Main > Living > Money > Credit & store cards
You know you have too much credit card debt when . . .- Your debt is not decreasing and you cannot make any savings.
- You make minimum payments on your credit cards.
- You have more than two or three credit cards, and you're at or near your credit limit on at least one of them.
- You take out cash advances on your credit card to pay other bills.
- You've tried to purchase something with your credit card and it has been declined, or you've been denied credit, or your checks have bounced.
- You get calls from debt collectors.
- You lie to your spouse or other family member about your spending or hide credit card statements from family members.
If you realize that you are in over your head, the sooner you act, the easier it will be to get out from under the burden of debt. There's no easy fix, but it is possible to turn your finances around if you work at it. You can make a start by making a priority of paying off the loans that have the highest interest rates. Another method is to pay-off a small debt first, just to give you confidence.
thesource (378)
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Main > Living > Money > Credit & store cards
Avoid credit cards: by using a cash or debit card rather than a credit card you won't be able to spend more money than you have. If you tend to get carried away when shopping you should seriously consider this option.
thesource (378)
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Main > Living > Money > Credit & store cards
Know that credit card companies are designed to earn their income via consumer debt repayments. They know very well, and deliberately profit from, the irrational optimism of consumers. That is, people usually believe their ability to repay a debt in the future will be better than their ability today.
kellyjones00 (593)
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Main > Living > Money > Debt
Bankruptcy: If you've gotten yourself too deeply into debt, and debt repayments are ruining your life and the lives of your family, then you can file for bankruptcy. That's what bankruptcy is for. That is, bankruptcy is a humanitarian service for those who cannot cope with their debt and who need a lifeline and a fresh start. The disadvantage of bankruptcy is that you may lose your home, and your credit rating will be damaged for a long time. Bankruptcy effectively puts someone else in charge of your finances to pay your debts. They will sell your assets and garnish your wages until the debt is paid or the bankruptcy expires (eg, after three years).
thesource (378)
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Main > Living > Money > Banking & loans
Consolidate loans and bank accounts: To reduce the amount of bank fees you are paying, consolidate all your bank accounts into one. If you have several credit cards, try to reduce them all down to one. If you have several different loans, consolidate them all into a single loan. This can save you a huge amount of money.
thesource (378)
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Main > Living > Money > Banking & loans
Loans: Sometimes loans are necessary: for example, for a business expansion, or to purchase your first home. But it is not smart to go into debt on your credit card to purchase things like LCD televisions. If you make it a habit to go into debt on your credit card, it can end up being a heavy burden. For items that cost less than $10,000, try to save the money for them before you purchase.
thesource (378)
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Main > Living > Money > Credit & store cards > Balance transfers
Credit cards: If the high interest rates on your credit card are hurting you, you can often transfer your debt to a new credit card from another company and pay a highly reduced rate of interest for a period of time (eg, six months). This can give you an opportunity to get on top of your repayments.
thesource (378)
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Main > Living > Money > Banking & loans
Bank fees: - Shop around to find low or no-fee bank accounts and credit cards. They are out there, but the banks don't particularly want you to know about them.
- If you accidentally overdraw your account and get charged a large penalty fee, phone your bank and ask that the fee be withdrawn. They will often comply with your wishes so long as it doesn't happen too often.
thesource (378)
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Main > Living > Money
Emergency money: It is wise to have, say, $5000 put aside to cover unexpected expenses. This amount will vary, depending on how much your unexpected expenses are likely to be. This money can be put in an interest-earning account, so at least you won't lose money due to inflation.
thesource (378)
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Main > Living > Money > Credit & store cards
Card Management: If you have several cards, you are best off accruing your points on one only, with a backup card in case you max out your main card, or their system is down when you go to make a purchase. But that doesn't mean you should get rid of your other cards, though you should make it impossible to use them. Choose two that are most favourable and put the rest in a relative's house somewhere where they won't attract attention - like in a garage or something. Alternatively, freeze them in a small container in the freezer.
myxlfidian (150)
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Main > Living > Money > Tipping
Normally, tips are at your discretion and are given only as a reward for good or superlative service. However, in America things are different. In America, waiters can receive very low wages, and therefore depend on tips for their income.
[guest]
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Main > Living > Money > Tipping
In America waiters expect an automatic payment of at least 15% of the pre-tax bill. If you don't think the customer should be burdened with having to make special payments to the waiting staff, then tell the manager you would use his restaurant more if the costs of the waiting staff were included in the price of the food.
[guest]
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Main > Living > Money > Investments
Don't invest in 'the markets'. The key to forecasting is psychology. Namely, fear of the low moods of other traders, and selling before they do. Useful companies can be destroyed by such volatile financial support, as it has no rational basis.
kellyjones00 (593)
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Main > Living > Money > Investments
High return investments usually entail a higher risk (i.e. a greater chance of losing your money).
Spud (21)
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Main > Living > Money > Investments
Do your homework prior to investing otherwise all you are doing is gambling.
Spud (21)
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Main > Living > Money > Social security > Australia
Work For The Dole Blues? You don't have to do it if you can get a part-time job where you work 15 hours a week. The solution? Most pizza delivery shops will take on anyone with their own car, and many even if you drive their car (though far less). You might not make much working there after costs, but you won't have to work for nothing.
[guest]
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Main > Living > Money > Banking & loans
Paying off loans and debts is a greater priority than saving money, because of the vast difference in interest rates. Save first, spend later.
kellyjones00 (593)
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Main > Living > Money > Credit & store cards > Debt-collection
Debt-collectors 'buy' debts from lenders such as credit-card companies. They then try to find the borrowers, and may contact people with the same or similar name, even taking them to court for unpaid debts. So although you might receive notice of incurring a debt, it may not be you that ever owed the money in the first place.
kellyjones00 (593)
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Main > Living > Money > Credit & store cards > Interest rates
It's okay to use credit cards, if the bill is cleared each month. This leaves your cash in the bank to earn interest. But it is a false economy if you're paying more interest on purchases made by credit.
kellyjones00 (593)
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Main > Living > Money > Banking & loans
Check the small print of loans. They may charge fees for 'overpayment', meaning, early repayment of a loan.
kellyjones00 (593)
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Main > Living > Money > Bills
Paying bills by direct debit often includes a discount. However, there may be a fee for paying in instalments on things like insurance.
kellyjones00 (593)
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Main > Living > Money > Credit & store cards > No-no's
Steer clear of cash advances from credit cards, which usually incur a hefty fee.
kellyjones00 (593)
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Main > Living > Money > Credit & store cards > No-no's
Never pay a credit-card cheque into your account, as you'll be charged heaps of interest. They are classed as 'cash' by card companies that send them to clients, so have a higher interest rate.
kellyjones00 (593)
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Main > Living > Money > Credit & store cards > Store cards
Store cards do not charge similar rates to credit cards. The interest rate is much higher, unless you clear your card each month.
kellyjones00 (593)
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Main > Living > Money > Credit & store cards
If spending more than $200, it's best to use a credit card as you'll get extra protection under consumer law if the company you buy from goes bust or the goods are faulty.
kellyjones00 (593)
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Main > Living > Money > Bills
Companies rely on laziness, not loyalty. So ask yourself if your gas, electricity, phone, mobile, broadband, or insurance bills are still the best deal for you. Check a comparison website then talk to the disconnections department, who have the power to authorise special rates in order to keep customers.
kellyjones00 (593)
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Main > Living > Money > Bills
Before shifting from one company to another, check for 'leaving' charges, or fees on early contract termination.
kellyjones00 (593)
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Main > Living > Money > Saving money
In the United Kingdom, there are plenty of money-saving websites with good tips. For example:
* www.uswitch.com
* www.moneysavingexpert.com
* www.moneyfacts.co.uk
* www.moneysupermarket.com
These sites have articles, free tools, and advice that are not limited to the UK.
kellyjones00 (593)
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Main > Living > Money > Credit & store cards > Interest rates
Interest rate reduction with lock-in: One of the most underutilised methods of saving on credit card debt interest is to try to negotiate a lifetime interest rate. Simply shift all the debt out to another card with a balance transfer, and call the credit card company to say you are about to close the card unless they offer a reduced rate. Go for about a quarter to a third of the regular interest rate. It will remain at that low rate for eight years to life, making the accrued interest bearable.
I recently did this with two balance transfers. If I had not done this, I would have been struggling to pay the interest charges.
myxlfidian (150)
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Main > Living > Money > Saving money
Methods for saving cash: Early 1900s German language contains a full system for building money. Did you ever wonder why technology and societal rules changed so much from the 1880s to the 1920s? It wasn't chance. The early 1900s was a Renaissance, of equal strength to that of Da Vinci's.
Within the language of that time is contained a full catalogue of how to play the money game. Remaining motivated. Detachment. The roll of the dice. The thrill of going for a triumph. Victory. Defeat is impossible in this system. Your life game can be the number game, but it must always be a game.
I didn't realise my gift with cash gathering until I developed enough competency with this system and it all came as a full piece with it. That's how people of that time who knew German could build so much capital. Many huge businesses started around that time with these skills. The biggest battle in this system is, like life itself, with yourself.
myxlfidian (150)
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Main > Living > Money > Credit & store cards > Interest rates
Rentalrewards.com.au. In Australia, this system enables you to pay your (housing) rent on your credit card for a 1.76% fee per charge. Sounds like a good way to lose money but it's the other way around.
With 55 days interest free, you earn up to two months interest on the rent, so long as you have the money in an interest bearing account paid monthly and calculated daily. Also, if you use a credit card with airline frequent flyer points, you get tens of thousands of points per year. Altogether, you make a gain of substantial proportions.
myxlfidian (150)
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Main > Living > Money > Credit & store cards > 'Rewards'
Buy everything on credit card if you get frequent flyer points for each dollar, and pay your statement in full each month through making scheduled online payments as soon as the bill arrives. The fastest way to build points is to have two people using different cards but linked to the same account (an additional cardholder). All purchases go to the one account (primary cardholder). Do not purchase anything on credit if an additional fee applies (i.e. some supermarkets and budget vendors charge extra for credit purchases).
myxlfidian (150)
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Main > Living > Money > Debt
Make a spreadsheet of all your credit cards, loans etc, how much you owe and how much savings you have. A running tally of your total debt minus savings and money owed to you will motivate you to reduce your debt levels. You can create your own running equations for almost anything, including your next month's interest and minimum monthly payment, total debt and interest paid over the next year, and total minimum monthly payments per month.
By making a slightly higher monthly payment, you can use this online calculator to see how much interest it will save you over what timeframe compared to the compulsory minimum monthly payment: link
For those who find it difficult to imagine why someone with credit card debt would have any savings in the bank, the average interest bearing account does pay more than the lower (sub 7%) interest rates on credit cards. So it makes no sense to pay off a card that is charging less in interest than the money would make in interest by sitting in a bank account. However, you do have to pay tax on interest as it is taxable income.
myxlfidian (150)
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Main > Living > Money > Banking & loans
Paying-off student loans (Australia): Don't pay off student loans in Australia before they get transferred to the tax system. You will still get 10% off for voluntary payments of $500 or more, so the saving you make by paying it off before it gets into the tax system is actually quite minor.
myxlfidian (150)
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Main > Living > Money > Bills
Online payment scheduling: Put as many of your bills on direct debit as you can, but those you can't, schedule the payment for the last day via online banking the moment you receive the bill. The knowledge that you have so many payments automatically coming out of your account will encourage you not to overspend so the money isn't there, and enables you to earn interest on each dollar before the final payday (only if you have an account that calculates interest daily, and usually pays monthly).
myxlfidian (150)
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Main > Living > Money > Credit & store cards > Interest rates
Bust annual credit card fees: Empty all debt off the card through a balance transfer. Then threaten to close the card unless the annual fee is waived this year. Or, if the card is upgradeable to another card, ask a curly question about a feature of the more expensive, deluxe card (i.e. does it cover domestic car rental excess or just international?) and if they say yes and you know that is wrong, upgrade the card and get details of who told you the wrong information. Call back a week or so later and say you were given the wrong information. They will refund the WHOLE FEE as a gesture of goodwill, even though the upgraded card fee might only be an extra $30 over the budget version. Downgrade the card later if you don't want its extra features.
Keep a list of when annual fees are due so you can close the card before they charge it if they refuse to waive it. In general, don't keep cards with annual fees unless they offer exceptional benefits like frequent flyer points for each dollar spent, annual 0% for six months balance transfers on several thousand dollars, low balance transfer rates (under %6) or free travel insurance.
myxlfidian (150)
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Main > Living > Money > Credit & store cards > 'Rewards'
Credit Cards vs Cash:
When you use a credit card, you don't feel the pain of parting with anything, like you do with cash. Studies have shown that people spend 12-18% more when using credit cards than cash. You don't get the ouch-y moment you get when you spend cash.
I think you should try a card that has airline reward points for every purchase with a major airline. If after 12-18 months you do not find you achieved any real reward with the points (i.e. you just got a toaster or something), you should revert to cash for face-to-face purchases, debit cards for the internet, and one credit card for credit card only internet purchases and travel.
If on the other hand you get 80% off a flight to Bali or something, you should stay with the credit card system, but not use it to spend more. I don't actually understand why anyone would spend more with a card because if you think of it as cash (as I do), you would want to minimise what goes on it at all times.
myxlfidian (150)
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Main > Living > Money > Debt
An alternative method of paying off debt is to pay off the smallest debt first. The theory goes that the psychological kick of beating a debt is worth more than saving a bit on the interest but having to still have it hanging over your head. I can tell you it worked for me. I paid down one card nine(9) months ago and still feel like I conquered it (and still have as it has always been paid in full since). I recommend you shuffle your debts with balance transfers to the lowest interest rates (call your credit providers to get those details as balance transfer rates are always different than other rates). Whatever card has the smallest balance thereafter is the one you should tackle.
myxlfidian (150)
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Main > Living > Money > Bills
Prepaid: If you take the prepaid option when it is available (eg, for mobile phones), it can prevent you from getting bills that you can't afford.
thesource (378)
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Main > Living > Money > Credit & store cards > Balance transfers
Paying off the full balance: You can do two things:
1) Throw every dollar you can at it to get it down and then "live off the credit" as you will have no cash
2) Balance transfer whatever the shortfall is to another card and pay the rest. Go for cards that offer sub 6% balance transfer rates, usually just for 5 or 6 months.
Balance Transfers: When you conduct a large balance transfer to another card (with a lower interest rate), for the sole purpose of taking advantage of the lower interest rate, it is advisable to divest the new card of all direct debits and cut up the card (if you need to) to prevent you from using it. This is because any purchase you make on the new card will accrue interest at the normal high rate until such time as the transferred balance is completely paid-off.
If you intend to make a large balance transfer, make sure it happens after an annual fee is applied if you can. This is because annual Fees are actually regarded as purchases (crazy, I know) and so you will pay interest on them until the huge balance transfer is paid. Some cards deliberately do this so they can charge you a purchase interest rate for something on a card they know you want as a balance transfer card.
myxlfidian (150)
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Main > Living > Money > Credit & store cards > Paying debts
Rules to save you extra costs: Try to pay your card 72 hours before it is due as internet payments may clear after the due date. The bank's computer will automatically charge interest in that case.
Be aware of the first day of your statement cycle (usually listed on the statement). Purchases made on that day get the full 55 or 62 days interest free before payment is due. Also, hold back on purchases during the last 10 days of your monthly payment cycle.
If you cancel a gym membership or something and they still charge you, keep a copy of the letter you sent (and send it at least two weeks before the last payment) and call the credit card company which processed the disputed transaction. With a copy of your letter, they will take up your case on your behalf, as a disputed transaction case. I have received refunds through this method.
Be wary of phone and utility companies that charge an extra percentage for direct debits off credit cards. Use a bank account direct debit instead.
myxlfidian (150)
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Main > Living > Money > Credit & store cards > 'Rewards'
Bonuses: Some credit cards offer an extra 1 year warranty on whitegoods and appliances purchased on the card.
myxlfidian (150)
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Main > Living > Money > Credit & store cards > Interest rates
6% interest rate with no expiry: Asked your credit card company for a rate reduction and got rejected? You needn't worry. Find two cards that offer 5.99% on balance transfers for 5 or 6 months. It's not an uncommon feature. Transfer the balance to one card, and make a note of its expiry date. A week before the special rate is due to expire, transfer it to the other <6% card. Do this ad infinitum and you will always be under 6% interest. It's a bit more work than a lifetime or long-term interest rate reduction but they are not always freely available. Sometimes they include punitive conditions like having to close down the card the transfer is coming from, for example.
myxlfidian (150)
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Main > Living > Money > Shopping
Whenever I see a salesperson who is attractive, young and appears intelligent and motivated, I know that they need this person to sell the product. Without them, it wouldn't be good enough on its own. Also, I imagine myself losing untold sums of money by being sucked into them, so that my defences are up high. I never fall for them when I have that vision or image, but if the product is good, I can still buy it. However, the more attractive the salesperson, the more superfluous or overpriced the product.
myxlfidian (150)
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Main > Living > Money > Credit & store cards > Paying debts
Pre-scheduling payments: The longer you have a payment scheduled online, the more real it is and the more you can deal with and accommodate it. I recommend you set up online access for all your credit cards. Nine times out of ten the electronic statement for the previous month is released on the first day of the new cycle, and this will tell you due date, total amount and everything else the paper one will, only about 2-3 weeks earlier. Schedule your payment based on that document online and you will not get any nasty surprises when the bills arrive in the mail.
myxlfidian (150)
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Main > Living > Money > Bills
Bills: The secret of paying them is to allow for them in advance. As soon as they arrive, factor them in to your financial equation as soon as possible (i.e. within that day or the next few days). Then the rest of your expenditure will bend to accommodate it. With credit cards, you can find out through online statements how much you will owe and by what date, well in advance of the paper bill arriving. Never miss an opportunity to face bills square in the eye from day one. The sooner the better. The broke people always pretend the bills aren't there, and go merrily spending up until the final day.
myxlfidian (150)
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Main > Living > Money > Saving money
Psychology of the lock-in: The only surefire way I've found of containing cash loss (and thereby inadvertently maximising savings) is to have several layers of "lock-in" before you can get to your money.
You know Fort Knox where they store all the gold bullion? It doesn't have just one door does it? There's several doors before you get to the money. You need the same thing to protect your finances from theft, otherwise known as wasting money on things you don't need because they are made to appear attractive at the point of sale.
Put all your cash in an interest bearing but non-ATM accessible account. Do not carry cards with you. Create a spreadsheet you modify every day or two that locks in all your cash for a dated future goal (i.e. pay off this credit card by this time). Carry no more than a small amount of cash. If you need to transport large amounts of cash, carry a small locked cash box with a media slot under your seat - store the cash in there en route and unlock when you get home.
The whole point is to create an impression that your money is locked away dollar for dollar well before you can entertain doing anything costly with it.
If money is already marked "reserved", it can't as easily find a strange car parking in its bay.
myxlfidian (150)
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Main > Living > Money > Saving money
A good idea for saving money is to get the habit of doing things for free (that are legal).
kellyjones00 (593)
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Main > Living > Money > Saving money
Probably the biggest and most frequent "unexpected" expense is the mood-bettering treat. Often people choose expensive pick-me-ups when something simple will do, like:
sparkling mineral water: dehydration leads to fatigue, many people like fizzy drinks
waldorf salad: fresh fruit and vegies can pick up the mood
head massage: get blood circulating around the brain
walk around the block: circulation, can help to focus thought
catch the bus: take a short trip somewhere you haven't been before
relax / observe nature: deliberately stop a cycle of habitual, pointless thoughts by letting the mind wander more freely and naturally
kellyjones00 (593)
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Main > Living > Money > Social security > Australia
The nine most terrifying words in the English language are "I'm from the government and I'm here to help" - Ronald Reagan
myxlfidian (150)
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