Category Archives: credit

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

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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Filed under budget, budgeting, consumer debt, consumerism, credit, credit cards, financial aid, frugal, groceries, money, money management, personal finance, saving, shopping

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