The Art of Credit

My world has turned into a search for credit, good credit, excellent credit, credit that will buy my house. I have lived off the grid on a generous budget for about 20 years, living within my means, and still living well (with a hiccup here and there when money was tight for a few days and food scarce), but that is not good in this credit obsessed world. I must have excellent credit and credit is a trap. At least as far as I see it.

I've been where my bank account emptied because of my ex-husband's inability/unwillingness to pay his debts. No matter what the divorce decree said about who paid for what, all the creditors cared about was money, specifically, my money. An attorney emptied out my checking and savings account without notifying me, which they can do once, and I didn't find out about it until the check for my rent bounced. Then checks for utilities, phone, groceries, and a loan to a family member also bounced. That's when I found out I had NO money and when I decided to go off the grid. That was about 20 years ago.

Now I'm being forced to deal with credit again and it's confusing and complicated and like looking down the basement to Hell and knowing the only way to get where I want to go through is down into the darkness and through Hell.

The first step of my credit plan worked fine. And then things started happening. A bank credit card I had applied for sent me a letter asking why I had not sent the paperwork necessary to prove my identity. I already had, but they obviously had not received it yet. The next day as I was getting ready to call the bank and ask if they had the information yet, I received an email that congratulated me on my brand new credit card, listed the last 4 numbers of the card, and said the card would arrive in 7 business days. That will be the middle of next week. I have no idea what the limit is, but anything over $300 will be beneficial at this stage of the move. That cushion will put me over the hump so that even my most generous estimations will be secure. Better yet, I will soon be the accredited user of a bank credit card, not a debit card, and credit will be established and accruing points.

I already have a plan in place for that too. I will use that credit card instead of my debit card to pay for all purchases, like groceries, and set that amount aside on my debit card until the end of the month, at which time I will then pay off all but $10 or $15 of the balance. The mortgage broker, Ingrid, said I should keep a $10 to $15 balance on the card every month. I've always thought that paying off the whole balance every month was better, but evidently it is not. I prefer the pay the whole balance plan and thus save myself paying interest, but maybe the point is paying the interest. I don't know, but I have an alternate solution. I'll pay the balance off every other month and leave a $10 to $15 balance on the other months.

Now I find out that a bank credit card isn't enough. I should also have a store card, like J. C. Penney (they already turned me down because I don't have a credit rating) or Macy's or Sears (hard to get) or Neiman Marcus (high end, but would look good on the report). I'll just have to decide what store will look best on my credit report and buy myself something small every month or two. Probably every other month if I go with Neiman Marcus. Pay it off like the bank credit card and not leave a balance if it's Neiman Marcus, which will require me to save the money well in advance. I am moving into a brand new house and will need a lot of new things, like furniture, drapes, curtains, curtain rods, patio furniture, throw rugs for those awful commercial patterned rugs, etc. Talk about debt.

I don't want to get ahead of myself, especially not with credit. I'll plan what I need and buy it as I can afford it once the major expenses, like utilities, phone, WiFi, mortgage, and gas for the car, are paid off first. I can still live within my means by using credit as long as I keep my head. Too bad no one taught me that when I was a child.

That's the thing. Parents thrust their children out into the world without explaining how credit works and why it is important and how to write and live within a budget, etc. Children are unprepared for life as an adult, though kids yearn toward the time when they are no longer under their parents' thumbs and able to stay up late if they choose. When a child's dreams are set on drinking alcohol, deciding their own curfews, and choosing who they will and won't allow into their lives, something is definitely wrong. Parents should train their children how to be an adult the same way they taught their kids to ride a bike and swim and do the dishes.

I remember asking to take ballet lessons and to get a membership to the local swimming pool, which was $15 a summer, and being told no because my parents couldn't afford it. That baffled me for a long time. How could they not afford $15 when Mom wore tailor made clothes and formal dresses for Eastern Star every year that made my $15 membership to the pool look like  a tip? A closet full of shoes and blouses and suits, most of which still had the tags on, boxes of makeup, several jewelry boxes full of necklaces, earrings, bracelets, and diamonds, but a $15 pool membership was too much to ask. That doesn't even take into the account the first edition books that filled several bookcases, the brand new furniture and carpets every 4 or 5 years with drapes to match, the brand new televisions, and the expensive vacations, but $15 for the pool was too much.

I got a job and paid for my own pool membership, but I still didn't have a clue about credit or how it works or how to manage a budget. That knowledge came after years of debt and marriages to two men who didn't have a clue about the true meaning of joint account and balancing the checkbook.

When it all comes down to it, I still would not have bought a house until now, but I probably would have had a lot more money in the bank for a down payment and excellent credit by now if I had only been taught and had known how important it all is.  I have learned, but the fire walk has been painful and long and it could have been avoided if my parents had taught me how it all worked.

I have learned patience and that I don't have to have something immediately. I have time to buy bedroom and office furniture for my house, time to choose and save for area and throw rugs for the living room and bedrooms, time to buy matching plates and good silverware, time to do it all and time to save for it even with credit. I can wait. I have time.

And now I have credit, but I'm still going to live within the budget that has kept me safe and not in debt to anyone. It will be the best of both worlds and a lesson well learned. Credit is a necessity, but good credit, even excellent credit, is an art.

Fox Books and The Shop Around the Corner

The debate between independent and traditional publishing authors is heating up and now bookstores have been added to the discussion. If Hachette does not get its way with Amazon, then bookstores will suffer. Bookstores will become extinct and books will no longer be available through the friendly neighborhood bookstore. It's like the underlying theme of You've Got Mail with Meg Ryan and Tom Hanks.

The 3rd generation owner of Fox Books, Joe Fox, sells books, lots of books, at low, low prices, much like Amazon. The Shop Around the Corner, owned by Kathleen Kelly, the daughter of the original bookstore owner, sells children's books at a much higher price, buying them from publishers at about 50% wholesale, which means she must sell the books at a much higher price than Fox Books. It's all about volume sales.

Kathleen Kelly also hosts authors for signings and reads books to children. It is part of the service she provides as the bookstore owner. She decorates her windows with books and photos of children's book authors and sells rare and expensive hand tipped books, packing everything in canvas book bags for customers. The Shop Around the Corner is a boutique business in the old world tradition.

Joe Fox sells millions, perhaps billions of books, and sells all the books at deeply discounted prices. He can afford to sell books cheaper than Kathleen Kelly because he has the space to buy more books and get a better deal on price than The Shop Around the Corner. "It's business. It's not personal," as Joe tells Kathleen as they battle for supremacy.

The audience groans when Fox Books puts another bookstore out of business, a mystery bookstore, and they cheer when Kathleen appears on TV to fight the good fight to protect her little children's book shop. Meanwhile, Joe Fox touts his deep and comfortable chairs, food, and lattes and the way readers can come and sit for hours and just read and relax.

In the real world, Barnes & Noble is Fox Books and boutique neighborhood bookstores were put out of business by Barnes & Noble because B&N could afford to sell books cheaper and they offered scones and lattes and comfortable chairs where book buyers could sit and relax and read and write or do whatever. B&N also hosted authors for readings and signings and even sold records, cassettes, and games, as well as iPods and tape players. B&N was the future of bookstores while neighborhood book stores unable to get deeply discounted prices for published books fought for space and sales.

The thing is that no one seems to remember that the death of the neighborhood and privately owned bookstore was touted when Barnes & Noble and Borders and Books-a-Million and Half Price Books and other discount bookstores came onto the scene and drove independent bookstores out of business.

Then along comes Amazon and a brand new technology - eBooks and Kindle. B&N and Borders were no longer the flavor of the month. They had been replaced by a virtual store that sold books at deeper discounts than B&N offered and Amazon quickly took the book buying world by storm. B&N and Borders liked that they could keep a book for years and send it back to the publisher worn, torn, and shelf scarred and get a full refund. That was a deal born of the Great Depression when publishers were motivated to keep bookstores in business, a model that has not changed and one that nearly cost publishers -- and eventually authors who had to give back royalties -- a bundle in October 2008. It was a bad time and an even worse one for authors who were hard hit by returning their royalties and not getting royalty checks when bookstores, like B&N and Borders, returned all those books, books that went directly to the landfills.

Life is about change -- and so is business. Either move with the times and innovate or be buried in the dust. That is what bookstores and authors and publishers and readers need to keep uppermost in mind.

As much as we all rail about this changing world and so many of us comfortable with the past want it to stay unchanged, that is not the way the world works, especially not when it comes to retail. In order for business to be viable it must make money. That is the bottom line.

It is also a bottom line that Barnes & Noble, Borders, and numerous privately owned bookstores do not seem to grasp. Amazon is not the enemy any more than Joe Fox was. It's business. It's not personal.

Except that it is personal to Hachette. Hachette still allows bookstores to buy books and return them for full refund even though the books have been on the shelves unbought and pawed over by untold numbers of potential book buyers. Hachette doesn't mind when books are dumped by the millions into landfills. It's a tax write-off they are more than happy to take at the end of the year, and they don't have to pay authors anything because the books were never sold. The perk there for Hachette and the Big-5 publishers is that even though the books were never sold, the numbers remain so their big name authors remain on the best sellers lists. It's all about numbers, just not numbers that include Amazon being able to dictate terms to PUBLISHERS.

Amazon just will not accept its place in the scheme of things. Hachette has been doing business in publishing for decades and upstart Amazon refuses to grasp that they are supposed to be grateful for being allowed to put Hachette authors on their virtual bookshelves. The nerve!

If bookstores want to stay in business, it is time to change the way they do business the way they did in the 1800s or even the 1980s and get move with the times. Sell books. Sell expensive books to make your profit, but diversify and seize the moment to look at business -- and life -- in a different context.

Kathleen Kelly closed her bookstore because she couldn't compete with Fox Books, but she found other options. Publishers asked her to write her own children's books. Some offered her a great salary to work for them as an editor. Opportunities opened up that were never possible as long as she clung to the past and memories of working in the bookstore with her mother when she was a child, memories that included growing up and becoming the new owner of The Shop Around the Corner. It was difficult saying goodbye to the past, but Kathleen Kelly embraced her new future.

Privately owned bookstores and chain bookstores still stuck with their original innovations now dusty and dated refuse to embrace the future, to look at the world from a different perspective.

We all hold fond memories of the businesses and, for me, the bookstores that were a bright part of our lives, but it is nearly impossible to give up $60 for a couple of books, no matter how beautifully hand tipped and First Edition rare, when that same $60 will buy me 6 or 10 or even 20 books just waiting to be opened, read, and explored -- and loved. In the end, it is all about numbers. More is better, especially when it comes to books, be they print or eBooks, thousands of which I can archive or put on the Kindle I take with me wherever I go. I love the convenience and format all my books in eBook form first, and I never have to worry about them being returned and buried in a landfill.

I still go to bookstores that provide a calm and quiet place to relax and read (sometimes on my Kindle), write in my journal, sip lemonade or tea, and eat a cranberry orange muffin on a lazy Saturday or Sunday afternoon. It's the best of both worlds and I look forward to the next innovation in publishing, which I hope will put the Big-5 publishers in their places and open up a world of possibilities.

Waht Hachette is Up to.

I'll keep this short and simple.

In a blog post by Hugh Howey, the data is clear. Hachette is ripping off authors and is fighting Amazon to continue to do so. Read it and weep.

So, Hachette authors in the midlist, how do you feel about that?

Michael J. Sullivan breaks it down so everyone gets the point.