Feel Free to Skip a Payment?

Ok, so things have been a little quiet from my end lately, but I feel compelled to bring this up. As you probably know, there have been major changes in the works for the credit card companies. Now that I'm a pay-the-balance-in-full customer, I've been wondering what that means for me. I don't really care if they raise my rates. I'd rather they didn't, just in case. But honestly I'd be just as disappointed in myself paying 9% as 30%, so whatever. So yes, some of the companies have raised my rates. No surprise there.

What really surprised my was that Chase eliminated my minimum payment.

By now I know exactly what day to expect my statement. So I went online to check for it. I don't know about you, but I usually look at the minimum payment when I'm expecting a new statement. As soon as its more than zero, I pay it. Well of course, it stays zero for a couple days longer than I expect. So I check for a new statement. Its there. New balance. List of account activity. Everything but a minimum payment. And all the way down at the bottom it says:

You have the flexibility to skip a payment. You must pay
past due and overlimit balances immediately. However,
the remaining minimum payment for this month has been
reduced to $0. Finance charges will continue to accrue.
To reduce your balance, feel free to make a payment.

What? Come on Chase! You notice that I pay my full balance every month so you're trying to trick me into finance charges? Please watch out for this, people!

The Tip Jar

I highly recommend checking out the Tip Jar. Find and share tips in a variety of categories including Finance, Eco, Health, Home, and Work. These money saving tips are ranked by other user. I had fun browsing through and submitted a few of my own :)

Reader Question: What do I say to get the company to reduce my finance charge?

A reader emailed me with a question yesterday. She wanted to know who she should talk to and what she should say to get the credit card companies to lower her rates.

This is tricky because I haven't needed to make one of these calls in months. Since then, problems with the economy and upcoming legislation has driven these companies to take unusual actions. They've started lowering available credit, closing accounts, and increasing rates. They are desperate to make up for huge losses and they are taking it out on people that really need help.

The best I can do here is tell you what has worked for me and cross my fingers that it will help you too. To test the waters I called a couple of my companies and tried this for myself. Chase, as ALWAYS, was unwilling to work with me. Even though I'm in perfectly good standing with them. No red flags. No problems at all. Discover on the other hand made me a few offers. So it may be a 50/50 here.

Anyways this is what I do (please submit your own suggestions if you have them). First of all, I try to be polite. I think that makes a person more willing to work with you. I start by saying hello to the first person I'm connected with. I tell them why I'm calling and then ask them to connect me to someone that can help.

"Hi Jennifer, my name is Amanda. I'm looking to reduce my APR. Can you please connect me to someone that can help me out?"

If you're lucky they can help you or they will transfer you to an APR department. Some companies (like Chase) may not be willing to help you at all. Don't let that stop you from trying. Keep these things in mind. How long have you been a customer? Have you been paying your bills on time? Use those facts when trying to persuade them if you need to.

"I've been a good customer for the last 5 years. I pay my bills on time and I'd like to keep it that way. A little relief would go a long way. Please work with me."

I hope this helps! Please let me know if you've taken a different approach and how these calls have been working for you.

Ok, I'll Try Smarty Pig

I'm very fond of ING. It will remain my primary savings account. Its very easy to use and the savings options are flexible. Historically the rate has been very competitive. But as HS from Our Debt Blog points out, there are other options. Its been a while since I shopped around for good interest rates - like I said I'm happy with ING. So thanks, HS, for pointing out a few good options:

ING has always been among the lower rates, try FNBODirect.com they still offer 2.40%www.smartypig.com offers 3.25% APY and redneckbank.com has a checking account with 5.25% apy on the first 25,000.

I have heard good things about Smarty Pig from the blogosphere, so I decided to read up. Its a very unique banking concept. Its all about saving for specific goals. You tell them your goal and timeline. They suggest a monthly savings contribution. You can accept that or adjust to get started. They have all kinds of options for how to redeem your savings and interest. You can get a debit card, a gift card for a retailer, or just transfer the money backto your funding source. There is also a social aspect you could take advantage of. People can watch your progress and cotribute to you goal.

Thats all fine, but I just want to take advantage of the interest rate. Then I want access to the cash when I need it. This is not where I want to keep my emergency fund. In case of emergency I want quick access to the money. With ING I can transfer directly to my checking account or take money out of the ATM. Plus I contribute anytime I want, any amount I want. (ING is savings snowflake friendly!)

Still I want to take advantage of the interest rate. Its almost twice what I'm getting at ING. So I decided this might be a good place to park money I won't need quick access to. I set up a goal that will take two months to meet. Once the goal is met, it can sit there and gain interest. When I eventually need this money I'll go through the transfer back to my checking. Kind of complicated. Not even close to the convenience of user-friendly ING, but it will work for now. Plus, I probably will use it for my next non-emergency fund savings goal.

Has anyone else used Smary Pig? How do you like it?

How Low Can It Go?

No, I'm not even going to mention the stock market. But I am starting to see a negative correlation between my own personal savings rate and the interest rate on my savings account.

Finally I'm ready to start saving and the interest rates are plummeting. How low can it go?

My First Micro-loan

I made my first microloan on Kiva.org yesterday. Kiva is the world's first person-to-person micro-lending website, empowering individuals to lend directly to unique entrepreneurs in the developing world. I decided to go with a group of people from Bolivia.

The Acapulco group is a group formed of 13 members now going for their second cycle where all of them have demonstrated the capacity to administer funds with responsibility in their payments. The members are dedicated to activities in the area of selling products like bread, clothes, food, catalog cosmetics, and providing services like construction, carpentry, and domestic services. There is a lot of competition, especially in the commercial field, but the experiences of the members prevails before any contingency. The credit is destined to the purchase of ingredients, materials to be able to provide a better service and get better incomes to improve the quality of life of their families.

My small contribution will go farther towards improving the quality of their lives than it would for my own, stashed away in some savings account. Plus, these members have demonstrated that they can use the loaned funds wisely. If all goes well, I'll be able to re-loan this money to other members six months from now :)

As I plan to keep these funds in the Kiva.org system, this will be my first donation for March. Other causes I plan on contributing to in the near future include:

• The local homeless shelter
• The local foodbank
• My city's community gardens

Most of these are local because I have visited the operations and can see what my money will be going towards. Otherwise I haven't done much research. I'm still open to suggestions here if you have any.

Cheers!

February 2009 - Monthly Review

I have to say, this was a big month for me. With the rest of the economy in crisis, I still had one solid investment: me. My remaining credit card balance was paid in full in the second half of the month. Then with my tax return I was able to pay off the balance on my car loan. What a weight lifted off these shoulders.

This is an example of that snowball effect really starting to take off. First the credit card and car loan, next will be the hospital bill in about three months. Soon I'll finally start making progress in my emergency savings and student loans.

I've already increased my monthly student loan payment by $50 and I'll increase it by $50 again once I have three months living expenses saved, and then again at six and nine months. At that point I believe that I could easily live with two hundred less per month. Putting it towards my highest interest loan will greatly accelerate the payoff while still allowing me to begin saving for a home.

I'd also like to point out that Dan is making great progress too. He's hit the 75% mark on his credit card payoff. It looks like he'll be debt free by the time he moves in this May. (I'm proud of you!)

February Net Worth:

Net Worth: ($24,678)
Increased: 7.4%