Friday, December 28, 2007

American Attitudes About Credit Card Debt--Not a Big Thing?

The Associated Press ran an article the other day about how the subprime mortgage industry mess is now causing some people to default on their credit cards. I guess this is logical. When people run into money trouble, they start charging more or taking cash advances off their credit cards. The article said that serious delinquencies--those 90 days delinquent--were up about 50 percent or more in the value of accounts at least 90 days late compared to the same period last year.

The article also predicted that defaults will be even worse after the holiday season, and mentioned that economists say Americans have a long standing attitude that credit card debt is not a big thing.

I am lucky that I do not have a mortgage, so I don't have to worry about this aspect. I have had credit card debt for too long, and I want to get rid of it. Speaking for myself, I think credit card debt is a big deal. I think what happens to many, including myself, is that you accumulate debt on credit cards quicker than you realize and then you are in a pickle.

The best thing is to not use credit cards. I feel badly though for those caught in the mortage mess who are just trying to survive now, and haven't gotten their heads cleared about it yet or figured out a game plan.

Thursday, December 27, 2007

Pay By Phone: The Good vs. the Bad

Pay by Phone, or whatever you call it, is another one of those decisions you have to make. When you are paying a credit card by automatic payment, many times there is a fee--sometimes as much as $14.99 or higher. That is bad, as that is money that gets slapped to your balance. And for those of us with high balances, that only makes it worse. Out of sight, out of mind, maybe, but that is just a little more each month that is tacked onto an already high balance.

The good side of these pay by phone options is that you know exactly what day the check will hit your bank, so you can plan for it. If I schedule my Discover card payment, for instance, for the 12th of the month, I know I will need that much money in my account to cover that amount, and if I don't have it, I can transfer some money into it for that day.

With a paper check, you don't have the luxury of knowing exactly what day it will hit.

I know--this is a silly problem, but I have been so used to paying my credit card bills by pay by phone for several years. I did it this way as a money managing tool. It made me feel good to know when the checks would hit, and then I wouldn't chance an overdraft. The bad side is it has helped to grow my balance.

Over the next few months, I am going to try to wean myself from this habit, maybe even starting this month. If I can, I'll be around $180.00 less in debt per year for every credit card I have.

Sunday, December 23, 2007

Minimum Payment Confusion

I again talked with CitiCards today about my balance. I get worried because each time I call, I get a different story. I need to improve my FICO and credit score, and I need to do it by April if possible. So getting the right info is important. Today I called the 800 number to see how much I need to bring my account current. I could swear that last month when I talked with them, they said I was about 60 days late. I need to avoid going 90 days late at all costs.

I made a payment then, and I called back today to ask the same question. They said I was current but over the credit limit (I knew I was over the credit limit.). I know I am not good at math, but this is ridiculous. If I was about 60 days late last month and made a payment to hold it stable, I would think I would still be in the same position this month, but I am suddenly current??? I kept asking and asking about it and even asked to speak to a supervisor about it. And they all said I was current but over the credit limit.

I am going to accept their answer, but hope this is not an example of if it sounds too good to be true, it probably is.

I just don't understand why you get different answers all of the time.