credit cards

September Credit Card Spending: Why no cashback spending?

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As credit cards become much more prevalent than before, we are finding that there are ways to use credit cards that were not possible just one or two years ago: travelling on the subway in Taipei, buying a cup of coffee (yes, I did that!), paying for doctor’s fees, paying regular bills, fees or memberships, and so on. Some of the ways get quite ridiculous, so it’s getting much harder to resist the swipe and forget reaction of credit card users!

Of course, online it’s possible to spend a lot of money using your credit card. You don’t have to worry about it till MUCH later. Seems ironic that we are actually using our own personal credit cards MUCH LESS than before, even though it’s easier to find ways to use them.

The September Credit Card statement arrived this week, and I have just paid it! So, you’re asking what was on it? Actually, the total this month was only half of last month’s, or NT$6300, a little over US$200.

So how did we rack up that NT$6300 in charges? Well, there was the usual $2000 insurance charge, a telephone charge for my mobile phone, and I recently purchased an annual subscription to EMusic.com, which cost about $3300. Somehow, though going to several nice restaurants, buying clothes, gasoline, books, and other knick-knacks, we managed to avoid swiping for almost all of these things in September.

If you’re really shrewd, though, it is possible to earn quite a bit of interest, or at least reduce your interest payments through balance transfers and through cash back credit cards which credit money to your account everytime you spend.

It seems dumb for me not to charge things to credit cards, when some cards are begging payments to be made through them, and offer 3% or 4% cashback. Now that would be a nice payment of nearly $189 or more on the money I spent! It’s getting harder to argue against using a credit card in those cases.

Financial Blogs

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I’ve been roaming the internet, and discovered that a lot of people are currently using the Internet to help them cure their financial woes, find encouragement and solace, and help plan their financial lives. It’s a really interesting phenomenon that people who would never even tell their best friend how much they make, are now splurging on the Internet the real situation.

I do believe that this will be very empowering. Too often, we are not “permitted” by others to discuss our pay packages, our benefits, (even Google has a stupid clause that precludes discussion of their adsense TOS), our financial situation, our personal financial mistakes, our successes, and whatnot.

I think that the way things are is very unhealthy. We should, have to, be able to discuss these as freely as some people seem to enjoy discussing their sex lives. It will help shift the clouds that surround financial wisdom, dispel the ignorance endorsed by our financial institutions (think credit cards, mortgages, etc..) and engender people to take responsibility for their own finances and the decisions that they make.

We are all responsible for our own financial situation, no matter how good or bad it is. We are all victims of our own choices in these matters.

We all need to realize that we can take back this power, this right, this obligation, whenever we need to.

Kenneth

Understanding the ABC’s of Credit Card Terminology

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Stewart Smith writes about common credit card terms that cause confusion.

Some people may think of credit cards as just “plastic money” that are there for their every convenience. What most people do not realize is that if you keep thinking that your credit card will let you get your way when it comes to “financial freedom”, well think again.

When it comes to dealing with credit card companies, be prepared to be bombarded with all sorts of “payment schemes”, “loyalty points” and “spending points”. It’s important not to get mesmerized by these sugar coated terms because in reality, no company is willing to shell out big money for big incentives for their clients without the hindsight of better profits for them. Always read the fine print before you start committing to anything, as well as keep in mind that when an offer is too good to be true – it most probably is.

Here’s a quick rundown of the most commonly used credit card terminologies:

* Grace period – In layman’s terms, this is actually the time allotted for you in between a purchase to the actual time that you’ll have to pay the interest for it. The most common time given for grace periods is usually from twenty to twenty-five days from the time that your purchase gets posted on the creditor. Although grace periods may actually be quite tricky at times because there are actually instances wherein you’re not given any grace period at all. So you’re actually better off to just pay off your total balance – in full, so that you won’t have to be bothered by increasing interest rates.

* Low introductory interest rate – if you’re looking for a good credit card, then keep an eye out for this kind of offer from credit card companies, although, there’s always a catch when it comes to these things so watch out. Some credit card companies are able to waive their high interest rates for up to a year while some can just have it for one to three months before your debt starts creeping in. There are so many choices out there, you don’t really have to pick instantaneously.

* Annual percentage rate – Also known as the APR, this is actually the number that would be referring to the total cost of your debt. Aside from that, it’ll also include all sorts of fees and the compounding interest of your account. The APR is what you should know how to use when it comes to properly being able to compare different credit cards. Always remember that the lower the APR number, then the better chances that you won’t end up with so much debt.

* Transaction fees – there are credit card companies who would still charge you this fee, especially if you opt to use your credit card for other transactions like a cash advance or if you don’t pay your dues in time as well as if you keep maxing out your credit card. Some credit card companies may actually even charge you a standard flat rate every month even if you didn’t use your credit card at all, so watch out for credit card companies like that. The kind of transaction fees that credit card companies may charge you is unfortunately, their sole perogative, so in case they would be offering you all sorts of incentives or even freebies, make sure that you know fully what you’re getting yourself into.

Credit card companies in spite of always wanting your good favor, they are strict on payments. If you don’t wise up about things concerning your credit card, they will bleed you dry. Not literally of course, but it is always better to spend cash when you have it instead of credit cards. Always keep track of your spending, or else before you know, you might end up in the deep quicksand of credit card debt.