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Can you refinance a car payment?

Dear Dave,

We have a ’97 Taurus that we bought on a whim, and it came with a high interest rate because we fell behind on some medical payments before we bought the car. Right now, we owe about $1,700 on it. We’ve also got an SUV that needs repairs to make it drivable, and we still owe money on that one, too. I know you can refinance a loan on a house, but can you do the same thing with a car?

- Cheryl

Dear Cheryl,

You can if you’re able to find someone who’ll give you the loan. It’s not going to make any difference if you haven’t cleaned up your credit since then, but if you have and you’ve got a credit union or someone who is willing to give you a lower rate, I’d go for it.

But let’s get ourselves into high gear and get both of these vehicles paid off. Get the necessary repairs made to the SUV and sell it. It’s sitting there in the driveway, you can’t drive it and you’re still making payments on the thing.

Get in attack mode and clean up this mess. It won’t take long, Cheryl. You just need to take action. And next time you get car fever don’t go to a car lot – take a cold shower instead.

- Dave

I’m 19, have no insurance, and owe the hospital $1,850 for treating a wasp sting. What do I do?

Dear Dave,

I recently went to the hospital because of a wasp sting. I didn’t think the treatment would be costly, but the bill was $1,850. I don’t have insurance, and I’m not eligible for any financial assistance. Also, I’m only 19-years old and don’t want to take a chance on messing up my credit record. What should I do?

- Glenn via email

Dear Glenn,

Nearly $2,000 for a wasp sting? You’ve got to be kidding! Well, I guess if you go to the emergency room it’s POSSIBLE that level of care was provided, but I think somebody’s got some explaining to do. Sticker shock doesn’t even begin to cover this. Some people are allergic to wasp stings, and I don’t mean to make light of that, but you’ll probably be tempted to try a little baking soda next time instead.
I would call the hospital and ask for a meeting with someone in the business office. Tell them you’re 19-years old and you don’t have that kind of money. Also, tell them you simply cannot conceive of $1,850 for treatment of a wasp sting. But most of all you need to let them know that you’re sincere about trying to pay what they say you owe.

Hopefully, you can get it reduced based on the fact that you don’t have insurance, you don’t have any assistance AND that $1,850 is a little ridiculous for a wasp sting.

- Dave

Is it ok to keep a credit card just for the airmiles?

Dear Dave,

In the last 18 months I’ve cleared up all my debt except for half of what’s owed on my house. I have one credit card that I want to keep, though, because I get sky miles with it and I’d pay it off at the end of each month. Is that a bad idea?

- Mitch in Salt Lake City, UT

Dear Mitch,

Yes, it’s a bad idea. Many debit cards now have airline miles associated with them, so there’s no reason to take a chance with credit cards.

You’ve done a really great job of managing your finances lately, but the reality is that 78% of Americans don’t pay off the balance on their credit cards at the end of the month. Another thing, Mitch, is that studies show people spend about 12-18% more with credit cards than when they use cash.

Personal finance is 80% behavior, so this means that living on less than you make is a matter of controlling yourself, not a matter of math. Visualize this, Mitch. You’ve got a $50 bill and a credit card lying on the table in front of you. If you look at these two items, the $50 bill is a more emotional thing and it will hurt more to turn it loose.

Do you see where I’m going with this? If it hurts more to let go of the cash, then you’re not going to spend as much. If you don’t spend as much, you’ll be able to save more and build wealth!

- Dave

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