Korean Job Discussion Forums

[politica]

Okay, I've never been good with money, and I've never fully understood financial matters, but I've gotten by. That being said, I'm starting to get a little panicky about the current state of affairs (and its relationship to me). I'm going to lay it all out on the table, including numbers, so please, if you can give sound financial advice- I'm all ears.

Before coming to Korea, I was always in a dire financial situation- first college, then grad school, then AmeriCorps, etc. The good thing is this- I have no student loans (woohoo!). Here are the bad things: I have two credit cards- each with a $3000 limit. I don't use them often, but I have to use them to buy things online and large items (flight tix, etc.). I have NEVER been able to fully pay them off, and that was one of my goals and reasons for coming to Korea. I unfortunately had a look at my credit score the other day . . . and it was dismal, at best. Seeing as how I'm never late paying, I can only accredit this to consistently having a large balance on each card- I currently owe $1500 on one, and $1700 on the other.

The good news- I have money! And lots of it! More than enough to pay off the cards! The bad news- Its here in Korea with me. I only have about $600 in savings in the U.S. . . which is currently being rationed off for the credit card bills. People keep telling me not to send my money home right now . . . apparently for good reason. It looks like if I sent 3 million won home today, it would only give me around $2,250. Yikes.

So what do I do? Wait it out for even longer- paying the minimum balance while my credit score plummets? Send money home while cringing? What can I do? I'm so lost and confused and I hate this little credit card hole I dug myself into.

Thanks in advance for the help. I truly do need it.

Shalom,
politica

[valkerie]

I would say bite the bullet, get the money home and the debt paid...regardless.

Many moons ago I arrived in Asia with a lot of debt. I saw the yen devalue by a third over 7 years and though the worst rate was after I had paid everything off it still smarted to send cash for savings...BUT...well u need to get it sorted and start saving so maybe best to just accept it and hope things are better when u can start saving.

[Ukon]

Sell stuff from back home on ebay....You can probaly clear away an easy grand if not more...people on ebay will buy ANYTHING!

[ttompatz]

Credit card interest accumulates at a horrendous rate and your losses due to compounded interest payments (up to 28.8%APR) will far outweigh any losses you will suffer on the depreciated won (from it average rate of 1250 - about 10%). The rate over the last year (w1000/$1) or so was inflated and due to fall anyway.

Pay your cards off at your earliest convenience. There is no guarantee that the won will climb any time soon but you can rest assured that with the credit crunch in the states the interest on your cards may certainly begin to climb and cost you even more money.

Stick the rest of your funds (or income) into interest bearing savings accounts (term deposits here are now paying about 6%). Keep the terms short (90 days) so when you do get a favorable exchange rate you can liquidate the CDs and send the cash home and put it into FDIC insured savings or certificates of deposit.

.

[saw6436]

I used to work for American Express as a Fraud Analyst. part of my job was investigating individuals credit history. Your CBR is affected by a variety of factors (mostly paying bills on time). Lack of credit, meaning low debt levels, can also lower your CBR. A $3,000 credit limit is pretty small and frankly, not something to build trust with a CC company. $10,000 to $20,000 is more helpful. I'd guess your low CBR is probably from 1. Lack of credit and 2. Not using your credit. (assuming you pay bills on-time)

I would pay off both cards ASAP. Then, get on the phone with both card companies and attempt to negotiate higher levels and/or a reduction in interest rates. CC companies WILL negotiate with you over rates and such. Todays economic climate may make them less willing to negotiate but its worth a shot.

Once finished, keep the CCs you have for emergency use only or to for convenience (just be sure to pay your bill in full when you get it).

I'd also shop around some. There are alot of companies offering good terms on CCs. Also consider an American Express card. Yes you pay an annual fee but its is nice knowing that you have to pay it off every month.
Credit is a nice thing but revolving credit will kill you.

[Paddycakes]

A "serious" talk over a measly $3000 credit card debt?

Jesus, I spend 5 Million Won a month just on monthly living expenses (I support a whole family by myself).

Reading your post made me feel like I was 22 again when $3000 was considered 'big money'.

Ah, the memories...

[Michelle]

The amounts you have on your credit card are of concern because they are big and difficult to pay at once.

If you are planning to be here for a year or more make a plan to put a portion into savings and a portion towards the card.

To do this effectively you will need to stop using them.

Is there any way for you to get a debit card?

With a plan it is possible to pay it off wihout crippling yourself from month to month. For example, if you paid $500 a month how long would the things last?

I believe saving are important in an emergency and credit to me has served as a fair weather friend. To me, it is not really preferable for emergencies if it bites you later.

[Cheonmunka]

[jbpatlanta]

OP: Pay off the debt ASAP. The interest compounds and will quickly negate any advantage of waited to change money. Get them paid off as soon as possible, then you can hold the rest of your money until the xchange rate gets better.

Other: 5 million a month! Geez! I support a family of 4 on around 2.5 million and that's including my mortage! What do you spend money on?

[Paddycakes]

[politica]

First off, thank you to those of you who replied, I really do appreciate it.

For what its worth, I am 23, and $3000 (x2!) does seem like a lot of money sometimes.

That being said, I think I will "bite the bullet" and send money home soon. I've only been in Korea for six months, but I'm already seriously considering signing on again. I like Korea and I love my job. I'd like to get this situation off my mind . . .

Unfortunately, I have nothing to sell on Ebay. The one little thing I forgot to mention, which now seems worth noting, is that I have a car back home. 1997 Honda CRV. The title is in my name, but its currently being driven and maintained by my dad (because my step-mom hogs the cadillac). Great little car, I tell ya. I've mentioned selling it to him several times . . . but he keeps wanting me to "hold out" . . . I think its a last-stitch effort to get his "baby girl" to come home. *sigh*

Anyhow, I apologize for dragging you all into my financial/familial drama, but I thank you greatly for your help.

Best,
politica

[Fredbob]

OK, one bit of wisdom I can't explain, wait until the end of the month/beginning of next month and there should be a pop up on the exchange rate, well founded rumours are that most of the Korean conglomerates are going to jump in to pump up the exchange rate sometime late this month or early next.

3000 on a credit card is basically nothing, especially if you are living here and make at least a modest attempt to live frugally. It's also nothing to the credit ratings agencies. There is two things you need to do first, if your credit rating is so low and you haven't made many late payments, there is the off chance that you've been the victim of identity theft, get at least 2 free credit reports and look through them. Next, any kind of store credit card, JCPenneys, Victoria Secret, whaterver, dump them.

Next, two options
1) Get some equity, if you don't really own anything valuable, you have no collateral. One reason it is easy to get a car loan is because, if you don't pay, they can repo the car and at least get something back, same thing for home equity loans (until recently). stocks, property, something.

2)This will sound strange, but use your credit cards, push the limits, BUT PAY THE BALANCE OFF COMPLETELY EVERY MONTH. There are some side benefits to this in terms of earning bonus points, just make sure you get a credit card that only charges interest after one month, Amex is, in fact a good choice. My experience has been that they will automatically raise your limit and credit card companies do offer an amazing array of point benifit packages, it's just that they usually come through the junk mail nobody reads.

Oh, something I just thought of, make sure then credit card companies have your marital status correct, married is better. Also, your ethnicity, make sure that is correct, sucks to say, white is best.

How do I know this? I did a consultant gig for a year doing database marketing for one of the biggest multinationals in the world (you don't get a name because I'll be dXXXXX if I remember how long the non-compete, non-disclosure agreement I signed was for. Here, I work with executives of the major conglomerates, some of whom are directly involved with businesses tightly keyed to the currency market.

[blaseblasphemener]

[Ilsanman]

We live on about 1.8, that's for 3 of us.

Pay it off asap. It'll save your credit rating some as well.

[Paddycakes]