The small 'justifications' can add up.
This post comes from partner blog The Dough Roller.
While we don't have any credit card debt now, except for 0% APR balance transfers, there was a time when we did. While we never let our credit cards get completely out of control, we did build up several thousand dollars on our credit cards when I first got out of college.
So having gotten into card debt and then climbed out of it, we've learned many of the causes of this financial pain. The fact is, we can talk ourselves into using our credit cards in ways that will hurt our finances down the road.
So here are 10 lies we tell ourselves that get us in credit card debt and keep us there.
Parents face social pressure to pay for photos every year.
Are school pictures one of those things you can’t sacrifice, no matter what they cost? What if you simply can’t afford them?
Jenn at Frugal Upstate offers three ways to avoid this expensive, annual tradition. (However, she wrote that under the pressure of time, "I caved. … Yes, I have now shelled out a grand total of $75 for school pictures: $29 for each of the kids for one of the smallest packages, then $17 for Buddy’s soccer pictures," she added.
One reader of Lafayette, Ind.-based MomsLikeMe.com reported paying $100 total for her two kids. Others lamented that you can’t buy photos a la carte anymore, but have to get an entire package.
"It's like cable. You have to pay for all the stuff you don't want or use," wrote "mockingbirdmom." "What a racket."
Maybe your bank will let you opt out of overdraft protection.
We’d venture that overdraft fees are the most hated fees charged by banks, and they charge a lot -- an estimated $36.7 billion last year, USA Today reports.
Bankaholic explains how overdraft fees work:
It doesn’t matter whether they’re buying a mink coat or a $4 latte at Starbucks. And to help them charge as many overdraft fees as possible, the banks deduct the largest purchases on any given day first to drain accounts as quickly as possible.
Now, facing possible restrictions from Congress and the Federal Reserve, more banks are putting limits on the despised fees, which are often in the neighborhood of $26 to $39.
Here’s what you can expect in the near future:
Should Congress take action to control debit card fees?
Several weeks ago, The New York Times featured an article callled "Overspending on debit cards is a boon for banks." While I usually favor personal-finance blogs over the larger online media networks (call me partial), this piece was particularly compelling to me. It does an excellent job of shedding light on a topic that is positioned to be the next major debate in our government’s quest for banking reform.
As many other sectors of the banking industry continue to underperform, debit cards have stepped up to become an essential profit center for banks. Fees associated with overdrafting checking accounts are expected to exceed $27 billion this year. In comparison, the article predicts only $20.5 billion in credit card fees, which is likely to drop even further in the years ahead as recent government reform will require consumers to opt in to over-the-limit charges.
Each major credit bureau has its own system.
Earlier this week we took a look at how to get your free FICO credit score from myFICO.com. Operated by the Fair Isaac Corp., creator of the FICO credit score, it offers consumers a free credit report and FICO credit score when they sign up for a 30-day trial of Score Watch. The FICO credit score myFICO.com provides is from Equifax, one of the three major credit bureaus.
And that's where some confusion can creep in.
- Bing: More on credit scores
There are three major credit bureaus: Equifax, TransUnion, and Experian. And each of these credit bureaus calculates a consumer's FICO credit score, which can be and usually is different for each credit bureau. In other words, you likely have a different FICO credit score from each of the three major credit bureaus. And to add to the confusion, each of the credit bureaus calls its version of the FICO credit score by a different name.
So let's quickly sort all this out:
To avoid price increases, companies stealthily reduce sizes.
"LivingAlmostLarge" at the blog with the same name read an article about how manufacturers of food and sundry items are shrinking the size of their products and charging the same price. She found the proof in her own cupboards.
She wrote that "curiosity got the better of me and I started to pull through my cabinets. And Bounty did decrease the roll size. I can say that because I have some from last summer." Bounty isn't the only product that's smaller now.
Many don't like being told they live unhealthy lives.
Freemoneyfinance has compiled more than 700 money-saving tips over the years. Based on feedback from readers, FMF, in typical snarky fashion, has compiled the 10 most-hated suggestions. We'll share some of the highlights here.
No. 10 on the list: "Be healthy." "Let's face it, people don't like being told they are fat and lazy," FMF writes. "I think that's at the core of the disdain for a healthy lifestyle." Quitting smoking is No. 8.
Do you really know as much as you think you do?
Do you think you’re the reigning coupon queen in your neck of the woods? Do you need proof or confirmation?
Try this question out:
3. The store is having super double-coupon sale up to $2 value. You have a 75 cents-off coupon for a product that has a retail price of $1.25. How much will you pay for that product?
A. You will get a refund of 25 cents.
B. The product will be free.
Here’s the answer (this post is all the better because Paula provides an explanation with each one).
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
ABOUT SMART SPENDING
LATEST BLOG POSTS
Joe Cantrell says he faces charges after trying to take advantage of the retailer's policy.