I still can not believe how stupid people think I am. I hope that they do not think the same of you.
What causes me to say such a thing has to do with the lame wad advertisements that come in the mail wanting me to do something extremely foolish such as take out a loan with them. The latest one came today from an 'American General Financial Services' company that thinks I am dumb enough to fall for the spiel that I can end the Credit Card Hassle by locking in fixed monthly payments and APR with them. They are even so kind as to let you pick a monthly payment due date that works best for you.
Thankfully they no longer hide the worst of it though there is the ever present small print, it just isn't as small as it used to be. So in big bold letters they tell me that my payment will be $156.31 per month for a loan of $5,150 (a strange number to be sure)for 48 months at (now get this) 19.85% APR. Who in there right mind would even consider a deal like this? People very hard up that haven't learned any better that's who and that is why I hope you are never in a position to do anything but laugh at the joke and the company that sends these out.
Now if that wasn't bad enough, they have the wonderful asterisk that refers to the note of small print at the bottom, this one at least is big enough that even I can read it, which might have been a mistake because it just adds to the insanity, so here goes.
"*Not a guaranteed offer. All loans subject to our normal credit policies. Rates and terms advertised are for very well-qualified borrowers and require collateral. Rates will vary based on individual creditworthiness and loan size. Rates will be higher for unsecured loans. Reply by..."
Can you believe anybody besides the government would have the gall to make you such an offer? What kind of fool do you take me for? How did you get my name and if you bought it off a list I want a cut to cover the abuse.
This is not the first offer from them nor the first from companies like them but I seem to be in the zone for these kinds of offers lately. Another one that came recently was a very official looking tri-fold envelope where you rip off the edges just like an official government notice. It had a picture of the statue of liberty on it, the words 'Form 1008-S Payment Reduction Notification' in the upper left corner and a warning that there is a "$2,000.00 Fine or 5 Yrs. Imprisonment or both for any person who interferes with or obstructs delivery of this letter or otherwise violates - 18 United States Code 1702 et seq. Advertisement - Newsletter". Pretty scary stuff...so I immediately handed it to my wife to open.
I saw it coming a mile away. It was more crap, an offering to do a refinance with them compete with many goofy references to the economic stimulus act which I had trouble following because I tend to read things a little more carefully than the next guy. The small print did indicate that it was a legal advertisement (aren't they all) and that "Schroeter Law Group is not sponsored or affiliated with you current lender (no edit check here) and this advertisement is not authorized by your current lender and your loan information was not provided by your current lender." I guess not since the name they used was not my current lender, nor were any of the amounts listed.
By the way, they go to the county recorders office and buy this information from our local public officials thereby having access to your name and address if you have bought or sold or refinanced a house recently. Again, we should somehow be able to stop this at the source, or at the very least get a cut back for a referral fee.
The last one I will mention came from a Dorcy Law, whoever that is, and I only find that out by their slightly referred too web address at the end of the letter. The rest of the letter came with the same illusionary mentions of the Obama Administration's Homeowner Affordability and Stability Plan of 2009 but nothing much else to go on. I say illusionary because I don't recall in all the hoopla and media hype about the stimulus packages passed and/or talked about, that an actual name was placed on an actual program actually instituted by the government, let alone any details on how it would work or who it would benefit. Rightly or wrongly I probably just assumed that I wouldn't qualify to receive, I would only qualify to pay for it.
Any way, it came from the Loan Modification Division, something that surely sounds more like an office section than the name of a company but that is what they had listed in the address heading along with a Washington DC address. (Does anything good come out of Washington DC these days?) In fact, there were no other names given than mine and the name of the original lender from the court records from way back when, and the only way I found a possible real company name (or at least a tie to one) was the reference in the web address at the bottom of the sheet. The letter wasn't even signed (how hard is it to get a computer to sign its own letters, I mean really) but was closed with the words "Sincerely, Sr. Home Retention Specialist". I wonder if they felt bad about printing the 800 number to contact them based on their level of effort to remain as anonymous as possible.
I do get upset when I see these things come in the mail and almost get to the point of wanting to call them up and expressing myself to them (or at the very least play with their heads and gain a little amusement for the effort) but then I get over it and decide that it really isn't worth the effort. These people are hopeless...but I don't have to be. And neither do you. There are so many loser organizations out there currently vying for your attention that we just shouldn't waste any more time on them that we have to. Thankfully some are way, way more obvious than others. Just do me a favor and watch out. If no one falls for their nonsense they certainly won't last long.
This is Ed Nef with a view from the Farr West.
Showing posts with label credit. Show all posts
Showing posts with label credit. Show all posts
11 March 2010
13 January 2010
Personal rules for Credit Cards
I said that I would add my rules for a credit card company and so I shall.
1. I will pay my balance in full each month. This is the standard that you set for yourself, and the most important one at that. There should never be any reason whatsoever to carry a balance on a credit card and incur the high interest rate charges that come with it. The only reason to carry a credit card is as a measure of convenience. If you do not have the money to make the purchase, you do not make the purchase. It is that simple. You must commit to yourself that you will not spend money you do not have. If you have to finance something there are better and cheaper ways to go about it, but saving for the price in full first is the best option you can make. The credit card is only to be used in place of carrying cash or writing lots of checks or other matters of transaction convenience. It is only used to consolidate purchases so that you are writing one sum total payment check, when due, on time, in full, each month always. No Exceptions.
2. Thou shalt incur no Annual Fees. First and foremost that means no annual fee, period, exclamation point and end of discussion. The very first thing I look at for any credit card offer is disclosure on annual fee. If there is one, I don’t need to read any further for it is off to the shredder. Beware of those that claim no annual fee but adds in small print ‘for the first year’ and then they charge an annual fee after that. Only be willing to take the bite on that one if it is your fully committed intention to cancel before the year is up and then follow through. By the way, they are counting on you to forget about it so if there is the slightest chance you will, don’t take their offer. Actually even your intention isn't enough, no annual fees period.
3. Thou shalt have no charge if paid in full during the grace period. This one should be standard by now but double check to make sure that it is. If you pay the bill in full by the due date of the bill there should be no charges what so ever. If there is no grace period or there is any way to assess fees that shouldn’t be there, then drop them like a hot potato.
4. Thou shalt not pay an excessive interest rate. Even though we said that we are going to pay off our balance in full each and every month so as to incur no fees and no interest charges, you don’t want to accept a card that has a 21% or higher interest rate just on the off chance that something should go wrong. Stuff happens and when it does you want to minimize the consequences as much as possible.
5. Thou shalt pay no excess fees. This goes along with rule four. If the offer made it this far without causing you to throw it away then look at the fees and see if they look excessive. Don’t compare them to other fees in the industry to decide if they are normal charges but compare them to your own standard of what seems reasonable. If a fee seems high by your standard it probably is. Fees everywhere have been inching up on all financial services to the point that they have lost their sense of perspective and proportion. It is time to use the power of the consumer and decide not to accept unreasonableness.
6. Thou shalt ask “What’s in it for me?” Lastly and I do mean last, what perks does the card offer? My first credit card was a Discover Card back when they first came out, for one reason, they met my criteria of no fees and they paid cashback. I liked that. I no longer like the Discover Card and I will report on it in another entry. I still like to get a kickback on my purchases. There are a myriad of perks being offered these days, some are better than others so compare carefully. Many of the perk cards come with a hefty annual fee, don’t bother with them, you can do better. Some provide airline miles, some simply provide points, I still prefer cash back as it can be used on anything at any time.
7. Thou shalt not change thy spending habits. Now that you have your credit card you must not change your spending habits, only your payment habits. This is especially important if you happen to have a card that has perks. Just because the government thinks it can spend its way into prosperity does not mean you should. There is no way you can create an income for yourself by spending $100 for a $1 return, so please don’t try. You can however look for ways to use your card in places that you used to use only cash as long as there is no added fee to do so. The daily lunch run can be handled by your card rather than cash at many places fast food joints included. Grocery stores almost expect you to use a card now. I will pull mine out even if all I am getting is a pack of gum. Again, you must remember that you are not changing your spending habit to earn perks; you are only changing your paying habit to earn perks. Big difference.
8. No matter what the available credit balance is thou shalt not try to use it all. The Credit balance that is issued on a credit card is an interesting side note and nothing more. It is a ceiling amount that can easily be raised and lowered but it is inconsequential if you are in charge of your account because you will never come anywhere close to using all of it. There is usually no need. It is an artificial measuring device that the card companies use; it is not a measuring device that you use on yourself. You set your limits. Remember that you have higher standards. Just because they say you can doesn’t mean you say you can.
If you have any self control issues at all then forgo all the above and use strictly cash. Give yourself an allowance that you carry in your wallet or an envelope or whatever system you choose and live from that knowing that once that money is gone, it is gone and will not be replaced until the next allowance cycle. Until you master yourself you will not master your money but that is a whole other set of standards and tools.
One side benefit of the above, I have a monthly balance that is paid in full each and every month which reflects nicely on my credit score. The monthly balance is far less than the available credit which also helps the credit score. Do I care what my credit score is? Not really since it should be perfect but isn’t. It is the most abusive and highly inaccurate financial tool used today which makes me wonder why it is given so much power with so little oversight or liability on its part. My credit score is fairly high I am told. I know that it is just a measuring device that has become an industry unto itself. I want to live my life and have my finances such that having a credit score or not will make no difference whatsoever in my life. Contrary to popular belief debt is not the natural order of life. If you think that it is then it is time for a change of mind. You will find that life gets easier if you avoid debt.
Well there you have it. This pretty well sums up my take on credit cards. By the way, I do not have a pocket full of them. Two is usually plenty, three tops, from different companies or banks. That way you have a back up if one becomes unusable for any reason such as a computer failure on their end. It’s rare but does happen.
Just remember that this is you we are talking about. You matter. You come first. You decide the rules you are willing to play by and you decide which ones you will have nothing to do with. You are the consumer, you have the say. You live with the consequences either way.
This is Ed Nef with a view from the Farr West.
1. I will pay my balance in full each month. This is the standard that you set for yourself, and the most important one at that. There should never be any reason whatsoever to carry a balance on a credit card and incur the high interest rate charges that come with it. The only reason to carry a credit card is as a measure of convenience. If you do not have the money to make the purchase, you do not make the purchase. It is that simple. You must commit to yourself that you will not spend money you do not have. If you have to finance something there are better and cheaper ways to go about it, but saving for the price in full first is the best option you can make. The credit card is only to be used in place of carrying cash or writing lots of checks or other matters of transaction convenience. It is only used to consolidate purchases so that you are writing one sum total payment check, when due, on time, in full, each month always. No Exceptions.
2. Thou shalt incur no Annual Fees. First and foremost that means no annual fee, period, exclamation point and end of discussion. The very first thing I look at for any credit card offer is disclosure on annual fee. If there is one, I don’t need to read any further for it is off to the shredder. Beware of those that claim no annual fee but adds in small print ‘for the first year’ and then they charge an annual fee after that. Only be willing to take the bite on that one if it is your fully committed intention to cancel before the year is up and then follow through. By the way, they are counting on you to forget about it so if there is the slightest chance you will, don’t take their offer. Actually even your intention isn't enough, no annual fees period.
3. Thou shalt have no charge if paid in full during the grace period. This one should be standard by now but double check to make sure that it is. If you pay the bill in full by the due date of the bill there should be no charges what so ever. If there is no grace period or there is any way to assess fees that shouldn’t be there, then drop them like a hot potato.
4. Thou shalt not pay an excessive interest rate. Even though we said that we are going to pay off our balance in full each and every month so as to incur no fees and no interest charges, you don’t want to accept a card that has a 21% or higher interest rate just on the off chance that something should go wrong. Stuff happens and when it does you want to minimize the consequences as much as possible.
5. Thou shalt pay no excess fees. This goes along with rule four. If the offer made it this far without causing you to throw it away then look at the fees and see if they look excessive. Don’t compare them to other fees in the industry to decide if they are normal charges but compare them to your own standard of what seems reasonable. If a fee seems high by your standard it probably is. Fees everywhere have been inching up on all financial services to the point that they have lost their sense of perspective and proportion. It is time to use the power of the consumer and decide not to accept unreasonableness.
6. Thou shalt ask “What’s in it for me?” Lastly and I do mean last, what perks does the card offer? My first credit card was a Discover Card back when they first came out, for one reason, they met my criteria of no fees and they paid cashback. I liked that. I no longer like the Discover Card and I will report on it in another entry. I still like to get a kickback on my purchases. There are a myriad of perks being offered these days, some are better than others so compare carefully. Many of the perk cards come with a hefty annual fee, don’t bother with them, you can do better. Some provide airline miles, some simply provide points, I still prefer cash back as it can be used on anything at any time.
7. Thou shalt not change thy spending habits. Now that you have your credit card you must not change your spending habits, only your payment habits. This is especially important if you happen to have a card that has perks. Just because the government thinks it can spend its way into prosperity does not mean you should. There is no way you can create an income for yourself by spending $100 for a $1 return, so please don’t try. You can however look for ways to use your card in places that you used to use only cash as long as there is no added fee to do so. The daily lunch run can be handled by your card rather than cash at many places fast food joints included. Grocery stores almost expect you to use a card now. I will pull mine out even if all I am getting is a pack of gum. Again, you must remember that you are not changing your spending habit to earn perks; you are only changing your paying habit to earn perks. Big difference.
8. No matter what the available credit balance is thou shalt not try to use it all. The Credit balance that is issued on a credit card is an interesting side note and nothing more. It is a ceiling amount that can easily be raised and lowered but it is inconsequential if you are in charge of your account because you will never come anywhere close to using all of it. There is usually no need. It is an artificial measuring device that the card companies use; it is not a measuring device that you use on yourself. You set your limits. Remember that you have higher standards. Just because they say you can doesn’t mean you say you can.
If you have any self control issues at all then forgo all the above and use strictly cash. Give yourself an allowance that you carry in your wallet or an envelope or whatever system you choose and live from that knowing that once that money is gone, it is gone and will not be replaced until the next allowance cycle. Until you master yourself you will not master your money but that is a whole other set of standards and tools.
One side benefit of the above, I have a monthly balance that is paid in full each and every month which reflects nicely on my credit score. The monthly balance is far less than the available credit which also helps the credit score. Do I care what my credit score is? Not really since it should be perfect but isn’t. It is the most abusive and highly inaccurate financial tool used today which makes me wonder why it is given so much power with so little oversight or liability on its part. My credit score is fairly high I am told. I know that it is just a measuring device that has become an industry unto itself. I want to live my life and have my finances such that having a credit score or not will make no difference whatsoever in my life. Contrary to popular belief debt is not the natural order of life. If you think that it is then it is time for a change of mind. You will find that life gets easier if you avoid debt.
Well there you have it. This pretty well sums up my take on credit cards. By the way, I do not have a pocket full of them. Two is usually plenty, three tops, from different companies or banks. That way you have a back up if one becomes unusable for any reason such as a computer failure on their end. It’s rare but does happen.
Just remember that this is you we are talking about. You matter. You come first. You decide the rules you are willing to play by and you decide which ones you will have nothing to do with. You are the consumer, you have the say. You live with the consequences either way.
This is Ed Nef with a view from the Farr West.
Subscribe to:
Posts (Atom)