When was the last time you took a look at your credit card APR (Annual Percentage Rate)? You may think you know what the bank is charging you for the use of their money, but you might be surprised to find that terms have changed and you're now paying as much as 18 to 20%. The U.S. average is around 18%, and I believe that is much more than you have to pay—especially when you've been a good customer with that bank.

So what do you do if you discover that you are paying too much for your loans? Well, quite simply, make the bank lower your rate. Sound impossible? More than half of the time I've been able to make my banks lower their interest rates. The trick is to have the right deal-breaker.

A deal-breaker or BATNA (best alternative to a negotiated agreement), as William Ury, author of "Getting Past No," would say, is what you will do if you don't get your way. It's the threat of leaving the car dealership if they don't agree to your price, or the I'll-call-my-lawyer option if you c (more...)

It is well known that money is the #1 reason for divorce! Money is very important in your relationship. It’s the blood that flows through the financial veins of the family. If there is a problem with its flow, everyone in the family will suffer!

Take this test with your spouse/partner to see how compatible your philosophies and monetary strategies are when dealing with money and debt!

You both need to take the test without looking at the answer key, or each other’s answers. Print two tests, one for each of you. Circle your answer for each question then, after both are completed, click on the link for the score key (at bottom of this page) and calculate your score.

1)

I think that my parents were very good with handling money.

True

False

2)

Looking back I feel that I was good at handling money when I was younger (ages 10 to 17).

True

False

3)

I believe that money is very important to our relationship.

True

False

4)

I think it's best (more...)

Scott,

I would like to know what the formula is for an amortized loan. How exactly do they calculate each payment? I suspect that all the interest for the loan term (i.e., 30 years, 15 years, etc.) is loaded up front in some way, but I would like to know exactly HOW? I want to teach my teenagers about this. I think it's very important for everyone to know.

If everyone understood these things that affect us all, there would be fewer people getting into financial trouble.

Thank you.

--Maria

Maria,

Thanks for writing! That's a great question and one I will truly enjoy answering! My background is in Engineering and math and I do love math. It's a good thing too, because doing the math has helped me make the right buying decisions and avoid being tricked countless times.

However, I must warn that the explanation of the formula to calculate loans is quite involved so be ready to get an Algebra refresher.

First thing to address is your suspicion that loans are "loaded up (more...)

Scott,

Here's my question. My husband and I want to buy a home being built in a new development. Our present home worth $260,000 has no mortgage except a $30,000 home equity loan. We need about $15,000 down payment for the home being built. Should we open a home-equity line of credit to pay the down payment? We will be selling our existing home so everything will be paid back at the settlement. If not, where is the best place to get the $15,000? We have several credit cards with 0 balances. Should we take a cash advance on one of those? Thanks.

--Marian

Marian,

Great question!

Coming up with the down payment for a house is always a major concern. When my wife and I purchased our house we had to use our credit cards, and other strategies, to come up with the cash. However, this is risky because mortgage companies want to be sure they track all the money for that down payment. They don't want you to borrow from your credit cards because you must come up with actual cash or els (more...)

Do you suppose it might be possible to have a sufficient number of consumers declare bankruptcy that the entire economy might implode upon itself?

Does history repeat itself? I suspect it does. It may take on a different appearance but its essence often times does come full circle. Let me illustrate with a mini history of credit and money.

Though credit was first used in Assyria, Babylon and Egypt 3000 years ago, an article at Newsweek MSNBC, suggests that early civilizations had far higher interest rates and crueler punishments for failing to repay loans than we have today. It seems that in Athens for example, enslaving debtors was common practice but was eventually seen as impractical as the farming class all fell into debtor's slavery. The outcome was no crops grown resulting in no one having anything left to eat.

The Babylonians' Code of Hammurabi set rates at 33 percent but the Roman Emperor Constantine set a much lower rate at 12.5 percent. Then the Church went on a cru (more...)