Out of Gas Newsletter - Issue 34 April 4, 2009
++ Savings Tip of the Week
I keep trying to teach my daughter the benefit of long term thinking… if you save $1 / day, by the end of the year you’ll have saved $365.00. While that may not seem like a lot, if you saved just $10/day by the end of the year you would have over $3,600. Remember as well that small changes do add up.
We have a twitter account so we can send updates when we find good deals… one thing that is the only time we’ll tweet.
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Saving Money The Nitty Gritty -
As with anything related with your finances, make sure to consult your personal accountant before making any decisions.
This week we were super busy (no complaints). I saw a news bit earlier this week on one of the morning shows and they were talking about credit cards and some recent changes they’ve made.
Now I know that some of you are saying, you have no pity or sympathy with someone that gets over their head with credit card debt. One thing I would like to say is sometimes it can’t be helped. People lose their jobs, have medical bills, unexpected expenses or loss of work, there are many reasons. Not just that they wanted to buy a new wardrobe.
The situation happened to me when I got married. We really didn’t have any money but Uncle Sam called me up to go to Desert Storm #1. So we let Uncle Visa pay for the honeymoon.
Many credit card companies have started lowering the credit limit and started to increase the interest rates on many of the cards.
Reasons behind the changes involve the number of slow / no payments they’ve had of late.
So what does this mean for you (even if you have no debt).
About 30% of your credit score involves the amount of available credit you have (your credit limit) and its relationship to the amount you have charged.
Say you have $10,000 in credit card limits, you have $1,000 on the cards. Your magic number would be 10.
What happens when the available credit limit goes down to $5000, your magic number decreases to 5 (or half of what it used to be).
While it doesn’t seem like much, those numbers can decrease your credit rating.
So what happens when your interest rate goes up to 22%. You can ‘freeze’ the card and keep the same rate (but again that would cause the amount of your available credit to go down).
So what can you do in these situations (here are some ideas).
Monitor your credit score (this is something you should be doing anyway).
If they decrease the limit - you can call the credit card provider and ask them to increase your limit. Nine times out of ten they will not.
This happened to us recently - it did impact our credit rating but not by very much. If it had been a big drop I would have opened up another credit card.
If your interest rate goes way up, call and ask the company will they revise it. Explain how you’ve paid them well, been a good customer, etc. If they will not lower the interest rate and you have a balance that you can’t pay off, look at your other cards.
Call them and ask them about any special rates for balance transfers. Beware… if they give you a low rate for six months, what will the interest rate be after six months. Many times they will offer you a low rate for a certain time period and then offer a higher rate for a longer time. Note that any interest you accumulate you will be billed your current rate. So I would suggest trying the lowest card first.
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Car -
Overview
Gas
Maintenace
Entertainment -
An Overview
Doing the Audit
Entertainment alternatives
