How to pay off credit cards

Debt is a fact of life for most people. Yet, getting out of debt is possible when you set your mind to it. The thing to remember about debt reduction is this simple fact, if you pay down debt every month rather than adding to it, it is only a matter of time before you will be back in the black. The question is, can you do it in a reasonable time frame, or will it stretch on indefinitely?

A good time frame for eliminating debt that represents 1/3 or less of your annual income is three years. For example, if you make $30,000 a year, and you have built up $10,000 in credit card debt. You would have to come up with about $330 a month for three years if you were paying 9% interest on that credit card debt.

Financial experts generally agree that the best way to chip away at your debt is to tackle the highest interest rate debt first. So, if you had one credit card at 9% interest but another at 14% interest, you would be much better off getting rid of the higher interest rate card first, to lessen the impact of compounding interest. The only reason to tackle a lower interest debt first is if it is small enough to eliminate quickly so you get the psychological impact of getting rid of one of your worries.

Here are some strategies to consider.

Making Extra Income

If you did a little moonlighting work on the weekends or an evening a week, you might make half or even all of your monthly debt reduction goal. This is less painful than saving, unless you really dislike the moonlighting work. Maybe you can get part time second job over the holidays, or through the summer. Whatever you do, it helps to apply all of that extra income to your debt and resist the urge to splurge.

There are websites that will pay you to write articles. You can also make crafts and sell them on Etsy, Ebay, or Craigslist. It’s also possible to resell things you buy at thrift shops and garage sales on Ebay.

Spend Less

Spending less than you make each month is easier said than done.. Well, consider the fact that if you simply brown-bagged your lunch every day instead of eating out, you would save at least $5 a day. With 20 work days in a month, that’s $100 right there. You can save another $50 a month by buying food in bulk and freezing portions to use later. Next, consider cutting out some monthly expenses to the tune of $50 a month. Perhaps you can eliminate premium channels on your cable bill, or cancel cable all together. With digital TV signals for the major networks being free, it’s not as bad a sacrifice as you think.

There are many blogs out there that give you thousands of tips for frugal living–everything from avoiding paper products like paper towels, to how to burn less gas in your car by altering your driving habits.

Experts also agree that simply by tracking all of your spending in a spending diary can help you avoid unnecessary purchases. Think about those books you buy at books stores (instead of going to the lending library), or those cups of coffee you grab at the convenience store or coffee shop.

If you smoke, add it all up and see what your annual cost is. Quitting will help both your pocket book and your health.

So, the bottom line is it might take you three years, but as your debt gets less, paying it down actually goes even faster because you are spending less in interest payments on that debt.

Obviously, a prepaid MasterCard can help you manage your finances and avoid adding to your debt.

Kardashain sisters exit prepaid card market fast

America’s fascination with celebrities also applies to the prepaid card market. Take for example the Kardashian Kard, a prepaid card that was marketed by the Kardashian sisters who are famous for being famous. PUlled from the market after only a month, financial experts such as Suze Orman strong criticized the card for having some of the highest fees ever put out there for a prepaid card. According to CNN, Connecticut Attorney General Richard Blumenthal blasted the card’s issuer, University National Bank, questioning the legality of the card’s “pernicious and predatory fees.” The now defunct card featured a $7.95 monthly fee, and $1 fee just for loading money on the card, and a $1.50 fee for calling customer support.

The Rush Card is perhaps the best known celebrity branded card. It is aimed at low-income African Americans by hip hop mogul Russell Simmons (not Rush Limbaugh).

One wonders which actress or musician will put out his or her own prepaid debit card.

The fact is, celebrities often put their names on products without having direct oversite of the business. They take a cut of the profits, and you may pay a premuim, or higher fees, just because the card is associated with a celebrity.

We like Dollar General for deals.

Dollar Generals do sell prepaid cards, just like a Walgreens or any other discount store. You can find prepaid Visa and prepaid MasterCards at Dollar General stores. They will be hanging on a kiosk with prepaid phone cards.

The problem with these cards, if you consider it a problem, is that you can’t easily research the company behind the card. What fees do they have? What sort of customer support can you expect? Can you check your balance online? In contrast, getting a MiCash prepaid MasterCard is an online process. Look, you are already on our website, so why not click around and learn more about our card

Prepaid Credit Cards at Dollar General

A lot of people confuse the terms “prepaid credit card” and “prepaid debit card.”

Dollar General in Every Town?

Bloomberg reports the biggest of the U.S. dollar discount stores, had a record decline in New York trading after reporting slowing growth in same-store sales. Fact is, there aren’t too many more places Dollar General can go. They are already in many small towns. Hence, the company is focused on same store sales. It, like many merchants, like people to use prepaid debit cards to shop there.

Do you want a prepaid card that looks attractive when you hand it to a store clerk?

If you are looking for the most attractive prepaid card, you are not alone. When prepaid card holders have been asked on surveys why they favored one card over another, many report that they wanted a black prepaid card or a pink prepaid debit card, or some other reason other than a card’s various features and benefits.

Benefits of a Black Prepaid Card

As you can see from this picture, the MiCash MasterCard is black. It’s a subtle photo of a curving ceiling, but we have to say it looks sophisticated. Perhaps it is an airport terminal for the savvy world traveler, or the curving ceiling of the Washington DC Metro. In any event, black is a great color for a credit card or prepaid card, because it suggests sophistication. Think evening wear. Think stability.

Living Social and Groupon are the two big names right now in offering local deals.

This week Google announce it was buying Groupon, a website launched in 2007 as a way for consumers to get great local deals on everything from restaurants, to retail stores, to day spas. You name it. It has taken off like wildfire, through social media such as Facebook and Twitter. All you do is sign up with an e-mail address, and tell Groupon where you live, and the site will automatically show you deep discount deals for your local area. It started in major cities but is now in 300 local towns nationwide and growing fast. Retailers love it because they get a flood of new business they wouldn’t already have. For instance, a local bakery in Chicago offered a special 50% off on muffins, and had to work around the clock to fill 10X their normal muffin orders for that day.

There are numerous other sites like Groupon. Another popular one, tied deeply into Facebook, is Living Social. If you “fan” Living Social, you will similarly see local deals for your area. A deal on Living Social might be as deeply discounted as 90% off but only available for one day. Also, you can often purchase a $50 gift certificate for eating at a restaurant for just $25. It’s like printing money!

No Free Checking for You

News reports indicate that the days of free checking accounts being so easy to get are waning.

Lot’s of people these days with no bank account–no checking and no savings–are turning to prepaid debit cards as way to manage their money safely and conveniently. This is because they cannot get a traditional debit card, tied to a bank account, so the prepaid card route is a natural alternative. Of course, we hope they consider the prepaid MasterCard for our low fees and excellent customer service. A common phrase to describe people without a bank account is “the unbanked.” Of these, some simply cannot get an account due to bad credit or being on the Chexsystems list. For others, they either don’t wish to have a bank account or they don’t understand what it takes to get one.

Did you know that one fifth of all U.S. households are unbanked, and half of the unbanked have college degrees? This statistic is provided by the Journal of Financial Transformation. With the growth of, in particular, government use of prepaid card products to provide better and more cost-effective services to the unbanked, it would seem that providing prepaid cards to consumers would be attractive to companies, and it is. More and more companies are offering prepaid cards. The ones that have been around for a few years, like MiCash, have name recognition and trust.

Should you want a checking account, you have to fill out a lot of paperwork, and the bank will likely want to know where you work and how much you make.  To get a prepaid card, all you need is to pass an identity check, meaning you use your real name and address and social security number.

So, in short, if you have no bank account, no problem. Just get a prepaid card and you can use it nationwide wherever debit cards are accepted by merchants. You can even get cash back with your purchases and avoid paying ATM withdrawal fees.

With the prepaid cards becoming more widely available in recent years, you can find them most all grocery store chains such as Publix, Costco, Meijer Foods, A&P, Ahold, and other chains. In fact there are so many regional grocery store chains that carry them, we’d be publishing a long list of stores that carry prepaid debit cards if we tried to list them all.

Buying a Prepaid Card at a Grocery Store

What you should know about the cards you get in a store, versus getting one online, is that you simply have more information available online to research the full benefits of a card, such as loyalty programs, the ability to text message to check your balance, and cash back bonuses for referring a friend. For instance, MiCash offers $30 for referring a friend (see details).

You can find the prepaid cards with gift cards, and hence it can be confusing to tell which is which. Reloadable prepaid cards bearing the Visa or MasterCard logo, can be used over and over again simply by loading more cash onto the card. They can also be used wherever prepaid debit cards are accepted around the country and even internationally when you are traveling.

A popular way to reload a prepaid card is through direct deposit from your pay, so instead of receiving a paper check, your pay goes straight onto the card, and you can then avoid paying check cashing fees. Another method is to get a Greendot Moneypak. These Moneypaks are a way to transfer money onto a prepaid card, and Greendot MoneyPaks are widely available in national grocery store chains as well. MoneyPaks are conveniently located by the prepaid cards. Makes sense.

Does your income and spending line up with this Infographic? Click on the image to see it full size.

Jar method of savings

We told you about the envelope method of budgeting a while back. Here’s another tried and true method of savings for special purchases such as Christmas gifts: “the jar method.”

Change Jar

If you are like me and empty your pockets out every night, you can quickly amass a small fortune in loose change. I use an empty milk jug. Be sure to wash it out and dry it very good before using it. If you have a bank account, your bank won’t charge you anything to convert your coins into cash. Most bank branches have a coin counting machine, and in just a few minutes, they can count your coins and either deposit the funds in your bank account or hand you paper money in exchange for all that metal. If you don’t have a bank account, many grocery stores boast a coin counting machine up front. These machines will keep 10% of the value of the coins they count. Coinstar is a reputable coin-counting kiosk.

Swear Jar

My uncle swore by his swear jar. It didn’t prevent him from swearing, but it was always a ready source of spending money. Every time he swore, he threw a dollar in his jar. I also had a landlord once that made his housemates put a quarter in a jar every time we forgot to tuck our chairs under the dining room table. People also keep this type of jar handy to create an incentive to stop bad habits such as drinking and smoking. The downside of the method as far as saving money, is that it does seem to work to break bad habits, so eventually, you stop the behavior and stop putting money in the jar.

Sacrifice Jar

To quickly save up a lot of money, say between now and Black Tuesday, go without a favorite vice such as a Starbucks coffee. Every time you skip that $4 purchase, put the four dollars in the jar. Suspend Netflix for a month, or your satellite TV, and put the money you saved into the jar.

Of course, whatever method you use, I advice not keeping all of your savings out in the open in this jar, in the event a loved one dips into it. You can withdraw most of the cash ever so often and hide it somewhere safe.  Likewise when you are ready to go shopping, and you have a MiCash prepaid MasterCard, use Western Union or a Greendot MoneyPak to put your cash on your card.