Just got our "house" credit card bill this morning, and noticed a VERY sexy box full of information on there ;) Which is funny considering we now have some credit card debt as I mentioned last week (I blame you Europe).

I'm not sure how many of you were reading this blog last year, but I had gushed all about these new c/c rules and got slammed pretty hard for it. There may be one or two that I'm not *as* excited about as I was initially (the over 21 rule specifically), but for the most part I stick by my HELL YEAH! attitude :) Of course we're gonna get slapped with nasty late fees/returned checks/etc if we don't pay attention, but you can't deny this sweet picture I'm about to show you! HOW COULD THIS BE BAD???:

(A snapshot of my actual credit card statement from USAA, minus the awesome doodles)



I mean come on, look at those sexy statistics! You think people are going to just overlook that and not think twice? Maybe the first few months, but overtime it will sink in and at LEAST shave off 5%+ their spending (I'm making that up, but I bet some economist will prove it!). I have absolutely no problem with these new additions here and I REALLY REALLY hope this gets people to wake the F up.

Shopping is fun & exhilarating, I get that - but guess what, so is financial freedom. I stick with you, dear credit card changes. Let's rock this together.

Labels: credit cards, interest

Yup, for the first time in two years we've got credit card debt again.

But as you can probably guess, there is a reason for such silliness - I finally booked EUROTRIP! And I didn't want to dip into our cash savings ;)

Financially it's not that smart because we'll now be accruing a few dollars in interest fees, but I'm totally cool with that. I know myself well enough that if I just xfer cash from one spot to another I won't work as hard to get that money back. But if it's on our credit cards for all to see, you better BELIEVE we'll be focused to get rid of it ASAP! :) I don't recommend this for those who have trouble managing their cards, but for us it works. I know it's temporary and that it will be cleared away in 2-3 months, if not sooner.

That's the biggest difference in Feb's net worth update. The rest has to do with me throwing 90% of my paychecks into 401(k) and just waiting for it to hit. It's kinda off-balance right now and makes us look all spendy-spendy, but I assure you that's definitely NOT the case ;)

Net Worth break down: February, 2010

CASH SAVINGS (-$1,984.48): Still getting my $75 paychecks until I max out my 401(k) for the year! When your company matches 100% up to 100% of your contributions (up to the legal match), it tends to change the way you invest ;)

EMERGENCY FUND ($0.00): Same $10,000 this month as it was last month, and the month before, and the month before that. I think we're rolling on 2 years of having this $10k fund, haha... The good thing about reaching your goal here is that you can then concentrate on all the others you've got brewing!

ROTH & TRADITIONAL IRAs ($373.40): Just the market doing its job here, we haven't increased any extra funding this year yet. We'll do that once the 401(k) is maxed out.

401(k)s ($2,624.50): Nice to see it up again! And one day soon it'll be even BIGGER once all my deposits hit (I can barely contain myself!). It's so crazy to me, though, that you can do absolutely nothing and your investments can ear $2.5k just like that. Of course, last month it lost $5k "just like that" but you get what I'm saying. Your money is out there working for you even while you sleep :)

AUTOS WORTH (kbb) (-$75.00): A little more off the ol' car values, but nothing unexpected. MUCH better than back in the day when my SUV was losing $900 a month! Bleh... Here's where our car values stand right now:

• Pimp Daddy Caddy: $2,995.00
  
• Gas Ticklin' Toyota: $8,885.00
  

HOME VALUE (Realtor) ($0.00): This will remain @ $300k (the price our realtor set it at) until I hit him up later for another review. He's the master in our particular neighborhood, and has been selling (and living) in this area for 20+ years. I keep an eye on Zillow & Redfin.com as well, but they fluctuate so much that I never can tell what's real and what's hype.

CREDIT CARDS(-$2,480.20) : No longer at zero! But one day soon ;) As I mentioned in my summary up at the top, we put our 10-day Eurotrip package on our credit card instead of paying in all cash. We lose a little with the interest charges, but it'll motivate me a lot more knowing it's up there for everyone to see. (don't try this at home, kiddies...)

MORTGAGES (-$4.48): We stopped paying off principal to deal w/ the above, and have already paid $400 of it off! It doesn't bode well for this section of our net worth, but we'll be back to chip away at it soon enough. As for refinancing, we're still pretty much screwed on it. Here's the breakdown:

• Mortgage #1: $286,818.64 - 30 year fixed, interest-only @ 6.875%.
• Mortgage #2: $62,554.62 - Maxed out HELOC w/ 2.8% interest.

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*My budget has now been updated.
**And so have my sidebars. And my excitement for Zoolander II

Labels: credit cards, net worth

It seems credit card debt has risen 18% in the last 6 months! This does and doesn't surprise me. It does cuz it seemed the public was getting better at managing their finances due to the jacked up economy, but it doesn't in that jobs are still going out the window and we had the holidays to deal with. Plus, people revert to their old ways in a heart beat ;)

Anywho, I got a whole mess of stats sent over by Credit Karma this week and I thought you'd find it interesting - especially if you live in any of these states. Here's what the U.S. Credit Score Climate Report found:

• Indiana - credit card debt increased by 39%
• Michigan - credit card debt increased by 30%
• Oklahoma - credit card debt increased by 32%
• Pennsylvania - credit card debt increased by 30%
• Tennessee - credit card debt increased by 34%

I'm surprised New York or California wasn't on there, although I don't have any real reasons to back up my theory. Michigan totally makes sense w/ their unfortunately high unemployment rate :( Any of you who live in these states noticing this trend? Credit Karma also researched the average debt from their 87,000 users:

• $8,079 in credit card debt
• $184,940 in home mortgage loans
• $53,744 in home equity loans
• $14,899 in auto loans
• $26,692 in student loans

I'm happy to report I only fail at 2 of these 5 categories ;) We've got absolutely no credit card debt, auto loans outstanding, or any student loans on the books. We do, however - and to my chagrin (always wanted to use that word!) - have $287k in a home mortgage loan, and $63k in an f'ing home equity loan. As you can tell I'm not the happiest home owner these days, but we deal with what we got ourselves into, right? Anyways, I'm a sucker for stats like these and comparing myself to the "average joe." It's nice to see where you land when you work your ass of like we do :)

Labels: crazy economy, credit cards, debt, in the real world

Guest post by Red.

What is the first thing that comes to your mind when you think of credit card debt? Maybe it's maniacal company executives laughing as they toss the money earned on your interest up in the air. Or the stress involved in mapping out your payments toward debt freedom.

If you've been down in the trenches - deep in credit card debt, missing payments and accumulating multiple overdraft fees - maybe your first thought is of phone call after harassing phone call from collection agencies trying to get their money back.

In 2007, I was $3,500 in credit card debt, working full-time while going to school full-time and struggling to pay my bills. I couldn't even make minimum payments on the six credit cards I had opened and maxed out to pay for my lifestyle. (Even though I was living like a student where cable and digs were concerned, I had a nasty shopping habit - clothes and new furniture were my weaknesses.)

It didn't take long for companies to begin calling me, night and day, every hour on the hour. I answered before I caught on to the numbers. I began ignoring all phone calls from numbers I didn't recognize, fearing they were from a nasty representative who wouldn't be happy that I had borrowed money I couldn't repay. I had just started dating my boyfriend. The collection agencies would start calling at 7 a.m., while we were still in bed. What could I tell him? That I had mishandled money? What would he think of me? Instead, I lied and told him I didn't know who it was. But I knew.

I easily received 15 phone calls a day. Sometimes they would leave a voicemail, but I deleted it without listening. I was terrified, and I knew what they would say. They wanted their money, and they wanted it now!

I've heard people claim credit card companies can't do anything but call you and after a while they'll stop. (Those people obviously don't know the destruction a poor credit card record can do to your credit report.) But the hourly reminder that I owed thousands of dollars at high interest rates was much more psychological torture than I could handle. The few times I'd accidentally answer the phone I'd cringe and hang up as soon as the person on the line asked, "Is [Red] available?"

Some good did come from the incessant calls. (Just don't tell the collection agencies that!) I knew I couldn't live in fear of my cell phone ringing, and I made a plan to rid myself of the debt. Here's the advice I have for anyone who is being harassed by credit card companies:

1. Know your rights!

The Fair Debt Collection Practices Act, part of the Consumer Credit Protection Act, maps out practices that are prohibited by law. These include calling outside the hours of 8 a.m. to 9 p.m., failure to cease communication upon request, abusive or profane language and communicating with consumers at their place of employment when advised that it is prohibited by the employer. If a collection agency is not abiding by the law, let them know that you know your rights and will contact the Federal Trade Commission or your state attorney general if the abuse continues.

2. Try to prevent the harassment before it starts.

Unfortunately, I don't share J. Money's optimism all that often. ;-) Credit card companies know that their interest rates are outstanding and that many consumers will treat their cards as free money. You're not the first person to go over your card's limit or be unable to pay your bill. If you're drowning in credit card debt, try to take the lead and call the companies before they call you! If you can call the company before they refer the debt to a collection agency, you may be able to work out a better payment plan. But if it's too late for that...

3. Send a cease letter.

The easiest way to stop collection harassment is to write the collection agency a cease letter. Federal law requires collection agencies to stop their collection efforts after they receive a written request to stop. Keep a record of any letters and phone calls received after sending the cease letter.

4. Create a repayment plan.

Consider your current financial predicament and work out a repayment plan. Be as honest with yourself as possible. You'll need a realistic budget to get out of this debt, and seeing the light at the end of the tunnel is better than blindly making minimum payments with no consideration to what your interest and credit card is really costing you.

5. Don't avoid the calls.

I know from personal experience that it is tempting to plug your ears with your fingers and sing la-la-la-la when you see that all-too-familiar phone number pop up on your caller ID. But, really, it only adds to your stress and encourages them to continue calling. Instead, answer the phone!

6. Contact the creditor and negotiate.

Though I still envision executives throwing my hard-earned money up in the air, dancing around their desks and laughing greedily, the representatives are human. Most of them understand that emergencies happen, and sometimes things are beyond our control. By this point, you should have a kicka$$ budget in your hands and know exactly how much you can pay toward your balance each month. Avoid offering too much. You don't want to make a deal that you know you can't keep. If you do, you'll end up right where you started. Instead, tell them honestly how much you can monthly pay for the foreseeable future. Ask for an interest rate reduction. (This rule is important whether you're in over your head or not. Most companies will reduce your interest rate if they know it increases the odds of getting some of their money back. And no one wants to lose business to a company offering a lower interest rate.)

It took me a long time to make it through this list of six dos and don'ts. But when I did make the phone calls and accepted that I needed to do something to get out of debt, I felt such a giant weight lift from my shoulders. I had a plan. I was in control of my finances instead of those collection agencies. And that made all the difference.

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This is a guest post from Red, a newbie personal finance blogger over at Girl with the Red Balloon. Her blog began as an attempt to stay money-conscious in a relationship and now includes tips and personal anecdotes on saving, budgeting, repaying debt and de-cluttering your home (and making money in the process, of course).

Labels: credit cards, debt, guest post, one of my lists

Have you ever thought about that? The amount of money that's available to you with just a swipe of a card? It's really freaky. I'm not sure what the average credit limit people have these days, but I'd be lying if I wasn't curious to find out (hence, the reason for this post!).

If it's any indication of what one of my blogger friends found out - who got to this post first, that turd bucket - the numbers def. vary. Some commenters had a few thousand to their name, while others had upwards of $150k! Of course, there are a ton of variables that come into play: age, credit history, overall net worth (I think?), so it's only natural we have varying limits. Plus, a lot of people don't know you could sometimes up your limit with a quick phone call! You might not WANT to if you're a spendy little mcspendster, but if you're trying to work the credit score #'s (by lowering your debt to credit ration) it's always an option you have. Just don't tell our friend Enemy of Debt, he can't stand credit cards!

Anywho, here's all the cards we have in our family - and don't think this is some sort of competition or anything, it's just for fun :) And also for future reference...like if you go on a game show or something.

1. USAA Cash Rewards card - $30k (my card)
   
2. USAA "World" Cash Rewards card - $25k (house card)
3. The Wifey's card - ? (she's sleeping right now, I'll have to edit later...)
   

We've got about $55k between the wife and I - up from $15k before we called to get it raised. I can't fathom a time when we would actually NEED thousands like that (knock on wood) but it's somewhat comforting knowing it's there. If only because of the "credit crisis" we're in.

Your turn. How many cards & total credit do you have in the hopper? Let's see if we can beat out Bargaineering's extremes of $0.00 for the least (aka no credit cards at all), and $185,500 w/ the most!

Labels: credit cards

I know this economy ain't the greatest, but pushing 79.9% interest rates? Come on now, that's just f*cked up. Would YOU sign up to such an asinine credit card? Would you hand one out to your kids or own mother? I doubt it. Whether people are falling for it or not, you can't feel good taking advantage of people like that. I'll send some prayers your way, you're gonna need 'em...
----
Thanks for the tip James....unbelievable indeed.

Labels: banking, cockamamy indeed, crazy economy, credit cards

As many of you know, The Credit Card Accountability, Responsibility and Disclosure Act was passed a while back and some of the stuff coming out of it is just plain AWESOME.

Not only will it improve a lot of the shadyness going on, but it'll hopefully get the average American back on track and *paying attention* again (see #4). It may also means entirely new fees to watch out for as the credit card issuers fight back, but all in all I'm personally pleased by it. While I promote smart leveraging of credit cards, I know very well of the trouble many people get into when they fall behind and it becomes a downward spiral. So if you're one of them reading this, pay attention and see what we all have to look forward to! Hope is on the way, baby...

Credit Card Legislation: The Good :)

Money Magazine breaks down 13 of the new mandates that affect us (print edition: Aug, pg107) so that people like you and me don't have to. Rather than list them in the same order as they did though, I figured I'd list them in order of the ones I think are MOST IMPORTANT first. Numbers 1-5 are the key ones in my opinion, followed by some others that are great, but not *as* sexy as the previous ones. But again, I pay my credit card off in full every month so it may just be that they don't pertain to me. Let's get started:

1. Payments in excess of the minimum owed must first be applied to the balance with the highest interest rate, and then to other balances in descending order. YES!!!! OMG this helps so many people. Even I have fallen for this at times. You have your normal rate set at let's say 6%, and then you withdraw cash @ 18% due to something unexpected and quickly turn around the next day and pay it off "in full". That might be fine and dandy but the old rules say you just paid that XXXX worth of $ towards the 6% instead of the emergency 18%!!! And if you have a large balance already that you can't wipe out? Sucks to be you. But now anytime you pay money it goes to the highest first, and THEN the next lower one in line. A++ politicos. (by Feb 2010)

2. Applicants under age 21 must have an adult co-sign, or show proof of income for approval. DAMN that's genius! Not only does this make the kid think twice, but now it puts more responsibility on the parent :) Again, another A++ for the nation. (by Feb 2010)

3. Issuers can't offer sign-up gifts on or near college campuses. Looks like no one will be getting any free shirts or stress balls anymore! Do you hear that Debt Free Dad of 6? If this were around when you got one of the first credit cards in history things might be better. A+ (by Feb 2010)

4. Issuers must indicate in statements how long it will take to pay off a balance (and the total cost) if you make only minimum payments. WOW. I guess sorta like a mortgage, eh? If this doesn't help educate the average American, I don't know what will. A+ (by Feb 2010)

5. Cardholders assessed a penalty APR for late payment can reclaim the lower rate if they pay on time for six consecutive months. Sexy! So no more "Well I'm screwed now and there's nothing I can do about it"-type mentality. You mess up, you pay the penalties, and you get right back on track 6 months later. I'm all for that. (by Aug 2010)

*****Other Great Ones****

6. Statements must be mailed 21 Days before bill is due (up from the current 14). (by Aug, 09)
7. Issuers have to give 45 days' notice (vs. 15) before increasing interest rates and fees. (by Aug, 09)
8. Issuers can no longer raise rates on an existing balance, unless payment is more than 60 days late or a teaser rate expires. (by Feb 2010)
9. Teaser rates must be in effect for at least six months. (by Feb 2010)
10. Except for expiring teasers, the rate on new purchases can't be hiked in the first year. (by Feb 2010)
11. Over-limit fees can be applied only if a consumer opts in for approval on going over the credit limit. (by Feb 2010)
12. Issuers can no longer practice "universal default" - that is, raise your rates if they learn that you were late on another account. (by Feb 2010)
13. In calculating finance charges, issuers cannot average in daily balances from the previous billing cycle. (by Feb 2010)

Credit Card Legislation: The Bad :(

Okay, so this new legislation is AWESOME in so many ways, but what about the consequences? You better believe the credit card issuers aren't going to just take it up the $%!* and let go of all that money. Instead, Money Mag predicts that we have the following new charges to look forward to:

• Late Fees: We may see a rise from $39 (average in '09) up 25% to around $49 in 2010!
• Customer Service Calls: Get the first one free, and then pay $4 for each additional call/month!
• Credit Line Increases: If you call to increase your credit line, you may now face a $35 fee.
• Cash Advance: Perhaps @ 4% with no cap. That cap one will get ya...
• 2nd Card: Need a 2nd card? Pay them $30 extra (instead of nothing right now).
• Paper Statements: Remember how they always want you to "save the Earth" and go electronic? Maybe now they won't be as pushy if they're charging you $4 PER MONTH!
  
• Credit Card Rates: And finally, they predict average credit card rates to go up to 15.07% by Feb. 2010 - up from an average of %13.76 in June of '09. Boooooooo.

So what's my overall take on this? I say LET'S ROCK IT OUT!!! Yeah the extra fees/charges/rate increases will suck for all those not paying attention, but guess what? PAY ATTENTION. We all slip up some time (except for maybe Brad who never uses credit cards), but the pros heavily outweigh the cons here. Credit Card Accountability, Responsibility and Disclosure Act - I love you.

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Related posts you might enjoy:
- It's all About the Credit Cards Baby! 4 Steps to Success...
- I'm all for The Credit Cardholder's Bill of Rights no matter what.
- Top 4 Credit CardIssuer Traps
- Credit Card Roulette - To Play or Not to Play?

Labels: awesomely awesome, credit cards, one of my lists

Payday Loans vs. Credit Cards - which are worse to take out cash from? They both have their pros and cons (mainly cons) but if you were in a bind and had to pick one, which would it be?

This debate popped up during my coffee meet up w/ James from Dinks Finance last night (I told you I'd be blogging about it! haha...). BUT, the crazy thing here was that we found ourselves defending opposite sides! He was slamming credit cards, and I was quick to diss those damn payday loans. It was an epic battle of two finance bloggers going head to head ;) Or perhaps a battle of nerds sipping coffee, take your pick.

The question we have to ask ourselves here though, of course, is who's right? Or better yet, which product technically IS the worst of the two? Well, I'm no expert in the field, but this little quote found on the CFA's (Consumer Federations of America) website says it all:

"Payday loans are extremely expensive compared to other cash loans. A $300 cash advance on the average credit card, repaid in one month, would cost $13.99 finance charge and an annual interest rate of almost 57%. By comparison, a payday loan costing $17.50 per $100 for the same $300 would cost $105 if renewed one time or 426% annual interest."

Ca-ching! They also share a pretty interesting cost comparison chart (pdf) and loan calculator that helps to determine what your total costs would be. By the way, for those who aren't familiar with the term "payday loan", it's basically a small short-term loan that's intended to cover a borrower's expenses until their next payday, sorta like a cash advance (also referred to as a paycheck advance or payday advance). They can be taken out online or at physical stores like pawn shops or their own entities.

In fact, it goes without saying that NEITHER payday loans or credit cards are a good answer for getting cash. Borrowing money from family/friends, taking out a personal loan, or just dipping into your savings accounts always trump cash advances when it comes to the fees you'll have to pay. Unfortunately there are times when these aren't an option though - and thus, the reason for this post (other than to prove my man James wrong ;) )

Contender #1: Payday Loans
The average fee you'll pay for a payday loan is somewhere between $17-$25 for each $100 that you take out, but it can get as high as $30 per $100 in some states! So, say you take out a common advance of $500 and you pay it back in full after 2 weeks - GREAT! You had to pay an extra $87.50 on top of the $500 you borrowed, but at least it's over with, right? Unfortunately no, the odds are stacked against you. According to the CFA - "Consumers have an average of eight to thirteen loans per year at a single lender." That's pretty damn scary.

On the plus side, you could argue that since these are mini loans of 2 weeks at a time, it might be easier to pay off and not have it drag on like it may w/ a credit card. That all comes down to personal preference and usage though - I can't really relate to it here.

Then, of course, we have that big ol' stereotype that payday lenders are bad evil people and are out to steal your money! Well, I don't have any facts myself to to say they're shady (although I feel they are), but I can def. say without a doubt that they want your money ;) And unfortunately you're hard pressed to see *all* their fees upfront and readily accessible on their sites - at least on the non-reputable ones.

Contender #2: Credit Cards (cash advances from)
Now let's talk credit cards. As much as I champion my dear credit card for budgeting purposes and the cash back rewards (not to mention the free grace periods to pay back purchases), they're certainly no angels either. According to common knowledge" and the talking heads on TV, the average American household is in about $8,000 debt. Some feel this is a bit inaccurate, but the fact is that many of us are, indeed, ADDICTED to our credit cards.

And if you're already addicted, why not just slap on a cash advance to it right? *shiver*. While usually LESS than paydays (do your research!) you'll still pay a steep price for it - anywhere from 15-25%. Of course, there's also the problem of mixing and matching normal purchases with cash advances. Most cards, if not all, will use your payments to pay off the lower interest items first (like your purchases), and THEN use it to pay off the higher cash advanced amount. It looks like there may be some new rules in place soon that would get rid of this though.

On the other hand, most credit card companys display all the informaton upfront - the rates, the fees, etc. You might actually have to look for it, but it IS there. And usually written in itty bitty font ;) I believe most c/c statements have it all disclosed on the back, but either way it's easily accessible on your bank's website or by placing a 2 min phone call. If you do your research and check around for the best rates, you might be suprised at what you can find.

The Winner: Credit Cards
In conclusion, they both suck and should be avoided like the plague. BUT, if forced to take one over the other, I'd go with my credit card all the way. I'm comfortable with it, I have a good relationship w/ the bank that issues it (USAA), and I can easily go online and pay the advance off at any point (because I don't carry any other balance. And if I did, I could always take out a new card specifically for this purchase and *then* pay it off online).

Now, if only I could remember the reasons James argued for payday loans ;) I'll have to ping him and get him to respond back here. Although in all honesty I'm scared as that boy's a genius at analyzing! Seriously, have you ever checked out any of his posts? whew.

UPDATE: James from Dinks posting up his rebuttal...although his tune has changed ;)


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PS: If you find yourself in a situation and you need help, PLEASE research RESEARCH research! Spending 30 mins now can save you hundreds of dollars later if you don't know what you're getting yourself into. It's easy for me to state my opinions on the subject based on what I know, and what MY experiences have been over the years, but it's not necessarily the best for *everyone*. Only you know that and can judge the best option for yourself.

Here are some other articles I found while researching:
- Payday Loan vs. Credit Card Interest
- Credit Card Cash Advances Versus Payday Loans
- Why a Payday Loan is Better Than a Credit Card Cash Advance

Labels: credit cards, fast cash, loaning money

Do you spend hours each week searching for the best interest rates around? Do you bounce from one bank to another, living on the thrill of that extra .01%? If so, you, my friend, are a rate chaser. And you also have a lot of time & patience ;)

Many PF Bloggers consider this on a daily basis, but personally, I just can't do it. The thought of opening & closing handfuls of bank accounts alone is enough to make me nauseous. All that paperwork & time to get it up and running, only to xfer out the money when a better rate pops up? Nah, not for this homeboy.

That's not to say it isn't financially smart though. Mathematically, it might totally make sense! If you can grab a higher interest rate or pay a lower % on debt, then more power to you! I support that 100%, hands down - especially if you have out of whack rates to begin with. Having the best rates is totally commendable, but it's the frequency of switching accounts (sometimes every 3 months) and the research involved that separates the rate chasers from the average joe like myself.

Not only do they need the best of the best, but they need it now. After all, it's just a matter of time until it changes again! Gotta bring in that extra dough while it's hot off the press, right? They also don't care if their accounts are scattered around town. If you're chasing rates, you won't always find the best ones at your favorite bank all the time (even at ING or Emigrant Direct, two of the usual favorites). This alone knocks me out of the running - I need everything possible under one roof, my bff USAA ;)

Then there's the actual cash reserves that come into play. If you've got thousands of dollars saved up (or in credit card debt) where the slightest move in rates can be the difference of earning hundreds of dollars to THOUSANDS of dollars, then yeah by all means get on that $hit! I'd do the same thing. As it stands, however, most of my our money (still not used to being married) are invested in our 401ks and Roth IRAs, with the remainder in a decent money market account which we tap every month. Without a huge cash reserve, it makes no sense for us to bounce around and follow the place w/ the higher rates - and I'm guessing the same goes for most of you reading this as well.

As you can see, it certainly takes the right type of personality (and bankroll) to play with the rate chasers. Financially, it certainly has its perks. But the real question at stake is if chasing rates actually makes SENSE for you? If it does, great. If not, then do your best and watch from the sidelines ;) More often than not, it doesn't pay to play.

Labels: banking, credit cards, interest

That's right! T-Mobile, BillShrink, and J. Money are teaming up to bring you savings AND a Free phone!

And with the way this economy's been lately, the timing couldn't be better :) You owe it to yourselves to make sure you've got the best cell phone plans and credit cards in your pockets - plain and simple.

For anyone in the dark, BillShrink.com has come out blazing and is all about helping people like you and me save money. They hook you up with the best cell phone plans, credit card plans, and best gas stations centered around YOUR personal preferences. The whole site's pretty clever if you ask me, and I'm kinda pissed I didn't come up with it first ;) But whatever, I've got a PF blog instead, right? So yeah, check it out. All you have to do is visit their site, enter some info and preferences about your current bills, and voila! It recommends some better alternatives to help you save some money. It's easy, it's FREE, and it's awesome.

They also have a freakin' great blog as well (and I'm not just saying that). Their tagline is "Shrinkage Is Good" for crying out! haha...bad to the a$$. Anyways, to give you an idea of what their recommendations are like, here's what they gave ME when I hit them back up again:


Credit Card Recommendation: American Express TrueEarnings

This was based on paying off the card in full every month, spending roughly $1,000/mo, and wanting cash back over mileage and other prizes. And it doesn't surprise me at all - If Warren Buffett's been picking up even more of their stock, they have to be doing something right! Plus, I've always considered them a top dawg in these races. For me though, there's no beating my USAA World Cash Rewards MasterCard ;) If you're not as addicted or faithful to your own card, however, then this tool is def. worth checking out. You can sort from cash back, mileage, whatever your preferences are.


Cell Phone Provider Recommendation: T-Mobile

In all honesty, I didn't think T-Mobile was gonna come out as the clear winner here. I knew Verizon (who I have) is always more costly than the rest of the carriers out there, but I thought AT&T would for some reason win - but I was wrong! Based on my usage and specific needs, T-Mo grabbed the top spot! I know they've been trying to developing strong relationships with their customers, and are always pretty confident they have the best rates going on, so I suppose it all makes sense. I guess that's why they're so keen on pimping out BillShrink, eh? ;)


Best Gas Station in My Area: Liberty

This is true! Where I live Liberty, in fact, IS the cheapest station around...unfortunately I prefer convenience over saving a few bucks when it comes to filling up my Caddy. This station is only a few blocks away (I know, I'm an idiot) but when I'm going to or from work, I'm already in a rush and I'll gladly pay that convenience fee. If you're smarter than me, you'll listen to what Billshrink recommends.

So there you have it - T-Mobile & BillShrink are lighting up the skies! Now, onto the part you probably care about a teenie weenie bit more - THE FREE PHONE ;) Yes, I speaketh the truth. I will be giving one lucky winner a Free Tony Hawk Ed. Sidekick or a Motorola ROKR E8 - whichever you prefer.

All you have to do is visit BillShrink's site, and then drop me a comment with your thoughts about it - that's it! You can tell us how much money they will save you, how much you loved their blog, or even how you'd rather swallow a huge rat turd than switch credit cards, it doesn't matter. Just leave your thoughts on the subject and you will be entered to win the free phone.

So whatcha waiting for? Get out there and see if you can save some big bucks! I'll be picking the winner this Saturday @ 12noon EST via Random.org. God Bless you my frugal ones..

*WINNER: Gloomberg News! Click here for more info...
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*These phones ARE, indeed, FREE! You don't have to activate it with T-Mo or sign up to a plan or anything - you can do as you please with it :) Although, unless you already have T-Mo you may need to get w/ 'em to have it work (not free), but the point is it's totally you're call. (And no, I did NOT get any money or any other sort of compensation for this post. Only one of YOU lucky bastards will get this free phone, not me ;))

Labels: credit cards, gas, giveaways, phone service, saving

Oh man, Colbert is on fire! I love it when him and Jon Stewart chat about all this financial stuff - hilarious. Favorite part is 1 min. in when his new Credit Card gets approved for its VERY OWN Credit Card! haha...what a pimp. Enjoy (and thx Consumerist):

The Colbert Report	Mon - Thurs 11:30pm / 10:30c
Credit Check
colbertnation.com
Colbert Report Full Episodes Political Humor Gay Marriage

Labels: awesomely awesome, credit cards

Well, I survived New Orleans! And I must say, Las Vegas has nothing on them. Never have I seen so much beauty and filth all packed into the same town, it was awesome. And now, 48 hours after all that beer and sight seeing and music and voodoo and bonding, it's back to good ol' reality. And it's a good thing too cuz my body can't take it any more ;)

But before we close out this chapter, allow me to share an interesting concept with you all. We were divvying up our dinner bill Saturday night when a friend said something about playing "Credit Card Roulette". Come again? Were my boys about to talk finance for once? Well, not exactly, but it was still pretty exciting to learn about. Urban Dictionary has it a bit differently, but according to my friends it goes a little something like this:

Credit Card Roulette: A game to see who's going to pay the bill. You take everyone's credit cards, put 'em under a napkin, and then mix them all up so you can't tell whose is whose. Then, someone (usually the waiter) randomly selects one of them and pulls it out to declare the "winner". Except in this case, you do NOT want to win, because the "winner" is the chosen one to pay the entire bill!

So why on earth would you participate in such a thing? Well, for one the odds of getting a free meal are totally in your favor. If there's a total of 6 of you playing (as we did), you only have a 17% chance of taking the fall and paying up! Not too shabby odds if you ask me. Of course, the more people you have playing the bigger the bill ;) And in our case Saturday night, it was a hefty $240 ticket without even taking on the tip yet. It's definitely not for the faint of heart...nor apparently us since we all politely declined.

I must admit, though, I was pretty tempted. I wonder what would happen if I bring this up at our next PF Happy Hour? Haha...so what about you all? Am I the only one who's never heard of this before? Drop me a line and let me know. In the meantime, I have to get back to replenishing my body with massive amounts of water & vegetables before I keel over...this body ain't the same as it used to be.

Labels: cockamamy indeed, credit cards, travel

Welcome to a guest post from my insanely talented brother :) Needless to say, you can tell who the "real" journalist is in the family. But even more importantly, he's finally got his financial act together out of all these years! You're my boy Blue!

This may be a little long, but if you like my writing style you're REALLY gonna love his. Perfectly punctuated and grammatically correct too (imagine that?). If you dig it, drop a comment and show him some love :)

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I used to be a squirrel - a bearded, six-foot-two varmint who routinely stored his hard-earned acorns in the mouth of a tree trunk. I wanted to be prepared for those proverbial "rainy days." I told myself I was saving up for the inevitable. You know, in case I needed to have my car fixed, my condo upgraded, or if Jessica Alba ever put herself up for auction.

Point is, I was preparing ... but for what, exactly?

Growing up, my parents instilled in me a sense of responsibility that still resonates to this day. Always floss, don't drugs, yadda yadda yadda. All of that after-school-special stuff guided me along my path from geek to chic, but what really hit me was the importance of staying financially healthy. I had to always balance my checkbook, save my receipts and look for sales. I had to build a home, put up those tacky lawn ornaments and live in the black.

My parents vehemently stressed the importance of saving money, of putting portions of each paycheck into a bank account and leaving it there. I remember when I was making a few greenbacks at a seafood restaurant, and I would come home smelling like I had spooned with a lobster for eight hours. They wanted to know if I would be putting some of my paycheck away for the future. Yes, I told them. Right after I spend some of my hard-earned money on outrageously priced Nikes.

My folks were always on my back about money, but it worked ... to a point. After I graduated from college in 2003, I applied for my very own credit card. One thing led to another, and I found myself owing $1,000 to Best Buy, $800 on two credit cards and several hundred against my bank's line of credit. At the time, I was only making $30,000. While I could have been paying down my debt (slowly), I instead felt obligated to beef up my savings from a paltry $1,800 to somewhere in the $2,500 realm. I needed to save money, a la my parents' advice. Besides, I could always pay off that debt, right?

Wrong. That line of thinking was ridiculous. I was so dumb that when I had a brainstorm, it just drizzled! I had a lot of unnecessary debt at the time, but I still felt the urge to store my acorns for that rainy day. Truth is: That was the rainy day. Debt is bad. It's like kissing your sister and liking it. You don't want to have it, and you certainly want to pay it off before you fatten up your savings account. Nothing's worse than having to relegate whole checks to debt payment.

Long story short, I wound up paying it all off by stripping for money at my family reunions. That was about five years ago, and today I have a 401k I'm trying to maximize; I bought a condo as an investment; I've built an emergency fund of $6,000; and I'm planning on investing in CDs and stocks. I no longer rely on a savings account that gives me a few dollars in interest every year- I'm beginning to diversify. Oh, and I'm debt free.

My parents taught me a lot about money, but what I learned on my own is just as important: Spread it around, baby. Act like your money is margarine and the bagel is your future. You're the knife, and if you're sharp enough, you'll cover all the financial bases. In the end, you'll find it's better to have a lot of nuts in various trees than soggy nuts when it rains.

Labels: credit cards, debt, guest post, money management

I don't know about you, but i'm alllllllllways forgetting to update my accounts when I get a new credit card #. (Don't care? click here)

It really sucks to be honest, and it makes me wanna bang my head upside a brick wall - even if it does cost me $1. But I guess it's just one of those things we have to deal with in life.

I bring this up now because USAA just had a "data compromise" in one of its divisions (they say it due to a 3rd party), but either way it means they had to send me a new card with a new #. This may not be that big of a deal for some people, but I use my credit card for everrrrrrrrrrrrrrrrything. Which means I now have to update allllllllllllllll my accounts that's attached to it! (why do I keep typing like thaaaaaaaaaaat?)

That brings us to today's topic: The list of places to update your credit card information. Originally I only thought of 2 or 3 places to update this new #, but as the days passed (and my charges kept showing up on the wrong card) I realized there are a ton more places I was still missing! haha....so my hope is that this will not only be a nice reminder for you all, but for myself as well during the next round of updates ;) Here's what I conjured up so far:

• Overdraft Protection - Do you use your card as a back up so you never get overdraft fees from your checking/savings accounts? If so, this is probably the first place you should update. It's pretty embarrassing going in the negatives to begin with, but to then have your credit card decline directly after?! Bleh, no thanks.
• Paypal - Both your personal accounts and/or your business ones.
• GoDaddy - Or any other of your web/domain name hosting sites (for you bloggers out there)
  
• iTunes - Sure they're just .99 charges, but they still gotta get paid!
• UPromise - Somehow I remembered to change this before most others on this list. wtf? I never go on there, and when I do it's only to see if i beat my record income of $7.08 ;)
• Comcast - Their website blows, but luckily you never have to log on except for times like this - as long as you have your bills automatically set, which I highly advise.
• Cell Phone - Yes, very important if you like talking and all....
• Netflix - Don't use this personally, but 99% of you do!
• Gym Membership - Another one I don't use, but this time I'm in the majority ;)
• Other Subscriptions - Magazines, clubs, organizations, nudie sites (!), etc.
• Toll Tag - I totally forgot about these since I stopped using on a couple years back. But it's certainly one for the list for those who do use these still. (Thanks Philip!)
• Corporate stuff - Such as your corporate travel agent or any other services/items you use @ work and/or things you need for reimbursements and the like. (Thanks Shtinkykat)

That's all I've come up with so far. If I'm missing something big here, do tell! I've crossed this off my to-do list now and it's about to be emptied out of my brain. There's only so much I can keep in there at a time ya know ;) Enjoy the day over there hookers...

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ps: Yes, of course I still love you USAA! You = My 2nd Love.

Labels: credit cards, USAA

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This article was contributed by Steven Sildon who writes frequently about personal finance and credit-related topics. Steve is the Managing Editor for the CreditCardAssist.com website where he provides credit card news items as well as tips and advice on credit card offers.
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There's no doubt that using credit cards can be a risky financial move for some of us. But it seems like credit card issuers make it even more perilous in the way that they conduct business with consumers. Now more than ever, credit card industry practices are rife with tricks and traps to whack their customer with more fees, higher interest rates and anything else under the sun that they can justify to extract more money from their customers.

I've provided a list of the top 4 most blatant credit card issuer traps to watch out for:

1. "As Low As" APR's: Typically, credit card issuers market their cards by promoting a low annual percentage rate (APR) that you'll have to pay if you carry a balance, "As Low As 7.99%" for instance. Most card applicants don't realize that not everyone will qualify for the lowest APR available. The APR that each applicant is assigned is based on their credit history as well as the card issuer's scoring methods. The reality is that card applicants simply won't know what APR that they've been assigned until after applying for the card. In many cases, applicants anticipate getting a low APR only to be shocked to find that their APR is at 24.99% or above!
2. Balance Transfer Fees: It used to be that any card holder could easily transfer a balance from a high interest credit card at no cost to another card promoting a 0% interest rate for 12 months or longer. These days, balance transfer offers are few and far between as card issuers are sharply cutting back on these types of promotions. No fee balance transfers are virtually impossible to find. Nowadays, all of the major banks and credit card issuers charge a flat 3% fee on balance transfers with no cap. So for example, if you wanted to transfer a $7,000 balance, you'd have to pay a $210 fee right off the bat. (What?!?!) In some instances, it still might be worth paying the fee to avoid paying those high interest rates. But above all, be clear that taking on new debt and getting it paid down is more expensive than ever.
3. "Up To" Cash Rebate Amounts: Card issuers have a slick way of promoting their cash back rebate programs. One common method is to promote cash rebates of "Up to 5% Cash Back" on your purchases. Typically, those "up to" cash rebate amounts are only for certain purchases, such as drug stores or supermarkets. There are usually caps or limits on the maximum rebate that you can earn as well. So, for instance, you might only earn that maximum amount on the first $200 of purchases that you make in each month. Typically, there are spending thresholds and tiers that you have to reach before you can get those cash rebates as well. So for example, you might have to spend $6500 on your card before you can start earning any cash back at all. Just keep your expectations low on what you think you can actually earn back from these cash back cards.
4. Credit Limit Trap: This one really bothers me (probably because I've been whacked by it so many times). You might think that card issuers establish a credit limit on your account for the sole purpose of limiting your spending to that credit limit amount, sort of like a back stop. The reality is that the "over limit" fee is one of the single most levied fees of all of the credit card fees combined. That being said, you have to keep an eye on your credit limit at all times. Those over limit fees range from $29 on the low side to $49 on the high side so they can really hurt when you get whacked by them, especially for those of us with small credit limits. If you're unsure of your current balance, call the card issuer on the back of your card before you make that next purchase and ask for a current balance amount.

Being aware of these tactics is half the battle. Understand that you're not necessarily going to get the lowest APR that's being promoted on any one particular offer. Avoiding those pesky balance transfer fees can only be done by not running up your card balance in the first place. Otherwise, be prepared to pay the piper for transferring that high interest balance. And don't be fooled by those "up to 5%" cash back offers. Most of the time, you'll only be earning a maximum of 1%, at best. And above all, always be aware of what your card balance is so you don't go over your limit. Not knowing can get very expensive.
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Yup, there are def. a lot of crazy "offers" out there, but if you can work it to your benefit, more power to ya! That is all - off to go party now :) THANKS Steve!

Labels: credit cards, guest post

Yup, even my beloved USAA is fighting the good fight these days. Got a nice little letter in the mail yesterday (which may, or may not, have been cleverly disguised as junk mail) stating there will now be a minimum annual interest rate set @ 6.00% starting in Feb, 2009 :(

It's certainly not the worst thing in the world, but that doesn't mean i have to like it. Currently I have two credit cards that are set at "prime", which as of 2 days ago just dropped again to 3.25%!!! It won't remain that low forever, but it still means this new minimum will now be DOUBLE.

The good thing here is that I don't have any balances right now on either card that would be affected by this. Here's a quick snapshot of both cards, and what their used for and all:

• Card #1 - the "House" card: $25,000 limit with a fluctuating balance. We put all household expenses on here (utilities, groceries, etc), and then pay it off in full each month.
• Card #2 - the "Auto Loan" card: $30,000 limit with a locked in 3.4% rate for 1 year. This is how i financed my old school cadillac ;) I knock off around $500 a month so the balance is slowly going away. Currently it has a $4,000 balance.

So right now we're fine...i'm just REALLY hoping that the credit limits don't get slashed next :( I pumped those bad boys up to help our credit scores, but it seems like a lot of companies are slowly cutting back now. Oh well, i don't have much power over it all anyways...

Oh, and i almost forgot!!! The funniest part about this whole thing was when i skipped halfway through the letter and saw, "You may reject these changes between Dec. 6, 2008 and Jan 23, 2009". I was like helllllll yeah, thank goodness i read that b*tch! I'll just opt out of it and be on my merry little way ;) haha...

Until i read the next header which read, "What it means if you reject the changes". Wanna take a guess as to what was in there? It wasn't fun, that's for sure: Your card would get closed down, you'd lose all your rewards/points/etc, and more importantly you wouldn't be able to re-apply for it again. Yikes! And yes, you'd still be accountable for all previous charges you already put on there ;) although it WOULD be at your normal rate, so at least you'd have that going for ya.

The moral of the story is to just read the stuff your bank sends you. It may look like junkness, but that one minor detail you miss might come back and bite you in the a$$ later. As for you USAA, you know i love ya! Can't get rid of me that easily...

Labels: credit cards, USAA

It's reader mail time again, and it's all about Credit Cards! You all know i love me some emails (and comments, twitterings, etc) so don't be a stranger, my virtual door is always open :) And if the stars align, i'll sometimes even blog about it! oooohhhh, ahhhhhh...

So yeah, today's post is brought to you by a fellow Budgets are Sexy reader who wants some advice on the old "Pay everything with your credit card" idea. And guess what? That's one of my specialties!

But before we start, you know i have to throw in a quick disclaimer here: Using your credit card like this is NOT for everyone, esp. those who aren't good at managing their money. If you've got that on lock, then continue reading my friend ;)

Here's what my dear reader asks:

"My question is this- I know folks like you swear by using your credit card for daily things, bills, etc and then paying it off each month. (by the way, neither myself or my bf have ANY credit card balances since we decided to buy our house this past year...) Anyways, I want to try this with this rewards card, but I\'m not sure how to go about it. I have online bill pay set up through my credit union for most household/regular bills and just worry about tripping up and getting screwed if I try to use this cc like you say you do. Help? Can you do a post about this, perhaps?"

Your wish is my command young lady ;) People use their credit card this way for a number of reasons, but the two main ones for ME are A) To help me budget & track my expenses easier, and B) To rack up a crazy amount of rewards! Plus, you'll actually find yourself spending LESS since you see the amounts build week after week. Here are the 4 steps for Operation Credit Card:

1. Create a Credit Card Budget!
Since you wont' be using debit cards, checks, or cash all that much now, you'll have to make sure to have enough to pay off your c/c balance each month. VERY IMPORTANTE amigos. The first time i did it i just guestimated and came out $200 short. Not. Fun. Here's a look into my own credit card budget to help get you started. Remember, it doesn't have to be all that complicated...

2. Find a Credit Card w/ Cool Benefits.
Everyone has their own soft spot - free mileage, gas rewards, cash back, there's a whole mess of them out there. Once you have a favorite, do a little research and check around for the best cards that focus on it. Pf Blogs, financial magazines, they're all great for finding them. I use USAA's Platinum Rewards card to get cash back, but you have to be affiliated w/ the military to get it. Here's a few others i found in Money Mag the other month, and also some of MyMoneyBlog's favorites to help get ya started.

3. Now, Use the Credit Card for Everything You Possibly can.
Cell phone bills, utilities, car insurance, life insurance, lunches, presents, tv/internet/phone, etc. Whenever it's time to spend money, try using the credit card first. Unfortunately (or fortunately?) you can't pay off ALL things like mortgages or car payments with it (well, you *can* but you'd have to use the cash xfer option which you NEVER want to do), but you can get pretty close.

4. Pay it off IN FULL Each Month!
Seriously, don't forget this - it's the most important part :) It may take a few months to get used to 100%, but it'll be second nature soon after. It can actually be pretty fun too - each month you get to see how you compare to the previous month! woohoo! haha....

There's a couple ways to pay here and stay out of trouble. I prefer using my bank's online bill pay over automatic anything simply cuz i'm scared $hitless of overdrafting my checking account accidently. If you manually pay it each month, you're more likely to stay on top of it! And if you're worried about forgetting, well, that's what we have Gmail/Outlook for! You can easily set up customized reminders and calendar events to help remind you every month. Plus, don't forget you'll still get the monthly credit card statements in the mail (or emailed) too.

And there you have it - the 4 steps to get in on Operation Credit Card! Again, it's not for everyone, but it sure is for Rock Stars :) It's all about maximizing the benefits baby!

Labels: advice, budgets, credit cards, reader mail

We had another interesting question in our "blogger brain trust" round up this week, and I thought i'd share it :) If you remember, the last one i participated in was regarding the Bill of Rights for Credit Card Holders - i got pretty fired up with that one!

Today's question is pretty cool cuz you ALWAYS here people talking about "having to" put things on their credit cards, which strikes me differently depending on my mood. The logical side says WTF? NEVER do that! While the "that's life" side says...well....that's life! Either way, it's def. interesting.

The Question:

"What goes through your mind when people say that they HAD to use their credit card to get by? Is using a credit card when you can't afford to pay a smart or necessary thing to do?"

My Answer:
I think "Wow, they must have REALLY been in a sucky situation!" I'm more of a positive thinker, so i tend to give people the benefit of the doubt from the get-go. I bet most of the time the people confuse NEEDS with WANTS, but that usually pops in my mind later if i'm giving it more thought ;)

There is nothing wrong with putting NEEDS on your credit card to get by - this is life, and it's not always perfect. If you need food or shelter, and have absolutely no money in the bank, then you're pretty much out of luck.

It also depends on the timeframe we're talking about here. If we're talking about a few years here, then obviously there are some other ways to get your hands on money - loans, friends, etc. But i see no problem w/ loading up the card for a few months and then working to pay it off as quickly as possible.

I personally put everything i can on my credit card to manage my budget - gives me 30 free days, ya know? I pay it off in full each month, but worst case scenario you rack up a little interest when needed. That's what it all comes down to really - the needs vs wants.

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You can check out the other bloggers' responses over at GetOutofDebt.org where they're complied each week - we all have our unique voices :)

Labels: brain trust, credit cards

I was recently asked to join a group of financial bloggers to discuss our opinions regarding a certain topic each week - thus getting a variety of perspectives. While i'm not sure how many times I'll participate throughout the weeks (some of this stuff makes my brain hurt!), I did give it the old college try on this last one ;)

The topic centered around the ABA's (American Bankers Association) disappointment with the way the "Credit Cardholder's Bill of Rights Act of 2008" read, basically stating that consumer protection legislation will lead to an increased cost of credit for consumers and small businesses, when more consumer safeguards are put in place.

That was a mouthful, right? You should try taking a stab at that link, it's pretty hardcore. And by that i mean b-0-r-i-n-g. But after giving it a good glance, and googling what all those big words meant (this is why i take blogging over "serious" writing anyday), I came to my own opinion...and, as you can tell, i answered in true J. Money style ;) Here's what we got:

The Question:

Should we be afraid of costlier credit if in exchange consumers get greater consumer credit rights and protection against sudden rate changes, elimination of huge fees and clear credit disclosures?

My Answer:
"Wow. I'm no expert in the field, but that statement really puts me off. Maybe it's because i manage a customer service department myself, but i am all for up-front & bold credit disclosures - regardless of the consequences that may, or may not, come to fruition down the road. Whether we should be "afraid" or not is a totally separate issue. It's like saying,

"I'm sorry grandpa, I can't help walk you across the street because i'm afraid that there's a chance i'll get hit while doing so. And if i get hit then i can't feed my family, and if i can't feed my family they will die. So, as you can see, I'm too afraid of helping you because of what *may* happen".

You walk that grandpa across the street because it is the RIGHT thing to do. Plain and simple.

Sure that's a pretty colorful exaggeration there, but the fact of the matter is that we can't lose sight of the MAIN objective here: helping the consumer. And if the end result IS higher costs for everyone, well that's the way the cookie crumbles. The only difference here is that the consumer is now more educated, and will at least understand what the hell is going on.

(So my answer is that it doesn't matter if we should be afraid of the consequences or not - we have to do what's right.)"

Haha...how'd i do? You can read all of our answers over at Get Out of Debt. The beauty of this sorta thing is that everyone's so opinionated, and thus no one is "wrong"! It's also cool to see such a vast assortment of writing styles :)

Labels: blogging, credit cards

I heart CNN like crazy, they are REALLY on top of their ish over there! I'm signed up to their "Breaking News" text alerts they've got going on, and i was alerted @ 7:22am this morning about this .50 key rate decrease!

If you're a news whore like me, all you have to do is text "alerts" to 26688 and sign up, it's totally free from them (you might have to pay for txt messaging if your plan doesn't cover it), and they usually come like once or twice a week....or even 6 these days ;) But i digress...

This new cut by the Fed affects a whoooooooole lotta things out there. And I don't know about you (although i'd like to!), but here are the ways that it impacts my own situation. And i'll give you a hint - i'm pretty happy about it.

What this means for my HELOC. This means total greatness! Since our Home Equity Line of Credit is tied to the Prime Rate (which will in turn go down the .50), our adjustable rate will also now slide. Holler! Currently @ 4.55%, it'll now be a crazy low rate of 4.05%!!! how crazy is that? And you know it's bad out there when my 2nd mortgage is a whole 3 points BELOW my 1st mortgage (6.875%)! haha... (Thank GOODNESS I didn't lock in our Heloc rate @ 7.72% back in June!)

What this means for my Credit Cards. This also means greatness! Most credit cards are based on the prime rate + or - some points, so as that goes down, so does the % charged! Anything can happen in today's market, but right now this means that i'll also see a hefty drop of .50% on any non-paid off credit card purchases, bringing my interest rate down to 4.5% now. Of course, i don't really have any c/c debt that isn't locked in at a great rate anyways, so this is really just potential greatness we're talking about here.

What this means for my savings. Not so good :( It's all about even stephen though, isn't it? luckily/unluckily i don't have much in our savings at this point anyways, so i wont' feel a hit on interest income there, but i DO have a nice pile in our Emergency Fund ($4k+) which is set in a money market account. I'm sure we'll start to see lower returns in there, but i have to admit i'd take the rate cut over this anyday! Selfishly speaking, that is ;) The economy going up would be best overall.

What this means for overall. Now's a helluva good time to find a great loan @ a great price! That, and the economy is getting scarier by the day...but you already knew that.

So what does all this mean TO YOU? Will this benefit your own financial gameplan? Everyone has their own way of workin' in out, so i'm always curious to see what everyone's up to out there. Anyone have even better rates? And if so, can i borrow some moeny ;)

Labels: crazy economy, credit cards, federal reserve, helocs, interest

Or at least stop adding to it :) One of my friend's bf had been going slowly under in credit card debt for years now, and finally decided to do something about it.

My friend (the same friend who thought she got $300 extra on her stimulus check) told him it was about time to clean it up so he can stop stressing and worrying about it. Smart!

At first he wasn't too happy about hearing that stuff from his girlfriend (who would?) but it eventually sunk in and he knew it was all in the spirit of love. I guess his family and friends were all in the same boat, so he considered it "the norm" and didn't realize how bad it actually was.

He was $13,000 in credit card debt, spread across 3 cards with interest rates at 22%, 28% and then another that i can't remember right now...but it was equally high. His payments were a good $500/month, and almost all of it went entirely to just INTEREST alone! It seriously made me want to vomit when i heard that...can you imagine? it's one thing to have a lot of debt, but it's entirely another to have a lot of debt with high a$$ interest rates.

My friend asked me for some advice, and i told her exactly what i'd do if i were him:

1. Call each company right away and ask to have your rates lowered. Play the loyalty card if you can, and say you're thinking of leaving if they say no right away. Throw in a sob story if you have to, i don't care as long as you get each one lowered. You can do 3 calls in less than 30 minutes and save hundreds, if not thousands, easy as that.
2. Consolidate! This won't work for everyone as your options depend on your credit and such, but I find it much easier to pay off one balance than 3 scattered about. You might even get lucky enough to stumble upon a 0% card offer for 12 months, or even a personal loan around 10% or so. Unfortunately it's a little hard to do these days, but it's worth asking around.
3. Talk with your bank or financial advisor. Especially if you can't consolidate on your own. They have a handful of ideas and plans they could line you up with, or at least offer you suggestions. Start with your own bank or advisor if you already have one, and then go from there.

She relayed them over ASAP and he surprisingly worked on them right away! WOOHOO! Unfortunately i celebrated a bit too early though. His credit wasn't low in the dumps, but it wasn't up to par either - more in the lower middle range, thus making consolidation and 0% interest cards harder to come by.

He did, however, get a cple of the cards' rates lowered (by 5% on one, and 6ish on the other) so that helped, but he still needed a better plan. Somehow in his research he came across one of those shady "fix it all" companies who said they'd get rid of it all for him, and even increase his credit! They said all he had to do was stop paying his payments on all cards, and pay this company $400+ each month which, over time, would pay off the entire balances over 3 years....plus the credit help, of course. The alarms were ringing when i heard this, but he went for it anyways.

Long story short, the creditors were on to the game and started calling non-stop for 2 months straight. He started getting worried and eventually cut the company (losing only $150 in the process), and started making the payments again. Whew!

This time, he decided to confront his parents and explained the whole situation to them. Not only were they not upset, but they loaned him enough money to pay it all off in one huge swoop! Awesome! He probably should have done that sooner...but i don't blame him, us guys like to handle things ourselves. But now all c/c debt is paid off, and he now makes the payments to his parents each month with a minimal interest rate (i think like 5% or maybe even 0%, i can't really remember). Not too shabby.

So the moral of the story, besides don't go in debt? When you find yourself going deeper in the whole, commit yourself to a gameplan and actually DO SOMETHING about it. That, and always listen to your girlfriend ;)

Labels: credit cards, debt

While I hate to admit it, I certainly have! Of course, those were in the ol' college days when i was pretty naive about things. But man, i shiver just thinking about it! Thank goodness i'm a bit older and wiser now...or at least older ;)

Anyways, I was reminded of it when I got a press release from someone over at TrueCredit.com. They commissioned Zogby International to do a survey of college graduates and came out with a pretty interesting list of stats regarding credit card usage.

Here was the most interesting quote i saw:

"The TrueCredit.com survey also revealed that four in 10 people have signed up for a credit card to receive a free gift or special offer. More than half of those respondents (52 percent) left college with credit card debt. "

FOUR in TEN! I knew giving away free stuff worked, but my damn that's some good marketing. I always fell for the shirts that had our school logo or something similar on it - it beat spending $35 on one from the bookstore anyday! haha...

I wish I could remember all the card details, but sadly it's been too long. There was ONE, however, that started charging me monthly for it!!! I was smart enough to cut up the card, but sadly forgot to call and cancel it right away - after i got the free gift of course. I think i had like $40 on it that I "owed" but i called and bitched and got them to wave it AND cancel it...although looking back it was totally my own fault. i never read anything! ha ha, how many times have we heard that one before :)

The survey also said that 1 in 4 students leave with more than $5,000 in credit card debt! That makes me sad :( I seriously doubt this is all because of a few free t-shirts, but it certiainly helps.

When will middle and high schools start teaching about personal finance?! Maybe they've started already, i'm not sure, but even just ONE class can go a loooooooooong way. The kids won't remember everything because sometimes you have to learn on your own, but i gaurantee they'd pick out at least 1 or 2 things that struck them.

I'm just glad i'm over the free t-shirt thing...and it turns out i can get shirts basically free from TJ MAXX, Rugged Wearhouse, thrift stores, you name it! Yeah it may be a few more dollars, but no way in hell you're getting me to sign up to any more funky credit cards again. Now, if they start handing out Saucony running shoes or gift cards to Amazon, i might be in trouble ;)

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ps: Funny enough TrueCredit.com offered me a free tee just for posting about this survey! haha...I turned it down, but i still wanted to share it with you because i thought it was pretty cool. just thought I'd throw that out there in case you were wondering if this was a sponsored post or anything, which just so you know i never do. Here's the entire article if you'd like to read more about it: Experts at TrueCredit.com Examine College Debt and the “Cost of Free”

Labels: credit cards