There’s a slight chance that you’ll watch the video and laugh. Or be jealous that the Estes Park area is beautiful - pay cash and go visit Estes Park, CO.
This podcast is about how credit cards are not a great choice for most people most of the time.
Dave Ramsey mentioned this later on a recent podcast episode (which could have been a repeat) and so I looked it up. It can be found online in a collection of his writings here. However, I thought you might like to read the letter because it is quite interesting to see Abe’s approach to helping his family.
Dear Johnston, Your request for eighty dollars I do not think it best to
comply with now. At the various times when I have helped you a little
you have said to me, “We can get along very well now”; but in a very
short time I find you in the same difficulty again. Now, this can only
happen by some defect in your conduct. What that defect is, I think I
know. You are not lazy, and still you are an idler. I doubt whether,
since I saw you, you have done a good whole day’s work in any one day.
You do not very much dislike to work, and still you do not work much,
merely because it does not seem to you that you could get much for it.
This habit of uselessly wasting time is the whole difficulty; it is
vastly important to you, and still more so to your children, that you
should break the habit. It is more important to them, because they have
longer to live, and can keep out of an idle habit before they are in it,
easier than they can get out after they are in.You are now in need of some money; and what I propose is, that you shall
go to work, “tooth and nail,” for somebody who will give you money for
it. Let father and your boys take charge of your things at home,
prepare for a crop, and make the crop, and you go to work for the best
money wages, or in discharge of any debt you owe, that you can get; and,
to secure you a fair reward for your labour, I now promise you, that for
every dollar you will, between this and the first of May, get for your
own labour, either in money or as your own indebtedness, I will then
give you one other dollar. By this, if you hire yourself at ten dollars
a month, from me you will get ten more, making twenty dollars a month
for your work. In this I do not mean you shall go off to St. Louis, or
the lead mines, or the gold mines in California, but I mean for you to
go at it for the best wages you can get close to home in Coles County.
Now, if you will do this, you will be soon out of debt, and, what is
better, you will have a habit that will keep you from getting in debt
again. But, if I should now clear you out of debt, next year you would
be just as deep in as ever. You say you would almost give your place in
heaven for seventy or eighty dollars. Then you value your place in
heaven very cheap, for I am sure you can, with the offer I make, get the
seventy or eighty dollars for four or five months’ work. You say if I
will furnish you the money you will deed me the land, and, if you don’t
pay the money back, you will deliver possession. Nonsense! If you can’t
now live with the land, how will you then live without it? You have
always been kind to me, and I do not mean to be unkind to you. On the
contrary, if you will but follow my advice, you will find it worth more
than eighty times eighty dollars to you.
I guess we could call this a guest post by Abraham Lincoln 
We don’t generally have to deal with collections. To my knowledge I have been ahead or on time with all of my payments for a year and a half. Unfortunately this last Saturday we got a call form a store credit card collection agency that I was completely unaware of. My wife was also unaware of the problem as we ran into some issues with email notification and spam filters combining to a net gain of nothing and a net loss of a stupid interest rate and late fee. We’ve paid the card and now we’ll cancel it. I don’t like store cards and I don’t know why this one was signed up for, I think my wife was offered tremendous savings of some sort. We’ve lost the savings, but gained a lesson.
When dealing with a collection person remember several things about their job:
So in dealing with these people, and they are people, though they may seem like monsters or jerks or rude people, just realize that their job is not to wave fees, reduce penalties, take your side, or help you get things straightened out. In fact, in most cases you shouldn’t even talk to them. The best way to deal with them is to not deal with them. Instead, if you get a call from a collections agency, find out who it is they’re collecting for and then call the company they’re collecting for and bypass their job’s inherent socially aggressive issues.
Remember that they’re trying to figure out your payer type. That is they’re looking for the type of person you are to find the argument that will talk you into paying them right now, which means they get rewarded. As soon as they get rude tell them they can stop being rude and work with you or you’ll hang up. They may respond in various ways, but in the end don’t let their attitude cause you to get worked up. This is what happens to me when I’m discussing things with people and they begin to ignore intellect and rationality. They know that if you’re emotionally charged that this will get you to act one way or another. Don’t let them get you worked up. Hang up first.
Remember that if you’re legitimately in debt to someone you should attempt to pay it as soon as possible, but don’t let their problem be your problem. Tell them that you’re glad to know the total you owe and you’ll figure out how you can go ahead and pay it on your time and schedule. Say, “Thank you, good-bye,” and then hang up. Don’t give them a foot in the door. Hang up and then genuinely figure out how you can pay your debt and put it behind you.
If you’re a newer reader you may not be familiar with the Credit Rate Reduction Rally. One of the purposes behind the rally was to build a movement that is about optimizing interest rates for people paying off debt. In my case doing this on one of our cards reduced the interest we’re paying per month (which also includes a lower balance from making payments) by $125.00 a month. That would be like saving roughly $1,400.00 in one year’s time [calculated loosely with the assumption of a reducing balance with minimum payments]. Or three Nintendo Wii’s, several car payments, a very, very nice bottle of wine, a Mac Book with memory upgrade, or a nice donation to a charity.
Have you sat down and calculated how much money you might save by getting your interest rates reduced? Be persistent, be consistent, and make them change your interest rate. It could change your future!
I will more than likely enjoy my economic stimulation check for all of two seconds as I flip it over, sign it, and then cash it in at my bank. Upon actually receiving the funds in my account it will go towards paying off my debt. The ‘fun’ of the spending money will be gone in a flash, but the excitement of being that much close to debt free is there. In fact last night I got paid for some work and that money is going straight into the debt snowball. Five hundy down in all principal since I’ve already made the normal monthly payment on the Disguster Discover card. It is this kind of extra payments that are exciting, but at the same time are a monument to my folly.
There are very few things in life that don’t come with lessons, but when they kick your pocketbook, the lessons feel a little more like sandpaper than satin. I’ve found that each check gets me closer to the short term goal of debt paid off, but serve as a reminder, as I sign them, that I’m signing off on the consequences of my previous stupidity. I don’t say that to be melancholy, but more to emphasize that I recognize the consequences of past actions, and in the future, as I sign other checks after having my debt paid off, I’ll be signing them as a monument to where I’ve been, where I’m going, and to help build the foundation of the long term goal: financial independence.
Do you care about your economic stimulation check’s arrival date? I figure that a few months difference in interest payments can be somewhat important, but the short term difference to me is insignificant.
Pardon my American term of soccer those of you who call it football. I blame my parents, they called it that because football was an awkward game with very large men attempting to damage one another while not getting damaged themselves. Its like politics only with more distinguishable words that the common man feels comfortable with. You see, my wife wants to sign up the girls for soccer [read: football/futball]. I want to sign them up, too. Just not for a combined total of $270.00. I’m going to declare that watching them play it is fun (we went to a free day where they could practice with a coach so as to hook us into the program). Its greater fun than watching the politicians for sure.
Our getting out of debt budget simply doesn’t have a $270.00 gap in it. Maybe if we saved up for a few months we’d have enough, but that would be money we’d be taking out of debt deduction instead of money going into the debt reduction process. In short we’d be paying our way out of debt for several months longer (or to put it in my wife’s terms: delaying our cash-only anniversary trip). In my mind its not worth it. I’m more than willing to do it once the debt is gone, but at present putting the debt as a lower priority feels like a violation of all that is mostly good (except for the politicians who are mostly not good).
So we’re going to have to discuss this because while we could eek it out of the zero budget, its not my first choice. We love our girls, we love to see them get exercise and fun, we love to see them get the opportunity to dominate spheres and cause mild pain and suffering in (non-competitive youth) soccer, but this may just have to wait for one more year to go by. We think next year we may just have all or most of our debt paid off. Maybe we can buy a soccer ball and kick it in the backyard. I know it isn’t the same, but neither is American Soccer and Football. I blame the politicians.
If you’ve seen the television show ‘House’ then you’ve probably heard the lines about everyone lying. In each episode something goes wrong with some patient and they have to find out what is causing the ailment. Often the problem has to be ‘dug’ into and they have to find out who is lying about information so that they can get to the truth of the problem. They don’t take ‘no’ from anyone.
If you have tried to get a lower interest rate from a credit card company and they’ve said no to lowering your rate and you’re paying anything like 18%: they’re lying. Don’t take no for an answer. Dig deeper. Go up the chain of command until you’re speaking to Warren Buffet’s cousin. Get to the person who can and will say yes. Don’t put it off, don’t delay, call now. Get a lower rate and save yourself some big cash!
Excuses that drones at the card companies will use include:
Kick the credit card interest rates in the butt. We got our interest rates dropped twice and each time they dropped the rate we saved $50.o0 in interest per month! Of course we’ve got enough debt that we’re paying a lot anyway. However, getting the lower rate will help us pay it off faster.
My bride came up to me and in her normal, ever so sweet way, told me that our debt reduction plan was insufficient. Normally this sort of thing would be a good thing, except that I exaggerated… she was ticked that we weren’t further along. She wasn’t angry at me so much, it was just that she wants to go on a romantic anniversary trip and the debt is hindering that. She’s fired up.
So she called up Discover, with whom we have a large line of credit [and accompanying balance] that we’re paying off and talked to an employee to find out if they could give us a better rate yet. They’d told us not until March the last time we asked. Well, upon asking for a lowered rate the gal on the other end of the phone told her that she would give us a 12.9% rate. My wife, being fired up, asked for a lower rate than that. To which she said, “No, I can’t do that.” But at least my wife tried.
So we’re now paying half as much interest as we were 7 months ago because we were persistent. The Credit Rate Reduction Rally is going to be semi-annual, but just because the rally is not happening right now doesn’t mean you shouldn’t call and press for lower interest rates.
I interviewed a buddy, “John” who was willing to talk to me about a bout with “Pay-Day” loans and lessons learned. Check out the audio podcast to learn more.
Pay Day Loans 4.5MB requires iTunes or Quicktime to listen to.
If you’re new to the Watch My Money Maker blog you’re possibly not familiar with the Credit Rate Reduction Rally that is taking place next month. From January 7th through 11th the world is invited to get blogging, posting, thinking, calling and making change to their credit card interest rates for the better. Not everyone is aware of the fact that they can often negotiate lower interest rates for credit card debt. Card companies make good money on charging interest, but they’d rather have you pay the cards off than leave them hanging with bad debt (even if later they come back with collection agencies).
Take a moment to check out the Credit Rate Reduction Rally homepage and consider blogging it yourself. Or better yet: tell a friend.
