A 2001 MIT study published in Marketing Letters found:
In studies involving genuine transactions of potentially high value we show that willingness-to-pay can be increased when customers are instructed to use a credit card rather than cash. The effect may be large (up to 100%) and it appears unlikely that it arises due solely to liquidity constraints.
No wonder Dave Ramsey encourages people trying to get out of debt to cut up their credit cards.
I have had a Capital One Mastercard for about 10 years. My interest rate has been 4.99% for as long as I can remember. I received my statement for October to find that my interest rate had jumped from 4.99% to 13.5%.
David over at MoneyNing urges us to all take action on the money tips we read online—not just read them and then forget them, or dismiss them as unrealistic, or tell ourselves they don’t apply to us. “We read the tips, agree that it makes so much sense, then we sit there and flip on TV to watch other people make money while we spend money watching them.”
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How filing a fraud alert with each of the three major credit bureaus works, as told by a blogger who recently had to go through the process. [No Credit Needed]
“Guide to Transparent Investing” is a 53 page PDF about how financial advisers are ripoffs and you can do all your investing by putting your money in index funds. The basic principles they promote are to figure out how long you want to invest for, pick a portfolio based on your timeline and risk tolerance, and put the money in index funds. Set it, forget it, and spend more time doing the important things in life, like gardening and getting your scuba diving certification.
VirginMoneyUSA, which launches today, is a lending service designed to manage personal loans between friends and family, by taking care of documentation, repayment schedules, and reminders. At first glance, the service sounds like an intrusive middle-man; however, anyone who’s ever been on either side of a personal loan knows how delicate the situation can be, so we can understand the appeal of putting some distance between the personal relationship and the fiscal one.
A columnist at Get Rich Slowly describes how her family learned to focus on getting the most use out of the things they purchase, rather than using them once or twice and then moving on to the next new thing. While it sounds like an obvious tip, it can be a little harder to practice in real life—but, she writes, the results can be eye-opening.
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Risky mortgages weren’t just for the poor and financially unsophisticated, spikes in high-rate loans were seen across the income spectrum. [WSJ via Consumer World Blog]
Widows finds that she’s lost more than just a husband, she’s also lost decades worth of credit history, as creditors are unwilling or unable to transfer the joint accounts into her name. Takeaway: married couples, make sure your credit history is correct and listed under your individual name. Free credit report copies available at annualcreditreport.com.
This graph from GOOD and FutureFarmers shows the number of graduating seniors with more than 40,000 in student debt by 2004.
Validas is a new service that aims to help consumers save on their cellphone bills by analyzing their cellphone bills and providing suggestions about how they could adjust their plans and save money. To use it, you create an account, validate your email address, download your cellphone bill from your cell provider’s website, upload it to Validas for processing, then wait a few seconds for your report.
One in four adults incurred overdraft fees in the past 12 months, according to a new study by Gartner. One in six adults said they were more upset about hidden fees than getting their identity stolen and accounts jacked by a thief. Probably because you have better chance of getting your money back from the latter than the former.
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Don’t withhold more taxes than necessary, you could be missing out on valuable interest earnings. [Kiplinger]
When we wrote about the glories of subletting your apartment while on vacation, we mused that renter’s insurance might cover it if your guest damages or steals stuff. While talking to USAA today about our renter’s insurance policy we asked them about this and they said nope, it doesn’t. You’re still protected from all the normal things, like fire, flood, and falling space probes, but not by the actions of someone you’ve invited into your home. So, we’ll just continue to beware and use our best judgment and not sublet to sketchy people. Other people with lower risk tolerances will disagree, and we’re okay with that.
WiseBread asks an interesting question this week: what’s your frugal obsession? You know, that one thing you can’t stand spending money on: “Some people refuse to pay for bottled water; others refuse to shell out $4 to rent a movie when they can get them from the library for free.” Responses so far include software, soft drinks at restaurants, and gift wrap.
If your empty wallet makes you feel the same, one way to boost your spirits is to get rid of crap around your house you don’t need, writes Debt-Proof Living.
2. CURB THE CLUTTER. I don’t care how clean your house may be, if you have clutter it’s pulling you down. Clear your closets, drawers, cupboards, garage and counters of everything that you do not need or brings beauty to your life. Clean open spaces, tranquility and simplicity chase away feelings of poverty. Clutter invites chaos which leads to depression and feelings of deprivation.
Toss it, garage sale it, give it away, burn it. Unnecessary objects steal energy and attention. Freeing up physical space frees up psychic space and boosts your mood, maybe even giving you enough energy to tackle a project that will more directly impact your bottom line, like figuring out a way to make more money, or reducing expenses.
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