A lesson in using credit cards

A few months ago, I’m embarrassed to admit, I completely forgot to pay my credit card bill. I know it’s inexcusable and I felt really bad. I use credit cards strictly for convenience and to earn points, never to borrow money since we all know how outrageous the interest charges are. As soon as I realized my payment was late, I paid off the full amount on the overdue statement and knew I’d be smacked with an interest charge on the next bill.

The next bill came, I was choked by how much they charged me for being one lousy week late, but I knew it was my fault so I sucked it up. And then I made sure to pay my next statement ON TIME.

Now, imagine my surprise when I got my most recent bill, and there was still an interest charge on it! I figured somewhere in the small print there must be some reason why they could be doing this, and the part of me who was embarrassed at having made the mistake of forgetting to pay the statement just wanted to pay the stupid fee and forget about it. But the ‘hey wait a minute’ side of me wanted to know what was going on.

So I decided to call the credit card people and find out. I spent quite a bit of time on the phone with the guy. He was deceptively nice, and kept agreeing with everything I said, like ‘I paid this then so what’s the problem? Why did I get charged more interest?’. And he kept saying ‘You’re right you did.’ I didn’t understand at all, and just felt really stupid and dumb because I just didn’t understand why I got charged interest. I was so close to just getting off the phone with the guy and just sitting here and mulling it over, but I knew if I did i would just end up paying the charge and still not really understand. So I just point blank told him I felt really dumb and sorry about this but I just didn’t understand. So he told me he didn’t mind sitting here explaining it to me again and again. So we went through it again and finally I was able to understand the following important lesson:

All this time I have been enjoying using interest free money and paying for it at a later date. This is something the credit card company grants me as long as I pay all my statements off in full, every time.

Now here is where my misconception came in. I was under the impression that if I paid off my statement in full one week late, I would be charged interest on the over due amount for the one week it was over due.

But that is not how it works. Apparently, as soon as I miss a payment, my borrowing money interest free gig is taken away and I start being charged interest on every purchase I make because my account is no longer ‘in good standing’. So the purchases I made after I paid that bill one week late, which would be interest free if my account was in good standing, were no longer interest free until I got my account back in good standing which takes two months of paying it on time.

I hope that made sense. The bottom line is to avoid more interest charges what I should have done as soon as I realized my payment was late was call up my credit card company and find out the total balance owing on my card (not just the balance on my statement because it’s not the most current) and paid that full amount. Then I wouldn’t have had this other surprise interest charge.

After the guy explained it to me, he asked if there was anything else I wanted to ask about. So I asked if I could have this second interest charge waived. He was a little reluctant because I was after all in the wrong, but eventually he agreed. I was nervous about asking (it’s hard!), and so relieved that he reluctantly agreed that then I was like ‘ok thanks bye!’. But in retrospect, I would have liked to confirm it verbally again like “Thank you so much for doing this for me, I really appreciate it. So I really don’t have to worry about paying this interest charge, it’s taken care of?’ And he’s say yes and I would thank him again. As it stands the conversation ended so quickly that now I worry that maybe the charge will not be taken care of.

secrets and smarts and saving

Two great posts I read today:

• Secrets to smart decisions when you graduate from college
• Concentrate On Savings First

And the interesting thing is that the first point in the first post, Taking action is more important than taking correct action, is kind of what the second post is about. It’s better to save (the action) than to find the most optimal investments (correct action).

Anyway the post about saving made me feel better. I’m pretty good about saving and lately I’ve been feeling bad about my lack of investing action and wondering why I’m letting all this money I’m saving just sit in a high interest savings account.

What I really need to do is automate my finances more. I’m going to do that after I pay my next credit card bill which will have a rather large one time but necessary charge on it. Or maybe I should just be using the money in my cushion fund to pay for things like that… Ok my action item for next week-end will be to get my finances automated.

Exploring the scooter option

I’ve had a whole lot of bus misadventures ever since I moved to Vancouver. So many in fact that my roomate keeps telling me I should start a bus misadventures blog… Anyway after a couple of really annoying rides last week, I snapped. I figured there Has Got To Be Another Way.

I started thinking about getting a scooter, maybe something like this Kymco. I didn’t care about style or anything, just something functional that will get me from point A to point B. But when I ran the idea past my dad (my go-to person for advice on these sort of purchases) he said not to even bother with anything under 150cc, so I’d be looking at something more like this scooter, which is a bit more than I really want to spend at this point. I mean, I’ve just about got my cushion fund where I want it, do I really wanna blow it all on a scooter?! Plus, I just found this great post over at Ginger Won’t Snap on her Vespa Investigation and I totally didn’t even start thinking about the costs of insurance or what kind of license I’d need to get. Needless to say, the costs add up fast!

It’s funny though how the combination of the weather warming up and gas prices going up to infinity really has people seriously considering alternative forms of transportation like scooters. Just over the week-end I was back in Calgary and saw that one of the neighbors had just bought a new scooter and was showing it off and riding it up and down the street. It must have been a 50cc coz even going slow on a residential street the motor was working hard and making a lot of noise.

Anyway, I realized that in Vancouver I’d probably stick to riding my scooter on the designated shared streets (meant for bike traffic, they incorporate traffic calming features and usually run next to a main street making it easy, enjoyable, and safer to get where you’re going). So why not just get a bike? And so the scooter idea was laid to rest. For the time being anyway.

Tips on negotiating salary

Just came accross this great article called Ladies, Take off your Tiara! It talks about how statistically women have a harder time asking for higher compensation. My favourite part of the article were these tips on negotiation for a better salary:

• Start positive and get it in writing. Johnson suggests saying something like, “I’m thrilled by the offer, but I would like to get the whole compensation package that you’ve offered me in writing.”
• Be firm. If the organization offers you a figure lower than what you expected, say something like, “I appreciate the offer, but I have to say that the base salary is less (or significantly less) than I anticipated given what the appropriate range is for this position and for the skills and experience that I bring to the job. Can you give me a sense of how much room there is to maneuver on this number?”
• Follow up. If an employer still won’t budge on the number, have them agree to a salary negotiation, or review, in six months as opposed to a year. Additionally, find other areas of the job to negotiate. Whether it’s working on a specific project, or with a certain group of clients.

I also really liked the tip on keeping a monthly journal of accomplishments that you can refer to when negotiating your salary. I always draw a blank when it comes to promoting myself even though I know I do lots of great things. Having a list I could quickly refer to would be invaluable.

Cutting down on paper clutter

I like to try and keep things as organized as possible and as uncluttered as possible. It’s not always easy but I just came to the realization that it’s so important to always think about habits and always be trying to make things better.

Case in point, I save all my receipts for anything I pay by credit card, and every month when I get my credit card bill I go through all the receipts and reconcile everything. When I’m done, I neatly staple the receipts to the credit card bill and file it away.

I thought it was a pretty good and organized system. But, I just realized that really, I don’t need to be saving a big stack of grocery receipts every month. After the reconciliation, do I really need to hang on to those receipts? I’m thinking… no. So going forward I’ve decided I will only keep receipts for larger purchases and transit passes (for when I do my taxes next year). But all those $10-20 grocery/restaurant/not important receipts are going in the garbage as soon as they’ve been reconciled.

Anyone know of any good reason to hang on to those receipts?

100 Free Prints

I just found out about this promotion through FuturePhoto where if you have an existing account with them (which i do) you can get 100 free prints from Kodak Gallery. I haven’t used FuturePhoto in a couple of years but the lure of 100 free prints was just too great and I logged in to my account to claim the free prints. I was really surprised to find that all the photos I had previously uploaded and printed were still there! I’m talking photos from 5 years ago! Total blast from the past! It made me really happy to find those photos again. And now I also get my free prints. I liked using FuturePhoto because they let you upload from home and gave the option of free in-store pick-up, which will continue now that the service will go through Kodak Gallery.

So if you have a long lost FuturePhoto account, go log in before the site goes down May 31st!

Bumbling along.

I feel bad that I start so many posts saying ‘things have been really hectic lately’ coz it sounds like such a cop-out, but they have been… Or maybe I’m just easily overwhelmed. Who knows.

One of the many things I’ve been dealing with is… Mice in my apartment. Yuck. It really makes me want to move, but I won’t move into another roomate situation (such a gamble) and I can’t afford even a bachelor basement anywhere in the vicinity of downtown Vancouver because I don’t make much and rent is expensive. So the roomie and I have been trying to deal with them as best we can and hopefully they will go away and I can stay here and keep paying my reasonably priced rent. Although I’ve come to the realization that it’s reasonable probably because we have an absentee landlord.

Anyway. The other day I was playing around on Networth IQ and according to their statistics for my age and education my income is way below average (what am I doing wrong?!), BUT for my income and occupation my networth is way above average. So that tells me that I’m good at saving. But that I need to work on my career.

I keep thinking it would probably be very helpful for me to blog about work and my job because it will make me more aware of my career and no doubt be useful in the future when I move on to better things. Things that I have a hard time with, like negotiating salary or even just selling my abilities and skills. But I’m really nervous about blogging about work too much because even though I’m blogging anonymously I don’t actually believe that there is such a thing as anonymous blogging. Don’t anonymous bloggers always get found out in the end? And those who blog too much about work get the boot? Hrmmm. It would be one thing to be blogging about work if I paid attention to what I said, but I definitely couldn’t have a blog mixing details about my job and the company I work for and my personal finance stuff. That’s just too much information.

Goal setting.

I got paid with $5 in my wallet to spare. Not bad. I got my first paycheque but am feeling uninspired as to actually managing my money. Need to set some goals and get some actions going. Maybe I should start tracking my networth, just for fun.

Business stuff

Although I haven’t actually gotten much done in terms of my business planning stuff, I feel like I have a clear(ish) path to follow right now and that’s the hardest part! The next thing I need to do is install some graphics software on my computer and create some technical product sketches. Actually, it might also be good to find out any specifics regarding what those entail…

What to know before buying a condo

I just stumbled across this awesome episode of CBC’s Marketplace all about the shady side of condo buying called Condo Crunch. They’ve got a written summary, or you can watch the video.

Mostly the tips apply to buying pre-built condos. Here are some of the main points:

• Take a tape measure to the model suite. It amazed me that they make the model suites bigger than they are on the floor plan.
•  Look into the developer’s track record.
• Hire a real estate agent and a real estate lawyer.

I’ll be watching some of the other Marketplace episodes that are online, some of them look pretty interesting.