Email Newsletter 7/6/2001
DEBTSMART EMAIL NEWSLETTER
- Tools for financial success!
A Free E-Mail Newsletter from
DebtSmart Online and Press One Publishing.
July 6, 2001 Issue 3
Scott Bilker, Editor and Publisher, mailto:firstname.lastname@example.org
Richard Crammer, Editor, mailto:email@example.com
For instructions to SUBSCRIBE, see bottom of this email.
IN THIS ISSUE
=> Letter from the Publisher
=> No Money Down
=> Car Debt or Credit Debt First?
=> 10 Reasons People Overspend
=> Credit Card Tip (Don’t cut up
=> Subscription Information
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Letter from the Publisher
by Scott Bilker
Good news--the Federal Reserve keeps
lowering interest rates...the bad news is that your credit card bank
isn’t going to lower your rate as quickly.
Why is that?
First of all, credit card rates, in
general, are very competitive right now. Many banks are moving
toward fixed interest rates and have also put a floor on lowering
rates. Additionally, many banks adjust their rates quarterly so you’ll
need to wait to get the benefits from the last Fed rate cut.
What about mortgage rates?
Don’t hold your breath waiting for
the last Fed rate cut to affect any pending mortgages or refinances.
This is because mortgage rates move in anticipation of rate cuts,
plus they’re tied to the long-term, ten-year rate.
Anyway, no matter what the current
market for interest rates, if you have been a long-time credit card
user of a specific bankcard then they should be treating you like
GOLD! If you’ve been paying on time, then you should have a decent
rate. I would say something less than 12% for sure!
If your rate is greater than 12% then
give that bank a call and let them know that they’ll have to drop
that rate to keep you as a customer. Remember that we’re the
consumers, we’re spending our money, and we have many choices!
You can reach me with your comments
No Money Down
by Gary Forman The Dollar Stretcher
Question: I see a guy on TV all the
time. He says that you can buy a home with no money down and then
come from closing with money in your pocket. Supposedly people buy
homes and make millions a year. Do you know about this? How this
could be done? Is it worth the 3 payments of $59.99? Or is it a
Answer: Sure sounds tempting. You
walk in with nothing, sign some papers and walk out with cash and
the keys to a house. And, you can do it over and over until you make
Much as we'd all like to believe that
the road to riches was that easy, it's not. Yes, you can make...
Read the rest of this article by
Car Debt or Credit Debt First?
by Scott Bilker
First off great site, very
I've already organized my debt with
the highest interest debt to be paid off first. Only thing is, my
car loan is up toward the top and it's getting close to the time
when I would need to roll over the payments of paid off debt to the
next highest interest rate debt, my car loan.
Does it make sense to start
increasing my payments on this loan? Isn't it fixed what I will pay
on the loan? If this is the case shouldn't I start paying on the
next highest interest debt (another credit card) instead? Thanks for
Thanks your positive comments about
It's great that you've already set up
a payment program that pays the highest-interest-rate debts back
first. Many financial "experts" advise to pay off the
lowest-balance debt first but that's simply wrong, meaning, more
Since your car loan is about to
become the most expensive debt, highest interest rate, you should
"roll" your payments from the last debt into the car loan.
This is the most efficient method of repaying your debt.
There are however, a few details you
need to check: 1) Are you allowed to pay off your car loan early
with larger payments? There are some loans that have pre-payment
penalty conditions so call the bank to make sure you can send in
more money toward the loan principal.
2) When you send in your payments be
sure the bank knows to apply the entire payment toward your balance.
There are a few instances when the bank will apply the scheduled
payment and hold the extra for the next payment. You don't want that
3) Will you need that extra cash in
the near future? If you pay more toward a credit card you can always
get that cash back if you need it by using a cash advance or making
purchases with the card. When you increase the payment on the car,
that money becomes part of the car and cannot be converted back into
cash again until the car is sold.
In summary, you are correct. It makes
perfect sense to send the extra payment to the car loan because it's
the most expensive debt on your list. Just be sure there are no
penalties for paying off the loan early. If there are penalties,
you'll need to consider if the savings from the interest charges are
greater than penalties. Chances are you can pay off the loan early;
if there are penalties let me know.
Keep up the good work!
10 Reasons People Overspend
by Debra Vaughn
There are as many reasons that people
overspend as there are budgets to help get people out of the debt
overspending has caused. By talking to people, conducting surveys,
and helping people throughout the years, I have made a list of ten
reasons for overspending that I hear most often. Take a look to see
if you fall in line with one or more of these causes to indulge.
10. Keeping up an image Many people
feel that if they fall below a certain image that the neighbors set,
the neighborhood will think less of them. This is known as keeping
up with the Jones'. The truth behind this is that the neighbors are
thinking and feeling the same way.
9. Avoidance I cannot tell you how
many people, in all financial situations, have told me that the
reason they spend too much money for lunch out with friends,
shopping with the girls, etc is to not have to admit that they
cannot afford to pay the bill for the whole table. If your friends
drop you because you cannot afford to buy them lunch are they really
8. The money is on it's way I have
heard this over and over "I thought...
Read the rest of this article by
Credit Card Tip (Don’t cut up those cards!)
by Scott Bilker
What should you do when you finally
pay off a credit card?
Many financial experts advise to
cancel the card and cut it up. However, I suggest that you shouldn’t
be so hasty because, when you cut up your credit cards you cut out
Borrowing money is just like
shopping. When you go shopping, you’re looking for the best deal.
And in order to find the best deal, you need to have more than one
store to shop in. When you cut up all your cards you limit the
places you can shop for a new loan.
When I need to borrow money I just
start calling my credit cards. I say, “hey, what’s your best
rate because I’m about to cash advance $1,000 and if you can give
me a good rate I’ll borrow the money from your bank, otherwise I
have plenty of other banks to call today.” The result is that I
can always get a great rate when I need to borrow money.
When I do pay off a card, I keep the
account open and put the card in a safe place in my files. Usually
after a short period of inactivity I start receiving new low-rate
offers from these banks as they attempt to get me to do business
with them again.
Remember, we’re the ones spending
the money for the credit so let’s make them work hard to get our
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