Archive for May, 2009

Strategy to pay down credit card debt

Sunday, May 24th, 2009

Slowly but surely some friends worked the plastic the last year and low and behold ended up with a few thousand dollars on their card. Definitely caught up with them.

So they sat down and devised an interesting way to pay it down.

Basically anytime they use the card for something the cost is double – so if they uses the card for lunch and lunch is 15 dollars – the lunch will cost in their system 30 dollars.

When they get home they will add up their uses and send an online payment for double the amount to the credit card company.

this does a few things

1. It makes them stop using the card by doubling the cost They are now forced to really think if a charge is necessary now they aren’t blowing their money on small things that add up quickly like they used to –

2. By making multiple payments during the month instead of one payment at the end of the billing cycle they are slightly reducing their interest.and they are no longer shocked by large minimum payments when the bill comes ..

3. By double their payment they are of course paying down their credit card aggressively.. they said they really don’t notice the extra money going to the credit card because it is in small increments..

Of course the key is not cheating the system which they have been very good at.

Now this isn’t the best system. Obviously the best system is to pay your full bill at the end of each month, never paying interest. If you can’t then you stop using credit and budget the biggest payment you can each month. This system is for people who have tried the 2 better methods of paying down credit card debt and failed. After all, you can’t give up.

Economics of poverty

Thursday, May 21st, 2009

Interesting article here on the economics of poverty. Poor people pay more for banking, spend more time waiting for stuff, more on food, etc.

Warren Buffet speaks some more

Tuesday, May 5th, 2009

Some more interesting stuff on Warren Buffet. He talks about insurance, real estate, Moody’s and more.

Where will Berkshire go next?

Monday, May 4th, 2009

Interesting article here on Buffet, his travel agent, and how he is more likely to buy US companies than foreign ones right now.

Berkshire’s Class A stock lost 32% in 2008, but the company reported a profit of almost $5 billion. Also with so much of it’s business (2/3) in insurance and utilities it’s not a bad call for uncertain times – if you still trust Buffet after he invested in ConocoPhillips when gas prices were at an all-time high. That cost Berkshire a billion or two.