Description: This passage is mainly about surge credit card login. In this passage, the writer tells us 5 sneaky secrets that credit card companies don’t want us to know, in this way we can save a lot of money.
Credit cards are the first cause of bankruptcy United States, 99% of all my cases have credit card debt in them, now I think that filing bankruptcy is a lot like getting into a car accident, someone that is a safe driver or who’s a speeder, or a saver can still get in a car accident, it’s is similar to Gramma, who drives very slowly and safely typically still gets in car accidents.
On the other hand, fast drivers or people that I consider as spenders get into bankruptcy or have financial problem probably with a higher incidence, are you a spender or a saver? You should think about that. I’m a spender which is ironic for what I do, but that’s me, but my point is that I think there is a certain randomness to people needing to file for bankruptcy.
Some people encourage it a little more usual scenario, husband and wife carry a little bit too much credit card debt usually at a high interest rate moving along spending more than they should buy, and then something happens to one of their incomes job loss dissolution illness, and they’re in trouble sometimes in 90 days, they are done in 90 days.
Now they shouldn’t be carrying that much debt, but they are able to service it, the credit card companies love that they service the debt at a very high credit rating, because they are servicing the debt, and 90 days later they’re done.
There is a Harvard professor named Elizabeth Warren, you may recognize that name, she writes two books, one is The Two Income Trap, and the other one called Forgive Us Our Debts, and she does a financial or statistical analysis of a select group or a sampling of people that filed for bankruptcy.
She has found that there are three root causes to individual bankruptcies job loss dissolution illness, most bankruptcies can relate to one of those three things, and those things most of the time not all the time are unforeseen or uncontrolled the debt piles up on the cards, it’s the best place and the easiest place for people to borrow money by charging and paying only the minimum monthly the debt accumulates, and they’re done in a very short period of time.
Now it’s the easiest place to accumulate debt, but it’s also the most dangerous, because to repay debt, remember what we say, the average interest rate is 15 percent in some cases 1821, I’m going to tell you about 29 percent in a couple of minutes which is almost impossible to repay, there are some hints with respect to this.
The first dirty secret to avoid this problem is that one carries only two credit cards, I tell clients to carry a business, and a person makes it great for tax purposes at the end of the year, if one gets messed up or that the magnetic strip gets messed up, you have something to substitute, but you only need two credit cards.
In the event you break down, and you need to tow, you want to buy one of those cool watches on the TV, or something else happens in an emergency situation, two credit cards are all that I carry, and I advise that to pay each month, if you don’t pay them each month, don’t use them the next month.
It’s very easy to accumulate balances, and frankly I’ve struggled with this, it’s a hard thing to do, but pay each month and consider going cash, there are studies that show that when people pay with cash, they spend 18 percent less, I give an example, I have got a Starbucks card, I love the Starbucks card,it is next to the office in Woodland Hills, I’m there once or twice a day.
I keep putting money on it when I get beep, one day I didn’t have the card, so I was going to have to pay cash, and I ordered a latte, and they said that 475 for that, I said that what caused 475, I’ve been beeping it on the card this whole time, when you pay cash, you’re a stingy or consumer, you’re a better consumer, it’s hard to give up those hundred-dollar bills.
When you go to the bank, they look at you oddly, it seems that you’re drug lord or something, but you get a hundred-dollar bill, you savor that thing, you don’t want to break that thing, pay cash, now the other side of it is that if you’re paying cash, it’s harder to account for what you’re spending, so there’s a push and a pull to that, but those are some ways to avoid that, I’ll show you someone that’s in trouble.
When I sit down and talk with someone, if their credit card debt is equal to or greater than their annual income, I know they’re terminal, let’s fill out the forms, give me some money and some information, I run into a lot of people, a lot of people like that interest.
Interest is the four sneaky secret to things that I want to talk about there, one is to pay minimum monthly, which is completely dumb, usually we pay one to three percent of the balance, and it takes 20 years or more to pay off minimum monthly, it is almost impossible to pay off a debt when you’re paying the minimum monthly.
If anyone wants to sell you something, the premise will the minimum monthly, it will only be this, walk away if they don’t have confidence in their product, they’re selling you credit financing, minimum monthly is a fool’s errand.
Now it’s a great business for them, they’re getting 15% 20% 21%, and if you take a big pool of debt, that’s a marvelous money-making opportunity for the company, but it’s not so good for us, there was a federal law seven or eight or nine years ago, and that’s been good, that hasn’t slowed some people down.
I mean that you considered the rule of 72 money doubles at ten percent every seven years, or you’re paying a higher interest rate, it’s going to double that much quicker, no one should ever think about carrying a balance or paying the minimum monthly payment.
In fact they do a study and they have found out that 45% of Americans almost half of Americans pay minimum monthly, think about the yoke and the burden that’s causing on people, it is unbelievable, there’s a person named Dave Ramsey, anyone has heard of Dave Ramsey, he’s got a show back in Tennessee, it is back there a couple of months ago.
He talks about this, and what he does is that he says that if you’re going to work your way out of debt, you can’t pay men on monthly, you get to chunk it down, you get to eat jelly beans and cotton candy for a couple of years, and if you pay it all off by chunking it down, you come to my radio station, I am there.
People walk in, and they scream over-the-air, we’re dead free, and that’s cool, but those people are working one two three four years without a lot of stuff to get that debt paid off, that’s a good solution for someone, that’s a marginal bankruptcy client, and I encourage it, but they sacrifice.
The second thing about interest is that no interest all comes back if you don’t pay, so you walk into a store, and it says no interest for a year, it means you get to pay the balance off in a year, and if you don’t, they’ll go back and charge you interest from day one, now you get to pay interest from day one, so never do one of those deals.
I have bought a washer and dryer with Sears, and when we bought him, we put them in, it was so nice, shiny and pretty, it was so nice when they came in, but six months later, we had to pay, and we wanted to pay it off and full, because we didn’t want to pay interest, and to pay for Washington dryer, now the lint trap was a bummer.
So I don’t like those deals, they offer him all the time, I don’t do that, if they persist I will go, you know what I do for a living, I’m a bankruptcy attorney, I’m your boogie man, don’t start with me on that, I have a friend that goes to a local mattress store, they sell mattresses that you dial in a number or something.
I have loan though, I can say the number, and he looks at the fine print, buy one of these beds, they say that we have no payments for a year, and they sign him up, he goes home, he look at the paperwork, if he doesn’t pay in full in a year, the interest for the prior year comes back at 29%, he will pay a third more if he misses the date, and he could have wrote the check at the uptake.
But if someone says that you don’t pay for a year, that’s very attractive, but they know that enough people are going to miss that deadline, this is good business, so don’t do it, there are electronic retailers that do the same thing, I can go on and on with people that do this, don’t do it, don’t need it, don’t need a department store credit card, because you can pay cash or you can use your one credit card.
If you pay it off every month, you need all these credit cards, remember that it used to be that, the affluent ladies that are going shopping have the wallet, they will open it up, there are all the credit cards, now it’s cash, because who wants to manage all that plastic and do all that stuff and take all that risk, and think about that no no wants to do that, don’t do it, it’s a it’s a waste of time, and certainly don’t pay retroactive interest if you happen to miss that date.
So here are five sneaky secrets, five things to think about five tips, and two of them have two subsections, so there are seven total ways to avoid being take advantage of, by the credit card company, you’re going to see a Visa card thing at the Super Bowl, I think they sponsor the half-court pepsi now.
But they do these commercials, they lose your luggage run off to Greece, that is MX, or it’s smart money, it’s the stupidest of money, you’re going to look at these advertisements now, and I’m not going to participate in anymore, and that’s my hope.
You’ll think back to Hagan talking about all this crazy stuff, and I’m not going to do that anymore, I’m not going to let them record my phone conversation anymore, I’m not going to pay that membership fee anymore, I’m going to be a lot more proactive about this, so hopefully I’ve been able to reveal some of their secrets.
Maybe hopefully it appalls you a little bit on some of these things, such as 29% interest, hopefully it saves you some money, go home and call them up, look at your statements, hopefully it reduces your risk, maybe of incurring debt, it reduces your exposure to bankruptcy, here are five sneaky secrets that the credit card companies don’t want you to know, thank you very much.