Credit Cards

Recently a discussion popped up in the forums discussing the end of credit card rewards. The discussion was spurred by an article from the NY Times (thanks Krozfan!).
In the article, the author mentions that:
…Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee [...]

What have you done to manage your debt in light of our current recession? Have you started paying more, or less?

If you are returning an item, the transaction will work similar to that of credit or debit cards. You just provide the merchant with the card and the funds will be credited back to the card. Who sells Visa gift cards?

Should credit cards be issued to college students? If you use the fire analogy that people often do when referring to credit cards, then parents should be teaching their kids how to use the credit cards (fire) rather than what actually happens to many college students. I remember walking around my college campus during orientation and seeing credit card booths everywhere giving out free t-shirts if you signed up for a card! Woo Hoo!

I was wondering how to pay bills and this was the solution I came up with…

I don’t remember what the interest rate was that they were charging her, but it was obviously pretty ridiculous. And for me, even though I was playing the 0% balance transfer game with all of my credit cards, It wasn’t until I saw this that I finally understood the importance of having a good interest rate.

It is so critically important to reduce your credit card interest rates, if you don’t it will take a whole lot longer to get out of debt. Not to mention that it will cost you hundreds or thousands more in interest charges as well!

I just saw this article called “My credit card was cancelled” on the money section of CNN.com. In it a reader asks a question about why her credit card company closed her account and how it would affect her credit score. The answer was a new one to me…

This isn’t really surprising if you think about it, but we can be sure that the credit card companies will be changing some policies as they adapt.

…The good news is that there have been so many complaints over the last few years that the government has stepped in and is creating new rules to prevent credit card companies from doing this. … Card companies will have to give consumers 45 days notice of any interest rate changes, up from the 15-day notice period currently in force, and give them more time to make payments.

I just caught up reading this month’s issue of Money Magazine. They had a quick little blurb called “What not to buy on credit.” It turns out that credit card companies are doing a bit of actuarial research and have discovered that they can identify credit risks in some non-traditional ways: where you shop. According to the article some major credit card issuers “now factor in where people use their cards when making decisions to cancel credit lines or slash spending limits.”

I learned how to negotiate a better interest rate…A few years ago, when I had over $15,000 of credit card debt, I was often negotiating with credit card companies to get better interest rates. I took a very active approach toward minimizing my interest expense on my debt and learning to negotiate with credit card companies was a key component. I am a big fan of the debt snowball method for getting out of debt and you actually can use this as another tool to speed up the debt reduction process.

How should I deal with my debt? I’m often asked what is the most important step in dealing with debt and the answer I invariably give is to start by getting visibility to what’s happening with your finances. About a year ago I had a conversation with a friend who told me that she and her husband had just been to see a bankruptcy attorney and that he recommended that they declare bankruptcy.

Why after every Christmas are most people looking at huge credit card bills wondering, “Where did all that money go?” It is no different than any other area of our lives, if we don’t have a leash on it - it will be out of our control. Think of your money like your neighbor’s dog

After a reader pointed out that 0% credit cards are not free, I had to dig into it… To boil this down to it’s simplest level, the point is that when you use a credit card, the merchant has to pay Visa or Mastercard for you using it. So while you may not see that charge itemized anywhere, it will get added into the price of the goods you buy. Each merchant isn’t going to just take a smaller amount of profit so you can use a credit card, they are going to add that cost into their overhead.

Getting out of debt part 4…Getting out of debt, creating wealth, living financially free, retiring with cash in hand can all be achieved by following one simple rule: Spend less money than you make.

Seth Godin, one of the premier marketing gurus of our time, recently wrote a post for “college grads or just about anyone.” I have read a few of Seth’s books, including a personal finance book he wrote, and have always had a lot of respect for him. He is a great marketer, but more importantly he really seems to be a honest guy trying to do the right thing. He has taken the long-term approach to doing things and it seems to have paid off for him.

How could I possibly be richer than John D. Rockefeller? With as wealthy as he was, he could have had anything that money could buy. But what a few hundred dollars may buy today, couldn’t be bought with millions 150 years ago.

I don’t normally go off on rants here, but I am getting frustrated with credit card companies. I have seen quite a few ads that say, in one way or another, that you should buy stuff (a lot of it) with your card, because YOU DESERVE IT.

Should a Christian be in Debt? The Bible makes it clear that being in debt is not God’s best for us. I haven’t found anything to indicate that it is a sin for a Christian to be in debt

Debt Snowball: Dave Ramsey’s method for getting out of debt. Creating a debt snowball is Dave Ramsey’s preferred method of getting out of debt. The strength of using this method is that it focuses on the behavioral side of finance rather than the mathematical. Since we are not robots that always do exactly what we know we should, I recommend this method for most people.