Archive for the ‘credit cards’ Category

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Credit Cards: Don’t Be A Sucker

Saturday, January 28th, 2012

Credit Card Failure

Use a credit card like a sucker and you lose.

DON'T BE A SUCKER

Credit cards and the companies that issue them are no better than yesterday’s trash.

Or so it seemed from the information rolling out of both Washington and the news corp for the last several years.

The CARD Act was signed into law in 2009 with many of the changes taking affect the following year.  Along with the Act came a brand new bureau to oversee the laws:  The Consumer Financial Protection Bureau (CFPB).

Consumer Financial Protection Bureau changes

In a report on their web site, the CFPB calls the following changes ‘significant’:

  • Jacking up  your interest rates:  not as often.
  • Late fee amounts:  substantially reduced.
  • Over limit fees:  damn near gone.
  • Significant confusion: remains.

Fees and exorbitant interest rates continue to exist.  The companies have to tell us first but it’s  in print so small even my eagle eyed kids can’t read it.

Bottom line: fees are not gone.

Companies are going to make money or cease to exist.

Fact remains:

Use a credit card like a sucker and you lose.

Credit Cards

How to avoid being a sucker:

Only use cards if you can pay them off every month, and you can truly, surely, and verily not be tempted to overspend!

There are internet sites to help you find the best cashback credit cards or cards  with bonuses like 5% cash back on gas, or other extras that might work-for you.

Credit cards can be a useful financial tool.  If you use credit cards wisely, they won’t monstrously devour your life and sanity.

Be wise with credit cards.

Or run from them like the devil himself is after you.

Because he is.

Reader Questions:

Are you afraid of credit cards?  Do you have a reason to be?

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Debit Cards Doomed? Swipe Fees 2011

Tuesday, July 26th, 2011

Debit Card Changes

Guest post: FDL BSN

Yep, after months of wrangling over sections of the “sweeping regulatory reform of 2010″ now known as Dodd-Frank, a few more decisions are now final.

If you’ve paid attention at all to Washington DC and it’s constant noise, it’s been the faltering debt/budget talks that have taken all the oxygen out of the capital.

And with all that hot air, that’s sayin’ sumpin…

These regs being written have been snuck  in without much notice.

Unnoticed unless you owned one of the many fine restaurants supported by all the lobbyist’s doing their thing on both sides of the issues!

Whining and dining, keeping  DC  hoppin and boppin like a gold rush town.

But in reality this set of rules will affect many of us more than the debt ceiling debate.

The original bill would have dropped debit card swipe fees from as high as .44 to a cap of  .12.

After much haranguing by  the end of June, 2011, the Fed voted to cap the swipe fees charged retailers to roughly .24, with the change to be implemented in October rather than July, 2011.

What’s the swipe fee big deal?

  • Predictions are that, coupled with the lack luster economy, the changes will result in a $16.4 billion annual loss of revenue for debit card issuers.

There’s a lot at stake here.

What does that mean to you and me?  One word defines the results:

FEES

Consumers will pay new and improved fees to make up the difference in the cap on swipe fees:

  • Checking:  Unrestricted free checking accounts are becoming dinosaurs.
  • Credit card interest rates:  You guessed it, higher.
  • The cost of goods:  There is mixed data on this, but studies show that at .21 per swipe, this may be negligible.
  • The end of debit card reward programs.
  • Consumers fees:This is a warning.  Be on the lookout for new and increased fees.

Other changes brought about by the 2,300 pages of Dodd-Frank’s  sweeping credit/regulatory reforms of 2010:

  • Issuers are prohibited from raising interest rates on a balance in good standing.
  • Payments greater than the minimum must go toward the highest-rate interest balance first.
  • Penalty fees are capped
  • Credit available to young adults is limited.

These changes are credited with a reduction in credit card debt and consumers who are more aware of the cost of carrying a credit card balance.

It’s those pesky fees that will be changing to make up for the new regulations that we gotta’ watch for.  If you carry credit and/or debit cards, as the dust settles after the latest bluster, you may decide what’s in your wallet is no longer working for you.

Keep your eyes and ears open and focused!

{photo credit: moneyblognewz c.c.}

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A New Credit Temptation!

Thursday, June 2nd, 2011

Business Credit Cards:

Many of you, like me, run businesses on the side. As I discussed in an earlier post, side businesses are  a great way to earn extra income.

Letters from credit card companies have been piling into our mailbox this year offering business cards.  I  haven’t thought much about it until I read  this article at Smart Money, by Jessica Silver-Greenberg.

Now I know why the card companies are so aggressively trying to get you to apply for their business cards.

Business cards don’t fall under the Credit Card Act.

Business (or so-called “professional”) credit card offers are sent to those people who the card company think own or run a business.

They get your name from numerous lists developed by companies who sell databases.

The database companies may be culling names from county or city records of anyone who’s applied for a business license.  They may get your name from your state if you have applied for a corporate ID-LLC’s or other  entity.  Or it may be because of a business bank account you opened-or credit application you filled out.

The number of card companies spending untold marketing dollars trying to get me to open an account has skyrocketed.  Sorry for them-the offers just get shredded…

Why the sudden interest in selling professional or business cards?

As mentioned above Professional cards don’t have to abide by the Credit Card Act of 2009.

Credit Card Act Doesn’t Apply:

  • Interest rates can be changed without advance notice.
  • Payments can be applied by the companies to the lowest rate balance, rather than the highest rate. This means it takes longer to pay off the higher rate balance.
  • Grace period alterations and double cycle billing may remain a problem.

What are business card rules?

If the card act doesn’t apply then what does matter?  How do you know the rules?

Your contract. You remember the three pages of fine print you usually throw away without reading when you get the card?   It spells out your responsibilities and theirs….

Make sure if you apply for a business card, you read these agreements carefully.  Find out when the payments are due, what your grace periods are, and what the fees are if you go over your limit.  File the contract for future reference.  Put a copy of the card (front and back) in the file too.

These card applications ask for business information.  Remember it is fraudulent to apply for a business card if you don’t own or run a  small business.

If you run a side business or own your own business, sloppy accounting is a common cause of problems with the IRS.  Having a business credit card to help you separate business and personal spending may be a great tool. Use that tool wisely.

If you get a business card and don’t treat it with the respect you would give a venomous snake, YOU WILL BE BITTEN!

Reader Questions:

Do you have a business credit card?  What kind?  Have you run into any problems with it?

Any recommendations for others?

{photo credit: Hakan Dahlstrom c.c.}

Make sure you follow me on Twitter @DrDeanBurke- quick links on the side of the blog!  And let’s not miss a post-sign up for email special delivery or the RSS feed!

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Gangsta Bank Fees: Don’t get Robbed!

Saturday, May 21st, 2011

How to Dodge New Bank Fees

Guest Post: By FDL, BSN

Congress set up tons of new controls in the last 2 years to save you and I from those abusive businesses known as banks. Today, we are no longer victims of staggeringly high fees on our bank issued credit cards.  We are no longer beaten up and thrown under the bus by those horrendous money grabbers.

Problem is, they are necessary businesses.  We need ‘em.  They are in the business of making money for their shareholders.  New regulations for companies always sound great, but they always trigger unexpected consequences.

Banks don’t want to be on the FDIC closure list that’s published every Friday.  Forty have closed so far this year.  So the feds eliminate a fee source on one hand, the bank pops up with a new fee on the other hand…..Just the way businesses work.

A great review of these new bank fees in the WSJ is worth a read.

Help You Avoid Bank Fees

Consider me your fee avoidance coach…..When the banks jab, with this or that new fee, we’ll bob and weave.  I’ll be the trainer in the corner helping you stay away from that dangerous left hook of a big fat fee  that otherwise you would never see coming!  To paraphrase Muhammad Ali, we’ll be floating like butterflies, while they are trying to sting like bees…

Free Checking

Never fear, there are still ways to maintain a zero in this column:

  • Direct deposit.  Many banks waive this monthly fee on checking accounts if you sign up for direct deposit.  A pay check or any sort of regular monthly deposit will usually meet the criteria.
  • Maintain a minimum balance.  Chase will waive the monthly fee if you meet a minimum in linked accounts that can include savings and investment  accounts.

ATM Fees

Those  pesky ATM fees have been soaring.  When you use an ATM outside your own bank, often both the ATM owner bank AND your bank, charge you a fee to withdraw your money.  Reduce this pain as much as possible.

  • Minimize ATM Use: Get cash back when you use your debit card for purchases, though that amount is usually limited to $50 to $100.
  • Open an online checking account.  Non brick and mortar banks like Ally Bank and Charles Schwab Bank refund ATM fees at the end of the month since they don’t have ATMs.
  • Smaller banks or credit unions may be members of third party networks of ATMs like Allpoint or MoneyPass.  You’ll find these in Walmart or McDonald’s.  They will usually not charge a fee for a withdrawal (but your bank may not be so fee friendly).

Overdraft Protection

  • Sign up for an overdraft line of credit rather than overdraft protection.  The fees are usually much smaller.
  • Link your checking account to a savings account. Transfer fees are much smaller than those noxious overdraft protection fees.
  • The way coolest thing to do is set yourself up for an automatic text-message or email alert when your checking account drops below a certain amount.

BOLO

Be on the look out for these fees:

  • Fees for paper statements.
  • Fees for additional copies of paper statements, deposits, checks or past statements.
  • Percentage of coin deposits-careful with that piggybank.
  • Returned statement fee.
  • Fees for replacing a lost card  or expedited delivery  to an address other than your home (like your vacation condo).
  • Annual maintenance fees on debit cards.
  • A late payment may generate a fee to reinstate the rewards you’ve earned for your credit card rewards program.

We need banks, so I get they need to make a profit.  Me and you’ll just make it a liiiittle harder for them- won’t we.  They won’t notice, they have plenty of customers not paying attention.

Every business has fees that can jump up and bite us if we are not careful.  Late fees, card fees, return fees, even the public library slams me every now and then when I keep a book too long.  Yes, that sweet librarian says “You owe us 3 bucks, you don’t want me to have to send Johnny the enforcer  by to collect, do you?”

Comments and advice-welcome!

Keep an eye out for new fees, and if one grabs you by the ass ankle, please share it here.  Any creative new fees you’ve been slammed with lately- help me warn others.  Leave a comment.  But just keep ‘em PG rated….

Guest post by FDL, a nurse, writer, and entrepreneur.

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Posted in credit cards, personal finance | 8 Comments »

Despair: Time To Consider Credit Counseling!

Tuesday, April 26th, 2011

{The is the fifth article in a  series of articles on credit card tips.  These posts cover  many common credit card topics  with action steps you can put to work immediately.}

  1. 5 Steps to Lower Your Cards Interest Rate
  2. Taking Charge of Your Credit Card Debt
  3. Searching for a Rewards Card
  4. Success: My Search For a 5% Cash Back Gas Card

Despair

Me to Mrs Dietz who is 8 months along:

  • 1980-I’m sorry but I don’t hear the babies heartbeat.
  • 1985-I’m sorry but I’m not hearing anything on the monitor.
  • 1990-I can’t see the heart moving on the Ultrasound.
  • 2006-Yes, 3-D ultrasound does look just like a real picture.  I’m sorry but there is no sign the heart walls are moving, there is no blood flowing across the valves, and the lungs aren’t expanding. (yes, babies breathe in the womb!)

Even after 30 years in the practice of medicine, I still get nauseous when I have to give bad news.

Bad news-the sharing of necessary though painful information is part of my job.  Telling a patient her mammogram looks bad.  That  her bleeding is from uterine cancer that has also spread to the lungs.

Despair

Telling a grown man his Mom or his wife is dying and there is nothing more anyone can do.  It hurts-not nearly as much as the families’ pain, but it hurts.

When it doesn’t hurt, I will know it’s time to hang up my scrubs…

All part of the job.

Despair

“What the hell does this have to do with credit cards and credit card debt?” you ask.

Please don’t think I’m trivializing this subject, but to change your behavior, to get true change requires despair.

Hit rock bottom! No place to go but up!   Hit the wall!

Despair

I’ve seen it so many times:

  • The smoker who truly quits- when he has a lesion on the lung.
  • The addict who shoots up for the last time when she wakes up in an alley wearing nothing but the blooming bruises covering her flesh like a tie-died blouse.
  • The minimum wage clerk who can’t look  her husband in the eye to explain the new bracelet and how she was able to afford it and the other new little treasures around the house….

Despair

You’ve tried everything and you can’t make progress on your credit card debt.

Then and only then should you consider Debt Consolidation.

  • You are making your minimum payments 90-95% of the time.
  • You have a job but your income won’t quite allow you to get ahead.
  • You’ve sold your last bauble on Craigslist.
  • You’ve begged Chase to lower your interest rate and drop those penalties for being late only twice in the last three years-sorry Charley is the only response….

You KNOW you’ve done all you can do.

It’s time then to try credit counseling/debt consolidation.

I know you hear some gurus say-”Don’t do it.  You can do the same thing yourself.”

Yes- you might theoretically be able to take out your own appendix.   But should you?

Just as you go to a professional like me for your medical care.  Once you’ve tried everything to get ahead of your debt and failed, it’s time to get professional help.

Please, oh please, get the RIGHT help.  Not the loudmouth who claims he can cut your debt in half.  Just send me 500 bucks a month for 6 months, quit making your payments.  Then we’ll MAKE IT HAPPEN FOR YOU, DUDE!

Use an accredited non-profit professional who has helped millions of others….

How?

  • Take a deep breath, quit beating yourself up, promise to quit spending, and look for non-profit debt consolidators.
  • Make sure they are members of the National Foundation of Credit Counseling (NFCC) or the Association of Independent Consumer Counseling Agencies.
  • Get references-either friends, accountants, or attorneys.  Or call and ask the company for previous clients you can call.  If they won’t give you any, run away.
  • Interview several before making a decision.  At least by phone.  Make sure you get a good vibe.
  • Check’em out.  What the hell is Google good for if it’s not to search for ” XYZ Credit Counseling complaints”,  “Better Business Bureau Membership of XYZ Inc.” or “I got screwed by Acme Credit Counseling” searches.

You lost your brain for a time while you were running up this debt-I know.  Don’t lose it again by turning your life over to the first smiling credit counseling cad who has a slick spiel and a promise too good to be true.

Do your homework.

Then trust them and do what they tell you to do.

  • cut up your cards.
  • pay the bi-monthly payment on time.
  • And pray that God (whichever one you believe in) will be there to give you strength the next time you are tempted to spend.

What are the affects of going through credit counseling?

  • You will have to admit your spending problems.
  • If approved and you go into a debt management plan, you will be debt free in an average of 3-5 years.
  • You cannot use your credit cards during that time.
  • Your credit will take a hit! (it probably already has) but not as much and bankruptcy, or written off debts.

Despair?

Are you there?  Is it time? Do it before it’s too late!

{photo credit Steve Snodgrass c.c.}

Make sure you follow me on Twitter @DrDeanBurke- quick links on the side of the blog!

Friends, I love friends-check out my Facebook page, and I’m definitely Linked-In-use the shortcuts on the side-that’s why I paid my Web Master of the Universe Ben the big bucks to put em there-save you time!

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Success: My Search For 5% Cash Back Gas Card!

Wednesday, April 20th, 2011

{The is the fourth article in a  series of articles on credit card tips.  These posts cover  many common credit card topics  with action steps you can put to work immediately.}

  1. 5 Steps to Lower Your Cards Interest Rate
  2. Taking Charge of Your Credit Card Debt
  3. Searching for a Rewards Card

Reward Credit Cards

Gas at 4 dollars-now they’re talkin 5 bucks for you Californians….  That’s a huge hit every time you fill up at the gas station.  Almost 80 bucks to fill up my old truck.  Has it hit you yet? I’m sure payin at the pump has taken a chunk out of your paycheck.

Now that the days are getting longer I’ll start biking to work a coupla’ days a week.

Good for my figure, I figure, and good for my billfold!

But for now:

As I have previously written here, I am searching for a gas rewards credit card to  numb the gas pump pain a little.

Think about it. A 5% cash back on gas card makes $4.00 a gallon turn into $3.80.  You may think  20 cents and say, who cares.  I see  $4.00 less every time I  fill-up.

I care-A Lot!  Multiply that times two for my wife’s gas, and it becomes real money in a year.

That’s better than driving across town to save 3 cents a gallon…..

Back to my card search

My rewards card criteria:

  • No annual fee.
  • Reasonable interest rate-not that I care cause I don’t carry a balance-but don’t like gouging….
  • The highest possible percentage back on my gas purchases-the holy grail is 5%.
  • Master Card or Visa-as I frequent gas stations that don’t accept my AMEX Delta Rewards Card.

I have stressed here over and over, don’t use rewards cards or any credit cards:

  • If you can’t pay it off, in full, EVERY MONTH!
  • If you have a spending control issue. Yes you know who you are!
  • If you have a low credit rating and haven’t dealt with the issues involved.

I followed the suggestions of Flexo at Consumerism Commentary, put on my pith helmet, grabbed my walking stick, and jumped into the credit card jungle.  You know the jungle- filled with lions and tigers and bears-oh my!

Success! I found a card that met my criteria: the Pentagon Federal Credit Union Visa gas rewards card.

Bummer, it looks like you have to be an active duty member of the Armed Forces of the USA to qualify.

Success again: Tucked away in the small print…  It seems membership in other organizations also qualified.  One of those is the National Military Family Organization. And they  accept civilian members for $20.oo /year donation.  YESSSS!

A reasonable price for getting my 5% gas card, IMHO…

I jumped through the hoops of joining the NMFO-which was just a couple of keystrokes. Then applied online for my Pen Fed Visa Gas Card.

I’m proud to announce they accepted my application and will be sending me a card ASAP.

I have a video here to show you the steps in my journey.  If you need a similar card check it out-it might save you a little computer time. That’s what I’m here for-to lighten your load, ease your burden, walk a mile in your shoes..(yeah, I know you’re turning green and about to vomit, sorry!)

Let me know if you apply for a similar card or if you have questions about my search.

Contest:

I am having a contest at The Millionaire Nurse Facebook page.  I will be giving two autographed copies of my book, The Millionaire Nurse to those who refer a friend to “Like” my fan page.  Here are the details:

How do you win? Simply invite your friends to become a fan of www.facebook.com/TheMillionaireNurse When they do, they need to write “New Fan – (Your name here)” Then YOU and the NEW fan will be entered to win! Contest ends on April 30th…we can’t wait to see who wins!!!

Check out the details on my Facebook page, and while you are at it-friend up.  Love to add you to my list.

Carnivals and Link Love Lately!

Carnival of Banking And Money Management at Credit Eh

Festival of Frugality at Wealth Pilgrim

Totally Money Carnival at the College Investor

Carnival of Wealth at Dividend Investor

Thanks for reading.  Rember-to get on my newsletter list sign up-upper right and get a coupla freebies…Ebook that will show you the way to save money, NOW.  And a mini-course on personal finance delivered weekly in your email over the next 10 weeks.  A GREAT way to get started controlling your money!

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