Archive for July, 2008
I promise I’m still alive!
July 30, 2008 6:01 pmI promise I’m still alive, just totally swamped with work and vacation planning. This isn’t permanent; I’m hoping to put up some new posts soon.
In the meantime, enjoy one of my favorite finance-related video clips ever.
Oh how I love both Kristin Wiig and Suze Orman. This makes me laugh so hard my sides hurt. I actually think I liked the one with Jonah Hill better, but I can’t find the video anywhere. Darn.
New Discover Card Offer Rewards On-Time Payments
July 22, 2008 11:18 pmBy Nancy Castleman, CardRatings.com Senior Reporter
Motiva, a unique new credit card from Discover, is designed for people who carry a balance and can use some extra motivation to pay their bills on time. Here’s how it works: When cardholders make six on-time payments in a row, they receive the seventh month’s interest as a “Pay-On-Time Bonus.” Send in that seventh payment promptly, and it counts toward the next set of six timely payments, so there can be two bonuses a year.
You can use the Pay-On-Time Bonuses, along with other Discover cash-back bonuses, to pay down your credit card bill, which could be helpful in getting that balance paid off. If you prefer, Discover will send you a check or direct deposit the amount into your bank account. All you have to do is call or go online to let Discover know how you want to redeem them.
Motiva is a no annual fee card with a teaser rate of 3.9%, good for 10 months on purchases, which then goes up to anywhere between 10.99% and 17.99%, depending on the cardholder’s credit picture. That 3.9% rate is also offered on balance transfers made by July 1, 2007 - and it’s good through April, 2010.
When you sign up for Motiva, you can choose the due date, and pay by phone or online, even on the due date. (Discover will also take checks and money orders, as well as automatic direct payments from your checking account.) If you want, Discover will even send you email reminders to help you avoid fees and pay on-time.
Does Motiva Motivate People to Stay in Debt or Get Out of It?
Personal finance writers and consumer advocates recommend that folks with balances pay them off as fast as they can, using a “no frills” card with the lowest interest rate they can get. That rate could be less than Motiva’s teaser or long-term rates.
One viewpoint is that Motiva encourages people to spend more money, to carry bigger balances, and to remain in debt longer. After all, there’s no “Pay-On-Time Bonus” if you don’t owe anything, and the more you owe, the bigger your bonus will be.
I asked Margo Georgiadis, Executive Vice President and Chief Marketing Officer at Discover, for her response to these points of view. Here’s what she said:
“Some people are always going to carry a balance. We feel that our cardmembers should be rewarded for using our card, no matter how they use it. Motiva is part of our commitment to make sure we offer a range of smart products designed for the different ways people choose to use credit. We’re giving people more options to make the most of their money.”
My own view? If you usually carry a balance, have higher rate cards, and think the bonus might motivate you to get out from under, Motiva is well worth considering.
Here are my tips for using Motiva to get out of debt:
1. Transfer balances from higher rate cards.
2. Limit your card use to emergencies, only. Resist the temptation to spend!
3. Pay off as much of your credit card bill as you can … every month … especially while you have the teaser rate.
4. Apply every single bonus against your outstanding balance.
5. Don’t be late! If you’re late making a payment on your Motiva card, your rate will go up - to as high as 28.99%.
We welcome your comments about credit and money issues in our popular credit forum!
Nancy Castleman has spent 20+ years helping people get out of debt, save money, and live better on less. Along with her partner, consumer advocate Marc Eisenson, Nancy is known for her work on mortgage pre-payment, and for first explaining “credit card math” in her often acclaimed free e-letter, The Pocket Change Investor. Find it, along with many articles from back issues, special reports, link picks, and book reviews, on her Good Advice Press Web site. You can also see pictures of her 10,000 square foot organic garden and her nine grandchildren.
But what she’d most like you to do is read about her book, Invest in Yourself (Wiley, 1998, 2001), which she wrote with Marc Eisenson and Gerri Detweiler. Nancy considers this book, which discusses how to invest your time, energy, and money to create the life you want, to be her life’s work. Nancy’s books have received rave reviews in leading national publications, including USA Today and Money Magazine.
CardRatings.com is the most comprehensive source for comparing credit card offers. CardRatings.com is pleased to offer consumers free credit card ratings.
Please Note! You are welcome to republish this article as long as you state that CardRatings.com is the source for the article. You must also include a link to our website if you republish the article online. Click here for more details about using our articles and thanks for your interest!
Best Budget Date Night?
July 21, 2008 11:58 pmAlpha Consumer’s asking you to share your best budget date night, and she’s giving the winner a free book. I know you guys have some great ones, so post them there and then post them back here! When I think of one, I’ll submit and share it with you. This could be fun.
Also, while you’re there be sure to read a few of the great ideas her readers are posting. Here’s a good one:
“Now that it’s summertime, the Brooklyn Bridge Park Conservancy has started showing movies under the Brooklyn Bridge on Thursday nights. My boyfriend and I pack some snacks, order a pizza from Grimaldi’s for about 20 bucks, and watch a FREE movie outside. Last night we even got to watch some fireworks that were being fired from Governor’s Island before the feature, Invasion of the Body Snatchers.”
Fireworks, movies, pizza and the Brooklyn Bridge? Love it. I can’t wait to hear your thoughts.
Choose Your Own Adventure
12:37 amSo many things on my mind, so little time to write. Which is the topic you’d most like me to write about next?
1) The fact that I’m noticing more and more of my friends are out of work. Young, smart, talented and totally capable people are being laid off left and right. WTF?
2) How I don’t know my credit score and I’m afraid I somehow recently messed it up. Arg! Credit!
3) To brokerage account or not, that is the (potentially) million-dollar question.
Let me know and I’ll whip something up faster than you can microwave last night’s leftovers.
Beware of Credit Card Foreign Transaction Fees!
July 20, 2008 1:18 amBy Heshan Demel, CardRatings.com, Consumer Credit Researcher
Foreign exchange fees on credit cards should be of keen interest to those traveling beyond the borders of the United States. Exchange rates offered by credit cards are usually hard to beat. Of equal and perhaps greater importance, however, is the foreign transaction fee that your credit card bill might show once you have returned home from your trip. This fee, which is often a shock to cardholders, has been increasing as of late. So cardholders that travel overseas extensively need to be aware of foreign transaction fees.
Many travelers now rely on credit cards to pay for overseas travel and purchases. For many consumers, credit cards are easier to keep up with than traveler’s checks and they’re almost universally accepted now.
Foreign transaction fees charged by credit card issuers will mean you may pay a little extra for that umbrella drink in the Caribbean or that Parisian pastry.
Virtually every credit card assesses an international transaction fee for purchases done outside the 50 states, and that could even include U.S. territories like Puerto Rico and the U. S. Virgin Islands. Visa and MasterCard charge a 1% processing fee and most card-issuing banks add additional fees as well (on top of the 1% fee levied by MasterCard/Visa).
This fee is generally a percentage of the U.S. Dollar value of the transaction. So, even if you paid 100 Euros for a meal that was actually $125.00 (U.S. Dollars), the foreign transaction fees will be assessed on the $125.00 amount.
A March 2007 survey of credit card issuers by CardRatings.com revealed the following foreign transaction fees:
American Express - 2%
Bank of America - 3%
Chase - 3%
Citi Bank - 3%
Washington Mutual - 1%
Wells Fargo - 3%
Capital One - No Foreign Transaction Fee
Discover - Rarely accepted overseas so not part of this list
Despite fee hikes in the past year or so, credit cards are often still the most cost effective payment method for overseas travel, but you should consider fees when planning your trip and budget accordingly.
Update: You maybe entitled to a refund of any Foreign Transaction Fees imposed between Feb 1, 2006 and November 08, 2006. Please refer to www.ccfsettlement.com.
Bon voyage!
Heshan Demel- Heshan joined the CardRatings.com family in January 07 but has supported them for many years due to his close friendship with its founder. He has a bachelor’s degree in finance from Ouachita Baptist University in Arkadelphia, Arkansas and a Master’s Degree in Business Administration (MBA) from the University of Arkansas at Little Rock, Arkansas. He has over 9 years of banking experience with Regions Bank where he was a loan analyst. He is a member of the Arkansas Young Professionals Network and enjoys ballroom dancing, travel, and entertaining.
We welcome your comments about credit card issues in our popular credit forum!
CardRatings.com is the most comprehensive source for comparing credit card offers. CardRatings.com is pleased to offer consumers free credit card ratings.
Please Note! You are welcome to republish this article as long as you state that CardRatings.com is the source for the article. You must also include a link to our website if you republish the article online. Click here for more details about using our articles and thanks for your interest!
Quick Carnival Note
July 19, 2008 1:56 amHey guys, the Carnival is updated to include a few articles that were inadvertedly left out. Please go back and check out the Reviews and Retirement section and make sure to visit our friends!
My Bad Relationship with American
July 18, 2008 2:35 am
Lately, I’ve been feeling stuck in a bad relationship. You know the kind: the more effort you put in and the harder you try to make things work, the worse it gets. The kind where you get nothing in return for your loyalty and sacrafice. The kind where promises always disappoint, and joyfulness turns to bitterness.
That relationship describes the one I have right now with American Airlines (we’ll call it Amer). Despite how perfect we seem together — it’s for business travelers, it has great schedules, direct flights and courteous staff — I know that deep inside, Amer doesn’t really care about making this relationship work. He’s got too many other things going on to care about little ol’ me. He’s working late nights, trying to come up with efficiencies to balance the cost of fuel to keep his planes running. He’s lobbying congress for lower oil prices and higher subsidies. He’s focused on the bottom line. And our relationship is suffering.
In the beginning, Amer was the best. There was a certain glamour to flying together, a cache that came with the ticket. He offered gifts (sure, they were just peanuts, but they meant something) and we went to movies together. When I got cold, he offered me a blanket. When I got tired, he offered me a pillow. We stayed together long enough for me to earn Gold status, and I couldn’t have been happier. He even managed to take me on vacation once per year.
Our relationship wasn’t always perfect. I admit, I strayed a few times over the years. But those experiences only reinforced how strongly I felt for my superior partner.
But over the past two years, to be blunt, things have been strained. Amer first stopped doing the little things - pillows, blankets, food, movies. I could deal with that if he kept me on time and running efficiently, and especially if I managed to get a free ticket out of the deal, but for two years, due to CRAZY restrictions on travel and changes to the loyalty program, there’s been no vacation trip. (Really? Do you think I’m going to take a three-leg, 12 hour flight to San Jose??? Am I worth nothing to you?) Just a cold, online booking interface that frustrates me to no end. And a promise to sock my friends and family with extra baggage charges whenever they bring their trip supplies.
So last weekend, instead of waiting around for Amer to meet me halfway, and after waiting around for months Amer to come to its senses on price or rewards, I did the unthinkable: I applied for a loyalty program with Southwest Airlines, and then I booked two flights on it.
And now, I have a vacation scheduled. For $450 ($300 less than Amer), I’m flying to Seattle in August to enjoy a lovely coastal retreat (my favorite kind). And while I’m not terribly excited to be traveling with a bunch of families on summer vacation, (I’m a travel snob now, what can I say…it’s no fun to be around crying babes or rowdy teens when you’re on a plane and wound tight. It’s just not.), I think there’s a lot to like about Southwest.
So Amer, I know we’ll be seeing each other around, and probably will even be hanging out sometime soon. But know this: it’s not the same. I’m through being that naive girl who waits expectantly for your gifts, only to settle for broken promises. I’m moving on. Southwest may not have your glamour, but it certainly makes up for it in niceness (how’s that for a word?) and appeals to my sense of frugality.
Plus, he’s offering that vacation flight way easier than you are.
+++++++++++++++++++++++++++++++++++++++++++++++++
(Moral of the story? I FINALLY booked our week-long vacation! More expensive than I wanted — I was hoping to cash in free miles to cut the flight cost in half — but less expensive than it’s been looking for the past few months. I’ll let you know how Southwest’s Rapid Rewards program goes. I think more and more of us are going to be flying it lately.)
Carnival of Personal Finance #161: The “Feeling Renewed” Edition
July 17, 2008 3:14 amHappy Monday and welcome to the 161st Carnival of Personal Finance! This week’s theme is renewal, because I’ve been thinking about it a lot lately. It’s been a central focus of my site, “The Budgeting Babe” since I started blogging in 2004 with a little savings, a lot of debt and a weakness for power shopping.
When I developed The Budgeting Babe, I did it knowing that my 20’s were a time for reinvention, the decade when I would officially “grow up” and define who I would eventually become. Today, going on 29, I’m happy to be a financially independent, fiscally fit (most days), free-spirited, fun loving woman. But while I’ve spent all this time reinventing myself in hopes of growing into a mature, financially savvy adult, it never occurred to me this week that rebirth, reinvention and growth never stop.
All around me lately, I see friends and family in the midst of change and fresh starts, most incredibly positive (new jobs, new roles as a mother or farther), yet some negative (foreclosures, layoffs). And in the midst it all, it has occurred to me that life is all about growth and renewal. Just because you’re fiscally fit today can’t predict who or where you’ll be in five years. Picking yourself up after a long slump, or reevaluating yourself to manage life’s changes are key to your ability to succeed financially.
On that note, here are my editor’s picks for the week:
- So Sick of Debt announces that she’s DEBT FREE! Kudos! If anyone doubts the power of transformation, read about it here and catch the feeling.
- Kim at Alpha Consumer was reading my mind this week. She published a great letter from a reader who lost it all, along with some great advice for starting over.
- Amanda at Value for Your Life is deciding whether to reimagine the shape of her dreams.
- Twiggers at In Debt Because I Like Nice Things has started a three part series on selling your stuff. Those of you thinking about starting fresh must read her exhaustive and helpful tips for sorting through your past life.
- Young Black and Prosperous has hit a new milestone: she’s engaged! And she has the best savings plan ever for affording a wedding. Who cares how long it takes? They’re smart, young and in love.
- Benjamin at Trees Full of Money offers planning tips to those expecting a new baby. Sort of a “What to Expect” for the PF community.
Enjoy the editor’s picks this week, but don’t stop there! Each category listed below features wonderful writing, thought-provoking articles and fabulous financial tips. It’s been an absolute pleasure hosting this week and I hope you enjoy the rest of the articles. Read on for more of this week’s best of PF blogging.
BUDGETING
My two cents: It’s never too late, or too early, to start a budget. If you’ve been thinking about it, today’s the day to start! And here’s some inspiration.
CREDIT
Up to your eyeballs in credit card debt? Figure out a plan to pay it back and start living again. For those starting out on their repayment journeys, here are a few great resources.
DEBT
ECONOMY
The news has been bad lately, hasn’t it? Our economy is due for a renewal, I think…
FINANCE
FRUGALITY
Lookng to reinvent yourself? Read about those who have discovered the benefits of the frugal life.
INVESTING
This is where I’d like to grow my knowledge. Maybe the Budgeting Babe will someday become a Dividends Diva!
MONEY MANAGEMENT
Great advice here for those in search of a renewal of balance.
REAL ESTATE
Buying property? Then you’re in the midst of a financial reinvention! Read on and support your new goals.
RETIREMENT
For the ultimate rebirth: The day when you leave work behind and do what you’ve always dreamed of with your free time.
SAVING
It might not be a big deal for anyone else, but the day I opened a savings account with direct deposit was the day my life changed.
SPENDING
Renewal is about a commitment to a larger goal, and baby steps help you get there. Cutting back on spending is one of those baby steps.
TAXES
TRAVEL
Because we’re all in need of a good summer vacation to feel refreshed and renewed, I opened up a new category. It’s a little self-serving for me, but I eat these articles up!
And that rounds out this week’s edition! If you didn’t make it in this week’s edition, it’s likely due to the cut-off time I had to implement this evening in order for me to get some work in. Your submissions will be considered for next week’s Carnival.
I hope you all have a fabulous week, and if you’re new to The Budgeting Babe, be sure to check me out from time to time.
Thanks to Flexo for being such an amazing PF steward. You rock.
Changes
July 16, 2008 3:53 amPhew! I’ve been making changes to the site all day to make it easier to navigate. I’ve been wanting to make these changes for like two years but no one would help me (cough, cough, design school brothers) so I took it on myself. I even took the new header pic of myself! I’m pretty pleased it turned out so well. I wish the menu bar were a little snazzier, but for now, this is the extent of my design skills. I would love your feedback!
As you can see, I’m trying to free up a little room on the site. I’ve been getting a lot of inquiries from potential advertisers and as soon as I can figure out how to set up a contract and payment method, I’m going to open it up. Of course, the ads WILL NOT interfere with the site content or usability. I will be very choiceful about what I put up. That said, after four years of hard work, I’m excited to finally start making some cash to go towards my downpayment!
Monday is the big Carnival of Personal Finance HERE so tune in and help make it a success. If you’re going to submit articles, please get ‘em in by 10 p.m. on Sunday.
Helpful Budgeting Babe Posts
July 15, 2008 4:33 amHere are some of my most helpful how-to posts. If you’re just starting out, these might inspire you to learn more. Enjoy!
Welcome!
This is the post that started it all. A manifesto of sorts.
Credit 201
All you ever wanted to know about how your credit card actually works.
Free Credit Reports
Get yours here.
Lost Wallet?
Really, who hasn’t lost it at least once? Here’s what to do about it.
Student Loan Consolidation
One of my most popular posts.
Grad School Dreamin’
A few thoughts on furthering your education.
CD’s: Not what you think
An investment basic.
Shopping Addiction
Pretty self explanatory.
Health Expenses and Flex Spending
I got braces at the age of 24. This saved me a lot of money.
Determine Your Net Worth
One of the best aspects of a PF regime is watching your net worth grow. Learn how to figure it out here.
