Money Musings 💭 Psych! Not free money…
Back when I was in college, you’d see credit card companies set up with tables around campus - "Get a free shirt and some free money!" 📣 🤬
Thankfully, that’s now illegal. BUT many of us didn’t (and still don't) know how credit cards actually worked when we opened our first card.
Credit cards don’t come with a manual. Or at least not one that’s realistic to read!
The thing is, credit cards can be a great tool and as Dasha Kennedy so beautifully said, a "saving grace" when you need the funds. But they also make it hard to know how much you’re spending and come with some major compound interest.
So let’s talk turkey. When it comes to any personal finance service or product, I like to know how companies get paid.
Here’s how credit cards make money:
Interest (paid by us). The % we pay on any credit card balance we keep
Fees (paid by us). This can be an annual fee for the card, late fees, balance transfer fees, etc.
Transaction fees (paid by merchants). Every time we swipe our card (or type in our card info), the merchant pays a ~1-3% fee
The good news? Because we are a major source of credit card revenue (billions per year), we have some power.
If you get charged a late fee (which can be $35!), don’t be afraid to call your credit card company to ask for it to be removed.
If you notice your interest rate is high, you can try reducing that rate as well (this is easier to do before you are carrying a balance).
Always mention how long you’ve been a customer and/or how long it’s been since your last late payment (if it’s been a while).
Do you have any calls to make?
P.S. If you're not yet following the Fiscal Femme on Tik Tok, check out this video on common toxic workplace phrases that has over 1.5 million views. 🥳
MONEY MOVE OF THE WEEK
KNOW WHERE YOU STAND AS FAR AS YOUR CREDIT SCORE.
Our credit score is important because it allows us to take out debt and impacts our interest rate when we do. PLUS, many landlords do a credit check, 29% of employers check your score before hiring you and insurance companies may use your credit score to price your policy.
Important Side Note: While credit scores are important, I do not believe they are a proxy for financial well-being.
Our score is based on whether or not we’ve made on-time payments, how long we’ve used credit, how much of our available credit we’re using (how maxed out our credit cards are), and how much debt we have overall.
It can take time to build a good credit score so it’s helpful to know what your score is and build from there. Many credit card 💳 companies now share your credit score online. You can also use Credit Karma or Credit Sesame for a rundown of where you stand and how to raise your score.
YOU GOTTA SEE THIS
CELEBRATE PRIDE.
Happy Pride, all! 🏳️🌈🏳️⚧️ To celebrate the LGBTQ+ community this month, I’ll be committing myself (and encouraging you all!) to buy from, invest in, and promote businesses owned and led by the LGBTQ+ community (please share your favorites with us on Instagram and we'll save to our highlights).
It’s also a great time to step back and reflect on how you (in whatever role you’re in) can make sure those in the LGBTQ+ community feel welcome, included, and invited to be themselves in the workplace and the spaces that you are a part of. Advocate for equity!
In addition to using our dollars to celebrate Pride, let's get educated. Here are some lists of documentaries (I’m still working through them!) that I hope to see this month.
If you have your own recommendations for resources, please share them. I’m always learning, and I appreciate that so many of you are doing the same!