Credit Card Accountability Responsibility and Disclosure Act of 2009

Getting control over your credit cards is one way to help begin frugal simple living. Credit cards are convenient and sometimes we have no choice but to use them. In some cases the only payment a merchant will accept is a credit card. Other times when we don’t have the cash available and we have to spend the credit card is the only way. So credit cards are part of life and we have to accept that.

But we can limit their drain on our wealth if we understand how they work. One of the problems is that most people don’t read the fine print and wind up getting hit with fees they had no idea existed. Credit card companies count on the fact that you are busy and probably won’t take the time to wade through all long boring complicated explanations about how the fees are computed.

But guess what? I love doing research and I did some research to find out what you need to watch for on your credit card bill and I am going to explain to you.

First thing to watch for is the credit card grace period. Credit card companies tell you it is the slice of time you have where you will not accrue interest charges, if you pay your bill off in full. The grace period begins when your billing cycle closes. It ends when the payment is due for that billing cycle.

As of February 2010 (from the Credit CARD Act of 2009) a portion of a new law to help consumers manage their credit went into effect. It requires cardholders to be given a “a reasonable amount of time” for making payments. The law reads that a minimum of 21 days must be given for credit card grace periods, which starts when the billing statement is issued.

Prior to this legislation some credit card companies would start charging you interest as soon as you made the purchase. The law eliminated that possibility for the credit card companies but there is a catch and it is a big expensive one.

If you don’t pay your balance off in full before the grace period ends, then you will be charged interest going back all the way to when the purchases were made.

Even if you make a partial payment when the bill is due you will be charged interest going back to the date of purchase for the entire purchase. Here is a simple example: You buy a computer for $1000. You pay $200, when your bill is due but because you didn’t pay the entire balance you are charged interest for $1000 going back to the date of purchase.

Not paying off the balance in full is what causes your bill to ratchet up so quickly. Interest rates are high and you are paying interest on the full amount of your purchase no matter how large a portion of the total you pay.

Cash advances and convenience checks have no grace period at all. They start accruing interest from the day you begin using them and you will be charged that interest even if you pay off your credit card statement in full.

Find out more about what the
Credit Card Accountability Responsibility and Disclosure Act of 2009 did for you in terms of protecting you from the credit card companies. See our post How to Understand Credit Card Account Terms at Fasthow.com

What does “Frugal Living” mean to you? Probably it raises visions of generic brand food products, rinsing out plastic bags to reuse again and generally making do with less.

Most of us feel frugal living is just a rationalization for a reduced income. If we live in a frugal way it is because we just don’t make enough money to live in an enjoyable way. When you put it that way it certainly does not sound appealing.

But what if I told you many wealthy people live in frugal way and live very comfortable lifestyles? Wealthy people often become that way because they spend wisely and because wealthy people feel like they can buy what they want, they feel less of an urge to buy things.

Frugal living is actually not associated with lack of things but with peace of mind. Doesn’t peace sound good and beautiful?

When someone first proposed the idea to me it came in the form of a book called “Simple Abundance” by Sarah Ban Breathncac. Then I found the very same thoughts in a book called “Don’t Sweat the Small Stuff and It’s All Small Stuff” by Richard Carlson. Both books were bestsellers and many more follow-up books were written.

Both authors discussed the lack of contentment most of us feel and how this translates into overspending. We spend a lot of time focusing on what we are going to buy and then when we get the thing all we can think about is getting the next thing. Plus we are bombarded by advertising always urging us buy more, upgrade and have the latest version.

Buying stuff does make us feel good for a short period of time. Dr. Carlson explains that it is because we stop focusing on what we don’t have. The catch is though the wanting feeling comes right back after we make the purchase and we start thinking about the next thing we have to have.

Frugal living not only means spending more thoughtfully but about being content and at peace with what we have right now. When you really think about it most of use have a great deal.

We have food to eat, friends, family, clothing, music to listen to, a beautiful sky to look at, beloved pets – so many things. Appreciating what you have is the very first step into frugal living.

So you can make the journey into frugal living just by taking that first step. Just get into the habit of thinking about what you have instead of what you don’t have.

Then something rather amazing begins to happen. You start to feel better and you begin feeling like you need less. When you get into the mind set of being happy with what you have it translates into better financial and mental health.

Contented satisfied people are less likely to use their credit cards to buy unnecessary items. Therefore they have more room on their credit cards when those big unexpected expenses pop up. And when you are able to pay for the unexpected expenses you stay in a better mental state.

Less credit card debt means you can save more money. You will feel financially secure and when you do make a purchase you will do it for the right reasons. Plus if you are thinking about retirement, learning to live frugally may let you retire early.

Frugal living is a way of getting out of that want it, put it on my credit card, regret it later financial misery prison.
Frugal living brings freedom from debt, freedom from constant wanting, freedom from overspending and disappointment when your purchase doesn’t bring lasting happiness.

The first step to financial freedom is easy. You don’t have to complete a worksheet or buy anything. Just begin with a mental shift, when you start thinking about all you want, think about all the things you have.

I have lots more ideas about frugal living and loving it so check back with me and get some more ideas. Also, let me know how you are doing. I would love to hear from you and if you want publish your thoughts on this blog. Use the contact form or make a comment.

Our sister site Cheapskateliving.org has great post on frugal living called Simple Way to Force Yourself to Save for Retirement

If you are anywhere close to retirement frugal living can help you have a more comfortable retirement.

You don’t have to buy a course, read a book or sign anything to begin your journey in frugal living. Just begin by focusing on what you have and feeling content. When you start to think about what you don’t have just dismiss that thought. Count your blessings.

Stay tuned for more lessons in frugal living. The journey is more fun if you go with someone, so let’s go together.

Here is some advice on what to consider before taking a reverse mortgage from the AARP

Do you really need a reverse mortgage?

Financially these are expensive so you must be very careful when you consider this option.

Can you afford a reverse mortgage?

These loans are expensive and the amount you owe grows larger every month. Also, due to high up-front costs, these loans can be especially costly if you sell and move just a few years after taking one out.

Can you afford to start using up your home equity now?

The more you use now, the less you will have later, when you may need it more, for example to pay for future emergencies, health care needs, or everyday living expenses. If you are not facing a financial emergency now, then consider postponing a reverse mortgage.

Do you have less costly options instead of taking out a loan?

If you don’t, and if you could make the monthly repayments on a home equity loan or home equity line-of-credit, these alternatives are less costly than a reverse mortgage. Many state and local governments offer low-cost loans for paying your property costs and taxes or making home repairs. And you could consider the costs and benefits of selling your home and moving to a less expensive one.

Do you fully understand how these loans work?

Before considering one, you need to do your homework carefully and thoroughly.

about reverse mortgages,are all reverse mortgages the same,best reverse mortgages,interest rates on reverse mortgages,pros and cons of reverse mortgages

Technorati Tags: about reverse mortgages, are all reverse mortgages the same, best reverse mortgages, interest rates on reverse mortgages, pros and cons of reverse mortgages

Did you know that employers may consider your credit rating and history when they are deciding whether or not to hire you. A bad credit report could keep you from getting a job. Currently, Congress is considering blocking employer access to most credit-report data, but for now it is still legal for companies to consider it. Jason Morris, president of a company that runs background checks for businesses, says employers should have access to the data. “If an employer is on the fence about an applicant, credit reports can be valuable—particularly if the job includes fiduciary responsibilities,” he says.

Consumer advocates say it’s unfair to base hiring decisions on credit histories, particularly at a time when one in 10 American workers is out of a job and lacks the means to pay creditors. They say debts accumulated because of layoffs, divorces, medical conditions, or other circumstances should not be held against potential employees.

According to Edmund Mierzwinski, a consumer advocate with the U.S. Public Interest Research Group, ” up to 33% of credit reports contain serious errors, so job seekers may be penalized unfairly.”

So before you start applying for jobs make sure at the very least your credit information is accurate. If you want to know more about how to improve your bad credit visit our sister site BadCreditBlues.com

Keep emergency cash in the right place - Basically you want something that pays some decent interest but you can access fairly quickly. Parade magazine reports that for the next year the federal government will most likely offer guarantees on many money market funds – investments provided by large mutual-fund companies that offer a return typically higher than passbook savings. Investors usually receive a checkbook so they can begin withdrawing funds immediately. Bank certificates of deposit are another options. These are insured by the government as long as they don’t exceed $250,000 per depositor. You can’t access you money right away without paying a penalty, but CDs generally earn more than a passbook savings or checking account.

Stay in the market – Unless you are five or fewer years from retirement, keep investing in your 401K. According to InvesTech Research, the average bear market lasts about 15 months. This sell-off is already a year old. Remember the old rule “Buy low and sell high.” Financial adviser Ric Edelman is quoted as saying “When the Dow hit 14,000 institutional investors started selling but consumers didn’t start selling until it hit 10,000.” He advises watching the smart money for cues. Also – DIVERSIFY – putting you money in lots of different ivestments reduces the risk that one sector will wreck your portfolio.

Guarantee your income - According to the Insurance Information Institute, 43% of 40-year-olds will have a disability lasting 90 days or more by the time they retire. In many states, all it takes is three months of missed payments to lose your home, so workers must protect their ability to earn income. The easiest way to do this is to opt into disability insurance during your company’s benefits-enrollment period. If you work for yourself, you may buy coverage on your own from life,health, or auto agents. Also consider an income protection plan. The one I am most familiar with is called Paycheck Guardian . This program pays cash in addition to what you would get from state unemployment benefits if you are laid off.

Keep your home – According to Parade magazine, if you’ve missed a payment on your mortgage, you may be eligible for Hope for Homeowners, a government program that lets you swap your mortgage for a more affordable fixed rate loan.

Pay down debt – The average American household carries $9,900 of debt on cards with a typical rate of 14%. Paying it off is like giving yourself a 14% return. Charge only 30% of your limit to keep from hurting your credit rating.

unemployment, job loss, layoff,debt reduction,get out of debt,savings,savings account,money saving secrets

Technorati Tags: unemployment, job loss, layoff, debt reduction, get out of debt, savings, savings account, money saving secrets

This is advice I wished I had taken when I was facing the debt monster. It comes from an article by one of the business columnists in our local paper. She is quoting from a post titled “Where to Put Your Money Right Now” by Mark Cuban a technology entrepreneur. The plan is pretty simple. Basically, the post advices pay off your debt now and forget about investing.

Here is the formula – If you have less than $250,000 saved and invested for your retirement and you are carrying a balance on your credit cards, you are in a losing situation. Why? Because credit card fees and interest rates are so high, you lose more money paying down interest charges than you make on your investments. Here is how you get started defeating the debt monster.

1. Write down a list of all money you owe and the interest rate that you are paying on that amount. For example MasterCard $1,000.00 interest rate 18%. Include everything on the list: credit cards, loans from family and friends, mortgage, car payments, student loans, payday lenders, pawnshops, rental companies for furniture, and appliances. Then rewrite the list putting all the debts in order from smallest to largest. When the amounts are similar, put the one with the higher interest rate above the other.

2. If you have money-market funds, take the money out and pay down your credit card debt. Wipe out the smallest balances first and work your way up to the bigger debts. I did have a friend that did this and it really did work for her. If you still have debt go to step 3.

3. Make a list of every stock, bond, fund, whatever you own, and mark what your cost is, the current market price, the current dividend yield on your cost basis, if any, and whether it is in a 401K, fund or brokerage account.

You are supposed to sell anything yielding less than what you are paying in interest rates on your debt and has a current price that is less than what you paid for it. Cuban says “when you call your broker to get the prices, you do not let them give you a bunch of BS about why you shouldn’t. YOU SELL IT!

4. Then you sell the stocks and bonds you have made money on, beginning with the stock/bonds that you have made you the least amount of money on.

And you sell and sell and sell until you’ve got enough money to erase all your debts. Then, cut up all your credit cards, and replace them with one debit card so you can only spend the money you have.

5. Once your credit card is paid off, then you go to your debt list and pick out the next-highest interest rate and start the process all over again until all your debt except your mortgage is paid off.

Visit us at Bad Credit Blues and find out How To Repair Your Credit And Keep More Of Your Own Money

debt cures,debt elimination,debt free,debt help,debt problems,debt reduction,debt solutions,get out of debt

Technorati Tags: debt cures, debt elimination, debt free, debt help, debt problems, debt reduction, debt solutions, get out of debt