What the Future Holds for Credit Cards

Throughout its long history, currency has adapted to keep up with the times and remain relevant in ever-evolving economic climate. And the credit card has formed the backbone of our cashless society.

In the wake of ATM hacking activity and an increase in the number of cases involving identity theft, the demand for new solutions to curb malicious intent is at an all-time high. But it’s more than just the card itself that needs improved security features.

Thought must be given to the infrastructure that has allowed credit cards to become such a ubiquitous form of payment. In America, the credit card system is currently undergoing an unprecedented $33 billion upgrade to chip-based smart cards.

But will that be enough? Experts think not.

The Changing Face of Credit Cards

A recent CNNMoney article outlines the new ways credit cards are changing and identifies the efforts of Oberthur Technologies, a French secure technology company in reducing credit card fraud.

As one of the last lines of defense against such activity, the company’s new prototype will see the CVV code randomized every 40 to 60 minutes via an ink screen display powered by a miniature lithium battery.

Unfortunately, a significant barrier threatening the adoption of the dynamic CVV lies hidden in the price. To be viable, it must catch on with the major banks – and this may prove difficult to achieve.

A single card will be 8 to 16 times more expensive for banks to purchase when compared to the latest EMV or chip-ased cards – a tough sell after the current upgrade.

Another concern with an alternating CVV code is it doesn’t address the need for multiple levels of security, nor does it fit with people’s preference to conduct mobile transactions from their phone or tablet.

While mobile applications will undoubtedly make things easier for consumers in the short-to-medium term, the sector tends to be reactionary and therefore tends to focus more and more on the problems at hand.

Additional Security Layers Lead to Solutions

Ultimately, methods of payment are tied to locality. For instance, the act of paying for an item online is entirely different to the way consumers purchase products or services when they’re within a physical store.

As a result, two-step authentication approaches – which require buyers to enter a one-time randomly generated password – seem to be rather unwieldy in the real world. This means they may not see as much use in the U.S. as they do elsewhere.

This has prompted the development of interactive credit cards featuring built-in mini computers, LCD screens and keypads that are capable of generating temporary passwords. They fill the role of ATMs somewhat in that they can display the balance, transaction history and more.

Once again, it’s up to the major banks to adopt the technology in order to make it mainstream. At present, only a handful of banks across Europe, the U.S. and Asia are offering these credit cards to customers.

A Revolution in Payment Terminals

Forward-thinking from financial institutions has resulted in the health care industry implementing new payment paradigms that provide a “future-proofed” payment terminal for medical facilities. It amends the fragmented experience many hospitals are forced to offer their patients.

Perhaps what needs to happen is a transition from outdated EFPOS facilities – regardless of whether they’re updated or not – to an entirely new payment paradigm.

The bench-top technology encrypts information sent between the bank and the terminal to allow for more secure transactions. This solution suggests that the credit card is here to stay.

Only with the benefit of hindsight will it become clear which way the world will lean, but when $33 billion is spent on overhauling an essentially effective way of paying for things, it’s difficult to see any future without plastic.

Anum Yoon is a personal finance blogger who started and maintains Current on Currency. You can sign up for her newsletter here.

Four Reasons to Use Credit Cards

reasons to use credit cardsWhat are some of the reasons people use credit cards?

There are definitely some very clear reasons why people use them, and I think that to some extent, they are distinctly different. What are even more divergent are the motivations for using them.

What’s your motivation?

I think it all depends on where you are on the saver/spender continuum. Those motivated by saving will think about using credit cards for reasons that will help along those lines. Those motivated by spending will see credit cards as a tool to get more.

This leads to four reasons why people might use credit cards:

Reason #1: To Buy Things That Aren’t Affordable Now

This, to me, is NOT a good reason to use credit cards.  Let’s get that out of the way up front! Yet, I suspect it’s a common reason that many will use cards.

For example:

Let’s say someone wants to go out and buy a $1,000 TV. However, withdrawing $1,000 and paying now would be impossible due to cash flow considerations, in light of other fixed expenses. In this case, instead of buying something much cheaper or making do with what is already owned, the shopper will simply charge the $1,000.

The $1,000 can then be paid off over a more comfortable length of time. Maybe it would be easier to pay off in 3 to 6 months. In which case, there would be interest paid on the balance.  Not ideal.

Reason #2: To Get Rewards

I don’t really see this as a concrete reason to actually make purchases, but it’s a good alternative if you know you’re already going to buy something anyway. In those cases, why not get some additional rewards? I’ve obtain a few flights through the normal course of spending.

The risk is getting caught up in spending in order to get rewards. That was never a problem for me, but I can see how people do this. It’s kind of like a grown-up version of Chuck-E-Cheese – you know, where kids buy tokens to play games, win tickets, and then redeem the tickets for prizes. Of course, those prizes are not worth much, so it’s like throwing good money after bad for the “reward”.

Yes, I know those games are fun for the kids, by the way. That part is cool. I’ve spent enough there on them. But kids everywhere are thinking of the prizes without considering the cost to the parents – which is how I envision some grown-ups spending to get rewards.

But again, if the spending on things you would already buy, why leave rewards on the table by ignoring them?

Reason #3: Convenience

For me, this has been the main driver behind the use of credit cards. When using cash, it means getting back change. Bills are fine, but coins are not so great to carry around. I wonder how we did this back in the day. It seemed so totally normal then, but it’s “old school” now – at least to me.

Charging makes it easy. Of course, it’s vital to make sure that you pay your credit card balance in full when the bill comes. If you do that, without resorting to reason #1 we described above, credit cards can be a no-brainer to use. Frankly, I charge most things these days.

Reason #4: Tracking

This one’s for the personal finance aficionados out there. Tracking expenses might have been really tedious at one time, but it’s not a cumbersome exercise these days. The benefits of knowing where you money is being spent can be huge.

If you use cash for most purchases, that adds a lot more manual work to the process of tracking. Using a card makes it so much easier, given the resources available to track in a mostly automated fashion

Bottom line: There are bad, okay, and good reasons to use cards. For me, convenience is the primary reason, with tracking a secondary reason. Rewards are not a reason, but way to choose which card to use. Using a card as a form of borrowing is a no-go for me though!

My Questions for You

Of the four reasons to use credit cards above, which ones apply to you?

Are there any other reasons you like to use cards?

Have your motivations changed over the years?

5 Reasons Why Having a Good Credit Score is Important

We hear so much about credit scores throughout the world of personal finance, that by now most of us know that it’s something important to pay attention to.  Better yet, it’s important to make sure that we have good scores.

But why does your credit score matter? Well, it can help you out in a variety of different situations that can impact different parts of your financial life.  Really, in totality, your credit score can actually impact your overall quality of life too.

Here are 5 situations where having a good credit score can be very important:

Getting a Job

Yes, some employers might actually check on your credit before bringing you on.  If a potential employee can’t manage his or her own money properly, why would you want to entrust your business to them in any way?  Since saving money requires income, we can’t exactly get ahead in life without a job.  It’s best not to interfere with this, and having good credit can remove one potential obstacle.

Buying a Home

While the housing market has shown a short-term upswing of late, things aren’t like they were 10 years ago.  Back then, it seemed like a person with a pulse could at least have some kind of shot at getting a home loan.  Now, its not as easy.  If you want to buy a home and get a loan to do so, don’t have a history that reveals that you’re a credit risk.   Carrying a subpar poor credit score could almost be considered a first-time homebuyer mistake, since it could prevent a person from actually becoming one!

Buying a Car

Now, I bring cars into the picture here despite my view that it’s better to pay cash for a car instead.  No 96-month loans for me!  That being said, not everyone is in a position to buy a functional, safe car with cash.  For people that need to take out loans, which might well be a majority of car buyers, having a good credit score can help with obtaining the right loan.

Starting a Business

If you need to take out a loan for a business, which many new business owners do, it helps to convince a lender to work with you if you have good credit.  Would you want to lend to someone to start or grow their business, if that person has bad credit to begin with?

Getting Utilities

It seems hard to imagine having difficulty getting utility services because of one’s credit.  However, people can be required to put up a deposit before getting services, which could be impacted by credit history.  Why create hassles with something so basic to modern life as utilities?

Bottom Line:  One’s credit can actually impact the day-to-day life a person lives.  Where you work, where you live, what you drive, how you can reach your business goals, and simply getting utilities hooked up without a hassle are all influenced by your credit.

My Questions for You

Have you noticed how important it is to have good credit?

What have you done to make sure you have a solid credit score?

Have you (or anyone you know) been impacted by a low score?


Should I Use a Credit Card or a Debit Card?

credit or debt

What about a debit card?

Credit or debit?

This is a typical question many of us get while at the register.  If you’re not paying cash, and you’re not going through the antiquated ritual of writing a check, then you have likely decided to pay with a credit card or a debit card.

We each have a preference.  Whether or not that’s based on habit, or based on a thorough, analytical assessment, is an interesting question.  I suppose it’s the former for many people, who simply do what they are accustomed to doing.  Frankly, once we get into the habit of doing something, it’s often a matter of putting forth the effort to make a change.  Before we do that, we have to have awareness of a need to change, and the motivation to find out the different courses of action in the first place.

Honestly, in this case of credit vs. debit, I’ve simply gone with habit.  This isn’t typical for me in terms of personal finance, as I do appreciate the opportunity to learn different – and better – ways of doing things.  I’ll tell you later what I usually use :)

Before that, let’s take a moment to consider some differences between the two:

OPM vs. Your Money

  • Credit card: you’re really borrowing from a financial institution, and paying back later when you pay the credit card bill.  In the interim, you can take advantage of float, keeping your money for a while before paying the amount due.
  • Debit card: you’re paying your own money immediately, deducted from your bank.

Interest Payments

  • Credit card: if you don’t pay on time, you’ll incur interest charges.
  • Debit card: you’re paying with your own funds right away, so there is no interest paid.

Risks from Unauthorized Misuse

  • Credit card: if someone takes your card or uses your #, you could be liable for charges.  However, there are limitations of up to $50 and you don’t necessarily have to find out and report immediately.
  • Debit card: your liability can be up to $50, but that can be the case when reported within 2 days. Beyond this time frame, liability for unauthorized purchases with your card may be higher (note: for both credit and debit liabilities, be sure to check for official liabilities – these are just general guidelines) 

Risks from Cardholder Misuse (i.e. having little or no discipline)

  • Credit card: your limit is basically your line of credit.  Not paying bills or paying late can negatively impact your credit history, which can be a big problem
  • Debit card: your limit is your account balance.  Maxing out your account balance can cause other checks to bounce, costing you money and causing hassles.  But, irresponsibility might not impact your credit history like it would with a credit card.

These are just some of the major differences, and there are many others between credit and debit cards that can be considered.  For example, a credit card might offer you some additional protection in terms of rental car or travel insurance.

What have I done? I mentioned above that I would share, and for me it’s been credit cards.  As I’ve posted before, credit cards and discipline go together.  Since I have the latter, I feel like I can use the former.

That’s what it comes down to for me: self-discipline.  One might ask what are the advantages using a credit card, and I think that if folks feel like they have discipline and can understand the value of debt-free living, then credit cards can a be a great financial tool to use for a variety of reasons I’ve discussed before elsewhere.  Otherwise, maybe debit cards work well. Also, if people just want to keep it simple and have everything flow out of one account, debit cards might achieve that more directly.

Of course, a case could be made for doing both – using a credit card and a debit card, depending on the situation.  I suppose there is no perfect or “correct” method, just a matter of what fits your situation best.  The key is doing just that: taking a little bit of time to think about what will work best for you. This way, we maximize value and convenience for ourselves.

My Questions for You

Which do you prefer: credit or debit? Or, do you use both?

Why do you handle credit vs. debit decisions the way you do?

Do you have any other advantages/disadvantages of each to share, from personal experience?

96 Month Car Loans are Insane

Have you ever taken out a car loan? I’ve done so once.  It was years ago, and for a vehicle that I would be out of my ideal price range today.

This is because, as we get older, we are supposed to get wiser.  Not everyone follows this pattern, and I know that I have my blind spots.  But when it comes to taking on loans, I think I’ve progressed in my thinking.  Unless I need to take on a loan, I would prefer not to.  Paying cash for a car sounds ideal, and I say that knowing that the car I buy will be purchased more with needs in mind, instead of wants.

If you are going to take out a loan, I like the idea of trying to make it as short-term as possible.  I took out a 3-year loan, and couldn’t wait to get it over with.  36 months of payments, tormenting my bank account 3 dozen times.

What about the notion of a longer-term loan than that? I’m not talking about 4 years, or even 5 years.  I’m talking about 8 years! That’s right, there are 96-month car loans available!

Somebody please tell me why anybody needs to take out an 8-year car loan.

If a person really needs a car, why not get one for a modest price? One can get a car that gets the job done, going from Point A to Point B, for a few thousand dollars.  Admittedly, I wouldn’t want to do that – but if one’s finances require this, then it can be done.   If someone is really tight on cash, maybe it would require a loan to pay for such a car.

But not 8 years.

That’s the point – I can’t see how too many people have to take out loans of that duration.  If that type of loan is required, then my guess is that car is too expensive, and you don’t need it.  Simple as that.

There are plenty of things that could surprise people in life.  Illness, job loss, or any number of things could surprise us and impact our finances.  Why purposely put ourselves behind the proverbial 8-ball by taking out unnecessary debt obligations?  While debt-free living might not be feasible for everyone, purposely making our lives debt-burdened is something I don’t get.

I wonder what goes through the mind of someone taking on an eight year loan. Probably things such as:

“Oh, I MUST have this car. It’s my DREAM car!” 

Or, for the entitled person: “I’m not settling for some average car. I DESERVE a certain standard!”.

Or, for the Big Hat, No Cattle people: “I couldn’t imagine driving some used, no-name car.  What would people think? I need to keep up my image”.

Really, at the end of the car loan, the thing will be 8 years old.  Now, I’m a fan of embracing car longevity, and driving one a long time.  My past experience going past 220,00 miles can attest to that!  The only thing is, not all cars drive well for that long.  A car 8 years old may not be all that useful at that point, and may not have much residual value.

Maybe there are people that need such a loan. I just can’t come up with a good reason why!

My Questions for You

Do you think the concept of the 96-month car loan is as silly as I think it is?

Have you ever taken on a car loan? If so, how long was the duration?

Paying Cash for a Car

Does anybody really like debt?

Of course, some people just think debt is great.  Those who are making money on the loans just might be among those :)  However, I’m certainly not.  I tend to think that its good to practice debt-free living in most cases.  In the case of buying a car, this applies too.

I say this from personal experience. Now, this experience doesn’t make me any different than anyone else, in that many people have taken out a loan to buy a car.  That seems quite typical, as a lot of people try to buy a car based on being able to borrow.  It’s almost like a rite of passage for a lot of people, their first car loan!

Well, I think it’s better to pay cash for a car.  The one time I actually took out a car loan, I couldn’t stand it.  Sure, the vehicle was nice though! The best one I’ve ever owned, and one that frankly I’d buy again if I had the right income level to fit that in.  But I had to make payments on it each month, and it really took away from the enjoyment of the car.

Just the notion of actually making a payment every month reinforces the reality that you really don’t own the thing outright.  The loan I took out was for just a few years, but that payment each month wasn’t fun to make.  When you make a few payments, and realize that you have years – not just a few more months – to pay off the loan, it becomes yet another burden.  I eventually paid the car off, and later got rid of it.

I learned from the experience, and bought the next car by paying all cash.  It was used this time, but that’s okay.  The feeling of owning it in full provided some sense of freedom that taking out a loan didn’t.  Naturally, not everyone is in a position to do this at all times.  If truly need a car, you’ll want a reliable one, and that might entail taking on a small loan if your circumstances dictate.   But WOW is it better to just pay cash and forget about it.

A good way to make paying all cash for a car is to regularly set aside money in a car fund.   You can almost pretend that you’re making car payments, but instead you’re saving money in a fund.  Here is one example of go about it:

  1. Start years ahead of the purchase
  2. Figure out the kind of car you think you will need, rather than one you’d like to feel cool in.  Don’t be one of the Big Hat, No Cattle people.
  3. Determine the cost of buying a quality used version of the car
  4. Calculate a monthly savings amount that will allow you to finish saving for it in 3 years
  5. Make sure whatever you’re saving does not take away from ample retirement savings or an emergency fund
  6. Regularly save each month in a dedicated account, and make it automatic

No interest paid, and you’ll have the peace of mind of knowing that you own the car outright when you buy it.

If you want to delay the process of saving for the next car, then truly embrace the idea that a car is something to safely get you from point A to point B, and not a status symbol.   Accepting that car longevity is important is what got me to drive a car well past 200,000 miles.  Sure, a few folks teased me about it.  But isn’t saving money worth getting teased by others who overspend?  I think so!

What About You?

How do you save for buying a car?

Do you take on car loans when buying a car, or do you pay in cash?

Student Loans and Senior Citizens?

Don't carry those loans late in life

Those of us who are interested in personal finance are aware of notion that student loans can be that proverbial monkey that people want to get off their back.  A loan taken when young can take years to pay off, and keep a person in debt for a while.

We’ve talked about the value of college in debates on college vs. entrepreneurship, as well in a discussion on how education can increase wealth.  One of the other factors in the equation, which we touched on in those posts, is the reality that student loans can be a real burden. Thus it’s important to choose schools and programs wisely, and consider ROI.

A recent article in the Washington Post actually brought this last point to light in a way that certainly caught my attention.  According to the article, there are many people in their 50’s and even 60’s who are paying down student loans.  That’s right: student loans can be a burden for senior citizens!

A chart in the online article indicated that of the student loans that are past due as of the 3rd quarter of 2011, 12.1% were for people in their 50’s, and 4.8% were for people in their 60’s!

That’s really something else. Those debts just don’t go away. Now, to be sure, some of those people might have taken on loans later in life upon returning to school. That doesn’t make it any less unpleasant to have debt later in life though.  But more eye opening is the notion that some people are still dealing with their initial round of loan obligations as they near retirement eligibility!

While I think that it can be said that a lot of debt is bad, student loans can be a more tolerable version of debt since it is being used to invest in one’s future and potential earning power. That’s different from buying an overpriced house or car. However, this goes to show that not all student loans are smart, and good loans can become bad if the repayments aren’t managed properly over the years.

To avoid such a situation, it seems like a good idea to strongly consider ROI when picking out a school and program.  Unless a school is a world renowned name brand, such as an Ivy or Ivy equivalent, it seems like a really good state school might be a better investment than an expensive private school without the name brand.  Does that make sense? Also, majoring in underwater basket weaving or some similar non-marketable endeavor is sure to wreak havoc with that ROI as well.

The big thing I see is that getting a good foundation of financial knowledge when growing up, from a parent or guardian, can be invaluable to people.  Signing up for significant debt shouldn’t be considered a rite of passage for everyone, when the idea for many of us is to work toward financial freedom.

Can you imagine not being able to buy a grandchild a toy, because you had to pay off your own student loan?

My Questions for You

Does this surprise you at all, that there are people out there in their 50’s and especially 60’s that are still paying off their own student loans?

What do you think a solution can be for these types of situations to be avoided?

Did you have any student loans at any time, and how long did it take to pay off? Or, if you still have them, when do you envision getting them paid off?

Is Most Debt Bad?

When you think of debt, do you get warm and fuzzy thoughts? Didn’t think so. Do you think of debt as something that you’d like avoid or work toward eliminating? This latter viewpoint seems to be the prerogative of many folks in the personal finance blogosphere, at least based on what I’ve read in numerous articles over the last several years.

A recent short article on Moneyland caught my attention, as it discussed the notion that more young people are leery of debt these days. Instead of viewing debt with the same mindset that their parents did, many are making decisions that reflect a greater reluctance to take on debt than prior generations. For example, making decisions such as living at home with parents or renting instead of going out and buying a place.

My take on this: Bravo!

Now, it’s probably true that instead of absolute fear of debt, it’s better to look at it objectively and realistically. It can be really bad, but at times debt can be a tool for getting certain things done – as well as an emergency safety net, dealing with totally unforeseen medical expenses, etc. Also, if there was no money to borrow, the business world would come to a standstill. So admittedly, debt does have an important role in the big picture.

That being said, however, for the average person out there, most debt is simply not worth taking on. There is something to be said for aspiring to debt-free living.

Here are some different thoughts on types of debt and their legitimacy:

Bad Debt

What do many people borrow to buy? Often times, it’s for consumer goods purchases. Buying clothes, electronics, furnuiture, etc. With such purchases, if we can’t afford to pay it off in full as soon as the credit card bill is due, it shouldn’t be bought.  Carrying balances means that you shouldn’t have bought the thing in the first place.

What about cars? Are these worth taking out loans for? Well, probably not in my view. If somebody is solvent enough to have a decent emergency fund, then why not pay in full for a car? It doesn’t have to be a $25,000 new car if that’s not affordable. Why not get a functional $5,000 used car instead, if that’s what you can afford to buy in full.

I remember a guy I worked with over a decade ago who bought a brand new SUV despite being a few years out of college.  He said he needed to buy it because he needed to feel like he “arrived”.  Smart guy, otherwise.  I’ve kept in touch with him, and he’s totally got his head on straight now. But back then, he made a decision that showed too much comfort with debt.

Borderline Debt

It’s safe to say that most home buyers, particularly first time buyers anyway, take on a mortgage. It’s just the way things are done. However, no matter what anybody says about tax deductions, the pride of home ownership, or things of the like – a mortgage is still debt. If you live in a dream home and finance it with a large mortgage, you will be working many hours and possibly years to pay for it. Sometimes it can be helpful to think about how time is money, and determine exactly how much we have to work to finance such dreams.

It seems to make sense that one should ideally buy something that fits legitimate needs in terms of space, location, schools, etc. Some debt is realistic in this case, but should be manageable with the goal of paying it off sooner than later. Trading up for a McMansion, luxury condo, etc – not sure about that if it requires extra financing versus what’s truly needed.

“Investment” Debt – To a Point, Anyway

Now, not all debt is bad of course. When people start questioning if college is worth it, I think that’s going way, way too far. It’s worth it, necessary, and needs to happen for most younger folks if possible. Such debt should still be minimized though, and choices can be strategically made to pick the right college based on quality and value. Then, this debt can be considered to be an investment in one’s future.

My thought is that burdening somebody with tons of debt to start out life is not ideal. But, since college is absolutely necessary for most people, why not view the choice of which college to attend as a strategic investment? You know, one that requires an analysis of costs and expected/potential returns.  Perhaps it’s a matter of financial literacy, reframing the college decision, or thinking more pragmatically than emotionally.

My Questions For You:

Do you see as I do, that most debt is truly bad and unnecessary, other than a few of the specific examples I noted above (medical, limited home, smart college choice)?

Do you think that this recent aversion of debt by young adults is a good thing for our society as a whole? Or, is it irrational and has it gone too far?


Make Sure to Review Your Credit Card Statement

Review Your Statement!

Review Your Credit Card Statement!

Do you carefully check your credit card statements, and review the transactions? It can help ensure that you’re not being charged unnecessarily for any “phantom” transactions, unauthorized purchases, or mistakes.  I had an experience recently that serves as another example of why we take the time to at least scan through our statements each month.

First off, I make it a practice to pay off any bills in full each month. I don’t like to carry credit card balances, and simply don’t do that. Rather, I pay it all in full and on time each month. So, when reviewing a credit card bill, I typically don’t think of there being any issues in those areas. I’m usually focusing on transactions instead.

A recent review of a statement showed that all the transactions seemed fine, but something else jumped out at me: an interest charge! Impossible, right? After all, I pay may bills on time and in full, so there should be no problems.

Immediately, I called the credit card company. After describing the situation, and asking why it happened, it turns out that my last payment had been received late. Now, that’s not something I wanted to hear, since you just don’t want to be paying bills late.  There must have been some kind of mistake on their part!

Well, after they described the situation, I froze for a second and realized that I had been busy the month before and my payment was made close to the deadline. I normally don’t do that, but it was just one of those things. However, I pay bills online and the payment date was supposed to be right at the deadline date. Apparently, it must have hit right after that so thus the late fee.

Ouch.  Obviously, if you read this blog, you know that this is NOT something I would be happy about. Being someone that takes pride in financial responsibility, I didn’t like that this happened.

I explained the situation to the person on the phone, and stated that I pay my bills on time in full every month, and that was the reason I was surprised and called. The guy on the line then said he would make sure that the fees were reversed and charges removed. Great!

After getting charges reversed, I felt some satisfaction in knowing that reviewing a credit card statement saved money. Of course, I also learned a lesson that even people who are responsible can slip and make a mistake by procrastinating. Best to pay bills well ahead of the deadline, to avoid any situations like this where you have to call.  Minimizing credit card expenses is a good thing.

Finally a big thing I learned from the experience is that building up a stellar track record of paying in full on time can build goodwill.

My Questions for You

Do you review your credit card statements each month?

Have you ever found any surprise charges on there? If so, how did you handle the situation?

What is your process for making the payments each month?