Business Research Cancer Christmas Gifts Credit Card Dessert Parenting Politics Recipes Technology
Health and Beauty Flowers Food & Beverage Fashion Hobbies Love Valentine Gift Video Games Travel
Sep 21

If you have recently had a baby then you probably already know that you’re spending more than you thought you would. You can take solace in the fact that you’re not alone; most new parents find themselves stretching their budget further than they ever had before. No matter how much misery loves company, however, nobody likes to watch their credit card balances steadily increase over time.

If at all possible, new parents should try to avoid using credit cards. Why? Here are ten reasons:

1. You spend more with credit cards. Most people find that when they shop with credit cards they’re more likely to spend more money than if they use cash, checks, or a debit card.

2. You buy things you don’t need. It’s so much easier to make impulse purchases when you have a credit card in your hand. Every new parent knows how easy it is to buy every cute baby item you come across.

3. You obligate future income. When you use your credit card you’re basically saying, “I know I can pay this in the future,” but nobody really knows that for sure. Take care when obligating yourself to pay something down the road.

4. You pay interest. Unless you pay your credit card balance each and every month you’ll wind up paying interest charges. Even if you have a relatively low interest rate you may still wind up paying close to $100 a month in interest if you have a high balance.

5. You might pay fees. Send a payment in late or exceed your spending limit and you’ll wind up paying costly fees. You have better things to spend your money on, like diapers or teething rings.

6. You start to rely on credit cards. If the costs associated with a new baby have you using your credit cards more than usual, beware. It is all too easy to fall into the pattern of using credit cards for every day expenses, and this is a dangerous situation.

7. You don’t budget. Turning to credit cards to make purchases means that you don’t have the cash to buy the things you need, and that means you probably aren’t budgeting. If you don’t have a budget in place then now is the time to write one.

8. High balances can hurt your credit score. If you are piling up your debt then your credit score may suffer, even if you make payments diligently every month. You’ll want a great credit score for when you finally give in and finance that minivan.

9. Spending habits as a new parent endure. The way you spend money right now will have a lasting effect on your future spending habits as a parent. Set the precedent now to only use credit cards when you really need to.

10. Before you know it, your baby will start to pay attention. Do you really want your child to grow up thinking that every time you want to buy something that you can’t afford you simply reach into your wallet and pull out a credit card?

Credit cards can be useful if they are used responsibly, but when a new baby comes along you may find yourself much more tempted to spend with reckless abandon. Use your credit cards as sparingly as possible and you have a much better chance of keeping tabs on your finances.

Sep 16

Been sucked in to the lure of a “rewards” credit card only to get burned in the end by high interest rates and a less than stellar return when it came time to cash in those points? You’re not alone.

For credit card companies, acquiring customers is big business, and most cards today offer some kind of incentive for running up the charges on your plastic. If you’re not careful, and use your card at will just to collect a few measly points, you could get stung. But by following a few simple rules, you can turn the tables on the credit cards companies and use that “rewards” card to your advantage.

What to choose?
Most likely, your mailbox is full of pre-approved offers for new and exciting credit cards. In fact, in 2005 over 6 billion unsolicited credit card applications were mailed. The average person received approximately 72 offers. If you’re in the market for a new card, it’s important to weigh your options carefully. Most credit cards today offer some kind of rewards, but which one is right for you?

Take a look at your lifestyle and spending habits. Would you benefit from a points-based rewards card, an air mileage card, or one that offers cash back on purchases? Points-based cards usually give you one point for every dollar charged. When you accumulate enough, the credit card company will usually have a shopping portal set up, where you can redeem your points on a variety of products (e.g., electronics, gas cards, travel, etc.).

Problem is, most items in the catalogue are ludicrously overpriced, though it’s better than nothing. Air mileage cards offer great benefits to the frequent flier, but in today’s airline industry, who’s to say how much fees will be raised by the time you’re ready to redeem? With cash back cards, there’s most likely a set amount you’ll need to charge annually before you reap any benefits, so make sure you read the fine print before you sign up.

Take Advantage
Quite simply, offering incentive-laden cards are a way for credit card companies to get you to sign up. Rarely are the rewards worth the interest rates you’ll pay if you carry a monthly balance. But therein lies the rub—pay off your credit card every month and put those rewards to work. Here’s how: Charge as much as you can on your rewards card. We know, it goes against everything you were ever taught about using a credit card. Let us explain.

If your collectors allow it, charge every bill you have to your credit card instead of using a debit card or writing a check. Then, pay that balance off immediately to avoid incurring an interest fee. You’ll collect big rewards points fast, and it’ll be just like paying cash. Be disciplined about it though, even one month of letting those charges sit on your card can be a killer when the fee kicks in.

Another idea: instead of having separate credit card accounts for you and your spouse, ask for an increase in your credit limit and a companion card for one account. The more you both swipe the plastic, the quicker you’ll accumulate rewards points.

Off the beaten path
As rewards cards have become more prevalent, credit card companies have come up with new incentives to make their cards more desirable to consumers. Many cards have a system that provides extra rewards points to customers who shop with certain vendors. Some will even offer coupons where you can save big shopping with certain companies while still earning extra points. It might take a little more effort, but it will certainly rack up the rewards points at a vigorous pace.

By: Joe Kenny

About Author

Joe Kenny writes for CardGuide.co.uk, offering UK credit card comparison, visit them today for more best UK credit cards. Visit today: http://www.cardguide.co.uk/

Sep 15

When it comes to looking for a gas credit card there are many things you will want to keep in mind. First of all, a gas credit card is very similar to any other credit card as far as what you should look for. So, keep this in mind as you begin your search. Remember that there are many benefits to gas cards and you should keep these in mind while you are comparing different cards. The following points are just a few things you will want to keep in mind when it comes to choosing a gas card.

Introductory Rate

You will want a gas card with an introductory rate of 0% for at least three months if not a year. This is great for you because it allows you to save on interest the entire first year. Of course, you don’t want to get in the habit of not paying your credit card bill in full each month, but it is really nice to have a good introductory rate. Look for cards that offer them because there are many that do!

Interest Rates

You also need to keep interest rates in mind. Whether you have an introductory rate or not you will eventually have a regular interest rate to contend with. Keep this in mind because it is really important. You don’t want a gas credit card with a high interest rate. Gas is already too expensive as it is and if you can’t pay your card in full one month you don’t want to have to deal with really high finance charges. That means you need to evaluate the interest rates in conjunction with introductory rates to see what makes the most sense to you. If you have one card offering a 5% interest rate, but no introductory rate, and you pay your card in full each month then that is better than a card offering a 0% interest for a year then 12% afterwards if you don’t pay your card in full. Evaluate the whole picture when making a decision.

Benefits

Some gas cards offer great benefits just to use them. For example, you could get cheaper gas by a couple cents per gallon by using your gas card. Or, you may receive points for every dollar you spend that can be traded in for airline miles, gifts, and even cash back! Compare the benefits offered by the gas cards, compare them with the interest rates, and this will help you find the right card for you.

Card Use

Some gas cards are for gas only while others act as full credit cards. Consider which of these options is in your best interest and would work best for you. Some people find they prefer a gas only gas card because they can only use it for gas while others like the flexibility of having a gas card that can be used for multiple purposes.

When it comes down to picking out a gas credit card, make sure that you take your time when you do your research. You will find sooner or later that there will be a card that suits your needs!

By:Tom Tessin

About Author

Visit Credit Card Review for More Information.

Sep 4
Debt is like cholesterol, says author and lecturer Jon Hanson: Some kinds are good and some are bad. Too much bad debt can wreck your financial health, but so can too little good debt. The problem is that many people never learn the difference. Hanson himself barely survived a “near debt experience” a few years ago.

In Good Debt, Bad Debt, Hanson explains how good debt can help readers achieve their dreams, such as buying a house, a car, or a college education. But he’s also tough about diagnosing the symptoms of bad debt. If you’ve ever gotten into trouble with your credit cards, or leased a car that’s way more expensive than you can really afford, or bought a house with only 5 percent down, it’s time for a reality check.
Hanson has been researching this topic relentlessly since pulling himself out of the hole he dug with bad debt. His book blends personal stories, humor, and even twenty original cartoons, making it more fun to read than the typical personal finance tome. It covers topics like income/wealth confusion, emotional spending, and marriage issues - as well as nuts-and-bolts chapters on car buying, home buying, retirement, and more.

Good Debt, Bad Debt is an entertaining and inspirational guide to improving your life so that bad debt can’t rob you of your joy. In the tradition of Rich Dad, Poor Dad, it shares the secrets that only a minority of lucky people already know.

 

Never itch for anything you aren’t ready to scratch for.
— Ivern Ball

It is hard to fit yourself for joy while spending money on temporary happiness.
— Jon Hanson

How are you doing?
How are you really doing?
Are you financially fit or financially spent?
Are you scratching it up or stacking it up?
Are you living the life you imagined - or an unimaginable life?

In America we have both enjoyed and abused the privileges of our society. Yet many are experiencing an implosion of insecurity and vagueness of purpose that leaves them vulnerable to clever merchants seeking to plunder their infant wealth.

Just what are you working for? A quick test: Take your net worth and divide it by the number of years you have worked. What’s your result? Seem lower than you thought? This number is how much you are working for per year. The rest is gone, burned up, consumed. There are other important measures of wealth, such as income, but you’ll soon find that income and net worth like to hang out together. If your net worth is $100,000 and you have worked for ten years, you are effectively working for $10,000 a year, even if your actual income is $75,000 a year or more. Don’t feel bad. With bad debt, some are working for room and board only; others have a negative net worth.

Certainly life is more than getting and spending money, but because money does necessarily and inescapably affect so many areas of life, it is the main focus of our attention in this book. Good Debt, Bad Debt is not about living a starved or pinched existence. It is about gaining perspective and right-sizing spending and saving while keeping retirement aspirations in line. It is about developing a philosophy of debt - or, for many people, a philosophy of no debt. Good Debt, Bad Debt encourages us to avoid the consumer entitlement mentality that can only lead to debt, regret, and broken dreams - not to mention a garage and basement full of junk.

What Good Debt Is

Good debt increases your net worth. Good debt helps you make money; the use of good debt adds to current earnings, net worth, or foreseeable earning ability. On the other hand, bad debt decreases your net worth. Bad debt takes your money. Payments on bad debt reduce cash flow. Compare:

Good Debt

  • Earns its keep
  • Increases your net worth or cash flow
  • Secures a discount that can be converted to cash or net worth
  • Creates a leveraged position with a strong margin of safety
  • Examples: debt for real estate at a safely leveraged level, debt for education that can be applied for a return of capital, debt for a business you are competent to operate

Bad Debt

  • Is typically for consumption
  • Decreases your net worth or cash flow
  • Absorbs future earnings
  • Examples: car loans that rob your retirement fund; continuous credit card debt

What Good Debt Isn’t

It’s easy to rationalize anything we want to do with our money. Advertisers even train us to overcome our own objections! We have all done this; I have done it many times in my life. Whether your excuse is to feel better about yourself or the catch-all “I deserve it,” the fact is that rationalizing debt and calling bad good does not change the reality of your financial position. Stacking bad debt on a good asset does not make it a good debt.

Stacking bad debt on a good asset does not make it a good debt.

Refinancing of personal residences has become a popular sport in America. It can be good, if done for the right reasons. The problem is that many people refinance to pull out cash or lower their payments, only to increase their debt with their newfound cash flow. For many, it only means freeing up their credit cards to be maxed out once again. Then they have all of their old credit card debt on their home and a new stack of debt beside it to contend with. Some believe that all debt on real estate is good debt. That is insane. Some lenders are willing to go 110 percent of value on real estate, so without discipline, disaster lies ahead (for both the lender and the borrower). Unless you have a real change of heart and discipline, do not stack credit card and consumer debt on your home equity. If you are considering consolidation of bad debt that will encumber home equity, please read the white paper Debt Warfare first.

Monkey See, Monkey Do?

Some Americans are beginning to question the popular notion (fomented by advertisers and popular culture) that everyone must pursue his or her own inclinations, regardless of the damage to self or society. We are seeing the result of promiscuous spending, easy credit, and, in the end, skinny or nonexistent retirement plans. Too often, debt becomes a weapon that we unwittingly turn against ourselves.

We are seeing the result of promiscuous spending …. Too often, debt becomes a weapon that we unwittingly turn against ourselves.

In The Millionaire Next Door, Thomas Stanley and William Danko discovered that average self-made millionaires save or invest 15 to 20 percent of their disposable income. In The Overspent American, Juliet Schor found that average Americans spend 18 percent of their disposable income on consumer debt payments while saving little or nothing. In this sad juxtaposition lies a key premise of Good Debt, Bad Debt: “The past is the past - unless of course you still owe for it.” Many can’t start up the hill of financial freedom because they are carrying a backpack full of debt.

This would be obvious if only we could step back for a moment and look at how we allocate our income. Madison Avenue and the merchants of debt heap the polite fiction “you can have it all” and “you deserve it” upon the average consumer thousands of times each day. The goal of Madison Avenue is to distract you while the merchants of debt pick your pockets.

In a recent radio broadcast Alistair Begg said, “Our society thrives on materialism, cashing in on the sin of covetousness. Its modus operandi is to create within our hearts a longing for the things we do not have. Not only a longing, but also an attitude of need and entitlement. We need it. We deserve it. Especially if someone else has it.” Of course, we have free will (to a certain extent). It is up to us how we respond to messages from Madison Avenue.

Fat, Old, and Broke

Isn’t it amazing, at least for a time, how resilient our bodies and our finances are? Eventually, though, poor eating and poor financial habits begin to take their toll. In the book Good Fat, Bad Fat, Drs. William Castelli and Glen Griffin counseled readers to distinguish between types of fat that clog the arteries and those that are not harmful. In Good Debt, Bad Debt, I counsel readers to engage in similar discernment as to consumer debt. The statistics on obesity are eerily similar to the statistics on debt problems. The Employee Benefit Research Institute and the American Savings Education Council report that 66 percent of Americans are unable to save enough for retirement because of current financial responsibilities (debt). Peter Jennings, in a special report on ABC News, said that 66 percent of us are overweight. Let’s hope the two groups aren’t the same people. Being fat is bad enough. Being fat, old, and broke is even worse.

The buildup of cholesterol in our veins is barely noticeable until the restricted blood flow begins to cause problems. Many people go for years with cholesterol-clogged veins, never realizing the problem until it is too late. For some, a stroke or heart attack may be the first warning. For others, death is the first warning.

A similar process operates in our finances. So long as we have enough blood flow, er, cash flow to pay the bills, we don’t see a problem. But in the background, too much debt, like too much cholesterol, looms as the number one killer of wealth and possibility. Once we begin to clog our financial arteries with bad debt, we may experience shortness of opportunities and high debt pressure. Unchecked, this may lead to financial death or at the least a financial infarction.

Debtabetes

In The South Beach Diet, Dr. Arthur Agatston writes of becoming healthy and fit through eating the right foods and balancing good carbs and bad carbs together with good fats and bad fats. In Good Debt, Bad Debt, I am advocating financial health and fitness through balance of good debt and bad debt. Agatston speaks of “a silent, so-called metabolic syndrome (prediabetes) found in close to half of all Americans who suffer heart attacks.” I sense a similar development in many Americans’ finances, perhaps a financial prediabetes syndrome. Let’s call it pre-Debtabetes. Debtabetes is the inability of the body to break down and eliminate debt because of insufficient cash flow. Debtabetes is most common in the debt-obese and is closely linked to financial strokes - either fatal or temporarily debilitating. To carry the analogy a little further, we could consider spending as your glycemic (blood sugar) index and cash flow as your financial insulin. To be physically fit and financially fit requires awareness and implementation of many similar skills.

By Jon Hanson