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Exposing The Universal Default Provision In Credit Cards

By Erik Folgate

Some of you don’t like the fact that I don’t like credit cards. One of my regular readers criticized me for putting too much blame on credit cards. He thinks that the lack of personal responsibility is what causes people to misuse credit cards, not the credit card itself. I agree that personal responsibility is the key to sound money management, but credit cards are a horrible financial product. The universal default provision, which many of you are familiar with, is the best reason why it is such a horrible product.

What is the universal default provision?

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How To Save Money In the Big City

By Erik Folgate

This week, I am visiting my brother and his family in Los Angeles, California. To be more specific, they live in Pasadena. People from Los Angeles don’t like when you say “They’re from L.A.”. You need to be more specific, because the city is so huge. It’s a fun city. The whether is amazing, but the traffic and the cost of living is enough to keep me away. I’ve been observing some of the interesting ways that they save money in this city. Los Angeles is a little different than big cities such as New York, Chicago, and Atlanta. It is a hybrid city. It has a downtown, but very few people live there. They live in the hundreds of towns that surround the core of Los Angeles. You can’t call these smaller cities suburbs of Los Angeles, because they still feel like the big city. Los Angeles doesn’t have a great public transportation system. It’s so spread out, that a transportation system to cover every area would cost a fortune. Here are a few ways that my brother and his family save money to live well in Pasadena.

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More Reasons To Cut Up Your Credit Cards

By Erik Folgate

The economy is slow, inflation is rising, and the price of everything seems to be higher. What will you do about it? Use your credit card to supplement the difference? I don’t think that’s the answer. The opposite is the answer. Trash your credit cards today, and you will be free from their bondage.

I’ve written about the advantages of using cash over credit cards, even when you never carry a balance on your credit cards. Here are a few more reasons that support my stance on using cash over credit. Donna Rosato from Money Magazine wrote an article in this month’s issue titled, “Life Without Plastic”. Here are some studies she refers to that support the notion that we spend more when we use plastic.

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Out In California For The Week

By Erik Folgate

I am in California right now visiting some family and friends for the holiday weekend. The posting has been sparse lately, but I am coordinating with a friend of mine to do some guest posts tomorrow and friday. California is a crazy state, and Los Angeles is even more crazy. I have tons of topics to discuss including saving money by using public transportation and how to save money in a big city.

I hope everyone has a great 4th of July. Take a minute to think about the freedoms that we take for granted every day. The United States is a great country, and we owe it to our ancestors for their hard work and sacrifice. God Bless America!

Kids And Money: Teaching Your Kids Not To Borrow Money

By Erik Folgate

For those of you that like to borrow money to the point that it comes out of your eyeballs, you might not want to listen to this advice. But, for those of you that are fed up with owing money to everyone for everything, and you don’t want to put your kids through the same agony that you’ve gone through, this is the article for you. The problem is that our nation is indoctrinated to think that borrowing money for everything is a way of life. Swiping the credit card has been woven into the fabric of our society, and now children are learning how to borrow at a very young age. So, the cycle will continue unless parents start teaching their children something different. Don’t count on the schools to do this for you. Most of them don’t even have a personal finance cirriculum, and if they do, it’s probably sponsored by a credit card company. Here are some tips for how to teach your children not to borrow money.

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Quit Your Job To Save Money

By Erik Folgate

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Should You Lease Or Purchase A Car?

By Erik Folgate

If you are wondering if you should lease or purchase a car, here is a link to a decent calculator to help you make the decision.

Calculator: Lease vs. Purchase a Car

What Would A Money Crasher Do? If you choose to follow the 11 principles of a Money Crasher, you would never consider leasing a car. I don’t think it’s ever worth it, because there are a lot of fees and if you end up buying it at the end of the lease, you’ll spend more money than if you had purchased it in the first place. I’ve read a bunch of articles about the justification of purchasing a new car rather than a used car. I don’t buy it. I’d buy a two or three year old car any day over a new car, because someone else broke it in and took a bunch of depreciation with them.

Watch Out For Mortgage and Housing Scams

By Erik Folgate

We are continuing to see the fall-out of the housing slump which means more foreclosures, falling home values, and more financially distressed homeowners. Scam artists love to prey on people that are in a tough financial situation. It is only fitting that scammers are trying to capitalize off of the housing crisis. Here are some housing scams that you need to watch out for:

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Which Energy Policy Will Help Your Bank Account?

By Erik Folgate

Okay, there are basically two different energy policies being proposed to help alleviate a possible energy crisis. Here is a synopsis of both:

Bush/McCain Proposal: They want to “drill here, and drill now”. Basically, they want to reverse a bill signed by Bill Clinton that took away the possibility of drilling for oil offshore of Florida and in Anwar, Alaska. They want to start drilling for oil in North America to take away the dependency on foreign oil, alleviate some of the high prices by increasing supply, and give companies and entrepreneurs a chance to continue development and research for alternative fuel resources.

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How To Deal With Various Types of Debt Collectors

By Erik Folgate

Hopefully, you don’t have any credit accounts that are in default. But, some of you may have recently seen the light about changing your finances, and now you’re trying to clean up your past. Part of that cleaning up may involve dealing with bill collectors. Bill collectors have one of the worst jobs in the world. It is their job to collect money from people that don’t have any money. Collectors have made a very bad name for themselves in the past few decades, because they have been known for their harsh collection practices. In fact, their treatment of customers was so bad, that it spawned a federal act to be drafted called the Fair Debt Collection Practices Act. This act gave more rights to the consumer and restricted collection agencies from certain practices. It basically stopped collection agencies from acting like monsters and gave consumers a legal argument against the way bill collectors treated them. If you are not familiar with this act, please click on the link above and read about your rights as a consumer and the rules and regulations that collectors must follow in order to fairly collect the debt you owe.

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Save Money Buying Your Cell Phone Online

By Erik Folgate

I wrote an article a few days ago about the possibility of the FCC changing the way that cell phone companies rope you into contracts with exorbitant early termination fees. One of the ways that cell phone companies try to rope you into signing a new contract extension is by heavily subsidizing an upgrade to a new phone. Most people want to upgrade their phone after a year or two, so they sign the new 2 year contract extension, and get a phone for cheap. If you don’t want to sign a new contract and save money on a new or newer phone, try looking for a lightly used phone.

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FCC Will Hold A Hearing To Talk About Cell Phone Contract Fees

By Erik Folgate

Tomorrow, the FCC and Congress will look into the high fees that cell phone companies charge consumers for canceling their contract early. We are all well aware of the exorbitant fees that cell phone carries charge for opting out of a contract early. Plan contracts have been a staple for cell phone companies since the dawn of the cell phone industry. It’s a way for cell phone companies to retain customers through leverage and incentives if a customer is loyal to the carrier.

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Question of the Day: What Will You Do If Or When Gas Prices Are $5.00 a Gallon

By Erik Folgate

Some sources are predicting gas prices to rise to $5.00 a gallon by the end of July. We’re all cringing at the fact that gas is $4.00 a gallon right now, and $70 a tank is no fun, but it’s still not enough to cause most people to cut back on their driving. But, I think that $100 a tank will cause people to change their behavior.

My Answer:
My wife and I have already cut back a little bit. We try to map out the most efficient route when we go places, and I’ve noticed that we do less joy-riding around town on the weekends. I think that if gas goes to $5.00 a gallon, we will definitely sell our Nissan Xterra and get a car with 25 to 30 miles per gallon. Our Hyundai Sonata gets 28 on the highway and 23 to 24 in town. I know that we’ll definitely be taking less trips to Orlando and Gainesville to see friends and family.

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The Month of May Was Favorable to Discount Retailers

By Erik Folgate

Retailers Such as Costco and Wal-Mart posted higher than expected earnings for the month of May. All of the major media outlets are referring to this as a result of the first wave of economic stimulus payments rolling out in May. But, take notice at what types of stores did well. It was discount retailers that did well, not mall retailers. The article I referenced to on Yahoo Finance indicated that the Gap and American Eagle had worse earnings than expected due to the stimulus payments.

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Consumer Beware of Professional Service Providers

By Erik Folgate

We all know about used car salesmen, auto mechanics, plumbers, and contractors that try to pull a fast one on us by selling us products and services that we may not need. Every time i bring my car in for service, there’s something new that’s “allegedly” wrong with it. In my day job, I deal with plumbers and restoration contractors all day long. Some are very honest and others will milk you for everything they can get away with. It’s pretty well-known that you should be cautious when dealing with these people. However, it’s not as well-known to be cautious when going to see your doctor, dentist, veterinarian, or any other professional with letters after their name. We as responsible consumers, need to be more careful wtih the professionals that we see, because your best interest may not always be on their mind.

Recently, we took our dog to a veterinarian in Jacksonville, Florida that we didn’t know anything about. Our dog has sensitive skin, and she has had an irritation on her back. She ripped out a chunk of hair, so we know that we needed her to see a vet. We take her to vet, and two prescriptions later and a skin scraping procedure, and we owe $235 bucks. The skin scraping was warranted, but I don’t think the pills are helping her at all. We also had a bad experience with a dentist about a year ago. We felt that she was very “crown” happy. My wife got a second opinion from a dentist we trust in my hometown, and he said that a crown wasn’t necessary yet.

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