After Christmas Blues

Paying Off Debt, Budgeting, Credit Lines Other No Comments »

The holidays are over, but that doesn’t mean they aren’t still going to haunt you for another month or two. In fact, those credit card bills are probably going to be showing up very soon in the mail. However, don’t let the post-holiday bills get you down too much because there are a few strategies you can use to get you through the holiday bill season, such as a simple cash advance.

If you’ve been like most people and swiped the credit card through the holiday shopping season, then you’re probably going to have a hefty bill coming soon, if you haven’t received it already. There are a couple of ways you can insure you get that bill paid off and a budget and cash advance can go a long way.

Subtract your expenses from your income and see where you can pay a little more. If you have a positive number when you’ve subtracted your expenses from your bills then you can figure out how much extra you can afford to spend. If you have a zero or a negative number then you need to take a step back and figure out how you can make more money or spend less.

A cash advance is a tool that you can use to help you through those weeks when you need that extra cash to pay your holiday bills off. A cash advance has simple requirements for you to meet and you may even be able to obtain a cash advance that can pay your entire post-holiday bill off. This makes a cash advance ideal if you will have the money to pay it off, but you need to send the bill off now. Either way, a cash advance can make dealing with the post-holiday bills that much easier.

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Credit Card Secured by Roth IRA?

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Have you every asked, Can you get a credit card secured by Roth IRA? How about this one: Can I withdraw funds from my IRA to pay off credit card debt? Well in this post, I am going to quickly cover these requests, and the open it up for any comments or questions you may have.

  • Credit Card Secured Roth IRA
    • The short answer to this question is no, the government does not allow you, or any family, etc. to borrow against your IRA, or to benefit in any way from your IRA or Roth IRA account, other than the intended use of the account (ie when your retire, using it for retirement). This includes any type of borrowing, whether it be through a credit card, bank, or anything else. Now you can, of course, withdraw money from your IRA accounts at a (typically) 10% tax penalty to pay any debt you wish. In this scenario I would say you should take careful consideration, and use my credit card debt payoff calculator for assistance in calculating a time line for debt freedom, then weigh that option with the tax penalty that you face.
    • However, the government does allow you to roll over retirement accounts, and gives you 60 days to complete the transaction. So, if you need money right away, and you can repay it within 60 days, you could use the money from retirement to meet the immediate need, and make sure to repay it all when you complete the roll over to the account. This is tricky, so I highly recommend seeking professional assistance on this one.
  • Withdrawing Funds from an IRA to Pay Off Credit Card Debt
    • As noted above, this is a viable option. But you must consider what you will be giving up in the long term. In my article, Invest in a Traditional IRA or a Roth IRA?, I compare the difference of the two just based on tax implications, and there is a significant difference in the amount of money accumulated at retirement age. So if you further compound that by withdrawing funds from your IRA to pay off debt, you may be setting yourself up for long term problems. There are other options; one option is to try to pay off debt using debt stacking, another is to seek online credit counseling. Debt stacking can help you accelerate your debt freedom date without contributing any additional monies to your credit cards. I do not recommend withdrawing from your IRA for any reason other than retirement, but if you have exhausted all other options, then consider it with reluctance.

In short, there really isn’t a viable option to borrow, or to secure a credit card with any kind of IRA. Even withdrawing the funds temporarily while rolling over to other fund doesn’t help most people very much. And taking the funds out to pay off debt isn’t a very good option either, because of the long term negative effects. If it all possible, utilize other methods, as mentioned above to get debt free. And lastly, make sure to sign up for my RSS feed, to get the latest and greatest on personal finance and how to reach your financial goals. It’s free, and well worth your time. If you have additional questions or comments, please post them below.


To apply for a credit card, one needs to now about the way the credit card finances work. Preferably a low interest card should be applied for. This is because whether it is a bank of america card , or any other banks, every bank charges a certain amount for credit cashed. Before venturing into bank loan market on your card, it is advisable to consult a home mortgage consultant, who are used to such requests and their outcomes.

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Home Equity Line of Credit FAQ

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A home equity line of credit, simply defnied, is a revolving line of credit, or loan that is taken against the equity that you have built up in your home, and can be obtained from most mortgage companies and banks.  In most cases, with a home equity line of credit, you can borrow up to 95 - 100% of the value of your home, minus the amount that you still have to pay on your mortgage. A home equity line of credit is rapidly becoming popular as property values increase, and consumers find that it is a great way to handle their personal debt and other financial issues far more efficently.  If you are wondering if a home equity line of credit is right for you, here are some frequently asked questions regarding home equity lines of credit to help you further understand the great benefits of getting one.

How is a Home Equity Line of Credit Different From a Home Equity Loan?

There are three main differences between the line of credit and the home equity loan. First of all, there is a difference in the interest rates you will receive. A home equity line of credit usually has a variable interest rate, while the loan has a fixed (or sometimes variable) rate throughout the life of the loan. Secondly, in a home equity line of credit, you are able to access your money anytime you like, so long as you pay back what you’ve used, but with the loan, you get all the money at once, and repay it over an extended period of time. In other words, with the line of credit you can borrow, repay, borrow repay as much as you like. Last, the home equity loan usually has fixed payments so that you will know what your payment is every month, while the home equity line of credit can vary based on the interest rate and the amount you owe.

Will Interest on My Home Equity Loan or Line of Credit be Tax Deductible?

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Unsecured Line of Credit Usage and Cautions

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My views of credit, especially unsecured credit, are particularly negative. However I am a proponent of the unsecured line of credit.  My primary recommendation for the use of an unsecured line of credit is for protection, in other words using it to guard against overdraft. I myself, have and maintain an unsecured line of credit. Through my personal banker, I have obtained an unsecured line of credit in the amount of $5,000. Currently, I am not utilizing it though (zero balance, :)). But let’s do a quick breakdown of this type of credit:


Potential Problems

  • Automatic overdraft protection (if I go into the red, an instantaneous transfer occurs from my unsecured line of credit to cover the amount needed, without any fees)
  • Automatic minimum payments are debited from your account, so you are never late or responsible for additional fees (unless you continually run in the negative)
  • Low interest rates (usually prime plus 1-2%)
  • Transfer can be made to your checking account for instant cash without exorbitant fees (I pay only regular interest rates on the transfer, no balance transfer fee or anything like a credit card)
  • No hassle, can be done all online without customer care help
  • Because it is tied to your bank accounts, it can be viewed easily, and in most cases, side-by-side with your deposit accounts
  • The ease of obtaining the money without penalty can lead to excessive spending, be disciplined!!
  • Because of its automatic nature with respect to overdraft protection, balances can go under the radar, and you may be surprised when your bank account is later debited for the minimum payment.
  • Be careful not to count the balance as positive when reviewing your snapshots, it is usually not placed in red, and can look like a deposit account.

I am a big fan of the unsecured line of credit. When used properly, it can save you a lot of money vs miscellaneous credit card fees. It’s automatic protection nature gives you a piece of mind, as well as saving you time when you are in need of a purchase. But let me go on a give a few recommendations on how to establish and maintain a quality unsecured line of credit:

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