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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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.

• Although usually, unnoticed Americans pay two times more in swipe fees than they do in late fees and three times more than ATM fees.

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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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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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.

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.}

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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

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Credit cards-I know they are the devils spawn. The scum of the earth. The ultimate evil…
But for me, alas, a necessary evil.

I have been listening to Dave Ramsey for 5-6 years now when I am on the road. {He is  more entertaining than many talk radio heads yelling about Obama, or Ocho Cinco.  And you can only listen to 70′s music for so long…hmmm, I’ll have to ask my CPA if this makes XM radio deductible…}

I have also read his books and I agree with a lot of what he preaches-and if you’ve heard him, you know he preaches!  His credit card advice, however, is like a reformed alcoholic preaching the return of prohibition.

I will readily admit I have two personal credit cards:

• An American Express Delta rewards card-I travel out of the country and in Georgia the saying goes “if you are flying to hell, you have to change planes in Atlanta…I use the points for free flights.
• A GM Master Card-I keep this card ’cause my favorite low cost gas station won’t take AMEX.  I need to switch to a different card since I no longer buy new GM’s.

Since I need a new rewards card and I know many of you need to switch or get a new card, I’ll let you guys join my journey.

I asked an expert for advice.  Something I recommend all of you do when you have to make a money decision.

Flexo, the writer behind Consumerism Commentary, has been writing about money for years.  His top ranked and long running blog  regularly reviews new credit cards and offers.  He agreed to answer my questions.

Flexo-a self portrait!

Dr Dean: Where do you get info on new credit cards and how do you inform your readers?

Flexo: I find out about new credit card rewards programs and changes in advance and announce them on Consumerism Commentary as soon as possible.

By visiting the Credit Card Center at my blog and subscribing to our RSS feed or newsletter, you will be aware of the best credit card cash-back rewards.

Maximizing rewards is more difficult than it used to be thanks to the card issuers making frequent changes. Reward-seekers need to be more vigilant, and Consumerism Commentary helps with frequent updates.

Dr. Dean:  Can I get by with one rewards card?

Flexo: Not too long ago, all you needed was one cash back card if you wanted to maximize your rewards.

Today, issuers reserve the best rates for certain categories of spending. To get the top cash back rate on all or almost of your spending now, you’ll need three cards.

People with good credit and good spending habits can own three cards without affecting their credit score for the long-term, though signing up for three cards in a row might temporarily ding them.

The nature of credit card spending is that, in general, people spend more with plastic than they do with cash. Only those who are diligent enough to acknowledge this and fight against this tendency should bother with rewards programs. (in other words, remember the alcoholic quote above-if you have spending control issues-don’t get any credit cards…)

Dr. Dean:  What is a good cash back reward percentage to shoot for?

Flexo: 5% is the Holy Grail of rewards programs. You can earn even more by using the card issuers’ marketplaces for shopping or rebate sites like Ebates in conjunction with the cash back card.

Your combination of rewards credit cards should get you as close to 5% in all categories as possible, and then you have to remember when to use which card. The easy days of getting 5% cash back on all purchases on one card are over for now.

Dr. Dean:  When you get a rewards card, should you care what interest rate the card charges on the balance?

Flexo: The greater your risk of missing a monthly credit card payment, the more you need to worry about interest rates.

Anyone can have an emergency. If your emergency requires you to spend using your credit card and not pay the bill in full each month, your interest charge will eliminate your cash back bonus advantage and then some…..

If you’re well-prepared with a significant emergency fund or other savings, a credit card interest rate can be one of your least concerns.

If you’re not in great financial shape, work on that before chasing credit card rewards.

Thanks, Flexo.  You da man.

I’m a bullet point kinda guy, so I summarized Flexo’s points to help me in my search:

• I will use his website to help in my search. The least I can do for his help today…
• You may need more than one cash back card to take full advantage of cash back on all purchases.   I mainly want cash back on gas and groceries-and only want one more card so I will remember to focus on cash back for gas cards.
• Look for 5% cash back-but they are getting harder to find. 5% I got it…
  
• Interest rates don’t matter if you always pay your balances on time and in full!  No emergency fund, no rewards card!! I got it, I got it!  sheesh…

So I’m off to see the Wizard about my new cash back rewards card.  When I get to the end of the Yellow Brick Road-I’ll report back and let you know what I find!  Witches and flying monkeys, oh my!

(Gosh Dorothy, that guy behind the curtain looks just like a character in the Simpsons…)

This weeks carnivals:

Yo, Yo, Yo was how Budgets Are Sexy let me know I had made the Best Of Money Carnival this week. What a with it dude, huh man!  I’m down with ya dawg!

Carnival of Wealth at  Personal Dividends

Totally Money Blog Carnival at Thousandaire. Thanks Kevin…

Festival of Frugality at Free Money Finance

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

Remember, you vowed you were going to get out of credit card debt.  You’ve had it up to you know where with making decent money, but having nothing to show for it.

The first few weeks, you went happily along with the plan.  Then reality set in:  You realize your  measly payment will get your credit card debt paid off about the time you move from assisted living to the nursing home…

You decide to ask the right questions in the right way…

“Maybe I need to use a little critical thinking here.  Do a little research, and make better choices?  What is the difference  between success and failure?”

“Yes I know it was my fault, but now I want my Citibank Card and Visa accounts  to  be as empty Muammar Gaddafi’s conscience.  They are history, baby!

Critical Factors in Payoff Success

You have probably figured out (without my brilliant analysis) your payment amount and your interest rate are the critical factors in paying off your cards.

Before starting this journey on your own, however, you need to prevent crisis management. Being in crisis mode makes smart decisions impossible.  Like throwing a drowning man a beer.  He may appreciate the gesture, but he remains a drowning man!

Crisis management

That’s what got you in credit card debt in the first place.  Oops, can’t pay for my books, put it on my card.  Oops, need new clothes for work-swipe away…

Living with credit card debt hanging over your head is not living, it may be an adventure—if you think constant stress and strain are adventurous.

Getting Started On Card Payoff

The American Way?

I know you want to jump in and start killing Citi-but even the Hulk will think before he leaps!

Let’s review  your pre-credit card payoff steps.

• Have a small emergency or mad money fund-for the next crisis. Don’t take one step forward and two back cause you had no cash….
• Cut up, freeze, or otherwise keep the cards in your wallet from adding to your credit card debt
• Decide which card to pay off first.  Smallest balance seems to be recommended by many, but highest rate card has math on its side.  Use your judgment, but read both sides of the argument and pick one.  Don’t wait for hell to freeze over while you choose.

Jump Start the Process

Now that you have the preliminaries down, it’s easy to become frustrated by the lack of progress.  What can you do?

Only one thing to do: Earn more money.

For you nurses, I wrote a post on earning extra money as a nurse.

For you non-nurses-read the post anyway cause it may give you a few ideas for side jobs or check out this other post for 10 tips on earning extra moolah.

Action Steps:

• Get on a spending plan-use Mint, Quicken,  or other systems.
• Throw every extra dollar at your credit cards- bonuses, raises, e-bay, or  yard sale money.
• If your card has a high interest rate, try to find a  lower rate card. It will cost you a fee to switch, but it’s worth it if you can pay off the new card quickly.  If you don’t know what a debt snowball, avalanche,  DOLP, or bucket of hot water are then do your homework.
• When you pay one off, reward yourself with an appropriate level reward.  That might be a night out at McD’s , Olive Garden, or your  favorite gourmet restaurant-if you paid off the BIG ONE!
• Then get started on the next one.

Other things to keep in mind:

• If you transfer a balance to a new card, it may ding your credit temporarily.
• If you use all the available credit on your card by consolidating  two balances-it may hurt your credit.
• If you get a lower rate card using the techniques I described last week for getting your credit card rate lowered, being late for a payment will jack the interest rate back up.
• If you are not making progress or can’t even make minimum payments-you may need to either negotiate a settlement or consider debt consolidation. These are topics for another post.

Success with Credit Card Debt Reduction

Getting out of credit card debt  has two parts that are amazingly difficult:

1.       Getting started: It is so much easier to just not rock the boat.  You can’t admit to your family or yourself  you don’t know how to manage your money.  You feel  like such a failure and you don’t deserve financial success anyway….

2.       Sticking with it: Diets, exercise resolutions, and making headway on debts are all in the same category.  They require lifestyle surgery.  You can’t just say, “Tomorrow will be different.”

To make tomorrow  different than today, you have to start.  And if you don’t have your stuff together before starting, you will be doomed to failure.

Remember, there will be setbacks along the way-just keep after it.  Learn to visualize your life after debt.  Use that vision to get you through the black days.  Get a buddy or friend that understands your situation and call them when you are frustrated.

Questions/comments: Tell us your story.  How did you get out of credit card debt?  What worked for you?  What are your frustrations?

(Photo Credit: Martinez, Carlos c.c.)

Carnivals featuring my articles this week:

Editor’s pick at the Carnival of Personal Finance at Money Beagle! Yes! (and thanks!)

The Yakezie Carnival is at Control Your Cash, with great commentary!

Totally Money Carnival is at Debt Free Divas

Remember the RSS Feed is top right.  You can sign up to receive our posts without worrying about missing one.  And feel free to like us on Facebook.  I try to make it easy for you.  And follow us @DrDeanBurke

{I am starting a regular article on credit card tips.  These posts cover many common credit card problems with action steps you can put to work immediately.  Let me know what you think.}

This weeks tip is fairly simple, but you have to have big ovaries-(sorry guys, but I’m a gynecologist…).

Interest Rate Is What?

You’re paying bills and notice the interest rate on one of your credit cards.  You coulda sworn it was 15%, and now it’s 25?  How the heck did that happen?  (one way is to be late for a payment).

But if you haven’t been late then maybe you need to become, wait for it…… “The Negotiator!”  (You heard the blast of music didn’t you?)

Credit card companies have responded to changes in regulations that have hurt their fees.  Their response, of course, is to try to get their profits in another way. By raising your rate…

Your job is to counter attack, jab,  respond with force….(you get the idea!)

The Negotiator is a super-hero who believes the first price is just a starting point.  That all things  purchased can be had for less if you just ask.  That those who accept prices and rates as they are are  just wimps.

The Negotiator???

You review your other cards and their rates have gone up too.  What are you to do?

Become: The Negotiator

To put on your “The Negotiator” cape requires a few preliminary steps.

You need three things to get started:

1. Your last credit card statements-and any pin numbers or passwords for these accounts.
2. Pen and paper, or spreadsheet for you tech folks
3. Phone

Simple huh!

Set aside a time, take a dose of courage, and become: The Negotiator!

Step 1: On your paper, make columns (if you are using a spreadsheet, you know what to do…)Your column headings should be: your credit card company, the name on the card, card company phone number, your account number,  your interest rate, and a blank column for the advertised rate for the card.

Step 2: Use your computer and compare your interest rates to the rates advertised by your card company-it needs to be the exact card-some companies cards sound alike-make sure it is an exact match.  Try your card’s company site, credit card.com, bankrate,  or other credit card comparing site.

Step 3: (this is where the ovaries come in) Pick up the phone, call the company for each card, let the customer service rep know you want to lower your rate.  Make sure you let them know what the rate they are advertising. And ask for the best possible rate for you, a Good Customer!

Step 4: When the rep says no-which they will- get the reps name, ID number, and ask to speak to a supervisor-be insistent, but not ugly.  Let them know you are a long time customer (if it’s true), that you never miss payments (if this isn’t true, you probably are toast anyway!)

Step 5: Say thank you when they lower your rate.  If they refuse, then wait a week and try again.  If you strike out again, you might need to check your surroundings for kryptonite, but it’s probably time to  find a new card.

5 Steps To Lower Rates

5 Easy steps to world domination huh-well maybe not-but at least an improvement in your world.

If you are struggling to pay off credit cards your interest rate can be the difference between months and years to the pay-off.  Don’t let the card company bully you.

Put on your “The Negotiator” super-hero suit and get after it!

If you try it, let me know if you are successful.  Let us know if you aren’t.  We can all learn from each others.

Recent Carnivals I have been included:

Young and Thrifty is hosting the Yakezie Carnival.

Carnival of Wealth

Totally Money Carnival at Money Mamba

Festival of Frugality is at How To Retire Rich

(photo credit: mikequozl c.c.)

Remember the RSS Feed is top right.  You can sign up to receive our posts without worrying about missing one.  And feel free to like us on Facebook.  I try to make it easy for you.  And follow us @DrDeanBurke

Parents who care, run for the hills, the world is coming to an end-righteous people all over the country are aghast!

Kim Kardashian has released a pre-paid debit card.  It will ruin our children, as they use it to buy the latest iTunes Kardashian show, for their iPad.

I will have to admit, when a friend sent me this link, I had to google Kim Kardashian.

I had “heard” the name, and seen references in the media.  But I had no idea of why she was famous.

Celebrity Kulture

KK, like most of the other celebrities/actors/drunks, and addicts that make up our current pop culture seems to be ubiquitous-once my Google search returned.

But I refuse to support their habits by watching their shows, or buying the mag/rags that worship them-like conjoined twins, sharing a heart.  One couldn’t live without the other.

I live a reality show, why would I watch one….

But I learned a long time ago, you can’t fight or alter pop culture.

No it’s not fair, that a 90lb blond, drunk, drug addict makes millions just by managing to dress, (without panties) and go to a club.

Klub Kulture (bysjurvetson)

And a 130lb blond nurse is doing CPR on a 1 1/2 lb preemie, trying desperately to save the life of a  precious newborn, and gets paid less than the pop queen makes in a 15 sec commercial.

If you dwell on these  issues,  you will  want to crawl into bed, pull over the covers, and cry!

I refuse to give in to those tendencies…

So I have my quiet protest-and refuse to support the celebrity driven culture-It does make finding a movie difficult.  Finding quality actors that haven’t sipped the kool-aid of their own exploded ego is a challenge-but I try.

My other 5 jobs keep me busy anyway!

Whew, now I feel better-back to the subject at hand:

The KimKardashianKARD-is it evil?

KKKARD Pro’s:

• It is a pre-paid debit card-so it has a self-imposed spending limit
• It is without overdraft fees
• You can get it with no credit check
• You can load the card with a call-and get text/sms messages or alerts-maybe good for parents who want to know if spending limits are breached.
• Kim’s Kleavage

KKKARD Con’s

• Supports a celebrity culture
• May encourage spending-showing off Kim’s Kleavage to your fellow hormonally challenged peeps-while you swipe  your card!
• But most important-the damn thing is 10 bucks a month!

If you buy this card for your kid, and you limit their spending to 100 bucks a month-then you are paying 10% a month in fees-outrageous considering most checking accounts come with a free debit card.

Now that is something worth celebrating!  Free checking ROCKS!

Reader Questions:

Have your purchased a pre-paid or debit kard for you teens?

Does it have a picture of a partially klad celebrity on it?

Do you think a kard kulture for your kids is a good thing?