Saturday, November 21, 2009



Wednesday, October 14, 2009

Beware of Bank of America

"USA Today" reports in today's edition that Bank of America will start charging an annual fee to some of its credit card customers in 2010. The fee will be $29.

Apparently, this fee will be "tested on 1% of its credit card accounts," this according to a spokeswoman for the company. The fee will be applied every February.

To make matters worse, "USA Today" states that even customers "in good standing" face the potential of being charged an annual fee. For those of you who don't know, credit card companies consider those of us who pay "on time" to be "deadbeats." In other words, they can't take any extra money from us on a monthly basis. So evidentally, banks like Bank of America plan to go this route, especially since new credit card legislation, which takes full effect in February, limits how banks levy charges.


Tuesday, October 13, 2009

'Tis The Season

Hi Everyone!

I'm back and ready to blog!! I'm looking forward to my upcoming seminars about avoiding credit card debt. And now that we are approaching mid-October, it's not too early to talk about holiday spending.

With so many people burdened by the economy, gift giving during the upcoming holiday season may add to their stress levels.........But it DOESN'T HAVE TO! Keep a couple of things in mind -

1) If you haven't already started to put some money aside for holiday spending, that's ok. You can start now. Now, yes, I did just write that people are burdened by the economy, so you might be asking "Why is he talking about saving for the holidays when bill paying is tough enough?"
Well, being a student of "human nature" as much as I am of credit card debt, I know that a lot of people will still spend a significant amount of money on holiday gifts, despite their current economic situation. So it's best to discipline yourself to put away a few dollars a week now for the next couple of months than to wait until December and then worry about where you are going to find the money. THAT'S when people get into real trouble...with their credit cards! They feel they have no other choice but to charge. However, if you save now, you can avoid those dreaded January and February bills.

2) If you feel that you cannot "save" money now, but you know that you are still going to spend that money, then buy those Christmas gifts NOW! At least you will get your shopping done early and you won't have to fight the crowds right before the holidays (or on "Black Friday.") This also gives you an opportunity to plan your spending instead of rushing at the end of the season and potentially overspending on items that you might not really want to by anyway, but were forced to because the "pickings were slim."

With a little bit of planning and discipline, you can have an affordable (and Happy!) holiday season. Remember - you don't have to "keep up with the Joneses." Besides, as Dave Ramsey says, "They're broke too!"

Wednesday, August 26, 2009

Suze Orman's Point of View

Hi Everyone,

This week, I decided to feature the opinion of someone who has been in the financial industry for almost 30 years and is well-known to tv viewers and book readers. Suze Orman has a weekly show on CNBC and she has also written several books on personal finance.

Last weekend, Ms. Orman featured a segment called "Suze Orman's Debt Loyalty List."
She listed, in descending order, how she feels certain debts should be paid off.

Here is the list:

1) IRS
2) Student Loan
3) Personal Loan
4) Mortgage
5) Car Loan
6) Credit Cards

Of the credit cards, Suze said, "Credit card debt is unsecured debt." That means, the banks and credit card companies CANNOT repossess anything that you own because you are behind on your card payment. Also, they cannot seize your accounts and rarely does it get to the point where they garnish your wages.

Personally, I address this list because I want you to see that the credit card companies are
NOT the bullies that they pretend to be. They do NOT have any more power over you than you allow them to have.

Think of it this way - with the new credit card legislation that the president has signed into law and all that you are learning from this blog, YOU are the one with the POWER, not the banks and not the credit card companies.

Good job, Suze! Good job, Readers!! Stay tuned.

Thursday, August 20, 2009

Some Changes to Credit Cards Effective Today

Back in May, President Obama signed "The Credit Card Accountability, Responsibility and Disclosure Act of 2009" which will require the issuers of credit cards to present their rules and fees "in plain English" instead of in the convoluted legalise that they have gotten away with for so many years. In addition, they are forced to drop some of their misleading practices, such as delaying the posting of payments that arrive on time so that issuers can charge a late fee.

While the majority of the provisions don't take effect until February 22, 2010, some significant (and empowering) changes become effective today (August 20, 2009). These include that the fact that issuers must mail statements to customers at least 21 days before the payment is due. Also, issuers are required to provide 45 days notice before increasing annual percentage rates or changing terms of agreement on the account - this is a big deal! Up to now, the issuers had to provide just 15 days before these increases and changes took effect.

Not surprisingly, credit card issuers were not happy with the president's decision to help consumers and immediately tried to make financial lives tougher while they could. According to Adam Levin, chairman and co-founder of, "several card companies have been increasing fees, reducing credit limits, raising rates, boosting minimum payments and dropping customers with high balances."

Personally, I had an experience a few months ago where one of the card companies cut my available credit in half, largely because I don't use the card very often and when I do, I pay it in full. They don't like that - they call those of us who pay off our balances "deadbeats." So, I called them right away and told them that I wanted my available credit reinstated at its full amount and because I have an excellent payment history, they had no option but to do what I wanted. Basically, they did not want to risk me leaving them and going elsewhere. Hey, I may not use the card a lot, but they figured it's better that they get some money from me sometimes than no money ever!

Come mid-February of next year, the other changes in the law will take effect, namely

*If a card has a balance at varying rates, payments must go towards the higher rate first.

*If the interest rate on the card goes up, it cannot be applied to an existing balance. It can only
be applied to new purchases.

*Double cycle billing will be prohibited. In the past, companies would take the average daily
balance from both the current month and the previous month and calculate finance charges.

*Also, and I like this one A LOT, marketers cannot hawk students who are less than 21
years of age without a parent's signature of unless the card company can PROVE that
the student earns enough money to pay the bill.

These are some of the main things to be aware of. As we move closer to the full
implementation of the law on February 22, 2010, I'll keep you posted on other significant changes and happenings.

For now, my advice is to follow the tips and pointers I've provided in the posts written to date and check back weekly for more valuable advice as together we get you OUT OF CREDIT CARD DEBT!!

Wednesday, August 19, 2009

Protect Yourself

These days, it seems that identity theft is all too common. Part of being responsible with credit cards is being aware of where they are at all times and being aware of where we are using them.

In some cases, unfortunately, identities and credit card information can be stolen, even if we have done everything possible to be protected. Such is the case with a Florida man who was just indicted (for the third time) for allegedly stealing data from over 130 million credit and debit cards. He has hacked into computer networks of stores and restaurants, such as T.J. Maxx, Marshalls, Barnes and Noble, 7-Eleven, and Dave and Buster's, among others.

It is highly advisable to check your accounts regularly, like once per week, to make sure that no illegal activities have occurred. If something unethical has happened, contact your credit cards immediately, put a freeze on your credit reports, and contact the authorities immediately.

We have to be proactive in ALL ways when it comes to our credit...and our identity.

Friday, August 14, 2009

Parents and Kids, LISTEN UP!!

While this post is not exclusively about credit card debt, it does play a role in what you are about to read.

On a couple of occasions, I have addressed the problem of instant gratification, of the "I want it and I want it NOW" mentality. The main problem is that we don't develop patience nor do we establish a work ethic in order to provide for the "want." This is an issue for adults and children. To make matters worse is that undisciplined (financially) parents cannot teach constructive money habits to their kids.

Recently, Dr. Phil had what I consider to be one of his best television programs called
"How To Talk To Your Kids About Money." The primary guests were parents named Lori and Chris and their 15 year old daughter, Kati. I'll start by saying that the parents admitted that they "have trouble saying no" to their daughter and she admitted that she "likes to manipulate the situation" in order to get what she wants. This is a recipe for DISASTER!! To put it in numbers, the parents spent $27,289 in just 2 years to satisfy their daughters' materialistic desires.

The financial mess is easy to recognize. But on a deeper (rational) level, the problem is that neither the parents (especially the mother) nor the daughter take full responsibility for this situation. Lori (mother) makes excuses for this wasteful spending, claiming that Kati "makes good grades," as though As and Bs should equate to thousands of dollars. If that were true, I would have been a millionaire by the time I got out of high school. Then, ironically, Lori says that Kati "spends too much money." DUH! From whom does she get the money?!?

Dr. Phil addressed the issue directly, as he often does, when he said, "The parents are not willing to step up" and that "Overindulgence is the most insidious form of child abuse." Simply put, the parents have trained their daughter to beleive that if she simply puts her hand out, she will eventually get what she wants. I pity her future spouse, significant other, etc. This habit is hard to break.

Ultimately, it was determined that the father brings home $6,000/month (net), but by the time that the bills are paid and Kati's "stuff" is bought, there is only $240 left.

There are so many things wrong with this situation. To make matters worse, this is not an isolated situation. There are MANY American families that are living in debt (largely credit card) because parents cannot say NO to their kids. And it's really NOT that hard....
kids frequently say no to their parents!! So maybe parents can learn from their kids!

Monday, August 10, 2009

It's Off To School We Go!

It's August. That means that by the end of the month, most or all students will be back in the classroom, starting another year of education. Especially for college students, this means trips to the bookstore to buy texts and other course necessities.

As a college instructor for the last 13 years, I have seen first-hand how many students are undisciplined when it comes to spending. This is particularly true when it comes to the use of credit cards. Some students have cards in their own name; others use their parents' cards. Either way, this can be a dangerous situation and a bad spending habit that can last a lifetime, without careful consideration and advice.

Many credit card companies and banks are aware of the naivete of these young men and women as well as their desire for instant gratification. For several years, representatives of these companies would show up at campus student centers and "invite" students to sign up for their cards. In many cases, this led to hundreds, and in some cases thousands, of dollars of debt, on top of student loans. Sadly, many parents were not aware of this excessive debt until it was "too late."

So my advice to students is to avoid these salespeople should you see them on campus. Also, if the cashier happens to throw a credit card application into the bag along with your books, tear it up and throw it out ASAP.

Parents, be aware of your child's spending habits, especially if he or she is away at school. Monitor this very carefully. Don't be afraid to ask how they are buying things, what they are buying, etc. In this case, ignorance is NOT bliss - it can lead to pain: in the wallet!

I wish students and teachers a successful academic year!

Thursday, July 23, 2009


Hi All,

It's been a few weeks since I posted here. Sorry to keep you waiting. I have made a couple of trips and been involved with some other projects. But now I back and ready to go!!

Last time, I wrote about the dangers of using a credit cards at fast-food restaurants, like McDonald's. There is a temptation to buy more than you really need or want because you are not spending cash on the spot. And I'm not even taking into account that many items on a fast-food menu are not very healthy.

That leads me to my next point. If you feel the need to "spend" money, think about a cause that is important to you. Consider giving money on a regular basis to an organization that can use the resources to help those in need. Speaking from personal experience, I get great joy when I give to a cause that's close to my heart. It does not need to be a lot of money - that's for you to decide. Amounts are relative. What are you comfortable giving? How much makes you feel good?

The bottom line is that when we give, we get back in many ways, including joyful feelings, gratitude from others, and yes, even money. If you are a cheerful giver, you will never do without.

Monday, July 6, 2009

"Super Sized? Sure! Cash or Credit?"

I hope that everyone had a wonderful Fourth of July holiday weekend! Here in the northeast, we actually had some nice weather!! We had a couple of days with no rain - (See, miracles really do happen!!)

While at church yesterday, I was speaking with someone who works at McDonald's. He said that it was very busy there over the weekend because of the holiday. Then he added that the orders were larger than usual because of the number of kids and the size of the families who came in.
He finished by stating that "a lot of people paid by credit card." He probably said that for my benefit. He knows that I write this blog and that I cringe when I hear about unnecessary use of credit. So I thank him for sharing; he is the "inspiration" for today's post.

Folks, think about the philosophy of paying for "fast food" with "LONG TERM debt." It makes no sense! While parents may, in fact, have gone into McDonald's with their kids, they (the parents) had to know that they were going to stop some place for lunch or dinner. Likely, they did not think twice about pulling out the credit card and putting off payment until a later date. The problem with this is that frequently we buy more with credit cards than we do with cash for the simple reason that no dollar bills are coming out of our wallets or purses. We overindulge, thanks to MasterCard, Visa, etc, so we can get instant gratification and immediately satisfy the kids. But the credit card companies "get the last laugh" when the bill comes due becuase there is a very good chance that that McDonald's purchase is not the only one on the current statement. How many other purchases were made during the month for instant gratification or to satisfy kids, friends or somebody else?

You can pay the bill in full every month? That's great! Chances are, this message is not meant for you. At the same time, let's say that money is tight and an unexpected expense or an emergency comes up later in the month. As a result, those unnecessary credit purchases now make it difficult or even impossible to pay the bill in full. We cannot predict the unexpected; we don't know when emergencies will occur. However, we do know that they may occur. So we have to be prepared, financially and other ways, to tackle those events without putting ourselves in debt. That's why an emergency fund is so important. It should be a liquid, cash fund, not a plastic, credit card.

Fast food is fine in moderation. An occasional "super size" is ok. But using credit while placing the order is absurd. As financial consultant Dave Ramsey says, "Cash is king!"

Sunday, June 28, 2009

Chip, Chip, Chip Away

At this point, you have made the necessary phone calls to lower your interest rates and even to pay off your balances "at pennies on the dollar." The latter may not be possible for you, but the former, the lower interest rates, are certainly possible and, in many cases, essential to getting yourself out of debt in a reasonable amount of time. Time truly is money when it comes to debt repayment.

How many credit cards do you have? How many of them have outstanding balances? You will see that some of your cards have lower balances than others. Which card has the lowest balance?

Your next assignment is to make a list of all of your credit card balances. Write the list from lowest balance to highest. It doesn't matter how many cards you have at this point. The goal is simply to get this list on paper. And actually the grand total of your credit card debt isn't very important at this point, either.

Right now, we simply want to get a list on paper so you see what you are dealing with on a card-by-card basis. Ideally, we want to train your eye to go to the top of this list where the lowest balance appears. This balance will get the majority of your attention and money until it is paid off. You will pay the minimum on the other balances, but you will put as much money as you can toward the card with the lowest balance.......until you see a balance of zero! Of course, you will not be using this card (hopefully you will not be using any of the cards - you can't get out of debt by debting).

Once you pay off the card with the lowest balance, follow the same process for the card with the second-lowest balance. Continue to pay the minimum on the others, but now put as much money as you can toward this "new lowest balance card." And here's some good news - put the amount of money that you paid on card #1 on this card plus as much other money as you can.

Ultimately by doing this, you will accelerate the pay off of this card. In other words, the more you can put towards the balance, the faster you will pay it off. That's common sense, but many people don't realize it, nor do they discipline themselves to stop using their credit cards.

Keep this process going until all of your balances are paid off - whether you have two cards, five cards, ten, twenty, less, more.

Remember that it takes about twenty years to pay off a credit card with a $2,00 balance at an interest rate of 18%. By following the system listed above, you will cut years off your debt!

Wednesday, June 17, 2009

"Hot On The Heels" Of my Previous Post...

Hi All,

If you recall, last time I addressed the need to call your credit card companies and negotiate a reduced interest rate. Well, yesterday's "New York Times" had what I found to be an interesting and inspiring article for anyone facing difficult economic times and especially for those struggling with credit card debt.

In an article titled "Credit Bailout: Issuers Slashing Card Balances," writer David Streitfeld states that "credit card companies are increasingly doing something they have historcally scorned: settling delinquent accounts for substantially less than the amount owed."

Streitfeld cites a gentleman from Chicago named Edward McClelland who reportedly had received several phone calls from a credit card company, regarding a "$5,486 balance." This time, Mr. McClelland had a proposition for "big business." Specifically, McClelland "proposed paying half" of this balance.........and the account representative replied, "It's a deal" at which point, Streitfeld writes, "the matter" was considered "even."

Apparently, credit card companies and banks are becoming more responsive to the plight of many Americans during this recessionary period. No, they are not, all of a sudden, becoming philanthropic and good-natured, but it seems that they are becoming more open to negotiation.
With delinquencies rising, they realize that some money is better than no payment at all. In the article, Streitfeld cites a Federal Reserve report which states that "6.5 percent of credit card debt was at least 30 days past due in the first quarter, the highest percentage since it bagan tracking the number in 1991. The amount being written off was also at peak levels."

Streitfeld continues that not all creditors are on board with this new policy, but the American Bankers Association, "acknowledges that settlements are becoming more common."

Unemployment is now more than nine percent and is likely to rise. Frequently, jobs are the last things to come back during an economic recovery. Thus, as jobs continue to decline, credit card debt and the inablilty to pay will increase.

On a positive note, we now know that there is some "wiggle room"; the potential for negotiation exists. If you are struggling with debt, make that call. I beleive it is better to be proactive and contact the card company yourself than to wait and hope that the company will call and "make you an offer."

Re-read my previous post "Call...And Save!" with regards to negotiating a reduced interest rate. Read Mr. Streitfeld's article in its entirety in the June 16 edition of "The New York Times."

Also, I encourage you to read my blog every week.

Thursday, June 11, 2009

Call...And Save!

Alright, we are beginning to make some headway. We are becoming aware of our spending patterns and we are reducing (or eliminating) our use of credit cards. We are becoming proactive in our quest for debt freedom!

Now, it is time to "slay the dragon" (so to speak). Chances are, the interest rates on your credit cards are quite high. They don't have to be. It's time to call the credit card companies and negotiate a reduced rate on those cards. If you look at the back of your credit cards or on your statements, you will find a toll-free phone number. Call it and speak to the representative. Get your interest rates reduced!

This might take a little persistence on your part. That's not a problem since you are determined to get out of debt. If the first representative says he or she cannot help you, ask to speak to a supervisor or manager. Keep going up "the chain of command" until you are offered a satisfactory rate, one that is significantly lower than your current rate.

You need to do this for each of your cards. It might take some time, but it is worth the effort...and money that you will save!

Until next time........

Wednesday, June 3, 2009

"Cut " The Plastic (Probably Not What You Think)

Last time, I wrote that we should all add up what we owe on our credit cards. This gives us an idea where we stand presently with regards to debt. Many people have only a vague idea of how much they owe. I remember back when I was deep in debt, I frequently forgot how often I used my credit cards and I had many of them. Ultimately, I didn't know how much debt I was carrying until I finally built up the courage to sit down and add up the balances on each and every card. My best recollection is that I had as many as fourteen credit cards at one time and I owed on most of them.

I felt terrible when I finally realized that I owed several thousand dollars. However, shortly thereafter, I also realized that knowing the exact amount was crucial if I were to stop this terrible trend of unnecessary debting. At first I was guilty, but then I was empowered.

So I suggest that you add up those debts for your benefit. This is not to make you feel guilty or even angry. This is meant to be a "Wake-Up Call." Hopefully, it inspires you to start changing your habits, even if it's just little by little at first.

Now that you know exactly how much you owe, start recording what you buy for the next week. I'm not saying to change your buying habits necessarily, at least not right away. But notice what you buy and more importantly how you pay for it. For example, do you stop for coffee and a muffin every morning? three mornings a week? Do you pay cash? Or do you put it on a credit card? Do you realize that you're doing it?

This is not to condemn; it's to make you aware. So for the next seven days, take a small pad of paper with you and each time you buy something (no matter how relatively inexpensive it may be) write down what it is, how much it costs, and how you paid for it. If you spent cash, write "Cash" next to the purchase. If you put it on a credit card, write "cc" next to it.

After a week, review how you purchased. If you notice that you used credit cards
less often than you usually do, then you are becoming aware that you don't need to use credit cards so often. I suggest that keep that pad with you for at least another week or two and do the same thing.. Remember we are now establishing positive habits and breaking bad ones and it takes time. This also reaffirms/solidifies what you did in week one. In the process, you are convincing yourself that change is possible and that, in fact, it is happening. You'll also see your debt amounts decrease over the course of several months once you drastically lower the number of times you use credit. You have "cut" your use of plastic!!

If, on the other hand, you notice after one week that you used your credit cards as often as you usually do, don't give up. You may have been using credit cards so habitually that it can take a while longer for you to break the habit. Again this is NOT a criticism. Maybe instead of thinking about this as a seven-day experiment, think of it as a ONE-DAY experiment - today. Convince yourself that you will pay cash for EVERYTHING you buy today. And buy what you usually buy for that day - keep it natural. Then notice that you succeeded TODAY. Congratulations!! Now do the same thing tomorrow...and the nex day...and the next day, etc. Soon, you'll notice that a week went by and either you used the card rarely or ideally NOT AT ALL. You, too, have "cut" your use of plastic. Keep doing this day-by-day and see the results!

I'd love to hear from you! Please feel free to comment or ask questions.

Until next time, be positive and see yourself as DEBT-FREE!

Wednesday, May 27, 2009

It's Up To US

Well, there's some good news on "the credit card front." Congress and The White House have stepped in and will reel in some of the unethical practices of the banks and credit card companies. The Obama administration does apparently have the best interest (no pun intended) of the American people in mind with regards to the staggering debt totals we are presently seeing.

While it is crucial that "the powers that be" do what it can to stop what can rightfully be called the "legalized rape" of the American consumer by the banks and card companies, we
MUST NOT simply rely on or expect the government to change our financial situation for the better. It can stop the abuse, but WE must be proactive if we are to get out of debt and ultimately prosper.

In other words, it's not up to the U.S. - it's up to us. Note the difference.

We must take responsibility for the credit card debt that we've incurred.

So, my first piece of advice is to add up all of your current credit card debt. If you already know exactly how much you owe (and I mean to the penny), that's terrific. But my experience is that most people do not know their exact debt load. Knowledge is power - so become of what you owe to MasterCard, Visa, AmEx, and all other cards and make a list of those individual totals.
Then add them up.............Take a deep breath and relax.

Remember, in order to turn your situation around, you have to admit that there is a problem, know what that problem is, and be willing to do what it takes to gain control over it.
That's your responsibility and together, in these upcoming posts, we will take the steps necessary to become empowered.

No one can do this for us..........It's up to us.

Friday, May 22, 2009


A Happy Memorial Day Weekend to Everyone!

My name is Joe Paretta and I welcome you to the first of what I hope to be many blog posts about avoiding, getting out of, and staying out of credit card debt.

This is a topic that is near and dear to my heart. Years ago, I was several thousands of dollars in debt to many different cards. But with determination and persistence, I got out and have stayed out for the last eight years.

For a long time, I "dragged my feet" about starting a blog (mostly due to fear of technology),
but the time has come...and I can't believe how easy this is!

But this blog is not about technology; it's about a topic that has become epidemic in this card debt. Recent surveys have shown that the average American household credit card debt is now between $8,000 and $10,000. And with people losing their jobs and in many cases, at best, finding just part-time employment, those totals are likely to rise in the very near future.

No, my goal is not to get your holiday weekend off to a depressing start. But since this is my "pilot" post, we need to face this difficult reality.

Now, are you ready for the good news? We can and we will get out of this credit card debt! It will take time, it will take perseverence, but we will get there. I write "we" because I will help you. That's what this blog is all about. We'll take my experiences and put them to work for you.

Check back for my next posting. As we go along, I invite your questions and comments.
I pray that this is the start of a long and prosperous relationship!!