As the economy seems to be sinking to new lows, there are savvy financial decisions that you can make that will have a huge impact on your bottom line. Reducing spending doesn’t always mean making cuts into your way of life. Likewise, increasing savings doesn’t always mean settling for anything of lesser quality.
Credit Card Perfect Error
I think we’ve finally gotten wise to the credit card game. Years ago an analyst came out with the scenario that if you have a $5000 balance, I think it would take you 20 years to pay it in full if you paid the minimum. Then, another analyst came out with the fact that credit cards can change the rate on you at any time. So, congress has even been asked to step in for fairer credit card practices on the side of the consumer.
Here’s what most people miss. The credit card company may be able to change the rate at any time, but new rates only apply to charges made from the date of the change. You can get documentation for all the rate changes that have been made on your money for the last year or from the date you first started using your card.
Use money software or a spreadsheet to help you keep track of those changes and you will find that the credit card company has been getting away with thousands of technically wrong charges for years. If you make a charge yesterday and the credit card company changes your rate today, legally the money you borrowed yesterday is bound under the rate that existed yesterday. But, many people don’t catch that little trick.
But, be savvy! If the rate goes down today, let the card have fun with their charges. It’s when it goes up that you have to call them on it. You can correct them and save yourself thousands. You might think that you don’t have time to keep track of every rate change, expenditure and payment, but for a few thousand dollars in instant savings, I would make the time. You might even be able to request a refund or at least a credit and instantly increase your spending limit. The credit card company might not see it coming and might try to fight you on it. But, anything worth thousands in savings is worth fighting.
Credit Card Perfect Spending
A simple way to use the credit card is to use it for all of your expenditures throughout the month while your paycheck goes straight to your savings. When you get the bill, transfer the money to checking and write the check or whatever method you use to make payments to your credit card. This is beneficial in two ways.
One, you don’t handle money throughout the month and you don’t pay interest when you pay your credit card in full on the date it is due. Two, your money will gain interest sitting in your savings until the due date. Watch as this strategy grows! You’ll find your savings growing by the month because you’re gaining interest in savings and you’re not paying any out to your credit card.
But, this strategy takes discipline. Don’t spend any more than you have. Don’t spend frivolously over your limit. Don’t go overboard with your credit card. Use it for your bills, gas, groceries and anything else you would normally need throughout the month. Make informed decisions on any other expenditure. Don’t change your spending limits. Just change how you choose to pay.
Look for Deals
All over the internet are great deals. They pop up every day. They aren’t always what we need. But, eventually something we need or want does come along. Not always, but it is quite often if you keep your eyes open for those opportunities.
The best strategy is to tap into every notification system you can. Create for yourself an email that you use for getting notifications about special offers. Once a day, go through them to see if there is anything you can use. The best time might be before going shopping. But, don’t let the emails pile up because they will. Then, you’ll be lost in a pile of offers you don’t want while you are missing the ones you do want.
It’s actually a steady formula to get yourself out of debt and happily in the black. But, you have to keep yourself on top of your money and your goals. Once I created a spreadsheet and started keeping track of my spending, credit card rates and payments, it takes me a few minutes a day to stay on track. I delete email notifications I don’t need in about a minute every day, and then I save the ones I do need in a special folder in about two seconds. For less than five minutes a day, I clean my financial house and I’m more capable of knowing at any given point on any given day exactly where I stand financially.