REWARDS CARD

Credit cards can be bad things or good things depending upon how one uses them. If you do use them, it is wise to pay them off monthly and not carry a balance. When you do this, you will be known as a deadbeat in the credit card industry. I used to think that deadbeats where the ones that did not pay their bills. Now if you pay off your credit card monthly and do not allow the credit card companies to earn any interest off of you, you officially become a deadbeat in their eyes.

Don’t worry about the credit card companies. They are still making money off of me. They charge the merchants 3% for every purchase I make with my credit card. So if I purchase $1,500 in a month, the credit card company makes $45. Just imagine if I carried a monthly balance of say $1,500 at 11.24%. Then their haul would be $45 for monthly purchases and $14.32 interest for a total amount of $59.32 for the month. Now multiply this by thousands of accounts and you can see why money lending is extremely lucrative. All that the credit card company did was provide for an unsecured loan. Not much sweat off of their brow, but plenty off of yours.

It does not make sense to own a credit card that does not have any benefit to it other than getting an unsecured loan. There is no incentive for me to use it. I might as well use a debit card, check, or cash. There is no difference in using a credit card that you pay off monthly and these other forms of payment. For me to use a credit card, on a regular basis, requires the credit card company to give me an incentive.

I have two credit cards. One is used for making monthly purchases and the other is used in case of emergency because it carries a fixed rate of 7.9%. The one used for monthly purchases is a reward card. I use it to make almost every one of our monthly purchases. I just got through depositing a $50 check just for the privilege of using this card. This is a better rate than I could get on $10,000 deposit in a Certificate of Deposit paying 3% (which is $25.47). Of course, I do not always get $50 a month. Most of the time, it is $25. It takes a while to accumulate $10,000 and then receive a paltry 3% a month is almost not worth it.

I have to purchase a certain brand of gasoline that pays me 5% on each purchase. I work part-time as a vendor and so I fill up the delivery truck every other week which gives me $8 in reward money a month. I receive 2% on travel and dining and 1% on all other purchases. This means that just about every monthly purchase is put on the card. These amounts add up. If you are not able to generate $25 for a month, your rewards carryover to the next month. This system works.

DEBT FREE!

Money is essential to living. No money means that we cannot survive long. This is why people call it "making a living" for that is exactly what it is. Money is a life or death issue. Money is not neutral. It is to be used to maintain life. The Bible does not condemn money. Why would the Bible condemn something that is vital to maintain life? What the Bible condemns is the love of money, because the love of money is idolatry and this is clearly forbidden by the Second Commandment.

What is debt? Debt is a loan for goods or services. It is borrowing money for something that you do not have the money currently to pay for. A loan can be useful, such as a business loan or detrimental, putting essentials on a credit card and not paying the credit card balance off on a monthly basis. Debt is negative because it is something that is taken away when figuring net worth. It is not something you own, but something you owe.

Debt is getting something today that you have not earned the money for yet. Debt is thus unearned. Paying back debt is based upon future earnings. This means that in a sense you are mortgaging your future when you go into debt. Debt limits your freedom. When you are in debt, you are working for your creditors, not for yourself. This means that you are paying for someone else’s living and taking away from your own living. Thus, debt is a form of death.

We live in a world where there is no neutrality. It is either life or death. Every item can be put into one of these categories. Being in debt is living on borrowed time. Your time no longer is yours. It belongs to your creditors. They expect to be payed back and so they want you to be out working for them. This is a situation of bondage and slavery. Debt puts you into chains. Some debt is necessary at times, but it should be limited and manageable within one’s budget.

I have just paid off all of our debts. We are now debt free! This was a goal of mine that I made last summer. What is good about it is that I was able to pay off all of our debts in less than a year. When you save money on a weekly basis, you can build up a big enough amount to pay off credit card debt with one payment. Even if you pay more than the monthly minimum on credit card debt, it will take you years to get out of debt this way.

The credit card company is getting rich off the interest you pay, while you get poorer. They keep gaining, while you keep losing. It is time to get off that never ending treadmill. Pay these vultures off. The key to reducing debt is to take the emotion out of it. Most people are emotionally attached to their money. Money must be viewed from the vantage point of life. If more money is going out than coming in, then death will occur. It is called bankruptcy. It is a form of death. Whatever you do get debt free and really live life.

RIDING IT OUT

I had been talking to someone who lives in Florida. She was telling what it was like to go through two hurricanes. In the first one, they sought a safer clime inland. She lived on the eastern coast of Florida in Hobe Sound. She said that a lot of other people had the same idea and the congestion was unbearable. She vowed that her and her husband would ride out the next hurricane.

Sure enough, the next hurricane came and they rode out. Riding out a hurricane means that you batten down the hatches, as much as possible and you wait until the storm passes. You know, at some point the storm will leave your area. It is a matter of being patient. When the storm finally passes, then you can access the damage. This is something that you cannot do while the storm is raging.

Hurricanes are something that are beyond our control. A hurricane is considered to be an act of God. In a similar way, we have no control over the economy. The economy is bigger than any one of us. It requires the attribute of omniscience to understand all the ramifications involved in an economy. The government clearly lacks omniscience, no matter how godlike it claims to be. They still cannot turn stones into bread.

REO Speedwagon did a song called Riding the Storm Out. This is good advice in regard to our present economic situation. Prices are rising on a daily basis with no end in sight. We know that at some point, they must tail off. If they do not then hyper inflation will cause a complete collapse of the economy that will take years to recover from. The reasons for this period of price instability are many and some are very complex.

Essentially, it is a law of supply and demand issue. The reason for the present maladjustment between supply and demand is increased worldwide demand and the lack of present supply capacities to meet that increased demand. Any type of crop failures will contribute to a lack of supply. These are things that will correct themselves overtime. What cannot be corrected by the market and by supply and demand is government intervention in the marketplace.

For the economically challenged, they will blame business for price gouging. The government even passes laws against gouging. Any gouging will be short lived and is an exception and not a rule. Governmental policies always gets a free pass from these people. This is because they are not bright enough to see that the governmental policies leads to crisis after crisis. The government implements a policy that fails and then implements another that fails and then the blame is invariably shifted to the business world. If only businessmen were not so greedy for obscene profits, we would all pay lower prices.

Businesses are subject to the law of supply and demand. Government policies are not subject to the same policies. Government possesses the legal monopoly of coercion. One governmental policy that has failed is the constant lowering of interest rates. This has encouraged people to borrow money at below market rates. This gives the borrowers a false sense of security. This forces the prices of the underlying assets to rise. Now someone can afford a bigger house than they need because the interest rate is lower. It leads to a situation of too much money chasing too few goods.

Government regulation of the oil industry has forced prices upward. Environmental regulations make the refineries have to change to different blends during the spring and summer. This causes the price of gas to rise. Of course, the government gets a free pass when it comes to a gallon of gas. Each gallon of gas has Federal and States taxes built into it. Since the consumer only sees the price of a gallon of gas, he falsely assumes that all the money is going to the oil companies. He does not see the check from the oil companies to the government agencies. This is the way the government would have it. Like Satan, the government seeks to hide in the shadows and have the dupes blame businesses for the rise in prices.

When something is beyond your control, the only thing you can do is control what you can. With rising prices, living frugally becomes all the more essential. Those who live frugally as a matter of course are not as affected by rising prices as those who are spendthrifts. The self-disciplined and self-governed have great advantages over others no matter the economic climate. They are not deep in debt.

This is another thing that you can control, your amount of debt. The wisest thing to do with debt is to pay it off. No ifs or buts about it. Once paid off, you will have more money available to handle the extra money necessary to offset rising prices. This is essential in riding the price rise storm out.

BUYING PRINTER INK

If you own a computer, you probably also have a printer. What you type on the screen remains in your computer. If you want your output, you will have to print it. Printers require ink and lots of it. Buying a new print cartridge can be an expensive proposition, especially if you own a Lexmark printer, like I do. Some printers today are themselves a disposable item. These printers are the same price as buying a new printer cartridge.

It dawned on someone one day that printer cartridges could be reused. All you had to do was refill the cartridge with ink. This has brought down the price of buying printer ink. Some stores have places where you can refill your cartridges yourself. I have never used these myself. I can just imagine getting ink all over my fingers. I would prefer to have this service performed by someone else. Isn’t the division of labor a great thing? Let someone else get their fingers inky.

I take my empty cartridges to Cartridge World, which I believe is a franchise. I thought I saw on their sign that the name was trademarked. They refill my printer cartridge for about half the price of buying a cartridge retail. This is the way that the frugal operate. Why pay retail when you do not have to? I do not understand why anyone would pay retail when there is Cartridge World.

In my local area, there is a coupon book that contains a $2 off coupon for a refill at Cartridge World. The other day, when I went to refill my cartridge, I did not have a coupon with me, so I thought I was going to have to pay their full price. While I was waiting, I saw a coupon book on their reading table. I began to look through it and found the Cartridge World coupon. I tore it out and used it in making my purchase, thereby saving the extra $2.

If you have a cartridge refill store in your town, you will save money on ink by visiting them and inquire whether they have a coupon that will save you more money. It pays to be vigilant on every item that you purchase.

DISCOUNT CARD RIPOFFS

Many stores require discount cards to get the store’s discounted price. With some stores, it requires filling out of a form. Some stores require that you pay them a yearly fee for the privilege of getting a discount. General Nutrition Center (GNC), Barnes & Noble and Books a Million are just some that the Frugal Accountant knows of. There may be more.

Question, why should the Frugal Accountant have to pay a company a fee to get a discount? This reminds the Frugal Accountant of multi-level marketing schemes where you have to pay the company to sell their products. What is most amazing about these fee based discount cards is when the Frugal Accountant attempts to explain to the cashier about the way that these cards work and the cashier begins to argue with him.

Take for example GNC’s Gold Card. You have to pay them a yearly fee of $15 to get 20% off of the selling price of their products. To get this discount, you have to purchase your products usually within the first seven days of the month. If it is the eighth day of the month and you need their product, it is too bad for you. You are going to be paying full retail. This means that you have to buy all of your vitamins according to their schedule. This is inconvenient. What happens if you forget to buy your vitamins on their schedule and you run out mid-month? You do not get to use your Gold Card even though you have paid the company for the privilege to have one.

The Frugal Accountant does not like a company telling him when he can use his discount card. If you have already paid them for this privilege of having a discount card, then you should be able to use it anytime. If not, then the Frugal Accountant’s attitude is he will not shop there.
Back to arguing with the cashier. The Frugal Accountant tries vainly to explain to the cashier (who is asking him if he wants a Gold card and the Frugal Accountant tries to explain why he does not one) the way the card works. To get a GNC Gold Card requires you to pay them a $15 yearly fee and in return, you will get 20% off of their products for the first seven days of the month. To receive your $15 value, you have to purchase $75 of products to break even ($75 x 20% = $15). After this initial $75 purchase, then you start to benefit from the discount.

Remember, this is an annual fee. So every year, you get to repeat the same process over again. The cashier will tell you that you are getting your 20% savings right away. This is true. They give you the 20%, but it does not become any discount until you purchase over $75 of products. This is the part the cashier does not comprehend nor do most of the customers.

The advantage for the company is that they get this fee every year and those who get the Gold Card are usually regular customers. This gives them a core of dedicated buyers. Just not the Frugal Accountant who is frustrated by this system. GNC has been sending the Frugal Accountant coupons in the mail. The Frugal Accountant takes advantage of these. There is only one product that the Frugal Accountant purchases from GNC and these coupons allow him to get this product at a discount without having to purchased a Gold Card. Why pay retail, if you do not have to?