Posted: November 22nd, 2010 | Author: Joe | Filed under: Debt | Tags: Debt, Debt Annihilation Formula, Opinion, Saving Money, spending, transform debt into wealth, transforming debt into wealth | No Comments »
I’ve been hearing a lot about The Debt Annihilation Formula lately and decided to look into it. My general impression is that it’s essentially Dave Ramsey’s Debt Snowball method to paying down debt, but packaged in a different way. Which I guess is good, becauseRamsey’s method works, but there are some eye catching claims in The Debt Annihilation Formula. One such claim is that:
“The more in debt you are, the richer you’ll become!”
Really? How can this be? I mean, debt is a bad thing, isn’t it?
Well, the author of The Debt Annihilation Formula has a point – up to a point. Or perhaps I should say he has a point at a point. Here’s his point: When you’re in a massive amount of debt, you have all these payments going toward that debt that effectively rob you of your income. That’s a bad thing, and the only way to make that better is to get rid of those payments by paying down the debt.
His point in saying that being in debt is a good thing is that if you have enough income to make the payments, then you have enough income to become wealthy once those payments are gone.
Fair enough. I think that’s a great realization for people in debt. It can be a great motivator to see the money that used to go toward your car payment or credit card payment now going into your savings. But it’s a bit irresponsible to say that the more in debt you are the richer you’ll become, or that you can transform your debt into wealth.
Those phrases make the casual listener or reader think that it’s good to be in debt and that if they go deeper into debt, maybe for the “right” things, that they will somehow become richer doing so.
The simple truth is that you’d be much better off not going into debt in the first place, and putting that extra cash into savings or investments from the start. That is the message more young people need to hear.
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Posted: January 25th, 2010 | Author: Joe | Filed under: Credit | Tags: Credit report, Credit score, Opinion | No Comments »
A lot has been written about the importance of your credit score, but how important is it really?
It all depends on what you’re doing in your life at any given time. For example, if you’re thinking of buying a home in the next few months, then your credit score is extremely important because it will be a major factor in how much it will cost you to borrow the money for a mortgage. Likewise if you’re looking to buy a new car.
But if you aren’t applying for a new loan or credit card soon, is it really important?
It could also be important if you’re looking for a new job or shopping around for car or homeowner’s insurance. Prospective employers and insurance companies have been known to use credit scores as one of the criteria for judging new hires and new customers.
So, clearly having a good credit score is important, but sometimes people just get too carried away with monitoring it. It’s important, but is it worth the money to check it unless you’re applying for a loan?
I don’t think so. In fact, I don’t even think it’s important to check your credit score even if you’re applying for a loan. Here’s why:
- Your credit score is based on the information in your credit report.
- You can get a basic idea of your credit score for free.
- You can’t really do anything about your credit score that you wouldn’t do about your credit report.
You can get your free credit report from AnnualCreditReport.com and see if your financial history is good, bad or just plain ugly. You can use BankRate.com’s FICO® Score Estimator to get a general idea of how you rate. But consider this – If you paid to find out your credit score was low, you’d have to get your credit report anyway to find out why, and refute any erroneous information. Why not just check your credit report and leave it at that?
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Posted: November 14th, 2009 | Author: Joe | Filed under: Credit | Tags: Credit Cards, Opinion | 1 Comment »
Let me apologize up front for the brevity of this post… the flu has got me down, and I just don’t have it in me to be prolific.
But alas, I just came across a post by Len Penzo titled, No, I’m Not Cutting Up My Credit Cards! (Maybe You Shouldn’t Either.), that I had to share. This post is a very well thought out and reasoned rebuttal to a post by a fellow blogger, Matt Jabs.
Matt wrote a post titled, Credit Card Rewards – Rethink Your Returns, that was an equally well reasoned post on why people should not use credit cards. Ever.
Penzo’s post is a terrific defense of credit card use – responsible credit card use.
Regardless of which camp you find yourself in (I’m in the Penzo camp), these are thoughtful arguments in the ongoing discussion of the proper role of credit in our lives. The also just so happen to be far better written than anything I can muster these days. 
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Posted: October 27th, 2009 | Author: Joe | Filed under: Scam | Tags: Opinion, proflowers, Rant, Scam, spending | 25 Comments »
I can’t believe it and I’m a bit embarrassed to admit it, but I was scammed. I used Proflowers.com recently to send flowers to my wife (our anniversary) and my mother (her birthday) and thought I got a great deal. The flowers were beautiful, and they seemed to last forever. It wasn’t until two months later that I realized I was scammed!
Here’s how it happened.
At the end of my order process, I was asked if I wanted to sign up for additional coupon offers from a 3rd party service. Since I make it a rule to try to spend as little as possible at all times (ask my wife), I selected “No thank you” and continued with my order.
Despite my having selected “No thank you”, I was enrolled in this bogus program anyway.
The program is called “Easy Saver“, and as near as I can tell they charge you $14.95 a month to grant you access to a web site that contains coupons.
The problem is that not only was I being billed for a service I wasn’t using, I was being billed for a service I didn’t even know about! I was never contacted by the 3rd party (Easy Saver) to congratulate me on my enrollment, much less notify me of how to make use of their program. They seem to exists solely for the purpose of skimming $14.95 off unsuspecting proflowers customers.
I’m lucky I noticed the $14.95 charge on my credit card with an odd business name next to it:
“$14.95 ezsver rw 1-800-355-1837″
It was only after I went back to the previous month that I really became suspicious. There I saw a charge for $3.95 – and that was the month after my proflowers purchase appeared on the credit card.
I called the 1-800 number to talk to “ezsver” and that’s when I discovered they were really “easy saver rewards”. I asked the customer representative who easy saver is and how they got my credit card number. She told me that they partner with a number of popular Internet and 1-800 companies, like proflowers…
All in all, there were 2 unauthorized purchases beginning 1 month after my proflowers purchase – 1 charge was a small, almost unnoticeable $3.95, and after that came the monthly $14.95.
I must say that the customer rep at easy saver was very pleasant and very helpful, and I was able to cancel my “subscription” as well as have the previous charges reversed without any problem. But the way the whole thing went down is what bothers me the most.
The fact that proflowers signed me up when I explicitly opted out, and the way that easy saver never sent any correspondence to inform me that I had been entered into a subscription service bothers me so much that I will not be using proflowers again, nor will I be recommending their services to others.
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