Comments on: A word of financial advice

By: Andrew

Andrew — Mon, 07 Dec 2009 15:12:43 +0000

Awesome that you’re nearly out of debt. My wife and I paid off our last debt (apart from our mortgage) a couple of months ago, after a year of intense focus on retiring debt. For those who still have credit card debt, your advice is worth heeding. But ultimately, there’s no substitute for kicking the credit card companies to the curb and closing the accounts.

With a written budget, and a willingness to tighten one’s belt, most folks would probably be surprised at how quickly they could start retiring debt. I highly recommend Dave Ramsey’s book The Total Money Makeover. It’s what got us started, and is something anyone can follow. If you really want to be cheap, you can do as we did and get a copy from your local library.

By: Meryl Yourish

Meryl Yourish — Sun, 06 Dec 2009 19:15:20 +0000

Eric, I never had to control impulse buying, but it sounds to me like you’d need to dump it deep into a plastic container so you can’t read the card number.

And there’s always the microwave. It’d probably be better to put the card inside of something inside of something inside of something that you have to use a ladder to get to, if impulse buying is your problem.

By: Eric J

Eric J — Sun, 06 Dec 2009 15:04:24 +0000

A couple of other tips – if your CC website lets you schedule multiple payments, schedule the minimum payment for the next six months, then supplement each month with what you’re paying off.

And the greatest way I’ve heard of to control using credit cards for impulse purchases – put your credit card in a bowl of water, then put that bowl in the freezer. If there’s something you want to buy, you have to wait for the ice to melt before you can buy it. Most of the time if it’s something inessential, by the time you can get to the card you’ll have changed your mind. Of course the kind of person who can stick to this probably doesn’t have a problem with impulse purchases.

By: Meryl Yourish

Meryl Yourish — Sun, 06 Dec 2009 06:25:58 +0000

Actually, the credit card companies are out to screw you as often as possible. I helped my relative transfer a high-interest balance to a lower-interest card, and we were told the lower interest rate would be for the life of the loan. That’s the card we’re switching it off of now. They lied. When the government changed the laws, they made it even harder for people with good credit to get low-interest rates. My low-interest card tripled the minimum payment after the new laws took effect. It happens that I was paying at least that much anyway, as I’m paying it down, but that’s beside the point. I took advantage of a life-of-the-loan 3.99% interest. I’ve kept my part of the agreement, paying it on time and steadily. At the time, bank loans were 17%, and no bank will give you an unsecured loan. I had no home, and nothing for collateral.

John, you’re not being realistic. Sometimes, things happen. You get an unexpectedly high car repair bill, for instance, and you have to pay it because you can’t afford a new car. Or you’re living on a fixed income. My father could pay cash for all of his cars and his two condos, but he lived like a pauper and settled for crappy neighborhoods. I like creature comforts and living in good neighborhoods. But I lived in a shithole while my credit card debt piled up—because I was unemployed. And I didn’t have a whole lot of control over the unemployment problem.

We’re not talking about people who spent their way into credit card debt buying new and expensive toys, clothes, and jewelry. In both cases, we used credit cards to pay the bills. Sometimes, that’s what people do. And the last thing we really need to hear is how we shouldn’t have gone into debt in the first place.

And even people who spent their way into debt buying luxury goods can still use the advice in this post. You’d be astonished at how many people don’t know you can bargain down your interest rate simply by asking.

By: John M.

John M. — Sun, 06 Dec 2009 03:19:33 +0000

Hmmm…To add a wrinkle here, most of the above would not be necessary if one never used credit cards at all.

By: Soccerdad

Soccerdad — Sun, 06 Dec 2009 02:11:04 +0000

Ah but we need government to protect those who don’t read the terms from the predatory credit card companies. Why are you doing the government’s work?