Karen Archives

Karen

Send a comment to Karen

Have you ever been in your favorite store with a cool new pair of jeans, a new t-shirt, and a slew of other clothes in hand, ready to pay when the cashier says, "If you open a store credit card account with us today you'll get 10% off your purchase?" At that moment you consider how great it would be to have a credit card at your favorite store — without having to pay for that $500 charge right away.

Before you decide to sign up for that store credit card, you might want to consider that typical annual percentage rates (APRs) on credit cards from a retail store are about 23%. Ouch!

If you are able to pay off your purchases right away, the percentage rate might not matter to you (just remember the possible effect on your credit). But, if you think that paying a little bit each month is more your style, you should see if the savings will be worth it. To do that, you'll need to know how your rate is calculated. 

Let's break down what a 10% savings at the register for a $500 purchase looks like in one month:

1. Figure your average daily balance.  Add balances each day (purchases minus payments) and divide that by the number of days in the billing period. We'll use 30 days for this example. Say you make no additional purchases or payments for the first 15 days, and then on day 16 you make a $50 payment and on day 21 you make a $75 purchase. So your balance was $500 days 1-15, $450 days 16-20, and $525 days 21-30.

Here's the math:
($500 x 15 days) + ($450 x 5 days) + ($525 x 10) = 15,000
15,000 divided by 30 days in the billing period = $500 average daily balance

2. Calculate the interest. After you have the average daily balance, you can find out how much interest you'll pay that first month. Take your APR divided by 12 to find out how much interest you're charged each month. Then take that number times your average daily balance.

   Here's the math:
   23% APR divided by 12 = Monthly rate of .019166
   .019166 x $500 = $9.58 interest charge

3. Was the savings worth it? Back to your original sale: You saved $50 at the register (10% of $500), but after a month on your store credit card, you owe $9.58 on the balance. That lowers your savings to $40 after the first month. And unless you pay off the remaining balance, those savings will continue to drop.

While I am an advocate of using credit when it makes sense, I'm highly in favor of knowing what my rates are and what it will cost me in the long run. It's easier to make better choices when you know exactly what that retail therapy  will cost.

Karen

My Wells Fargo® Credit Card doesn't look like any other credit card in the world!

Want to know why? I used the newest Wells Fargo feature called the Wells Fargo Card Design Studio^SM service to put a picture of my daughter on my credit card. Now, every time I take out my card to use it, it's an excuse to show the world my personalized card and brag about my daughter a little bit. I liked it so much I added a picture to my Wells Fargo Check Card as well.

If you haven't checked it out, you should. Why shouldn't your Wells Fargo card be as unique as you? You can show your school spirit by adding a photo of you and your friends decked out for the big game. Or use the feature to remind yourself of something you miss from back home.

It's easy to upload a photo of you, your pet or your favorite sport — pretty much anything that interests you, but doesn't go against image guidelines. There's also an image library you can choose from if you don't have a personal image handy.

Best of all, it's a free service!

If you already have a Wells Fargo Credit Card or Check Card, sign on to Wells Fargo Online® Banking, click on the Account Services tab and select the "Access Card Design Studio" link to customize your card. If you don't already have a card, you can explore your options at wellsfargo.com. Or if you're just curious about the feature, view the demo  to see how it works.

So, what would you use to personalize your card?

Karen

Mid-summer, as I was blissfully reading email, I received three order confirmations from iTunes  thanking me for my gift card order.

"Wait!" I thought to myself, "I haven't placed any iTunes orders!" I tried to stay calm, but there was that little voice in my head saying, "Someone stole your credit card!"

I learned that it's hard to dial a customer service number when your hands are trembling, but I managed to do it. The nicest Wells Fargo customer service person answered the phone and walked me through all the pending transactions on my account, and at least five of them were purchases I had not made.

The representative noticed I was starting to get nervous again and assured me that I had nothing to worry about. After all, I have the WellsProtect® program built into my Wells Fargo credit card. This free program comes with all Wells Fargo credit cards and automatically protects the cardholder from liability for fraud and theft when reported promptly.

The representative closed my account and explained that a new account number would be set up for me. All I had to do was sign an affidavit  of forgery, which was mailed to me a few days later, and return it to have the charges that were not mine removed.

Everything that the Wells Fargo representative explained to me was exactly how it went. I received a new card in the mail. A few days later, I received the affidavit and returned it to Wells Fargo, and then my fraudulent charges were removed from my account.

I wonder what happened to the charges, or if the culprit was ever caught?

Now I'm a little bit more cautious about shopping online with my card, but knowing that the WellsProtect® program is always going to be there for me, I'm not going to let that stop me!

Karen

In my first post, I mentioned the trials and tribulations my son has had to experience by not being a part of the "Wii"  crowd.

As the holidays approach, my son reminds me almost daily of how great it would be to get a Wii for Christmas. My husband and I decided that if we could find one, given that these tend to become almost like Where's Waldo  around the holidays, we would get it.

Yesterday, my husband called me to announce that he is the "best dad ever" since he found and purchased a Wii. Whew — checking that off the shopping list right now!

So we were surprised when Wells Fargo contacted us last night. Why were they calling? To ask if we had made a recent purchase using our Wells Fargo card, since it was a purchase we didn't normally make. Wow, that's looking out for us! We verified that the purchase was one we made and thanked the representative for checking in.

Although I know Wells Fargo has many services to protect my accounts, it's still reassuring to know that they're working hard to make sure my money is safe.

Karen

In remembrance of one of my favorite writers of children's stories, I dedicate this post to Theodor Seuss Geisel , also known as Dr. Seuss  (03/02/1904 – 09/24/1991).

Karen

A funny story comes to mind about my son when he was about 5 years old. He assumed that since Mommy works at a bank, she can just get money out anytime she wants. Oh, if it were only that simple.

Fast forward about 7 years to the future – now he thinks that a credit card is the simple solution to anything we could ever want.

"Why, he asked me very innocently, "can't we get a Wii ?

I reminded him matter-of-factly that money doesn't grow on trees and, besides that, Wii's cost a lot of money. I thought that would end the discussion. This time, however, he'd been thinking a lot about his response.

"You have a credit card, he said. "Why can't you just buy it with your credit card? For some reason, he's convinced that a credit card is just like a gift card you get on your birthday. Someone gives you money to spend, so it's your duty to spend it.

I've fallen short of my parental role because what he really needs to know are the basics. Luckily, there's this great, online educational tool from Wells Fargo called the Hands on Banking® program that I haven't introduced him to yet (but it sounds like I need to start soon). The Hands on Banking program guides you through the fundamentals of smart money management, dividing learning into four different age groups: 4th & 5th grade Kids, 6th to 8th grade Teens, Young Adults and Adults. It's one of those things that I wish had been around when I was venturing into the world of credit – kind of like how I wish there'd been Wii's around when I was younger.

But don't feel too bad for my son. He may not have a Wii, but he is armed with the knowledge that it's something he has to work for to get.

Too bad Wii's don't grow on trees.

Editor's note: We're excited to benefit from Karen's customer insight (and killer dance moves) here on the Student LoanDown!