Archive for April, 2009

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What’s the difference between a Visa debit and Visa credit card?

It can be confusing but if you don’t fully understand the difference then it can end up costing you a lot of money!

The Visa debit card (or Maestro card or many other variations) is a card that allows you to pay for goods and services but the money comes directly from your bank account, thus you can only draw as much as you have in your account or up to the overdraft limit that you have. Usually, unless you are already overdrawn or it takes your account overdrawn, you won’t pay interest on the amount paid.

However, a Visa credit card is a line of credit granted by the credit card provider up to previously agreed limits. Each month you pay back either the minimum, a fixed amount or the whole balance. If you pay back the minimum or a fixed amount, leaving a balance on the account, you will PAY interest on the balance… and this can be a lot of money!

Know the difference between the two types of cards and keep a close eye on your spending. That way you won’t slip into any difficulty with money.

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Should I invest in a cash ISA? With interest rates so low and, worse still, savings rates so low, I have to question the wisdom and advice that some financial advisors are giving their clients right now and telling them to go ahead and invest in a low paying cash ISA.

All things being equal, it seems a nonsense to me. If you have money in the bank saved up for day to day emergencies, a long term savings plan in place for those larger items you want and around 3 to 6 months money stashed away for redundancy protection until you get another job, then I believe you should use all your spare savings to pay back unsecured (or secured) debts.

Let’s look at some figures to make it easy for you. You have £3,600 now and you’re not sure what to do. ISA rates are around 1% (say) but the debt on your credit card (ignoring introductory rates and special deals and assuming you are only paying the minimum) is around the 19.9% mark. “DO THE MATH! ” (as the Americans would say). To be able to earn enough to offset your credit card payments you would need to earn a credit rate of 24.875% (assuming you’re a basic rate – 20% – tax payer). Compare 24.875% against 1%.

Conclusion: PAY OFF SOME DEBT and start turning the tide of compound interest back in your favour.

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On 31st March I added  a post informing you of a rather nifty way you can make some money over a period of time that doesn’t cost you a bean, is easy to set up (have an account opened in less than 2 minutes) and whereby you can grow your own income simply by referring your friends and family.

Basically it works by using a different search engine to Google or Yahoo. These two are great search engines, but they don’t make YOU money. They only make themselves money. Why not take a small share of that pie by using a different search engine that pays YOU every time you do a real search on specific keywords. Just a ward of warning… you will not earn anything for searches on popular sites such as the BBC or YouTube or Facebook. However if you have  real need for information and you decide to search for it by using this search engine, you will earn around 2p per search. Not much I know, but if you do, on average, around 20-25 searches a day, by the end of the year you could’ve earned around £100… and that’s just on your searches alone! If you invite your friends and family, you make a small percentage on their income too.

All for FREE; can’t be bad! Scroll down to the 31st March post now and sign up for a free account.

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I’ve  just finished watching the BBC Panorama programme called “Life After Woolies” and was saddened to hear the hardship caused by the collapse of the retail giant in the UK and the struggles faced by ordinary people up and down the country. It goes without saying that I feel compassion for everybody that has been affected by redundancy, whatever their profession or job.

What saddened me the most though was the way in which each of the people interviewed never gave serious consideration to the fact that they might not always have a job. I live my life in the knowledge that tomorrow I may be made redundant and will lose my main source of income. That might seem pessimistic to some but to me it’s rather refreshing. It means that I am alert for opportunities to make money and I am continually searching and investigating and setting up ways to make PASSIVE INCOME so that I may attain true financial freedom. This is a quest that every person who is currently in a JOB should join. 

What is PASSIVE INCOME? PASSIVE INCOME is income that you receive but it is NOT tied to your job. It comes in to your bank account whether you work or not! It is income from things like property investments (buy to let income), royalties from writing a book, dividends from shares, income from a business and, the most common one, interest from a savings account.

One very good way is to start up your own part-time business, after work. Do some research, find a need and then fill it. Set up your own business and grow it to the point where you can let someone else do the work on a regular basis, leaving you to grow the business and multiply your passive income streams.

For those that might be interested in starting up a business and would like some easy to start business ideas that take little, if any, capital, I invite you to join my newsletter. It is packed with magic money tips and ideas that will help you through these hard times. Just enter your name and email address to start receiving it.