Reader Mailbag: Post-Christmas Thoughts

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.
1. Adding another credit card user
2. Re-selling debt
3. Figuring out life insurance
4. What makes people negative?
5. Babies and emergency funds
6. Paying for pet medical expenses
7. Unwanted gifts
8. Handling pet cleanup
9. Planning for after graduation
10. Favorite Christmas gift

I’m actually finishing up this reader mailbag late on Christmas Day, after the rest of the family has collapsed in a heap of exhaustion.

There are few things more fun than watching a pile of grandparents, parents, and children all huddled together in a room, sharing memories and gifts and excitement and laughs.

Forget the presents. The best part of today was the people.

Q1: Adding another credit card user
I was thinking of adding my partner of 2 years as an authorized user on my credit card (low limit) to use for gas and household expenses – all budgeted items. The reservation I have is that she just recently walked away from her house (after 3 years of nonpayment and a dismissed bankruptcy). She is unemployed due to a medical condition but is covered under COBRA. Her debts are 4-5+ years old and are considered uncollectable. My credit is outstanding and my only debt is the mortgage. Anyway, do you have an idea of what it would do to the interest rate, credit report, etc for her and myself?

- Veronica

It shouldn’t affect your credit report at all, except perhaps an indirect effect.

As for the impact it will have on your card, it has more to do with the policies of the specific bank you’re working with than anything else. Generally, my experience has been that an authorized user doesn’t impact the interest rate or the credit limit of the card at all, though there are certainly quite a few anecdotal cases out there about limit reductions and the like.

This is where the indirect effect might happen. If your credit limit lowers, this will have a small negative impact on your credit score, but it shouldn’t be enough to drastically impact the loans you might get or other things. There are actually a few courses of action for responding to a credit limit cut.

Generally, however, adding someone as an authorized user has little impact on the main cardholder and a positive impact on the credit of the new authorized user, assuming the new authorized user uses the card responsibly.

Q2: Re-selling debt
I have an old credit card account which was charged-off years ago. I recently found out the debt was sold to another debt collection agency with a “new” charged-off date of 2009. Is it fair practice for creditors to keep re-selling old debt just to remain within the 7 year limitation before the debt must drop from my credit report? If not, what should I do?

- Fred

That’s generally not an acceptable policy. However, actually tracking this down and fixing it is next to impossible. Neither agency involved has any interest in changing this for you – it’s not good business for either of them – and trying to sue them to make them change it will probably cost you more than it’s worth.

Companies that buy and pursue old debts are generally not the most fun businesses to work with. They’re in a business of pursuing debts from people who don’t pay their debts. They’re debt collectors. They’re going to turn what screws they can to get their money.

The best way to get rid of this permanently is to negotiate with the company that holds it. Make them a low offer to pay it off and have it removed from your report. This is the best permanent solution to the problem.

Q3: Figuring out life insurance
I’m 25 years old and make a nice salary but I am really very very tight budgeted. My wife is in college and watches our daughter all day. I want to get life insurance but I’m not sure which one is good for me. I could get 30 year term for a 700 dollars a year. Or i could get universal for $4360 a year. The perk with the universal is that it is like a savings account where after 20 years I’ll have money in the account to use towards my childrens wedding or college. Plus I’m paying for private schooling which is a whole diffrent ball game. Should I get universal and be tight with my money or should I get term and free up my now funds but not have the same security in the future.

- Andy

You should get a term policy, then open up a 529 college savings plan for your daughter. That’s the plan I would follow.

If you lock yourself into a more expensive policy and then lose your job, you have a good chance of losing that policy. If you have a term policy and are contributing to a 529 and lose your job, you can cut contributions to your 529 and not lose your insurance.

Besides that, most of the numbers I’ve seen comparing a universal policy to a term policy and an investment shows that the term and investment combo tends to win out both in the short run and (usually) the long run.

Q4: What makes people negative?
I’ve been dreading my family’s Christmas celebration this year because it’s always so negative. Everyone just sits around and ridicules people that aren’t there, famous people, and when the drinks start flowing they often ridicule each other in a very hurtful way. I don’t enjoy it at all. Why do people do this?

- Emily

Everyone channels their feelings and emotions toward the world in a different way. This is definitely a negative channeling of emotions, but it’s how some people vent.

I generally prefer to vent in a positive way. When I’m frustrated, I work it out alone. Sometimes, I work it out through my writing – some of the characters in the fiction I write are truly deplorable people.

When I’m around others, I try to see the positive in each situation. (The only thing I tend to be sarcastic about is politics, actually.) I find that the more effort I put into channeling my feelings into something positive, the more positive I generally feel about my life and the things around me. Positivity breeds positivity and negativity breeds negativity.

Q5: Babies and emergency funds
We are expecting our first child any day now. We have been very good at budgeting very well so far. We’ve budgeted for or been given all the furniture, clothes, diapers, etc. that we will need, at least for the first 6 months or so. We’ve been good about not over buying everything the baby industry claims you “need.” We have also budgeted for all the medical expenses that we will need to pay for. However, there is still a number of last minute things popping up that we just didn’t realize we would need to pay for. Part of this is probably part of being new parents and not knowing what to expect. Do you think it will be easier to budget better for subsequent children? Is it ok to use our emergency fund to pay for those purchases we didn’t budget for?

- Lauren

It will be much easier to budget better for your subsequent children. The biggest reason is that you’ll already have an awful lot of things on hand, and the second reason is that you’ll actually know what you need through experience rather than the advice of others.

Each parenting experience is different. Some parents find certain things very useful, while others find them useless. It has a lot to do with the house you live in, your neuroses about hygiene, and other such factors.

As for the emergency fund, this pretty much falls under the umbrella of what I would use it for. I would just focus on replenishing that fund as quickly as possible after you tap it.

Q6: Paying for pet medical expenses
We have a 4 year old dog that we love to death and that we consider part of our family. She is going through some health issues and the vet thinks that she may have an auto-immune disease that is very difficult and costly to treat.

We have already decided that we will pursue the treatment (we are not putting her down). The biopsy procedure along cost me $1200 and the treatment (steroids) are expensive and could last for 6 weeks (or for the rest of her life in 25% of the cases).

I charged the $1200 to a no interest credit card (for about a year) and I have $1700 in savings. I am wondering if I should use my savings to pay the credit card and try to pay the treatment out of pocket or if I should keep my savings and hopefully build more until my no interest period is up? My husband is unemployed (has been for a year), but I make enough for us to survive on my pay. The minimum payment on the card is only about $20 a month.
- Monica

It really depends on how much the steroid treaments are going to cost you and whether they’re permanent.

If I were in your shoes, I would probably leave this amount on the zero interest credit card for as long as I possibly could and see what happens with the steroids. If they’re needed permanently, then I’d spend some time focusing on reworking your budget so that you can afford these as a normal monthly expense. This might be a difficult shift and you might find emergencies during that period very painful, which is why I’d keep that emergency fund intact for now.

I’m going to assume that no cost is too expensive for this dog. Given that’s the case, there’s a good chance that this experience is going to push you into debt. If the steroids are a permanent thing, work with your doctor (and with comparison shopping online) to find the best possible price on the maintenance medication. Also, your husband shouldn’t be afraid to seek employment below his station. There are lots of jobs to be found out there if you’re willing to work them.

Q7: Unwanted gifts
What exactly do you do with an unwanted Christmas gift? I’m never sure what to do when someone hands me something weird.

- Ernie

When I open anything, I try to be polite and thankful about it, whether it’s something awesome (making it easy) or something awful (making it hard).

I don’t feel bad about re-gifting if the gift is really appropriate for someone else I know. I view it as simply passing along a good idea.

If it’s something that I don’t want and I can’t regift it, I’ll hold onto it for a while and eventually take it to Goodwill.

Q8: Handling pet cleanup
I have two pugs, and no yard. Both dogs are walked three times a day and each will do their business 2-3 times per day, so I’m using up to 6 bags per day and that gets expensive. Currently, I purchase the generic “Bags on Board” bags, but I cringe at the thought of paying so much for something that I’m just going to toss. I’m wondering if you have any ideas for a more frugal disposal of dog waste. Grocery bags/bread bags are not an option – I don’t buy that many groceries and I already reuse these bags as trash bags. I don’t take the paper, so I don’t have those types of bags either. It needs to be something that I can bring with me on our walks. Do you have any suggestions?

- Jeff

A friend of mine used to use a Dirt Devil type device with a hose attachment for this purpose. She had a small dog and this worked great for her.

Another friend of mine would carry a cloth bag and used a rubber glove to pick the waste up and put it in the bag. She’d then clean the bag at home (I think she had several of them and would just keep them in a bin in the garage and wash them all together).

You could also use the rubber gloves with something like a Rubbermaid container that you use just for this purpose.

Q9: Planning for after graduation
I will graduate in May with my bachelors degree and want to start getting together a plan for financial stability.

After graduation I’m hoping to move to Washington D.C. where I know I’ll probably have to intern for a while to get a full-time position. It’s very likely that these internships won’t pay anything so I’m starting to save up now. At the moment I have about $1,000 saved and anticipate a tax refund of $2,000 will go toward the fund as well. I save about $50 a week. As it stands now, my boyfriend will be moving with me and we anticipate that he will be able to find a full-time position to help support us. But of course we know that you can never bank on getting hired right away.

I will have about $30,000 in loans (all federal but both subsidized and unsubsidized) and no credit card debt (because I don’t have a credit card). A few questions-

1. Should I get a credit card? I’m afraid that if I get one I will start spending more than I’m earning with the mindset of “oh well I’ll pay it back.” I just really don’t want to fall into that trap especially when I know money is going to be tight.

2. How much should I plan on saving up if I anticipate interning until around January?

3. As to student loans- have you ever published a guide for students graduating college on steps to take to start out on the right foot with repaying student loans? What can I do now to prepare for repayment?
- Shawn

Effective credit card use is about willpower. If you doubt your willpower, I’d either not get one or get one and put the card somewhere where you’ll never use it (just to build a bit of credit). If you don’t think you can do it responsibly, don’t do it.

Housing in D.C. is insanely expensive. You need to start looking at housing opportunities right now. If you’re lucky, your internship will help you with this. If not, with your current savings, you’re either going to be building up debt or living in a car or living in a large group apartment.

The best thing you can do right now for repayment is simply to minimize the amount of debt you take out. The less debt you’re in when you graduate, the better. The next most important step is to make your choices toward securing good employment.

Q10: Favorite Christmas gift
What was your favorite gift that you received this year for Christmas?

- Elaine

I received an Arduino.

If you’re confused as to what I’m talking about, it’s a programmable microcontroller.

If you still have no idea what I’m talking about, think of it as a small piece of equipment that you can program with your computer to independently do simple tasks. For example, my first project with it (which I started earlier), was to make an electronic set of dice where all you have to do is touch a button and a dice face lights up, showing a random number between one and six. I hope to eventually build a Christmas light controller that takes the audio from a radio station of my choice and converts it into light patterns on the lights.

Got any questions? Email them to me or leave them in the comments and I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive hundreds of questions per week, so I may not necessarily be able to answer yours.

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23 thoughts on “Reader Mailbag: Post-Christmas Thoughts

  1. mary m says:

    Jeff – try asking friends or co-workers to bring you in some of their old plastic grocery bags. I asked one co-worker of mine and she would bring in some once a month or so. I never was without. Also, one time when I was in a bind, I asked the bagger at my grocery store for a few extra, and she gave me a handful – which turned out to be probably 50 bags. I also thought about asking the service desk at the grocery store if I could have some out of the plastic bag recycling bin outside the store, but with the stash my co-worker brought me I never needed to.

  2. Robin S says:

    Q9
    I live in DC and agree that housing is really expensive. That is something you should start looking into early. Even a studio apt in an accessible part of town will easily be over $1000 a month (depending on the part of the city you’re in, it could be over $1500). See if anyone from your school will also be moving down to DC. If not, then try to find housing to share with other interns.
    Don’t bring a car, you likely won’t need it if you’re actually in the city. The Metro system can be unreliable but utilize the buses, which can get you more places.

    You’ll have 6 months grace period before you have to start paying your student loans. Even if you have an unpaid internship, I would suggest looking for a part-time job. You can drop it if you get something full-time, but honestly you can’t live on an unpaid internship in the city. If you and boyfriend have never lived together before, you’ll definitely want your own income stream in case things go south. Don’t rely on him to pay your (what will be very expensive) bills.

  3. valleycat1 says:

    Q8 – We buy a roll of plastic bags that groceries provide for produce at a local store that sells restaurant/grocery type supplies and food. We get a huge roll for almost nothing.

  4. Tom says:

    Q8- I second the suggestion from Mary – especially if you know other dog lovers who shop more than you. I currently have a laundry hamper full of grocery store bags that I could give away.
    This will sound gross, but if they poop every time you take them out, can’t you use the same bag for both dogs? Pugs are relatively small…
    My final suggestion would be to go to a local public dog-friendly park. Most of them near me require you to pick up after your pet, and provide clean up bags on a roll. You could grab a few for free there.

  5. Tom says:

    Q9 – You’re going to have to have a paying job before moving to DC right? I bet your standard 10-yr repayment is going to be close to $250 per month. The apartment likely will require a first-month (and possibly last month) deposit, and you’ll probably need a small deposit to get your electric service started. Including moving expenses and start-up costs of living on your own, it probably wouldn’t be unreasonable to save a minimum $4000.
    I don’t know how big your school is, but if you have a professor or someone in your department as a guidance counselor, perhaps you can get some could suggested places to look for internships (or full-time employment) in the DC area.

  6. Johanna says:

    Q2: As I understand it, the law states that an old debt should fall off your credit report after seven years from the date of first delinquency. If the collection agency is reporting a false date of first delinquency, they are violating the law.

    However, even if the debt falls off your credit report, that doesn’t mean you don’t owe it anymore. I agree with Trent that you need to talk to the collection agency to negotiate a settlement that they will accept. Get everything in writing before you send them a dime. At the same time, you might as well ask them if they’d be willing to report the correct date of first delinquency – and get that agreement in writing too.

  7. Kate says:

    Q6: All dog stories end sadly, because their lives are so much shorter than ours. I have had to face this situation at times when money wasn’t a factor and a times when I made a lot of financial sacrifices to treat the pet. Remember that quality of life is everything to an animal.

  8. Andrew says:

    Q1 Veronica– adding your partner as an authorized user to your credit card may turn out to be a big mistake. She has already compiled a rather iffy track record–she has walked away from a house, has old uncollectable debts, and has declared bankruptcy. Once she is on your card, any debts she incurs using that card are legally your responsibility as well. Of you break up she could very well repeat past history, leaving you holding the proverbial bag. Wait until she has shown better judgement before combining your finances in any way.

  9. Nate Poodel says:

    Q8-I second the asking friends and coworkers for used shopping bags and newpapers. Until the local government outlawed them I usually had hefty bags full of them. You could also try to make a habit of picking up a copy of the free newspapers and advertisments you see around town. To me even junk mail would work for this purpose.
    Also, my sister has a jaw type pooper scooper she got at Petco or Petsmart. As she walked her dog she could pick up the poo and then carry it to the dumpster at her apartment. She then wiped it clean on in a patch of sandy soil that was near her door and stored it inside next to the door for the next use. If it got dirty she could rinse it off easily.

  10. Monica says:

    Apparently poop is a popular discussion point today :)

    What about using fold-over plastic sandwich baggies if you can’t secure a supply of free ones? You can get them at the dollar store, or even at the regular grocery store inexpensively.

    (Maybe they wouldn’t be big enough. I don’t have a dog, so can’t speak from experience.)

  11. deRuiter says:

    Veronica #1, You’ve got two choices. A. Hand this financially irresponsible person a credit card and in effect take a dull butter knife and hack away at your (financial) wrists while your (financial) lifeblood drips to the ground and disappears into the porous dirt forever. With luck the relationship will then disappear along with your vanished moneny up to the limit on the credit card, leaving you with bills for frivolous items, your utilities not paid, and possibly dings to your now stellar credit. B. Give partner a prepaid card for a modest amount and watch that get hemoraghed away. Plan B is far superior because it will only cost you $500. bucks or so to see how things will be, and it won’t damage your credit. This person has had no compunction about (financially) sticking it to people who trusted her by selling her goods and services for which she refuses to pay. Partner will do the same to you eventually. Stick with preloaded card, don’t ever put her on a regular credit card. Let PARTNER get job and arrange for prepaid card in her name, what are you, the sugar daddy? Blind people, crippled people in wheel chairs, all sorts of people with horrible disabilities get jobs and earn income. Most likely this “partner” could earn some kind of income, but chooses not to when “partner” can instead leach off of you. Sadly love is blind, but try not to be taken too badly financially by your “partner.”

  12. AnnJo says:

    Q1, I would make very sure that the credit card you plan to allow your partner to use does not allow a mere “authorized user” to change the credit limit. You should also keep in mind that if the card has a low limit, having your partner using it is likely to bump the charges up closer to the credit limit. I’d make sure I understood how the card will handle attempts at over-limit charges; do they pay them and then charge you over-limit fees and ding your credit report?

    Personally, I think it is always a mistake, both credit-wise and relationship-wise, to combine finances with a person whose financial principles are the opposite of your own. If you value your credit OR your relationship, don’t do it. If you want your partner to have a credit card for emergencies, get her a prepaid one.

    Unlike deRuiter, I don’t necessarily think a financially irresponsible person is necessarily a waste of good oxygen on the planet, but such a person operates under a very different set of rules when it comes to money, and you won’t like how it plays out.

  13. AnnJo says:

    Q8, you can buy a huge pack (880 bags) of bags on board from Amazon for $26.49 with free shipping. That works out to 3 cents a bag, or about 18 cents a day for your usage.

    Public dog parks (which are often run and supplied by volunteers) provide bags so you will clean up after your pet AT THE PARK, not to subsidize your general pet expenses. Please don’t follow Tom’s advice and steal bags from parks to use elsewhere, or sooner or later that amenity will go away, as so many other community amenities have gone away or been cut back due to freeloaders and thieves.

    Maybe we all have our price points at which we might consider compromising our ethics for a financial advantage, but seriously, who in this country really needs to set the price on their integrity as low as 18 cents a day?

  14. Stacy says:

    Q8- we use the foldover sandwich bags mentioned in comment #10. You can buy a big box of them at Sam’s or wherever pretty cheaply and it is easy to stuff a few in my pocket before I head out. We have a 50lb dog and these bags are big enough to do the job.

  15. Sabine says:

    Q6: Although pets often become like “friends” or “family members”, they are actually not. I would pay for medical treatments beyond reasonable expenses only if I had the money to spare. If the dog is so sick that the expenses would put me into debt, I would put him down. I know it’s hard, but do you want to sacrifice your future for a pet?

  16. Andrew says:

    Sabine-actually, yes I would sacrifice my future for a pet, as you so melodramatically put it. So would many other pet owners.

    A full bank account offers you no love.

  17. jim says:

    Q1 : She does not need a credit card.

    Q3 : Stick to term. The universal life policies are full of fees and you’d be locked in for several years and they probably over promise returns. Don’t dump all your money into insurance. Buy the term policy and save your money elsewhere.

    Q6 : Get quotes from multiple vets. Tell the vets you’re on a tight budget and negotiate the rates with them. The prices aren’t set in stone. Do some research and see if there are any pet related charities in your area or nationally that might help with the vet bills.

    O9 : You need to figure out your living expenses during the internship then save up enough to cover that.

  18. Mike says:

    For the poop bags, we get a bag of painters gloves at the dollar store. Then, when fluffy does his business I grab it & pull the glove off inside out and tie off the glove end. Really cheap & really effective.

  19. Annie says:

    Q6, I have a bichon poodle mix that is 4 years old that is diabetic and on liver supplements. I got care credit for him, i am not sure if you want to look into it. I believe the first year is zero % interest and then obviously it changes. I would do anything for my dog also. I wouldn’t just put it down because it’s sick, i would only do that if my dog was severely ill and in pain.
    As far as clean up bags for dogs, i can’t believe the cost when you go to petsmart or petco. I was able to find a deal once on petsmart clearence for 120 bags for 4.99 which was great. You can also get pet clean up bags at the dollar stores but the bags are not as strong as the kinds you find in retail stores. You can always ask for extra bags when you go grocery shopping, as far as using cloth bags or container that totally grosses me out, the last thing i want to do after walking by dog is bring anything home that has his poop stink in it.

  20. Penny says:

    For the pet clean up? Totally agree that if it’s a small-ish dog? Buy the cheapest sandwich bags with the fold over top. They fit perfectly over your hands, if it’s a small dog (mine is a 25 pound coakapoo) it’s big enough to hold the mess. I just insert my hand into the bag, pick up the waste, flip the bag inside out over the waste and drop it in the trash before going back inside. I usually find them for about 200 bags for $1.50.

  21. Tom says:

    I wasn’t suggesting that Q8 take an entire roll of bags. If he is a community tax payer (I was referring to publicly funded parks; I wouldn’t even know how to find out if it was volunteer-driven), and he is being a good neighbor and citizen by cleaning up after his pets in the community, then I don’t see a problem with him grabbing 3 to 5 bags for future use. Taking 50 or 100 bags is unethical. Just my opinion, feel free use the other less-morally-questionable suggestions.

  22. Johanna says:

    Q7: There’s regifting, and then there’s regifting. I’d feel much more comfortable taking the unwanted gift to someone on a non-gift-giving occasion and saying “I got this for Christmas, but I can’t use it. Is it something you can use? If so, you can have it,” than saving it until the next gift-giving occasion, wrapping it up, giving it to someone in lieu of getting that person another gift, and pretending it’s something you picked out especially for them. The latter strikes me as cheap.

    (Having said that, for Christmas this year I did give my mother a DVD that she’d given me last year. But (1) she’d asked me if she could borrow it, (2) I gave her several other gifts too, and (3) I obviously wasn’t hiding anything from her.)

  23. michele says:

    About collecting doggie poo…first of all, dogs are very easy to train to ‘go’ on command. I’d recommend you train them to ‘go’ before you leave for a walk. (If you have questions, go to the library and check out the Monks of New Skete for training suggestions) then, dump their load and go for a walk…but don’t let them pee on someone’s lawn! My personal peeve!!!
    Here’s what we do-we have 2 Yorkies and 1 German Shepherd. We have a bucket in the back yard with a lid (it’s a former Costco laundry soap bucket) that is lined with 1 heavy duty black plastic bag. When the girls ‘go’ we use a scooper and rake set ($2 at a garage sale) you can also use a small shovel-and flip the poo into the bucket. The bucket is then covered– so no stink.
    It’s actually under the master bedroom window, so I know it does not stink!
    We dump the black plastic bag once a month into the garbage. This is easy, does not use excessive bags and is an easy way to dispose of dog poo. German Shepherd poo is about 10 times the size of Pug poo, by the way. My friends who have a Dobie do the same thing. Best wishes! We love our dogs and understand our responsibility to them. I’m sure you do, too!

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