Credit Card Debt into a Home Equity Loan
December 15, 2008
When you wrap up all of your credit card debt into a home equity loan knowing that the interest will be tax deductible, you have just placed your home at risk and could lose it if you fail to make your payments. Nobody ever plans not to be able to make her payments. The reason the lender uses your home as collateral is so she can take it from you if you default on the loan. As for the tax deduction, who knows whether the interest will be deductible for the life of the loan? Credit card interest used to be deductible but no longer is. Are you confident that home equity interest will always be deductible?
What credit cards are for
October 19, 2008
Credit cards are not evil. They are not bad. Credit cards can actually do good things for you if they are used correctly. Having a few credit cards with high limts and very low balances can give your credit score a good boost. Paying your credit cards on time and not using them until you have reached your maximum limit can help you get better interest rates on large ticket items like your vehicles or your home mortgage.
Credit cards should be used wisely and are best used for emergencies only. While most of the time you should never charge more on your credit card than you can pay off in a month this is not always possible. An unexpected medical bill or if your car breaks down and you may have no choice but to charge more on your card than is possible to pay off in a month. This is why it is wise to keep a very low balance on your credit card. If that emergency does arise you want to be able to use your card.
Credit cards should not be used for vacations, clothing, eating out or other non-essentials. These things can be saved up for and do not constitute an emergency.
Use your credit cards but use them with care.
Credit Cards: Savior or The Devil in Disguise?
September 20, 2008
Sure, having a credit card may sound fine and all, but you never know the trouble it is to have one until you actually have trouble keeping one. Once I got my very first credit card, I felt like the man. I walked around and told everyone how I have a credit card. But now that I have this godforsaken thing, i have to keep making payments to get the freaking thing to have money on it. I use it mostly for iTunes and food and gas to get back and forth from work. It is a life saver when you first get it and when you need it, but putting money back on it is just too much!
The Snowball
September 18, 2008
I recently read about a form of debt reduction called the “snowball effect”. I am fascinated by this and have decided I’m going to try it out for myself. Essentially, you place all of your debt on a list either from lowest to highest bill or highest to lowest interest charged. Once you have made your list you put all of your effort into paying off the lowest credit card bill (or the debt with the highest interest rate) while still making your minimum payments on you other bills.
Once you have paid that bill off you take the amount you were giving to it and apply it to the next bill in line, along with that bills regular monthly payment. You keep doing this creating a debt snowball. The point is that you pay off some small bills quickly which gives you incentive to keep going after the larger ones.
I recently racked up a little bit on my credit cards after moving into a new house and I think this will be a great way to get me debt free again.
Collection Agencies
July 6, 2008
I have been religiously paying for my credit card balance these past few months. However, last June, due to unavoidable circumstances, I have not been able to pay but I have noted to myself that I will resume paying again as soon as I get my paycheck.
After that, I have been receiving calls again from collection agencies. They once again resumed calling my office, which is useless because I rarely go there because I work from home. They also call at home and started threatening me again. I calmly spoke with them and explained the situation. They made me feel like I was running away from my financial obligations and even wanted me to pay the full amount at a specified date. There was no way I can do that and if only I have the money, I would have paid the credit card company a long time ago so as not to incur additional charges and for me to experience all of the hassle.
When our conversation ended, I explained that I have already made payment arrangements and it was just unfortunate that I failed to pay for June. I just told them that I’ll pay as soon as I have money. Sigh. It was really a hassle and I promised myself that after I pay off my balance, I’d never get a credit card again. Ever.
On The Road To Being Debt-Free
June 17, 2008
When I was still single, I maintained two credit cards. It was easy then to pay for it and I was able to manage my finances. Later on, I have to admit that my credit cards ruled over me. It gave me a sense of power every time I swiped my card and bought things or ate out even if my paycheck was far from coming. Honestly, I thought of it before as as a well. One that is bottomless.
Here’s when the problem started. I transferred to another company and it was a struggle at first because we got paid by the hour and our hours were reduced resulting to a lower paycheck. I had bills and credit cards to pay and my salary wasn’t enough to cover for all. I decided to do convert my balance into installment with low interest rate. This worked at first but when accountables outnumber the receivables, it’s difficult to make ends meet.
I started paying just the minimum due which I knew would cause me problems in the future because the actual balance is just piling up along with the accumulated interest. There even came a time when I was not able to pay for months because I simply can’t accommodate it anymore in my budget and I had to make sacrifices.
The demand letters to pay came along with calls from collection agencies. I entered into a bargain and I told upfront how much I can only pay for in a month. It’s still a long way to go to eventually being credit card debt-free. It wil take years but I’m slowly getting there. I don’t have a single credit card now. When I don’t have money, I stay at home. If I need to buy something, I wait for the next paycheck and see if I can squeeze it in the budget. I learned my lesson. It was the hard way indeed but I’ll overcome this and hope that I will come out a wise spender.
Creditors Are Evil
May 30, 2008
Check this out… I’m not a bad citizen. I pay what I need to. I do my best with stuff. But, we also all know that the economy is going straight into a hole. So, sometimes, when you get charged 25% interest it’s hard to pay the card.
Do you know, that credit companies are now calling me at my home office? That’s right… I’m expecting calls from students, and the phone starts ringing at 7:00 in the morning… and won’t stop until 10:00 at night. So, because of my aggravation, I wanted you all to know how illegal this is and to let you know that there are restrictions on credit card companies harassing you. Basically, there things is to set you on a psychological imbalance so that you pay them your life savings. However, they actually don’t have that right. If you are dealing with credit companies…here’s their restrictions.
1. They can’t call you during office hours.
2. They can’t call your office. AT ALL.
3. They can’t call anyone else in your home, such as family or relatives.
4. They can’t call you before the hours of 8 AM or after the hours of 10 PM.
5. You don’t have to promise them anything if they do call, meaning a ‘payment plan’ or even a debt settlement.
That’s right. It’s basically a harassment line. And, if they call you, you have every right to sick ‘em. And, I would do it on all levels. The only way that creditors are going to stop trying to run over everyone’s lives and keep them in a point of submission is if everyone starts learning the rules and doesn’t get trapped by their corporate decision to leave all of the poor people in turmoil and strife.
In the years ahead, this is definitely one of the areas that U.S. citizens are going to have to start to battle… if the credit card companies don’t completely fall on their own from the harassment, you can expect some rebellion will start… or at least I suggest it does.
To much to handle……
May 10, 2008
Credit cards are great as long as you are aware that the more you have the more you spend. Personally I have been in debt over my head and managed to escape it with some rather unsatisfying decisions that could not be avoided. The plastic is fun while it lasts but eventually you find yourself in need of help. I am famous for robbing peter to pay paul. Recently my families finances went to pot. We have established a new goal. If you can pay out six hundred dollars a month in credit card debt then you should of been able to buy the stuff (with cash) that you put on the dang card, right? This is right but thinking to yourself you’ll just keep your cash and put it on a card is the worst decision I have ever made. I just loved all these companies giving me credit cards, I could buy whatever I wanted, right? Well sure until the card is maxed out and you are still paying a monthly bill on stuff that is over 2 years old. Now any extra money you have goes to the credit card bill and not towards anything new you want because your card is maxed out and your money has to pay the bill on that. UGH!!!! As the PROUD owner of ten different credit cards, not to count the personal loans taken to try and pay them off only to run them up again, take it from me if you cannot pay for it with cash don’t buy it. Save then buy. Plastic is not perfect!
Avoid College Financing with Credit Cards
May 1, 2008
As a college student, you will find that many credit card companies are willing to give you pre-approved credit cards. In fact, some will give you credit cards with a large credit amount. Other cards will have you make no payments until after you graduate or complete your course work. Sounds tempting? There are some pitfalls that you should be aware of.
Charging books, clothing, occasional tanks of gas and so forth during college can be very tempting. But if you finance your college through credit cards, you are going to have some huge bills when you graduate. Worse yet; many are at extremely high interest rates.
Avoid college financing with credit cards and you will learn to budget. You will have significantly less credit debt when you graduate from college. Plan, optimize and think smart with your money while you are in college.
Be Aware of Pre-Approved Credit Cards
May 1, 2008
I cannot tell you how many pre-approved credit cards show up in my mailbox daily. They are simply amazing. It is a challenge to meet all my bills now. My credit isn’t even really that good. But, I still receive numerous monthly offers for pre-approved credit cards. Here are a few things that I have learned.
Most of the pre-approved credit cards are for a very low credit amount. This means that if I don’t have that type of cash on hand; I probably shouldn’t be using a credit card to pay for it anyway.
The majority of the pre-approved credit cards offers that I receive have horrible interest rates. You would be amazed at how high some of them are!
The membership fees for the pre-approved credit cards are out the roof. If they want to give me a credit card, why are they charging me membership fees? Obviously, they looked at my credit record; right?
Some of the pre-approved credit cards aren’t pre-approved at all. You have to deposit what you want your credit limit to be. If I had the money on hand, why would I need the card to begin with?
