Monday, March 22, 2010

Lure of gold and selling your old unwanted jewelleries

I read an interesting article from the SMH (author Lesley Parker) about steps you should take first before selling your unwanted gold jewelleries in order to obtain the best price for yourself.

"1. Make your own estimate of the value of the gold jewellery you're thinking of selling
2. Obtain at least three quotes.
3. Check that the buyer has a second hand dealer's licence and calibrated scales
4. Consider whether you'd get more selling jewellery intact rather than as "scrap" metal
... consumers should expect about 80 per cent of the spot price for gold per gram according to its carat value..."

Step one is the most complicated because it requires you to weigh and value your own jewellery yourself. First, the confusion of gold terminologies need to be cleared up:

Troy ounce = 31.1 grams and is the unit used for measuring gold
Avoirdupois ounce = 28.4 grams is the standard ounce that we typically use
24 carats = pure gold
22 carats = 916 = 91.6% pure gold (22/24=91.6%)
18-carats = 750 = 75% pure gold (18/24=75%)
14-carats = 585 = 58.5% pure gold (14/24=58.5%)
9-carats = 375 = 37.5% pure gold (9/24=37.5%)

Parker writes that using grams will simplify things and you can ask the buyer (second hand dealer) to to put their offer to you as a price per gram.

i) Separate your gold jewelleries into piles of the same purity and weigh those piles separately
ii) The amount of gold you actually have is achieved by multiplying the weight of the piles by the purity. Eg 300g of 9-carat gold jewellery would melt down to 112.5g in pure gold (300g x 0.375 purity).
iii) Now you can roughly estimate the value by multiplying the pure gold weight by the prevailing gold price. Using the example from above: 112.5g x $40/gram = $4,500 for the pure "gold" in your jelleweries.

Although gold prices are usually listed in troy ounces, Parker wrote that you can find the price per gram (instead of troy ounce) in Australian dollars at which would be useful if you're not great at converting grams into troy ounces.

Using the example from above, 112.5g is 3.62 troy ounces (ie 112.5/31.1).

Gold buyers usually do not want the stones and if they do, ask for an additional quote for the stone that is separate from the quote for the gold. If you're in Australia, then you can check the guide for Jewellers Association of Australia for additional information.

If you're interested in buying gold as an investment then you can buy gold coins or bullions from or buy gold investments through the ASX.

Sunday, March 21, 2010

Understanding Credit Card Charges

If you buy $2000 worth on your credit card and don't pay that $2000 off by the due date, then you will be charged interest on the entire balance - even if you made a partial repayment of $1999.

If you pay the bill late, then most credit card companies will charge interest back to the purchase date (back dating interest).

If your bill is overdue, then most will cancel your interest free days until the overdue balance is paid completely.

Some credit card companies will charge interest on the entire balance even if you've paid a portion of your bill (even the new transactions that hasn't been billed to the statement yet). So until you pay your credit card statement in it's entirety, you will be charged interest even on the portion that you have partly paid off. And lose the interest free days on all the new transactions until the entire statement balance is paid off. This is entirely unfair but this is how they operate.

Balance transfer deals involves transferring your debt from one credit card provider to a new one who might be offering six months interest free deal. When the special period ends (in this example, it's six months) and there is a transfer balance remaining, the interest will be charged on that balance as if it was a cash advance. Cash advance rates are usually much higher than transaction rates.

If you find that you have overlooked the bill and paid it 1-2 days late (or even up to 1 week late) by accident and you have a good payment history, phone your card provider to explain and request them (very politely of course) to reverse the late fees and interest charges as a courtesy to you. They will usually reverse it for you if you have a good reason or you have a good payment history. It is usually left to the discretion of the staff member that is working which is why it pays to be polite when calling them to reverse any charges and fees.

If that doesn't motivate you to pay off the credit card statement in full, then you shouldn't be using a credit card. Not when it's costing you 10-28% extra in terms of interest charges.