Life Craziness

Yesterday was one heck of a day. Girl Ninja and I were faced with having to make a HUGE life decision that we were not expecting. As a result of yesterday’s craziness, I sit here at 12:04am with little energy and no desire to blog. I know I’m being totally ambiguous and lame about details, so you’ll have to forgive me. I will definitely be writing about this dilemma soon (likely tomorrow) and will share the specifics then.

Since there is no new content, I’m going to copy an paste and old blog post of mine below. I’m assuming most of you weren’t reading me a year ago, so it will probably be new to you anyways.

I use my credit card for every purchase I make . I do this for two reasons 1) It consolidates all my expenses in to one big payment 2) I earn reward miles for every dollar I spend. Not too long ago I wrote about the perks of credit card incentives . Well a month later, I’m wondering if I am going to hell for taking advantage of these perks.

I’ve heard it argued that it is unethical to take advantage of CC perks. Why? Because the only reason the banks can offer these sweet deals is because they are charging the bajeezez out of those that are only making minimum payments. As one that ACTUALLY uses the perks of my mileage card, I feel obligated to lay my case for why using incentives is okay.

1. I have no internal debate as to whether or not I am hurting someone else by using these incentives. When I was in high school I cheated on a few tests (shhhh don’t tell anyone). When I was cheating I had an internal conflict that went something like “Ninja, you know this is wrong…Why are you doing this?” Obviously I told my conscience to shut it and cheated anyways. But at least in that situation I knew what I was doing was wrong. I have never felt like I was doing something bad by cashing in my airline miles.

2. There are two types of credit card owners out there. Those that pay their bills in full each month, and those that don’t. We both borrow money with an intention to pay it back. Why should I feel bad about being rewarded for being a responsible borrower and paying in full each month? The answer: I shouldn’t. As long as I follow through on my end of the deal, Why can’t I be rewarded?

3. At the end of the day, let’s be honest…it’s the credit card companies that are going to hell. They make a ton of money from sketchy lending, jacking up interest rates, and charging people five buttloads of money in late fees. Think about it like this. I’m actually screwing the banks by paying my balance in full each month. Every time I redeem my rewards, I end up costing them money. No sir, they get no interest charges or late fees from me.

So peeps what’s your call on this two-sided debate? Am I going to hell? I see arguments from both sides, but as of this moment don’t feel compelled to change my ways.

I can’t wait to take on more debt….sike!!!!

So I received a free 9 month credit monitoring package from TransUnion as part of some class action lawsuit I was unknowingly involved in. I have to say, having the ability to access my credit report whenever the heck I want is pretty dang convenient. I still don’t think I’d pay the $12/month the credit monitoring regularly costs, but I could see why some people might.

As I was poking around and exploring all my credit details, I stumbled upon my credit score. Here’s what I saw…

Cool. My credit score isn’t crazy high by any means, but it’s probably not too shabby compared to most other 24 year old males. I got a good chuckle out of the next section titled “Ways to improve your credit score.” Here was their suggestions…

Okay bucko, I’m on to your clever tricks. You want me to get in more debt. Well I got two words for you… Suck it!!!

I love that the first piece of advice suggests that I do not have enough revolving debt. Apparently my $16,000 student loan debt isn’t sufficient.Their solution? Go take out a bank loan, an auto loan, a business loan, and maybe finance some plastic surgery. Surely then, my credit score will increase! Think about it, I can go rack up a good $30K in debt to raise my, already good, credit score a few points higher. Where do I sign up!?

The second recommendation kind of shocked me. I knew multiple credit accounts helped boost your credit score (see point one), but I never really thought I would be told I needed MORE credit cards! Like I said, I’m 24. I already have three CCs (all with zero balances). Do I really need to go sign up for another two or three just to give my credit score an artificial bump? Hell to the No I don’t.

There really isn’t much I can do about the third recommendation. I’ve only been legally allowed to have a credit card for six years, but apparently that isn’t good enough for the credit score gods. Perhaps I should have considered illegally applying for a credit card when I was 8 years old so I had a “longer” credit history. Stupid, stupid, stupid.

I have no plans in the immediate future to accumulate any more debt or open any new credit accounts. I guess this means I will never break the 800’s as far as my credit score is concerned. Sure having a good credit score is important, but there is no way in H-E-double-hockey-sticks I am willing to take on stupid debt just to do it. I’d rather have $50K in the bank and a 760 credit score than$50K in debt with an 820.

Have you ever had experience with a credit monitoring program? Do you know your credit score? Do people actually follow this crappy advice? Has anyone out there ever actually accumulated debt simply for the sake of improving their credit?

I hate cash

Screen shot 2009-12-03 at Dec 3, 2009, 10.10.43 PMHave you heard people say “Don’t use plastic because you tend to spend more money when you do.”? That is another piece of financial wisdom I have decided to ignore. I never carry cash on me, and when I do get some greenbacks, I take it straight to the bank to deposit. A lot of PFers, Dave Ramsey included, preach the wonders of being on a “cash only” system. Their main argument is this: People tend to spend less when they pay with cash because giving tangible money tends to ‘hurt’ more than swiping a card.

I am absolutely, positively, 102% against the ‘all cash’ plan. It just doesn’t work for me. I’m a pretty disciplined dude, but dollar bills are my kryptonite. They sit in my wallet, taunting me, whispering from my right butt-cheek “Hey Ninja, why don’t you put me to use and walk over to Rite Aid and buy a tub of  ice cream?” Seriously, cash is evil. If I have it on me, it will most likely be spent on unnecessary, unbudgeted, and unsmart things (I love making up words).

For me, it ‘hurts’ a zillion times more to put it on my credit card. I pay my CC balance in full each month. Do you know what that means? I get to watch the damage accumulate over my 30 day billing cycle. As the balance grows, I become more and more frugal. Paying between $1,000 to $1,500 each due date, totally motivates me to minimize my spending so I have to pay less on my CC balance. Seeing the damage in it’s entirety, as oppposed to incrementally, influences wise spending choices.

I’ll be honest. I don’t have the discipline (or the desire) to work an envelope system. With the envelope system, you put X amount of cash in the “groceries” envelope and use that as your guide for the entire month. If you run out of grocery money, you starve (or borrow from another category envelope). If you have the discipline to stick to your budget ALL OF THE TIME, than the envelope system is definitely something you should consider. But if you haven’t noticed, I’m kind of a bada$$ and I sometimes like to spend outside of my budgeted parameters. Envelope system=good for people who have a lot of discipline. Envelope system=ineffective for 99% of the US population.

What about you all, Do you prefer using cash or a card? How much cash do you keep on you at any given time? Do you think you spend more when you swipe? Anyone out their like-minded and struggle to keep cash in their wallet?

We’re all screwed!

Have you heard about all the crazy new fees the big banks are tacking on to credit cards? I hadn’t until I watched The Today Show. Usually I don’t pay much attention to credit card fees. Why? Because I have never gotten one. I have ALWAYS paid my balance in full each month. Paying your balance guarantees no fees….right? WRONG!

We are all pretty much screwed. Those who can’t afford to pay their balance in full have been getting screwed for a while, but now everyone’s gonna be hurting. Here’s just a few of the sneaky fees…

Initiating or increasing annual fees (aka: We hate you fee)…

Bank of America is testing out new annual fees of $29 to $99 on certain customers. How’d BoA decide who they were gonna hit with the new fees? They aren’t telling. Hear this Bank of America, you increase my annual fee and I will punch you in the face and cancel my credit card faster than you can say “I smell like pantyhose”

Inactivity fees (aka: We really hate you fee)….

WTF? This one honestly dropped my jaw. I have a few credit cards that are really old, but that I never use. I keep the accounts open because my history with them gives my credit score a healthy bump. Ya really have three options here: Pay the inactivity fee, use the card (assuming you haven’t cut it up…oops), or cancel it and damage your credit score.

Not Enough Activity Fees (aka: The bend over fee)…

I said it once before, but WTF!? I feel like the banks must have had a giant how-to-piss-off-our-customers board, with about 50 different ridiculous fees included. The CEO’s then blindfold themselves and throw a dart at the board, thus creating the “not enough activity fee”. Essentially if you don’t charge at least “X” dollars on your card each month, or year (depending on the terms), you are gonna get penalized with a fee. Again a problem for me, considering I really only use one credit card, even though I have three in my name. Do I really want to be carrying balances on multiple cards, to avoid a stupid fee?

This is absolute insanity. I’m damned if I do and damned if I don’t. I can either fork up the cash and pay these crazy new fees, or I can say “Funk You, Bank of America I’m out like a fat kid playing dodge ball” thus hurting my credit score. Even though I’m at the peak of my financial game, this could end up being a lose-lose situation. It’s time for this ninja to start shopping around with local credit unions. I’m done with the big bank drama.

You can see the Today Show clip here to get the quick scoop on what I just ranted about.

Banks are geniuses!

Now I know banks obviously have their best interest at heart and not always their customers, but they have come up with some pretty clever programs to bring home even more bacon. I had someone email me a while back asking for ways they can try and rebuild their credit, when no one will lend them money.

One of my suggestions to them: Attempt to obtain a secured credit card. If you don’t know what a secured credit card is, I’ll break it down for you. The bank looks at you and decides you are way to unreliable to give a normal credit card to. They say “Hey give us $500 and we will give you a quasi-credit card with a $500 limit.” Essentially they allow you to borrow your own money from them. If you use the card for small purchases, and make your minimum payments (or pay the balance in full) each month, then the bank will eventually feel comfortable lending you some of their money. Soon enough you will be able to sign up credit card, bank loans, car loans, and any other kind of debt you want (although I’ll punch you in the face if you take advantage of all this credit).

If you think that a secured credit card is a good option for you, you might want to check yourself before you wreck yourself…here’s why. If you miss a payment, or are late, the bank still is going to charge you interest and fees. That’s right. They charge the crap out of you for using your own money. Here’s how it works….

You give them $500, they give you a secured credit card
You use $100 at the grocery store, and make a payment of $50 at months end.
The bank now charges you $15 in interest for borrowing your own money.

Booya, score one for the banks! I don’t think people that have secured credit cards realize they get virtually no benefits of an actual credit card, but could end up getting charged a ton for using their own money. The secured credit card does have a benefit; improving your credit score if you’re a responsible borrower, but for the irresponsible you’d be better off smoking dope laced with mushrooms that were dipped in black tar.

Suck It

I hope this is not news to you, but is not free. Although the company isn’t doing anything illegal, I think they still deserve a swift punch to the throat. It infuriates me that a company boasts about it’s free credit report service, when in fact it is a we-hope-you-don’t-realize-you-are-signing-up-for-a-monthly-subscription service. Sure, your initial report is free, but they stick it to ya 30 days later if you haven’t had the due diligence to cancel the contract you probably didn’t know you signed up for. Now I haven’t been tricked by, but a lot of people I speak with think that is the place to go.

Okay now that I’m done with my ranting on to better things. Yesterday, I hopped on (the truly free site) to review my credit report. I do this every four months. I usually print off a copy of the report and keep it in my files. It’s important to periodically check your credit report. Why? It’s the best way to protect yourself against identity fraud. If someone manages to get their hands on your personal information, it wouldn’t be too difficult for them to sign up for a credit card in your name. If you don’t check your credit report, there is no way of knowing if someone has opened unauthorized accounts. If you don’t know what a credit report is, it’s basically is a complete list of all debts you have had over the last seven years. Credit cards, school loans, late taxes, car payments, they all will be in your credit report. Even those who have gone all Dave Ramsey and sworn off debt, you still need to check your report.

This leads me to my question. If you follow me on twitter, I tweeted about this the other day, but now I want to bring it to all the PF bloggers stopping by. Is credit monitoring worth it? I have been utilizing my three free checks per year and so far haven’t had any identity theft issues. I did some simple browsing yesterday, and it looks like for about $10 to $20 you can get a decent amount of protection against identity theft. It would be super convenient to get email notifications each time an account was opened in my name. Or a text message each time a large purchase was processed on my credit card. But is it really worth the monthly fee? Do you pay for credit monitoring? Have you dealt with having your identity stolen? I bet it only takes one incident to convince someone credit monitoring is a worthwhile expense.

Banks are to blame for the rainforest woes.

I think I have discovered the exact scientific reason the longevity of the rainforest is being threatened. If my calculations are correct (which they are always are) then Chase, Bank of America, Wells Fargo, and every other big bank to roam the earth is directly responsible.

Don’t act like your confused. Go check your mailbox right now and tell me you don’t have 10 credit card offers, 5 bank statements, 3 new account offers, 2 random bank notices, and a freakin’ partridge in a pear tree. Seriously. I think the the big banks hate trees. The majority of my mail consists of grocery coupons and bank notices. WTF! It’s like I get excited now when there is an actual letter in my mailbox. I have come up with a couple remedies to try and ease the frustration of bank junk mail.

1) If you receive a bajillion credit card offers a week then your first plan of action needs to be this: Go to this website and opt-out of receiving them. It may take a couple months, but soon you will notice a HUGE decrease in the amount of credit card junk mail in your inbox. I did this about 6 months ago and couldn’t be happier. This will directly help the rainforest cause that is one less piece of mail being sent out.

2) Get a shredder. Although this won’t directly help the rainforest. It will protect you from identity theft and compact your massive amount of junkmail. Quickly sort through your mail, decide what is important and what isn’t. Throw the unimportant things in the shredder and walk away. Doesn’t get much easier than that.

3) The last solution I have to completely ridding your mail box of any and all junkmail is this: Wait by your mailbox and tell the mail person you will punch them in the face if they ever put junkmail in your box again. While I have never tried this, I’m pretty sure it would be effective. I know if I was that mail person I sure as heck wouldn’t want to mess with you.

Are your mailbox woes similar to mine? Do you ever get irritated by the “sign up for our online savings account” or “transfer your credit card balance here” offers. Part of Obama’s “green” plan should include a clause that only allows banks to send out a few pieces of junk mail per year. Or at least they should be required to plant one tree in the amazon for every piece of mail they sent out. Are ya with me tree huggers?!