Apr 28 2009

Credit crunch could keep people in debt longer

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It seems as if the ‘credit crunch’ is officially upon us. According to this story in the Post-Gazette, credit card companies are raising interest rates, reducing cash-back rewards programs, and lowering credit limits.

I can see why they are cutting back rewards and lowering credit limits … but increasing interest rates? That’s just going to send more people into default.
If people are struggling to pay their credit card bills as it is, raising their interest rates will only keep them in debt longer. Maybe that’s the credit card companies’ intention, as they’ll get more money out of the person that way.
The article states that credit card companies are required to tell you how long it will take you to pay off your balance if you continue to make only minimum payments. Is this a new thing? I don’t recall seeing it on past bills, but I haven’t used my card in quite awhile so I can’t say for sure.
Depending on your interest rate and your balance, there is a point at which if you only make minimum payments and never charge another dime, you’ll never be able to pay it off.
I’m pretty sure we were once at that threshold, but fortunately we were able to start paying much more than the minimums.
Yikes.
I’m glad I don’t have credit card debt, and I hope to never again. 

If you use credit cards, are you seeing your terms change?

Apr 27 2009

2 houses we won’t be getting

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What a beautiful, unseasonably warm day here in Pittsburgh! If I had a clothes line, I think I’d do laundry just for the sake of hanging it outside to dry. 

This weekend, Shane and I looked at our budget and other factors and decided that even though we could technically afford a more expensive house, it would be in our best interest to drop the amount of money we’d be willing to spend on a house to the $85k or lower range. We’ll have to shift our search to a different (but nearby) area, but I think it will be worthwhile. 

We went to an open house and a private showing over the weekend. The open house was out of our reach, but we wanted to see what $110k could buy in that neighborhood. It was a nice, well-kept three-story house with a basement. It had four bedrooms but only one bathroom. The kitchen was smallish. The top story was a ‘bonus room’ type of thing and that was neat. It only had a parking pad out front, but it was better than having to park on the street, which is typical in some areas here. To enter the house, you’d have to go up at least a flight’s worth of steps outside. The fenced-in, mostly level backyard was a plus.
We liked the photos of it and seeing it in person helped us to figure out how those photos matched up with reality. Also, I didn’t like how close it was to the neighbors. 
The next house we saw was a privately scheduled showing. Johnny fell asleep and from the outside the house didn’t look worth seeing, so I stayed in the car while Shane had a quick tour. The place was awful, apparently. The porch looked like it had cracked and was sinking into the ground. You have to be careful with mine subsidence around here. I don’t know if that’s what caused it, but it didn’t look promising.
The photos of that house made it look fairly decent. When we got to it, though, it looked awful. Extremely overpriced for the area and for what it was, too.
In the future, we won’t schedule a private showing for a house that we haven’t driven past first. That will save us a bit of time.
The search continues. Seeing more houses in person will help us figure out what we want and don’t want in a house.
And now, some links I’ve been meaning to share:
I was featured in the Carnival of Personal Finance last week, hosted by Mighty Bargain Hunter .
Also, I enjoyed this series by M is for Money about first-time homebuyers .


Hey! I'm Kacie, wife to Shane and mother to Jonathan (8), Vivienne (6) and Amelia (3) . I write about my family's finance: how we save money, improve our spending, and plan for the future.

I hope I can inspire and encourage you to improve your situation. See disclosure.

I'm adopting a much slower-paced posting schedule, and treating this as a hobby blog now.

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