Online Money Advice

As many of you know I am very anti Credit Card and Loan. There is good reason for this, they nearly destroyed my life and everyone elses life around me. I will never forget standing in front of a pile of bills with tears rolling down me cheeks as the phone was ringing off the hook, the final straw for me was the day my Grandparents died I recieved a call from a credit card that basically told me they didn’t care about my personal situation when were they going to get their money!This was a whole lot different when they were giving it to me like it was going out of fashion. My life changed that day and I haven’t looked back since. This is why beating the so called credit crunch isn’t effecting me as much as many others.

In the past on this blog I have posted ways of saving money, not spending as much money and basically reducing your income down to pay off the debts. Well now more than ever is the perfect time for you to reduce down the amount of money that is going out the door and try to bring in a little extra if possible.

The helpful friendly credit company that was only too willing to give you an increased balance and that vacation in the sun is now under pressure to bring that money back in as their bottom line looks a little on the unhealthy side. They are pumping up interest rates and charges, challenge them, do not let them do this or they will continue to do it during the hard times. As soon as you get the letter telling you they are increasing the rate call them up and tell them you would like to renegotiate your rate. Don’t wait until you have paid the first payment as it is harder to do at this time, do it straight away!!

When you go shopping try to use cash as much as possible this is the best way to pay for everything don’t get caught by that special offer it will end up costing you in the long run. I saw a store the other day that offered a discount for paying by cash! Unfortunately this isn’t strictly legal but if you can get away with it you will benefit. You will never see a discount for using a credit card!!

The credit crunch, resession, dark times and so on, all names that they use on television to say that life is going to be tight for the next year or so while the economy recovers. Most of it is caused by the cost of oil and unfortunately there is too much money to be made by governments for them to do the sensible thing and cap the price of fuel so there are some people getting very very very rich while the rest of us struggle.

Have a read of the articles in the blog, see where you can save a few bucks and make sure that you buy with your head and not your heart and the credit crunch will be much easier on your pocket!

Everyone hates those letters that drop in every now and again where your credit card decides to put up your monthly interest to an even more astronomical rate than it was. Well instead of them being your worse nightmare you could easily become theirs and the more people that follow these easy tips the less they will be able to take in what is not much more than daylight robbery.

• Pay them on time, by making sure that you pay your credit cards on time you avoid late payments and effecting your credit score by keeping your finances up to date.
• If you can afford to do it then pay off your card in full, I know this is a lot easier said than done but many people even if they can do this don’t. The thing is if you can afford to do it then you will be avoiding paying interest thus not paying the credit cards anything and keeping what you have to pay back down to a minimum.
• Check your statement fully when you recieve it. Make sure that you have actually purchased everything you have been charged for. Calculate your interest payment make sure you have been charged the right rate. Any charges should have been informed to you in writing before they charge you. Anything that you are not sure about call your credit card company straight away and challenge it. If you leave it then you will be leaving yourself open for problems in the future.
• Call your credit card company anyway and ask them for a lower rate of interest. If they say no ask them to give you a valid reason. The best way to do this is to play off one credit card against another card offer, you will either receive one in the post or see them advertised on TV or in newspapers. Tell them you want that rate from them instead of moving to the new credit card company.

These are just a few ways that you can go about getting out of paying your credit cards a fortune in interest and charges. By doing these tips you pay the credit card companies less money and thus become their worse nightmare as they will not be making any money from you.

As it becomes harder to get credit from banks and credit card companies over the next few months it is important that if you find yourself in credit card debt that you look to reduce it and eliminate your debt as quickly as possible. We have given a number of hints and tips on how to reduce your credit card debt so we just wanted to run through some of the obvious ones today and tomorrow we will give you some of the less obvious ones.

• STOP USING YOUR CREDIT CARDS! Living your life on borrowed money is not a good way to live no matter how much you pay of you will always find that you are just increasing your credit card debt by continuing to use them.
• Make sure you know what it is you owe. Make a list of what you owe and then take the debt that you owe the least on and pay that one off in full first. This will make you feel better and reduce your debtors by one!
• Always try and gather enough money together so you are paying more than your minimum balance each month. This means where you owe money you are actually getting the balance down rather than just sitting on the balance of the debt with the interest ever increasing.
• Set yourself a budget and stick to it! This way you will not spend as much as you have been when you were using your credit cards as you will have a stringent routine that you need to stick to in order to make things add up at the end of each month.
• Don’t rob Peter to pay Paul. Very simple thing that many people who are on the verge of no return get into. Borrowing money from one credit card to pay another credit card is a sure fire way to let your finances spiral out of control.

These are just a few of the simple to say but tough to enforce tips that we have told you about over the past few months. Make sure you have a good look around and get as much information as possible! Tomorrow we will be looking at some of the less obvious ways to reduce your credit card debts.

I have been looking today at a new service in the UK that allows you to consolidate your bills into one payment each month.

Remember all those ads to get your debts into one simple payment and all that sales pitching for consolidation loans and such like there is now a UK solution for your monthly bills.

The service claims to pay all your bills for you so you only have to worry about one payment coming out of your bank each month. Of course there is going to be a management fee but they also claim to be able to save you money on your bills.

I haven’t tried it so I can not say if it works or if it is any good but I would like to give you the website address which is http://www.moneyway.co.uk/products/onebill/ Now the reason I am giving this to you is so you can see what I mean by it all.

We all like to have a few dollars behind us in the bank and a little pot to dip into should you get into difficulties. Well in fairness I am inclined to agree, I like having an emergency fund but adding to that fund each month rather than putting it towards your debt is costing you money.

And here is why, it is simple math but so many people overlook the simple calculations and it just makes the lenders a lot richer than they already are.

If you are in the lovely position of putting $150 a month into a nice savings account after 5 years based on an average of 5% interest you will have the handsome sum of $10,200 in that savings account. So for the sake of $37.50 a week you could be much better off!

Now lets turn it around where you are using your credit card to top up that $150 a month, based on 18% (which is in fact daylight robbery but they still charge it) after 5 years you would have totaled up close to $14,400. That is an extra $4,200 for your overall debt!

So since we have spoken about a number of different ways to save an extra few bucks here and there does it not make sense to put this money towards getting rid of your debt, instead of saving for that rainy day?

When your monthly credit card statement drops in and you look at the bottom line of how much you owe, then you look at the interest that you are paying to the people who lend you the money. Have you ever worked out what it is costing you daily?

The reason I ask this is because by doing this you can reduce what you owe quicker. Here is a way that you can go about reducing your debts quicker by having a daily goal of what to pay back:

• Make a complete list of everything that you owe
• Make yourself a realistic date that you want to be debt free
• Work out what the interest on the debt will be in that timescale
• Work out the number of days between the current date and the day you have set as your out of debt target.
• Add together what you owe to the interest you are going to pay then divide that number by the days you have to pay it off.
• This is the amount that you will have to pay each day.
• Should this be more than you thought it would be then increase the time to pay off the debt.
• Once you have a reasonable length of time and a sensible amount to hit each day then you have your figure.

How does this help you? If you are working hard to get out of debt and you have stopped increasing your debts then you will be completely in control of your finances. This means that you know to the cent what you need to be earning each day to clear these debts.

In many cases people find they are looking for extra ways to bring in a little more cash, extra ways to save and hit that daily target. It is a good way to give yourself some motivation to hit your target every day.

You know that letter, the one that drops on in your mail box to tell you that because there was a delay in your payment to your credit card and they will be charging you for the privilege of letting you know. Well you probably already know that the letter is on its way because one of the helpful pains from their customer services call you to ask when you WILL be paying.

In this case the fact that you have already sent the payment means nothing to them, but you see there is a little thing you can do at this point. Say to them that you have already sent the monthly payment but you are very disturbed by the fact that you will be charged for the late payment as the money has been paid. Wait for their reply and if the words “I am sure we can waiver the fee this time!” then tell them you are considering closing your account with them and moving it to their competitor.

The power of competition is a wonderful thing and the credit card companies really want to keep your business because even though you have challenged payments, challenged interest rates and now challenged late fee’s you are paying them to give you a service. And you paying them keeps them in business meaning as many customers they have your business is valuable to them.

I discovered a long time ago that if you keep on contacting your debtors and asking them to reduce charges and reduce what you owe them then you will continue to reduce your debts! I managed to knock hundreds of dollars off of one credit card by calling them each week about a different matter.

Be warned though they will try and pass you off and they will say things like “I need to check it with my supervisor” or “I don’t have the authority to do that!” Well thats OK, you just tell them that you will wait for their call or if its a free line you are calling make them check with their supervisor there and then.

Its a matter of persistently keeping on at them! I know your debt plays on your mind because mine did so instead of putting it at the back of your mind bring it forward and take it on from the front, your debt will not go away on its own so make an effort and you will be making a breakthrough in no time! Don’t be a victim of debt!

No I am not going to tell you to change your light bulbs, even though it is a good way to conserve energy and save money but here are a few simple ways you can save some money and go green at the same time.

1. During the winter, like now if you are baking in your oven or cooking dinner in the oven then when you are finished turn off the oven and open the oven door. This means that the that you get some heat from the oven and you haven’t paid extra for it.
2. Simple tip but gets very much overlooked by many people, if your not using it unplug it. If you leave your TV on standby it is still on, if your stereo has a clock it is still on and if you have an electric toothbrush on charge its on charge the whole time. This goes for cell phone chargers, portable game chargers and basically anything that requires a recharge. If your not using it unplug it that way you are not burning electric that you are not using.
3. Take a quick shower rather than a long shower. I know that a nice long shower is relaxing and some people can’t get through the day without a long shower in the mornings but a cooler shower will wake you up in the mornings, and it will save on water and heating meaning it is great environment and money saver.
4. Hang your washing straight away and make sure it is pulled tight on the washing line, this way you won’t have to spend as much time ironing and in many cases you won’t have to iron at all. This is a saving on electricity using the wonders of the sun to dry and iron where possible.

These are just a few ways you can reduce your monthly bills by being friendlier to the environment, so you can go green and save green at the same time!

In many cases people will look at the bottom line of their credit card statements and that of what they owe and don’t check through what they actually have been charged for and if its the same as what has actually been spent by them or not. With ID theft becoming more and more prominent in todays society it is imperative to make sure you check your statements.

Another thing to check for is that you haven’t been charged too much interest or picked up charges that should not apply. Remember a few days back we told you about calling your credit card and asking them for a reduced rate of interest, well just because they said yes doesn’t mean it will be reflected in your monthly statement. Check it so that you know they have stuck to their word.

A number of times in the past few years I have discovered that I have actually been charged twice for the same thing by the same company. The only way to spot this is to go through all of the items that you put on your credit cards and ensure that you actually paid what you did. Now as we said that your not going to use your credit cards anymore (I think it was about 10 days ago) it is a good idea to go over old credit card statements and see if there is anything out of the ordinary.

Every now and again you will come across something and you have the right to challenge them when you find them so make sure if you do find something you pick up the phone and ask about it straight away.

Tomorrow we will be looking at challenging late charges.

I had an email from a lady who is $40,000 in debt and she has been struggling to meet her bills (sound familiar?) She ahs been trying to reduce her monthly outgoings but she is concerned that she is not going to be able to keep up the life style that she is in at the moment if she reduces a lot of her monthly outgoings.

I wrote to her and said that unfortunately giving in to the temptations to carry on in the life style that got her into $40,000 worth of debt would only end up with her being even deeper in debt. She emailed me back with a breakdown of her monthly costs and her lifestyle etc.

The first thing I noticed was that she was spending an absolute fortune on food each week. Now this is a single woman who lives on her own in a one bed apartment. I asked her to send me a copy of her grocery bill for last week and she obliged, she was spending $45 a week on fresh prawns for her cats!!!

After a number of exchanged emails where I became the worlds number one cat hater we eventually agreed that she would try and give the cats frozen prawns as they were 1/5th of the cost of the fresh prawns. In this case when the lady told me her cats would only eat fresh prawns, I replied with “A hungry cat will eat what ever you put in front of it!”

Sacrifice to get out of debt is important and making them is a family thing, that includes stubborn pets that insist that they are only eating the expensive food!