 2% a year.

So should you buy or stay in bond funds today when interest rates are at historical low?

It depends on where you see interest rates are going. If you think interest rates are going down, instead of up, you should buy bonds, and buy long term bonds. Long term bonds pay more in interest than short term bonds. As interest rates go down, your long term bonds will also get a capital gain. Maybe the game will still go on for some time. Enjoy. Just remember to get off the railroad tracks before the train comes. I’m not comfortable with this risky strategy.

However, if you see a risk of interest rates going up, you are better off taking shelter in CDs. A 3-year CD paying 2.5% a year is much less risky than a 10-year Treasury paying 2.6%. The cost of being conservative this way is really low. Some CDs have a cheap embedded put option: if rates go up substantially before the CDs mature, you can pay a small early redemption penalty and reinvest at the higher rate. That’s even better.

Reference:

• Bonds and rates: The reality behind the headlines, Vanguard Insights, February 2, 2010
• Deficits, the Fed, and rising interest rates: Implications and considerations for bond investors, Vanguard Research, March 2010
• Risk of loss: Should investors shift from bonds because of the prospect of rising rates?, Vanguard Research, July 2010
• Should you beware of a bond bubble?, Vanguard Insights, August 3, 2010

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Free ETF trades make it really easy for small investors to put together a diversified portfolio at extremely low cost because the minimum investment in a ETF is just one share, usually less than $100. See previous post Low-Minimum Index Funds and Commission-Free ETFs for Small Investors.

If you don’t have a problem with meeting the minimum initial investment requirement and you are already investing in traditional open-end mutual funds, should you switch to ETFs?

You probably should, at least for the majority of your portfolio.

Lower cost is the biggest advantage of ETFs over open-end mutual funds. ETFs are primarily index funds. If you are investing in actively managed mutual funds, they usually cost several times more than the comparable ETFs and they don’t necessarily deliver superior results.

If you like index funds for their low cost, you will like ETFs even more since ETFs usually cost less than comparable index funds. Some index funds charge purchase and/or redemption fees; ETFs don’t.

Getting the same investment at lower cost means more money in your pocket. Vanguard offers a cost comparison calculator. I tried it with several ETFs. The ETFs won every time. Here’s an example:

For $30,000 invested in Vanguard Value Index Fund for 20 years at an estimated return of 6% a year, the total cost is $2,865. The total cost of investing in the equivalent ETF is $1,581, or 45% less. Who doesn’t want to save the cost of investing by 45%?

More choices is another reason for choosing ETFs. Vanguard has 29 index funds, but it has 46 ETFs. Schwab has five index funds and 11 ETFs. If you want something not available as an index fund, you may find it as an ETF. More choices means it will be easier to assemble a portfolio exactly the way you want.

ETFs and index funds are not mutually exclusive. Nobody says you can’t have both. Having both not only is OK but maybe even better than having only funds or only ETFs.

If you are not familiar with ETFs, you may be concerned about their trading aspects: the premium/discount to NAV, the bid/ask spread, market orders versus limited orders, etc. etc. If you are a Vanguard customer, don’t be afraid. You don’t have to master trading when you are investing in Vanguard index funds and ETFs. That’s another unique advantage to being a Vanguard customer.

Vanguard index funds offer a unique feature that lets you convert mutual fund shares into ETF shares at the net asset value. Not all Vanguard index funds have an ETF equivalent and not all funds offer conversion, but the majority do (20 out 29 index funds allow conversion to ETF, see list). You can convert the bulk of your index fund holdings to ETFs and still leave a minimum amount in the index funds for periodic purchases and rebalancing. When you accumulate enough index fund shares that make it worthwhile, you can convert them to ETF again.

Because converting from fund shares to ETF shares is done at the net asset value, you can be oblivious to the premium/discount, the bid/ask spread, or market order or limited order. If you have index funds in a taxable account, you don’t have to worry about triggering taxes either, because the conversion is a non-taxable event.

Isn’t it nice to have the best of both worlds? Mutual funds are easier to buy; ETFs are cheaper to hold. Have your cake and eat it too. If you are used to buying index funds every month on a set schedule, you don’t have to change your routine at all. Just convert the bulk of your existing holdings to ETFs and convert again maybe once a year after you do your rebalancing.

Is it too much trouble? I take it that most people have a checking account and a savings account or CDs. The idea is that you use your checking account for day-to-day spending and you use your savings account or CDs for more stable savings. You do that because the savings account or CDs pay more interest. Having both index funds and ETFs is along the same line: index funds for dollar cost averaging and ETFs for long term holdings. I think it’s not too much trouble and totally worth it.

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Bing Cashback is an online shopping cashback rebate service offered by Microsoft. Microsoft announced the program will end on July 30 at 9:00 pm Pacific Time. Before it bids farewell, Bing Cashback offers 40% off shoes at Endless.com. I’ve been buying from Endless.com through Bing Cashback for some time now. At times it was 25% off or 30% off. 40% off is the best I’ve seen so far.

Some shoes are hardly ever on sale anywhere. For those shoes, 40% off at Endless is a great deal.

Here’s how it works. You start at Microsoft’s search engine bing.com. Search for "shoes". Click on the ad on the top of the search results that says 40% off at Endless.com. Give an email address to Bing Cashback if it asks you. Shop at Endless.com as usual. When you are done, you will get an email from Bing Cashback about your rebate. Your rebate will be paid to an Amazon Payments account in about 60 days. You can redeem the rebate as an Amazon gift card or withdraw it to your bank account. For more information, read Bing Cashback FAQs.

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