Archive for credit cards

Stimulus check, ho

Yes, you can read that anyway you want to.  But the point is that I got my (wait for it) . . . letter telling how much my stimulus check will be and where on line I can go to find out where the hell it is.  That sure sort of stimulated  me.

Especially since I am sort of floating between the save it all in the Emergency Fund and the spend part of it to buy something I have been putting off getting for about a year.

Like most music-heads of my generation, making tapes was what you did.  But as technology evolved, and like, has gotten, well, different, I have moved away from making my own.  I used to listen to music all the time back when FM meant free from commercials music.  But these days of promos instead of honest reviews and downloads and Ipods and MP3s just feel fake to me.  Plastic in the old sense of the word.

When I saw the Crosely CD Recorder though, my mind went immediately to the treasured 300 albums I still have stored safely in my workroom.  I could splice some great stuff was my first thought.  But my second thought was to impose the 10 second rule while pondering what else I could do with the $300 out of pocket.  At that time my ING savings were earning 3.4% so adding $300 to the 5k already there would bring in about $15 a month compounded.  Not bad.  Plus,  well that was it for the pluses. 

So I went ahead and hesitated.   Seven months went by and every time I was in Target or Linens & Things I somehow found an excuse to check to see if it was still there and maybe on sale.  Target dropped its price twice, once by $10 and once by $25.  Still . . .

Then came the news of the Stimulus Checks.  Whoa!  Since the money was extra I could just treat it like found money, right?  Plus, ING was now down to 3% and falling.  So now I was looking at $9 a month compounded that I wouldn’t earn.  Okay then, this was my emergency/special occasion fund wasn’t it?  All systems were go but somehow I found reasons for not.  Damn, how did I turn so frugal?

Fate, meanwhile seemed to be working the situation too.  My check is being sent in the July cycle.  Gas prices show no sign of falling, the economy be heading deeper into a recession followed by a spectacular inflationary period and now is not the time to slip down the slope.

And then I saw it.  Posted in the window for all, and especially me, to see.  20% off on your first purchase when you sign up for our Linens & Things store credit card.  Uh oh!  that is $60.  My dream for just $240 of found money, I’ll pay the credit card off right in the store.  

I’ll only lose out on $240 worth of interest earning but I will gain that in pleasure just in compiling my first CD.  I think I am going for it.  Come July or high water, that is.

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Stimulus check

This week the government announced the schedule for the delivery of our stimulus tax check.  If you used an electronic debit to pay your taxes, you will get yours in early May.  If you paid the old fashion way, then those checks will be spread out over the next three months with the latest being delivered in July.  I don’t now about you, but if I was one those receiving my check in July, then “frustrating” would be the descriptor I’d be using instead of “stimulus”.  With everyone else already in their money so to speak, the pressure to spend it ahead of time via credit card will grow exponentially.  Just what we need, more pressure to use credit.

Meanwhile, the possibility that the U.S. will suddenly change into a nation of savers with this check continues to disappear as food and fuel prices escalate.  The free market frame of mind that has held America and the world in thrall for the last 30 years is going to be more than difficult to shake off.  Just as individuals have been captured in the credit debt cycle of living large, so is the U.S. caught in the cycle of being the world’s only super power.  Both with the same type debt loads, and with the same spending styles.  I see no reason not to believe that just as American lenders are extremly unfriendly when we don’t pay on time, so to will the foreign investor countries follow form.

Our problem, it seems to me, is our very own political and economic behavior.  As a people, according to the last two elections, we eschew taxes.  The lower the better.  For the middle and lower class that means they will have a few more dollars upon which to survive.  For the rich and the ultra-rich, it means they will have more and more to invest and sock away and pay for the richest standard of living in the world.  Politically, because we are constantly stressed out over which party is in power, we almost never notice that economically both parties are the same old same believers in the efficacy of the free market.  Though I don’t know if believe in is the right phrase at this point.  Many of them may be finally noticing the free market failures but just like any credit debtor knows being locked in means paying for your mistakes right to the very bankrupt and foreclosed end.

Tomorrow I’ll be reviewing Charles R. Morris’s The Trillion Dollar Meltdown.  I am hoping it will provide some ideas for what we as individuals and as a nation can do to turn this disaster into an opportunity.  After all, isn’t that what super powers do, save the world?

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Cash and Carry

An old phrase that makes me reminisce for the day when I worked for tips and so could measure my worth by what I had in my pocket at the end of the day.  But a quick search of the definition for that term shows me that there is more to it than meets the eye.  For instance, in the stock market the term refers to how you can connect  two trades through arbitrage.  But historically, the term goes back to a time of war and the very real truth that we have always been a nation divided on the question of making war.  They say if you want to know why something happens, follow the money.

Meanwhile, back to the topic.  I remember this term because at one time we did all our grocery shopping at a local store called the Cash and Carry.  So my financial education trained me to think in terms of real money whenever I wanted to buy something.  Personally, both T and I have developed a set aside system (hah!) for this purpose.  I use a coffee can; she uses a quart jar.  All loose change, extra money from side jobs, refunds, rebates; they all end up there waiting for the next purchase of something she or I really need or really, really want.  Yes, I confess.  I sometimes buy CDs that only have two or three songs worth listening to on them.  But that’s because I am still a neanderthal as far as techtronics are involved.  No Ipod, MP3, no downloading for me.  That, and the fact that I really don’t want to spend a lot on extra stuff just in case it might entertain me.

Money is like water in the sense that as much as we’d like to keep it in hand that’s how much it wants to leak away.

In our business, we have learned the art of stoozing.  We get a lot of 0% interest credit card offers primarily because we always pay  off our active cards within the month or way ahead of time.  Our FICO is 780.  So when we are planning an equipment purchase or an upgrade or we just need funds for operational reasons, we pick an offer and draw what we need and since there is no interest we repay with cash the credit amount borrowed from the ongoing business income.  It’s our own version of cash and carry.

Funny, isn’t it?  How it started out that pay as you go was the strategy for staying debt free and now it’s pay as much as your able to and carry the rest for later.

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The customer is the one in front of you

So I am sitting outside at a small white plastic picnic table.  T is inside delivering a banana box of strawberries and bananas to the store owners.  Sunshine turns my legs warm and the cool of the umbrella shade sets the tone.  I am reading the sport’s page, lakers in four!, and waiting while T barters us smoothies for breakfast.  Cars pull into parking lot in front, the click clack of someone walking down the sidewalk from the hair salon next store, the murmur of conversations, hello echoes, and then I realize that I have finished my paper, 25 minutes have passed and no breakfast smoothie of mango and ahsighee sits in front of me.

Without thinking very much, I find myself dropping the paper onto the table and striding off through the parking lot towards my favorite bagel shop across the street.  Later, as T and I walk back up the hill towards our place, I find myself trying to explain what I felt about what had happened.

The customer is the one in front of you.  The one who placed an order and is waiting while you . . . well, while they apparently did everything else but finish your order.  One of them got interrupted by family phone call.  The other decided to finish making the tuna salad for the lunch crowd while she talked to you and the other customers who wandered in and actually ended up getting their orders filled first.  ‘Cause when the cashier got off the phone, he began taking their orders and assumed that his partner was taking care of you.”

“They’ll never make it big,” says T.  She says it although since she started advising them on their business three months ago, the business has quadrupled its sales.  This month they have already reached their contracted limit for credit card sales ($5,000) with a week to go before the end of the month and they’re happy to pay the small penalty.

Mom and pop versus McDonalds, that is the nut of it.  Small businesses don’t have the benefit of a book of procedures that tell you exactly how to upsell the customer.  At any MacD, the cashier takes your order, your money, and by the time that’s done, almost, the finished product is waiting at the pickup point. Everyone on the staff has an assigned set of tasks designed to get you in, get your money, and get you out.  As a society, we have gone in my life time from drive ins to drive throughs.  Grocery stores rush up extra cashiers when the line is more than three.”

T gives me that look she saves for when I’ve gotten up on my soap box and she wishes I could just hear myself.   So I don’t have to say any more, she knows my drill.  We have owned small businesses like that one together for several years.  She also knows that most of the time I am totally anti-fast food from plastic flavored foods to upsizing the drinks.  (Have you noticed the new ads for “extra chicken” that they are trying to slip through under the guise of going “green”?)  So she is probably secretly amused at my upsettedness.  But hey, I am a breakfast person and waiting 25 minutes well that just doesn’t wash.

The thing is that I really do support the idea of thinking global while buying local.  T and I, we live the talk.  We walk to the grocery, we barter with our local merchants, we both ride bicycles, we stack our vehicle trips and use the library for the majority of our reading materials and studies.  Taking time to take the time is our motto but still we don’t live outside of our culture we live in it.  Even in an uncrowded store, when you get to the purchase point, you can feel the breath of the next customer on your neck.  And so we aren’t immune to the constant pressure unless we develop habits for dealing with it.  Relearn the ideas of breathing deeply, and enjoying the warmth of the sun on our backs.  And as Frankie used to sing,

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Weekly Tags

So here we are again, adding things up, reliving the week’s research and hoping that doing so will unearth even more blogosphere gold.

I spent quite a bit of time this week looking at the financial industry.  But I came across this site when I visited a blogger who had been brought to my attention by wordpress.com’s new “automatically generated related tags”. I seem to remember there was some lamenting at the state of financial literacy in school age children.  This project called, Banking on our Future, has several strong memes:  Urban education, political correctedness, and the real effects of a true financial education on our children.  The Board of Directors smacks of money, and the articles on the blog lead one to believe that in money matters god may be on your side.  Hope floats.  Ah well, who knows maybe the $836,000,000 they’ve spent of educating 228,000 kids will change the world.

I guess you can tell, dealing with the money men and women this week has left me cranky.  This next tag came about because there appears to be a species of search engine which crawls the sphere looking to link you up with an ad for their business.  This one came in looking to lead me to his business blog about MLMs.  His comment was easily recognizable as a car salesman’s hello.  But then I shouldn’t complain, right?  Traffic is traffic.  Plus, you might actually be interested in finding someone to invest in your home business so why not at least take a look.  Just remember to cross reference your Google search so you see all sides.

As you might have noticed, I do have some thoughts about the coming election and the effect the new president might have on the economy.  I could spend time commenting on this type of news report but something about Obama’s reaching out to new voters, and thinking voters at that, makes me less concerned about this foolishness than I used to be.

 Which leads me to this last little link.  Marc Prensky’s name came up in a discussion about media, learning, and writing at Nicola Griffith’s blog.  I had never heard of him but as a veteran of the education system and the ongoing battle to make it computer literate I could feel myself certainly responding to his message.  Why are kids still carrying 30 lbs of textbooks when the money spent on them could be used to deal with the ongoing economic crisis in our classrooms.  Fear of the machine and the loss of power it would bring about in the corporate atmosphere of America’s staid and true education system are real issues and I am glad someone’s addressing them because the 50% drop out rate doesn’t mean necessarily that students are failing, it may mean schools and their resistence to change may be failing the students.

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Real Estate, Interest Rate . . .

So first things first.  I think we might have to give a thumb up to the Fed.  Yesterday’s news that the sub-prime reset rates for mortgages at risk did not jump as high as was expected.  In other words, people expecting their mortgage payments to leap out of payment reach were pleasantly surprised at a little they had changed because the Fed had lowered prime.  Breathing room is what they call it.

Strangely enough, on the very same day that I read that news, my Citibank credit card sent me a letter explaining that they were forthwith increasing my variable rate for purchases to U.S. Prime plus 14.9% but with a minimum set at 19.99%.  At BCSAlliance.com, I found this note:

When the prime rate decreased during the period February 2001 until June 2004, most credit card interest rates did not decrease accordingly.  In fact, most credit card issuers raised their interest rates steadily during that period.  How did they do that?  When the prime lending rate fell, they simply raised their margin rates to compensate for the decreasing prime rate so they would not have to lower the interest rate on customers’ credit cards.  You can find out how ethical your credit card company is by getting out your old monthly statements and seeing if your interest rate dropped as the prime rate fell steadily during the period February 2001 to June 2004. (Of course, to do this your credit card interest rate must be tied to the prime lending rate.)   If you have a variable rate card, notice how quickly your credit card company raised your interest rate when the prime rate increased.  Did they lower your interest rate when the prime rate fell?

I think just about everyone would agree that the credit card industry lacks in transparency.  Even as congress struggles to regulate it, it is also clear that the question about what reasons apply to explain the lenders margin rates are still missing.  As I expected, information about this problem is scarce and indicates the slant of privacy is definitely towards the credit card companies. 

Meanwhile, the world turns.  Have a nice Sunday.

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