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I Hate To Say This, But I Was Saved By A CREDIT CARD!!!

I have written a few times on my weight loss blog about having to bring my car to the mechanic. I think I have made 5 trips since the end of November for the same problem.

During this time we have replaced practically the entire cooling system – including the radiator! After spending $1,600 to do this, my car started overheating a week or two later. At the same time, someone brought a car like mine (just one year older) in to my mechanic with the same exact problems. They found air in her cooling system just like mine! However, they did not detect any problems inside of her cooling system, as with mine.

This prompted him to check the Internet to see if this problem was common. He not only found tons of complaints in forums and other places, but he also discovered that this is something that GM knows about but are choosing to ignore. It seems that the problem is with the intake manifold gasket, and it usually happens after the car is already out of the warranty period.

It cost us about $650 to replace it (this was mainly labor, since the job took many hours), bringing our total to fix this problem up to $2,250! That doesn’t even included all of the countless hours on the road to and from the shop, who knows how much gas and wear & tear on both of our vehicles, as well as dozens of hours driving, worrying, and even sitting on the side of the road waiting for the engine to cool down.

[Find out how to save money on car repairs!]

I’ve talked in the past about how having an emergency fund can help when these types of necessary but unexpected expenses pop up. Fortunately, we were able to pay for some of these repairs (specifically replacing the intake manifold gasket) by tapping our emergency account. However, in order to cover the other $1,600, we would have had to drain the account completely!

I hate the idea of have a $0 emergency savings account, so we really needed to come up with another way to pay for these expensive repairs. Since we are deeply in debt bondage, we don’t have a lot of “wiggle room” when it comes to our expenses and our paycheck (most of our expenses consist of nothing more than debt payments), and although we try to keep a cushion in our checking account, we don’t have an extra $1,600 sitting around.

We could have tried to take out a personal loan, but I really don’t like the idea of owing people money. Another option would have been to take out a payday or other short-term loan, but we are really trying to avoid increasing the amount of interest we have to pay out this year.

So, as a personal finance blogger, I had to turn to the one place that was probably the least expected…a credit card! I’ve written about the benefits of credit cards in the past, so it shouldn’t come as a surprise that I don’t hate them. I just hate that many of us us them for the wrong reasons.

Last year my wife and I found a credit card that would allow us to charge any car repairs over $299 and have the interest deferred for 6 months. This means that if we can pay off the balance by the end of the 6-month period, we will have received an interest free loan. 🙂

Normally, I don’t like to be put in a position to have to place an expense (or multiple expenses as in this case) on a credit card, especially since we already have a ton of debt, but in this case it seemed to be our best option. The very worst case scenario (outside of us needing additional repairs) has us draining our savings at the beginning of the summer to pay for the repairs, but if we are able to use every extra dime to pay down the credit card, things won’t be as bad for us.

So this is definitely a case where having a credit card was a great benefit to us. I just pray that we can get back to moving in the right direction with our debt repayment plan…having our car need over $2,200 in repairs (and it needs more, plus my wife’s truck has a few things wrong with it as well) definitely set us back.

photo credit: Dan Esparza

Reader Questions

Have you ever used a credit card to bail you out of a jam? Not, to buy a tablet or a toy, but for an actual emergency.
Do you think we should have just emptied our savings account even though the credit card may not cost us an interest payments? If so, why?
How do you feel about someone not having an emergency savings account at all, and just having a credit card or two (especially a rewards card) to pay for emergencies?

5 Points You Should Consider When Looking For A Reputable Payday Loan Company

By // by guest

[The following is a guest post on behalf of Check ‘n Go]

The payday loan industry has been a very fast growing, yet controversial, industry over the past few years. With state level legislation frequently changing, it can be difficult to be sure you’re choosing a reputable payday loan company. If you’re a consumer of this fickle industry, it’s important to do business with a reputable lender. These 5 points are surefire ways to know you’re dealing with a credible payday loan company, especially when buying online.

5 Signs Of A Reputable Payday Loan Company

[Khaleef’s note: These items are not a guarantee that you will find a reputable payday loan company, but they can help you weed out a lot of bad ones!]

Look For Logos:

When visiting a payday lenders site, look for credible logos. One such logo is the Community Financial Services of Association of America. This is your best source for responsible lending practices, as well as pertinent information about the payday loan industry as a whole. If a site displays this logo, you can be assured they’re a reputable brand.

Also, look for a secure transaction logo, such as VeriSign, or other reputable authentication service logos. This will ensure that your account information will not be compromised when purchasing a loan online.

A Reputable Payday Loan Company Will Have Knowledge of State Laws:

A legitimate payday loan lender will have knowledge of payday loan laws as they vary by state. Legislation pertaining to payday loans is always changing as it is a hotly debated topic. A reputable lender will keep up with this information by updating and informing the customer as necessary.

Frequently Asked Questions And Information:

A reputable payday loan lender will be very knowledgeable about payday loans and other related services; they will have all the important information, should you have any questions about their services, or debt and bankruptcy matters!

A Physical Location:

Most of the top trusted payday loan lenders have locations online and off. Retail locations were the initial source of payday loan lending, but because many have become internet savvy, there is an online option for this market. While online payday loans may be appropriate for some, not everyone trusts or prefers them. Having a physical location builds trust and offers relief to customers who are skeptical of online transactions.

Offers Additional Services:

An experienced payday loan company knows that their customers have needs that extend beyond a payday loan. That’s why you’ll find that the most reputable payday loan companies will offer additional services, such as cash checking, title loans, installment loans, and even money transfer services. The less experienced payday lenders will focus exclusively on the payday loan, and aren’t as aware of their consumer base and needs.

Because payday loans are sometimes a quick answer to difficult financial answers, there have been many payday loan lenders, especially online, that have evolved to take advantage of peoples misfortunes. These cases often end up turning into fraud, or other non-friendly consumer experiences. To eliminate this, consider a reputable payday lender that you can trust.

This blog post is provided by Check ‘n Go, a trusted online payday loans and cash solution installment loans company. Check ‘n Go is the fourth largest consumer financial service institution offering check cashing and online payday loans in the United States. A founding member of the Consumer Financial Services Association (CFSA), Check ‘n Go has always been committed to responsible lending and continually works with legislators to improve the credibility of the cash advance industry.

photo by vichie81

Stewardship of Resources Can Include Smart Payday Loan Borrowing

By // by guest

[The following is a sponsored post on behalf of The Payday Place. To be honest, I do not have the hatred of a payday loan that many personal finance writers have. I think that it can be a tool for people who are in certain financial situations.]

We are all given many talents that should translate into how we take care of ourselves, our households and our communities. Some of those talents include the things we do to earn a living. Other talents include our capacity for managing those earnings. A cash advance loan, handled correctly and at the right time, can be part of wise stewardship.

Payday Loans As A Financial Tool?

How so? The idea of a payday loan cash advance is to navigate the challenge of timing. Say you had an unexpected or emergency expense shortly after your last payday. Something as simple as a car repair – necessary for managing family matters as well as getting to and from work, for many of us – can drain your bank account before your bills are paid for the month.

If you do not have a credit card or other line of credit to accommodate that expense, or if borrowing through that card would come at very high interest rates, you would need to find the money elsewhere. [editor’s note: This is one of the main reasons why you need an emergency fund]

An Early Payday Solution

A payday loan can often provide the cash advance you need to take care of paying your bills and your car repairs or other emergencies. In effect, you are borrowing from yourself.

Are these easy to get? And importantly, can they create a less-than-optimal solution?

A paycheck advance loan is relatively simple to get online. And if you shop around, or use a payday loan aggregator service (for example, The Payday Place), you should be able to find the lender that provides the best loan terms for your situation.

If you worry about borrowing when finances are tight, the most important question is how well can you manage yourself and your expenses over the next four to six weeks? Can you reduce expenses in the future, to allow yourself to catch up and keep bills paid in the pay period to follow? After all, a cash advance loan on a paycheck is borrowing from the next pay period.

[editor’s note…again: I think this is a great piece of advice, and it causes you to be extremely careful if you ever find yourself in a situation like this.]

Give it prayerful consideration. If you fully understand the terms of the loan, then you will know how to pay it back. After all, a very important part of stewardship is to use your brain as among your most valuable talents.

photo by rinkjustice