Monthly Archives: April 2007

Credit Card Fees (Further Motivation For Getting Out Of Debt!)

I’m a pretty unique guy. I do not use a credit card. Why? I like using ink and writing checks. I enjoy the process of using “real money” and I simply dislike the “hassle” of managing credit card payments. Also, I have no desire to pay the interest, fees, or penalties associated with carrying a credit card balance. (Plus, it takes too much Ink to write all those checks.) Sure, I could pay my credit card balances off “in full” at the end of each month, but I have found that I will spend MORE whenever I use a credit card than I do when I use cash. Now, I may not be able to persuade you to give up credit cards forever, perhaps I can motivate you to get out of credit card debt as quickly as you can so that you can avoid the following FEES!

Interest: While not technically a “fee”, credit card companies charge you interest on the money that you borrow from them. According to Bankrate.com, the current AVERAGE interest charge associated with a “standard” credit card is about 13%. The greatest motivation for getting out of credit card debt (for me) was the idea of never paying credit card interest again!

Late Payment: If your payment arrives late (for whatever reason) you will be charged a late payment fee. I did a quick “search” and found that the average late fee associated with credit cards is $35! Remember, it does not matter if the postal service “loses your check”, you still have to pay the late fee. (If you get hit with a late fee, it never hurts to call and ask (politely) for them to waive the fee! It just might work.) Again, because I do not use a credit card, I never have to worry about paying a late fee.

Over-the-limit Fee: Credit cards have a pre-set limit, which indicates how much money they are willing to loan you. If you exceed this limit, you will be assessed an over-the-limit fee. Guess what? If you are “close” to the limit, and only pay your monthly minimum, and your card accrues interest, and the interest plus the balance = over your limit, you can (and will) be hit with an over-the-limit fee. Oh yeah… The average over-the-limit fee is about $30!

Payment processing Fee: If you find yourself in a ‘bind’ many credit card companies will allow you to pay via your telephone. Guess what? You’ll pay a FEE to make a PAYMENT. Not only will you be sending them a payment, they’ll gladly charge you for the privilege.

Cash Advance Fee: Many credit cards allow you to use your card at an ATM. But, they charge a pretty-penny for this service. In most cases, you will pay a 3% cash advance fee, up front, regardless of whether you pay off your entire balance at the end of the month. If you get a cash of advance of $1000, you’ll pay $30.

Annual Fee: While many credit cards do not charge an “annual fee”, some do! That’s right, you pay them for the privilege of carrying their card in your back pocket, regardless of whether you use the card or not!

Convenience Check Fee: Those nifty checks that you receive with your credit card bill are called “convenience checks.” Use one, and the credit card company will treat it like a cash advance and charge you a cash advance fee!

These are just a few of the fees that credit card companies CAN and DO collect each year. (According to this report in USA Today, credit card companies collected over $17 BILLION in fees last year. Yes, friend, that’s BILLION, with a “B”. How much is $17 BILLION Dollars? Well, if we equally divided $17BILLION between, say, 300,000,000 Americans, each man, woman, boy or girl would receive a check for more than $56!) My advice, based on two years of not having to WORRY about these fees and charges? Get out of debt, stay out of debt, use cash, and relax. Let somebody else pay your share of the $17BILLION!

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My Wife Could Retire In 20 Years! How Much Money Will We Have By Then?

My wife is a school teacher. She started teaching 10 years ago at the age of 22. In 20 years, at the age of 52, she will be eligible to retire. My wife contributes to a pension plan and will receive a monthly benefit. The amount of the monthly benefit will be determined by the amount she is paid during the final two years of her employment.

My job does not provide a pension plan, so I am aggressively saving for retirement. I thought it would be interesting to see where our savings might be in twenty years. I plan to save a MINIMUM of $20,000 (combined) per year in various retirement accounts.

I used this calculator to calculate results: Compare Savings Rates Calculator

For the purpose of this post, I entered “zero” as my starting value. I wanted to see what would happen if I discarded the fact that I already have SOME retirement savings. What if I had to “start” today?

Here’s a screen-capture of my inputs:
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I chose the following rates of return: 4%, 7%, and 10%

Here are screen-captures of the outputs:

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Wow, there is a $600,000 difference between 4% and 10%! Of course, I’d love to make more than 10%! (Last year my retirement portfolio posted a 17.29% return.)

So, in 20 years, I’ll hopefully have between $600,000 and $1,200,000 saved in my retirement accounts, my wife will be ready to draw her pension, and life will be good.

Some notes:

While I entered “zero” as my starting point, I actually have over $33,000 saved in my retirement accounts.

While I assumed a return between 4% and 11%, the actual returns could be much more OR much less. In fact, I could easily LOOSE money. I am aware of these facts, but I will continue to save and invest.

I do not include Social Security income.

Inflation was not considered.

While I plan to save a minimum of $20,000 per year, in 2007 I actually plan to save $32,000 in retirement accounts.

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How I Get Dave Ramsey To Talk To Me

I am a huge fan of Dave Ramsey and the Dave Ramsey radio show!

(In fact, if you go back and read my first post, you’ll see that I was inspired by Dave to begin this blog.)

I have talked to Dave on four different occasions. (Now, before you get the wrong “idea”, I’ve never actually had a one-on-one conversation with Dave, but I HAVE called into his radio program and been selected to “talk” to Dave four times.) What are my “secrets” to getting on the air?  Well, first off, it helps to have an awesome debt reduction blog! (Just kidding…)

1. Dave’s show goes live at 2PM Eastern Time. (The show airs at 3PM on XM Radio and 9PM on Sirius, but the show actually begins taping around 2PM!) I have managed to get on air twice by calling at around 1:30 PM. Calling any earlier than that seems to be a waist of time, but waiting much longer simply allows other callers to get ahead of you.

2. Once I get the screener on the phone (usually Laura) I get STRAIGHT to the point. I always have a SPECIFIC question to ask or a SPECIFIC statement to make!

3. I listen to the show. (One of the few problems I have with the show, Dave has to answer the SAME questions, over and over and over and over…) If you listen to the show, then you can get a “feel” for what Dave is talking about on a particular day.

4. If I cannot get on the air at the beginning of the show, I wait for Dave to hangup after he is finished talking to another caller, and then I hit redial. If I get a busy signal, instead of constantly hitting redial, I just wait until I hear him hangup on another caller. This has worked for me twice.

5. I called Dave to scream that I was “Debt-Free”. I made sure that when I talked to the screener, I mentioned how much Dave and his teachings had helped me. (It never hurts to give them a reason to put you on the air!)

The above techniques have helped me get on Dave’s radio program on four different occasions. They may or may not work for you. I have no affiliation with Dave or the Dave Ramsey Show, I’m just a huge fan! If you use any of these techniques to get on the air with Dave, leave me a comment and let me know.

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Online Billpay “Issues” (Or, Why Wachovia Disappointed Me Today…)

I have been a Wachovia customer for more than seven years. In the past, I have been pleased with their service and the people who work at the local branch in my area are super-nice.

Today, Wachovia (actually, four of Wachovia’s customer service representatives) disappointed me. Here’s the story:

I scheduled an online billpay transaction using Wachovia’s billpay interface. I scheduled for my electric bill to be paid on April 9. Apparently, Wachovia has to ‘write’ and actual check and mail it to my electric company. (In other words, it is not a bank-to-bank transaction, but a physical check is printed and mailed.) Well, I SCHEDULED the payment ON March 25th, to be paid on April 9th. (Too clarify: I went online and entered the payment information ON March 25th, but the date for Wachovia to “pay” the bill was April 9th.) The bill was actually due April 10th. My electric company did not RECEIVE the check until April 12th, 3 DAYS AFTER it should have reached them. Thus, I was charged a $3 late-fee. Now, you may be saying to yourself, NCN, you should have instructed Wachovia to make the payment EARLIER, and not “cut it so close”. And, you would be right! But, please read the following, taken DIRECTLY from the WACHOVIA online FAQs:

Are all my payments sent electronically?

We cannot guarantee that 100% of your payments will be sent electronically. Some billers cannot receive payments electronically. Keep in mind that whether the payment is sent electronically or as a paper payment, the service delivers the payment to the biller on the scheduled pay date.

When does the biller receive my payment?

The biller receives the payment on or before the scheduled pay date you specified. Some billers may not always credit your account on the same day that they receive the payment. Allow for extra time in this situation so the payment is not considered late. If you want to verify the payment posted, you may want to wait a day or two after the scheduled pay date before contacting the biller.

Please note the highlighted portions. I am AWARE that the biller may NOT choose to CREDIT my account on the day that they receive payment, but Wachovia CLEARLY states that the PAYMENT WILL ARRIVE ON OR BEFORE THE SCHEDULED PAY DATE!!!

I called the electric company, and due to my record of always paying my bill on time, they removed the $3 service charge. I then called Wachovia and spoke to FOUR different CSR’s. Paraphrasing, each one of them said, “Wachovia mailed the checks on the 4th, and the payment SHOULD have been there by the 9th. Once the payment leaves Wachovia, it is NO LONGER OUR RESPONSIBILITY.” Each CSR then talked about how I should have scheduled the payment “four or five days” before the due date. I acknowledge that, to be on the safe-side, I should give the BILLER more time to actually DEPOSIT the check, BUT, I should be able to count on WACHOVIA to get the check to them ON TIME! (If you are unfamiliar with Wachovia’s billpay system, they actually provide you with a pop-up calendar which lets you know IF they can deliver a payment on a specific date.)

I not only have to worry about whether a check will get “lost in the mail”, or whether a biller will credit my account, I NOW have to worry if WACHOVIA will actually GET a payment TO my billers ON TIME!

One more reason to go “cash only”. (New website? No Checks Needed…)

Oh yeah, to add insult to injury, WACHOVIA debited my account on the 9th, 3 DAYS before the electric company even received the check!

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