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DebtSmart® Email Newsletter
September 19, 2007: Issue #159

Tools for financial success! A Free Email Newsletter from DebtSmart Online and Press One Publishing.


" If you have a computer, then you should be using financial software."--Scott Bilker
Quotes from all previous newsletters


Letter from the Publisher
Cool Quote
DebtSmart Reader Tips
DebtSmart® Recommended Products and Services
Paying off debt is hard work
Statistics: Rich are Happier than Poor
"Fees taken off!"
Household Math(tm): Sale or gas savings?
Bush Administration to help 240,000 homeowners keep homes
Discover Card Consumer Survey shows we're upbeat about our personal finances, but...
DebtSmart® Column for your use in-print, ezine, or website
DebtSmart® books and software, and other products
Update Your Email Address, Subscribe, Unsubscribe, and Disclaimer Information
Publisher: Scott Bilker
Editor: Larissa S. Bilker
Assistant Editor: Denise Troy

ISSN 1538-6740

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Rich are Happier than Poor

When it comes to happiness, it's better to be rich than to be poor: 56% of people who make more than $75,000 a year say they are "very satisfied" with life; Only 24% of people who make $25,000 or less a year say they are "very satisfied" with life.
Read more credit card and debt statistics

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Credit Secrets Bible
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Letter from the Publisher
by Scott Bilker


Here are a few items for this issue starting with an email from Richard about Capital One.


What you didn't report about Capital One is that they are increasing as of September from 9.9 APR to 15.9, a super whopping 60% increase in their interest rate. You better believe I am opting out of that. Do a story on opting out of credit cards when they increase rates like this and what you might save by opting out at certain dollar levels. Thank you for your informative newsletter.

R. Witter

Yes, I should mention that--thanks!!

Personally, I would hold onto the card but not use it. In short order, they'll beg me to use them by offering me low rates. They will! They do!


Debt Consolidation Loans:
One strategy for easing the management of debt is consolidating loans. I once went to a local bank to get a consolidation loan and they turned me down. Their loss--I used my credit cards instead. And, I was happy to hear that this bank went belly-up for bad loans to real estate companies. They could have made a profit from me, but instead chose risky loans that brought them down. Anyway, if you're thinking about consolidation loans, you should check out CreditLoan. They have good information on all areas of debt consolidation.

Comments from readers:
"Really love it. I'm in great financial shape, but the information is always useful."--Shannon

"I wish I had 1/100th of the knowledge about credit that I have now on that fated first week of college at the bookstore when my bags were filled with 'Great student credit card offers.' I can honestly contribute this experience to the beginning of my downfall with credit. Thanks to DebtSmart, I am getting back on track and learning to make the most of my hard earned money!"--Tad


Paying off debt is hard work
by Scott Bilker


Your advice on several topics lately has been about moving around debt to produce the lowest APR or the most savings to consumers. However, it does not cover anything about the hard work of actually paying off the debt. The point of this website should be to pay off your debt and not just pushing it around from one account to another.

For example, your most recent answer to a reader who wanted to charge a car purchase on a credit card was missing half of the answer. When you obtain a car loan, the loan is paid off within a period of time, say 5 years. This time period cannot be changed unless the entire loan is refinanced. This requires the buyer to pay an amount that covers interest and a significant portion of the principal. However, when you finance the purchase, say on a credit card, the payment period can be as short as 1 year or as long as 30 years. If you paid the minimum monthly payment on a credit card, you could easily pay more in interest than if you took out a car loan.

Example, if you took out a 5-year car loan for $15,000 at 6%, your total interest is $2,400. If you purchase the same car $15,000 at a special credit interest rate of 3%, but take twice as long to pay it off, it will cost you $2,402. It would be easy for someone to say, "Well, just pay it off early," but you and I know, that is easier said than done. And this is the point I want you to address in your future advice. Paying off debt is a psychological issue. The psychology of paying off your debt fast and using your credit to make money not spend it.


Finish Reading Article

DebtSmart Reader Tips
by DebtSmart Readers

Thanks for submitting your tips! I'm going to be introducing a few new tips in each issue. So you can be sure that yours will be out soon. Here are this issue's tips:

Credit Cards: 4 steps to manage cards
(1) Open your credit card bills the day you get them. Look over the statement (make sure you learn how to read them and really understand them) to ensure that your last payment was received and that there aren't any charges you didn't personally make. You also want to make sure your interest rates are what you think they are. If you see anything unusual or incorrect, call the Customer Service number right away. TIP WITHIN A TIP: Many credit card Customer Service Reps must have been found under rocks because they can be very dense. If a Rep can't easily understand or handle your question or dispute, ask to talk to the Supervisor; (2) Write the due date and the amount you are going to pay on the outside of the envelope. Place the envelope with your other bills in chronological order; (3) Pay your credit cards online. I've been doing that for many years and have never had a problem, whereas I've had many problems with the US mail making me late by losing my payment. You can actually pay your card payment right away online or schedule it electronically to be withdrawn from your checking account the day it's due, and; (4) Always print out the web page that says your payment has been submitted, with the transaction confirmation number. If you ever get in a dispute with the bank that you paid on time, you've got their confirmation number that you did.

ID Theft: Photo of Wallet
Take a photograph of what's in your wallet so you know whom to call if it's lost or stolen.
--Bobby Shaw, host of The Family Friendly Morning Show, KFSH

Read more DebtSmart Reader Tips

"Fees taken off!"

"Scott--another success story for you--I had absentmindedly forgotten to make a payment on one of my Cap1 cards, and because of it, it pushed me over the limit. I not only got slapped with an overdue fee, but an over the limit fee as well. I called and asked for the fees to be taken off, and the rep refused. I got my scissors out and held them up to the phone, and cut the card in half and told her to cancel the account. She immediately got a 'supervisor' on the line who not only took off the over limit fee, but the past due fee as well. I told her she would have to send me a replacement card, which she of course agreed to do--so it does pay to call! And, best of all, it won't be reported to the credit bureau because I was less than 30 days late in making the payment. Thanks!"

--Sue Sheffler, Richmond Hill, GA

Read about special offer for all three of Scott Bilker's best-selling books

Household Math(tm): Sale or gas savings?
by Scott Bilker

How much are you really saving to be there for that sale? This is a true situation at our house. My wife drives a Dodge Ram; it gets 12 mpg (miles per gallon). Gas in our area is $2.45 per gallon. The mall is 18 miles each away. If she cuts back and only goes to the mall once a week, instead of twice a week, how much would she save in one year? (Steve, DebtSmart Reader, submitted this question.)

Answer this problem


Bush Administration to help 240,000 homeowners keep homes
by Federal Housing Administration (FHA)

President George W. Bush announced on 8/31/07 that HUD's Federal Housing Administration (FHA) will help an estimated 240,000 families avoid foreclosure by enhancing its refinancing program effective immediately. Under the new FHASecure plan, FHA will allow families with strong credit histories who had been making timely mortgage payments before their loans reset--but are now in default--to qualify for refinancing.

In addition, FHA will implement risk-based premiums that match the borrower's credit profile with the insurance premium they pay--i.e., riskier borrowers pay more. This commonsense, risk-based pricing structure will begin on January 1, 2008.

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Discover Card Consumer Survey Shows we're Upbeat about our Personal Finances, but...
by Curtis Arnold

In May, Discover launched a new research program, the "Spending Confidence Monitor," with Rasmussen Reports, a well-known, independent survey research firm. Together, they're planning to survey lots of us every month--they interviewed 500 consumers daily (15,000 total) in August alone--to find out what we think we'll spend in the future, what shape our finances are in now, and what our opinions are on the economy.

Finish Reading Article

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The author(s), Press One Publishing, and DebtSmart.com shall have neither liability nor responsibility to any person or entity with respect to any loss or damage caused, or alleged to be caused, directly or indirectly by the information contained in this email newsletter and/or at the DebtSmart.com web site. The information, methods and techniques described may not work for you and no recommendation is made to follow the same course of action. Every effort has been made to verify the accuracy of all content contained herein. However, there may be mistakes; typographical, mathematical, or in content. This email newsletter and the DebtSmart.com web site have been created for your entertainment only. You must always seek the proper professional advice before taking any financial or legal action. You have been warned.

Copyright ©2007 Press One Publishing. All rights reserved. Please do not reprint, or host on your web site, without explicit permission. However, if you found this newsletter helpful, we grant you permission, and strongly encourage you, to e-mail it to a business associate or a friend. Thank you.


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