Although I’ve never established a set of great personal financial practices, there’s one rule I consistently followed: always pay off the credit cards each month to avoid finance charges. I’d say I was successful about 95% of the time. Until this year, specifically this past holiday season. Like many people, the perfect storm of money pitfalls struck us right about Thanksgiving time. We had a final semester college tuition payment and less income coming in from my husband’s real estate business. So, instead of taking a machete to holiday gift spending, I pared back only slightly…and charged up the cards. January 15 rolls around, with notices of payment due. I took one look at the balance and choked on my Diet Coke. There was no way I was going to be able to pay the balance in full.
Last week, one of my friends and I were whining over lunch about credit card charges. Her card company recently notified her that her interest rate would go up – a lot. I hit the panic button. I certainly can’t afford a hike in interest rate. When I got home, I researched this and found - It’s true! There are many banks raising interest rates, even if you’ve never missed or been late on a payment. Incredible! According to an
article in the New York Daily News, JPMorgan Chase, Citigroup, Bank of America and Capitol One all are raising rates.
According to Gail Hillebrand for the Consumers Union, “Your situation hasn’t changed; your bank’s risk tolerance has changed.”
Banks are required to notify you only15 days in advance of the rate hike. And, the notice may come in the normal monthly statement or in a mailer that could look like junk mail. The only recourse you have is to send a letter indicating you decline the new rate and will continue to pay the card balance to the current rate. The letter must be sent prior to when the increase is scheduled to take effect.
The good news for me – my card through Affinity Credit Union has not increased since I opened the account. Sandy Robinson assured me when I called to ask about credit card rates that “Affinity hasn’t raised or lowered credit card rates in 15 years. They are a ‘fixed rate’ and not a variable product tied to anything.”
Whew. One less thing to worry about. And, one more reason to appreciate Affinity.
Now, here’s a stimulus package that’s targeted for people…not industries. Part of the Rebuild Iowa bill signed earlier this month provides $250,000 in matching funds for qualifying individuals saving through Individual Development Accounts (IDAs). According to the Iowa Credit Union Foundation the program goal is to motivate savings and provide financial education during economically challenging times. IDAs can be used to help people save for a home, college expenses or even to start a business.
I’m proud to say that Affinity Credit Union, my credit union, is one of the first credit unions in Iowa to participate in a pilot program through the Iowa Credit Union Foundation, Credit Union Family Partnership Program. Affinity CEO Sandy Robinson believes the key program component is teaching people to save. "It's a matter of people understanding there is help out there," she said.
Check out the Des Moines Register article featuring Affinity’s participation in the Credit Union Family Partnership Program.
The road to improving my finances is…ROCKY. I’ve already stumbled, stubbed my toe and nearly fallen flat. Affinity CEO Sandy Robinson, my financial advisor, gave me my first “assignment” – tracking my expenses for one month. (Actually, she suggested a longer period. I set a checkpoint of one month.) I was supposed to start mid-February. I started March 2.
To improve my financial position, Sandy suggested that getting a grip on what I spend money on, no matter how much, is important to understanding the overall picture of my finances. Good point. I happen to be the type of person who can’t tell you the price of a half gallon of milk or what I spend weekly to fill the gas tank. I’m not exactly a spendthrift. I just simply am not aware of what I spend on daily items. I think there are a couple of reasons for this:
- I’ve already got a lot on my mind with family & work, and
- My grandmother pointed out the cost of every single thing she bought, from a cup of coffee to the birthday presents she gave me. Annoying & boring.
I was thinking about my lack of enthusiasm for tracking how I spend money. Clearly, I’m not wired to enjoy this. I started thinking about if my personality affects my finances. So, I Googled “how does personality affect finances.” The search returned 10,600,000 results! Turns out there’s an entire industry focused on finding the answer to this question.
I took a few online financial personality quizzes. My favorite: “What’s Your Money Personality” posted on MSN Money. In less than a minute, I learned I’m The Innocent. People who fall into this category are described as: “avoids paying significant attention to money, believing (or hoping) that life will work out for the best.” It appears I’m the financial version of Pollyanna.
What money type are you? Take the quiz and let me know.
