that’s just me. i have left plenty of lazy errors, with which both can dissect; however, back onto the topic at hand…

From the limited information Tammy provided, getting this particular credit card does not seem to be a wise decision.

.

Also to Trent and everyone else who has said
similar things: it’s not really true that “almost all” people misuse these cards and end up losing more money than they gain from using them. In fact, a large percentage of credit card users never carry a balance at all (I think it’s somewhere in the neighborhood of 40-60% IIRC). The average amount of credit card debt is a very misleading statistic, because in this case the average is not even close to “typical use”. The average is in fact, way higher than the amount of debt that the typical user carries because it the distribution of credit card debt is highly skewed towards a relatively small number of people.

Moreover, the statistics about “average debt” don’t even usually distinguish between debt that is being paid off each month and debt that is being carried over. For example, every month I charge $700-$1000 on one of my credit cards, and pay it off in full (I use my cards for groceries and gas to get rewards money). But my credit report will simply report that number as my “debt” each month; there is no way for someone datamining that information to determine whether I am charging $700 each month and paying it off in full or whether I’m simply carrying $700 forward. So it looks like I’m $700 “in debt” as far as these statistics go, but I’m paying no interest so it’s not really a bad thing. Same goes for people who take advantage of extended 0% interest offers on a big balance just to get extended float…the statistics count them as being hugely in debt, but they aren’t paying interest.

Bottom line: you have to look into the statistics more deeply to really understand what’s going on.

Having said that I would add that since she is living hand to mouth right now I think another credit card would be too much temptation. It would be very easy to let it slip one month, or use if for a frevolious (frivolous thanks google) purchase. My suggestion would be to focus more on changing her thinking from spendthrift to frugal. Once she’s completely out of debt than she can start thinking about a rewards card.

Sadly, a lot of companies accept employees who aren’t finished acquiring basic English skills; it’s simply overlooked for talent in other areas. However, I certainly agree about poor spelling and grammar’s aggravating nature in its prevalence in ‘educated’ society. ^_~

The average person does not realize that they are burning money when they don’t pay off their credit card monthly. That’s why they give you rewards. I have the ATT Thank you network rewards card. I have taken out over $500 from the rewards already and never paid a cent to them in finance charges I pay off my card monthly.
I came across I card I applied for Citi Banks Amex card with thank you network points. You’ll get 5 points for every dollar on gas, food, etc and 3 Points for every other for 2 years. That’s the best card yet I have seen. The bad part is its $99 a year with first year free. Still the best deal around. All other cards give you max 3 points on gas, food, etc and 1 point on all other purchase.
Even Amex Blue cash states it gives up to 5 percent back on gas, food, ETC and 1.5 on all other purchases. Their fine print…is that they don’t tell you its after you spend $6,500. With this Citibanks Amex you’ll already earn $180 in rewards points compared to $97 with Amex Blue Cash.
Also with the Citi Amex with Thank you network you get $150 in points after you spend $300. There goes your next years fee. And after two years pass find a new card that gives great rewards.

These are my few cents to the simple dollar.

Marcin NYC

Tammy’s argument is a bit confusing. The card is a 0% BT which does not mean 0% for charges. In actuality, for charges it will be at least 9.99%APR. She did not mention BT fees associated, but it is 3% without ceiling with minimum $10. She also says she wants to use the card and pay it off as soon as she uses it. This is what you should normally do–that is, pay the bill off every month and not carry a balance. If she is going to do this, then it makes no difference whether it is a 0% BT card or not.

Tammy is living paycheck to paycheck, barely being able to put something away. Getting a credit card at this point will more than likely compound the problem. Tammy should seriously review her finances and spending. She has a lot of loans already, as she indicated. There is a big danger for Tammy to keep floating the charges on the credit card and go further into debt.

Bottom line, Tammy doesn’t sound like she is going to take advantage of the 0% BT. Only the BT is 0%, this means that credit charges are not (they are a minimum of 9.99%). If she elects to take the BT and continues to make charges, then when Tammy makes a monthly payment, the payment will be applied to the lower interest rate (i.e. 0%). So she will continue to accrue interest. This is the case in most cases. This means that she will continue to accrue interest until the BT as well as the charges are paid in full.

If Tammy intends to pay in full every month, she should opt for a credit card that gives more than 1% for purchases on gas, drug store, and food (i.e. things that she will consume on a regular basis). This would be much better than the worldpoints card, which gives her 1 pt per $1 spent. This doesn’t mean $1 = $1 rebate. You will have to charge $25k before you get the maximum 1% cash back on the card. In order to start cashing in the rewards, you have to have 2500 points which means you have to spend $2500 before you cash in the rewards. If you want to get cash rebate for your $2500 that you spent to get the 2500 points, you will only get back $12.50 which equates to half a percent cash back. you don’t have to cash in at 2500 points, you could wait until you spent $25k total so you could get 1% cash back, but then you aren’t going to earn any interest on the money either. moreover, 1% cash back is the most you can get with this credit card.

Tammy should definitely read the terms and conditions on any credit card application before applying.

To answer the other questions. it doesn’t matter who the credit card issuer is. If sallie mae goes under or the credit card dept is bought by another bank, your credit will go with the new bank. if you have bad feelings about a company, then why would you continue a relationship with it? Tammy sounds very angry about Sallie Mae, and I won’t try to guess what the issues are, but Tammy ought to take a look at her financial habits and take some blame for them. If this newest credit card question is any indication of past credit, Tammy may not have read what she was getting into before getting into it.

Before Tammy can think about getting more credit, she really needs to establish her current financial position.

How much total interest and fees have I paid over the years? $00.00. Nothing.

The keys: You must be absolutely disciplined & organized about 2 things:

1. YOU MUST ALWAYS PAY OFF THE BALANCE AND NEVER EVER BE LATE.

2. If you have a spending dependency with another person (spouse, partner, sibling, parent, children), which if you are married, you do by default, then THAT PERSON MUST SHARE YOUR SENSE OF DISCIPLINED SPENDING/PAYING.

The 2nd Point is not obvious to most, but it is absolutely critical. ** You will fail **, repeat, **You will fail ** if your spending dependents are not on board with you and do not meet your level of discipline. They can take you down with them, and/or make your life financially miserable. Or the exact reverse.

Good luck; it’s not easy …. My wife and I didn’t attain that level of discipline until we were older.

Even if you pay your credit card off every month, they still make money from you. It’s just that the businesses you use your card at are the ones paying it, not you.

Oh, and please be considerate and don’t use your credit card at small businesses.

Evidently merchants feel whatever benefit they get from accepting credit cards justifies the 1% to 5% fee.

As for rewards checking, I use Electric Orange – it earns 4% interest. Then I use a credit card and use the E. Orange to pay off the balance. I hesitate to recommend using a debit card because they don’t have the same protections against fraud that a credit card has.

But I’ll make another. When I was younger, (poorer,) and less financially savvy, I carried credit card debt. When I decided to get it under control and get rid of it, I used those zero interest on balance transfer offers several times over. I paid no attention to the rewards, because there were fewer of them in those days. But the few offered months of zero interest on each card I used to my own benefit. I simply stopped charging anything on the cards and paid off as much as I could each month. When the card I had transferred my balance to was about ready to start charging me for my balance, I traded up to another interest-free-on-transfer-balances card. I did that several times until the debt was paid off.

Yes, it took attention to detail. It took discipline, some time and effort, and sacrifice too. But that’s how I got out of credit card debt, and I’ve never gone back. So I know that it IS possible to use the irresponsible lending practices of credit card companies to one’s own benefit.

We still use a credit card. In fact, we use it for just about every expense we have. It’s got a nice cash back reward with no annual fee and we pay it off in full every single month. They’ve yet to take a cent out of our pocket in five years of use.

Merchants are charged an average of 1.5–5% of the final purchase price. So if you have a cash back card that is earning 1% on all your purchases, the credit card issuer is still making money even if you never ever carry a balance or pay any sort of convenience fees.