Comments on: Anchoring Minimums

By: Rrrr Matey I’ve Been Anchored! | Out of Debt Help

Rrrr Matey I’ve Been Anchored! | Out of Debt Help — Fri, 26 Nov 2010 01:20:01 +0000

[...] What talk about Anchors you say? On Gail Vaz-Oxlade’s Blog yesterday she had a post about Anchoring Minimums. After reading that post I realized that with this last debt I’ve had the anchor shackled to [...]

By: jenny

jenny — Tue, 24 Nov 2009 20:02:56 +0000

wow, it pretty interesting. i just finish reading the actual article as well and i realized Stewart’s research leaves many questions unanswered. If you received grant money to follow up this work, what research question would be of interest to you?
I just think there are more detailed needed to this follow-up report from neil stewart =)

By: Amanda

Amanda — Sun, 22 Nov 2009 17:07:06 +0000

I noticed when I lived in the States that there also must be laws about font sizes. My US Visa had the minimum payment in a huge font. I had to hunt around on the bill to figure out what I actually owed. If I had poor literacy, or poor vision, I would probably pay the minimum simply because I couldn’t read what my balance was. Not true of my Canadian visa, where both numbers are clear.

By: Tanis

Tanis — Fri, 20 Nov 2009 11:51:37 +0000

When i was a student, i got a student credit card. never having used them before i was pretty nervous about it and used it only in emergencies. after about 3 years i had my computer basically die. I had been saving up and had the money to pay for it, i just had to go and pick it out. well i ended up needing to buy it online with my credit card.

so i have a $700 limit that’s been with me on that card for 3-4 years with a good repayment history(I paid in full ever since i got it). I call the credit card company and ask to have my limit raised so that i can make this purchase. Their one and only important question was how much did i make per year. As a student, only working summers, i made abotu $5000 a year. Now what would you think they would give me for a credit limit(i never asked for a amount)? 1500, 2000………..no a $3700 new limit! they were just waiting for me to over do it and end up paying hundreds of dollars in interest.

After finishing school i started work and wanted to open a line of credit for emergencies (since i was broke coming out of school and wanted better interest than what was on my CC) they looked at my good credit rating and asked me how much i wanted. on a unsecured LOC from a student just finished school they didn’t even blink when i asked for a random number like $10000. so far i’ve only ever used it one and that was for 5 days while i waited for a cheque i knew was going to arrive.

I’ve been pretty good with my credit but it would have been very easy to end up like some of the people on gail’s show. and after my small experience geez, i wonder how we came into a recesion….TOO MUCH CREDIT!

By: Rita

Rita — Fri, 20 Nov 2009 04:38:54 +0000

“Mrs T. says:…financial advisor” I spoke with at the bank suggested I might consider changing my current “unsecured” LOC to a “secured” LOC. When I explained that I didn’t want to make any changes because I planned to pay off the credit line promptly and plan to no longer use it, she said something to the effect of “Well, a lot of people use credit lines to do home improvement projects or take a trip…. blah, blah, blah.”

I had virtually the same conversation when I was seeing what was the best rate my bank could give me on my LOC! Needless to say I opted to stay with an unsecured LOC.

I don’t even know where the minimum payment box is on my credit card statement nor what the current rate of interest is. I ALWAYS pay it off in full each month so the total owed box is all I care about.

I do know that credit card companies are always trying to up my credit limit and I phone them and tell them to put it back to where it was. If I did have a major purchase I couldn’t pay for with cash, why would I be stupid enough to put it on a credit card which has interest rates of 20% (or whatever the going rate is) when I have a LOC at 6.75%? They always seem a bit surprised when I tell them that, which makes me wonder how many people fall into their traps. From watching TDDUP I’m afraid far too many people do.

By: Pam

Pam — Thu, 19 Nov 2009 14:30:21 +0000

Aha! I knew there was a reason I only looked at the amount I owe the CC company and not the minimum they want back from me each month!

I may be in credit card debt, but i’ve been on my own repayment plan for a while now – making decent payments back to the company each month. I’m not in a position of being able to pay it off each month yet but I am definitely taking firm, regular strides towards that goal. Not as big a fool as I thought I was for paying more than minimum.

By: Ann

Ann — Thu, 19 Nov 2009 14:17:10 +0000

@ Diana – Yeah, I managed to pay all my bills on time too using the traditional methods. Imagine! But there was a better option available for me, someone who prefers to spend time making money instead of making bill payments, and I took it.

And imagine this: my statement applies to those who are making late payments (and, thus, not you). I’m saying they shouldn’t because there is a solution for their problem. Why aren’t they applying this solution?

By: Alexandra

Alexandra — Thu, 19 Nov 2009 13:29:29 +0000

@Diana – I don’t rely on my computer to pay my bills – they (credit card balances included) are paid in full the day they arrive – I recently moved and was checking websites to confirm that my change of address had been updated properly so that I wouldn’t miss a bill

@ Suzanne – I see it at the Casinos too – once or twice a year (depending on how I take my vacation time) I like to take a couple of hundred dollars out of my “fun money” account to play Poker. My stomach also hurts when I see people take cash advances and also use the Casino’s ATMs. I like to “people watch”. Some of them look like lost souls when they leave.

By: Rrrr Matey I’ve Been Anchored! « Canadian Savings

Rrrr Matey I’ve Been Anchored! « Canadian Savings — Thu, 19 Nov 2009 13:03:56 +0000

By: d

Thu, 19 Nov 2009 12:28:24 +0000

I am pretty good with my money. I have a visa jar and put cash in there when I spend on my cc. I didnt realize that if not paid in full then had to pay interest on whole amoung!!

By: Risa

Risa — Thu, 19 Nov 2009 06:36:50 +0000

I’d really like to find a financial advice book (or write one! ) that explicitly talks about the idea of minimizing the amount of interest you pay over your lifetime (while still doing all the things you want to do, like buying a house, going to university, buying a car, etc.) It just seems to me that one component of ending up with a decent net worth over a lifetime, AND having a more fulfilling life, is to minimize interest payments–put that money instead partly towards savings and partly towards life experiences (or even “stuff”!) I think it would be an enlightening exercise for many to sit down and calculate how much money they have spent on interest over their lifetime–especially when they contrast it to how much they’ve got in their RSPs, RESPs, TFSAs, etc, or how many trips to Europe or other life goals those interest payments could have bought. Not all interest is avoidable (e.g. mortgage), but it can certainly be minimized.

By: KG

KG — Thu, 19 Nov 2009 04:44:12 +0000

I too pay my credit card off bi-weekly. I use it as a tool to rebuild my credit as we had a bankrupcy after a job loss (and no work in our area)and were discharged 2 1/2 yrs ago. We moved out west from the maritimes and life has improved dramatically. There is well paying work and our credit score is rebuilding nicely, we have money in the bank, putting money into RRSP’s, a small mortgage and vehicles paid for in cash. I always say it really doesn’t matter to me what the interest rate is anymore as I have no intention of every letting it accumulate interest. We are doing fantastic now, pay cash, track our money and live a balanced life. What a welcome relief after years of struggling. I now live the Gail way and advocate it to everyone I know.

By: Stephanie H.

Stephanie H. — Thu, 19 Nov 2009 03:33:59 +0000

This doesn’t really suprise me at all. I use CC as a tool. I always know how much has been charged to the CC and where the money is coming from to pay for every cent. I also always know within a few dollars how much is in my checking and savings accounts. I actually will pay my card off a couple of times a month. I can’t even remember the last time I received a statement showing a balance for my credit card. I actually thinks of my credit card as being linked to my checking account, it makes you think before you chard.

By: tigerlily

tigerlily — Thu, 19 Nov 2009 03:06:16 +0000

WOW. I actually heard about this, or a very similar, study in another context and did not apply it to credit cards. I’m going to do exactly what Gail says.

By: Chris

Chris — Thu, 19 Nov 2009 02:08:45 +0000

@Geoff – Sure thing it was absolutely my ex who spent the money, but the bank did him no favours.