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How To Stay Out Of Debt

September 24th, 2009

NCN

1. Live on a budget and plan for future purchases.

If you are going to live without borrowing money, you will need to save for future purchases. Saving for automobiles, furniture, and appliances requires a lot of discipline and a lot of planning. The debt free life is awesome, but it does require that you spend some time mapping out your financial future. We use the You Need A Budget software to manage our finances and I’m proud to have them as a long-time sponsor of this site.

2. Maintain adequate cash reserves.

Rainy day fund, emergency fund, freedom account – It goes by many names, but no matter what you call it, you’ll be glad you have it when life throws you a financial-curve ball. How much you’ll want to keep in savings will be determined by your particular situation. I keep enough money in my emergency fund to replace my income for six months.

3. Avoid lifestyle inflation.

Take this from someone who knows what he’s talking about – Once you get out of debt, you are going to feel very, very rich. You won’t be, but you’ll feel like it. For the first month or so, you’ll pay your bills, see just how much you still have in your checking account, and a big smile will come across you face. Enjoy it, because getting out of debt does, indeed, rock! Then, take a second – and realize that if you go crazy and spend all of that freed up cash, you’ll quickly find yourself right back in debt. Continue to follow your budget and live below your means.

4. Plan for your financial future.

Retirement. College. Yep. Now is a great time to really focus on saving for retirement and paying for kids’ college. This is not to say that we should wait until we are debt free to save for either, but being debt free does allow us to really amp up our contributions. Do some research and analyze your various options. Do you have a 401(k) through work? Do you have a Roth IRA? Have you considered an ESA or a 529 Plan? Take the time, educate yourself, and prepare for tomorrow.

5. Be smart with your credit cards.

If you use them – use them wisely. Pay your balance off each month and avoid carrying balances. Rock on.

This week I will be writing a series of Back to the Basics articles. I encourage you to subscribe to No Credit Needed via RSS or Email. Also, if you liked this article, please consider promoting it via the social network buttons below. Comments are always appreciated – and don’t forget to follow me over at Twitter.com/NCN.

Posted in Basics, Debt Free

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Can I Rent A Car Without A Credit Card?

September 23rd, 2009

NCN

This information is provided in summary form and you should conduct your own research before using any of the companies listed. Information is subject to change at anytime. (Emphasis added)

From the Hertz FAQs site:

Debit Card Policy-

Q: Can I use my Debit Card or Bank Card to reserve a Hertz car?

A: At most Hertz locations, debit cards (sometimes called check cards) issued under a VISA or Mastercard logo which draw funds directly from the cardholder’s account may be used to qualify for rental. However, prepaid or stored value cards which have a VISA or Mastercard logo are not accepted to qualify for rental. Debit cards must have available funds for the estimated amount of the rental charges plus a reasonable amount to cover any incidental charges in order to secure the rental. Both debit cards and prepaid or stored value cards issued under a VISA or Mastercard logo may be used as a form of payment when you return the vehicle. Please contact your local Hertz Reservations Office if you have a question about whether Hertz will accept a certain card.

Cash Policy-

Q: What can I do if I do not have a credit or debit card in my name?

A: Cash Rentals are accepted with a Cash Deposit ID Card. Applications for a Cash Deposit ID Card are available from your local Hertz Office. Applicant must be 18 years or older and the application process takes approximately 30 days. There is a $15USD nonrefundable processing fee. A Hertz Cash deposit ID Card may be used at a Hertz Location.

From the Enterprise Website-

Debit Card Policy-

Debit Card:

Some locations will accept a debit card for a rental deposit and/or payments. To be valid, a debit card must have a Visa or Mastercard logo.

Airport locations that are able to accept debit cards will require return trip itineraries.

Most local renters who would like to use a debit card for their deposit may need to complete a cash qualification process. The branch may ask for you to bring in two valid, current utility bills and your most recent paycheck stub.

It is common that a rental branch will require your drivers licence to be issued in the state you are renting.

We are happy to help you with policy information specific to the renting branch. Please contact us ahead of time to determine what is needed when renting with a debit card.

Cash Policy-

Cash:

For security reasons, our locations do not accept cash. We apologize for any inconvenience.

From the Avis FAQs-

Debit Card / Cash Policies-

Debit Card Policies

Avis reserves the right, in its sole discretion, to seek a Debit Card authorization hold in excess of the estimated rental charges. When using a debit card at Avis, there may be a minimum hold of $500 and a maximum hold of the estimated rental charges will be placed on your account.

Upon returning the vehicle, Avis will process a release of the unused portion of the hold subject to your bank’s procedures. The hold may take up to 2 weeks to be released by your bank.

If you fail to return the vehicle as agreed, Avis will obtain additional authorizations from your account to cover the rental charges.

Avis is not responsible for any returned checks or over-drafts based on this policy.

This policy applies to both U.S. residents and foreign renters.

Positive identification in addition to your driver’s license may be required.

In the United States, debit, cash or check cards can be used at the end of the rental for payment of rental charges. For acceptable credit identification and payment methods in countries outside of the U.S., please search for the specific location.

From the Budget Website-

Debit Card Policy-

Credit and Debit Card Rules

Generally, at the time of a U.S. rental, we’ll require a credit card hold of total estimated charges plus 25% or $200, whichever is greater. If you’re using a debit card at a location that accepts them, we’ll require a hold of total estimated charges plus 25% or $300, whichever is greater. However, for insurance/service replacement rentals and tour rentals, the minimum debit card authorization hold is $100. At select locations in the Northeast and North Central regions, the minimum authorization hold is $500. Renters under 25 years of age may not use a debit card. Look at the terms and conditions on your reservation confirmations for the deposit required at your specific rental location. Some select locations do not accept debit cards at time of rental to release the vehicle, but do accept debit cards for payment at time of car return.

Cash Policy-

Can I pay with cash?

Yes. Your deposit type, amount and method of payment will vary by Budget location.

From the National Website-

Debit Card Policy-

Debit Cards

When renting in the U.S., debit and check cards may only be used in conjunction with proof of a round trip travel ticket (airline, cruise ship or train) at time of rental.

A debit/check card is considered to be any non-credit card bearing the VISA, MasterCard or Discover Card logo.

Any other non-credit card without the VISA, MasterCard or Discover Card logo is not accepted.

For pick-ups in the United States, without proof of roundtrip ticket, debit or check cards are only accepted when returning the vehicle.

A credit card in the name of the renter must be presented at the time of pick-up.

Cash Policy-

Cash Rentals

Customers must meet National’s requirements for renting a vehicle without a credit card.

Only Economy through full-size vehicles can be rented with cash.

No Additional Drivers are allowed on Cash Rentals.

All cash rentals, including prepayments, vouchers, and the like will require a deposit of $300 per rental, in addition to the pre-calculated rental charges.

When the rental vehicle is returned in accordance with the rental terms and conditions, the cash deposit will be refunded upon return of the vehicle, and in some instances, the refund will be mailed to the customer following the return of the rental vehicle.

Summary:

Almost every major rental car agency WILL rent a car without a credit card. Most, however, will place a “hold” on your debit card for the full rental price, plus, in most cases, an added deposit.

When it comes to payment, most will accept a debit card as payment when you return the automobile. Available options appear to be:

A) Reserve the car with a company that allows you to use a debit card. If you do this, be sure that you bank account has a sufficient amount to cover the deposit, the hold, and any other charges that you might incur.

B) RESERVE the car using your credit card and PAY for the car rental using cash or your debit card.

While I do not use a credit card to make purchases, I do carry one in my wallet. If necessary, for the security of my family, I would use the credit card to reserve a car and then pay cash for the rental when I returned the car.

Before renting an automobile, understand a company’s policies. Do your own research and call ahead if you have questions. While I was compiling this information, I did not take into account ANY insurance-related policies.

Posted in Automobiles, Cash, Debit Cards, Money Management

6 Comments »

How To Stay On Track

September 23rd, 2009

NCN

Lets be honest: This whole debt reduction / saving money / getting our finances together thing can be difficult / boring / exhausting. Perhaps, there are some steps that we can take to stay (or get back on) track – even as we push through those difficult / boring / exhausting days.

1. Start with a solid game plan and a defined goal.

Your first goal will depend on your starting point. You may need to get current with all of your creditors. You may need to build a small emergency fund. You may need to pay off you consumer debt. Whatever you goal – put it on paper, date it, and determine your plan to achieve it.
It never hurts to print out some copies of your goal and put them up in prominent places around your house. I keep a copy of my goals inside the front flap of my Bible. When I’m studying the Word or spending some time in prayer, I can take a look at my goals, and focus on the next steps I need to take.

2. Block out the nonsense and the noise.

Here’s the deal. Just as soon as you set your mind to get out of debt, a buddy will call and ask you to play golf or friends will call and ask you to get together for lunch. While we don’t want to avoid fun all-together (more on that in a bit) we do need to learn to change our behaviors. Remember, those of us who struggle(d) with credit card debt do so for a reason. We bought things we couldn’t afford with money we didn’t have. When you feel the pull to go out and spend, remember you ultimate goal, block out the noise, and stay focused.
The above is easier-said-than-done. It never hurts to have an accountability partner or good friend with whom you can share you goal, someone who will not tempt you to spend but who will actually help you reach your destination. Surround yourself with like-minded folks and you’ll be ahead of the game.
After reading this post, I came back to add this paragraph. When you first get started with personal finance management, you might feel overwhelmed. You might also feel intimidated. Don’t worry. These feelings are normal. Learn to breathe, take things step-by-step, and feel comfortable about the steps you are taking.

3. Learn from yesterday’s mistakes and move forward.

It’s going to happen. You will blow your budget, you will bounce a check, you will buy something you don’t really need. Understand that you are human, that life can (and will) throw you a few curve balls, and that obstacles will find their ways into your path. When I was getting out of debt, I missed my goal date by more than four months. Instead of getting (overly) discouraged, I regrouped, re-focused, and moved forward.

4. Reevaluate your goal and be realistic.

This one is so important. As you move forward, one of two things will become apparent. You will either (a) need to be less aggressive with your goal setting or (b) become more aggressive. If you are easily reaching your goal, well ahead of schedule, you may need to reevaluate and change your goal date, by moving it forward. If you are really struggling, and feeling completely overwhelmed, it may be time to move a goal date back by a month or two. The key is to keep up a steady, solid pace of progress.

5. Take time to celebrate.

I’m old school. I still like to give the good old high-five, especially to my kids when they do something awesome. Since I’m a push over, I consider almost everything they do to be awesome, so I’m used to giving lots of high-fives. From time to time, give yourself a high-five. Go out for a nice dinner. Buy a book you have been wanting. Splurge a bit and do something nice for the kids or your spouse. The celebrations need not be elaborate. Find simple ways to keep yourself motivated.

This week I will be writing a series of Back to the Basics articles. I encourage you to subscribe to No Credit Needed via RSS or Email. Also, if you liked this article, please consider promoting it via the social network buttons below. Comments are always appreciated – and don’t forget to follow me over at Twitter.com/NCN.

Posted in Basics, Motivation

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Understand It Before You Do It – Today’s Quick Tip

September 22nd, 2009

NCN

Today’s Quick Tip – Understand It Before You Do It

Before you make any financial decision, understand exactly what you are doing and why you are doing it.

If you sign up for a credit card, understand the card’s terms and conditions.
If you take out a mortgage, understand the mortgage’s terms and conditions.
If you make an investment, understand the potential risks involved.
If you buy and insurance policy, understand how the policy works and what it covers.

You get the point. Imagine that you have two jobs. First, there is the job that you do for someone else – the job you do for your boss and for your customers. That’s the job that pays you your salary. Second, there is the job that you do for yourself. You are both boss and customer. Don’t let the you of today sabotage the you of tomorrow. Take the time to educate yourself and you’ll be better off, in the long run, for it.

Do not be afraid to ask questions.

Do not be afraid to say no.

Do not be embarrassed if you do not understand something.

This is your future. You have a right to feel comfortable about the decisions you are making and the steps you are taking.

Bonus Tip -

Be sure to keep a copy of the terms and conditions associated with any financial product or service that you might use.

Posted in Tips

1 Comment »

How To Maximize Or Minimize Interest

September 22nd, 2009

NCN

If you are working to get out of debt, one of your goals will be to minimize the amount of interest that your creditors will charge you. If you are working to save money, one of your goals will be to maximize the amount of interest that your savings will earn. Here’s how to minimize the amount you will be charged and maximize the amount you will earn.

Minimize Interest Charged -

1. Do not wait until the due date to make payments.

Most credit card companies use the average daily balance when calculating your interest charges. What does this mean to you? The sooner you make your payments, the lower your average daily balance will be. The lower the average daily balance, the lower your interest charges will be.

2. Carefully consider a balance transfer from a higher-rate card to a lower-rate card.

This one can be tricky. Before you transfer debt from one card to another, be absolutely sure that you are committed to paying off the debt. Our goal is to eliminate debt – not just move it around. With all that being said, transferring debt from one card to another can make since, provided you understand the terms of the balance transfer, correctly calculate the cost of the transfer (transfer fee), and can pay off the transferred balance before the terms of the transfer expire.

3. Get angry and attack your debts.

I can remember it like it was yesterday. I was thirty years old, I had been working since I was fourteen, and I had almost nothing to show for it. Sure, I had a house full of stuff, but I also had a mailbox full of credit card bills. I can’t quantify the impact of attitude, but I can definitively state the following – Once I got sick and tired of being sick and tired, my financial life turned around. If you really want to minimize interest, get angry, work hard, live on a budget, find another job, sell some junk, make lots of extra payments, and attack those debts!

Maximize Interest Earned

1. Make deposits early and often.

Different banks use different methods for compounding interest. Money saved with ING Direct (where we keep a portion of our savings) accrues interest daily and then that interest is compounded monthly. Basically, whatever amount is in our account is multiplied, each day, by that day’s interest rate. At the end of the month, all accrued interest is then added to our account balance. Suffice to say, the higher the daily balance, the more interest that will accrue.

2. Automate your savings.

Remember the old saying: out of sight, out of mind. Build your automatic savings plan into your budget and you’ll ensure savings success.

3. Consider a savings account which pays a higher rate of interest.

If you are comfortable with multiple accounts, consider opening a savings account that pays higher interest than your current account. You might find a higher rate with a local bank, an online bank, or a credit union. Be smart. Do some research and understand all of the terms and conditions associated with any account you might open. A good place to research rates is over at Bank Rates. You might also consider certificates of deposit and money market accounts.

It’s extremely important, as we move from indebtedness towards prosperity, that we consistently look for opportunities to earn more (and pay less) interest. I am not a financial professional (nor do I play one on the Internet), so I’m just like you guys. I’m looking for ways to stay out of debt and improve my financial situation.

This post (and this week’s series of posts) is aimed at those who are just getting started and may have questions about how this personal finance stuff works. My goal is to break-things-down and discuss the basics. I am a big fan of keeping things simple, and I think you’ll see that reflected in this week’s posts. Rock on!

This week I will be writing a series of Back to the Basics articles. I encourage you to subscribe to No Credit Needed via RSS or Email. Also, if you liked this article, please consider promoting it via the social network buttons below. Comments are always appreciated – and don’t forget to follow me over at Twitter.com/NCN.

Posted in Basics, Saving Money

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