The GEICO Platinum MasterCard is no more. Buffett and Berkshire Hathaway (the parent company of GEICO) has canned all of the GEICO credit card operations and sold off all of its receivables for 55 cents on the dollar.

Buffett’s unique brand of homespun honesty was on full display when he mentioned that when he first brought up the idea of launching a GEICO credit card he was discouraged from doing so by GEICO executives to which Buffett “subtly indicat[ed] that I was older and wiser.” Now Buffett humbly says, “I was just older.”

Apparently selling credit cards isn't so easy a caveman can do it... (Credit: GEICO, CNN Money)

Although the GEICO credit card company is now a thing of the past it is refreshing to see someone, especially of Warren Buffett’s stature who I have long admired, take responsibility for his actions and freely admit to making a mistake. It happens to the best of us. Even Warren Buffett.

What financial mistakes have YOU made lately (hopefully not a $50 million mistake)?

(Credit: GEICO.com, CNNMoney.com)

Editor’s Note: Have you ever wondered how you could discuss your friend or family member’s credit card debt problems without offending them? Austin has some great tips for how you can approach this potentially very tricky situation. As a former English teacher in China myself I would encourage you to read through this article and then be sure and visit Austin’s site at ForeignersFinances.com, subscribe to his RSS feed, and then be sure to check out our true cost of credit cards calculator to see just how much carrying a credit card balance can really end up costing you!

We all want our family and friends to be happy. There’s nothing worse than watching someone close to you struggle with a demon in their life. What’s even worse is watching a loved one hurt themselves unknowingly.

According to MSN Money, about 45% of households carry credit card debt from one month to the next. Chances are you have someone close to you who is drowning under credit card debt, and they don’t even know the price they’re paying.

For example, if you carry $3,000 of credit card debt on a card with 19% APR, it’ll take you 26 years to pay if you only pay the minimum. What’s worse: you’ll pay $7,896 just in interest!

I had a good friend who often discussed his money troubles in public.

Through his stories I could piece together that he paid the minimum on his credit card every month and his paycheck was disappearing fast every two weeks. It appeared he had no savings and was just banking on making more in the future to make up for his money troubles. He also continued to spend extravagantly on a new video camera, a nice car, and nights out to expensive clubs.

At the time, I had just started learning about personal finance and decided this was going to be my chance to put my knowledge to use. I could save him tens of thousands of dollars if I got to him early before the debt consumed him even more.

One night I sent him an email saying I’d like to help him out with his money troubles by looking at the numbers and seeing how we could figure out a way to get rid of his debt.

After I clicked send I felt awkward after sending the email. I didn’t know if it was my place. The next day I saw him and he seemed thankful, but rushed by saying, “I don’t have my accounts right now, but we’ll discuss it later”.

Based on his demeanor, I knew he wasn’t ready to discuss money yet, so I said “yeah, definitely” and we never discussed it again.

My first mistake was rushing to try to fix the problem. I immediately put him on the defensive by saying, “I know you have a problem, let’s fix it”. I believe he knew he had a problem, but I don’t think he was quite ready to fix it.

Before you go all Dr. Phil/Oprah/Suze Orman on people’s money problems, understand that there won’t be any change unless the person wants it.

So how do you help out a friend or family member who is struggling with credit card debt, but doesn’t know it?

You be a social sleuth.

Wait for the right time to bring it up. Don’t do it at a party or anytime there are other people around. Wait until you’re one-on-one with the friend. Perhaps over lunch, casually watching TV, or in the car together.

Let them mention their money problems. Like I said earlier, my friend occasionally mentioned his money troubles. Wait until they are admitting there is a problem and this will be your best time to help because there natural self-defense walls will be lowered. The perfect time to suggest change.

Once they mention their troubles, offer suggestions for furthering education and knowledge. Only mention A+ stuff that you’ve had experience with. The stuff that turned around your financial life is a great place to start.

Put them in your shoes, by showing how you turned your money situation around. Don’t gloat about your success, but empathize and suggest that they too can experience a money and debt turnaround.

Mold your suggestions to their favorite medians. If they like reading, offer your favorite personal finance book. If they prefer blogs and short reading, offer 2-3 personal finance blogs that you like. If they are a video person, find a good YouTube video that’ll help them.

If they show ANY interest at all in fixing their problem, offer to provide the medians. You must do the work for them because it’s too easy for them to avoid following up on your advice.

- Email them the links to the blogs

- Buy the personal finance book and give it to them the next time you see them

- Send them the YouTube link to a money video that’ll peak their interest

Your suggestion has to be eye-catching or else they’ll get distracted and move on to something else. Suggest something that makes them go “wow, I need to change how I handle my money”. If you can get them to say this sentence, you’ve done your job and they’ll be eternally grateful.

After this, they can explore the new information on their own. If you’re lucky, they’ll mention how much they liked the video, book, or blog, and hopefully you will see the money light go on above their head.

You can only do so much in the beginning stage without smothering.

Show them there’s a way out.

People don’t realize how many medians there are for money education. But if you have the possibility to suggest even one, it can potentially open their eyes to a financial world they didn’t know existed.

Remember: be patient, wait for them to bring up their money troubles, offer (don’t tell) a suggestion that suits their interests, and then step aside and let them explore.

This formula isn’t guaranteed to work, but it’s a soft approach to handling a rough topic. You don’t want to hurt your relationship with the person, so be patient and gentile with how you offer the information.

Good luck!

Have you successfully helped someone close to you learn about money? Ever tried and failed? Share your stories in the comments below!

Make sure to check out Foreigner’s Finances today!

Here is a general framework for why it may very well be true that sub prime credit card users (bad credit credit cards) and even some regular credit card users who used to be able to get approved for a credit card with ease pre-CARD will now find themselves taking out a payday loan with interest rates of sometimes more than 1,000% (yes, 1,000% that is not a typo – check out our guide to usury & interest for more information).

Here is How the “Conversation” Goes

CARD ACT: “Let’s limit the fees and interest rates that credit card companies can charge on sub prime credit cards and other credit cards designed for those with credit problems.”

Credit Card Companies: “OK, since people with bad credit are (surprise, surprise) much more likely to just charge up money on their credit cards and then not pay us back then if we can’t charge high enough fees and interest rates to make up for that extra risk we are taking then we will just stop approving bad credit credit card applications.”

CARD Act: “Let’s make it illegal for credit card companies to assess interest charges using practices like double cycle billing, multiple over-limit fees, and universal default provisions.”

Credit Card Companies: “OK, we will stop using double cycle billing, multiple over-limit fees, and universal default provisions but that just means that it will make it harder for us to make money off of credit card balances and make it more difficult to assess default risk before it actually happens so we will just have to make it harder for even people with decent credit to get approved for a credit card since we won’t make any money off of them anyway and people with really good credit can get approved for a credit card but we won’t be able to give them as many credit card rewards and we will probably have to give them higher interest rates and annual fees AND now even people that pay off their balance in full every month – yea, we will have to raise their interest rates and fees right along with everyone else because now we can’t single out the high default risk users as easily anymore.

The Public: “Credit card companies are evil! How dare they make money issuing credit cards! I would like one myself because they are pretty convenient but we deserve low interest rates and no fees even if we have bad credit. How dare the credit card companies actually make money by providing us something we want and then charging us money for it!”

Credit Card Companies: “Sorry Charley, we have to stay in business. After all, even though everyone thinks that we just rake it in every year our profit margins are much lower than even a software company or companies in many other industries (although they are higher than the very low profit margins at health insurance companies which President Obama seems to think makes obscene profits so at least we are glad that the President has his focus on stirring up the people to criticize the “obscene profits” at health insurance companies rather than directing more populist rhetoric in our direction). In fact, even the Bank of America Credit Card Division lost a ton of money for 5 straight quarters so all of the people that take out a credit card and don’t pay us back or pay us late or the bazillion credit card transactions that we have to process securely and almost instantly all over the world while making sure you aren’t liable for any fraudulent charges – yea, that costs money.”

Consumer: “Hmm, so now that the CARD Act is here I have less options for credit… I guess I will apply for a few credit cards and then if I can’t get approved for a credit card there’s always a couple payday loan stores on almost every street near my house..

Payday Loans vs Starbucks vs McDonalds

Benefits of the Credit Card Act

Don’t get me wrong there are a lot of things that I like about the CARD Act. I love the provisions that make credit card companies more transparent, colleges disclose any relationships that they have with credit card companies, and other provisions that promote transparency in marketing, underwriting, and issuing credit cards BUT the only benefit that will come from the government stepping in and forcing credit card companies to underwrite credit cards in a more restrictive way will only end up making it harder for consumers to get access to credit and will quite naturally drive many consumers to choosing payday loans and other horrible choices for borrowing money (which is perfectly within their rights as a consumer but why does the government think that providing less options for credit is a good thing?).

Since When is Less Choice Better for the Consumer?

In a nutshell, consumers should have as many choices as possible. If they want to apply for a credit card that charges them fees up the wazoo then they should be able to. If they want to take out a payday loan that charges 1,000% interest then they should be able to. If they want to do the responsible thing and research the best credit card offers and find a good cash back credit card that they will use to live within their means and pay off the balance in full every month then they should be able to do that too. Wait… is it because maybe people A) Don’t want to face reality and use a calculator like our true cost of credit cards calculator to see just how much that new pair of shoes really costs if they buy with a credit card but only make the minimum payments or maybe people B) Don’t want to admit that your credit card debt is your fault! ??? Maybe it’s just easier to let the government slowly take control of as many things as possible because they know best and we are not smart enough to make choices for ourselves, right?

CARD Act Regulations for Transparency in Credit Cards = Clear Understanding of Credit Card Features and Options = GOOD!

CARD Regulations for Forcing Companies to Cap Fees/Interest Rates and Underwrite Credit in a Certain Way = Less Options for Consumers = BAD!

Do you think that the credit card reform act will end up turning many past bad credit credit card users into payday loan users?

Do you think that the CARD Act will end up having many unintended consequences that will end up harming consumers more than helping them?

What are some of the unintended consequences of the CARD Act?

When credit card companies charge their standard credit card processing fees even to charitable organizations to accept donations by credit cards are the credit card issuers profiting from tragedy? This infographic is the final part of our Haiti/credit card company series. To read some of the prior articles visit:

Credit Card Processing Fees Waived on Haiti Donations

Are Credit Card Companies Evil if They Don’t Waive Fees on Haiti Donations?

Haiti Donations by Country (Infographic)

As you can see from the above visual aid it seems that even though credit card companies get a bad rap for charging credit card processing fees for charitable donations the money gained from fees levied on those donations is relatively very small. Would it be a nice thing if credit card companies always waived the credit card transaction fees for every single charitable donation just like they did for donations to Haiti? Absolutely!

However, if they choose not to permanently waive fees then there is certainly nothing unethical or immoral about them doing so because every other business that offers goods and services to charitable organizations charges for those goods and services as well. What do YOU think?

Embed this Image, Share, Link, and then Donate!

<a href="http://www.creditcardchaser.com/are-credit-card-companies-profiting-from-tragedy/"><img src="http://www.creditcardchaser.com/wp-content/uploads/2010/02/credit-card-company-profits.jpg" alt="Credit Card Company Profits" width="520" /></a><br />Infographic by CreditCardChaser.com: Start “Chasing” down the best <a href="http://www.creditcardchaser.com">credit cards</a>!

The history of my finances is at the level of a novice. With part-time jobs I have earned consistent wages, my work experience ranging from working in a bagel shop, to filing real estate referrals, appraisals and forms, to writing articles. I’m a college student who has not yet understood what it means to be in credit card debt, on the verge of a credit card payment, proving a lack of worthiness in terms of how credit savvy I am.

But I have questions, so many questions. And I would think it valuable as a credit card specialist, or a professional in any area, to take into account the questions and uncertainties of a younger generation who are unaware of much in that particular profession. I am a slightly above average student, I would say I have a good idea of how the world functions. But credit is something I am oblivious of. And I am certain that many students alike are oblivious to credit and their credit score as well. I need to understand the basics before I can play the game.

Whether you’re a parent, a brother, or an aunt, I think it is important to tell others about credit and what it means in the context of the world, if you yourself have even a general understanding of it. There are plenty of terms and graphs and numbers that books can teach, but they mean nothing unless it is practically correlated to the world and our role in it. Some of the different questions that I and others have are the following, which I’m sure can be easily answered, and if so will be greatly appreciated:

• What are the different types of credit I can attain?
• Why are there so many different credit cards that can be used to purchase different items? Won’t one credit card suffice for all of it?
• What does a credit report entail?
• How soon am I able to pay off my credit card bills after I make purchases?
• How late am I allowed to pay off my credit card bills?
• What will happen if I don’t pay off my bills soon enough?
• Why is it important to build up a credit score?
• What benefits does one receive with a good credit score?
• How do I establish good credit?
• Where should I start when trying to obtain a credit card?
• What are some good reasons for having a credit card?

These are questions that your siblings, children, nieces and nephews have, and you have the ability to let them know. If you could go back in time to know all you know now, would you? And what would you do differently? I think that this generation has the ability to quickly become informed easily through the internet, and the ipad, and the millions of different facets of this information-rich culture.

There is a blog for just about anything these days, on tons of different subjects. Each subject based on how to improve one’s life financially, physically, emotionally, etc. But learning through a family member or friend can be more helpful and more valuable. Teaching younger generations about this information is valuable to them because they will be more readily equipped for their future with finances.

If I was more aware of what a credit card could potentially do for me in my education and in my daily needs, I might have one. And from there I am assuming I would need to learn how to better manage my finances in terms of the money I make, which would lead me to making a budget. Having a budget would more easily allow me to keep track of the money that I spend and the constraints I have in spending and budgeting my money. Becoming more aware of credit and taking advantage of the rewards of a credit card would enable me to be more responsible because I would have a valid reason in keeping track of my finances.

The point I am making is that sharing knowledge of the practical things in life such as financial principles are so important and beneficial when learned early on. They have the potential to produce intelligent thinkers and well equipped businessmen and women.

Here are some details of the PerkStreet checking account that has been provided directly from PerkStreet Financial:

• PerkStreet Financial is a FREE online checking account
• Perks include free coffee, music and more
• No cap on the amount of perks you can earn
• Nation’s largest surcharge-free ATM network
• Super fast live phone service, 24/7
• No minimum balance requirement
• No monthly fees when you use your account
• Sign-up in just 5 minutes
• Free online banking and bill pay
• No need to worry, deposits are FDIC insured up to $250,000 and protected from fraud by the Visa Zero Liability policy

I am a huge fan of cash back rewards over other types of rewards offers like airline miles, points, etc. and it is pretty rare to see a solid cash back debit card like PerkStreet offers rather than the many different cash back credit cards. If you are interested in learning more about the PerkStreet cash back checking account and if you think it might be a good fit for you then click here to visit their site and apply today!

Admittedly this Haiti Donations by Country infographic is a little bit unrelated to the primary topic of this blog which is of course credit cards but after doing some research into the credit card transaction fees on charitable contributions issue for past posts we thought that this graphic would be a helpful one.

Credit Card Processing Fees Waived on Haiti Donations

Are Credit Card Companies Evil if They Don’t Waive Fees on Haiti Donations?

Look for a visual guide to accompany some of the above posts surrounding Haiti donations and credit card processing fees shortly. What do YOU think about the above Haiti donation statistics?

(Sources: ReliefWeb.int and the CIA World Factbook)

Embed this Image, Share, Link, and then Donate!

<a href="http://www.creditcardchaser.com/haiti-donations-by-country/"><img src="http://www.creditcardchaser.com/wp-content/uploads/2010/02/haiti-donations-by-country.jpg" alt="Haiti Donation by Country" width="520" /></a><br />Infographic by CreditCardChaser.com: Start “Chasing” down the best <a href="http://www.creditcardchaser.com">credit cards</a>!

It’s very easy to focus on the external things that we like to think “cause” us to go into credit card debt or wake up one morning and realize that our jeans don’t fit (yep, I am writing this from personal experience!). “Those credit card companies just keep sending me those cash advance checks so I just have to head out to the mall and use them” or “Well, it’s an office party and I would be rude if I didn’t eat 4 plates of cocktail shrimp, right?” rather than the REAL issue of “Wow, I need to get control of MY spending and MY eating. I need to get some discipline, self control, and work on building better habits for eating right and managing my money.”

In a recent comment that I made on the Dave Ramsey & credit cards/credit card debt post I mentioned the following analogy which I think is an apt one:

Whether someone uses a credit card, debit card, check, cash, or a Confederate penny the method of payment is totally irrelevant because the issue is that to get control of debt one must spend less than they have.

None of the various instruments of payment ever spend themselves – the owner does all the spending. Many people like to play the “blame game” and act as if it’s somehow their credit card’s fault that they got into debt when in reality its certainly not the fault of an inanimate piece of plastic.

It would be similar to someone with a weight problem blaming all of their overeating on their fork. No matter whether they use a fork, spoon, knife, or just shove the food in their face with their hands to eat it still boils down to the fact that the method of eating is totally irrelevant because the issue is that to get control of ones weight one must eat less!

What do YOU think?

Do you ever find yourself falling into the trap of blaming your behavior on the methods you use rather than the root cause of your behavior (you)?

Is the analogy between overeating and going into debt a good one?

How Does Kwedit.com Work?

The way that Kwedit.com works is that a Kwedit user enters into an agreement called a “Kwedit Promise” whenever they opt to purchase virtual goods from online games that offer Kwedit as a payment option and then the user is obligated to make payment at a later date. There are 3 different ways to make a payment to a Kwedit.com account:

1. Pay at a 7-11 convenience store.
2. Send cash through the mail.
3. Have a friend or family member pay for you using their credit card, debit card, or check (called “passing the duck” in Kwedit terminology).

Kwedit.com has partnered with Social Gold and many other social gaming platforms and social game developers to offer the Kwedit purchase option on thousands of different games across various social platforms.

Kwedit.com & Child Credit Education

In addition to powering a whole new payment system targeted at the estimated 9 million US households (7.7% of all US households) without a checking account, savings account, or debit card (Source: FDIC Household Survey) Kwedit also has a goal of helping parents educate children about using credit properly. While the #1 motive behind doing this kind of education is no doubt powered by a desire for parents and kids alike to use the Kwedit.com payment service it is still a nice thing to see a company focus on teaching people how to use credit responsibly.

Should You Use Kwedit.com?

Naturally, I would much rather use my rewards credit card or even my debit card before I would ever consider using Kwedit.com to make a purchase online. However, if you are among the 7.7% of all US households that do not have a checking account, savings account, etc. then first of all get a checking account or a savings account ASAP! Then if you would like to try out Kwedit.com by all means give it a try.

In a nutshell, Kwedit.com could be a nice fun way to teach kids, teenagers, and young adults how to use credit responsibly but if you want all of the benefits of fraud protection, rewards, and convenience then better to just stick with a credit card.

What do YOU think of Kwedit.com?

Do you think the Kwedit.com is a smart way to teach kids about money?

Would you ever consider signing up for a Kwedit.com account?

The introductory rate for purchases is 0% for up to 6 months. After that, the APR will be 12.99%, 17.99%, or 22.99%.

The introductory rate for balance transfers is 0% for up to 12 months. After that, the APR will be 12.99%, 17.99%, or 22.99%.

With the new pricing the Chase Freedom credit card jumps into the top tier of balance transfer credit cards with the likes of the Discover More American Flag Card and certain others. If you are considering a balance transfer then be sure and first check out out free credit card balance transfer calculator and then consider applying for the Chase Freedom Card or the Discover More American Flag Card!

Chase Freedom ^SM

Card Details

Chase Sapphire

Card Details

Slate ^SM from Chase

Card Details