Category Archives: credit cards

Life without a credit card

In the distant past, I wrote a post about shopping online without a credit card. At the time, I recommended Vanilla Visa gift cards; these cards come in denominations of $25, $50, and $100, and can be purchased in many places, such as CVS Pharmacy.

I have come to decide that these cards are NOT the way to go. A big disadvantage of the Visa gift card variety is that they are only good for the face value, and cannot be reloaded. Add to that a steep initial purchase price, and the cost-effectiveness of using the card goes way down. The environmental impact of all those disposable plastic cards is also a concern.

Since then, I have been using– and highly recommend– the Wal-Mart Money Card. Say what you will about Wal-Mart (and I’ll probably agree with every criticism you might have), but the Money Card has changed my financial life.

The Wal-Mart Money Card has many advantages over the “single use” cards:

  • A debit card that can be used anywhere Visa is accepted
  • Card is printed with your name
  • Reloadable
  • Direct deposit for paychecks and income tax refunds
  • Convenient bill-payment service
  • Low fees

Using the Wal-Mart Money Card for direct deposit and bill-paying has made budgeting so much easier… and no more weekly trips to the bank to cash paychecks! Most important, I am only spending what I actually have– no credit card debt or hassles.

Do yourself a favor and check out the Wal-Mart Money Card. You may very well decide it is the right choice for you.

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Filed under budget, budgeting, cash basis, credit, credit cards, frugal, money, money management

Shopping online without a credit card

As I’ve made the lifestyle shift to operating on a strictly cash basis, I’ve learned plenty about navigating through the world without a credit card.

Worried that you’ll miss out on great online deals because you don’t have/use a credit card?

The fact is, you CAN shop online without a credit card. The trick is, you need to have the cash to afford what you want to buy. (There’s always a catch, isn’t there?)

Here are a few options for safe online shopping… without a credit card.

PAYPAL

Paypal is an internet service that allows you to make payments online. Ebay owns Paypal, so I consider it a solid and reputable . Aside from ebay, many other websites also accept Paypal for online purchases.

Paypal is basically an online bank account that is linked to your primary bankaccount(s). You transfer money from, for example, your checking account to your Paypal account, and then Paypal will release funds at your request to the online merchant(s) you do business with.

Unfortunately, Paypal has been targeted by phishing scammers who attempt to access customer bank accounts. If you get an email from Paypal that requests log-in information such as your password, NEVER give out that information! Don’t click on any links in Paypal emails, even if they seem legitimate. Always open a new tab/window and type in paypal’s web address.

VISA GIFT CARDS

These handy cards can be purchased in various denominations (such as $25, $50, $100) and used just like any gift card. But unlike a store gift card, they can be used anywhere that accepts Visa. They are especially handy for shopping online– they have the familiar 16-digit card number and expiration date. You are, of course, limited to the face value of the card. Remember that a giftcard is as good as cash, so protect it as such!

I buy all my college textbooks on Amazon.com (at a staggering discount), using pre-paid Visa giftcards. For just three of my classes, I saved almost $200 over the school bookstore!

You can also get a pre-paid Visa card from banks, credit unions, and other places such as Wal-Mart. You load money onto the card, and then it is available for purchases.

The reloadable Wal-Mart Money Card is a super alternative to the cards with fixed denominations, as I have recently posted here.

Still other bank-issued pre-paid Visa cards can be custom-imprinted with your name, and the activity on your card will appear on your credit report. There may be some extra consumer protection with this card, but I’ve had no problem using Visa giftcards.

With pre-paid Visa cards, you will usually pay a fee. A $50 card might cost you $53.95, for example, and a $100 card might cost $105.95. The $100 card is a slightly better value at $105.95, since two $50 cards would cost you  $107.90.

Of course, always protect your Visa giftcards and keep them in a secure place– they’re as good as cash to anyone else who might find them.

DEBIT CARDS

Debit cards can be used for purchases on virtually any website. You enter your debit card information directly from the card, just like a credit card.

Your debit card is linked to your checking account, so you are of course limited to the amount of money you have in your account. Think about it: you would have to write a check to the credit card company (hopefully) at the end of the month anyway, so use your debit card and save yourself the extra work.

It’s important to know that debit cards are just as safe as credit cards, despite what the credit card merchants would like you to know.

Personal finance author Dave Ramsey has written some excellent articles about debit cards, such as:

The Basics of Your Debit Card

There are ways of living in the world without incurring credit card debt. Hurray for cash!

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Filed under cash basis, credit cards, money management, shopping

Today’s blog brought to you by….

I think you’ll enjoy this informercial. I certainly did.

And sure, the audience is laughing, but I wonder if it’s uncomfortable laughter…. 🙂

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Filed under budget, cheap fun, consumer debt, consumerism, credit cards, frugal, insanity, money management

Out of sight, out of mind.

The thing with watching my money is, as with babysitting an unruly toddler, I have to watch it every minute of the day, or else it gets into trouble… quickly and unexpectedly.

As soon as I forget to record an expenditure or two, I feel things sliding out of control, like I’m in a trance of sorts. I have just enough self-awareness to realize I need to keep my finances tightly (obsessively) reined in until I’ve learned discipline.

I also realize that the “unruly toddler” mentioned above is not money itself, but my own reckless spending impulses.

I’ve recently cobbled together a low-tech money-management system, based on my own special set of sometimes-contradictory neuroses and several techniques I’ve read about elsewhere.

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1. Budget Envelopes

When I (finally) got my last paycheck ($400) from THE PREVIOUS EMPLOYER WHO SHALL NOT BE NAMED, I skimmed $100 off the top and deposited it in my checking account. Boom. Gone. No touch.
I divvied up the rest of the cash in envelopes, earmarked for specific expenses: Phone (I’m good through the end of October), Gasoline ($10 a week for six weeks into the future), Food, etc.

I even budgeted myself $20 a week for miscellaneous expenses (“Week ending 8/24”, “Week ending 8/31”, etc). I organized the envelopes in an accordion-style file, and stowed it away in a safe place.

My mom always used to say that money burns a hole in my pocket, and I’ve come to realize she was right (about this, and about many other things, too). If I’ve got money on me, I will spend it. It’s so true to say “out of sight, out of mind”… if it’s not in my wallet, I forget it even exists.

2. Dollar dollar bill, y’all

Any loose change and one-dollar bills in my purse or wallet go into a jar at the end of the day… and forget I ever had it. Even if I throw only $1.50 a day into that jar, that will add up to: $10.50 a week, $42 a month, $504 a year.

3. Cooking the books

That semester I took Financial Accounting I wasn’t entirely a waste, because I’ve devised my own half-assed bookkeeping system, and it works for me.

I divided up a notebook (10 cents at Wal*Mart) with colored tabs. Each section is devoted to one area of my finances: Wallet (cash), Checking, budget envelopes (Gasoline, Phone, Food, Weekly miscellany).

Each time I spend money, or move money from one “account” to another (such as taking $20 from the envelope marked “Week ending 8/17″and putting it in my Wallet), I make a note of the transaction, and keep a running total for each category.

At the back of the notebook, I keep a weekly running total of all categories combined, so I have a snapshot of what I’ve got. Not the most professional system, but it works for me and makes sense to the way my mind works. That’s the most important part of any system– that it’s something you can do.

4. Keep a price book

I adapted this from Amy Dacyczyn’s Tightwad Gazette. I keep track of the prices I pay for groceries and other products I buy regularly. I’m getting to know exactly what things cost, and it’s making me a sharper shopper. How can you know what’s a good deal, when you don’t know what things normally cost?

5. Cash only

I have a debit card with my checking account, but I’ve found that (just as studies have shown with credit cards) I tend to spend more recklessly when I’m just swiping plastic at the register.

I try to avoid using my debit card, and make an effort to pay with cash as much as possible. Debit and credit cards make money unreal– disconnected and theoretical… but physically parting with cash is real– tangible and visceral.

I personally need to feel grounded in reality when it comes to money, and that means hard, cold cash. Otherwise, I will just space out and lose track of my finances entirely. Come to think of it, maybe that’s exactly why the powers-that-be encourage debit and credit cards. Think about those check-card commercials that show the lone maverick cash-payer slowing down the entire cashless-transaction-machine robot march.

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Overall, the budget is pretty tight around here until school starts and financial aid kicks in. And believe me when I say I will be just as cautious with my grant, scholarship, and Work-Study money, as well!

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Congratulations! You’re Pre-Qualified!

Y’know, it’s been ages since I got a credit card offer in the mail.

Maybe it’s because I’ve moved five times in seven years and potential creditors have had trouble finding me.

Maybe it’s because my credit stinks and nobody’s wanted me anyway.

Nevertheless.

This morning’s mail brought a real doozy. Kind of a letdown for someone who, at age 20 had two gold MasterCards, a platinum Visa, and an AmEx….

But we mustn’t dwell in the past.

Anyway, this offer found its way to me at my current street address (a single family residence), but with an old apartment number tacked onto it. I haven’t lived in Apt C-9 since 2001, by the way. Good detective work, guys.

Seriously. I would love to know exactly how many people would actually agree to the terms of the Sketchy Evil Bank MasterCard.

The Offer:

Your available credit line of $300 will be reduced by an annual fee of $150 that will be billed directly to your account. So, your initial available credit will be $170 once you make your minimum monthly payment of $20 to activate. A monthly maintenance fee of $6 will be assessed once you make your first purchase.

In English

Initial credit line: $300

Upon approval, you’re immediately $150 in debt.
Once you receive your card, you must send in a $20 payment.

Once they’ve received and processed your payment, you may activate and use your card.

Once you make your first purchase, they begin charging a $6 monthly maintenance fee.

Now, they don’t mention anywhere that they begin accruing interest as soon as they tack the $150 annual fee onto your account, but I will assume they do.

So conceivably, it could be a month before you can actually even use your new credit card… 5-7 business days here, 5-7 business days there… but they’re already charging you interest on that $150!

Some Numbers

Annual Fee 150.00

Maintenance Fee (12 x $6) 72.00

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Annual cost just to possess card $ 222.00
So basically, taking into consideration the cost of possessing this card, you really only have $78 to play with over the course of the year. Thanks, guys. I’ll get right on that.
Oh, and then there’s that pesky interest.

Other Terms and Conditions

19.50% APR on purchases

25.50% APR on cash advances

25.50% Delinquency APR for purchases

31.50% Delinquency APR for Cash Advances

5% Transaction fee for Cash Advances ($5 minimum)

$35 Late Payment Fee

$35 Over-Limit Fee

In Conclusion

In my mind, these terms verge on criminal. I’m still gagging on that 25.50% interest rate for cash advances. That’s just mind-blowingly nefarious.

These scumbags are getting $150 a year (plus interest) just for taking a chance on someone they’re probably hoping will get drunk on their own credit line and incur lots of late and over-limit fees.

I’ve seen “MAXED OUT”. I know how these people operate.

I’m not accepting this very generous offer, by the way.

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Filed under consumer debt, consumerism, credit, credit cards, debt, evil, excess, frugal, hopelessness, insanity, materialism, money, money management, personal finance, saving, shopping, surviving, waste, wastefulness