Tag: financial security

Barbara O’Neill, Ph.D., CFP®, Rutgers Cooperative Extension, oneill@aesop.rutgers.edu

There are two types of credit card fees: those that are charged to all borrowers to use a credit card or specific card features (e.g., annual fees and transaction fees for cash advances and balance transfers) and those that have been established to discourage, and indeed profit from, certain consumer behaviors (e.g., late fees and over-the-limit fees). Both types of fees increase the cost of borrowing money. Some credit cards with relatively …

Barbara O’Neill, Ph.D., CFP®, Rutgers Cooperative Extension, oneill@aesop.rutgers.edu

Secured credit cards are a good way to establish credit if you have no credit history or a history of prior credit problems (e.g., late payments, charged-off accounts, and bankruptcy). Secured credit cards are backed by money that cardholders deposit with the credit card issuer. In other words, the amount deposited serves as collateral (security) for the credit card limit in the event that a borrower misses payments. In this case, money …

The High Cost of Credit Card Minimum Payments

Barbara O’Neill, Ph.D., CFP®, Rutgers Cooperative Extension, oneill@aesop.rutgers.edu

When it comes to managing your money, compound interest can be your friend (e.g., through systematic long-term investing) or your enemy (e.g., by making minimum payments on outstanding debt). This article will focus on the latter; specifically, the high cost of credit card minimum payments. Of all the credit card traps that are out there, and there are quite a few (e.g., late fees, …

Barbara O’Neill, Ph.D., CFP®, Rutgers Cooperative Extension, oneill@aesop.rutgers.edu

The best way to select a credit card is to match it to your intended use and bill-paying habits. Are you a “revolver?” Revolvers are credit card users who rarely, if ever, pay their credit card bills in full and, thus, pay finance charges each month to carry outstanding debt. If you plan to carry a balance from month to month, select a credit card with a permanently low-interest rate; i.e., not …

Barbara O’Neill, Ph.D., CFP®, Rutgers Cooperative Extension, oneill@aesop.rutgers.edu

Got outstanding loan balances and credit card debt? Do monthly payments seem overwhelming? You are not alone. The ability to “buy now and pay later,” coupled with slick advertising, has made living beyond one’s means very tempting. As a result, many Americans, at all income levels, went on a credit-fueled “spending spree” during the late 1990s and early 2000s. Now it’s time to pay back what we owe and get out of …

Barbara O’Neill, Ph.D., CFP®, Rutgers Cooperative Extension, oneill@aesop.rutgers.edu

The term “consumer debt” refers to all types of non-mortgage debt obligations. Examples include outstanding balances on credit cards, installment loans for cars and other “big ticket” items (e.g., furniture and appliances), and student loans. For every person with outstanding consumer debt, there comes a point, called “enough,” where carrying too much debt starts to cause financial stress. Even minimum required payments become difficult to make or perhaps some payments get skipped …

Barbara O’Neill, Ph.D., CFP®, Rutgers Cooperative Extension, oneill@aesop.rutgers.edu

Outstanding credit accounts often go to collection agencies when people fail to pay their creditors. One of the most stressful parts of being in debt is receiving phone calls and letters from collection agencies requesting immediate repayment of outstanding balances. It is typical for calls and letters to become more aggressive and threatening over time. The term “collection agency” describes a variety of business models that have one thing in common: recovering …