Credit Card Terms and Conditions---THE FINE PRINT.

Yup folks! There they are those teeny tiny words on that other piece of paper in the envelope with the credit card bill.  Well I read mine yesterday and after that dreadful hour and a half trying to decipher what it said I thought to myself "doesn't someone regulate these credit card companies"?  If I'm 20 seconds late with a payment my rate will shoot up to the sky?  It just doesn't seem right, however with most credit card companies you can opt out of the new terms & agreements.  What that usually means is that you can contact the company in writing to request that when your card expires they close the card out completely.  Keep in mind if you have a balance or if you have a limited credit profile this may not be the best thing to do.  Weigh your options...but definitely read the fine print.

Re: Lesson #5

I forgot an important bit of information from lesson #5.  Where can you get a transaction register?  Take a trip to your local bank and just ask, they're free!! Thanks S.E.

Down Down Down...Rates are going down

So the Fed cut the rate again.  Great run out and refinance...right?  WRONG! You have to determine whether or not refinancing would be a good decision for you.  If you have 2 years left on your 30 year fixed and you have a rate of 6%, refinancing at 5% for another 30 years doesn't really make sense considering you would have to pay closing costs all over again, AND a majority of your payment is going to principal anyway.  If you have 28 years left on your 30 year mortgage and you can reduce your rate by at least 1% and you don't mind paying closing costs again or have enough equity in your home to roll the closing costs into the loan and have 3 weeks to spare, hey go for it!  Good luck.

Lesson #6: Credit Score

Have you ever used a website to get your credit score and you are so excited that you practically run to the bank to apply for that new car loan or credit card? Then you get there and the (not so nice) loan officer has a score that is almost twenty points lower than the one you got.  Most banks and credit unions use credit reporting agencies that use what's known as a FICO scoring model to get your credit score.  There is a fee charged to the financial institution each time they pull your credit score.  So what some of these sites have decided to do, in order to avoid paying the fee, is create their own model, which is similar to the FICO model, in order to determine your credit score based on the information provided on your report. So don't chew off the loan officer's head, take deep breaths, and take a second look at your credit report, they may be a mistake on there that once fixed could bump your score up after all.  Remember...capital counts ; )

Lesson #5 (from my mobile device): Transaction Registers
Transaction Registers are so important! What are they?? Oh, they are those little books that fit snuggly into your purse (ladies) or your wallet (fellas) where you jot down your transactions in order to keep a running account balance. With the increased use of check cards (see lesson # 2 & 3) stores place debits on hold & it can be confusing if you have outstanding checks & all these check card transactions. So run into your local bank & ask for a couple transaction registers.  Begin jotting down each transactiong, not only will you feel more secure when you write that next check you may also curb your spending habits when you see exactly where your last check went. So off into the wild wild world of finances...and remember capital counts ; )

Lesson #4: Fraud Fraud and more Fraud

With fraud and identity theft on the front page of the newspaper every morning. We have to be proactive in the steps we take to protect ourselves.  A lot of financial institutions have fraud matrices on your check cards. What that means is if the bank or credit union sees a transaction that is out of the ordinary they will give you a call to verify the transaction.  When they call, they will ask you to verify information, such as the most recent transactions on the card etc.  If you are uncomfortable, SAY NO, & call the number of the back of your card.  If it was a legitimate call, it shouldn't matter.  Remember, if something seems out of the ordinary, it probably is, always protect yourself, and allllllways remember capital counts ; )

Lesson #3: Credit or Debit

Now that you know what your check card is, why does the girl behind the register keep asking you "credit or debit"? What's the difference?

When you select credit, you are doing a signature based transaction. Meaning the store will send an electronic message to your bank saying that you just made a purchase for $5.04, that amount will then be placed "on hold" for a certain number of business days depending on the store. After the hold is released that $5.04 "will post" to your account.  So if you check your account balance after the transaction and you see your current balance is $210.96 & your available balance is $205.92, that means the $5.04 is on hold.  After a couple of days your current balance will be $205.92 & your available balance will be $205.92, and if you use online banking you will see that item that you purchased show up on your statement.  So, when selecting credit you will sign for your transaction and you will not enter your pin number at the register.

When you select debit, you are doing a pin based transaction. In this case the store sends an electronic message to the bank saying that you just made a purchase for $5.04, but this time the funds come out of your account right away.  So after this transaction your current balance & your available balance will be the same.

There are positives and negatives to both types of transactions.  With a credit transaction you don't have to enter your pin number.  So you know that man that is standing right right behind you?  You don't have to worry about him seeing your pin number & you possibly forgetting your card as you hurry out of the store.

With a debit transaction if you don't balance your checkbook *that's another lesson* & you swipe your card often, you could lose track of how much you really have in your account & with overdraft fees average $34 that could become costly.

What do I do?? Oh, I use credit for everything, my bank has a great protection policy in the event I lose my card.  And balancing my checkbook is a part of my routine so it doesn't feel like work.  Oh yeah, and somehow I always have that person who is breathing down my neck at the register...so I don't always feel comfortable entering my pin #.