Archive for the ‘credit cards’ Category

Credit Score:8 Tips To Improve It

Monday, April 12th, 2010

Credit Score

Do you worship at the “Sacred Church of FICO”?  Do you bow down to your credit score maker?

I hope not, but it certainly seems that way at times.  Google keywords says there were almost 2 million searches for “credit score” in March alone.

Dave Ramsey says, don’t worry about building your score-that the score only tells you how good you are at borrowing money….

But is it that simplistic?

Why you need a good credit score:

  • A new job-many companies pull a credit report when you apply
  • Buying a house-your report is used to approve/disapprove-but also affects the rate of your mortgage
  • Credit cards-the higher your score, the lower your rate-of course the inverse is true too!!! (I do agree with Dave that carrying a balance is stupid!)
  • Renting a home or apartment-most landlords pull a report now.
  • Lower insurance rates-homeowners and car insurance rates can be affected by a low score.

So the difference between having a good score and a bad one can mean  tens of thousands of dollars in interest payments over the life of a mortgage.  Also  whether or not you get that  job,  the apartment or home you have set your sights on.  And can make your monthly bills higher if you have to pay higher rates for your car or homeowners  insurance policy.

So  now  you understand why your credit score is important,  what can you do about it?

Improving your credit score:

  1. Pay your bills on time-yes all your bills, not just your loans.
  2. Keep your balances on cards below 50% of your limit.
  3. Your score will be higher if you have different types of loans, not just all credit cards.
  4. Avoid foreclosure
  5. Avoid bankruptcy
  6. Keep your number of cards to less than 5
  7. Avoid applying for too many loans-yes even loans you decide not to take count against you if you apply for too many.
  8. Have a tickler system at home-to be sure you do number 1-paying your bills on time.

Now you may say-avoiding bankruptcy and foreclosure are so obvious, why include them.  Many folks are underwater on their mortgage and struggling to get by.

It may be tempting to just walk away- and not deal with the problems.  However those decisions can stay with you for more than 7 years, before you can repair your damaged score.

Just a few more reasons to keep working your way through your debt problems (or better yet avoid them!!!!).

Now for more information about obtaining your credit score, check out this post from the past.

And for those of you who are ready to dispose of your  credit cards, I recommend cutting them up with bandage scissors-you nurses should have those in your scrub pocket- right….

Check out this video for a unique way  of destroying his card- in the microwave.  I don’t recommend this-those fumes are probably poisonous.

DON’T DO THIS AT HOME!!!!!

Let me know if you have any credit score comments or questions.  Are you worshipping at the FICO altar????

My free mini-course on personal finance, which you can get along with my free E-book “Emergency Money Resuscitation” can be found here. The mini-course has several posts on credit card management…

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Posted in Credit Reports, credit cards | 8 Comments »

BillShrink: A Millionaire Nurse Way to Cut Expenses!

Monday, February 22nd, 2010

BillShrink is a website designed to assist you in comparing rates on your cell phone plan, local gas prices, Certificate of Deposit rates, and credit cards.

One of the first things you need to do on your journey to become “A Millionaire Nurse” is to improve your cash flow.  You do that by increasing your income, and by cutting expenses.  This is a “cutting expenses” exercise today!

How do you use BillShrink?  Depends on which of the above things BillShrink does, that you need.

BillShrink is a free site, but does require you to give your email address, and opt-in to use their service.  They do allow you to choose whether you want to get on their email list for up-dates on changes, for example if gas prices change at a station in your area-they will shoot you an email.

cellphone plan page

Now to review what BillShrink can do for you:

  • Cell phone bill comparison:  Answer a few questions about your current plan-or even upload your current bill-they analyze and come up with potentially cheaper alternatives-In my case, they recommended a pre-paid plan, since I spend so little time on the cell phone-When my contract is up, I will definitely consider that!
  • Credit Card analysis: You tell them about your current card use, your credit score (estimate will do) and whether or not you want miles, cash rewards etc, then they come up with alternatives-in my case they recommended an “Alaska Air” card.  Not sure that one helps me a whole lot…..(But to be fair, I didn’t review all the card offerings-who needs another credit card-I am preaching debt reduction here!!!!!)
  • Gas prices: tell them your route to work, and they give you alternatives of “cheaper gas!”  If you live in a metro-area with long commutes-this would be a real winner.  As mentioned, they will also update you by email of changes-”Go Gas Wars!!)
  • CD rates: I will admit to not checking this out-since I don’t have a CD to compare… But seems straightforward enough-as long as its FDIC insured-why not chase the best rate!

Now, having done a quick Google search, I have not found any real negatives about the site.  They do make money, when you decide to change your card, or cell plan, and click on one of their recommended choices. So there is always a conflict of interest risk.  But if you are making a change because it does indeed save you money-then I think your risk reward ratio is positive!  And we are all ok with people making money,  as long as it is ethical and above board…..

So please check it out.  Plug in your numbers, and if anyone saves any money at Bill Shrink and let us know here.  Help out your extended nurse family and share…..    That is what nurses do!!!!

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Christmas Shopping: What Would a Millionaire Nurse Do?

Monday, December 7th, 2009

A Millionaire Nurse is kind, gentle, frugal, loving, generous, a leader, and well-read. (Sounds kind of  like the Boy Scout oath)  So what are millionaire nurses doing for their Christmas shopping.

  • They are shopping by a list with spending limit on each person-agreed upon by both adults in your family (although many of us act like kids this time of year).
  • They make sure they pay for their purchases with cash, or debit card-no credit cards allowed unless they can easily be paid off -no cheating allowed!
  • They give money or time to charitable organizations  in honor of their recipients, and not a tie, or another sweater – thrown in the closet or re-gifted next year.
  • They understand the reason for the season, and avoid the hype/materialism and consumerism and focus on being a better friend, mother, father, son or daughter.
  • They make a list of all their friends and relatives and send them a note, or a phone call just to let them know they are thinking about them.

Brent Arands in the Wall Street Journal has an article detailing the savings that could be had by cutting back on our holiday spending.  The amount of money that you could save over your life time by cutting back on your purchases by just 20% should open your eyes.  Saving over 10,000 bucks over the next 35 years if you are an average spender of $600 each Christmas.

So make the difficult first step towards becoming a millionaire nurse.  That step is to vow to begin to change your spending habits and grab ahold of your finances.

Please share with us your giving plans this Christmas, and if you are spending more or less than usual.  And check out this Christmas related spending question on Cash Commons-a great financial question and answer site.

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Posted in Planned spending aka budget, Uncategorized, credit cards, personal finance | 1 Comment »

Credit Card Offers-How to Stop Them From Cluttering Your Mailbox

Monday, November 23rd, 2009

Unsolicited credit card offers: When you go to the mailbox, looking for that letter from a loved one-(do you remember letters?).  Or maybe you are looking for a favorite magazine or newspaper (do you remember newspapers?).  I know when I check my box I am unfortunately receiving many unsolicited credit card offers-probably 1-2 per day.

The credit card companies get credit information from the credit bureaus, and if you meet their financial criteria-they send you an offer.  Now before the recent recession and the bursting of the credit bubble, we all heard stories of credit card offers addressed to children, dogs, and dead people.  Whether they have now decreased the offers from the credit card companies with the currently decreased credit availability, or just sending more to less people now, who knows.

If you would like to stop receiving those offers then I can help.   You can go to this website for opting out of credit card offers.  Fill in the necessary identifying information, and voila, no more credit card offers filling your mailbox.  If you would rather make a phone call then try 1-888-5-optout.

What other advantages to stopping those annoying credit card offers?

  • Saving trees-how many trees murdered to send these millions of unsolicited credit card offers.
  • Saving time and energy-if you are like me you either shred or tear these offers into little pieces to keep others from applying for your credit card, ( identity theft).  Not counting the trouble and time involved in tearing them into little itsy bitsy pieces.
  • Decreased temptation-when  trying to get out of debt-all these card offers are like a drunk walking around in a liquor store-temptation, temptation, temptation….

Now if the only mail you get is credit card offers and you will miss the full mailbox, let me know and I will send you a few catalogs that are also filling my mailbox.  Maybe I will write another post on getting off catalog lists-but since most of those are my wife’s, maybe I better leave that one alone.

Now if you need “Emergency Money Resuscitation” go my website linked here, and get a free ebook.  This will also result in getting a free short course on financial management-did I mention free.

Please let me know if you have any credit card offer stories to tell.

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Emergency Money-Five Ways to Raise Money in a Hurry!

Wednesday, November 18th, 2009

One of my strongest recommendations for people trying to get out of debt, beside goal setting, and planning is the emergency fund.

See this post for more information about the super-duper emergency fund, that I recommend all  of you have and the reasons why.  For today’s post, I want to give you a few options for how to raise an emergency fund account in a hurry.

  1. For nurses, overtime is frequently available.  On one of the wards that I work, there was a sign about overtime available to work the night shift, because of a temporary nursing shortage on that wing.  Two or three extra shifts at time and a half, can raise a thousand bucks for a small emergency fund in a hurry.
  2. Sell books and text books.  See this blog post from Money Blue Book on helpful hints for those of you who haven’t sold any books online before.
  3. Have a yard sale-while this tried and true method for raising a few bucks may seem old hat, in this economy people are shopping more than ever for a bargain.  Go in with friends, and make it a fun day, in addition it will  help clean out a few closets.
  4. A second job-if overtime is not available-and these days those overtime shifts can be harder to come by, a second job working an extra weekend a month, or a couple of shifts extra on your off days-can help you pile up emergency cash.  Most nurses can find work in their field, but if not delivering pizzas or other short term work can help fill the coffers-remember this is for emergencies!
  5. Sell a toy-(no I didn’t say sell your boy).  If you have a Harley, boat, extra vehicle, jet ski ……. You get the idea.  Put it on the block.  Do an internet search to find out the going price and get it gone.  If you have no emergency money, you have no business with a toy or toys anyway-and you need to be working extra right now, not playing.

So look at the above list and find which way suits you to help build your emergency fund.  Maybe do some of it all-having a cash cushion or margin can be a life saver for those of you trying to work your way out of debt.  It can be the difference between just a bad day-having to dip into savings for a new set of tires, or an expensive medical emergency. Compare that to blowing weeks or months of hard work trying to lower your debt, then having to reach for the old credit card to pay for an emergency expense-then having to start all over.

Good luck!

For more ideas for “Emergency Money Resucitation” go to my website for my free ebook, packed with money-saving ideas.

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Credit Card Debt-Pay to Play!

Tuesday, November 3rd, 2009

I have had several questions lately about consolidating credit card debt, rolling over to another lower rate card.

These options can be beneficial from a monthly payment standpoint, but only temporarily deals with the real problem.

When people make fun of the term “Millionaire Nurse”-saying it is impossible on a nurses’ salary, all I do is show them the math.  If you start saving between 5-15 % of your  income in a tax-free account after you graduate from nursing school-(provided you don’t graduate at age 45 or later), you can be a millionaire at retirement, with only a very conservative 6% rate of return on your money.

So how do you develop the skills to live like a millionaire-copy what the wealthy do.  People who have and are building up significant wealth, don’t carry balances on their credit cards at 15 +% interest.  They may use cards for convenience, but pay them off monthly.

Studies show people spend more when shopping with plastic, rather than paying cash.  Wealthy people can get away with a little over-spending, those trying to build wealth cannot.

The real problem for most people  is the temporary  use of other peoples’ money, that will require a pay back with interest for the privilege.  This allows you to spend more than you make.  Overspending does not allow the build up of wealth.

So, my recommendation is when you  consider credit card or debt consolidation, do it only after you have made short and long-range plans and goals.  You have developed a spending plan that will allow you to live within your means.  You have an emergency fund to prevent those  “I had to charge it, it was an emergency!” moments.

So, live like a millionaire-no that does not mean over spending, it means building wealth-which requires you to live on less than you earn, to have left-over money at the end of the month.

Do you have questions-comments, be sure and let me know.  If you need “Emergency Money Resuscitation” to help with your money problems, check out my free ebook at www.themillionairenurse.com.

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Online banking: ibankUP, A Review of a New Online Banking Option from Plastyc for Gen Y

Wednesday, October 14th, 2009

Online banking got a new player this week, with Plastyc announcing a new online banking option directed towards Gen Y.  See this news release from the CEO, Patrice Peyret.

Plastyc, a privately held company and provider of pre-paid Visa cards, has added an online banking option for teens (with a parent’s permission) and for young adults who don’t need all the services of a full-service bank, but need more financial options than just a pre-paid Visa.  According to the website a new account can be set up in 5 minutes, with only a social security number required-no other bank account, or other credit info needed.

See this page for a summary from the ibankUp website on a comparison of various fees to traditional banking.

What are the benefits of such a service:

  • Lower monthly fees
  • No overdraft fees-you can’t overdraft, because the system will not let you spend more than is in your account.
  • Balances are always accurate, since you access the site for checks-no paper allowed, and the card use is immediately reflected electronically.
  • Your money can be deposited by direct deposit, credit card transfer or the use of the Green Dot MoneyPak sytem already available at many popular retailers such as Wal-Mart, K-Mart, Rite-Aid and CVS, just to name a few.
  • They do allow a system for cash rewards, if you shop at their ibankUpside mall.
  • You can access your  balances free online, smartphone, and by a cool facebook widget, and for a small fee at most ATM’s

What are the downsides:

  • Only your first online check is free, after that they are two bucks each.
  • Although the site promotes itself as a way to teach about/limit overspending, it still means using plastic to pay for things-which some studies suggest leads to overspending.

So, what do I think about this new e banking option?  Anything that limits overdraft fees, and limits costs, while at the same time improves visibility and immediate feedback, I think is a plus.  To think that the world will ever go back to cash only is naive even if spending may be a little higher without that pulling of green stuff out of your pocket.

But more importantly, what do you think?  Love to hear your feedback on this new option of online banking for the gen-y consumers.

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Credit Reports and Consumer Credit Information, Free, Of Course

Friday, October 9th, 2009

The Wall Street Journal’s Cranky Consumer has written an article today about checking out three different free credit information sites.  The sites, Quizzle, Credit.com, and CreditKarma.com propose to give a comparable score to FICO and the other major credit agencies, Experian, Equifax and TransUnion.  You can obtain a free credit report from those sites 3 times a year by visiting www.annualcreditreport.com .

I have a full-time job, so I did not visit each of the above sites for a test drive.  Please read the professional journalist’s very well reported article linked above for that.

I did, however, visit www.quizzle.com.  The questions required to confirm my identity were not answered to their satisfaction-they were referring to a non-mortgage loan originated about four years ago.  But it was listed as my home mortgage loan,which was refinanced less than 2 years ago. Therefore I failed their identity tests…..

So if this is confusing sorry.  My point is I would have to call an 800 number to allow them to give me a credit report.  Maybe tomorrow after a full nights sleep.

Now, don’t let  roadblocks like these keep you from checking your credit information.  Going to one of the sites above and obtaining information is extremely important, both from an identity theft standpoint, as well as identifying errors.  You want to make sure no one has tried to obtain credit on your behalf.

A low credit score  can cost you thousands in extra interest, and fees -if you are able to obtain a new loan. You also will probably have to take out mortgage life insurance resulting in higher monthly payments.

But keep in mind, all of these reports give their own proprietary information.  The only way to get your FICO score is through FICO.  They now offer a free report as well, but is tied to a monthly service that will be charged to your credit card, unless you cancel it within the first thirty days.

Just keep in mind that FICO’s mathematical weighing of your credit information is not available, anywhere but at FICO.  Although all of the above sites will give you information that will be in the general range.

So where does all this go, for Millionaire Nurses

  • Check your report several times a year-for free
  • Don’t carry a balance on your cards
  • Make all your payments on time, so your score won’t be dinged
  • Keep your balances, if you have them on your credit cards-less than half of your credit limit.
  • Save monthly-so in time, you won’t care what your score is, you will be your own banker….

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Credit Card Savings: Rewards Or Penalties?

Wednesday, October 7th, 2009

Credit Cards

Millionaire Nurse wannabes’ know intuitively that paying fees and penalties on your credit cards are major no-no’s.  I would say that using credit cards at all is not the best road to travel on your path to financial freedom and wealth.

However, I don’t want to be a hypocrite, so I confess I do have a couple of credit cards.  I have a Delta Am-Ex because I travel overseas enough to use the points for upgrades.  I have a GM card that we obtained years ago-back when I would buy a new GM (that alone should tell you how old the card is)  car rather than new-used car-which is my preference now.  Our local gas stations requires  PIN numbers for fuel purchases, and we are just becoming used to the idea and safety of debit cards.

That being said, we pay our cards off every month-no balances.  Studies show spending is greater with credit cards rather than when paying cash.  We have replaced our card use with cash over the past couple of years.  We now use cash for purchases-more than 85% of  the time.  I would say we could cut up our cards tomorrow and not miss them.

www.mint.com/blog has posted  a graph and breakdown of credit cards and their various point schemes.   One stat that got my attention was that if you are late with a payment, it will take $3,900 worth of charges to earn enough points to pay for the penalty.

That should be enough reason to not to be late for a payment, and make you wonder about  the true benefit of  the various credit card reward programs.  The bottom line is, unless you fit a very narrow set of criteria, the disadvantages and costs of various card point schemes are not worth the risk of overspending, fees, and penalties.

I have a free ebook for Emergency Money Resuscitation for nurses at my website, www.themillionairenurse.com.  If you sign up for the free ebook, you will receive a free mini-course on money management by email.  In that free mini-course there are several great tips  on credit card management.

So here is your homework:

  • Review all your credit cards-find out what the rewards are, and have you been late with any payments.
  • Begin to payoff your cards monthly, when you are out of credit card debt-or destroy them.
  • Try to keep your balances below 50% of your limit-helps with your credit score
  • Destroy all your store cards- they have high interest rates

Good Luck-steering clear of all the temptations are difficult, but must be done for you to become successful.

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