A Class In Finance

The Best Kept Credit Card Secret…

admin — Thu, 31 Jul 2008 16:26:48 +0000

…is the PayPal Debit Card.

(I am NOT being paid to write this.)

The PayPal Debit card can be run as a credit card on almost all transactions, and, you can configure your account to recieve:

1.5% cash back INSTANTLY
Interest on your PayPal account at a competitive online savings rate

Most cash back programs require you to collect a certain amount of cash back or rewards credit before redeeming it, and many also require certain steps on your part to actually receive it — like having to log into online banking and specifically clicking “request check.” Not so with the PayPal card — your cash back, which at 1.5% is 50% more than most companies return to you, is nearly instantly deposited into your PayPal account, usually the same day as the transaction clears.

The balance of your PayPal account, from which the debit card draws, can be configured as a money market fund — automatically turning the contents of what would normally be a checking account into an investment. There is no need to specifically maintain a balance in your PayPal account since it can pull from your traditional checking account to fund the debit-card purchases, but the more you keep in PayPal the higher your dividends.

As with any debit card, with the PayPal Debit card you are spending money that you have, as opposed to the credit card model which predisposes you to spending money that you don’t have.

Extraneous Credit Cards

admin — Sun, 29 Jun 2008 21:13:27 +0000

…I never want to see a “rewards” credit card again — especially a travel based one….

I like Alaska Airlines, but EVERY flight, several times, they ask you to sign up for a “Alska Airlines Signature Credit Card” from Bank of America. Yay! You get 20,000 miles. Here’s the catch: there’s a $69.00 annual fee. So, basically, you are paying for those extra miles. You might as well forget the card, and just buy the ticket. What do these credit card companies/banks expect you to do? Do they really expect you to have a multiple rewards accounts (from them) fro each service you use? Is it really worth our time? NO.

I. CANCEL

admin — Fri, 30 May 2008 17:34:41 +0000

Step One of getting your finances in order is a simple verb: CANCEL.

In this step, you, your S.O., and anyone else who consumes (and therefore potentially saves by CANCELING) on your dime must take a hard look at consumption.

The first thing here is to CANCEL (or reduce) every subscription-based product that you consume (that you can bring yourself to cancel).

There is a reason why almost every service or product these days tries to get you on a subscription-based payment scheme: because eventually they will bill you without having to provide the product. (Failing that, at least they have a guaranteed MINIMUM level of consumption, which they can plan for. And those are only the biggest, most surface-level, reasons.)

Will you eventually pay for more than you get? Yes. Let’s take a popular example: Netflix.

They charge you $20/month (or whatever their special is) for unlimited movie rentals (3 at a time) per month. There are many people who take advantage of this service. BUT. They only people who should are those that already have a movie budget of OVER $240/year.

Personal Note: I don’t come close to this required minimum spending amount to engage in Netflix. I probably spend $5-10/year on movies, seriously.

And even for the people that $240/year represents a reduction in amount spent, if you fail to operate at minimum capacity of the service in any particular month, then you just spent money on nothing.

Reduce your consumption to your normal rate of spending, what you budgeted or what you should budget. Trade a product with an enforced minimum, like Netflix, for a quid-pro-quo product, like SwapaDVD.

Removing a service with an enforced minimum allows you to lower your total output for that budget item. The key to spending less money is, of course, consuming less. But you’d be surprised to know what you can get for even a much lower dollar amount when you stop paying for subscription services. Suddenly you discover what the provider has known all along: they charge you for services that they don’t provide, and that you don’t use.