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Well, I was tempted to skip over this update and hope no one noticed.

Darn my honesty.

We went nowhere on debt this month. Why? Shopping Sprees? New TV’s?

Not so much.

Our extra debt payments went to insulating our home and to pay to my brother’s father-in-law (combined with some manual labor) for some desperately needed furniture.

Perhaps the best part of this equation? We have a nearly new fancy mattress. Now, sure, it would be difficult NOT to impress me. Our previous mattress was more than a dozen years old. But for TWO YEARS, I thought I was an insomniac.

Turns out. I’m not. I just needed a new bed.

I would say I’m losing sleep over this update but for the first time since we bought this house, the temperature in our bedroom is over 55 degrees even though it’s 37 outside and our mattress is zzzzzzzzzzz…

My Debt
• Original Debt: $38,495.86
• Added Debt: $1,781.50
• Total Debt: $40,277.36
• Paid: $ 31,662.16
• Remaining: $8,615.20

Broken Down

• Auto Loan 1: $0
• Credit Card: $0
• Student Loan: $8,615.20
• Auto Loan 2: $0
• Vet Loan: $0

Are Expedia credit card rewards truly worth it? Here are the pros and cons you need to know…

For starters, there are actually two different credit cards – both being an Expedia MasterCard issued by Citi, but the costs and rewards are different for each.

Expedia card w/ no annual fee
This one only has a $50 signup offer and the following rewards:

• For purchases on Expedia it’s 2 points per dollar
• For other purchases it’s 1 point per dollar
• There is 1 point given per 3 miles flown

Expedia card elite with $75 annual fee
For $75 per year this credit card gives more rewards and benefits. When you see the Expedia credit card $100 off promotion while booking a flight, it is referencing this card.

• For spending on Expedia, groceries, gas, and drugstores it’s 2 points per dollar
• On other spending it’s 1 point per dollar
• For each mile flown 1 point is given

This card also has some additional benefits such as getting one companion ticket with a new account.

Should you apply?

Overall, my Expedia credit card review is favorable for both cards, but I don’t think they are the best out there. We went over the “pros” above so now let’s take a look at the “cons”

The problem with double points on Expedia
I use Expedia.com on a regular basis to book my flights, however they aren’t the only site I use. So if I were to buy tickets from another site using the Expedia MasterCard unfortunately there wouldn’t be any double points earned.

Now you may think the solution is “Just buy from Expedia then!” but unfortunately it’s not that simple. In January 2011 it was announced that Expedia would no longer be offering tickets for American Airlines. That’s a big problem, especially considering that American Airlines is the biggest carrier at some airports I fly to.

With more and more airlines getting fed up with paying commissions to sites like Expedia I can’t help but wonder if we will see more of this in the future with other airlines. You already see some airlines advertise that their own websites have the guaranteed lowest fares – I like the idea of getting higher rewards even if I’m buying directly from an airline’s site.

The signup bonus is only average
Don’t get me wrong… something is better than nothing, but as someone that writes credit card reviews for a living, I can honestly tell you the Expedia credit card promotions are a big yawn.

The $50 for the basic card is definitely on the low end for a travel credit card. Even the $100 is still on the low end and when you consider the annual fee is $75 that means you are basically only getting $25.

What are the absolute best cards for travel?

Below are two sponsored offers which I feel are a much better value than the Expedia credit cards:

Citi ThankYou Premier card – This is a brand new travel card from Citi that has a signup bonus worth $200, free companion ticket every year, excellent rewards on spending, and no foreign transaction fee when used internationally. Check out this Citi Thank You Premier card review to learn more.

Discover Escape card – What’s so unique about this card is that you earn 2 points for every dollar spent – that means you are basically earning 2% on all your spending. To learn more check out this Discover Escape review.

Early this week, I had the pleasure of interviewing David Bach, founder of FinishRich.com and 8-time New York Times Bestselling author.

David’s new book is called Debt Free for Life. He regularly appears for series on Oprah, The Today Show, and Larry King Live.

Before we started the interview, David let me know that in his decade-plus experience with media and interviews – this was his very first Skype interview ever.

Viva la new media!

Below you’ll find our interview on good debt vs. bad debt, why America loves debt, stepping on the “debt scale”, the best way to pay down debt, and a new online tool – DebtWise – that helps you by automatically showing which debt to pay.

SPECIAL NOTE: You can win one of two hard-copies at the bottom of this post!

[If you cannot view the interview, click here to see it in your browser]

Below, I’ve included the full transcript from our interview. This one is really worth watching in full, but for those that can’t the text is below.

Hi everyone. It’s Baker from Man vs. Debt, and I have a special guest today. It is my honor to interview via Skype David Bach. David, thanks for joining us today.

It’s my pleasure. Great to be with you.

And if you don’t know David Bach, you may have been under a rock for the last 5 to 10 years, but he’s an eight-time—I think I have that right, David—eight-time New York Times bestseller, and he’s got a new book out, which I have in my hands. And that is Debt Free for Life by David Bach.

I’ll put mine in front of you. We’ll touch them.

Exactly. We’ll get it up there. I was sent the book last week. Your team sent me the book; thanks for that. And I did get to read through it and really enjoyed it. One of my most favorite parts of the book is, I think, on the first page of chapter one.

It’s you recount someone asking you your take on good debt vs. bad debt, and how that’s changed for you in the last few years. Can you share with the readers how that has changed, and what your view on good debt vs. bad debt is now?

Absolutely. What happened was, I do a segment every week on The Today Show called “Money 911,” and I’ve been doing it for two years now. We do it on Wednesdays. And two years ago, most of our questions started off, they were financial questions.

And what I started realizing over time was happening was almost all our questions are related to debt. I will tell you, over 75% of our questions are debt-related. Whether that’s credit card debt, mortgage debt, student loan debt—it’s all debt.

And in the green room I got asked this question, “What do you think about good debt? Is mortgage debt good debt? Is student loans good debt?” And I started answering like I’ve answered years in the past: “Yes, good debt is mortgage debt. If you borrow money to go to school, that can be good debt. If you borrow money to build a business, that can be good debt. But bad debt is credit card debt.”

I started answering with really what I would say is the standard answer, which is what we’ve all been led to believe. And I had this moment, kind of this epiphany sitting in the green room, where I looked at this friend of mine and said, “I’ve got to tell you something. This recession has really proven there’s no such thing as good debt or bad debt, there’s just debt.”

If you can’t afford to pay your debt, it’s all bad. And when you look at people who are losing their homes, they’re losing their homes because they have huge mortgages and they can’t afford to pay them. So I looked at her and I said, “I’ve got to tell you something. My advice to you is, pay your debt down as fast as you can. And there’s certain debt that’s worse than others, but really, the faster you’re debt-free, the faster you’re free.”

And that’s how I started the book Debt-Free For Life, was this idea that we have been led to believe—and it’s almost become like a myth—this idea that there’s good debt and bad debt. And that idea of good debt and bad debt has really led millions down the wrong path.

Yep. I can’t agree more, and I love—that’s why I said it was one of my favorite parts. I didn’t expect it to be there, but right when you dig in, I said, “I think I’m going to like this book,” right from the get-go, when you had that conversation.

And that leads us, I guess, why? My question for you is, in your opinion, why as a culture are we so addicted to debt? As a society or as a culture? Why do you think that is?

You have to go—Things have really changed. I go back to my grandmother. My grandma, Rose Bach, I’ve talked about in a lot of my books. And she was a Depression-era child. And if you have a relative that grew up in the Depression, they never wanted to have debt. My grandmother never had any debt. She didn’t—What’s your phrase? What do you say? Throw away the stuff?

Sell Your Crap, yeah.

Sell your crap. My grandmother, she recycled tinfoil before there was a green movement. She always paid cash for everything. And that’s how the Depression-era children grew up to be, and then they passed that on to the next generation.

Somewhere in the last, I’d say, two generations—really in the last 20-30 years, that whole philosophy of pay down your debt, have mortgage-burning parties, live free, is just gone away. And part of the reason it’s gone away is we have incentivized people to borrow more money.

Leverage, leverage, leverage.

I’m a huge proponent of home ownership, and I think it’s great that we get tax deductions. But I have to tell you, this whole tax deduction philosophy around borrowing money has really brainwashed people into thinking, “Great, I borrowed all this money, but I get a tax deduction.” In reality, who cares if you get a tax deduction if you still owe money? If all your income goes to making debt repayment, and you’re only paying interest, you’re really not getting ahead. So I just think we’ve been led down the wrong path, and I think Americans need a wake-up call. And they just got one with the recession.

Exactly. Again, I agree on every single point. Just shaking my head this whole interview, I think it’s going to be.

Moving on, I always like this question, to get it on different issues. For you, if I’m new and I come to you and I say, “David, I need help,” what is the very first step? For someone that’s deep in debt but they want to change, what’s the first step you would advise for them?

I’m going to go back to my own situation here for a second. It’s going to be completely on a tangent, but it’ll make sense. I’m on a juice fast right now. I’m making an effort to lose weight going in the new year, like a lot of people do. There’s two things in the new year you want to fix: your weight and your finances.

So every year, the first week of January, I do a juice fast. It starts my year off energized. I’m seven days into my juice fast; I started it early. So I feel amazing right now. But what’s the first thing I did? I stepped on my scale. My scale, I was at 150 pounds, which is not—155 pounds. And what I should be, Baker, is at 140. That’s my ideal weight.

So I know—Here, I step on the scale, I look down, I get depressed. I know I’m fat, for how I should be. And my goal is to get down to 140. Now I’m going to relate this to losing your debt. What’s the first thing you need to do? You need to step on the debt scale.

When people say to me, “David, I’m in debt. What should I pay off first?” How much do you owe, and who do you owe it to, and what does it cost? Every single time I’m out, I’m brought in to do TV shows and makeover shows—whether it’s Oprah, The Today Show, all these different TV shows—when I’m brought into people’s homes to do a financial makeover and they tell me what they owe, they’re always wrong.

In other words, I sit down and I go through with them—In many cases, I’ve gone into homes where—I did an Oprah show, the person, I was told going into their house they had $43,000 in debt. And when I totaled it up, they had over $90,000 in debt.

So the first step is, you step on the debt scale, and you look at “How much do I really owe? Who do I owe it to?” You list all your debt down. You look at the interest rate. And you have to do that first. That’s where you start, knowing exactly what you owe and how much it’s costing you. And then you start figuring out what order to pay it off in.

Exactly. That’s a great transition because I wanted to ask you—This is another interesting part. And I recognized this method, because I’m familiar with some of your past work as well. In the order to pay down debt.

Courtney and I, when we paid down our debt, we started with just the most emotional debt first. We didn’t use a given system. It just made sense to us and we went with that. And you have peers and colleagues that suggest anything from highest interest to lowest balance payment.

But you have a unique—I think it’s the method that you call the DOLP method, if I’m pronouncing that right. What is the DOLP method, and why is it beneficial for people to use that when starting to pay down their debt?

Super-simple. DOLP, first of all, it stands for done on last payment. I used to call it dead on last payment. Then my readers came back to me and said, “Yeah, but now that I’m debt-free, I don’t want to be dead.” So changed it to done. I listen to my readers. Just like you listen to readers on your blog, and so I changed it. So we call it done on last payment now.

And what done on last payment does is, it’s really simple. You list all your debt. I’ve got a little form you figure out. You take your debt, whatever it is, and you divide it by your minimum payments. And what that does is tells you how many payments it will take you to pay off that particular debt.

As an example, if someone’s got $500 on a Visa credit card, their minimum payment’s $50, they divide $50 by $500 and they find out it’s going to take 10 payments to pay it off. All DOLP does is it shows you which debt you have. It’s usually credit cards, but which debt you have, which will be the fastest you can pay off quickest.

What it does is it gives you the list and prioritizes it, so you know, this is my first, second, third, fourth, fifth debt. And the reason that’s so important is, what I teach is this. You make minimum payments on every debt, and you add all the extra money you can, then, to the number one DOLP category, which is the card or debt you can pay off the fastest.

Once that’s paid off, then you go to the next one, and you apply that money to the next one. Now, some people call this the snowball approach. Dave Ramsey calls it the snowball approach. Somebody was talking about that yesterday. It’s similar. It’s just a mathematical formula.

And the reason I teach it this way is that I don’t believe you should focus on highest interest rates first. I think the debt really is very much an emotional issue, and you need to see yourself make progress. So if someone’s got 10 credit cards, as an example, using this system, they quickly reduce the number of cards they have. So they see themselves making progress, they’ll have less chances for late fees or over the limit fees on those small cards.

But it’s that progress factor. “Wow, I can’t believe it! I actually got rid of one or two or three cards.” And that keeps them motivated to keep going.

And of course, they can more easily grasp their financial situation. Those people that think they have $43,000 and have $90,000 can see it when they have less accounts, they can see and feel and grasp it, which is an awesome way to pay down your debt there.

And we’re going to move on – I haven’t got a chance to fully use the tool, but you’re a big fan of Debt Wise, which is a new online tool. What I wanted to know—and you could even sell me on this, ‘cause I still need to go give it a spin, ‘cause it looks cool. What features of Debt Wise do you enjoy? Or I guess, what features excite you the most?

Here’s what happened. I’ve been teaching DOLP, this system, for over a decade. And as you know—I just saw your whole Unautomate Your Way to Wealth—As you know, I’ve written a book called The Automatic Millionaire. And what I’ve always taught people is, the more you can automate your finances, for most people, it’s easier because you don’t need discipline. And the problem with my DOLP system, the challenge, is that it’s manual. People have to write it all out, and then every month they need to go back and follow up. And they need to update their DOLP form.

And it’s amazing, because people have actually sent me, Baker—someone, we just did an interview for an AOL podcast. This woman, Genevieve, sent me all of her DOLP statistics going back to June of 2005. She’s got a DOLP team at work, and she had five years of data on her DOLP form.

Well, about a year and a half ago, I saw a banner ad for this product called Debt Wise. And I clicked on this banner ad and I said, “Oh my goodness. Who are these people? They’ve copied my DOLP system and they made it automatic.”

You call your lawyer?

I started going, “What is this tool?” Because how can they make paying your debt down automatic? As I clicked into the tool and went to see who the parent company was, the parent company was Equifax. And as I started playing with the tool, what I realized was, only a company like Equifax could do this, ‘cause they’re one of only three credit bureaus.

What Equifax does is, now with Debt Wise.com—Sorry, let me just shut that off for a sec. Take that in another room. We’re at my home right now in New York, as the phone’s ringing. What Debt Wise does is, when you go in to DebtWise.com and you put your information in, because Equifax is a credit bureau, they have all of your debt. They know what you owe.

So in seconds, Debt Wise pulls your debt, like a DOLP form and sticks it online, on a dashboard, and shows you: here’s all your debt, here’s what you owe, it’s your debt scale. It’s all automated, and it shows you—instead of you doing the math, it does the math for you and says, “Here’s your first priority debt. This is the one you should pay off first. This is the one you should pay off second, third, fourth, etc.”

And then every time you make a payment, because it’s being pulled off your credit file, they’re able to update it. So it’s the first time I’ve ever seen a tool that’s completely automated. For instance, Mint.com is a tool I’ve talked about in the past I like. It’s free, but you have to pull all of your data into Mint.com. Whereas with Debt Wise, there’s no data to pull. It’s pulled off your credit file. Then you can also add debts if Equifax doesn’t know about it.

I saw this tool, reached out to Equifax, said, “I can make this tool better. You need me on the tool. You need videos. You need more teaching tools. And let’s partner together.” And that’s basically what we did. I integrated it into the book, and in Debt Free for Life, what happens is first I talk about DOLP.

And I say, “But if you want an automated system, here’s Debt Wise,” and then we give you a free month trial of Debt Wise. It’s a paid service. It’s $14.95 a month. I think it’s just seriously the best deal I’ve ever seen on a debt reduction tool. It’s cheaper than going anywhere. It’s cheaper than going to debt consolidation. It’s even cheaper than going to a nonprofit credit counselor.

So for those who want to do it themselves, I think it’s the ultimate tool to get out of debt.

Absolutely. And your team, I’m assuming the team at Equifax has sent over another free month link as well. I’ll put that in the comments, so anyone that’s interested in trying that out, they can get a free month with your book and I think they’ll have a free month here below this video, so people can try that out.

That sort of wraps up the question I had. But I try to end every interview with asking if the interviewee has any questions for the readers of this site. And obviously you know how the websites work.

We can ask the question. A lot of times, we get really great feedback from the community here at Man vs. Debt. So I guess in closing, do you have a question for the Man vs. Debt readers that you would like to pose to the readers?

Yeah, I do. And you know what? Let me ask this question, and I think it would be a great question to ask people who are following you and having a lot of success. And the question is, for those who are following you, who are on the journey to getting out of debt, what was the catalyst that led them to make a decision?

There you go. That’s a good one. Yep.

Because what happens for me—And I’d suggest this to you when people come up to you, by the way, and start thanking you for the work you do—Everywhere I go, people will thank me. They’ll tell me the success that they’ve made and the progress that they’ve made, especially around debt.

I always ask, what made you decide? Because one thing I’ll say—I told everybody the first step was to get on a debt scale and figure out how much debt you have—but the truth is, the first real decision, if you want to get out of debt, is to decide.

There’s a moment in which you make a decision, and my experience with people who truly get out of debt, they don’t make an “I’ll try it decision.” They make a “I’m done. I want my life to go in this direction. I’m making a permanent change until I’ve reached my result.”

Which is exactly what it sounds like you did. And I don’t know—Out of curiosity, what was the catalyst?

The birth of our daughter. Our daughter Milligan, when she was born, the day we came home from the hospital, that was sort of the smack across the face. And we sat down and we just said, “Our life isn’t in line with our values. We make fun of the people who live like we’re living right now.”

And then that was the impetus when we decided that we’re going to sell everything and travel the world, pay off our debt. And over the next year, we did. And that was the start of the site. So I had a very tangible moment, and I’ve very interested to hear other people’s as well.

Awesome. Well listen, congratulations to you. I think you’re a fresh voice in personal finance, which—

Thank you.

Which we need.

Thank you very much. And I look up to what you’ve able to do and all the people you’ve been able to help. And I appreciate you taking a slice out of your day to join me today.

My pleasure. God bless. You have a great day, and good luck with everything. Have a fun trip.

We will. Thanks, David. We appreciate it.

Take care. Bye-bye.

Win a free hard-copy of David Bach’s “Debt Free for Life”!

David and his team have also given me two books to giveaway to the Man Vs. Debt community today!

There are two ways to get the book:

First, answer David’s question in the comments below.  He asked:

What was the catalyst for you to start your journey out of debt?

Answer that below, and I’ll randomize a winner on Monday morning (10th). There’s no need to do anything else!

For the second book, I’ll send a special link to those that subscribe to e-mail updates of the blog next week. I’ll randomize a winner from those who click on the link. This is a special way I can reward those who take the time to subscribe and read the email updates.

If you’d like to get those updates (and the link), you can sign up in the sidebar or below:

Thanks again to David Bach and his team!

I enjoyed the interview with David. You can find more information on David’s book and products on his website, FinishRich.com. Also, here’s the link for a free one-month trial of DebtWise (which David recommends in his book).

Let me know below what inspired you to get out of debt!

You may be surprised to see exactly how credit card interest works…

Credit card interest can be confusing, even for those who have been using credit cards for decades.  Sure, it’s buried in the fine print how credit card interest is calculated, but deciphering that legal mumbo jumbo is no easy task! So here’s a straightforward guide to help you.

How do credit cards calculate interest?
In the United States the vast majority of credit cards use the daily balance method – that means interest is calculated each day you carry a balance.

1. The daily rate is calculated
If your APR was 15% then your daily balance would be calculated as follows:

15% divided by 365 days = 0.0411%

So you would be charged 0.0411% each day a given amount is carried as a balance

2. Interest is compounded for each day
The APR advertised on credit cards is usually what is called the nominal rate (the rate before taking into account the compounding). Your effective interest rate will be higher because of daily compounding – each day your interest is calculated and added to your balance. That means the following day’s balance will be slightly higher (and therefore cost slightly more in interest).

But to what degree will daily compounding affect how credit card interest is calculated? Well, going back to the example above, the nominal 15% APR would actually turn into an effective interest rate of 16.18% if interest was compounded daily.

Of course payments, credits, and new charges will also be taken into account when calculating the applicable interest for each day.

3. The daily interest charges are added up
How credit card interest is calculated for an entire billing cycle is by adding up all the daily interest charges during that period.

Using the above example, the nominal monthly APR would be 1.25% (15% divided by 12 months) and the effective APR would be 1.258% if compounded daily.

Now you know how credit card interest works! However, there is something very important you may not know…

There is no grace period if you don’t pay your charges in full!
Many people assume if you don’t pay your balance in full, interest will only start accruing after the grace period. Unfortunately that’s not how it works.

Basically, everyone is charged interest from the date of purchase on their credit cards. However if you pay off your bill in full before the grace period, those interest charges are waived and you don’t pay them (nor will you ever see them on your statement).

However if you do carry a balance forward, those interest charges going back to the date of purchase will show up on the following month’s bill. This is why many are shell shocked when they see their interest charges for what they thought was just one month.

A reader shared that she is planning on taking a trip to Yellowstone National Park over the summer and asked for advice on how to save money on flights.

Other than recommending obsessively monitoring every online travel search engine (Bing, Travelzoo, Kayak) for months and doing a faux mystical rain dance to evoke the flight sale gods, I’m a bit short on good advice.

I always avoid summer travel since its peak rate season so I’m not much help.

Do any of you know the best way to buy a summer flight?

Q: What are the best credit cards for people with bankruptcy? I’m worried none will approve me.

A: Going through a bankruptcy is stressful enough as it is. So don’t add to that stress by worrying about things you don’t have to – like getting approved for a credit card – because guess what? Getting one is easier than you think! Here’s what you need to know…

1. Some banks will cater to you (but most will not)

When it comes to credit cards for bad credit or bankruptcy, you will want to focus on banks that are specifically geared to people in those situations. That being said, some “regular” banks do offer secured cards for bad credit, but the majority of them don’t.

2. Secured credit cards are your best bet

With secured credit cards, you put up a security deposit and that amount becomes your credit limit. For this reason, practically anyone can get approved for one. In fact, there are a number of credit card companies that offer guaranteed approval as long as you meet the basic requirements (like being a legal resident, 18+ years old, etc). These are the best credit cards for people with bankruptcy because your credit history will be irrelevant to the approval process.

On the other hand, unsecured credit cards will base their approval on your credit score and credit history. As you can guess, it’s next to impossible to get one with a recent bankruptcy on your record, especially in today’s economic environment.

3. Make sure the card issuer is legit

Most bankruptcy friendly credit card issuers you probably have never heard of before – that’s to be expected so don’t let it alarm you. After all, if it’ a bank that solely focuses on a credit card for people with bankruptcy, you would normally have no reason to do business with them.

That being said, watch out for the illegitimate companies out there. Some may not report your account to the three credit bureaus. Some may rip you off with excessive fees. So make sure you get your card from a legit company that is respected in the credit card world.

4. Don’t use a high percentage of your credit limit

I hear about so many people that get new credit cards to rebuild credit after a bankruptcy, only to overuse them. By that I mean using too high a percentage of the card’s credit limit.

A component of the FICO score formula takes into account what percentage of your credit limits you use. You may think using a higher percentage is better but that’s not the case. Why? Because the closer you get to maxing out your credit limit, the riskier you look… and your credit score suffers for it.

For this reason most personal finance experts typically recommend never using more than twenty to thirty percent of your available credit. So once you get your new credit card make sure you keep this in mind.

5. After having a card 9 to 12 months, try for a better one

The inevitable drawback of credit cards for people with bankruptcy is that they charge fees. Some charge monthly fees, annual fees, maybe even a processing fee. It’s hard to avoid these – you should expect up to $10 to $15 a month on average. This is why you will want to move onto a better credit card as soon as you are able.

So after you have had your card for 9 to 12 months – managed it well and re-established your credit – you should start looking for something better, hopefully something with no annual fee.

Which card should you start with?

Check out Credit Card Forum’s sponsored listing of credit cards for people with bankruptcy:

Best credit cards to rebuild credit after bankruptcy

On Saturday, we finished cleaning out our one-bedroom apartment and passed the keys back into our landlord. We walked across the street and spent the evening and night in our new home – on wheels – in a family member’s driveway.

Yesterday, we pushed off from that driveway and started the first leg of what will surely be a new, big adventure.

I’ve spent the last week trying to put together a huge “IT’S A NEW YEAR – WHOO-HOO!” post. I’ve sorted out December’s income (I made more in December than the rest of the year) and completed my year end income/expenses (which I’ll also share).

I’ve brainstormed what I did well and not so well in 2010 – which goals I hit and which I left shattered on the floor. I’ve projected passionate benchmarks which will guide 2011.

Here’s the thing – I’ve been working so hard on this summary/post, that I’ve been stressing myself out at the beginning of a new, life-changing experience.

Last night, I stayed up for a few hours after a day full of fun with several people here in Ohio (I’ll recount more in the first official travel update). I was feverishly working to get the post ready for today.

Suddenly, I realized something even more important than big resolutions or year-end recaps.

I realized that spending another minute stressing on this one project would likely cause me to miss being in dozens of moments with family and friends.

It wasn’t worth it.

I went to bed.

The mammoth post will come – probably tomorrow – maybe Wednesday. It’s information that’s important and that I want to share – just not at the cost of not soaking in the start of this experience.

There are million things on my to do list. We are making our way to Baltimore to potentially have this baby wrapped in a design. I’m finalizing things with a potential sponsor for the trip. I’m still learning how to use the RV and how to find an external propane station on the road (this is really hard).

But all of that can wait.

Scroll up and look at the picture at the top of this post.

Milligan could care less about wrapping the RV – lining up a sponsor – or putting out a kick-ass end-of-year post.

“This is fun.”

“I wonder where we are going.”

“This apple tastes delicious.”

If I had to guess, those would be her top three thoughts/priorities.

I think we can all learn something from that – I know I can. No matter how ambitious your goals are – and no matter what elaborate plans I share with you tomorrow (or the next day) – let’s all make one resolution that’ll matter in 2011.

Let’s all not forget to live in the moment.

No goal of mine is worth losing that this year.

I’m honored to have you guys along for the journey…

Xoxoxo,

-Baker

photo by the amazing Courtney Baker

I received my husband’s registration for his truck in the mail yesterday. I noticed it looked a bit naked, the registration had a big empty white space.

Curious, I took a second look and noticed the void was a representation of our new debt free way of living.

Yup, the ‘Lender Information’ section was bare for the first time since we’ve been married. Heck, for the first time EVER.

We paid off his truck in July and seeing that big empty space brought back the same feelings I experienced the day I mailed the final check. I received two reminders since then that my fight with debt is ending. The pink slip made me giggly and the registration nearly made me cry.

Debt has haunted me, but I’m finally starting to clear the ghosts out of the closet.

It’s a wonderful feeling.

Q: Are there any credit unions that offer secured credit cards?

A: Credit unions can be a great place to turn to for credit. In fact, my auto loan is through a credit union. However when it comes secured credit cards from credit unions, there are some important things you need to take into account:

• Some credit union credit cards are actually managed by banks
  You would think credit unions that offer secured cards would also manage them? Well, that’s not always the case. Years ago (before the financial crash) there was a huge trend in credit unions selling off their credit card portfolio to big banks. So if you get a card from one of the many credit unions that did this, you are essentially just getting a bank-issued credit card.

  Not every credit union has sold off their card business. According to an article I read on Suze Orman’s website, of the 7,900 credit unions in this country, approximately half of them (3950) issue offer credit cards. Out of those about 10% are managed by banks (thanks for the stats Ondine Irving).

  How do you know if a credit union’s card is manage by a bank? Dig through the fine print on the application and if, for example, you see FIA Card Services, that is actually Bank of America. Infibank and Elan are a couple other common big name banks to keep an eye out for.

• You will need to join the credit union to get their cards
  One of the drawbacks about credit unions that offer secured credit cards is that you will have to become a member, before you can get their card. If you want to do that anyway, then it works perfect. However if you don’t, then it may be a waste of time and money. The time it takes to open and manage your membership and the money for any fees you might incur (i.e. Penfed Federal credit union requires a $20 mandatory donation to join if you aren’t affiliated with the military).

• You may have to attend educational courses
  Reportedly, some credit unions that offer secured credit cards (or cards for those with bad credit) will run courses or seminars and ask you to attend. I doubt this is a common practice, but you still hear about it nonetheless. The frustrating thing about this is that most people who have ruined their credit have already learned from their mistakes and know what they did wrong, so they feel this type of requirement is pointless.

Conclusion?
Although Credit Card Forum does not normally advertise credit union credit cards, we do think they are a great option for many. They aren’t very good for rewards, but if you have good credit you can usually get a card with a decent APR, making them a smart choice for those that carry a balance.

As far as secured credit cards are concerned, if you choose to go the route of a credit union to get one, just make sure you do your research and know what you’re getting yourself into.

If you would like to check out some great secured credit cards from banks, click below to check out our sponsored rankings which are constantly being updated with the best cards:

Compare Secured Credit Cards To Rebuild Credit

There’s no guaranteed way of how to win a credit card dispute, but understanding the process may help your odds.

What is perhaps the most important credit card benefit is your protection against unauthorized and fraudulent purchases. Over the years, I can’t even count the number of times a credit card dispute has saved me (many times!). Below we will go over some very important things you need to know about disputing a credit card charge.

Know the difference between “billing errors” and “disputes of quality.” It’s very important to understand that these are two totally different things and there are different credit card dispute rights for each.

First, let’s talk about billing errors…

Credit Card Dispute Rules For “Billing Errors”

The Fair Credit Billing Act (FCBA) applies to the following “billing errors” on credit cards:

• Unauthorized charges. (Sidenote: Federal law 15 U.S.C. § 1643 limits a cardholder’s liability to a maximum of $50 for unauthorized charges. That being said, most reputable credit card companies will waive that $50 and give you zero fraud liability.)
• Charges for goods and services you didn’t accept or weren’t delivered as agreed upon.
• Charges that have the incorrect amount or date.
• Charges incurred when payments/credits are not properly posted to your account – i.e. If you return an item and the credit never shows up on your account.
• Charges in which you ask for an explanation or written proof of purchase, along with a claimed error or request for clarification.
• Charges incurred due to the credit card company not mailing the statement to your current address. The change of address must have been provided in written form and the creditor must have received it at least 20 days before the billing cycle ended.
• Math errors

Important: The FCBA credit card dispute rules and rights do not apply if you are disputing the qualify of goods and services. So if you purchased something defective, it would not be considered a “billing error” (but we’ll talk about disputing the quality of goods and services a little bit later).

Credit Card Dispute Process For “Billing Errors”

If you’re disputing credit card charges as a billing error, here’s an overview of the process….

Step One: Notify The Credit Card Company

You will you need to notify your creditor in writing in order to qualify for all of the above billing errors, except for “unauthorized charges” which can be reported over the phone (but it’s still highly recommended to also report them in writing, in case you have misclassified their category).

Personally speaking, I have handled my disputes over the phone with most major credit card companies and have never encountered any problems by going that route. However, since the FTC website says you must mail a credit card dispute letter in order to be covered, then you should do that… especially if it’s for a large amount. Here is a credit card dispute letter sample.

When you mail the letter, make sure you send it to the “billing inquiries” department. This is probably a different address than where you mail your payments so call customer service to find out where you should send it.

There is a credit card dispute time limit! The letter has to be received by your creditor within 60 days after the first bill was generated which showed the error (but for “unauthorized charges” there reportedly is no time limit). If you send a letter, make copies (and copies of any receipts you included) and send it via certified mail with return receipt so you have proof it was sent.

Step Two: The Investigation Process Begins

Within 30 days of receiving your dispute, the credit card company must respond to you in writing to confirm they received it. If you choose to only make the complaint over the phone, you still should expect to receive the written confirmation in the mail. In my experience it has usually arrived quickly; within 7 to 10 days.

Once the complaint has been received the credit card company must resolve it within two billing cycles, which is typically 60 days. If for some unusual reason your billing cycle is longer, the maximum amount of time the process can take is 90 days.

During the credit card dispute process investigation, you will not be required to make payments or pay finance charges on the purchase(s) in question.

Step Three: The Investigation Concludes

The dispute will either be ruled in your favor or the merchants favor. Here’s what typically happens in each situation:

Dispute ruled in your favor?

The credit card company will mail you a letter which states your billing error complaint is valid and the appropriate corrections to your account have been made. This includes permanently removing the actual charges, accrued interest charges, applicable late fees, etc. resulting from the disputed transaction.

Depending on the circumstances, the creditor may say you owe a portion of the disputed amount. For example, if you bought something for $100 and were charged twice ($200 total) and had disputed that entire amount, then the credit card company will probably come back and say you owe $100 of the disputed transaction.

If you are found to be partially responsible, you will owe any applicable finance charges and fees that would have normally accrued (from date of purchase to the present) on whatever amount you’re responsible for.

Dispute ruled in seller’s favor?

If the credit card dispute process finds that the disputed charge is valid (not a “billing error”) then you will be responsible for the full amount, plus any interest and fees that would have otherwise accrued. The letter will provide details explaining what you owe.

If you disagree with the decision, you do have the right to try and refute it. However to do so, the credit card dispute law states that you must respond in writing within 10 days after receiving the ruling.

If you are going to refuse to pay the disputed amount, you can indicate that in your written response. However you should be aware that the credit card company will have the right to start the collections process after you tell them you won’t be paying the disputed amount. If it is reported to the credit bureau, legally they will be required to notate the fact that it’s money the customer doesn’t believe they owe.

Credit Card Dispute Process For “Quality of Goods & Services”

As mentioned, if you disputing the quality of goods and services received, the above credit card dispute rules for “billing errors” will not apply. That being said, you will be entitled to other rights of protection if:

• The purchase is for $50 or higher and it was made within your home state or 100 miles of your billing address. (Note: In some states internet purchases made from your home would qualify).
• You have already made a “good faith effort” to try and resolve the problems with the seller

If both of the above circumstances apply, you are allowed to take the same legal action against your credit card company that you can take under state law against the seller (so in a nutshell, if the seller violated state laws which entitle you to remedies, then you can go after your card issuer for those same remedies).

If your credit card issuer happens to also be the seller (or if a special business relationship exists between the issuer and the seller) then the distance requirements and $50 threshold do not need to be met.

5 Things You Need To Keep In Mind

1. Document everything
As with any dispute, it’s always a good idea to document everything very thoroughly. Keep multiple copies of all correspondences and receipts. Make a log of your phone calls. If communicating by mail, make sure it’s sent certified with return receipt so you have proof.

2. Remember pre-existing agreements
Judging from posts on the credit card message board, the #1 mistake I see made is that people forget pre-existing agreements they have with the seller. You may have already signed away your rights to a dispute and not even know it.

For example, an increasingly common practice among contractors is to have their customers sign away their rights to a credit card dispute when you hire them (this is very sneaky and should be a major red flag to not hire them). Later on when a customer files a dispute about the quality of service, the contractor weasels out of it by sending that signed agreement to the credit card company.

Even if you did unknowingly sign away your rights, it doesn’t automatically mean you will lose (depending on the circumstances and the state you live). But it very well could kill your dispute, so you should always avoid waiving this right.

3. “Unauthorized charges” probably offer the best protection
I have heard of disputes which were essentially the same (with the same seller) but one cardholder filed as an “unauthorized charge” and another filed as a different billing error. Despite that the circumstances were for all intents and purposes the same, only the man who filed as an unauthorized charge won.

Now this does NOT mean you should mis-classify your dispute. But if it truly is an unauthorized charge, make sure it is filed as such. Sometimes, a rep may file it under some other billing error and that will change the way it is handled, since the credit card dispute rights will be different.

4. Penalties for the card issuer not following procedures
The credit card dispute laws must be followed by your card issuer.

• Was your complaint acknowledged past the 30 day time limit?
• Did the investigation take more than two billing cycles?
• Did your card issuer threaten to report you to the credit bureaus for not paying while the dispute was still in process (that can only be done after).

Those are just a few examples. The bottom line is if the credit card issuer failed to follow the process (and you can prove that) then they may not collect the amount in dispute or any related finance charges, up to $50, even if the charges turn out to be correct.

It is also possible to sue the card issuer when they violate the Fair Credit Billing Act. If they’re found guilty, you may be awarded damages, plus 2x the finance charges accrued – as long as it’s between $100 and $1,000.

5. This article is not legal advice
I am a consumer just like you. I am not a lawyer or law professional. Therefore you should not misconstrue anything mentioned here as legal advice. Also, keep in mind that this was written at the start of 2011 and credit card dispute rules may have changed since then. Although every reasonable effort has been made to ensure accuracy in this article, verify all information mentioned here with the FTC and consult an attorney for advice.