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How To Destroy Credit Cards

November 17th, 2006 at 09:39 am

This is one way:

Gas Savings - Cash and Credit Cards

May 28th, 2006 at 07:30 am

I've placed up a number of short posts about how you can save money with credit cards and cash when purchasing gas including some hints of what to do to make sure you're using the method that will get you the most money back.

Some gas stations offer a discount if you pay in cash rather than by credit card. There are also cash back credit cardsthat you can use to save money and now there are even gas specific reward credit cards to save you money.

Figuring out which of these gives you the biggest discount can save you quite a bit over the course of a year.

Getting A Loan From Prosper

February 18th, 2006 at 03:36 am

This post is from Liz from Everyday Goddess about her experience signing up with prosper.com to try and get a loan to pay off some credit card debt and I thought the information might be helpful to some of the people here:

As a personal blogger, I blog about my romantic life, my childhood traumas, my bad days and the band that's playing downtown this Saturday. I'm sure a whole lot of it seems really, really intimate. But what's truly the most intimate, what I find most difficult (read: terrifying) to blog about, is my finances.

See, I'm not in the best financial situation (read: debt-ridden). I struggle to make good choices and to learn from my mistakes. I have credit cards and loans and school debt. Sometimes, I screw up. Sometimes, I have a small financial success. And I blog about it because I'm betting that I'm not alone.

Sometimes, I blog about it because high-interest rate credit cards are evil. Oh, I've stood at the edge of the whirlpool. In fact, it's still right over there.

The trick, of course, is lower interest rates. You know, those great rates all those financially solvent people get? They make it MUCH EASIER to actually pay off debt. Ever so slowly, I've been trying to roll all my debt into lower-interest rate loans.

So I was particularly interested in prosper.com.

The premise being, individuals funding individuals. Adding a level of personal connection. Bypassing the corporate behemoths.

I decided to check it out, and I decided to give it a try. As a borrower, of course.

The first thing I did was extensively check out the site. It all seemed simple enough. Most important, I learned that the loans are all three-year loans. So you have to borrow an amount that you can afford to pay off within three years. I also did the basic site registration (just setting up a user name/password). And I learned that payments are made through automatic monthly deductions to your bank account. Cool.

Next, I explored the "groups" on Prosper. This is one of their basic concepts. That people will form groups, and overtime, groups will gain a good payback reputation and therefore earn lower interest rates. Also, groups will provide a personal connection which creates social pressure for people to pay back their debts.

That all makes sense, but I couldn't really find a group. First of all, it's not like I know anyone in any of the groups. Still, maybe if there was one for my school, or a professional organization that I belong to. But it's new, so there's not, and I'm not interested in forming my own either. Further, I thought, a good group leader would probably call me, and I didn't want to talk to anyone! A group that just accepted me without contact - probably destined to not be a good group. This is also why I didn't want to start a new group. Because to do it right, I would want to really talk to anyone before accepting them, and I don't want to deal with that.

So, I decided to stick my toe in the water on my own. Onto the real registration I went. Social security number. Driver's license. Income.

And before long, I had a big, fat "C" rating, and I was looking at my 27% debt-to-income ratio. "Wow. I totally suck," I thought.

To make matters worse, my highest financial priority is to roll a debt that is currently at 10%. There's an account opened long ago! See, it has an ex-boyfriend on it, and it's not his debt. But because my situation is much worse than it was back then, any opportunities I've had are at higher rates. They've closed the account for me, but they won't remove his name (read: his liability). So, I chip away at it every month. And I've got three more years to go.

I took my "C" rating, and my hefty ratio, and I decided to lead with that. I like to aim high.

Creating the listing was quite easy. I even went back and forth between the various steps a few times to change things. At first, I listed at 10%, but with the Prosper fee, it became more like 10.6%, so I went back and changed it to 9%, so that it's closer to 10% in actual. You're given the opportunity to add pictures, but I wasn't sure how I felt about putting a picture of myself up with it, so I used a dragonfly graphic. (I did wonder if pretty girls get better rates!) Best of all, you get to write out your request and talk about what you need and why, etc. I thought about linking to my blog - kinda like, hey, you'll know where I live - but, for this go 'round, I didn't. Honestly, it was a bit of wanting to stay more anonymous on the site. Of course, then I went and blogged about it on my not-private blog. That's personal bloggers for you!

So my dream listing is up. As of writing this, I have a nibble! And twelve days to go on my listing.

The site is brand new, and I really like that. Getting involved and jumping on and participating helps get it rolling. Plus, if I can get a loan at this early stage and start paying on it, as the site matures, I assume that my good payment habits will look good for me. I can build a history. Maybe join a group. And just like on ebay, I got my user name locked in. Yeah, baby!

Finally, it is my hope that someday I will turn the tide, and I will have the ability to be a lender on Prosper. Because it's brand new, and already it feels more like people than behemoth.

A New Way To Consolidate Credit Card Debt?

February 18th, 2006 at 03:21 am

I received an email regarding my earlier introduction post about Prosper.com and whether it would be a good place to consolidate her credit card debt:



...I have a little under $10,000 in credit card debt where I'm paying about 27% interest on three different cards. The payments are killing me and I've been trying to consolidate them at a lower rate, but because my credit rating isn't good, I can't get a lower rate card to transfer the balances to.

I saw your post about Prosper.com and I think this would be a good way for me to pay off the high interest credit cards and be able to pay a lower rate. That is what Prosper is for, right? To get loans like this...


While you need to make your own financial decisions based on your circumstances and I can't tell you what to do, there are some issues that you need to seriously consider.

While Prosper may look like an easy way to consolidate high interest loans, it's important to run the numbers to see if it will truly help out with your current problem. If it is the current monthly payments that are "killing" you, Prosper may be the last thing you want to do. Why? Because prosper offers a three year loan. Depending on the percentage your credit cards are currently requiring for the minimum payment, getting a loan from Prosper may actually increase your monthly payment even if you get a better interest rate.

Let's take the following example. If your current credit card requires a 3% minimum payment per month and the credit card balance is $9,500, your minimum monthly payment would be approximately $285. Now if you get the same loan from Prosper at 14% (highly unlikely if you have high risk debt - you would probably have to pay more), your monthly payment would be approximately $325 or $40 per month more than you currently are paying.

Before you look purely at the interest rate, it's important to make sure that the monthly payments can be met and aren't going to increase your monthly costs.

Shop With Your Finger

January 31st, 2006 at 05:02 am

You have no will power and you know it. You have therefore cut up your credit cards keeping a single one frozen in a block of ice in the refrigerator just in case of an emergency. You finally gotten the monkey off your back that comes with easy access to money you don't have that a credit card provides. But wait. Retailers aren't going to let you off that easy.

It won't be that far off when you can pay with your finger. I started hearing about this a couple of years ago and it looks like it's a lot closer to reality on a large scale. Here is the part that will send shivers down the spines of all those that can't control their credit card spending:

Within three months of a pilot program at four Piggly Wiggly grocery stores, 15% of its customers who normally did not pay by cash enrolled in the Pay By Touch system. Those users increased their store visits by 15%, which translates into an additional 7,350 transactions a year. Not only did they come more often, those shoppers also spent 12% more on groceries.


The problem? It's not quite as easy (and a lot more painful) to cut up your finger and if you freeze it in a block of ice and leave it in your freezer in case of an emergency, the neighbors will likely call the cops on you...