Your Money Book

While not all of these are related to credit and finance, here are a few fresh things from South of the border:

What’s with the ads for Canadian pricing on cars? Come on! I’d love to take some of these manufacturers down here and compare the EXACT models that we have in Canada…then explain to me what “Canadian pricing” is. Small wonder we’re now importing upwards of 200,000 cars into Canada.

Utility companies are light years ahead of us down here. There is something you can install called a time of use meter. You have to know that power has different values and pricing at different times of the day. Using air conditioning when the whole planet wants it, is more expensive than the middle of the night when demand is at its lowest. So these meters track when power is used and bills accordingly. Talk about having a huge impact on your utility bill!

Want to get a pair of prescription eyeglasses for $25? There’s a web site called zennioptical.com. You fill in your proper prescription from your optometrist and three weeks later you’ve got a great pair of eyeglasses direct from China! Even the Costcos of the world can’t match that. Not sure if they’ll ship to Canada but I’m going to be checking. I’ve seen them – they’re great!

When will Canadian cell phone companies stop ripping us off, compared to the U.S.? There can’t be anyone left in this country who pays long distance charges as almost all carriers have unlimited long distance plans. At most, it’s $50 a month and one even has a family plan for 4 phones – all unlimited – for $100! And we’re still stuck signing three year contracts and paying a fortune? Good thing Virgin Phones is now in Canada – hope that helps.

With the huge gas prices, according to the Americans’ standards, Chrysler now has a marketing gimmick: For 12,000 miles, they’ll let you have gas at $2.99 a gallon. Sounds great, but you always have to compare what you’re getting with what you’re giving up. Like taking that 2.9% financing but now it’s costing you a $2,000 rebate, for example. In this case, instead of the cash rebate, they’ll cover the difference in the gas price. But when you do the math – you might be getting cheaper gas but it’d have to go to over $6 a gallon to be better than taking the cash rebate! Good marketing gimmick and lots of people are taking it – but it’s totally tripping over a nickel to pick up a penny!

Yes, you can get a 95 percent discount on the high price of gas just by using your credit card… sort of.

The vast majority of people are buried in credit card debt and monthly payments that make every lender rich, leave nothing for savings, and have the average family working most of the month just to pay bills. That’s surviving and not thriving, and it’s a horrible way to go through life.

As a result, every small increase in food prices, the cost of a gallon of gas, or any price increases become very painful. And what do most of us do right now? We charge our gas on credit cards.

The good news, next month we only have to pay around a five percent payment on our ballooning balances. So really, that $50 fill up hasn’t cost us anything when we charge it on our credit card since we’re not parting with any actual money at the time. Then, next month, when the credit card statement arrives, millions of people can only afford the minimum payment. That three to five percent payment puts $2.50 towards that fill up, tops. OK, it puts nothing towards it since almost the whole payment is getting sucked up by interest charges, but you understand the sick logic and financial nightmare so many people find themselves in.

Making minimum payments buys us the right to use the card for another month. Nothing more. It’s treading water and making a huge number of card issuers very very rich.

One of the most dangerous things we do in our financial lives is to charge consumable items to our credit cards. The restaurant charges, groceries and gas are used up and consumed way before the credit card statement even arrives! In other words – we have nothing to show for all those charges and that huge balance.

Could you set yourself a credit limit below which you won’t use your credit card? Can you decide to pay by cash or debit card for anything you’ll use up before the week is up? You’d be amazed at how quickly your debts will turn around when you no longer have those ten or twenty charges on your card, because they were paid in cash. Your statement will start looking weird with some payments on it, but very few new charges.

The price increases of gas and food impact us so heavily, and hits us so hard, because most of our money is already spent way before the next month even starts. In the big picture, if we were debt free, would we really notice that a fill up costs another $8 or $10? No, because most of our pay would be staying in our accounts! THAT is debt freedom. Until then, it hurts disproportionately, because we just don’t have that $8 or $10 left right now.

Right now, credit card companies have millions of families exactly were they want them: Carrying huge balances and no hope of paying much more than minimum payments. What’s in your wallet? A financial nightmare, waiting to explode – sooner or later. Or changing around that old American Express ad: Don’t leave home with it!