Credit Cards’ Hidden Costs by Kathleen Day
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The report by the Government Accountability Office found many consumers do not understand that if a borrower is late on one payment, companies will not only impose a late fee, which can reach nearly $40, almost triple that of a decade ago, but also significantly raise the interest rate on past and future charges, possibly to as high as 30 percent.
Credit cards can be a convenient tool but if you do not pay the balance off every month on time that is a very bad sign for your financial health. And leaves you open to onerous fees from credit card issuers. If you do pay off the whole balance every month (as you should under almost all circumstances) you should have a credit card than pays you a rebate (1% of your spending is common) and has no annual fee.
Don’t cash that check! It’s a scam:
The surprise check in the mail “A $10 check is a nice surprise,” the letter from Travelers Advantage says. “Especially since it’s yours for just reviewing the benefits and privileges of this national savings network. And there could be more checks coming your way!”
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Last year, California Attorney General Bill Lockyer filed a lawsuit against Trilegiant and Chase Bank, alleging they worked together to create and carry out a marketing scheme that, he says, “unlawfully deceived tens of thousands of California consumers” into paying for these membership programs.
Don’t cash such checks. The means they are using is so deceitful you can’t trust what else they are going to try to trick you into. Credit Unions are often much less deceitful than banks (though you can’t always trust them either – which is a shame). It is too bad that organizations decide to prey on the financially illiterate. But they do. The easiest thing is not to waste your time trying to find the one good place that actual offers a good value and just chose to use a very bad method to inform people. If they offer something of value let them sell it to you for what it costs (not trick you into cashing a check and then start charging you a monthly fee).
Skip the Coffee? What’s Money for, Anyway?:
My crime: buying morning coffee from Starbucks for my wife and me.
Avoiding the regular cup of overpriced coffee has become an easy cliché for financial advisers, a symbol of money frittered away.
The author is right. There is nothing wrong with spending some of your money on the luxuries you choose. The problem is too many people spend more than all their money on the luxuries they choose (going into debt to support their lifestyle). The author states:
In previous post: saving for retirement, we discuss the options for planning for your future economic security. Cutting back on luxuries is only necessary if you are living beyond your means (looking at your whole financial life). If you have incorporated the luxuries you want into a good overall plan, great, good job, keep up the good work. If not, figure our which luxuries you want to cut (or how you are going to earn more money).
Britain becomes ‘never, never land’ as personal debt runs out of control
Britain seems to be taking after the USA. Debt is not necessarily bad for the economy or individual. Too much debt is. When it becomes “too much” is one of the issues we will discuss, and link to articles discussing, in this blog.
People will benefit from understanding how debt effects their future economic life. To do this they need to gain financial literacy. To help people gain financial literacy is one of the aims of this blog. We believe that gaining financial literacy will lead people to make better economic decisions. Such as not taking on too much debt.
The 2006 Nobel Prize in Economics (technically, the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel) has been awarded to Edmund S. Phelps, Columbia University for his analysis of intertemporal tradeoffs in macroeconomic policy. In other words he won for his work exploring the trade offs between short term and long term effects of macroeconomic policy. The Nobel foundations does an excellent job of providing additional information on the work of prize winners to the pubic:
We are still experimenting with how best to arrange our blog posts. We have decided to setup a new blog for posts most purely related to investing and economics. The Curious Cat Science and Engineering Blog has quite a few posts related to economics and science and engineering. I would foresee those post in the future still being made there. The Curious Cat Management Improvement blog also has economics and investing related posts. In the future I would imagine most of those posts would now be made in this blog – expect those that tie closely to both management and economics or investing.
We also will be posting more frequently on general investing and economics topics. And we will be providing posts linking to interesting articles we find.
The Curious Cat Investment Glossary defines investing terms and includes links to related online resources. The Curious Cat Investing Library includes links to selected investing and economics online articles and the Curious Cat Investing Bookstore highlights books we feel are of value to investors.
I have also added the posts on investing and economics that were originally posted on the other blogs here (that way they will be returned in searches of this blog and be seen when browsing the category listings).