Balance Transfer Credit Cards – When Does It Make Sense to Use Them?

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Dave Ramsey and other popular financial pundits are fond of saying things like “You can’t borrow your way out of debt!”

The advice is to those that would like to open up a new credit card for a balance transfer, or get a new home equity loan or home equity line of credit in order to pay off their current debts.

And generally speaking, borrowing money to pay off borrowed money is a losing game.

Their advice is for those that can’t handle the financial responsibility of paying off the debt and spending less than they earn at the same time.

If you continually spend more than you earn, no amount of balance transfers or new lines of credit will save you.

Since many people calling into the financial shows can’t handle that responsibility (they are up to their eyeballs in debt currently, right?) the advice points against this strategy.

However, that doesn’t mean transferring a balance from one credit card to a new one is always a bad idea.

If you are smart about how you handle the balance transfer it can actually save you thousands of dollars in interest and result in you being debt-free a lot earlier than you would have been otherwise.

How Does a Balance Transfer Credit Card Work?

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First Comes a House, Then Marriage?

Did you live with your spouse before getting married?

If so, you’re not alone.

More and more Americans are choosing to live together before getting married.  According to a CDC study, 48% of women interviewed between 2006 and 2010, ages 15 to 44, had cohabitated with their significant other.  This trend has been on the rise, so it’s not surprising.

When you consider the level of student loan and credit card debt some adults have when leaving college, living together may also be prompted out of financial necessity to pool resources and be able to afford living expenses while paying down debt.

A New Trend — Buying a Home Before Marriage

Did you buy a house with your spouse before you were married?

The opportunistic housing market with low housing prices and unbeatable interest rates combined with the trend for many couples to cohabitate has sparked a new trend — buying a house together before getting married.
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Celebrating Memorial Day 2013 and Links

Memorial Day is a great long weekend for most people in the United States.

But the point isn’t to take a day off just to go to the lake for a cookout.

Memorial Day, originally titled Decoration Day, is to honor and remember the men and women of the United States Armed Forces who died during their service.  Take some time to think about that this weekend as you enjoy your time off.

Having an extra day off is a great time to get your finances straightened out. Here are some good reads for that:

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Blue Cash Preferred ® Card from American Express Review – More Cash Back and Free Amazon Prime

Does it seem like you spend a ton on groceries and gas these days?

Yeah….me, too.  Here’s a card that helps ease the pain of that spending with some great cash back rewards on gas, department stores, and the best we’ve seen on groceries.

It’s the Blue Cash Preferred® Card from American Express credit card, another card in the “Blue” family of American Express cards.

They’re offering a decent Welcome Bonus right now, too – if you charge $1,000 to the card in the first three months, you get 100 in Reward Dollars.  AND you can also get a free year of Amazon Prime if you satisfy the bonus requirement.  Nice!

Now Let’s Dig Deeper Into the Blue Cash Preferred® Card from American Express

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What Is A Secured Credit Card?

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Just like bank loans, where there is secured and unsecured borrowing by businesses, credit cards as a form of consumer debt can also be either secured or unsecured.

Credit cards, as most of us know and use, are unsecured.

The money is lent to card users without any collateral against it and it is up to consumers to pay back the account balance later and if not, the card issuer loses (well, they will go after you but there is no guarantee they get their money back).

When the possibility of not paying back by a credit card holder becomes a serious concern, either because of the applicant’s bad credit in the past or no established credit at all, a card issuer would require certain amount of funds to be deposited as collateral before a credit line can be issued.
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How to Start an Emergency Fund

One of the best things you can do for your personal economy is to start an emergency fund.

Your emergency fund can help protect you against financial setbacks, since it provides you with a little extra cushion to draw on.  Rather than turning to debt, you can use money in your emergency fund to cover unexpected costs.

Experts recommend that you save at least six months’ worth of expenses in an emergency fund.  So, if you spend $3,000 a month, you need to have $18,000 in an emergency fund.

That’s a daunting task.

How can you get started when you have that huge amount of money hanging over your head?

Here’s How to Start an Emergency Fund

Break It Down

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Second Marriage? Have a Financial Date Before You Tie the Knot

With a divorce rate that is commonly quoted as being 50%, second marriages are common. 

However, according to the Wall Street Journal, many experts cite the divorce rate of second marriages to be 40%.

Second marriages come with more baggage — ex-spouses, stepchildren who may or may not like the new step parent, and, of course, financial complications including spousal support and first family obligations, just to name a few.

It’s no secret that money disagreements can be one of the top causes of divorce.

According to a study conducted by Jeff Dew of Utah State University, “Couples who reported disagreeing about finance once a week were over 30 percent more likely to get divorced than couples who reported disagreeing about finances a few times a month” (The New York Times).

So how do those in second marriages, who perhaps bring more money issues and baggage into their marriage with them than they did their first marriage, avoid financial conflict?

One strategy is to have a financial meeting before they marry (and some may argue before they even get engaged).

Make sure to consider these financial topics before that next marriage:

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