Smartcards

Smartcards

Smartcards

The next kind of plastic the banks want you to keep in your wallet is a smart card. They come in different varieties and most are not yet ready for a mass distribution, but, at this writing, pilot projects are forging ahead. Promoters of smart cards make the assumption that you don’t like to carry cash. You do not like fishing for bills and coins to buy a newspaper or a soda. You would to rather put down plastic instead.

This kind of card has money on it, embedded in a computer chip. A $50 card, for example, will give you $50 in spending power. If you buy a 5o cent newspaper, the seller will put your card in a special terminal and drain off 50 cents. Identification or signature is not required.

You now have a card with $19.25 left on it. After spending $1 on a soda, the value of your card goes down to $18.25. If you forget how much you have, you can check it with a little portable card reader. Some readers might also list the last five things you have bought.

If every merchant, street vendor, cab driver, and bus accepted smart cards, you would not have to have cash on your pocket. To some, that would be a huge convenience; to others, it is a shrug. If some merchants took smart cards and others did not, however, you would have to carry both.

What is in it for the bank? Eventually (although not at first), the bank will charge you for the card. There might be a fee when you accessed the ATM to load it up. The merchant would also pay a fee in return for getting what is presumably a more secure transaction.

What is in it for you? Convenience, maybe. Putting down a card is a tad quicker than pulling out cash. You always have the equivalent of exact change. You would not have to count you change (but you would have to use the card reader to be sure the merchant’s terminal deducted the right amount). You might also use the card to make small purchases over the Internet.

For a while, the smart cards probably would not have any more than $100 on them and the limit might be lower than that. So they are strictly for walking around money. You would still need your credit card, debit card, or checkbook for more serious shopping.

If the card malfunctions say, it registers $14 when you are sure you were carrying $36 the bank can check the balance on the computer chip.

Credit Card

Unauthorized Use: Here is what you have to pay if your credit card is stolen and charges are run up: Nothing if you reported the loss to the bank before a fraudulent charge occurred. Up to $50 for charges run up before the theft was reported to the card issuer and banks often waive even that small fee. Nothing if you still have your card, but your number was used fraudulently, for example, in a mail order transaction or a transaction over the internet. This covers both business and consumer transactions.

Billing Errors; you are fully protected against consumer billing errors. If you have already paid an erroneous bill, you will get money back.

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What Are You Saving Money For?

What Are You Saving Money For?

What Are You Saving Money For?

A savings account is not something to hang on the wall and stare at, like a Rembrandt. You are not hoarding. You are preparing to use your money in a different way.

Refer, please, to your Spending Plan. It says that your current goal is to pay down debt. Or 3 month’s living expenses in the bank. Or $2,000 more in a college account this year. Or $5,000 for long-term investments. Or $1,000 to play the slots in Vegas, where you will really make some money. Tithing, or semi tithing, is how you are going to raise your stake.

Here is how to accomplish it:

First, write down how much you are going to save (5 or 10 percent of each paycheck).

Second, write down how long it will take to reach your goal. At $250 a month, you will have your college account in 8 months. (Tip: It is easier to save $59 a week than $250 a month. The smaller sum sounds more doable, even though it comes to the same in the end.)

Third, note each future $250 (or $59) payment on your calendar and check off every one you make. That may sound hokey, but it is a strong motivational tool. Every time you turn to a new week or new week or new month, there is a written reminder to keep up your resolve. Saving money is easier if you see it climb toward a specific end. It is like polishing the car. You feel that you have accomplished something.

Fourth, when you have reached your goal give yourself a little present. Then start the process all over again.

Should you build up a bank account instead of paying off debt?

No, no and again, no. Repeat after me: paying off debt is a form of saving. In fact, debt repayment is one of the most lucrative ways to save. It is nuts to keep money in the bank at 4 percent interest while carrying credit card debt at 18 percent. You are losing 14 percent a year on that deal (the 18 percent cost of the debt minus the 4 percent earned on the bank account). Take most of your money out of the bank and reduce the debt. If you need quick cash, you can borrow against your card again, and in the meantime, you are saving yourself a mountain of interest.

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If You Can’t Pay Your Bills

If You Can’t Pay Your Bills

If You Can’t Pay Your Bills

Don’t hide. Don’t cry. Don’t shove unopened bills into a drawer. Don’t have your cousin tell the bank that you have gone to Sicily for the summer. That would not help. Someone will find you probably a bill collector and you will be in more trouble than you were before you got your commercial truck title loan.

What is your biggest problem when you can’t pay your bills? Money, you say. I say it is fear. You are sure that everyone will point and sneer. Your son will be kicked out of Boy Scouts. The police will hang you up by your thumbs. But nothing like that is going to happen. You are not Jack the Ripper. You do not beat up babies or set fire to cats. All you did wrong was to buy more things than you can pay for right away. That is an error will be forgiven.

If you can’t pay your bills, write a letter to your creditors and tell them so. For a really big bill, like a mortgage, make an appointment to see someone in the credit department. Don’t slump in like a bankrupt. Approach the interview like a business person with a problem to solve.

To do this you need: a spending plan showing how much money you need to live on; a repayment plan showing how much you can spread among your creditors every month; a specific offer for each creditor, as in, “I will pay you $50 a month and clear up this bill in 10 months.” If your situation is dire, offer your unsecured creditors a settlement say, 50 cents on the dollar.

Each creditor will want more. But if you hold firm and keep making the payments you have decided on they will eventually accept the deal. If someone threatens to sue, do not ruin your rehabilitation plan by trying to accommodate him. Keep on talking, keep making your payments, even go to court. No judge will order you to pay more than you can afford, and your creditors know it. Your strengths are three: the lender would rather stretch out payments than repossess, it is cheaper to talk than to hire a debt collector, and the interest you pay is compensation for the delay.

If you can’t handle these negotiations yourself, or if you are such a spendaholic that you find yourself hurtling toward bankruptcy, nonprofit credit counselors can help with your Atlanta car title loan.