Expert Interview with Chris Muktar on Economic Recovery for Mint

There's no question that Americans took a financial beating between 2007 and 2009.  A survey conducted by Rutgers University last year found that 73 percent of us were personally affected by the Great Recession - either having lost a job or been close to someone who lost one.

Given the fact that it's been seven long years since the economy collapsed in a smoking heap of burst bubbles, we're all looking over the rainbow for some much-needed financial respite.

But personal finance blogger Chris Muktar cautions that we shouldn't be overly optimistic.

"There's a sense that with low interest rates, everyone can 'afford' to be in debt, and that this is the 'new normal' - but this is anything but the case," the founder of ConsumerFu, says. "The government will likely put interest rates up slowly, so as not to shock those with significant debt, but it's important to realize that this will happen, so it makes sense to plan around it."

We recently checked in with Chris to get his insight on everything from taking on extra debt in the form of credit cards to the amazing power of compound interest. Here, he shares great tips on finding your pot of gold without relying on wishful thinking or ruby slippers. Read on:

Tell us the story behind ConsumerFu...when and why did you start the site? What does the name mean?

The word "fu" is Chinese for happiness. The idea is to try and offer impartial advice to consumers about saving money, credit cards/loans and saving for college. Too many sites recommend just the products that pay them the highest commissions. ConsumerFu does not take commissions.

What are the most common personal finance questions or concerns your readers come to you with?

The two largest categories of people are those who are very financially astute already and are looking to do even better - perhaps by finding the best bank to put their cash in or learn to save money with coupons - and those who are deeply in debt, typically from credit cards, who are looking for a way out.

What financial decisions do you think Americans are most likely to avoid or overlook? Why do you think this happens?

Saving for retirement, particularly for the self-employed, doesn't seem important until it's too late. But the power of compounding is incredible.

Here's an example: If you saved $5,000 per year between the ages of 20 and 30, that would leave you with a pension pot of around $800,000. However, if you started at age 30, you would have to put in $5,000 per year until you were 65 to get the same $800k. Conversely, if you have a child, if you were to make contributions for them of $5,000 for just their first two years of life - they would never need to make any contributions of their own - by the time they reach 65 their pension will be worth around $800k.

The other thing people need to remember is that the low interest rate is only temporary and is definitely in its final chapter. Most likely it will return to around five percent over the next few years (which is what many economists agree is a healthy level). People who take on long-term debt should consider how affordable it might be if their repayments tripled.

What are some of the easiest or quickest ways we can save money in our day-to-day life? What about longer term?

Instantaneous wins are cooking more and eating out less, cutting back on costly Starbucks coffees and generally looking for where you're "wasting" money on valueless things. There are so many ways that just changing our daily routine could save many thousands of dollars over the course of a year and a fortune over the course of a lifetime.

What are some best practices for using credit cards? What should we be doing to avoid taking on extra debt?

The first rule of credit cards is to always make the repayment. Set it up to debit automatically from your bank account if you can so you don't have to worry.

For those who don't have any debt, use them to collect points. There are a number of card companies that offer benefits for using their cards, including cash-back credit cards and gas rewards cards - these are my favorite and everyone should use these.

For those who do have debt, stop using the cards immediately. Find a card with a low interest rate and zero percent balance transfer and move to it. Work out a plan for how much you can repay every month and stick to it. When the card's offer period runs out, swap to another. This guide can help you. The sooner you get the cards paid off, the better.

What tips can you offer on shopping for a credit card? What things should we consider?

There's a lot of competition for cards, and many come with a whole range of benefits. It's best to compare online and see what you can find. Store cards can be useful if you spend a lot of money at a particular store. Always calculate what the points are worth, though.

Why is it important to review our credit reports and how often should we be doing it?

Reviewing credit scores is not something you want to do often unless you really need to; at most, once every two years. When you inquire into your credit record, a note is made on the credit record (know as a "hard inquiry"). Checking too often will arouse the suspicion of lenders.

The bulk of your credit score is generated from two factors - your history of repayment and how much money you owe compared to your available credit. It tends to be much better to focus on better credit "habits" rather than worrying about the score itself. ConsumerFu has a guide ("How Credit Scoring Works").

What are some ways we can improve our credit scores?

Start early so you have a credit history. Don't ever take on any debt that you don't need. Try to make the repayments. Perhaps the most important thing is to make financially astute choices from the outset - try not to buy/rent a house fancier than you need, or get a car that's more than what you need it for. By doing these things, you'll increase the amount of available credit to you, which means when you really do need credit, you can obtain it easily.

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