credit card

Minimum Repayments: That’s EXACTLY how much? How long?

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Once a month my credit card statement drops on the mat, and I get a chance to peruse my spending that previous month. Actually, this month’s spending was quite minimal and mostly anticipated.

(All Currencies: NTD).

First, we had a nice meal at the beginning of our annual break. That came in at $1518 for two, including a buffet, a nicely prepared main course, and 10% service charge. The restaurant is called Dante’s and is located inside the campus of Taipei National University of the Arts! They serve Italian, French and American style cooking with fresh local and imported ingredients. On Saturdays, they are SUPER busy, and the staff need a bit of politeness training… but we go for the food anyway! We’ll go there if you visit me in Tamsui!

Second item on the list was an odd one: a 2-year domain purchase of my business site in Chinese. This was provided by UnicodeDN and cost me the grand sum of $1314. I’m now thinking of adding another with another variation of our company name.

Third is our regular payment: a combined life insurance and investment product from Cigna. I counselled my wife NOT to buy this, but she didn’t buy it for the obvious reasons. She felt that she was helping her sister go through a rough patch! And indeed her sister has done fabulously and gone on to become a local financial adviser, having passed some tough exams (and that’s one thing Taiwanese are good at: setting exams!). We are definitely not making a lot of money out of this one, as in general, such products don’t offer good value: there are just too many ways to take commissions, including a standard commission, unit transfer fees, I’m sure there’s a currency commission, and, most certainly, there is a credit card fee, of course! In fact, once you consider all of this, I’m surprised that we don’t OWE Cigna money for this product.

Fourth and Fifth payments are for two nights in different hotels while we had a three-day trip to some of the mountains around Lala Mountain in Taoyuen County. I’ve included a You-Tube video for you to get some idea what the area is like. Though the first night we stayed at a hotel near the Yi-lan, in a tourist zone area. Quite pleasant on the East Coast overall, I have to say. Then we drove up to the LaLa Mountain area where we stayed at another hotel called MingChih National Forestry Resort. Neither of these was particularly cheap. But getting a chance to stay there was wonderful, and we were lucky to get a vacancy on the spot. We had a little cabin with NO airconditioning… it was VERY cool outside, in fact about 21C, compared to down on the plains where the temperature and humidity were much higher. Total cost: $6170 for both nights.

There were no penalties or interest charges to pay off this month, either. That left us with the grand total of $11,002 to pay on our credit card, or we could pay the minimum balance of $1100. We also earned 551 bonus points to add to our total. Naturally, we paid it off entirely. A quick look at the calculator below showed us why: we saved about $606 doing this, and it would have been paid off in a year exactly.

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How was your August Credit Card spending? Did you spend wisely or blow your budget? Did you pay it off at once or slowly? Use the calculator to find out how much you would spend. Don’t worry, you can simply ignore the British Pound sign and assume dollars or euros.

Late Fees: Have you eliminated them all?

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It’s not often that I deal with mundane financial stuff these days, but I was reminded yesterday that this is something a fairly disorganized person like myself needs constant practice at. You see, I received a small bill from the water utility company for about US$20 or so.

It was such bad timing that I simply filed it under “Things to Do”, and I forgot about it, until the due date had passed by one day. Woops! Yesterday I had to travel uptown to the water company to pay the bill. I noticed that in the Chinese writing on the bottom of the bill a simple statement saying that, for late payment a 10% surcharge will be added to the next bill.

Annoyed at myself for doing that , I realize that $2 isn’t big in the grand scheme of things, but to avoid late penalties, one has to be on one’s game, and organized. Still, a $2 late fee is much better than last year, when I spent six months paying a credit card bill in parts, instead of in one fell swoop. I could have saved much more than $2, more like $400; and that was despite having the money in the bank.

The root causes of late charges in my experience have been simply poor planning, and poor execution. Poor planning was looking ahead, evaluating the cost-benefit relationship between certain expenses being paid off slowly vs. quickly; and execution was failing to pay bills in a timely manner despite this being an easy and convenient thing to do.

In Taiwan, there is really no excuse for bill paying. The water bill I paid late could be paid in anyone of seven ways: at 7-11, at the bank, on MOD TV, via ATM, via credit card, standing order, and online, not to mention at the water company. Mobile phone payments will soon be possible, too. So, why did I plan poorly and execute sloppily? And how can I resolve to not do that again, esp. since this isn’t the first time?

So here are two suggestions that I have considered trying:

A. Use automatic calendaring

1. make a list of regular payments and bills and their due dates;
2. advance the date by one week or two to build in an appropriate safety margin; and
3. set up your Calendar software to remind you that it has to be paid (and the penalty, too!) for one week prior, three days prior, and on the final day!

B. Autopayments

Alternatively, set up your automatic payment so that you don’t have to remember at all. It’s quite easy to do that for all your bills! You can set up a credit card autopayment, or a standing order on your bank account, too.

So many bills: so many late fees!

Typical bills that may incur penalties or late fees include: all utility bills (phones, electricity, gas, TV, water, taxes – local and national), membership fees for schools, clubs, etc., community fees, credit card minimum payment or payment due dates, overdrafts, student loans, loan installments on houses (mortgages), car loans, secured and unsecured loans, insurance policies on property, family or cars, … the modern life includes a lot of payments that need to be made… make sure your list is complete and paid on time!

What late paying horror stories have you had? How did you manage to fix those bad habits? How much did it cost you?