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ISSUE #184

Email Newsletter  

  September 3, 2008  

Scott Bilker
Scott Bilker, founder of DebtSmart


It's back to school time. Now you may be able to find some quiet time to take a closer look at your finances. So clear your mind, and prepare to find ways to save money and make money!

Saving money is the best first defense against your debt. It's truly us against them. That is, "us" trying to keep our money and "them" trying to take more than their fair share--and you know who I'm talking about.



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In This Issue

Cool Quote
Living above my means for years--what now?
STATISTIC: Buying Used vs. New
7 Things You Should Never Say to Customer Service
3 Bank Deception Stories
"When Credit Card Companies Compete for Your Business--You Win!"
How to persuade customer service reps to help you
Household Math™: What does Jenna owe?
Should I declare bankruptcy?
Digging Out of Medical Debt

Cool Quote

"Stretch your leg only as far as your blanket."
--Turkish Proverb

More cool quotes from past issues

Living above my means for years--what now?
by Scott Bilker


I've been living above my means for years, using credit cards to pay for the difference from what I make and what I spend. I can't be in denial much longer as the cards are getting to their max. I currently don't' have any past-due payments since I still use the credit cards to offset what I can't pay. What do you recommend I do?

I was thinking of going to the credit card companies and letting them know that I'm struggling, to see if they would stop charging me interest, but I'm afraid of losing a good interest rate or the payments going up as they'll mark me as high risk. I just don't want to go through the harassment I've heard other people have gone through, with them calling or trying to go after what you own or your paycheck.

I have 2 homes. I downsized with the second one, but that backfired when I couldn't get rid of the first one. So it's renting right now for the majority of the payment, and I have no equity in either of them.

Please let me know ASAP what you think, as I need to do something before it's too late. : (


Finish reading this article

STATISTIC: Buying Used vs. New

Pre-owned shoppers refers to U.S. adults ages 18+ who have ever purchased pre-owned merchandise. With economic concerns facing many Americans, more than half of pre-owned shoppers (54 percent) are turning to online sites such as eBay to purchase used items. The most popular items purchased secondhand within the past six months include consumer electronics and entertainment, which 56 percent of pre-owned shoppers have purchased, and clothing and accessories, which more than half of pre-owned shoppers (54 percent) have purchased. In addition, pre-owned shoppers have purchased used home-related (31 percent), automobile-related (24 percent) and collectible (23 percent) items within the past six months. Seventy percent of adults say buying used is more socially acceptable now than five or 10 years ago and 43 percent say it's easier to buy popular items if purchased used rather than new.

More credit card and debt statistics

7 Things You Should Never Say to Customer Service

Comedian George Carlin made famous seven "dirty" words you should never say on television. Likewise, I have a list of seven things you should never say to a customer service representative. Mention any of these and your conversation will come to an abrupt end--along with any hope for a quick resolution to your dispute.

1. "Lawyer." As in, "I'm going to call my attorney." This will end the conversation instantly and eliminate any future communications, except between guys in expensive suits with bar cards. Corporate legal departments train customer service agents to terminate the dialogue any time a caller mentions going to court or getting a lawyer involved. For the same reason, avoid using legal terms, such as "lawsuit," "district attorney," or "mandatory sentencing."

See story here

3 Bank Deception Stories
by Scott Bilker

Below are three stories of bank deceptions submitted by email newsletter readers. Thanks to all for your feedback about my Chase story. However, keep in mind that we need to use the banks against each other. That means you don't want to close your accounts. Transferring your balances is the best revenge!


Sunday due-date raises rate to 28%
From Mona Williams

Chase was the bank. We had written a convenience check to make an investment, with the life of loan interest at 3.99%. Our monthly bills are paid electronically through our personal bank, with most of the electronic transactions occurring in about 24 hours....


Cheers to you Ms. Robinson
From John Phillips

A few years back, my partner Ben, who is an authorized user on my Bank of America Rainbow VISA card, had charged up to the $7,500 limit. At the time, the card had been issued by MBNA, prior to their merger with B of A. I contacted MBNA customer service, and I asked if it would be possible to lower the interest rate, which at the time was 14.49%. I admit that was my first mistake...talking to a customer service rep at MBNA!...


Deliberately set up to be overdrawn
From JoAnn Breitling

My check goes in automatically, and I have items that are set to come out on the same day. I also deposit several cash transactions throughout the month. My friend who worked at Bank One said they will deliberately try and set you up to be overdrawn, showing a larger item to come in first, and sending back three items, charging three fees, when the two smaller items could have been paid, incurring one overdraft fee...

Finish reading the article

"When Credit Card Companies Compete for Your Business--You Win!"

If you are carrying balances at a high APR rate and your credit card company refuses to lower the rate, then take action and "spank their bottom lines" (page 222). Find a better credit card offer, transfer the balance, then wait a few months for a low-interest rate offer from the same bank to appear in your mailbox. This strategy worked for me and saved me a considerable sum in monthly interest payments.

This was the first strategy I employed after my first night reading Scott's book. The interest I saved paid for my investment in Scott's books many times over. Let me tell you how I applied Scott's strategy to win an incredible promotional offer from the very same credit card company that refused to lower the APR on my account balance.

When I called the credit card company, they flatly refused to lower the 26.99% APR. I told the representative that I would find a better rate and transfer the entire balance to their competitor, at which point they would lose the cash flow from my monthly interest payments. The representative still refused as did the supervisor that I spoke with soon after, in spite of agreeing that they would be better off with some monthly interest payment rather than none at all.

I did find a better offer soon after. I transferred the entire balance to a competitor and then maintained a $0 balance on the account, as Scott advised. Several months passed. I then received a mail offer from the same high-APR credit card company. As I read the terms of the offer, I realized that the same company that could not lower my rate was now offering me a balance transfer deal of up to $4000 at a promotional rate of 3.99% APR fixed until the balance is paid off (page 233).

Where can you get a $4000 loan at 3.99% interest fixed, with an unlimited amount of time to pay off the balance? As Scott suggested, credit card companies do take notice when you do take action and transfer balances to a competitor.

I used half the available credit line ($2000) to "fire a shot over the bow" of another stubborn credit card company that I had warned previously about their absurd APR rates. The remaining $2000 balance, at 3.99% percent fixed rate, financed a much-needed home repair.

Needless to say, Scott's strategies are now a part of my own financial management strategy respective of managing debt and improving cash flow. I continue to reduce my debt and reinvest money that I would have otherwise paid to credit card companies. I have only scratched the surface respective of all of the strategies that Scott provides in his book and via his website.

I highly recommend "Talk Your Way Out of Credit Card Debt" to consumers who carry a balance on their credit cards. It is an excellent guide for those of us that want to learn how to better negotiate with credit card providers to reduce interest rates and uncover the best offers available. If you want to save thousands of dollars over the life of your credit card loans, then this book is a must read for you.

--James C. Intriglia, Management Consultant (Conifer, CO)

Learn how to "Talk Your Way Out of Credit Card Debt"

How to persuade customer service reps to help you

Here's a clever tip for getting customer service reps to help you with a sticky problem that will require extra effort on their part. It's from Noah Goldstein, a behavioral scientist at the University of Chicago Graduate School of Business and the author of Yes!: 50 Scientifically Proven Ways to Be Persuasive (co-authored by Robert B. Cialdini, who wrote the terrific book, Influence: The Psychology of Persuasion).

See story here

Household Math (TM): What does Jenna owe?
by Scott Bilker

Jennafer read Scott Bilker's, "Talk Your Way Out of Credit Card Debt," and called her credit-card bank in the hopes of reducing her interest rate. Armed with the techniques from the book, she was successful at reducing her rate by 5 percent to 9.9 percent! After doing the math, she calculated that the debt would be paid back one year faster and she would save a total of $3,012! How much does she owe the bank--what is her current balance?

Answer this math problem

Should I declare bankruptcy?
by Gary Foreman


My husband and I got married quite young, made some unwise financial decisions and ended up in debt (some credit card, some personal loans) with a grand total of $24,000. My husband has worked very hard over the years, sometimes 3 jobs at a time, trying to make ends meet. We have gone through credit counseling and a consumer proposal. We are the parents of 3 young children and have had to choose between paying our bills, so we wouldn't go bankrupt, or buying groceries.

After many years of trying, we feel that we have no other choice but to file for bankruptcy. We honestly would like to do anything else, but we feel that this is our only alternative.

Exhausted in Sudbury

Finish reading this article

Digging Out of Medical Debt

Back in 1994, Jinx Kincaid, now 55, was diagnosed with breast cancer. Although the Locust Grove, Va., resident has long held health insurance and her cancer is now in remission, she is still in debt. Years of costly medical treatments saddled her with more than $100,000 in medical bills.

Kincaid has since whittled that heart-pounding sum down to $8,000, thanks to financial assistance from her medical provider and the help of a credit-counseling agency. Even better: She expects to be completely debt free in two years. "I feel like now I can live to see my grandchildren get married...if I was still looking at all that [debt] in the face, I would be looking at hypertension in a bad way," she says.

See story here

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 website. 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 website 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 ©2008 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.

The DebtSmart Email Newsletter, ISSN 1538-6740, is written and published by Scott Bilker and edited by Larissa Bilker and Denise Troy. Please contact comments@debtsmart.com with any comments, problems, or concerns. (See the very bottom of the email to make changes to your subscription.)

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