Dominica Island Blog: Sharing Every Dominican Moment with the World

In the last five years Credit Card have literally exposed in the Caribbean. Not long ago, the only people who had credit cards were professionals like lawyers, doctor, accountants, etc – now anyone can own a secured debt or credit card. Yep, once you’ve a steady income and you can meet the month payments you can own some plastic. In fact banks now are literally cramming these cards down people’s throat – on the other hand they’re trying to convince as much merchants to hook-up a credit card machine in their business.

In all the hype of trying to get as much merchants hooked up many of these bank forget to educate merchants on how to protect themselves against credit card fraud. Over at CONSUMERIST.COM published a very information post on the 10 Thing You Might Not know About Your Credit Card.

If you’re a merchant or someone who owns a Credit Card (s), I urge to take some time out to read this article. I’m positive you’re going to learn something new card, and merchants will learn ways to protect their business. Some highlight points are:

• Merchants Cannot Charge A Surcharge For Using A Credit Card, However, They Can Offer A “Cash Discount”
• Merchants Cannot Require A Minimum Transaction Amount
• If Merchants Suspect You Of Fraud They Are Supposed To Call With A “Code 10″ (in USA only)
• Unsigned Cards Are Not Valid And Merchants Can And Will Refuse Them

By the way things are going, soon we will being to see a high in credit card - knowing what to do to protect yourself from being a victim of credit card fraud in your best line of defense.

10 Things You Might Not Know About Your Credit Card [CONSUMERIST.COM]

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Yesterday I wrote a post on how powerful your piggy bank can be just by collecting the extra change in your pocket at the end of each day, and I thought it would be fun to write a post on the different ways to trick yourself, to get around obstacles, to boost your accounts, without it hurting.

For a lot of people in Dominica improving their finances improves their happiness - in general. I know lots of people who are happy only when they’ve money to spend. So I though it would be important to share stuff that’s worked for me.

I’m in the best financial shape in my life, despite having one source of regular income which is my job. Thanks to my penny-pinching program I’ve eliminated all my debts and I now able to save as much as I can.

Here’s what works for me — please note that, I’m not saying they’ll work for everybody. Share your tips and tricks in the comments!

Use more cash. Instead of charging things to credit cards or debit cards. In the past three years it’s much easier to own a credit card(s) – in fact banks now are literally begging you to apply for a card. Using cash for non-bill spending such as eating out, gas, groceries makes the spending more real, and there’s an added advantage of knowing when you’re out of cash, instead of spending more than you own.

Small monthly savings transfers. I got this idea from my grandma, who automatically deducts $20 a week from her check to savings. I decided that I could live with $100/month without really feeling it — it’s a relatively small transfer that I barely notice, and I save about $1200 a year.

Stay home. Going out makes you more likely to spend unnecessarily. You eat at restaurants or go out drinking with your friends every weekend. It’s hard to avoid spending when you’re on the road. Instead, stay home, and find free entertainment. It’s also a great way to get closer with your family.

Cook at home. I know, it seems more difficult than eating out. But it doesn’t have to be hard. Throw together a quick stir-fry with some vegetables and either boneless chicken or (my favorite) mince meat. Not only is this much cheaper than eating out, but it’s healthier.

Exercise. Staying healthy is the best way to avoid costly medical bills later.

Pay savings and debt first. When you sit down to pay your bills, make the first bills you pay be your savings transfer and your debt payments. If not, if you pay them last … you’ll often end up shortchanging them. But if you pay them first, make sure you can still pay your rent or mortgage, utilities, groceries and gas …

Find happiness in life, not spending. Many times I meet people buying lots stuff because they think (subconsciously perhaps) that it will bring them happiness. They just HAVE to have the latest gadget or shoes or cars. It’s so fun! And yet, you buy that stuff, and you’re only happy for a day or two at most. Then you just need to buy more. It’s a never-ending story. Instead, learn to love life. Find joy in nature and the people around you. Do something you love, be it exercising or reading. There’s so much in life to make us happy, there’s no need to find it in spending.

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This post was guest blogged by Dan Tanner of dan-ruth-tanner.com

Here in America, where everyone has credit cards and automatic teller machines (ATMs) and the Internet make banking and purchasing a 24-hour/7-day-per-week proposition, people are supposed to be somewhat sophisticated, or at least not completely naïve, financially. But that is not the case, and as a result our economy is in crisis, not just from the cost of the war in Iraq and Bush’s deficit spending and the imbalance of trade, but also because people consistently make bad choices against their own self interest. The home finance market meltdown is but one example. Sure, everyone in the picture – borrowers, lenders, brokers, bankers, traders, bond insurers, and even politicians – share in the blame, but none of it could have happened if the borrowers had exercised common sense in the first place.

Dominicans can learn from the miserable American example. My wife Ruth and I have weathered hard economic times and avoided these pitfalls. Both of had parents who were tempered by world wars and the Great Depression, and passed on to lessons that we heeded and which I’ll now share. Remember these three rules:

• 1.Know the difference between what you want and what you need.
• 2.Be patient.
• 3.Nothing is free.

I’ll illustrate these rules by giving examples:

Know the difference between what you want and what you need. My mother had an older brother and one younger. My older uncle did well in business and would make loans to his younger brothers and sisters if they needed money. He would always ask what the money was being borrowed for. It had always been for some real need; a rent payment, to pay a doctor, etc. Payback of the loans was always a matter of honor. A payment might be missed, but that was infrequent.

It was never stated, but well understood, that if for some reason a loan could not be paid back, my older uncle would not be putting his younger relatives and their families out on the street – he was not like a bank. One day his youngest brother asked for a loan and when asked what it would be for, he replied that he wanted to buy a TV set. My older uncle refused him the loan, telling his young brother that he did not need a TV set, he merely wanted one. Too often, people can’t make that distinction, and then they can’t wait for what they want, leading to the second rule.

(more…)

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