Category Archives: Credit Cards

How AKPK Debt Management Program Blogger Saves Money As Emergency Fund?

0
Posted by Vedis the DMP Blogger on January 30, 2010 – 3:20 pm
Filed under AKPK Debt Management Plan, Credit Card Debts, Credit Cards, Debt Management Tips, Financial News & Updates, Free Debt Reduction Tips, Saving Money, Spending / Expenses

Question: My wife and I know we should have an emergency savings fund, but with one income we have nothing left to save after paying expenses.

But I’ve been thinking of a way to deal with this problem. We charge about $2,000 in monthly expenses to our credit cards, which we then pay in full each month.

My idea is this: Instead of paying off the cards every month, I’ll make only the minimum required payment and save the rest. Once I’ve accumulated a decent emergency fund, I would then begin paying down the cards. Do you think this is a good strategy? — N.G., California

Doesn’t this sound familiar to many people? It definitely sounds familiar to me. ;-)

There was once upon a time in 2007 that hubby and I were living on one income. Life was tough then because there’s so little income in hand, yet there were so many bills like car and home loan installments, term loans, and as many as 15 credit card payments waiting to be paid every month!

It’s very difficult to save for emergency fund after paying all the expenses because there was literally no money left at all!

But since hubby and I enrolled in AKPK debt management program and hubby started his full time teaching job, we have been able to save money as emergency fund.

If you are thinking of paying the minimum credit card payments and saving the rest as emergency fund until you have accumulated a decent amount of emergency fund to paying down the credit cards, well, it may/might never come true.

Financial experts say so. And I say so; I did what the reader above thought of doing and it didn’t work for me. It’s either you find extra money/income or cut down on expenses or do both if you want to save money as emergency fund.

I agree with Walter Updegrave, the author of the article of Big No-No for Building Emergency Savings that, “If you can’t save today because you have no money left after paying your expenses, how are you going to pay those expenses, plus come up with an extra $xxx a month to pay down the credit card balance you racked up to accumulate your emergency fund?”

I also concur with him that it’s more practical to spend less than you make or cut down your expenses to save money.

Well, the reality is that there is only one way to save — and that’s to spend less than you make. There are a number of ways to do that. You can go the “cut the latte” route and avoid relatively small daily expenditures that add up. You can create a budget and then go over it line by line, looking for specific areas to squeeze. You can try two techniques that I’ve advocated in the past, focusing on big-ticket items or employing strategies that can effectively fool you into being a better saver. Whatever works for you. But one way or another, you’re going to have to find a way to pare your spending.

… But I also know that borrowing to save is an oxymoronic concept that’s more likely to create problems than solve them.

A Must Read For Malaysian Credit Card Holders: ‘Those Bloody Banks, Credit Card Companies and Bank Negara!’

0
Posted by Vedis the DMP Blogger on January 17, 2010 – 8:35 am
Filed under Credit Cards, Financial News & Updates

I, the AKPK DMP blogger, chanced upon this interesting article, ‘Those Bloody Banks, Credit Card Companies and Bank Negara!‘ by Fahri Azzat at loyaburok.com, at The Malaysian Insider.

You may have missed this article that relates how banks and credit card companies can be so unreasonable when it comes to credit card terms. Enjoy reading!

(Source) JAN 16 — Diana Chee Vun Hsai, like many of us owned a credit card. She had two. One from Citibank Berhad, the other from HSBC Bank Berhad. On 7 September 2008, HSBC called up her to alert her about her credit card being used. When she checked her purse, she discovered both her credit cards were missing. She notified both the credit card companies of the loss of her credit cards on the same day and lodged a police report at Dang Wangi police station about it the following day. She understandably thought that was the end of the matter. She was wrong.

On 16 September 2008, Citibank told Diana Chee Vun Hsai they were billing her for the unauthorized transaction of RM 1,859.01 done on 6 September 2008. She responded through her solicitors to inform Citibank that the limit of liability for a lost credit card was RM 250.00 as provided in clauses 15.1, 15.2 and 15.3 of the Bank Negara Guidelines BNM/RH/GLO-041-01 (“the BNM Guidelines”). Citibank’s lawyers replied pointing out to her that the terms of her credit card the crux of which is as follows:

“Our client imposes a duty on the cardholder to notify the loss one (1) hour prior to the unauthorized use and to provide proof of acting in good faith and exercising reasonable care and diligence to prevent such loss or theft of unauthorized use of the card before our client can exercise its discretion whether to resolve the liability or not. Such a clause is not in contravention of the Bank Negara guidelines.” (emphasis mine) Read More »

Don’t Want To Enroll In AKPK DMP? Then, Start Managing Your Debt Now!

0
Posted by Vedis the DMP Blogger on January 9, 2010 – 8:50 am
Filed under AKPK Debt Management Plan, Auto Installment Loans, Cash Is King, Credit Card Debts, Credit Cards, Debt Management Tips

You have a debt problem, but it’s not serious enough to get you into AKPK debt management program yet? Lucky you! If you don’t want to resort to enrolling in AKPK’s DMP or declaring bankruptcy in future, then make sure you start managing your personal debt now.

Here is Raymond Roy Tiruchelvam’s article on How to Manage Personal Debt.

THE “easier said than done” phrase latches on to this topic like ants to sugar. While getting into debt is made easier today with the many innovative marketing plans undertaken by financial institutions, getting out of if, leaves much to be pondered.

For those who do not see the light at the end of the tunnel, Bank Negara has introduced AKPK or Credit Counselling and Debt Management Agency. I am assuming a single source of funds being financial institutions, and not “ah-longs” and other unconventional sources.

There is actually one step to be undertaken prior to managing your debt, which is managing your cash flow. It does not mean that if one is a millionaire, there is no need for debt management … well perhaps there is no need, since the ability to source for debt is high, but everyone will need to manage their cash flow, let it be millionaires or paupers.

Let’s look at some steps that we can take to ensure that we are able to manage our personal debts so that we do not go into the “PN4” or “PN17” status (which for companies implies a financially distressed state).

Let’s start with liquid debts, credit card and car loans. For the former, never follow the minimum payment requirement of the bank, which is 5% of outstanding sum. The reality is that it does not diminish in 20 months (5% X 20 months = 100%) – which is the general misconception.

Instead, spread the payment over a reasonable payable period. For example, if you purchase a personal computer for RM1,500 perhaps, you want to make a RM300 monthly payment over 5 months, rather than pay RM75 in the first month, then RM71 for the second month and so on (assuming one follows the minimum 5% payment, excluding interest charge).

As a matter of fact, if one were to purely pay the 5% minimum payment, do you know that it will take 50 years for the sum to trickle down to RM100. And mind you, even with that, the debt won’t be fully settled. Read More »

A Free Debt Management Program Blogger Loves Reading Debt-Free Success Stories

0
Posted by Vedis the DMP Blogger on November 29, 2009 – 9:31 am
Filed under Credit Cards, Debt Management Programs, Debt Management Tips

Having been in a free debt management program since October 2008, I must say that reading news, articles or success stories of cutting up credit cards, paying off debts and living cash-or-debit-card-only lifestyle is very inspiring.

The success stories of getting rid of debts motivate me to keep on paying down my credit card debts through the debt management plan and most important of all, they give me hope that I can be debt free one day.

I want to be like Russell and Kathy Hildebrandt who successfully pay off $100,000 debt with DMP or Lisa Brough who was forced into a debt-free life:

Lisa Brough was forced into a debt-free life by medical disaster.

Her husband has Huntington’s disease, a degenerative brain disorder, and has been unable to work since 1999. The couple, who have three children, saw their finances suffer as a result. They ended up with $50,000 worth of credit card debt as Brough worked two jobs and still struggled to pay the bills and the high property taxes on their home in Westchester County, N.Y.

“I said to myself, ‘I can’t do this anymore,’ ” she recalled. “He was going downhill, and I had to figure out a way to get out of this. I couldn’t count on tomorrow because I didn’t know what tomorrow would bring.”

In 2005, she took drastic measures. She decided to sell her $350,000 home, pay off all the family’s debt, and move to lower-cost Cary, N.C., where she was able to buy a house for $164,000 house in cash.

Since then it’s been cash and debit cards only for Brough, 50, who has no debt of any kind.

My reasons of getting into knee deep debts were more or less the same as theirs. However, their ways, means or methods of getting out of debts may or may not the same as mine.

By reading and utilizing their tips on how to eliminate the debts and save money, I hope I can be free of credit card debts through the debt management programme in a few years’ time.

The success stories of others also make me realize that it is possible to survive and thrive without depending on credit cards!

AKPK & Banks Say Not To Worry About Late Payment Charges On The Monthly Statements?

0
Posted by Vedis the DMP Blogger on November 24, 2009 – 9:44 am
Filed under AKPK Debt Management Plan, Credit Card Debts, Credit Cards, Credit Counselors, Debt Management Companies, Debt Management Programs

AKPK Banks Late Payment Fee ChargesTell me you can still keep your calm after seeing the outstanding balance of your credit card as of today and in March is RM6,300 and RM6,400 respectively.

I think any reasonable mind will go mad or freaked out after seeing no noticeable decrease in credit card balance despite being in a debt management program, right?

This morning, I thought of doing a spreadsheet for all my credit card accounts. When comparing the figure of March and November statements of a bank, I was shocked to see RM6,300 and RM6,400.

How could it be? I had already been in AKPK debt management plan for one year, so logically, the amount owed should have dropped to less than RM6,000, right?

Ya, I was mad and freaked out. I knew it’s because of the late payment charges that showed up almost every month for the last few months.

I remember my Ipoh credit counsellor had told me before that there’s nothing to worry about the late payment fees. They would not show up anymore once the banks had everything updated.

I also thought the banks would remove the late charges from their record sooner or later, so I didn’t call or write to the banks. But after giving them so many months to get updated, the late charges still showed up in the statements.

Enough! Too much! So I gave AKPK Ipoh branch a call. As usual, the ever helpful Ms Lina answered the phone.

I told her about banks (except Public Bank) which still had the late charges printed on the monthly statements. After listening attentively to my complaint, Lina assured me not to worry about the late payment fees.

According to her, banks would stick to only collecting the agreed amount of outstanding balance plus interest charges. I hope the banks really do so.

To know the latest correct amount of each of my credit card, Ms Lina even gave me every bank’s phone number and name of person who is in charge of AKPK cases.

I did call one of the banks and raised my concern regarding the late payment charges. Again, I was reassured that there’s nothing to worry about the late fees.

AKPK DMP Blogger Is Free From $50 Annual Service Tax Per Credit Card!

5
Posted by Vedis the DMP Blogger on November 13, 2009 – 2:38 pm
Filed under AKPK Debt Management Plan, Credit Card Debts, Credit Cards, Debit Cards, Debt Management Companies, Debt Management Programs, Financial News & Updates, PayPal Withdrawals

Am I considered lucky to be able to escape from the new RM50 service tax a year on every principal credit card and charge card since I am now in AKPK debt management programme? So is hubby :-)

Imagine how much annual service tax hubby and I had to pay if we still had the 15 credit cards!! 15 principal credit cards from 6 banks. Phew, it’s RM750!

According to financial analysts, it is predicted that at least 30% of the holders of 11 million cards in circulation who have more than one card will have to pay RM100 every year.

You know, the applications for new credit cards dropped by 80% following the Government’s announcement of the service tax starting 2010.

Don’t you think this new imposition is good to those who are thinking of applying credit cards? It scares them off and thus they carry no credit cards. No credit cards mean no credit card debts, right?

When there are no credit card debts, people will have no reason to turn to non-performing loans, short-term loans, personal loans, debt consolidation loans, AKPK debt management programs, or bankruptcy easily.

It’s also good to those of you who have stacks of credit cards; you are forced to reduce the number of cards you own. Having fewer credit cards means you have to cut down on spending, retail purchases and impulse buying.

Also, you get to learn to use cash and debit cards. As a credit-card-debt woman who is in AKPK’s debt management plan, I must say that I love using cash and debit card now.

I have had two debit cards, Public Bank Visa debit card and Tune Money Visa debit card. Both cards are not used for retail purchases. Noop. They are only used for collecting PayPal money from my online income.

Since PayPal has now allowed Malaysians to link their PayPal accounts to their Malaysian banks or overseas banks operating in Malaysia, I think I can totally stop using and renewing my Tune Money Visa debit card.

As for the Public Bank Visa debit card, I will keep on using as a backup for PayPal fund withdrawals.