Thoughts To Live By…

Archive for the ‘Personal Finance’ Category

Erica Sandberg, On Wednesday January 26, 2011, 1:00 am EST

It’s amazing how often we blindly hand over our credit cards and numbers to so many people and businesses. Why? We trust them! The problem is, however, that sometimes we’d be better off holding back and taking a more discretionary approach. Certain individuals and companies should be off limits. To keep safeguard your credit, avoid giving the following folks unlimited access to your account.

1. Your darling child. Whether you have a PC, smart phone or iPad, chances are high that your kid has become quite the gaming pro. She begs for your password and soon your bill swells. It happens, and the damage can be extreme. In January 2011, a 7-year old in British Columbia was on an iPod and found an app called Touch Pets – Dogs 2. An hour’s worth of play ran up $852, which was charged to the credit card her parents had on file with iTunes. “Trust can’t come without education and maturity,” says Jan Ruskin, spokeswoman for Creative Wealth International, a financial literacy product company. And clearly a child can’t be expected to read and understand fine print.

2. Callers investigating a credit card scam. The man on the phone sounds both professional and deadly serious. He’s with the police or credit card company, and he says that your account has been compromised . To confirm your identity, he needs you to read off your card’s numbers. The catch: He’s the thief. “No responsible agency will work this way,” says Los Angeles-based security expert Chris McGoey. It’s easy to fall for this scam because very often the caller knows a few facts about you. “They’ll get a hold of people from a list — religious, political, etc. The story sounds plausible,” says McGoey. To ensure all is well, though, hang up and call the number on the back of your card.

3. Loved ones. You’d think you could rely on your best bud to never do you wrong, right? Well, not necessarily. Sometimes it’s those closest to us who abscond with our credit information. A 2010 Identity Fraud Survey Report found at least 13 percent of all identity theft is perpetrated by friends, neighbors and other close acquaintances. Lend a pal your card or leave statements in plain view and you could be exposing yourself to trouble.

4. The hired help. It may save you time to hand over your Home Depot card to a contractor, or give your Visa to the nanny so they can buy supplies, but that’s giving strangers way too much access. They might be the most upstanding people in the world, but you should still order your own stuff. The only people who should ever charge on your card besides you are other co-signers and authorized users.

5. Virus protection heroes. Get online and see a warning message that your computer has a virus needing immediate attention? Use extreme caution when purchasing new protection software. “Don’t trust anyone who tries to scare you into downloading software to fix your PC that’s supposed to have a virus,” warns Robert Siciliano McAfee, a consultant and identity theft expert. “This is scareware, and it will mess up your operating system, and your card will be charged more than once.”

6. The disappearing waiter. Anytime your plastic is swept away by another person, you have reason for pause. Unfortunately, some restaurant staff may be especially dangerous. “Many skimming networks operate using wait staff,” warns Steve Rhode of GetOutOfDebt.org. “They will pay $50 or more for credit card information that can be swiped off your card using a small electronic device that reads the magnetic strip on the card. Skimming only takes two seconds.” While you can’t always control where they take the card, it’s important to check your receipts and statements immediately.

7. The “helpful” debt collector. If you owe money to a collection agency, you might be asked to enter into a payment plan or settlement agreement using your credit card. Don’t do it, says Sonya Smith Valentine, attorney and author of “How to Have a Love Affair with Your Credit Report.” “If you are working out a deal on past due debt with a debt collector, send a money order,” she suggests. “Some debt collectors will charge your card for the whole amount that you owe, not just the amount they agreed to settle the debt for.”

8. You. According to Carrie Coghill, director of consumer education for FreeScore.com , the person you might want to be most wary of may be reflected in the mirror. “Even the smartest people do the dumbest things,” Coghill says. She cites examples of those who consolidate debts on low interest rate cards, but don’t pay attention to the special rate time frame and get hit with super high APRs, and millionaires who overextend themselves because they must have the latest things. So look inward, cardholder: If you can’t trust yourself to stay out of debt, purge your wallet of plastic.

While casting suspicious glares at everyone is unnecessary, being careful can prevent common credit problems. Monitor your financial affairs too. “The bottom line is the best deterrent against credit card fraud and abuse is for you to monitor your monthly statements and check your consolidated credit report twice a year,” says Rhode.

http://finance.yahoo.com/news/8-people-trust-credit-card-creditcards-1745829924.html?x=0

by Kimberly Palmer
Monday, January 10, 2011

Job security might be out, but freelance, contract, and temporary work is in, which makes it easier than ever to moonlight as a graphic designer while you spend your days as a public relations rep. Slimmer staffs mean companies often need the extra help, and new websites offer free tools that match potential employers with workers. And earning extra money beyond your steady paycheck, if you’re lucky enough to have one, can provide a big boost to your financial security.

Here are seven ways to make extra money off the new economy in 2011:

Launch a Brand
When Kimberly Seals-Allers, former senior editor at Essence magazine, was expecting her first child, she discovered that black women face higher risks during childbirth and pregnancy. “I realized we were a special group, and I wanted to write a book about everything in black women’s lives. Not just pregnancy, but money, men, and myths in our community. [I wanted] to create a new way forward.”

Her first book, “The Mocha Manual to a Fabulous Pregnancy,” turned into a series as well as an online magazine, maternity line, and consultancy. Seals-Allers also licensed use of the Mocha Manual name to create an instructional DVD sold at Walmart and supermarkets.

Start a Blog
The anonymous blogger behind Lazy Man and Money defies his site’s name. He works about 14 hours a day on weekdays and then puts in nine hours on Saturday and Sunday. But his hard work is paying off — his blog earns him enough to support his lifestyle; back in 2008, he estimated his annual earnings at around $30,000. But it’s tough for part-time bloggers with full-time jobs to keep up with all the demands of a lucrative blog. “There’s simply a lot more [to do] than what the average reader sees,” he says.

Even if the blog itself doesn’t generate a six-figure salary, it can lead to other money-making opportunities, such as consulting or speaking gigs. Silicon Valley Blogger at The Digerati Life has carved out a successful niche as the expert on personal finance and technology in Silicon Valley. While she says she didn’t earn much during the first six months of her blog’s life, she received her first $100 check from Google AdSense shortly after that point, when she was getting around 600 unique visitors a day. She now earns money from her blog-related consulting, as well.

[Industries With the Biggest Boosts in Hiring]

Sell Your Skills
Whether your expertise lies in social networking, editing, or web development, several new websites can help you find potential clients willing to pay you for your work. Elance.com, Odesk.com, and Guru.com make it easy to advertise your skills and find work, which you can do from the comfort of your home at all hours of the night. To get started, explore the websites to see what might be a good fit. You can also stick with a more traditional approach and use Craigslist.org, which allows users to post advertising for their services, ranging from household labor to music lessons.

Sell a Wacky Service
For those interested in a more unusual approach, the innovative website fiverr.com allows users to sell (and buy) services for $5. Current offerings include sketching a stylized portrait, writing a name on a grain of rice, and digitally restoring a photograph. It’s one of the trendiest ways to make a quick buck for the internet-savvy; dozens of videos, websites, and blogs offer advice on how best to earn money off the site. The best advice? Since you’re only going to make $5 a pop, sell a service that you can do easily and quickly.

Talk and Teach
Colleges, organizations, and companies are constantly on the lookout for new experts that can inspire an audience. If you’ve built up an expertise on a subject, perhaps through your blog, then consider branching out with some speaking gigs. Offer to talk for free at first to build up your reputation, and then a speakers’ bureau can help connect you to paying gigs (for a cut of your fee).

[Resolutions That Will Save You Money]

Design T-Shirts
Companies such as CafePress.com allow people to design and sell their T-shirts for a cut of the profits. According to the company’s website, some users earn over $100,000 a year. But it’s not always easy: Jen Goode, who earns enough through CafePress to pay her mortgage each month, found success after a year and a half of long, sometimes 16-hour days. Her time is spent creating designs and then uploading them. She has uploaded about 2,500 designs, many of which are cartoon oriented, including the popular penguin series. For her, she says, the secret has been to make many different images that are steady sellers, as opposed to creating one or two megahits. Now, she says she doesn’t need to put as much time into her shop because she has such a large inventory of designs.

Sell Other People’s Products
Make-up companies such as Avon and Mary Kay are always looking for new sales representatives, as are other companies such as kitchen products seller Pampered Chef. “If you don’t have to make a big investment to get into it, it’s probably not a bad idea,” says Marcia Brixey, author of “The Money Therapist.” But she warns people to stay away from businesses that require sellers to make significant up-front purchases that they might not be able to unload.

 

The bottom line: The new economy offers plenty of creative ways to earn extra money; to find the best fit for you, consider your skills, lifestyle, and ambitions.

http://finance.yahoo.com/career-work/article/111747/ways-to-make-extra-money-in-2011?mod=oneclick


by Dana Dratch
Friday, March 19, 2010

Debit cards have different protections and uses. Sometimes they’re not the best choice.

Sometimes reaching for your wallet is like a multiple choice test: How do you really want to pay?

While credit cards and debit cards may look almost identical, not all plastic is the same.

“It’s important that consumers understand the difference between a debit card and a credit card,” says John Breyault, director of the Fraud Center for the National Consumers League, a Washington, D.C.-based advocacy group. “There’s a difference in how the transactions are processed and the protections offered to consumers when they use them.”

While debit cards and credit cards each have advantages, each is also better suited to certain situations. And since a debit card is a direct line to your bank account, there are places where it can be wise to avoid handing it over — if for no other reason than complete peace of mind.

Here are 10 places and situations where it can pay to leave that debit card in your wallet:

1. Online

“You don’t use a debit card online,” says Susan Tiffany, director of consumer periodicals for the Credit Union National Association. Since the debit card links directly to a checking account, “you have potential vulnerability there,” she says.

Her reasoning: If you have problems with a purchase or the card number gets hijacked, a debit card is “vulnerable because it happens to be linked to an account,” says Linda Foley, founder of the Identity Theft Resource Center. She also includes phone orders in this category.

The Federal Reserve’s Regulation E  (commonly dubbed Reg E), covers debit card transfers. It sets a consumer’s liability for fraudulent purchases at $50, provided they notify the bank within two days of discovering that their card or card number has been stolen.

Most banks have additional voluntary policies that set their own customers’ liability with debit cards at $0, says Nessa Feddis, vice president and senior counsel for the American Bankers Association.

But the protections don’t relieve consumers of hassle: The prospect of trying to get money put back into their bank account, and the problems that a lower-than-expected balance can cause in terms of fees and refused checks or payments, make some online shoppers reach first for credit cards.

2. Big-Ticket Items

With a big ticket item, a credit card is safer, says Chi Chi Wu, staff attorney with the National Consumer Law Center. A credit card offers dispute rights if something goes wrong with the merchandise or the purchase, she says.

“With a debit card, you have fewer protections,” she says.

In addition, some cards will also offer extended warrantees. And in some situations, such as buying electronics or renting a car, some credit cards also offer additional property insurance to cover the item.

Two caveats, says Wu. Don’t carry a balance. Otherwise, you also risk paying some high-ticket interest. And “avoid store cards with deferred interest,” Wu advises.

3. Deposit Required

When Peter Garuccio recently rented some home improvement equipment at a big-box store, it required a sizable deposit. “This is where you want to use a credit card instead of a debit,” says Garuccio, spokesman for the national trade group American Bankers Association.

That way, the store has its security deposit, and you still have access to all of the money in your bank account. With any luck, you’ll never actually have to part with a dollar.

4. Restaurants

“To me, it’s dangerous,” says Gary Foreman, editor of the frugality minded Web site The Dollar Stretcher. “You have so many people around.”

Foreman bases his conclusions on what he hears from readers. “Anecdotally, the cases that I’m hearing of credit or debit information being stolen, as often as not, it’s in a restaurant,” he says.

The danger: Restaurants are one of the few places where you have to let cards leave your sight when you use them. But others think that avoiding such situations is not workable.

The “conventional advice of ‘don’t let the card out of your sight’ — that’s just not practical,” says Tiffany.

The other problem with using a debit card at restaurants: Some establishments will approve the card for more than your purchase amount because, presumably, you intend to leave a tip. So the amount of money frozen for the transaction could be quite a bit more than the amount of your tab. And it could be a few days before you get the cash back in your account.

5. You’re a New Customer

Online or in the real world, if you’re a first-time customer in a store, skip the debit card the first couple of times you buy, says Breyault.

That way, you get a feel for how the business is run, how you’re treated and the quality of the merchandise before you hand over a card that links to your checking account.

6. Buy Now, Take Delivery Later

Buying now but taking delivery days or weeks from now? A credit card offers dispute rights that a debit card typically does not.

“It may be an outfit you’re familiar with and trust, but something might go wrong,” says Breyault, “and you need protection.”

But be aware that some cards will limit the protection to a specific time period, says Feddis. So settle any problems as soon as possible.

7. Recurring Payments

We’ve all heard the urban legend about the gym that won’t stop billing an ex-member’s credit card. Now imagine the charges aren’t going onto your card, but instead coming right out of your bank account.

Another reason not to use the debit card for recurring charges: your own memory and math skills. Forget to deduct that automatic bill payment from your checkbook one month, and you could either face fees or embarrassment (depending on whether you’ve opted to allow overdrafting or not). So if you don’t keep a cash buffer in your account, “to protect yourself from over-limit fees, you may want to think about using a credit card” for recurring payments, says Breyault.

8. Future Travel

Book your travel with a check card, and “they debit it immediately,” says Foley. So if you’re buying travel that you won’t use for six months or making a reservation for a few weeks from now, you’ll be out the money immediately.

Another factor that bothers Foley: Hotels aren’t immune to hackers and data breaches, and several name-brand establishments have suffered the problem recently. Do you want your debit card information “to sit in a system for four months, waiting for you to arrive?” she asks. “I would not.”

9. Gas Stations and Hotels

This one depends on the individual business. Some gas stations and hotels will place holds to cover customers who may leave without settling the entire bill. That means that even though you only bought $10 in gas, you could have a temporary bank hold for $50 to $100, says Tiffany.

Ditto hotels, where there are sometimes holds or deposits in the hundreds to make sure you don’t run up a long distance bill, empty the mini bar or trash the room. The practice is almost unnoticeable if you’re using credit, but can be problematic if you’re using a debit card and have just enough in the account to cover what you need.

At hotels, ask about deposits and holds before you present your card, says Feddis. At the pump, select the pin-number option, she says, which should debit only the amount you’ve actually spent.

10.  Checkouts or ATMs That Look ‘Off’

Criminals are getting better with skimmers and planting them in places you’d never suspect — like ATM machines on bank property, says Foley.

So take a good look at the machine or card reader the next time you use an ATM or self-check lane, she advises. Does the machine fit together well or does something look off, different or like it doesn’t quite belong? Says Foley, “Make sure it doesn’t look like it’s been tampered with.”

http://finance.yahoo.com/banking-budgeting/article/109125/10-places-not-to-use-your-debit-card?mod=bb-checking_savings

pastdue

Grade yours on a 10-point scale.

Nobody’s perfect. When it comes to our financial lives, we’ve all done things we later regretted — whether it’s getting slapped with a $3 fee for using an out-of-network ATM or going on a Las Vegas bender and losing the house on an overly aggressive poker bet.

The key is to understand the scale of the transgression. With credit card blunders, that’s no easy task — is it worse to take a cash advance or to pay a bill a day or two late? Experts graded a range of credit card mistakes on a scale from 1 (losing a few bucks to a cash machine) to 10 (losing the house). Find out which worry the pros most — and which may (almost) get a free pass.

Paying Late
How bad is it? 6
The details:
Credit card companies are notoriously prickly about late payments — even a payment that’s late by a few minutes can pile up fees, interest charges and other penalties. Depending on how late the payment is, your card issuer may also report the problem to any of the credit bureaus, which can wreak havoc on your credit score. The good news, says Stacy Francis, president of Francis Financial, is that the error may be reversible. “You do have the option of giving the credit card company a call and asking them not to report it,” she says. “If you’ve generally been an on-time payer, they may waive the fees and not report it.”

Paying Only the Minimum on Your Card
How bad is it? 4
The details:
Credit card companies love it when you pay off your debt slowly, but you should loathe it. It won’t necessarily affect your credit score, but that doesn’t mean it’s a good practice. Sending in only the minimum payment “is definitely going to keep you in debt longer, and you’re going to pay a heck of a lot more in interest,” says Francis. “You may be paying twice as much — or more — as you would by paying in cash.”

Buying On a Card Just For Rewards
How bad is it? 1
The details:
If you’re paying off your balance on time and in full, using your cards to grab extra rewards isn’t necessarily a bad plan, says Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling. “You can win the rewards card game if you know how to play,” she says. “But you do have to know yourself.” Because most people spend more when they’re paying with plastic than with cash, be cautious and recognize when you’re buying something only because plastic makes the purchase painless.

Missing a Payment
How bad is it? 9
The details:
Not only are you going to be slammed with fees, interest charges and other penalties when you miss a payment, but you’ll likely see a rise in your interest rates. If that weren’t bad enough, you’ll also have to contend with a significant hit to your credit report — about 35 percent of your credit score is based on your ability to pay bills on time. As a result, you’ll pay more when you try to get a loan. “Missing a payment has both immediate and long-term consequences,” says Clarky Davis, Care One Debt Relief’s Debt Diva. “You may be dealing with the fallout for years.”

Having Too Many Cards
How bad is it? 6
The details:
If you’re the type to apply for a card just so you can grab a discount on clothes or other merchandise, you likely have a huge stack of cards in your purse or wallet. You’re probably not getting enough value from the card to make it worth the high interest rates or additional complications from additional bills and junk cluttering your mailbox — and you’re increasing the likelihood that a payment slips through the cracks or that you’ll be a victim of identity theft. “There’s rarely a good reason to get a new card if you’ve already got a general-purpose card, a rewards card and a low interest card,” says Cunningham.

Maxing Out a Card
How bad is it? 7
The details:
Maxing out a card can have a serious impact on your credit score, since about 30 percent of your score is based on “credit utilization” — the amount of credit you’ve used relative to the amount you have available. More important, says Davis, is the fact that it likely signifies a distressing trend in your personal finances. “Maxing out a card may not have an immediate financial pull, but it’s a sign that you’re not budgeting or spending your money wisely,” she says. “It means you don’t have enough saved up to cover unexpected expenses.”

Playing the Balance Transfer Game
How bad is it? 5
The details:
Moving your debt from a high-interest card to a low-interest card with a balance transfer isn’t as smart a move as you think, says Francis. “About 15 percent of your credit score is affected by your recent credit applications,” she notes. Pile up a few transfers and your score will take a hit. “Credit bureaus don’t (differentiate) that these cards are for the same [debt], they just see it as you getting pre-approved for more and more credit.” Add in the fees that generally accompany balance transfers and you’re not gaming the system — you’re getting hammered by it.

Debt Settlement Plans
How bad is it? 9.5
The details:
If you’re overwhelmed by debt, negotiating down your balance with the credit card company (also called debt settlement) sometimes helps you pay pennies on the dollar on your debt — but you’ll pay a steep price. First, there’s the tax hit you’ll take for the amount of debt that’s forgiven — it will count as income during that tax year. And your credit score will be decimated, so don’t expect you’ll be able to take out a loan soon after consolidation. Next to bankruptcy, debt settlement “is the most negative thing you can do to your credit score,” says Francis.

Getting a Cash Advance?
How bad is it? 8
The details:
It may feel like free money, but the truth is that it’s anything but: You’ll likely have a fee associated with the advance, and you’ll likely pay a higher interest rate than you would by using the card associated with it. “You also have no grace period,” notes Cunningham. “You’ll start accruing interest from the moment you get the money.” While these are all dangerous attributes in and of themselves, they’re not the worst part, says Cunningham. “When you start using cash advances, you have to understand why you’re using them as they’re likely symptomatic of a deep financial problem.”

Using a Card in a Pinch
How bad is it? 2
The details:
If the fridge went on the fritz or the furnace conked out in mid-January, you might not have the means to fund its immediate replacement. Putting the bill on a credit card — and paying it off quickly over the course of a few months — is a pretty solid option, says Cunningham. “You don’t want something like that to become standard operating procedure,” says Cunningham. “But it’s OK to have a balance on a card for a few months when you’re going through a rough patch in your financial life. Just make sure it’s on a card without an annual fee or with a very low annual fee.”

http://finance.yahoo.com/banking-budgeting/article/107996/how-bad-are-your-credit-card-mistakes?mod=bb-creditcards


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