Browsing Category: "credit cards"
Can you really save by using cash?
Many, many year ago before credit cards were invented people paid for everything with cash or a barter system. I know for most of us it’s hard to imagine not being able to conveniently whip out the plastic at the grocery store, gas station, movies and even fast food restaurants.
For some of us this still remains true. My dad still only carries cash to pay for many common things such as those mentioned above. Even the president of the company where I am employed told me he still only uses cash for most common purchases. I have gotten so used to using a credit card to pay for things it’s hard to imagine life without them.
What would life be without credit cards? So many times I have heard that you can save so much money by using a cash only system. It hurts so much more to pay for something with cash than with a credit card. I’m still not completely convinced this is true for me, but recently I have thought about something that does temp to to test the cash only system.
Let’s assume I went to the grocery store and only took $80 cash to pay for my groceries. I left my wallet at home with my credit cards hidden away to prevent any possible usage. I would think twice about buying those Twinkies for $2, after all that’s 2.5% of my weekly grocery budget! On the other hand if I had a credit card I basically have a $10,000 + limit so buying something unnecessary would be much easier. So using an all cash system in this case would definitely help save money.
Another great example of where I could see an all cash system being successful in our life is with the eating out budget. Sometimes we spend over $400 per month eating out. I know we could easily make it on $200 and put an additional $200 per month in our savings account. If we only brought $20 cash with us for dinner it would be much easier to skip dessert or the appetizer that we don’t really need anyway.
I think an all cash system could definitely save our family money. However, because we have used the “pay your credit card off every month” system for so long I think it will be very difficult to get used to destroying our credit cards. Maybe I will have to create a happy medium to ween ourselves off our addiction!
Before you file for bankrupcy think about debt settlement
Thinking about filing for bankruptcy? I know it may sound like the easiest thing to do and in certain circumstances it may be the only option, but before you give up all hope maybe you should try some type of debt settlement program.
There are thousands of different agencies who are willing to help you settle your debts with your creditors. I’m sure there just as many who are only interested in your money and not at all in actually helping you, but you don’t even have to use a third party to settle you debt.
The term debt settlement simply means negotiating with your creditors to reduce the overall balance of your debt. Debt settlement only works with credit card debt and unfortunately, most creditors won’t negotiate until you’ve stopped making payments on the debt and have racked up hundreds or thousands of dollars in interest.
When you declare bankruptcy you may be hurting hundreds of other people, not just yourself. The money you owe the companies goes to other peoples salaries and helps provide income for many families. Before you make the decision to declare bankruptcy please consider a debt settlement program or at least contact your credit card companies and try to settle the debt by yourself. Many times you can save thousands of dollars with just a phone call.
Credit Card Companies Re-write terms
Yesterday my wife and I got mail from one of our credit card companies. Not that it matters too much for us because we pay our credit card balance every month, but it was still interesting.
The government recently set new restrictions on credit card companies. These restrictions were supposedly put in place to help the consumer with credit card balances. After reading over the changes to the policy there are some policy changes that are definitely designed to help the consumer, but there is also some bad news for those with credit card debt. I don’t have the letter in front of me so I’ll just talk about the things I remember from the notice.
First, the monthly minimum payment will increase this will help pay off the credit card debt quicker and may deter additional spending. Many consumers may view this is something bad because they can barley make their current minimum payments.
Second, the credit card company will no longer increase your interest rate on existing balances because you pay late or skip a payment. They can however increase your rate for future purchases and you know they will do this. Again this may help denture additional unnecessary monthly spending.
Third, additional payment you send over the minimum payment will be applied to the highest interest rate debt. This is a great plus for the consumer and I must admit I’ve been caught by this trick in the past. Credit card companies sometimes offer low or no interest balance transfers. If you take advantage of this offer any additional spending will be charged your normal interest rate and it’s usually in the double digits. When you send payment to the credit card company this money is used to pay the lowest interest rate loan first. This means until you pay off all the 0% balance transfer you will continue to accumulate a high rate interest on any additional spending. I’m sure so many people have complained about this that the government finally took action.
Finally, late fees and the current interest rate both increased. I guess since many of the features were designed to help the consumer save money they had to add this one to counteract the savings. I guess the credit card companies have to make money too.
What will happen to credit?
I read an article today on Yahoo about how many credit card companies are starting to lower their lending limits even on their best, most dependable customers. Even those who pay their credit card bill on time, send more than the minimum payment and have a good credit score are seeing lowered limits.
Credit card companies currently have the right to lower your limits even if you have done nothing wrong. Credit card companies examine risk factors to determine how much money they should loan customers. The risk factors include late payments, extreme cash advances, unemployment, check bouncing and even having a mortgage in an area where home values have decreased. However, lately credit card companies have also targeted customers with small balances or inactivity on their accounts.
Banks and credit card companies are getting very nervous and extremely picky on who they lend money too. I can’t say I blame them for not wanting to lose money or run a successful business, but it seems unfair for those who pay bills on time, and are responsible with their finances to not enjoy the benefits of credit.
Responsible Credit Card Users Punished
If you haven’t already herd there are big changes in store for credit card holders. Congress passed a bill on Wednesday that will force credit cards to make major changes to the way they do business. The major change is that credit card companies now have to limit sudden hikes in interest rates.
Sure high interest rates have forced millions of Americans deeper into debt, but who is really at fault? Can you blame the credit card companies for wanting to make more money? Or can you blame the consumer for not being responsible with their spending?
No matter what, the credit card companies are going to come up with a different strategy to make money. After all the credit card companies have bills and salaries to pay too. Who is most likely going to pick up the bill? The responsible credit car users.
In order to increase profits most credit cards companies will start charging annual fees to use their services. They will also reduce or even drop rewards programs.
We personally use a credit card almost everyday. We pay many bills with the cards and about 95% of our spending is done with our credit card. We pay off the bill every month on time to take advantage of the rewards. I can only think of one time where we were late paying a bill so over the past 7 years we are well ahead of the game. Sounds like those days may be over.
If credit card companies start charging annual fees and drop rewards programs we will switch back to cash or start using our debit card to pay for everything. Credit cards are such a convenient way of paying for things and can be rewarding if used responsibly, it’s sad to hear this news!
Check credit card statements
I’m not usually one to pay close attention to details, but after today I am going to attempt to keep a closer eye on my credit card statements. During my lunch break today I thought I would check the balance on our credit card statement. We use a rewards credit card to pay all our bills and spending throughout the month. We always pay the bill on time, avoiding late charges, and collecting the rewards bonuses from spending.
I clicked the view recent transactions and noticed that there was a double charge on the account for a local fast food restaurant. There was a charge for $7.94 on the account twice. Since it was an all you can eat pizza buffet I know I didn’t eat there twice in the same day!
I always glance down the credit card statement each month just to analize where we spent our money, but I guess I’ve never really paid close attention. Obviously this happens often however, because under the contact section of the credit card companies website is an entire section dedicated to this specific problem.
Now that I’m aware of the problem I will always double check each line of the credit card statement to ensure I’ve not been double charged. A few extra minutes of my time could save me some money!
Are credit card companies really that greedy?
Driving to work this morning I heard a commercial on the radio for a debt solutions program. The company promises to eliminate your credit card debt or make the payments very mananagable. They scold the evil, greedy credit card companies for trying to take advantage of those poor consumers who have spent more money than they have.
First, I understand everyone has a different financial situation and I don’t know the circumstances of everyone’s debt. However, for the most part debt racked up on credit cards is pointless and there is little or no excuse for massive amounts of credit card debt. It’s not Visa, MasterCard, Discover, or American Express that made you spend $500 for a new summer wardrobe you can’t really afford. Sure they may charge 20.99% interest on that money, but they didn’t make the initial decision to overspend.
We as adults need to have some responsibility for our own actions. Stop blaming the finance companies for being greedy and start taking responsibility for our own out of control spending. I really hat to take up for credit card companies, but quit looking for handouts and start earning a living!
How to be responsible with credit cards
A few days ago I wrote a post about how there are actually good credit cards and if used responsibly they can be a great financial tool. I thought it would be good write an article about how to be responsible with credit cards in order to take advantage of them.
I have used a credit card for years to pay my monthly expenses, but I have always paid the balance in full each month. There are hundreds of credit cards available today and each offer something special for using their cards. If you have good credit you can get gift cards, free air miles, free hotel stays, and other items just for signing up. The days of a free t-shirt or poster are over, credit card companies offer much better temptations. However, you have to realize they are giving this stuff away for a reason, they are still making plenty of money. The trick is to be one of those responsible users in order to take advantage of the credit card companies.
The first step of using credit cards responsibly is to not spend money that you don’t have. Don’t plan on buying big items that you know you won’t be able to pay for when the bill comes. Credit cards are a very convenient way of paying for everything as long as you only use them for properly.
Second, pay your bill on time. Credit cards always carry harsh penalties and fees if you are even one day late paying the bill. You will probably see at least a $25 to $30 late fee for being one day late. Also don’t think you can call in a payment the day it is due without paying a hefty fine. Keep a calendar or schedule of when all your bills are due and check up on it daily. Paying your bill on time will save you some cash.
Just like anything else in life use credit cards responsible and they can be rewarding. Don’t get caught up in the spending spree spending more money that you have. Always pay your bill on time and never pay to use a credit card. Follow the rules and be responsible, credit cards can be rewarding!
Be responsible with good credit card offers!
Even though our economy isn’t in the best of shape right now there is some good to come from the credit crisis. Right now if you have good credit you can find some great deals on good credit cards. I know most financial advisers and mentors will preach about how bad credit cards are and you should not use them at all costs, but I tend to disagree. If you are a responsible well organized individual who is in charge of your finances then take advantage of the great deal credit card companies are offering.
As I’ve said before my wife and I make all our purchases on a credit card and pay off the balance each month. I’ve been doing this since I graduated college and on this paticular card have never carried a balance. I have also never missed a payment and I’ve not been late on a payment either. I was close once and had to pay the bill over the phone and pay a small fee but I’ve still came out way ahead on the credit card rewards.
Currently many credit card companies are offering 0% interest rates for over 1 year and many of them even offer this same interest rate on purchases. Many credit cards are offering lower fixed rates for the life of the loan and many great rewards program.s
Be advised that there is fine print with all credit cards and be sure to read this. There are many terms that you must be advised about before you transfer the balance. Some charge a fee, usually 3% but a maximum amount, usually $50. Most of the time you will still save a lot of money on the lower interest rate, but be advised of these terms.
Be responsible and in control of your personal finances and take advantage of any offer that will benefit you financially.
Credit Cards, Designed by the Devil?
It’s pretty obvious our economy is a mess, but who is really to blame? You hear a lot of talk about how banks, credit card companies, and other lending companies are all to blame. It is their irresponsibility that has got America into the financial mess we are in today. But is this really true? Can we blame this mess on the people who lend the money?
Is it really the responsibility of lenders to take care of us and make us pay or financial obligations? Do they need to babysit us and make sure we send our payments in each month? Or is it our responsibility as adults to make sure that before we take out a loan, we can actually afford to repay the debt?
I think that credit cards, banks and other lending institutions are great financial tools if used properly and responsibly. If an excellent credit offer comes your way and you can responsibly control your finances then take advantage of the offer. I have personally used a credit card for over 6 years to pay my monthly expenses and paid the bill every month. I have never been late on a payment or missed a payment (on this card, I was late one time on another card), therefore I have came out way ahead since I get 1% cash back on all purchases.
If used properly credit cards, banks and other lending institutions can be great financial tools. If you are looking for a place to find some great deals on credit cards you may want to take a look at www.requestcredit.com. Be smart, be responsible and be successful!
