How do you know you are in deep-debt trouble?
June 11, 2008
In general, when your expenses is growing higher than your income (both passive and active) you are in deep trouble as you will soon fall into lots of debt. If two or more of the items below apply to you, then it is time for you to think about your lifestyle and your sources of income:
1. You pay only the minimum of your credit cards or loans and yet they account for at least 20 percent of your total expenses;
2. You use cash advances from one credit card to pay another credit card;
3. You do not know how much your total debt is;
4. You receive a letter, email or call from your credit card company due to unpaid balances;
5. You are, in general, late in paying your debt obligations;
6. Lately, your credit card has been declined in stores or restaurants, as you have maxed your credit limit;
8. You have more than three credit cards and you all use them; and
9. You have more than three credit cards and you still apply to have another one.
If you can apply two or more of these to yourself, it might take months or years to bring back to normalcy your financial life. You need to plan on how you could pay all your debts and at the same time follow that plan.
Do Not Mismanage Balance Transfers
June 4, 2008
Balance transfers allows you to consolidate your high-interest rates credit card debts into a credit card with a low-interest rate. You can have the freedom to choose how long to pay your consolidated debt according to your capacity to pay. However, there are drawbacks with its use:
1. Make sure you pay the amortized balance transfers in full to avoid getting interest charges on your consolidated debt.
2. Freeze your credit cards by not using it anymore thus not accumulate further debt.
3. Use your credit card with consolidated debt sparingly so that you will only have to pay for the amortized balance transfers monthly.
4. Do not miss paying the amortization or else the bank may increase its interest rates that will defeat the purpose of your transfer.
PayPal Concerns
June 3, 2008
A lot of us try to use PayPal to keep our credit card info secure online. But is it much better than a credit card?
Amy Derby of Freelancaholic (and and tons of other sites) had her PayPal hacked, and found that PayPal’s staff was less than helpful in resolving the issue. After the hackers sentthemselves money, PayPal then froze her account, stopping her from accessing her own money. This is a disaster for any of us, but especially bad for a freelance writer who relies so heavily on PayPal.
Travel blogger Simpson’s Paradox has also been shut out of her PayPal for trying to use the account abroad.
I’ve seen some tips for protecting yourself when you use PayPal, but they’re nothing more than the obvious. Use a good password, don’t give it out, etc. I think
PayPal may be safer than using a credit card number, if you shop online, but their customer service and security “features” leave a lot to be desired. Be careful, even with your PayPal
