Don’t forget to set your clocks ahead one hour this weekend. I would like to call for the abolition of Daylight Savings Time. Why in the world do we do this every year? Anyway, here are some articles that I enjoyed this week:

Be sure to stop by Green Panda Treehouse today and sign up for the free iPod Touch giveaway!

Ron at The Wisdom Journal figured out where our government learned math. Funny video, check it out.

Jason Topp, one of the writers at ChristianPF, posted a really challenging article about the best ways in which to help the poor. Outstanding post.

Jim Wang tells us how to survive an IRS tax audit. Fun stuff.

That’s the list! Have a great week and remember, do not just spend money, spend time with family.

Article by Stew

Photo by knuton

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Insurance. Every time this word is heard, we frown; we get sceptical. We all know someone who has a “story about an insurance salesman. Since it is a commission based environment (if they don’t sell, they don’t get paid), many clowns become desperate and turn into i-want-to-make-a-quick-sale insurance agents. They hijack your emotions (look your wife and kids in the eyes and tell them how much you love them… don’t you think they deserve financial security when you pass away?).

That having been said, it is a fact that most people need life insurance. Of course, reps are going to tell me that everybody needs it, I would tend to say it’s a case by case scenario. Many people are wondering if they need insurance and they don’t really know how to ask to get a clear an unbiased answer. Fundamentally, I think there are 4 reasons to get life insurance:

#1 Get life insurance to pay off your debts

If you have outstanding debts, you surely need life insurance. Why? Because you will surely leave people behind when you pass away. Since you can’t bring your debt to the other side, you will leave those you love with grief… and debt!

A mortgage, a car loan, a line of credit. They are all linked to one’s estate. Therefore, if you accept the estate of someone, you get the right to their assets AND liabilities. A decent life insurance policy will cover the debt and relieve your family from an additional burden.

In order to get coverage, you can ask for credit life insurance (provided by the creditor) or through an independent broker (which can be a regular life insurance contract, not linked to the debt). While the creditor may push pretty hard to sell you their life insurance product, the latter will usually be way cheaper (unless you have a pre-existing condition or take more than one type of insurance with the creditor such as critical illness or disability). If you are looking for a life insurance only, go with a broker.

#2 Get life insurance for your financial dependants

You are debt free and your mortgage is already covered? Congratulations! But you may still need additional coverage. The second reason why you should get life insurance is to make sure that your financial dependants don’t suffer from your economic loss (it will be enough grief to be left alone, it would be worse to have to start work the next morning on top of it!). Financial dependants could be your spouse, children and any other individual benefiting from your income.

When you pass away, some expenses are reduced. You don’t need to eat or buy clothes . However, there are a great part of your income that was used by your family to pay common expenses (heating, utility bills, mortgage, etc.) and if you are the main bread winner in your household, the lack of revenue will deeply impact your family’s lifestyle after your death.

There is an easy way to calculate how much you would require to cover for this lack of revenue but this will be discussed in another post alone. For now, just remember that if you are making good money right now, a part of it needs to be replaced by a life insurance policy so your spouse and children can maintain their lifestyle even if you are gone.

#3 Get life insurance for estate planning purposes

This third reason why you want life insurance concerns the wealthiest of us. If you have rental properties or an important investment portfolio, your death may trigger important capital gains. If you want your estate to keep its assets, life insurance can be put in place to pay off the taxes generated upon your death. This amount is usually pretty small for the rest of us so I wouldn’t be too concerned about my last cheque sent to Uncle Sam.

#4 Play Santa

I have met some people who want to make sure so and so gets enough to live the good life if they ever pass away sooner. Then, you can purchase life insurance to “give” to someone who doesn’t really need this money but would make their life much easier. For example, you can decide to increase your coverage in order for your children to receive 1M$ each. They surely need money if you pass away tomorrow, but they surely don’t need that much. This is why I call it “playing Santa”.

Final Thought on Why Do I Need Insurance:

I’d say that everybody needs life insurance. Some require more than others and some need it for a limited time while others will always need substantial coverage. This is why there are so many types of life insurance and costs to go with them. However, regardless of your situation, what is important is to know that you need insurance. In the upcoming weeks, I’ll share more thoughts about life insurance products and insurance needs calculations. In the meantime, I would be curious to know your experience about getting life insurance. What did you choose? How did it go? Did you shop around?

Author: Mike.

Image source: Sava the Aggie

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I remarked to my wife the other day that if we have no major, unexpected financial calamities this year, our financial situation might be back to where it was in 2002-2003. That is, back before we had our second and third child, before we went down to a single income, before I learned to budget, before we moved and before we took sixteen months to sell our home in another state. In financial terms, back to a below average debt-to-income ratio, back to being in possession of an emergency fund and back to being able to again contribute to our retirement savings. I do not want to count our chickens before they hatch and I probably just jinxed our prospects, but being almost back to even is a nice feeling.

Then today I was sitting at a stoplight and a really slick, wide rim, dual exhaust SUV pulled up beside me and for an instant, I thought, “Boy, it would be nice to roll around town in one of those.” My next thought was, “why in the world would I ever want something like that?” Even if I could afford to purchase it without using a loan, a nice car is just another source of worry. I have enough trouble parking our minivan next to other vehicles at Walmart, much less a huge luxury ride without a scratch on it. Then it hit me:

I have become far more interested in debt freedom than in a nice car, house or clothes. I like knowing that while we do not have a whole lot in this world, but that we are not living beyond our means, either.

And I would not trade that place of contentment for the best house on the block. There are people all around us who own really nice stuff, but that stuff only ends up being a source of worry. Isn’t it interesting to look back on one’s life and realize that you were just as happy before you came across certain luxuries than before you got used to having them around? I recently purchased a new computer to use for blogging, homeschooling, etc. The one I purchased is not extravagant, but it is probably the most expensive thing that we own outside of our car. The other night I thought about what I would do with that desktop computer if, for some reason, we suddenly had to pack up and leave and all we could take with us was what would fit in our car – and my thoughts went immediately to that computer. How could I fit it in? Would it fit under a seat? Boy, it would be a shame to leave it behind! I am always puttering with it and warning the kids to stay away from it if they are eating or have dirt on their fingers . . .

Good grief! That pile of circuits and wires is a useful tool, but I am not sure that I can take the stress of ownership!

I want to heed the warning of Ecclesiastes 5:10-20:

Whoever loves money, never has money enough; whoever loves wealth is never satisfied with his income. This too is meaningless. As goods increase, so do those who consume them. And what benefit are they to the owner except to feast his eyes on them?

The sleep of a laborer is sweet, whether he eats little or much, but the abundance of a rich man permits him no sleep. I have seen a grievous evil under the sun, wealth hoarded to the harm of its owner, or wealth lost through some misfortune, so that when he has a son there is nothing left for him. Naked a man comes from his mother’s womb, and as he comes, so he departs. He takes nothing from his labor that he can carry in his hand.

This too is a grievous evil: As a man comes, so he departs, and what does he gain, since he toils for the wind? All his days he eats in darkness, with great frustration, affliction and anger.

Then I realized that it is good and proper for a man to eat and drink, and to find satisfaction in his toilsome labor under the sun during the few days of life God has given him—for this is his lot. Moreover, when God gives any man wealth and possessions, and enables him to enjoy them, to accept his lot and be happy in his work—this is a gift of God. He seldom reflects on the days of his life, because God keeps him occupied with gladness of heart.

And be more like Matthew 6:25:

Therefore I tell you, do not worry about your life, what you will eat or drink; or about your body, what you will wear. Is not life more important than food, and the body more important than clothes?

Article by Stew

Photo by yachtfan

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As Frank Hubbard puts it, “The safe way to double your money is to fold it over once and put it in your pocket”. Do you think this is the only way out to save more money? No, it can never be this. Man is subjected to temptation and no one can ignore the sensation that money gives. However, the smarter way for you is to think and spend, than spend to think. If you are a geek or love gadgets, here is something very exciting for you. iPhone applications can now boost up your finances.

You wish to live life king size but at the same time want to control your outgoings. iPhones are craved by almost all gizmo lovers and so there are a number of personal finance applications that come as a package with it. Whether it is tracking your stocks, expenses or calculating your debts or converting currencies, you can have a real time pleasure with your iPhones. You can also manage all those multiple account woes or transfer money between your accounts with your iPhones. The very trendy GPS or WiFi helps users to find the nearest route to the ATM. You will get all these applications for a low cost.

Every time when you swipe your credit cards, you either end up paying huge bills or accumulate huge debts. What happens next is you consolidate debts in order to improve your bad credit history. Isn’t this complicated? Yes, indeed. The best way is to gorge on things that help you to lead a frugal life in style. So take a look at these 10 most stylish yet cost-effective finance iPhone applications:

1. In the numero uno position, it is worth mentioning about an iPhone application from Bank of America that comes free. If you have an account here, you can surely find a quick view of this Mobile Banking in its web portal. This helps you to manage and check your balances, make bill payments or transfer funds round the clock. The USP of this application is its ability to detect the nearest ATM or banking center locations with the aid of GPS in the iPhone. You can be rest assured about Bank of America’s online banking guarantee. So there would be no unauthorized transactions. This is enabled by a special advanced encryption technology that would safeguard your online identity.
2. Next in line is an iPhone application from PayPal and its absolutely free. You would no longer require opening up your wallets to make your payments. Do you know in Japan, people have almost given up using wallets as they are using this application? Right from train tickets till buying a beer from a vending machine, they are using iPhones. The PayPal iPhone application gives you complete access to your PayPal account for carrying out transactions and 16 currencies are supported by this application.
3. Bloomberg Mobile is another aesthetically sound iPhone application. You get this for free. Wall Street Traders forge on Bloomberg Terminal for analyzing financial market data and also get the latest money news and price quotes. A very trendy yet useful mobile application from Bloomberg will give you real-time scoops, stock market updates and give you a brief insight into the market trends. As you rotate your phone horizontally, you will get larger charts and this is made possible with the help of the iPhone’s sensor device. Let the power of Bloomberg in your iPhone and stay financially alert.
4. Have you heard about ATM Hunter from MasterCard? This also comes free. This is one of the best ATM locator or finder no matter where you are. This is just perfect for use in US and Canada. You just need to enter an address or an airport location in your iPhone GPS from anywhere. So now move around in style!
5. The next most coveted finance iPhone application Tipulator. Wondering what is this? This is another out of the world iPhone application. It stands way above in the world of calculators. Wired.com said Tipulator is, “…an elegant, intuitive interface…” Whether converting currency or other calculations, everything can be done at ease. There is an innovative disclosure picker for selection of unit names. A revolutionary magic lens displays only the information that you ask for.
6. E*Trade- another smart iPhone application is the best way to carry on stock trading as if you were on Wall Street. Get up-to-the-minute news and quotes, trade news or add to your watch list. There is another attraction as you get completely integrated historical and intraday charts as well as free streaming finance updates on your iPhone.
7. Are you having trouble in borrowing or taking out a loan? Well, Loan Shark on your iPhone can help you do away with financial blues. As Foggynoggin says, “Navigating the waters of financial lending can be very dangerous indeed. Loan Shark helps you fight off predators and assists you in making sound financial decisions for you and your family.” After you get the detailed information about the loan you want to take out, just click on the Amortization button that will elucidate the monthly payment. Not only this, your interest rate for the loan can also be checked with this.
8. Another venerable finance iPhone application is a mobile checkbook-PocketMoney that can track all your accounts and fulfill all transaction requirements based on payee. This will also generate essential reports and pie charts. PocketMoney gets its database files from the Palm version and Quicken Interchange Format (QIF).
9. Are you an investor? There is one special iPhone application for you-Daily Finance. This comes free from AOL to receive current stock quotes, money news, track portfolios. So you will have the entire market updates at your fingertips.

10.  Last but not the least, it is important to detect your spending and keep a track of your money when you are shopping. This is one of the most favorite pastime for commoners but something that lands us in a soup if we do not regulate our finances. So Save Benjis has catered to this issue and with this you can transform your spending habits as you will instantly compare prices while going on a shopping spree! You need not carry your American Express Card. Instead do not forget to get yourself a Save Benjis application on your iPhone.

So if you want to save money in style, make use of these finance iPhone applications. Get away from age old methods and make use of your gadgets to bag more money into your pockets. Live smart and spent smartly!

author: Dorothy Anderson

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Dave Ramsey has done well for himself as a financial advice guru. He was one of the first people to recognize that our culture is steeped in debt, dependent on debt and that debt was enslaving the American culture. Ramsey has not been successful in changing our cultural dependence on debt, however, there are many individuals and families who owe him a great deal when it came to turning their financial house around. One of Dave Ramsey’s more controversial pieces of advice deals with FICO scores, also known as a credit score. Ramsey has said things such as: your credit score is an “I love debt score” and, Americans today are “worshiping at the altar of the FICO score.” He downplays the importance of a credit score on a regular basis and emphasizes his strategy of paying cash for everything.

I think that if you have had the misfortune of going into debt, a certain amount of credit score maintenance is necessary. My credit score has been checked by potential landlords, insurance companies and potential employers. Since credit was a big part of the last ten years of my life, I don’t want them to check my credit report and see bad news. I like my high credit score, but I do not plan to use it for financial credit ever again . . . I hope.

I did not realize how much I had been affected by Ramsey’s advice until the other day when I told a friend of mine to not worry about his credit score and actually delay repayment of a loan. I think I gave the correct advice. Here is the scenario:

“Vince” is in his early thirties, no children, single and has a limited criminal record. About five years ago, he trusted in Christ and began to attend our church. Although there are some consequences from his past that pop up now and then, he has pretty much forsaken the influences and habits that hurt him during his twenties. For the past five years, Vince has been sober, faithful to church, hard working and stayed out of trouble. Lately though, he has run into a string of bad luck – lost his job due to the economy, has been unable to get into college, had to move back with his parents. Then, two weeks ago, he was in a car accident – not his fault – that left his only vehicle totaled. To make things even worse, Vince had not purchased “gap insurance” – not a mistake that he will make again – but the fact still remains. Vince has no job, very little money and now he owes $2,000 on a car that he cannot even drive.

Vince is struggling to pay his rent and even purchase food, yet in the aftermath of the accident, he was worried about his credit score that he had been carefully cultivating for the last five years. He told me that he thought he could partially settle the balance of the car loan using IRS tax refund of about $1,500 that he was due to receive this month. I made the following suggestion to him:

1. Forget the car loan for now.
2. Use the tax refund to purchase a $400 or $500 beater.
3. Save the balance of your refund to live on.
4. Get the best job that you can find – fast food, janitorial, whatever – hopefully within walking distance of your house.
5. Start paying on the loan again when you have regular income.
6. Never use a loan to pay for a car again.

Vince’s response to me was, “but won’t that kill my credit score?” I told him that it would, but right now, he has much bigger fish to fry than FICO. Vince was almost ready to go without food in order to “please” his credit monitoring service. I believe that God expects us to settle our debts. Not paying or refusing to make payments on money that has been lent to us is sin. Vince definitely needs to eventually finish paying off the car loan because it is the right thing to do, however, right now, the credit score can wait.

Article by Stew

Photo by Library of Virginia

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Spring is springing in my neck of the woods. I hope you see the light at the end of the winter tunnel where you live. Here are some articles that I recommend this week:

The second installment of my time saving articles was featured at the 246th Edition of the Carnival of Personal Finance.

An article about making money online, written by my boss was featured at the Carnival of Money Stories.

Dough Roller asked if renter’s insurance is worth the cost. My policy is eleven bucks a month. I think it is worth it.

Lynnae talks about the tension between quality and price.

Do you ever find yourself fascinated by things that you do not really understand? I did as I read an article about short selling stocks at Moolanomy. Whew! I will never do it, that is a pretty tension-filled way to live.

Another article about home insurance, Mrs. Micah encourages us to document our possessions for insurance purposes. Yep, I need to do that.

Do you block all that extra stuff on Facebook? Yeah, me too, but Mighty Bargain Hunter profiled the Buddy Bailout . . . I might be interested in that one.

That’s it, that’s the list! Hope you have a great weekend. Find a good church on Sunday and remember, do not just spend money, spend time with family.

Article by Stew

Photo by spisharam-AWAY

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Before I start with this morning’s article, I want to ask you to vote for me in the Free Money Finance March Madness contest. The best personal finance article will win the right to give $1,000 (generously provided by FMM) to a charity of your choice. I have selected a charity that helps children. Please comment on this post with the word “figures”. Thx a million!

A few weeks ago, I wrote a quick 3 part series about how to teach your children about money. Teaching money management is probably one of the most important legacies you can prepare for your children. Making a budget, saving money and avoiding credit abuse are fundamentals that everyone should be aware of, especially our youth. One of the first tools you can use to teach your children about money is by giving them an allowance. However, there are certain rules to apply if you want your children to benefit from this experience.

Rule #1; present the allowance as a privilege

Money is not a given, it has to be earned. This is true at any age. If you give your child an allowance, he should know that it is not automatic. It is important to explain why he receives this allowance (keeping his room tidy, washing the dishes, etc.) and that not everybody receives one.

No matter the amount, the value of working and earning an income is more important than the allowance itself. On the other hand, I think that by telling your kids why they receive their allowance, it makes it easier to explain when they don’t do their chores.

Rule #2; no cash advances

Our children will learn faster than we expect to live off credit. And the first lender they will approach is the “Mom & Dad Bank; founded since your date of birth”. So don’t play the payday loan or cash advance service with your children. If they need more money to buy something, they will have to wait until it’s payday before cashing their allowance.

Rule #3; money is not everything

I am a big advocate of making more money year after year. But I don’t really believe in the almighty back; I like what it can give me access to; special moments, treats, comfort and security. As you will always find someone doing your job with a better pay check than yours, your son will surely find one of his friends making a bigger allowance (and maybe doing less work that he does!).

I don’t think the amount of the allowance matters. However, it will to your kid! This is why I will try to spend time with my son and explain that he does help us and we appreciate it. I will also tell him that it is the maximum amount I can give him right now and that we all have to learn to live with this amount; this is called budgeting

Rule #4; when should we give the first allowance?

This is always a big question. I am currently asking this question as my son will turn 5 this year and will start school this autumn. I didn’t talk about this with my wife yet but I think I will start when he enters school.

Receiving an allowance is also a milestone in a child’s life. This is living proof that he is growing and that he can become more responsible. Since he will start school, I think it would be a good way to show him that going to school is like going to work.

I don’t expect to give him much at first, especially since I want to start at such a young age. Probably $1 or $2 a week. Just so he can start calculating how much he makes per month and realize that he can go to the dollar store to buy a toy at the end of the month. It won’t really affect my budget and we will start a great money lesson.

Your take: How do you manage allowances?

As a young parent, I am not exactly quite sure how/when to give child allowance. What is your experience with kids and money?

Author: Mike.

Image source: yup that is my 2 kids

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A long time ago, Benjamin Franklin or somebody said: “Early to bed, early to rise, makes a man healthy, wealthy and wise.” When I was young, I had the habit of sleeping in on Saturday mornings, I remember stumbling up the stairs around 10 am and my dad said, “the day is half over!” When I started college, I quickly learned the benefits of getting up early in the morning. First period at my college was 7:20 am and I was assigned first period for my entire first year at school. The early class time was not my choice, but by the end of the fall semester, I learned to enjoy getting up early and continued the habit for most of my college career. I even started getting up early on Saturday mornings to spend time in the nearly empty library. I got so much more accomplished when there were no distractions (girls) in that venue.

The benefits of rising early are numerous and well-known. Even Scripture exhorts us to get out of bed: “O God, You are my God; Early will I seek You” (Psalm 63:1). The wife who “rises also while it is still night and gives food to her household” is praised in Proverbs 31:15 while the one who sleeps late is called sluggard:  “As a door turns on its hinges, so a sluggard turns on his bed” Proverbs 26:14. I am well aware that almost every area of my life improves with an habit of getting up early.

The difficult part is getting to bed early enough in order to enable me to rise early. It is just that when the kids are in bed, it is so nice to relax and watch a little tube or surf the net. Here are some motivations for the “early to bed” part:

• Save electricity: think about how much less electricity you might save if you headed for bed at 10:30 pm rather than 11:30 pm? You could turn off all lights, the television, the computer and everything else.
• Save heat: We always turn our heat down two or three degrees at night. Get under those covers and give your furnace a rest.
• Quality time: Mrs. Stew and I interact more when the television and computers are off and we are just lying in the dark. Lot’s of good conversation and sometimes a little “conversation”.
• Eat less: When I stay up late, I always end up snacking on something that I do not need. When I am in the “stay up late” cycle, I pretty much eat a fourth meal every night.

Get to be early tonight and hit the ground running tomorrow morning!

Article by Stew

Photo by rkramer62

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High Yield Rate: 1.39%

The very first thing we look at when thinking of a high yield online savings account is the annual rate. Ally Bank is offering a decent 1.39% (FDIC secured) interest rate.

Smaller Rate than SmartyPig but More Flexibility

I will make a few comparisons between the SmartyPig account and the Ally Bank product as they both offer some of the highest interest rates on the market right now (especially when you consider minimum deposit amounts and no fee accounts). When we compare rates, we have 2.01% for SmartyPig vs 1.39% at Ally Bank. While this seems like quite a difference, I would say that the latter gains additional points with its flexibility.

As you will see in the fees’ section, Ally Bank doesn’t require a minimum amount or monthly deposit. Therefore, it is easier to manage your money if you don’t have any specific goals or if you only want to invest a starting amount and leave it there as an emergency fund.

What About The Fees?

As you can see, the first 6 first transactions are free. However, it is quite expensive to use this kind of account as a regular savings account with a $10 charge per transaction exceeding the first 6. However, a high yield online savings account should show 1 to 2 transaction per month (a monthly or bi-weekly deposit ).

I also like the fact that you can write good old, paper checks from the online savings account without any additional fees.

There is no minimum balance and no monthly fees related to the online account. When compared to the SmartyPig high yield savings account, you can open the Ally Bank account without a systematic investment. In fact, you can open the account online with a 0$ balance.

The High Yield Rate Is Not A Promotion, It’s A Philosophy

Besides the flexibility offered by Ally Bank, I also like the fact that they really want to offer a high yield online savings bank account with the lowest fees possible and the highest interest rate.

Therefore, the 1.39 annual percentage rate on their savings account is not a promotion but their regular rate. Then, you know that your savings account won’t go from one of the highest interest paid to almost nothing like some banks do once their promotion is over. Ally Bank definitely wants to position its online account as a steady high paying interest account.

Along with this philosophy, Ally Bank is also compounding your interest on a daily basis as compared to other banks that do so monthly, quarterly or annually. The fact that the interest helps your money work harder for you and grow faster.

As with most well known online savings account, the Ally Bank high yield savings account is secured by the FDIC up to $250,000.

Before making a decision, look at this chart; the Ally Bank account is a real strong choice

For your information, I have compiled the highest paying saving accounts among all in this chart. SmartyPig looks like the most attractive due to a 2.01 APY% (and additional bonus if you take the gift certificate from specific stores) but the Ally Bank savings account is definitely the choice with the best combination of flexibility – low fees – high interest rate.

Bank

APY

Min Deposit

Review

Notes

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APYMin

9.65%

$0

APYMin

2.01%

$0

Review

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APYMin

1.50%

$100

APYMin

1.49%

$1,500

APYMin

1.35%

$500

APYMin

1.29%

$0

Review

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APYMin

1.25%

$10,000

APYMin

1.25%

$1

APYMin

1.16%

$10,000

Review

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APYMin

1.10%

$1

APYMin

1.10%

$1

APYMin

0.95%

$50

APYMin

.90%

$100

APYMin

0.85%

$5,000

APYMin

0.50%

$1,000

APYMin

0.50%

$1

APYMin

0.35%

$5

APYMin

.10%

APYMin

0.10%

$1

APYMin

0.05%

$1000

APYMin

0.05%

$100

Savings Account and Money Market Rates updated daily. Data provided by Debt Kid.

Author: Mike.

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I think that on the whole, most Gather Little by Little readers are not major credit card users, so most of you will not notice any credit card changes. Last Monday, several new laws regulating credit cards went into effect. I listed the changes in a post here at GLBL a couple of months ago. This month, we start to see the effects of the new laws. Here is what I have noticed so far this year:

• Fewer balance transfer offers: In 2007 and 2008, 0% introductory APR balance transfers helped me to make extra income through balance transfer arbitrage. When savings account interest rates took a plunge early last year, arbitrage was no longer a way to make money, however I still used balance transfers in order to stay afloat financially while it took 16 months for our house to sell. I am sure glad that I no longer need such offers because balance transfer offers with favorable terms have almost completely dried up. In 2007, I could get five or ten or fifteen thousand dollars in free money for 12 months without fees and interest free from almost any credit company out there. At one point, I had close to $100K in various bank accounts earning interest at 5% or even 6%. All I had to do was stay current on my payments and pay off the balance before the introductory period ended. With the new legislation, those days are long gone.
• Closed credit cards: My wife and I only use one credit card, however we have close to fifty open credit card accounts between us, the result of past transgressions . . . don’t ask . . . While we do not use the old cards, I have kept the accounts open because closing a line of credit hurts one’s credit score. Over the past two months, several of our idle accounts have been closed by the banks without warning. Mrs. Stew and I closed a couple more accounts when the banks stated that the accounts would now come with annual fees. I expect our credit score will drop a few points next month.
• Increase in fees: I never pay fees, but I have noticed several fee changes – over-limit, late payment fees have increased. I have also heard of new fees being charged, however, I have not seen any new fees on my card.
• Increase in interest rates: This is the big one. The interest rate on our main credit card went from around 9% to between 13 and 14% – a big jump. But not as bad as if I have a late payment, then my APR will increase to 29.99%! Yikes!
• Decrease in rewards: Our main credit card had great cash rewards, I think that we earned over $1,000 in the two years that we used the card. We were careful to make purchases that earned us almost 4% cash back. When the bank changed that rewards program was significantly back in December, we switched to an airline card that earns flight miles on an airline that flies to airports near both of our families.
• Changes to statements: This is interesting. Some of the changes were mandated by law, some are dependent on your credit card company. I looked at my statement and found that it lists my total fees and interest charge in 2010 ($0 for both). There is also a really prominent section that explains how long it will take me to pay off the balance if I only pay the minimum amount – 12 years in this case! It also lists how long it will take if I make no additional charges, but pay double the payment: 3 years. Of course, I always pay my balance in full every month.

Have you noticed any other changes to your credit card statement this month? (If you don’t want to admit credit card use, you can claim that you saw “your sister’s” statement or something like that.)

Article by Stew

Photo by sJasonRogersx

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