Bryan C. Fleming

There are many things that your bank fails to tell you when have a credit card with them.  One of the biggest things that they neglect to tell you about is the truth about interest rates and just what they can do with them.  Before getting a credit card with your bank you need to be well educated on interest rates and what the rules are with them.

First and foremost don’t get pulled in by the claim of interest free time if you transfer the balance from one card to the new credit card.  What they neglect to tell you is that only the balance of the other credit card is subject to the interest free period.  Any new purchases that you make will be charged interest and this can be misleading for many as they do not read the fine print.

Another thing that the bank may not tell you is that they can raise the interest rate on your credit card if you late with payments for other cards.  You need to be sure that you make all of your payments on time so you can avoid these unwanted increases in your interest rate.  This is known as the universal default clause and it is becoming a general rule for most credit lenders.

Another thing that most people are not aware of is that the bank has no limit set on the amount they can charge you on a late payment.  Even if it is just one hour late the fees can be as little as $5 and as high as $30, sometimes even higher then that.  The amount of credit a bank will give you and the amount of the interest rate you will be assessed is based on your FICO score.  This is the score a person gets from their credit history.  Lenders such as banks and credit card companies look at the amount of dent that you have and how many times you have been late on your payment history.

Banks do not tell you that there is no federal limit as to what interest can be charged on a credit card.  You need to be sure that you read the tine print to know exactly what you are getting into with any loan or credit card that you obtain.  Be sure to talk things over with your bank prior to signing any papers.  You need to know what you are getting into completely before the final signing of the papers.

There is usually a 3 day waiting period when a loan is processed.  This is to allow you the opportunity to cancel the transaction.  This is the only window you have in which to rescind the loan or credit.  Again, this is something you need to discuss with the bank prior to signing the final papers.  You need to know what all of your rights are and what penalties that the bank will instill for breaks in the signed agreement.

Many people make the sad mistake thinking that they need to have a great deal of money in order to invest.  That’s far from the truth.  You do not need to have a lot of money to invest you just need to know where to invest it at.  You can make small investments that will have big pay offs in the end.

There are many options for first time investors to get started with $1000 or even as little as $50.  One of the easiest investments that you can get into is a 401(k) Plan.  You do not need any money at all to start with and you can add a minimum of 1% of your pay to the plan with each paycheck.  A great perk of these kinds of plans is that your employer will also put money in at the end of their fiscal year so that means you will get free money each year that is earning money for you.  

This means if you earn a yearly income of $30,000 with bi weekly paychecks, you can have as little as $11.50 taken out for your retirement fund from each paycheck.  This is taken out pretax so you will only see about $9 missing from your check.  Most people recommend that you contribute at least 10% of your pay to your retirement in order to save enough to live a comfortable life style when you retire.  

You can save for college with a 529 plan and you can start it up with as little as $25.  You would then need to have at least a $15 automatic deduction from another account like a savings or checking that will go directly into the 529 plan.  This is a great way to invest in your child’s future and there are great plans that you can get into such as Upromise where you save on things that you buy each day.  

These plans are tax exempt when they are used for qualified education costs of the beneficiary on the account.  With plans like Upromise, you can sign up with different credit cards from yourself as well as family and friends.  Each time they take certain purchases with those credit cards, a percent of the purchase is places into an account for your child for college.  You can then take those savings and use them in a 529 account.  

Another great investment choice would be U.S. Savings Bonds.  All you need to buy one is $25 dollars and you add to it in $25 increments.  Generally you can buy Savings Bonds right through your payroll as an automatic deduction.  The good thing about this is that the interest on the Savings Bonds are exempt from both state and local taxes and most often federal taxes as well.  

Investing doesn’t have to take a great deal of money.  Just do a bit of research before you invest your money so you can go with the best option for your goals. 

Having a moderate income does not mean that you have to live like a pauper.  If you want to live well, then the key is living within your means.  That means not stretching the family budget to upgrade to a larger home that you can barely afford, or trading up for a new car every few years.  A few small sacrifices here and there on your more big ticket items can mean a lot more money to spend (and save) in other places.  
If you find yourself tempted to “upgrade” homes, consider why you are looking.  If you simply do not have enough room for everyone, then think twice about how your home is currently arranged.  Does everyone have to have their own room?  Do you really need a room dedicated to being an office or an exercise room?  If you can combine spaces to make things work in a smaller home, then you can spend the money that would have gone to a larger mortgage payment on other things that will bring you much more immediate and hopefully lasting joy.  
The same goes for upgrading your car.  You may want to drive the newest model, but it obviously doesn’t keep you happy for long, or you wouldn’t feel the urge to upgrade.  Instead, pick a model that you love and stick with it.  Bonus points for picking a model that is moderately priced and that will save you money on gas in the long run, too. 
Spending quality time and living well does not have to involve spending a lot of money.  If you find yourself going out to dinner or to the movies often, then think about why you are going out and see if you can change your attitude to change your behavior.  You may find that taking a walk to the local park or spending time on your bike is not only healthier, but less expensive and just as enjoyable as spending money.  If you don’t cook your own meals because you don’t know how, then consider taking a cooking class - which you can consider an investment in yourself for the future.  
When you love to spend money, you should also never underestimate the power of the coupon.  If you have to shop, then save as much money as possible doing it by applying coupons and even using cash back rewards cards.  You should always make sure to pay your cards off in full when you get the bill to ensure that your interest does not negate the cash back.  Enjoy your spending, but do it wisely.  
It is easy to live well if you are living within your means.  “Keeping up with the Joneses” is a practice that is guaranteed to get you into financial trouble very quickly, but if you learn to enjoy the things that you can afford to have and to do, you will find that your life is already incredibly rich.