BusinessWeek lists 25 companies that have great customer service. It may not surprise those of you that read this blog regularly to see USAA at the top of the list.
If you or one of your family members is in the military look into there product, both insurance and finance, and see if they can save you money.
I personally have found their insurance, car loan and credit card terms and services great.
I don’t use there brokerage, banking or custom funds.
You’ve seen me talk previously about dragging my credit score down by refinancing opening a slew of credit card accounts and creating huge balances to take advantage of 0% credit offers.
Today I got my credit score again and it popped up more than 15 points. Why? Time. All those accounts that were opened over a 5 month period have aged another month and the scoring model has decided that I’m now a few percentage points less risky as a borrower.
Remember to give yourself a big discount on your car or home loan by paying down credit balances and not opening accounts several months before you plan on getting a loan.
The time factor is huge. About a month. Over fifteen points.
If you have debt, especially high interest credit card debt, you have a problem. Your financial well health is being drained away.
A common suggestion offered to people for getting their debt under control is to put together a budget. This helps identify costly holes that your money uses to escape.
Unfortunately the concept of a starting a budget frightens, intimidates and bores many folks. If you fall into this camp it is okay. There is a smaller step you can take to help you get your situation under control.
Spending Log
1- For one week sit down every evening and write down everything that you spent cash on that day. You only need to track cash because everything else should have other records.
2- At the end of the week sit down with your cash list, checkbook, credit card and bank transactions and add them up. If you have online access to your bank and credit cards this will be easy. If you don’t have online access to your accounts just wait a few weeks until you have all your statements.
3- Multiply your cash items by 4. We only tracked these expenses for a week to limit the amount of work you have to do.
4- Add in your big monthly bills like your mortgage, car and utilities.
Now you know approximately what you spend. Look through it. Is there anything that stands out that you are really not happy about? Is there a restaurant you grab lunch at because it is near work that isn’t very good but is quite expensive? Did you buy a bunch of music that you really don’t listen too that much?
Use these items to identify a few simple areas that you can save some money and get started.
Smile when you write a bigger check to the credit card company. You are building your financial health and that should make you happy.
You can make many changes and not have your credit score respond significantly. At some point you cross a magic line and your credit goes down hill big time.
I had applied for a USAA 0% card and the inquiry for that card was one of the precipitating factors in the recent drop in my credit score. Now the account has been reported open to the credit bureaus. Ding, ding, ding. I just got the alert that my credit went down about 15 points. This is before my balance transfer even hit.
It will be interesting to see how this further impacts my credit score.
I expected all this activity to hit my credit score. I did not expect it to go unchanged for such a long time and then take dramatic drops with every subsequent action.
Refinancing. Check.
0% Chase card. Check.
0% Citi card. Check.
Bill Me Later account. Check.
0% USAA credit card. Check.
If you look at my credit moves over last six months you might guess that I was trying to drive my credit score down. It is not true. How my credit score changed is an important lesson.
When I was considering how to leverage my credit I first decided I wanted to keep my credit score as high as possible before refinancing because the rate and fees there are so large. This made me put the refinance effort first. I also knew that I wanted to be taking more advantage of my credit. This made me examine 0% credit card offers.
I was actually a little bit surprised after refinancing the house, applying for getting, and maxing out two credit cards how little my credit score actually moved.
But I find now, after the inquiry for Bill Me Later, the new account opening and the inquiry for the USAA credit card my credit score finally taking the serious hit that it so justly deserves (Just kidding, I think thousand of on time payments over tens of years counts for a bit too). Because of the inquiries and the new account opening my credit score plunged over 10 points on a single day. I found this out thanks to the myFICO ScoreWatch service.
I my credit score to fall given all of the activity that I’ve instigated and had been quite surprised the previous months that I hadn't seen more of a move in my score.
It's easy to see from this example that it takes quite a collection of individual events to move your credit score dramatically. I consider this all an interesting experiment in what moves credit scores. I'll I will not be applying for new credit in the near future. We'll see how quickly it takes for my credit score to bounce back to where it was before. The hope is by late this year my credit score will have rebounded again giving me the opening to start new 0% accounts and keep leveraging my credit to help earn income.
I just got another credit card offer mailer. It had a 0% teaser on the outside so I opened it to check out the terms. It had an annual fee of almost a hundred dollars. I tossed it, and so should you.
If you have any credit cards with an annual fee that is just money burned. I have never seen a credit card offer a higher cash back rate or other awards in exchange for these fees. Airline and business cards seem to be the biggest culprits.
So look through your mail, or checkout bankrate.com or creditcards.com and find a better deal. Annual fees stink.
I had been seeing the little blue checkmark on many websites. Then I saw a comment from on of my readers on it so I decided to check it out. The blue check is a service called Bill Me Later.
Bill Me Later is a credit card alternative for online purchases. It requires you to enter less information with the merchant, just the last four digits of your social security number and your birth date along with your name.
The Advantages
- The system is very easy to sign up for.
- It is very easy to use.
- It is more secure against merchant database security disclosures.
The Disadvantages
- Worse terms than the best credit card offers. The account does not charge interest during the grace period but there are no rewards and the interest rate is 17.99%.
- No pre-approved credit limit. Every transaction is checked and can be approved or denied unlike a credit card when you know in advance how much you’ll be allowed to buy.
- The potential for more frequent credit checks. There is no data on this but only time will tell how often they review their customers credit records.
Ease of payment is not the only hurdle in the path to internet shopping growth, but making payment easier and more secure is certain to help boost sales.
The service also boasts a merchant fee of only 1.5%. This can be significant as I’ve seen other cards charge merchants over 3% in some cases. For merchants with a large volume this can be a huge benefit and if Bill Me Later gets big enough there will be some good competitive pressure on Visa, Mastercard and friends to lower their rates a bit.
Bill Me Later still has a limited number of merchants and I haven’t been through a full service cycle with them yet but they certainly look like they add value.
I’ve read and written many articles on techniques for eliminating credit card debt. But there is a simple first step that you must take to be successful. Forget about it and all the other techniques combined will not help much.
You have to stop build credit card debt. If your credit card debt is out of control you have to regain control. It may sound really hard, but it is something you must do.
Start by laying out a budget. List all income you receive. Now try listing out you major expenses. Just start with anything that is 10% or more of your total income. Look for a way to make your income more than your expenses without using credit.
My Christmas wish for you this year is that you can find a way to take this important first step. If you do you’ve taken a huge leap towards being debt free.
Good Luck!
Remember, if your signed up for your Discover Card’s “Get More” program you get 5% cash back at a bunch of places like restaurants, movie theaters and Amazon.com. In normally shop at Amazon for 40-60% of my Christmas gifts already and this is a huge bonus for me.
Read more here.
If you are paying more than ten percent on your credit card balances you have to get the rate down. Your first step will be to try transferring your balance to another card with a lower rate, preferably 0.
You may have credit so damaged that you can’t get a new card. In that case call your credit card companies and ask to be put on a payment plan with a lower interest rate.
Credit card companies may well turn you down, but you don’t know until you ask.
Here are some points to remember:
• If you’ve been a long time member remind them of that.
• If you carry a balance and pay on time your are likely a profitable customer remind them of that.
As with all negotiations:
• Be polite, if the person you are speaking with has discretion you want them to use it in your favor.
• If you are not getting anywhere ask for a supervisor. The supervisor may be better able to help but the customer support person may not tell you that.
If you negotiate your rate down this will help you eliminate your debt much more quickly. Whether or not this works you should find a way to pay down your debt faster.
Good Luck!
Making extra payments is a powerful way to get out from under a mountain of debt. Even small amounts pay off dramatically.
Search hard to find one dollar a day to set aside for paying down your debts. Drink water at a restaurant instead of having a drink. Clip coupons. Work overtime one night a month. Whatever you want to do.
If you paid thirty extra dollars a month on a five thousand dollar balance at eighteen percent interest you would pay it down four times faster, paying of the debt twenty years earlier. Twenty years.
Find that dollar!
I have to use credit cards. I am not a spendaholic. I don’t pile up tons of credit card debt. But I have to use the plastic.
Why?
I keep my money longer. I earn money on the money that I keep. I have more flexibility if my life hits a rough spot.
I get protection from merchants. Some merchants don’t care about their customers. When I use my credit card I have an 800 pound gorilla on my team. When I call attention to the fact that a credit card company is on my team businesses become far more cooperative.
I get protection from criminals. If someone commits fraud with my checking account I have to duke it out with my bank to keep from being held responsible for the fraud. With my credit card I simply let the credit card company security department take care of it.
I get perks. Rental car protection, flight insurance, cash rebates and so on. My checking account and the Federal Reserve don’t offer these deals.
Don’t pile up credit card debt. Don’t spend money you don’t have. Do use your credit cards wisely.
Ten dollars a month is all it take to pay of your credit card debt a lot faster if you are paying the minimum. How much is a lot faster?
If you have a five thousand dollar balance at an 18% interest rate and paid the minimum it would take about 26 year to pay it off. If you add an extra ten dollars over the minimum each month you’ll pay off the card in less than eight years.
You heard right, paid off in eight years, 18 years faster than the minimum payment.
Never pay the minimum. Always pay more. Stretch, scrimp and save get at least ten dollars a month to knock out your debt. Every dollar counts. Every dollar you pay off today counts way more than the dollars you pay in 5 or 10 years.
Good Luck!
No Swipe RFID Credit Card
Bankrate has an article on new no swipe credit cards. The new cards, which use RFID technology to transmit your credit information, certainly present security risks, although I think the industry will work those out with time.
I was shocked by the quote that these cards cut transaction times by 25% but if it works great.
As an aside who uses checks any more? Unless I must I don’t.