It's Your Money! Tools, Tips and Tricks to Borrow Smarter and Pay It Off Quicker

It's Your Money! Tools, Tips and Tricks to Borrow Smarter and Pay It Off Quicker

by George Boelcke

Paperback

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Overview

Its Your Money is your insider guide to all types of consumer credit with the information you need before signing on the bottom line. Having the right answers to borrow smarter, pay less, and get control over your money on your terms. From credit scores to HELOCs, car loans to mortgage choices, budgeting to credit cards, Its Your Money is a must-read reference guide. With every chapter, and for any type of debt, the countless tips and insights will save you thousands of dollars to borrow smarter and pay it off quicker.

Product Details

ISBN-13: 9780973666809
Publisher: Vantage Publishing
Publication date: 05/01/2005
Pages: 196
Product dimensions: 5.56(w) x 10.76(h) x 0.27(d)

Read an Excerpt

*Introduction: Credit - love it or hate it - most of us can�t live without it. But most of us also don�t understand it very well and that costs us in the interest we pay and the total debt it accumulates. (pg. 9)

*Credit 101: Obtaining credit is not a gift or a windfall. It only creates spending power for today�at the cost of future purchasing power. When you�re making payments on last year�s stuff you�re using up money that can�t go towards this year�s stuff. (pg. 14)

*Credit Cards: At first banks had little interest in credit cards. It was the desire to eliminate checks that changed their minds. Processing billions of little pieces of paper became an expensive undertaking. With credit cards, all those paper checks and expenses to process them turned into credit card slips that were actually making them money. At that point they were well on the way to becoming an indispensable bank in everyone�s wallet. (pg. 23)

*Does your interest free grace period stop just short of payday? If you promptly pay your balance even one day after, it�s too late and interest is charged for the full month - not just one-day. A simple call could save you hundreds of dollars just by adjusting your statement date. (pg. 31)

*But even when it comes to the interest rate, a Financial Consumer Agency study in 2001 which found that more than 40 percent of cardholders didn�t know the interest rate of their own cards! (pg. 33)

*Furniture, Fridges and Other Loans: Be truthful and practice full disclosure with your loan officer. They will find out anyway whatever you�d rather hide. You may as well avoid embarrassment and get them on your side and wanting to work with you. Like people everywhere, lenders become very leery of helping when you�ve spent the first part of the appointment bluffing or wasting their time. (pg. 40)

*Your debt-load is easy to calculate. It will let you know whether you have a chance of being approved. If your income before taxes is $2,000 and you already have $1,000 in bills - sorry - you�re not getting a loan of any kind, any rate - from anyone, no matter how great the reason. (pg. 42)

*When you�re declined for a loan the first thing to do is always ask why? Not to storm out, get mad or defensive. You can�t change or fix anything until you have some answers�instead of going from place to place expecting something different - their decision will likely be the same. (pg. 45)

*Buy now - pay later: Often consumers pretend this debt is not real until the due date. Merchants count on that feeling when they market the program, but nothing could be further from the truth. (pg. 47)

*No payments - for a while: Is it an invaluable way to purchase something now and pay later or just the illusion of getting it today and for free - for a while? (pg. 50)

*No payment for 12 months: What you don�t know is that interest is still charged at rates over 23% while you�re not paying anything towards the loan�at minimum payments, a $1,000 computer will take over 19 years to pay. Do you know many people happy with a 19 year old computer? (pg. 52)

*Borrowing from friends and relatives: If they don�t lend you the money - you resent them. If they do - they resent you�Figure out what you can afford and pay them on time no matter what. They trusted you with the loan when (perhaps) others turned you down�(pg. 55)

*Automobile Loans: Be careful reading this whole chapter as you�ll likely just get a headache.  Don�t worry, there is no need for a financing course. You just need to understand that there are three main factors influencing any vehicle loan. (pg. 57)

*Consumers are re-mortgaging to pay cash for their vehicle as they view it. Tax savings aside, nothing could be further from the truth. It creates the dual challenge of having payments hidden in the mortgage for much longer than the life of the vehicle and costing significantly more interest. A fifteen or thirty-year mortgage for a five or seven year car ownership is never a good idea. ( pg. 59)

*Take the rebate or cool rate? Yes there is a third choice�At 7% the total is $1,536 less than the 2.9% rate! If you are having flashbacks to your last purchase - remember there are always options available if you take the time to ask the questions and do the math. (pg. 64)

*Lines of Credit: They�re certainly very convenient and create total control over their use - for better or worse. The poor customer has now been made the loan officer�a line of credit never matches the logical term of a loan. A 12-month vacation loan makes sense - but that same $1,000 on a line of credit can take at least seven years to re-pay at minimum line of credit payments. (pg. 80)

*Mortgages: When it comes to taking on a debt of this size and length, it is not the time to be lazy, complacent or just consider convenience. Where you bank is irrelevant. It�s not as if you�re going to visit your mortgage company for coffee. All that matters is their rate, points and terms. (pg. 88)

*Yes, a 15-year mortgage will save you more than $77,000 in interest before tax deductibility is factored in. For that amount of money is it worth doing everything possible to avoid a 30-year term? Only you can decide. (pg. 107)

*Your Credit Bureau: Long gone are the days where a move across the country meant a good chance of leaving behind memories of credit problems lenders might not discover. Credit bureaus: If you don�t them they certainly know you! (pg. 112)

*Your FICO Score: So with a score just 23 points lower, a typical mortgage will now be over $23,000 in extra interest. Now do you understand in real terms how important your FICO score really is? (pg. 127)

*Budget Stuff: Let�s be honest. Perhaps a few people out of a hundred do a budget and actually follow it - and odds are you�re not one of them�Yes anyone can cut out one latte a day and save thousands. But that money never shows up, does it? Maybe skipping the lattes just makes it possible to buy some lottery tickets Friday night�Instead of calling it a budget would it be better to call it a Financial Reality Check and just do it every six months? (pg. 133)

*Dealing With Debt: If you�re broke, stressed out about your financial situation or couldn�t ever afford to miss a single paycheck - welcome to the club, as you�re certainly not alone. It�s just not something anyone really likes to admit or talk about. Debt is a silent killer that starts choking you, your lifestyle, and your ability to maneuver. (pg. 138)

*Paying it off sooner: The end result? You had $25,000 in debt and were on track to pay for 15 years at over $9,000 interest. It�s taken 46 months and saved $4,700 interest! What�s it cost you? A hundred bucks a month and a little determination. (pg. 149)

*Smart: Start paying yourself first: When did you become less important then your bills? When did savings become a dream instead of reality? Every creditor and credit card company is making money off you except yourself - when did that become acceptable?  (pg. 159)

Table of Contents

Introduction: Why You Need to Know 
  
Chapter 1: The Start of Credit  
  
Chapter 2: Credit 101
 Payday Loans and Short-term Credit Traps
 Getting Started For First Time Borrowers   
  
Chapter 3: Credit Cards 
 Card Categories 
 Credit Limits  
 Annual Fees  
 The Free Grace Period  
 Understanding Credit Card Interest 
 The Cheap Promotional Rate 
 The Changing Fixed Credit Card Rates
 Congratulations! You�re Pre-selected   
 Killing Your Credit Card 
  
Chapter 4: Furniture, Fridges and Other Loans 
 Can You Afford It? 
 What�s Your Net Worth? 
 Collateral 
 When They Say No 
 If You Can�t Bank on the Banks
 Buy Now � Pay Later 
 No Interest Promotions 
 No Down Payments 
 No Payments � For a While 
 Careful With Those Credit Offers 
 Are Lower Rates Really Cheaper?  
 Borrowing From Friends or Relatives  
 Don�t Forget! 
  
Chapter 5: Automobile Loans 
 Buy New or Used? 
 Take the Rebate or Cool Rate? 
 Down Payments 
 Zero Percent Financing 
 Do Not Pay Until 2015  
 What Do You Want For a Payment? 
 Some of Those Other Gimmicks  
 Where to Finance
 Balloon Contracts  
 Leasing Made Simple  
  
Chapter 6: Lines of Credit 
 The Risk of Using Them 
  
Chapter 7: Mortgages 
 If It Seems Impossible 
 Shopping for a Mortgage Loan 
 The Questions You�ve Got to Ask 
 What Happens When you Apply?  
 Common Mortgage Types  
 Mortgage Insurance 
 Paying the Points 
 Adjustable Rate Mortgages
 15 or 30 Year Mortgage? 
 Your Mortgage Obligations 
 Refinancing Your Mortgage 
 Paying More � Paying More Often 
  
Chapter 8: Your Credit Bureau File  
 What�s in Your File? 
 What a File Looks Like 
 How to Check Your Information 
 Mistakes to Look For 
 How to Fix Stuff 
 Credit Problems and Repairs 
 What are Credit References?  
  
Chapter  9: Your FICO Score � It Matters a Lot 
  
Chapter 10: Budget Stuff 
  
Chapter 11: Dealing With Debt 
 Building Financial Success  
 Is There Good Debt? 
 It All Starts With a Game-plan 
 Bad Debt Traps 
  
Chapter 12: SMART: Life after Debt  
  
Definitions 
Statement of Assets & Liabilities 
Debt Service & Income Worksheet  
Budget Worksheet � Your Monthly Spending 
Promissory Note Outline 
Resources and Contact Information  
 Federal Agencies Complaints
 Other Resources and Contacts 
 Leasing Concerns Or Inquiries 
 Consumer Credit Counseling Contacts 
 Opting Out of Credit Card Solicitations
 Major Credit Card Companies
 Credit Unions Locator 
 Credit Bureaus Contact Information
 Obtaining a Copy of Your Credit Report
 Your Rights Under The Fair Credit Reporting Act
  
Reference Tables and Charts  
 Credit Card Payment & Savings Calculator 
 Loan Payment Tables

Introduction

Why You Need to Know

 
Credit - love it or hate it - almost all of use it and most of us can�t live without it. Unfortunately, most of us also don't understand it very well and that costs us dearly in the added interest we pay and total debt we accumulate.

This book should become your best friend, and be your insider guide into many areas of credit. Having a basic insider knowledge of credit is an invaluable resource for getting credit, keeping it and then getting rid of the debt it can bring as fast as possible. Plus, you�ll understand your options. Anyone uninformed, in a hurry, unwilling to ask questions or easily intimidated will never obtain the best deal for themselves. Let�s face it, nobody has a vested interest in explaining shortcuts, savings or options to you.

Understanding the ins and outs of financing is a mystery to most people. There is seldom a black or white answer and credit decisions are not mathematical equations with clear or tidy explanations. Credit decisions are as unique as the people applying, and sometimes that�s very confusing. In the time it takes just to read the next page:

* Dozens of Americans will be filing for bankruptcy.
* Hundreds are signing mortgage loans trusting, but not really knowing, what their rights or interest charges really are.
* Thousands will be buying consumer goods on credit without knowing all the facts of what they�re signing.
* Tens of thousands are charging away on their credit cards hoping, but not certain, to make more than a minimum payment next month.
* Hundreds of thousands are making payments on the purchase or lease of an automobile on terms that might have seemed a good idea at the time.
* Millions of individuals are carrying more than one credit card in their wallet and treating it as cash, with many potential pitfalls.

Every day, countless numbers of consumers make poor or uninformed credit decisions that create consequences for years to come. It is never by choice, but because they don�t know the credit tricks or pitfalls, or the right questions to ask first.

How did we get here and how do we avoid some of these expensive traps? It will be through understanding the inside rules and tips of credit - how to get it - in the least costly way. It is also through managing debt�the how to get rid of it part.

Obtaining credit is not a gift or a windfall as it only creates spending power for today. The downside is that repayment must be made at some point. This results in spending more money later when interest charges are added to make up for the gotta have it today attitude. So, credit always comes at a cost of future purchasing power when the bills arrive. When you�re making payments on last year�s stuff, you�re using up a lot of money that can�t be saved or put toward this year�s stuff.

This book is not about numbers - they are deliberately kept to a minimum - even all examples are rounded to the nearest dollar. Plus, nobody expects you to read this book from beginning to end, but it will become an invaluable reference guide. You�ll see many examples of ways you�ve borrowed without always knowing what�s really happening with long forms, tiny print or pushy salespeople in your face. Chances are you might not have known what to look for, or to avoid, and anyway - who wants to look or feel stupid? Next time, you�ll be ready - with some tools, knowledge and the right questions to ask. After all, if you don�t ask, nobody will, as others won�t be making your payments or helping you pay your debts later.

According to the Federal Reserve, more than 40 percent of Americans spend more each month than they earn - and it�s rising. At the same time, our savings rate keeps dropping and has now gone down to almost one percent of after tax income. That�s seven times less than it was just 20 years ago - ouch! For most of us it�ll be years before we see the light at the end of the tunnel. More and more borrowing, with an increasing debt load, and almost no cushion of savings to fall back on is not a good combination. So for many, being debt free is quite an unrealistic goal for the foreseeable future and many are just a paycheck or two away from serious financial problems.

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