Fixed Rate Credit Cards: Do They Exist?

Over the years I have many clients tell me about this great fixed rate credit card at5.99% or lower. They didn’t want to put credit card in mortgage since they had this low rate on their credit card. I would tell them that at any point a credit card company can change their terms even if they weren’t late.

Well jump forward to the present time and I told them the truth. Many major credit card companies from Citi, Chase and Bank of America are now raising rates on people who had low promotional rates. Most of the rates are going from single digits to double digits of 12% or higher.

Why are banks doing this to good paying customers? The banks claim it is to reduce their financial exposure from clients. How does that make sense when their customers payments have to increase to make up for the higher interest rate? It simply is a way to make more money.

Remember, currently banks can borrow money from the Federal Reserve at almost 0%. Now they are lending the money at over 10x the rate they have to pay back. Keep in mind banks make money from lending people your money. This is Finance 101: Customer deposits money to banks. Banks loan money to people and earn interest. Banks pay customer very little interest or in this case the Federal Reserve.

A news article said that Wells Fargo earned over $4 Billion dollars this last quarter. Why or How? They could borrow money for almost free from the Federal Reserve and lend it at 5%, 8% , 12% or more. It is very easy to earn a lot of money from interest.

If you owe any money to a credit card company or bank you owe it to yourself to buy my book, “How To Beat Banks & Credit Cards At the Money Game.” It is almost free considering how much money you will save over the years. I have had clients implement the ideas in my book and save over $40,000 or more in finance charges. Most of my clients had a goal of being debt free and most have accomplished that goal.

If you are sick and tired of being taken advantage of by banks and credit cards you need to do something about it TODAY not tomorrow.

Hope this helps.

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Grace Period & Credit Cards

Grace Period in its simplist terms would be how soon interest starts building on purchases. A Grace Period of 0 days would mean interest starts the next day after the purchase. So if you bought a new pair of pants today for $100 there would be interest owed by the time you receive your statement. If you only paid the $100 there still would be a balance.

For easy math let’s say your interest is 12% which means over 12 months you would pay $12 in interest on the $100 purchase. Once again this assumes you continue to owe $100 for the entire year. In this example you would have $1 of interest on the pair of pants you bought. This is an example of a Grace Period of 0 days. Most credit cards have more than 0 days.

A good Grace Period would be at least 20 days for new purchases. Where do you find the Grace Period on a new account application? It would be found on the back of your application. There is a universal box which shows or explains the details of the credit card. One box discloses the Grace Period for that credit card.

The longer the Grace Period the better for you the customer. I have seen this vary from company to company. I’m sure you have credit cards that you have no idea of the Grace Period on most cards. An easy solution is to contact your credit company for that information. They should be willing to let you know the number of days you have for new purchases. If not, you may want to find a new credit card.

I hope this helps when you are reviewing your credit card applications. Grace Period is usually something no one looks at since they are usually most concerned about the interest rate.

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Credit Card Same As Cash

Over the years same as cash purchases has become very popular. Same as cash offers come from appliance, computer, furniture and home improvement stores. What you need to review with these offers is how soon do you have to start making payments.

I have seen offers where payments are deferred for up to two years. Many people think this is great since you don't have to make any payments for two whole years. However, interest is building on the balance.

For example you purchase a new furniture set from you local furniture store for $1,500. The offer states NO payments for two years. The only problem is the interest rate is probably 19.99% or higher. What this means to you the consumer is that you better pay off that entire $1,500 before that 24th month. If not, the new balance will be $1,500 plus the accrued interest. This can quite significant if you haven't made any payments the previous two years.

With deferring your payments for two years the local furniture store or actually the finance company is hoping you won't pay off the balance in two years. The interest charged is how the finance company will earn their money.

The second type of same as cash offer would be no interest for two years as long as you make a monthly payment. How this offers differs from the first is that some type of minimum payment is required to continue the offer. If you happen to miss a payment the offer may no longer be valid. Whether or not missing a payment will cause such a scenario is based on the company. Always read the fine print.

The monthly payment requirement is actually a good feature since you are required to build some type of payment in your budget. Over the same as cash offer you would be lowering your balance. Just like the first offer the interest will continue to accrue on the unpaid balance.

Same as cash offers are very good ways to save some money on finance charges, but you must have knowledge of what happens after the offer expires. If you happen not to pay off the entire balance by the end of the offer period the accrued interest will be added to your balance.

Let's use the same $1,500 I used previously. Suppose you paid only $1,300 on the $1,500 after the two years. According to most same as cash offers ALL the interest built up over the previous 24 months is added to the remaining balance of $200. This amount can be pretty large and the reason why the finance company made the offer in the first place.

The finance company realizes a certain will pay off the entire balance and some will not. You need to make sure you are not one of the one's left with a balance. To make sure this does not happen to you definitely should divide your balance by the number of months you received the same as cash offer and subtract two months. For example the offer is for 24 months you would divide your balance by 22 months. The reason should be obvious. You don't want to come to the 24 month with a large balance still due.

I hope this helps you when you are looking at making a purchase of a new TV, computer or furniture.



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Credit Card Payments

Why do credit cards seem to take so long to pay off? I've met with clients who are stunned that it can take over 15 years to pay off a simple $4,000 balance. They feel by paying a $10 to $15 more than the minimum should cut the pay off date significantly. It does only about 15 years.

What you as the consumer need to do is look at each month's statement and review how much of your payment goes to interest and principal. You may astonished that only $20 or $25 of your $75 amount actually goes to the balance or principal.

Credit card companies really like all their customers who only pay the minimum every month. If you happen to be one of the minimum payers out there, your balance will pay off in about 35 years. Not good.

Another way we increase our pay off dates is to continue to use the credit card for monthly purchases. I had a client each month charge their satellite bill on a Visa and they wondered why the balance wasn't getting any lower. They were charging an additional $125 a month, but only paying $200 a month. When I reviewed several bills I noticed the balance was increasing since the $125 charge and the interest was actually more than the payment. Not good.

What made this even worse was they had the money to pay each month it was just out of convenience they used their Visa. Now they pay out of their checking account with a direct debit.

You can save a lot of money just following some simple steps, but steps we are not taught in school or by our parents. I go over many great tips in my book you can purchase at debtstrength.com The cost of the book can be recouped just by implementing only one idea.

Once again knowledge is power. Increase your Debt Strength today.




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Believe It's Possible by Vic Johnson

This is a great article by Vic Johnson

"Belief is the basis of all action, and, this being so, the belief that dominates the hearts or mind is shown in the life." - Above Life's Turmoil

You will rarely attempt something you don't believe possible and you will 'Never' give 100% of your ability to something you don't believe in.

Some years ago I was listening to a friend speaking to a business audience. She quoted a teaching by David Schwartz from 'the Magic of Thinking Big' that rocked my life. She said, "The size of your success is determined by the size of you belief." Now that was the first personal development book I ever read and I've read it at least 20 times since. I'm sure that I had heard that concept many times before that night. But it impacted me so much that I wrote it down and must have looked at it a hundred times or more in the thirty days after that.

I spent the next few months focused on strengthening my belief in myself and in what I wanted to do. I took to heart what Wayne Dyer wrote in You'll See it When You believe It: "Work each day on you thoughts rather than concentrating on your behavior. It is your thinking that creates the feeling that you have and ultimately your actions as well." So I worked each day on my beliefs by constantly affirming myself using written and verbal affirmations. The years since have been an incredible rocket ride.

One of the best known stories about the power of belief is about Roger Bannister, the first person to run a mile in under four minutes. Before his accomplishment it was generally believed that the human body was incapable of such a feat. But as soon as he had done it, scores of others accomplished the same thing. Thousands have done so since and today it's not uncommon for it to be done by a talented high-schooler. Did the human body change so that this could be done? No. but the human belief system did!

Nightingale-Conant says Napoleon Hill is considered to have influenced more people into success than any other person in history. And his most quoted line from Think and Grow Rich describes the power of belief: "Whatever your mind can conceive and believe, it can achieve." Just believing that statement, truly believing it deep down inside, is a bold step toward living your dreams.

Lisa Jimenez, in her great book Conquer Fear! Writes, "change your beliefs and you change your behavior. Change your behaviors and you change your results. Change your results and you change your life."

And that's worth thinking about.

By Vic Johnson

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Credit Card Debt

We currently owe $957 Billion or more on credit cards. One of the best ways to eliminate credit card debt or any kind of debt is through debt stacking. I have made several posts about debt stacking in the past.

I have several resources you can use to set up your very own debt stacking plan.

1. I the book "How to Beat Banks and Credit Cards at the Money Game"
2. Is a finance program you can use to set up a debt stacking plan.

Both are excellent to help you accomplish your financial goals through debt stacking.

How to use debt stacking? It is very easy you take all the money you are paying on your credit cards or bills over the required minimum. Most people usually pay $20 to $50 extra on a couple bills to attempt to get out of debt.

The little secret is that this is not very efficient. It will work, but not as well as debt stacking. I was with a client once and they paid off one car and wanted to use the extra $300 to pay off the other car. However, this car still had a balance of $12,500. They had several credit cards with a with less than $2000. Debt stacking looks to free up money by paying down lower balances first. By following a plan like this can increase the amount to pay on other bills.

The best way to do this is to purchase a software product to accomplish a debt stacking plan. The amount you pay is minimal considering the amount of interest you will save on your credit cards, sometimes $20,000 or more.

The program will show exactly how much you are currently paying by following your plan. What makes this program unique is that it will take the extra money you were paying and give you an exact plan for you to follow.

I have used a program similar to this one and it is almost exactly the same. The only difference is that is won't charge you a single dime to update the plan. Follow this link to the program. CLICK HERE


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Profits Are Better Than Wages

My mentor, when I was 25 years old, dropped a phrase on me that changed my life forever when he said, "profits are better than wages. Wages will make you a living, profits can make you a fortune." You know it is a bit difficult to get rich on wages, but anybody can get rich on profits. Profits change your whole attitude, even if you start part-time. Whether it's part time on your entrepreneurial business, network marketing company or service business.

It can be a landscape business in the summer or hanging Christmas lights in the winter. It can be training, consulting or tutoring. It can be your hobby such as painting, writing, crafts, woodworking, computers or cooking. But once you start investing even part time effort into your own business, you will find how much more exciting it is to get up in the morning and go to work on your fortune, even if you're only spending a few hours a week doing it.

How empowering it is to be able to go to work on your fortune every day rather than going to work to pay the rent. Now - it is noble to go to work to pay the rent, but if you could also parcel out part of your time - go to work to make your fortune. Your whole attitude changes; your spirit changes. It is in your voice. It is in your face. It is in your gestures. And then you can say, "I am now working full-time on my job and part-time on my fortune because I found a way to make profits." Wow!

And I will know what you mean.

To Your Success,
Jim Rohn


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