Be Responsible With Your Credit Card Use

While reading some other blogs on credit card use, I wanted to agree with many of the comments that I read. Some said don't use credit cards, they are evil. While I won't go that far, you do need to be fiscally responsible. Others related stories of people in serious credit card debt.

Let me be clear about the use of credit cards. If you cannot pay off the balance in full each month, do not attempt to get credit cards that provide you a discount. The finance charges alone will eat up any savings you might get.

I would suggest that if you find you cannot pay the credit card in full each and every month, you need to cut that card up. Get rid of it. Start trying to pay off those balances with a vengeance.

20% or more interest a month is highway robbery. If someone said they were cutting your pay by 20%, you would be really upset. This is the same thing, they are just pulling the money out of your pocket in a different manner.

If you pay off your credit card bills each month, good for you!! You probably don't need to read the rest of this. However, if you do not pay off your credit card bills each month, you absolutely need to read this.

Let's talk about the checks that come with your credit card statement. Shred them. Don't even be tempted to use one. I was looking at some that I got today, and they advertise 0% interest (for 5 months), for the first check, and 3.99% interest for an additional check, all in big bold type. In the fine type is where they put all of the gotcha's. There is an immediate transaction fee of 3% when you use any one of the checks.

They use such advertising slogans as "Save by transferring balances from higher APR accounts", "Write a check to yourself", "Go on a well deserved vacation", ....

So let's say you are going to Florida for vacation, and need $2,000 for the hotel, gas and meals. But you don't have the money. Is it a good idea to use one of these checks. You write the check, immediately the credit card company assess you 3%, or $60. You and your family enjoy yourself, then come back. The bill shows up, you don't have $2060, so you pay $50, with the intention of paying off the card before the 5 months are up.

The 5th month rolls around, and you don't have the $1860 to pay the bill, because you didn't set aside money to pay it off. Now they start hitting you with interest. You continue to pay the $50 a month. Guess when the balance is paid off? Assuming 20% interest rate, it is 5 years later!!! And that is also assuming you don't get the silly urge to do the same thing again next year! Plus, during that time you paid in $1,047 in interest. That vacation cost you right at $3,050.

NO, NO, NO. These are not good ideas, nor are they financially responsible. If you need to borrow money (which I don't recommend), go to your local credit union for a loan. If they won't give you one at a decent rate, then most likely they are trying to tell you something.

Even though I have written about discounts on air travel and hotels, vacations are no excuse to borrow money. If you cannot afford a vacation, then plan a "staycation", where you search on the internet for fun things to do near your home.

Go to some public park and have a picnic. Or find a nearby lake. Sit back, relax, and you will be rewarded by avoiding that $2,060 or much worse bill at the end of the month.

Use your money wisely, don't give it to the credit card companies.

How we saved gas money on our vacation

For a recent vacation, we recently took a trip to Chicateague Island, Virginia. So the first thing I did was to use MapQuest to determine the route. Then I opened up www.atlantagasprices.com and chose the feature of mapping gas prices. Then I zoomed out until I could see the whole southeast. Once you get out past a certain point, the map is color coded to show you where gas prices are the highest and lowest.

So I selected areas that looked like they were at least 100 - 200 miles apart, and I knew that I could probably use a stop to stretch my legs anyway.

I determined that gas prices were lowest in Spartanburg, SC, then Thomasville, NC, then a suburb of Norfolk. While the cheapest gas in my local area was $3.97 for regular, in Spartanburg it was $3.72 right off I-85, in Thomasville, it was $3.82 and in Norfolk it was $3.82. In most of these locations, the prices were $.10 a gallon higher at stations just one exit away!

So I got the address of each station, added it as a stop to Mapquest and had my travel plan all printed out. I added the stops to my Garmin GPS, but that is another story for another time.

It turns out that two of the stations I chose were BP stations, so I earned a 5% additional discount on the gas I purchased. All, in all, I saved just over $55 on gas expenses. Not too shabby.

Ok, here are a set of websites that will help you save gas money even on a daily basis. I use www.AtlantaGasPrices.com every time I know that I need to buy gas. This website shows me the lowest gas prices that members have reported over the last 36 hours in my area.

I can even narrow it down to a suburb of Atlanta. I can choose a type of station such as BP, Kroger, RaceTrac, Exxon, etc.

I don't drive out of my way to save a few pennies, but if I am going to work, running some errands, or just going to be out and I know I am going to need gas, I check this website.

Here are some others:
www.newyorkstategasprices.com
www.californiagasprices.com

Go to any of the above mentioned websites, and you can scroll down and look on the left hand side of the webpage where it says "Metro Areas OR States/Provinces", and click on the drop down arrow, select your state or metro area, then click on the go button just to the right and bam, you are there!!


I hope this helps you out during this high gas price time.

Let me know if any of this works for you, or if you have any other suggestions on gas prices.

One other website I just found has a contest going on for a $25 gas card. Just subscribe to their blog. Here is the link. Gas Card Giveaway.

Happy bargain hunting!!!

Credit Cards That I use

Personal credit card choices certainly depend on the individual's credit card habits. For instance, I don't care about what interest rate my credit cards choose because I pay off my credit cards each month. None of the credit cards that I use charge an annual fee either.

If I could not pay off my credit cards each month, then I would certainly be looking for the low interest credit cards.

My credit cards consist of three Chase credit cards. They happen to all be from Chase, because Chase bought up the companies that originally issued my cards.

I have a Chase PerfectRewards credit card. This card pays 3% discount on gasoline, and 1% on all other purchases. Right now when you first sign up you get 6% discount on gasoline for the first 90 days. Now here is the catch, you don't immediately get the credit, it shows up on your bill and will apply to your next months credit card balance.

So, for example, if I charge $500 in gas in May, I get a credit of $15 that will apply to my bill next month. So if in June, I also charge $500, I will then benefit from the $15 credit, so I will pay $485 for my May charges. Plus I have earned another $15 credit based on my $500 purchase during June. Using this as an example, it represents $180 savings over the period of one year.

However, the key is to pay off the full balance each month, otherwise the finance charges will eat away at your savings.

The other two cards I have are Chase BP, and Chase Marriott. The Chase BP offers 5% discount on gas at BP stations and 1% at other stations or other charges. However, I only buy gas at the BP stations when their price is within a few cents of another station.

The Marriott card provides reward points of 1 point for each $1 spent. These add up over time and can give you discounts or free rooms at Marriotts. These are good if you do a lot of business travel, especially if you stay at Marriott Hotels and are a member of their Marriott Rewards program.

So the bottom line is, credit cards can be used to gain small discounts that will add up over time. However, you have to be very careful. You do not want to get to the point of spending more than you could pay for with cash. Make sure you read my post on the lessons I learned about credit cards.

I do this by keeping a 3x5 note card in my glove compartment. I have a budget amount for gas and I write that at the top. When I buy gas, or other purchases, I note the amount and subtract it from my budgeted amount, and that way I know how much I have left to spend. This technique can apply to all of your credit card purchases. Just put down your budget amount on the index card and subtract each of your purchases as you are shopping.

Here is another tip to find the cheapest gas in your area. Just search on Google for gas prices and include the name of your state. For example, there are sites named www.SouthCarolinaGasPrices.com and www.VirginiaGasPrices.com. These also help you out with your budget for gas prices. More about that in a later post.

Have a great day!

Life Lessons With Credit Cards

I got my first credit card in 1967. I was a freshman in college and had never used a credit card before. I barely had enough money to pay for my first quarter, but that was OK with the bank.

That simple act started my frequent and sometimes abusive use of credit cards for the next 30 years. Only last year did I realize that I was not managing my credit cards. But the credit cards were like the little devil on my shoulder saying, "Oh go ahead and get it, it's not real money." So I felt good until the day the bill arrived.

Through my 20's, I used my credit cards anytime I "needed" anything. I built up what was then considered a large amount of debt and was living from paycheck to paycheck.

In the mid 80's, I was about 35 and went to see my first financial adviser. He told us that we needed to reduce our debt and start saving for retirement, and our son's college.

We sold the house, moved into an apartment and used what we had made to pay off all of our debt and begin saving. We used our credit cards, but now at least we paid them off when they came in.

Better, but not ideal. I still had this little devil on my shoulder that would tell me to buy what I "needed". Even if the price were a bit more than I really wanted to pay, or I might buy the next one up in price with a few more features. All on impulse, and on the advice of my little devil on my shoulder. So even though we were paying the cards off, we still had lessons to learn.

We continued in this same mode of operation, until late 2007, when we took Dave Ramsey's course. Dave does not believe in credit cards. He says there is a reason the banks have all those nice big beautiful buildings, it is because they are building it with mine and your money.

Dave's class is something that I wish they had taught me in college. His class teaches the real life lessons about more than just credit cards, he teaches you about proper use of your money, all the way from getting out of debt to being able to give generously.

His class was so good, we gave it to our 35 year old son and his wife as part of their Christmas present.

He has good books and advice and is carried on quite a few radio stations. To learn more about his program, go to his website, www.daveramsey.com. I highly recommend his Financial Peace University course, you can usually find where it is being taught locally and it is not expensive. It will be one of the best investments you will ever make.

Have a wonderful day!!!