20081112
Layaway Online Shopping and other Ideas to Preserve Credit
Online shopping is great. You can find exactly what you want, tell others about it, and most importantly save it to a wish list.
But some wishlist items are down right impossible, especially if you are trying to curb spending, pay off some of your credit cards or loans, or if you want to save money rather than spend it.
Credit cards provided the means to get what you wanted now, and make payments on your credit card later. But there are many problems with using credit if you abuse it,if the credit card company abuses you, or if your information is stollen.
Before I get into todays subject, the following things can possible happen, of which they shouldn't.
| How you could abuse your credit. | How your credit card company may abuse you | How other people may abuse your credit |
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- You max out. You spend over your limit, now it is time to pay the piper!
- You were dumb enough to skip a payment. If the creditor brags about this, DON'T DO IT! Hell, just don't in general!
- You were dumb enough to pay the minium. If you spend $150 on credit items, don't pay the minimum. Even if you didn't spend any credit, NEVER PAY THE MINIMUM!
- You have several credit cards and are doing the above points. If you are doing this, either you have not done anything constructive to control yourself or you are part of the problem.
| - Creditor jacks up the APR. You were at a cosy 3% to 9%. Now though no fault of the possible reasons in the left column (unelss you did one of the items of the left more than once), you are paying 16% to over 25%. When this happens, it is time to transfer. Preferably to a 0% for one year card. But don't do any of the things in the left column.
- Creditor increased your line of credit. Technically, it is not a bad thing. The problem is some people assume that they can splurge that money. DON'T!
- Creditors luring teens and college students. Parents worry that their kids will come under the influence of alcohol, drugs, and gambling. The truth is, it is the stuff that comes in the mailbox or is in the bottom of the bag at the school book store: The Credit Card offer. Much like the tobacco industry, the credit industry also seeks to "hook'em while they are young". Warn your kids about this.
- Creditor didn't transfer everything that you asked. So you decided to tranfers your credit balance to another card. Be sure that the entire amount that you asked to be transfered was transfered.
- Your creditor is about to go belly up. In an effort to make sure that their CEO has a gollend parachute, your creditor decides to freze your credit, jack up the APR, and press the self-destruct mechanism while they made you and their employees drink the kool-aid. While we hope this NEVER EVER happens to you, it has for alot of banks and creditors this year. If this happens to you, sic the FBI on them.
| - Theives stoll your info. It doesn't necessarily have to be Credit Card numbers. It could be anything. Drivers license numbers. Bank accounts. Social Security. Insurance policy, employee id, or club membership. A good bank or creditor will tell you if your card has been used without your permission. Paypal generally does it. Reguardless, there are some other websites that the government has that can help monitor your information for about a year should this happen.
- Theives "stoll a laptop" containing your information. Don't these stories in the news make you want to kick the guy's ass who not only stoll the computer but lost it too? What kind of self respecting company uses laptop computers for offline storage? Aside from seeking monitoring, you should find someone else to do business with.
- Inside Job. How else does a conartist find a job at a bank? They start out with such a clean record. Walk right in and help clean house. Fortunately, there are pleanty of checks and balances to make sure that you can be confedient that the man at the bank isn't double dealing or salami slicing.
- Dangerous Liaisons. That one night stand you had, where was you wallet? OK, maybe you didn't have an affair, but if your missing money, and the new person you are having relations with is suddenly gone and/or is spending your money, don't rule out the ones you love. Remember that a good relationship requires communication and trust. If he or she is not telling you they borrowed the money or if they decide to take advantage of you trust, it is probably best to end your relationship.
- The Ultimate Inside Job: Your family! Most people can trust their family. In fact, most of the time your family can help you set up an account at the bank as they have done it themselves. But then of course there are the disheartening stories about how parents stole from their kids accounts or the kids stole from the parents accounts. Families don't steal from each other!
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Layaway seems to be an effective form of preserving credit, but it requires patience. Something that credit cards bypased and instead let you make payments after the fact which as we now know is probably not the best idea if you are trying to pay for the fancy items you want to get for Christmas if you are doing lay away in november, unless you just need to make two payments.
But many places no longer do layaway. I remember when I was a kid, my mom took me to pick up a winter coat she had put on layaway at JCPenny. But Places like JCPenny, Sears, Dillards, Macy's, Walmart, Target, and K-mart don't have a layaway department anymore.
Now with online shopping, there are things, that even with credit, make you wish there was layaway for. While you aren't going to find Layaway on eBay, Places like Amazon.com, Overstock, Shopping.com, Best Buy, Circuit City, and of course all of the places mentioned in the previous paragraph could benefit from reinstating that program.
Think of it like this: The best time to buy a TV is at the end of football season in Feburary. If Football starts back up in August, then the TV you put on layaway is yours after making six months worth of payments. The same goes for buying baby needs. It takes nine months for a baby to develop, so why not pay over that nine months toward baby furnishing rather than nine months of credit payments that can go up after birth?
As a computer expert, I've often wondered to myself "Gosh it would be nice to afford that laptop, but I can't pay for it all in one sum and I certainly don't want to pay for two laptops with my credit when I only bought one laptop." College books should be the same way, but it requires the professors to decide what books they should use before classes start.
Layaway should be manditory in both paying for technology, books, furniture, clothing, and other items. But the credit card industry decimated layaway.
It sure would have been nice to do layaway even before we had this credit crisis. It would be even better if online retailers got with the program.
posted by Bushido Hacks
11/12/2008 12:12:00 AM
