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FEATURE ARTICLE:  Looking to earn extra income? Rule helps you avoid bogus business opportunity offers

Debt Management Credit Counseling Corp (http://www.dmcconline.org), a nonprofit charitable organization (DMCC), awarded grant of $17,366 from HUD to provide free comprehensive housing counseling to consumers in South Florida. Counseling to include pre-purchase home buying, post-purchase home ownership, foreclosure prevention and homeless services. DMCC also provides free budget counseling and assistance to consumers to repay unsecured debt.

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FEATURE ARTICLE:   Payday Loans Equal Very Costly Cash: Consumers Urged to Consider the Alternatives

The ads are on the radio, television, the Internet, even in the mail. They refer to payday loans, cash advance loans, check advance loans, post-dated check loans, or deferred deposit loans. The Federal Trade Commission, the nation’s consumer protection agency, says that regardless of their name, these small, short-term, high-rate loans by check cashers, finance companies and others all come at a very high price.

Here’s how they work: A borrower writes a personal check payable to the lender for the amount the person wants to borrow, plus the fee they must pay for borrowing. The company gives the borrower the amount of the check less the fee, and agrees to hold the check until the loan is due, usually the borrower’s next payday. Or, with the borrower’s permission, the company deposits the amount borrowed — less the fee — into the borrower’s checking account electronically. The loan amount is due to be debited the next payday. The fees on these loans can be a percentage of the face value of the check — or they can be based on increments of money borrowed: say, a fee for every $50 or $100 borrowed. The borrower is charged new fees each time the same loan is extended or “rolled over.”

The federal Truth in Lending Act treats payday loans like other types of credit: the lenders must disclose the cost of the loan. Payday lenders must give you the finance charge (a dollar amount) and the annual percentage rate (APR — the cost of credit on a yearly basis) in writing before you sign for the loan. The APR is based on several things, including the amount you borrow, the interest rate and credit costs you’re being charged, and the length of your loan.

A payday loan — that is, a cash advance secured by a personal check or paid by electronic transfer is very expensive credit. How expensive? Say you need to borrow $100 for two weeks. You write a personal check for $115, with $15 the fee to borrow the money. The check casher or payday lender agrees to hold your check until your next payday. When that day comes around, either the lender deposits the check and you redeem it by paying the $115 in cash, or you roll-over the loan and are charged $15 more to extend the financing for 14 more days. If you agree to electronic payments instead of a check, here’s what would happen on your next payday: the company would debit the full amount of the loan from your checking account electronically, or extend the loan for an additional $15. The cost of the initial $100 loan is a $15 finance charge and an annual percentage rate of 391 percent. If you roll-over the loan three times, the finance charge would climb to $60 to borrow the $100.

Alternatives to Payday Loans

Before you decide to take out a payday loan, consider some alternatives.

1. Consider a small loan from your credit union or a small loan company. Some banks may offer short-term loans for small amounts at competitive rates. A local community-based organization may make small business loans to people. A cash advance on a credit card also may be possible, but it may have a higher interest rate than other sources of funds: find out the terms before you decide. In any case, shop first and compare all available offers.
2. Shop for the credit offer with the lowest cost. Compare the APR and the finance charge, which includes loan fees, interest and other credit costs. You are looking for the lowest APR. Military personnel have special protections against super-high fees or rates, and all consumers in some states and the District of Columbia have some protections dealing with limits on rates. Even with these protections, payday loans can be expensive, particularly if you roll-over the loan and are responsible for paying additional fees. Other credit offers may come with lower rates and costs.
3. Contact your creditors or loan servicer as quickly as possible if you are having trouble with your payments, and ask for more time. Many may be willing to work with consumers who they believe are acting in good faith. They may offer an extension on your bills; make sure to find out what the charges would be for that service — a late charge, an additional finance charge, or a higher interest rate.
4. Contact your local consumer credit counseling service if you need help working out a debt repayment plan with creditors or developing a budget. Non-profit groups in every state offer credit guidance to consumers for no or low cost. You may want to check with your employer, credit union, or housing authority for no- or low-cost credit counseling programs, too.
5. Make a realistic budget, including your monthly and daily expenditures, and plan, plan, plan. Try to avoid unnecessary purchases: the costs of small, every-day items like a cup of coffee add up. At the same time, try to build some savings: small deposits do help. A savings plan — however modest — can help you avoid borrowing for emergencies. Saving the fee on a $300 payday loan for six months, for example, can help you create a buffer against financial emergencies.
6. Find out if you have — or if your bank will offer you — overdraft protection on your checking account. If you are using most or all the funds in your account regularly and you make a mistake in your account records, overdraft protection can help protect you from further credit problems. Find out the terms of the overdraft protection available to you — both what it costs and what it covers. Some banks offer “bounce protection,” which may cover individual overdrafts from checks or electronic withdrawals, generally for a fee. It can be costly, and may not guarantee that the bank automatically will pay the overdraft.

The bottom line on payday loans: Try to find an alternative. If you must use one, try to limit the amount. Borrow only as much as you can afford to pay with your next paycheck — and still have enough to make it to next payday.

MONEY SAVING TIP:  Break your restaurant routine

This may seem obvious, but we are creatures of habit and convenience. Make an effort to cut back a little, such as dining out once a week instead of three nights a week. With $20 meals, this simple act will trim your expenses by $160 a month.

Or, try something different –- and cheaper. Pick up a restaurant guide or a tour book of your city for budget-friendly suggestions. If you eat out three times a week, cutting just $5 from each meal ticket will save you $60 a month.

DID YOU KNOW…Military consumers have certain protections with payday loans?

Payday loans (and certain other financing) offered to servicemembers and their dependents must include certain protections, under Federal law and a Department of Defense rule. For example, for payday loans offered after October 1, 2007, the military annual percentage rate cannot exceed 36%. Most fees and charges, with few exceptions, are included in the rate. Creditors also may not, for example, require use of a check or access to a bank account for the loan, mandatory arbitration, and unreasonable legal notices. Military consumers also must be given certain disclosures about the loan costs and your rights. Credit agreements that violate the protections are void. Creditors that offer payday loans may ask loan applicants to sign a statement about their military affiliation.

Even with these protections, payday loans can be costly, especially if you roll-over the loan. You instead may be able to obtain financial assistance from military aid societies, such as the Army Emergency Relief, Navy and Marine Corps Relief Society, Air Force Aid Society, or Coast Guard Mutual Aid. You may be able to borrow from families or friends, or get an advance on your paycheck from your employer. If you still need credit, loans from a credit union, bank, or a small loan company may offer you lower rates and costs. They may have special offers for military applicants, and may help you start a savings account. A cash advance on your credit card may be possible, but it could be costly. Find out the terms for any credit before you sign. You may request free legal advice about a credit application from a service legal assistance office, or financial counseling from a consumer credit counselor, including about deferring your payments.

Military consumers can contact the Department of Defense, toll-free 24 hours a day, 7 days a week, at 1-800-342-9647, or atwww.militaryonesource.com. Information on the Department of Defense rule, alternatives to payday loans, financial planning, and other guidance is available.

www.ftc.gov

FEATURE ARTICLE:  What’s Behind Ads for a New Credit Identity? It

Could Be ID Theft Involving Children’s Social Security Numbers

If your credit is less than golden, you’ve probably seen pitches from companies promising a fresh start. Some claim you can get a “new credit identity” by applying for credit with a nine-digit number they sell you, rather than with your own Social Security number that you’ve used for years.

The Federal Trade Commission, the nation’s consumer protection agency, says don’t take the bait. The scheme often involves Social Security numbers stolen from children. Not only won’t you get credit, but you could face fines or prison.

The Pitch: A “New Credit Identity”

How do these fraudsters operate? They advertise in the classifieds, on radio and TV, and on the Internet. If you pay them a fee, they promise to help you hide a bad credit history or a bankruptcy. And after you pay them, they send you a nine-digit number that looks like a Social Security number. They may call it a CPN — a credit profile number or a credit privacy number. They’ll tell you to apply for credit using the CPN, rather than your own Social Security number. Some lie and tell you the scheme is legal.

Here’s what they don’t tell you:  In many cases, they’re selling you someone else’s Social Security number — often one stolen from a child. Using a stolen Social Security number to apply for a loan on another person’s good credit record is identity theft. And by encouraging you to use the stolen number as your own, the con artists have involved you in their scam.

It’s a crime to make a false statement on a credit or loan application. That includes misrepresenting your Social Security number. If you use the number they sell you, you could face criminal prosecution or civil fraud charges.

As a result, the fraudsters have pulled off a double whammy: They’ve created identity theft headaches for the families of children whose numbers they stole; and by selling you a stolen number to use on credit or loan applications, they’ve put you smack in the middle of a federal crime.

Spotting the Signs of Other Credit Repair Scams

The CPN ploy is the latest lie promising a quick fix to poor credit. The truth is that only time and sticking to a personal debt repayment plan will improve your credit report.

Here are some telltale signs of a credit repair fraud:

• companies that insist you pay them before they do any work on your behalf;
• companies that tell you not to contact the credit reporting companies directly;
• companies that tell you to dispute everything in your credit report — even information you know is accurate;
• companies that tell you to give false information on your applications for credit or a loan;
• companies that don’t take the time to spell out your legal rights when they tell you how their business operates or what they say they can do for you.

Your Rights Under the Law

The Credit Repair Organization Act (CROA) makes it illegal for credit repair companies to make false statements about what they can do for you and to charge you until after they’ve performed their services. The law, which is enforced by the FTC, requires credit repair companies to explain your legal rights in a written contract that also details the services they’ll perform, how long it will take to get results, the total cost, and any guarantees. Under the law, these contracts must explain that you have three days to cancel without any charge.

What if a credit repair company you hired doesn’t live up to its promises? You have the right to sue them in federal court for your actual losses or for what you paid them, whichever is more. You also can seek punitive damages — money to punish the company for violating the law. The law allows class actions, too, where people join together in one lawsuit. If you win, the other side has to pay your attorney’s fees.

The CROA is a federal law. Many states also have laws regulating credit repair companies. If you have a problem with a credit repair company, report it to your local consumer affairs office or your state attorney general (AG). Many AGs have toll-free consumer hotlines or let you file a complaint online. Check the blue pages of the phone book or your state website.

You also can file a complaint with the Federal Trade Commission. Although the FTC can’t resolve individual credit disputes, it can take action against a company if there’s a pattern of possible law violations. File a complaint online at ftc.gov or call 1-877-FTC-HELP.

Need information about legitimate ways to deal with debt? Visit ftc.gov/moneymatters.

www.ftc.gov

MONEY SAVING TIP:   Mind the unit price

Many grocery store tags will tell you how much an item costs per ounce, per pound or by some other unit of measure. Comparison-shop by unit price and save.

For example, a pack of 40 diapers at our local drug store cost $13, or 33 cents per diaper. A box of 144 diapers cost $35, or 24 cents per diaper. A difference of 9 cents may not seem like much, but when you change a diaper six to eight times each day, that amounts to a savings of $16 to $22 per month.

One caveat: Don’t buy in bulk if you won’t use it all — otherwise, you wasted your money, no matter how good a deal it was.

www.klipinger.com

DID YOU KNOW…Maxing out a single credit card can hurt your credit?

As MainStreet has previously reported, it’s never a good idea to bump up against your overall credit limit because your credit utilization ration will appear sky-high.  However, according to Chris Mettler, founder of CompareCards.com, maxing out a single card can negatively influence your credit score as well.  The impact this will have on your credit will depend on the rest of your credit profile.  As such, if you do have a particular card that’s bumping up against the limit, you will want to pay that down as soon as possible.

“The recommended balance to carry is 30% or lower of your available credit line,” Mettler says.

www.dailyfinance.com

Debt Management Credit Counseling Corp (http://www.dmcconline.org), a nonprofit charitable organization (“DMCC”), receives recognition for supporting South Florida schools by teaching students financial literacy. Focusing on teaching students the importance of credit, this educational program has been a part of DMCC’s mission since 2001. Covering topics from how credit is established to how to use a credit card, DMCC speakers make the presentation fun and easy to understand. The program is also offered online to high schools and colleges. South Florida teachers have integrated this course as part of their curriculum.

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FEATURE ARTICLE:  Secured Credit Card Marketing Scams

Secured and unsecured cards can be used to pay for goods and services. However, a secured card requires you to open and maintain a savings account as security for your line of credit; an unsecured card does not.

The required savings deposit for a secured card may range from a few hundred to several thousand dollars. Your credit line is a percentage of your deposit, typically 50 to 100 percent. Usually, a bank will pay interest on your deposit. In addition, you also may have to pay application and processing fees — sometimes totaling hundreds of dollars. Before you apply, be sure to ask what the total fees are and whether they will be refunded if you’re denied a card. Typically, a secured card requires an annual fee and has a higher interest rate than an unsecured card.

Deceptive Ads and Scams

The Federal Trade Commission (FTC) has taken action against companies that deceptively advertise major credit cards through television, newspapers, and postcards. The ads may offer unsecured credit cards, secured credit cards, or not specify a card type. The ads usually lead you to believe you can get a card simply by calling the number listed. Sometimes the number is not toll-free. A ‘900’ number service, for which you are billed just for making the call, may instruct you to give your name and address to receive a credit application, or give you a list of banks offering secured cards. It also may tell you to call another ‘900’ number — at an additional charge — for more information.

Deceptive ads often leave out important information.

• The cost of the ‘900’ call — which can range from $2 to $50 or more;
• The required security deposit, application, and processing fees;
• Eligibility requirements like income or age;
• An annual fee or the fact that the secured card has a higher than average interest rate on any balance.

How to Avoid the Scam

To avoid being victimized, look for the following signs:

• Offers of easy credit. No one can guarantee to get you credit. Before deciding whether to give you a credit card, legitimate credit providers examine your credit report.
• A call to a ‘900’ number for a credit card. You pay for calls with a ‘900’ prefix — and you may never receive a credit card.
• Credit cards offered by “credit repair” companies or “credit clinics.” These businesses also may offer to clean-up your credit history for a fee. However, you can correct genuine mistakes or outdated information yourself by contacting credit bureaus directly. Remember that only time and good credit habits will restore your credit worthiness.

Credit Reporting

If you’re considering a secured card as a way to build or re-establish a credit record, make sure the issuer reports to a credit bureau. Your credit history is maintained by companies called credit bureaus; they collect information reported to them by banks, mortgage companies, department stores, and other creditors. If your card issuer doesn’t report to a bureau, the card won’t help you build a credit history.

For More Information

To build a credit record, you may want to apply for a charge card or a small loan at a local store or lending institution. Ask if the creditor reports transactions to a credit bureau. If they do — and if you pay back your debts regularly — you will build a good credit history.

If you cannot get credit on your own, you can ask a relative or friend with a good credit history to act as your cosigner. The cosigner promises to repay the debt if you don’t.

If you’re having problems paying bills, you may want to contact a credit counseling service. Non-profit organizations in every state counsel consumers who are in debt. Counselors try to arrange a repayment plan that is acceptable to you and your creditors. They also can help you set up a realistic budget. These counseling services are offered at little or no cost to consumers. You can find the office nearest you by checking the White Pages of your telephone directory.

Sometimes, non-profit counseling programs are operated by universities, military bases, credit unions, and housing authorities. They are likely to charge little or nothing for their services. Or you can check with your local bank or consumer protection office to see if it has a list of reputable low-cost financial counseling services.

Where To Complain

The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint or get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. Watch a video, How to File a Complaint, at ftc.gov/video to learn more. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

www.ftc.gov

MONEY SAVING TIP:   Take fewer trips to the grocery store

Making bigger shopping trips less often will cut down on your impulse buys. In fact, almost half of all shoppers go to the store three or four times per week. Shoppers making a “quick trip” to the store usually purchase 54% more than they planned, according to a study published by the Marketing Science Institute.

If you go to the store three times a week and spend $10 on impulse buys each trip, that adds up to $120 extra per month. But if you go only once a week, you’ll spend $40 per month on impulse buys. That saves you $80 per month, or $960 per year.

www.klipinger.com

DID YOU KNOW…Closing and old account will hurt your credit score?

You should think twice before officially closing that credit card you opened back in college, especially if you’re getting ready to apply for a new line of credit.  Closing an old account can have a negative impact on your credit score since it can lower your credit to debt utilization ratio, which is essentially how much credit you have at your disposal versus how much credit you are actually using.

According to FICO, it can also cost you points you might have been netting by having an ideal number of credit cards in your wallet and by building that 15% of your score that comes from credit history.

The exact effect this has on your score will vary, depending on the rest of your credit profile, but the advice is consistent.

FEATURE ARTICLE:  Gift Cards: Use Them Before You Lose Them

The holiday presents have been unwrapped and most of us received at least one gift card. Now is the time to shop with these cards while they’re still fresh in our hands.

The National Retail Federation predicts that 80 percent of people have purchased gift cards this holiday season, and shoppers will spend an average of $43.23 per card. Total holiday spending on gift cards in 2011 will reach $27.8 billion. That number grows each year because gift cards are the easiest present to give, saving time and shopping stress for the giver.

Surprisingly, it’s also a present that often goes unused. Last year, 113 million Americans received gift cards during the holidays, but at the start of the 2011 holiday shopping season, a quarter of recipients still had an unused gift card from last year (according to Consumer Reports).

“For some reason, gift cards aren’t spent as quickly as a cash gift,” says Bill Hardekopf, CEO of LowCards.com. “We slide them into a wallet or drop them in a drawer, lose them, or forget about them. We let that money waste away. The best time to use a gift card is soon after you receive it. Use them before you lose them.”

What happens to unused gift cards? The Securities and Exchange Commission allows companies to count unused gift-card money as income once they can reasonably say the card won’t be redeemed. However, some states require unused gift cards to go to an unclaimed-funds account. Those states can then use the unclaimed funds for general purposes until someone claims it.

Here are some consumer tips for using a gift card…

• Use them before they expire. Merchant and bank-issued gift cards must now be good for five years, thanks to the CARD Act provisions. Reloadable cards can expire five years after the money was last added.
• Research the fees. Some cards, like bank-issued cards, also charge fees, such as a monthly fee after 12 months of inactivity.
• If you will not use the card, or would prefer to have the cash, you can resell the card. There are several sites, such as PlasticJungle.com and CardPool.com, that are a marketplace to buy, sell, or exchange gift cards. You may receive as much as 80 to 90 percent back for your gift card. Some cards are worth more than others and the price can vary between sites.
• Turn your gift card into cash for investing or saving. GoalMine.com trades unused gift cards for cash to fund your GoalMine account. Receive 150 percent of the initial $50 of card value on your first card if you’re opening a new account, and market value for the rest.
• Donate your gift card to charity and get a tax deduction. Many national charities and foundations, like the Kidney and Urology foundation, accept gift card donations.

www.moneytalksnews.com

MONEY SAVING TIP:  Saving on Gas.  Gas station chains often partner with other businesses, such as supermarkets, to create rewards-earning opportunities. For example, Shell has a deal with some of the nation’s biggest grocery companies, including Giant and Kroger, so that every $100 you spend at the supermarkets gets you a 10-cent-a-gallon rebate on your next fill-up. Tack that on to the 5% cash back offered by the PenFed Card and you’re looking at saving around 7.6% per gallon the next time you buy gas at a Shell station. The trick is to find savings opportunities that fit your spending habits, rather than changing where you shop or going out of your way to save.

DID YOU KNOW…about the different saving strategies for military personnel?

Even though those who stay in the military for 20 years or more can qualify for a pension, it’s still important to save on your own. In truth, few people actually stay in the military long enough to claim a pension, and, unlike civilian pensions, there’s no “partial vesting” to guarantee that workers who leave “early” get something. With the military, if you leave before 20 years, you get nothing. Even if you qualify, pension payments probably won’t be enough to cover your bills—you’re usually entitled to 50% or less of your base salary if you retire at 20 years (and more if you stay beyond two decades). See militarypay.defense.gov for options based on when you joined the service.

Instead of worrying about what might happen, take charge of something you can control: your own savings. The younger you are when you start setting aside funds for your future, the easier it will be to build a healthy nest egg. And while you’re in the military, there are special investing opportunities and tax breaks to help you supercharge your savings. It’s up to you to make the most of your options.

For more information check up on the government’s Thrifty Savings Plan and tax-free earnings from a Roth IRA.

www.kiplinger.com

PORT ST. LUCIE – “Small things add up fast” and “manage your spending” are pieces of good financial advice.

What makes this advice even better is it came from high-school students.

The Allied Health Assisting students at St. Lucie West Centennial High School recently completed a financial literacy program that consisted of 12 modules throughout the school year.

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Debt Management Credit Counseling Corp (http://www.dmcconline.org), a nonprofit charitable organization (“DMCC”), announces new office location. New location is on a major South Florida thoroughfare and retail front, providing increased opportunity to assist local residents. DMCC provides free counseling and debt management plans to assist consumers with the repayment of their debt.

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Debt Management Credit Counseling Corp. http://www.dmcconline.org, a nonprofit credit counseling organization (“DMCC”), has been named an Approved Adopter of the National Industry Standards for Homeownership Education and Counseling. Counseling organizations that adopt these standards use a set of guidelines for quality counseling. Individuals and families who want to be educated and counseled on homeownership can trust that DMCC will provide consistent, high quality services.

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FEATURE ARTICLE:  Audit-Proof Your Tax Return

Is there really such a thing as an audit-proof tax return? A way of preparing your return to guarantee that you won’t be subject to an audit? Of course not. But there certainly are ways to minimize your risk.

You don’t want to thumb your nose at Uncle Sam, thinking that an audit won’t happen to you. It just might, and if it does, you should be prepared. But what can you do to make your tax return less susceptible to the IRS’ eagle eyes? Here are some suggested strategies.

Be neat! 
Consider preparing your tax return by computer. A neatly prepared, computer-generated return looks much better to the IRS staffer (called a “classifier”) who will decide whether to audit your return. Virtually all reputable tax pros now complete their returns using computers, and there are a number of really good do-it-yourself computer programs for PCs and Macs alike. (For my do-it-yourself friends, I recommend TurboTax.) Some websites even allow you to securely complete your tax return from the comfort of your Web browser.

If you’re unable to use a computer to prepare your return, at least print clearly and carefully. Don’t decide to get your revenge on the IRS by preparing your return with a red crayon. A messy return — cross-outs, sloppy handwriting, and smudges — is like hanging a sign on your return that says, “Audit me!” It might also give the IRS the impression that you are careless and disorganized.

Remember that the IRS has stepped up its audit enforcement in recent years. The IRS believes that the taxpaying public has gotten an audit-free ride for years — and that ride is now over. While it’s still unlikely that you will be audited, the odds have increased substantially.

Be accurate! 
The only thing worse than a messy return is an incorrect one. By “correct,” I mean that all of your numbers add and subtract accurately. This is another reason to prepare your return by computer, since you don’t need to worry about a computer program flubbing any of the math.

Remember that your tax return will be loaded into the IRS computers, and those computers will check your return for math errors. If your return states that 2 + 2 = 5, they might start wondering about some of your other numbers. Don’t give them a chance. Double-check your numbers before you mail your return.

Document deductions! 

If you claim large deductions for unusual items, such as losses because of earthquake, flood, or fire, attach documentary proof to the back of your tax return. Copies of repair receipts, canceled checks, insurance reports, and pictures are always a good idea. This won’t stop the IRS computer from flagging your return, but the documents should catch the attention of the IRS classifier.

Be square! 
Whatever you do, don’t use round numbers. For example, if you report $1,000 or $12,000 instead of $978 or $12,127, it’s an indication that you are estimating rather than keeping good records and reporting the actual, correct amount.

By Jeanine Skowronski www.fool.com

MONEY SAVING TIP: Gym Membership

Are you really using it multiple times a week? Divide your monthly dues by the number of times you go in a month and get a realistic picture of what you’re spending on a one-hour workout. Park districts or community centers often have low-cost or free programs. Also check into exercise videos or a piece of home exercise equipment that you would use regularly. If you decide to keep the membership, check to see whether the facility offers discounts for coming at off-peak times.

DID YOU KNOW…that carrying a balance helps build credit is a myth?

The credit bureaus are privy to your payment history and the balance on your monthly credit card bill, “but they don’t know if you’re paying interest or not,” Nazari says. This means deciding to pay the minimum each month isn’t going to do much more than cost you money, especially if you’re carrying a particularly high annual percentage rate. The lesson? Don’t forgo payments just to carry a balance month to month.

FEATURE ARTICLE:  How to Dispute Errors on Your Credit Report

Your credit report contains the following information:

• Where you live
• How you pay your bills
• Whether you have been sued
• Whether you have been arrested
• If you filed for bankruptcy

Consumer reporting agencies sell the information to creditors, insurers, employers and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home.

The federal Fair Credit Reporting Act (FCRA) promotes the accuracy and privacy of information in the files of the nation’s consumer reporting companies.

Some financial advisors and consumer advocates suggest that you review your credit report
periodically. Why?

• Because the information it contains affects whether you can get a loan—and how much you will have to pay to borrow money.
• To make sure the information is accurate, complete, and up-to-date before you apply for a loan for a major purchase like a house or car, buy insurance, or apply for a job.
• To help guard against identity theft. That is when someone uses your personal information—like your name, your Social Security number, or your credit card number—to commit fraud.

Identity thieves may use your information to open a new credit card account in your name. Then, when they do not pay the bills, the delinquent account is reported on your credit
report. Inaccurate information like that could affect your ability to get credit, insurance, or even a job.

To get a full worksheet on how to dispute errors on your credit report, click HERE

MONEY SAVING TIP:  Cell Phones

“For $9.88, you can buy a TracFone (prepaid cell phone) with pretty decent coverage and pay by the minute,” says Mike Sullivan, director of education at Take Charge America in Phoenix. “And if you’re careful, you can end up saving $40 to $50 a month off a typical $80 cell phone bill.” He also recommends canceling your land line unless you have medical issues that may require emergency calls.

DID YOU KNOW…Your income does not affect your credit score

People tend to assume that the more money they make, the higher their credit score will be, but that’s not the case. While it’s true your income may affect your ability to pay your bills on time, it has no bearing on your credit score, Albary says.

Your income can, however, influence a lender’s decision to approve you for a loan. This is because lenders often compare the income you’ve listed on your application to the debts listed on your credit report in an attempt to judge your ability to make monthly payments.

www.finance.yahoo.com

Debt Management Credit Counseling Corp. http://www.dmcconline.org, a nonprofit credit counseling organization (“DMCC”), delivered holiday gifts to the children of Florence Fuller Child Development Center (FFCDC) in Boca Raton. Every holiday season, DMCC participates in the “Adopt an Angel” charity to give a child in need a new toy. Toys were delivered to the center by DMCC employees, and a volunteer dressed as Santa.

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FEATURE ARTICLE:  Energy Wasters in Your Home

According to Maria Vargas, spokesperson for EnergyStar, a division of the Environmental Protection Agency (EPA), energy bills can differ depending on the size and location on your home, but the average household spends $2,200 a year. The good news is these costs can be cut dramatically.

Energy Star, a program started in 1992 to help reduce greenhouse gas emissions and lower energy costs for consumers, offers suggestions for how to reduce your annual electric costs by a third. In other words, you can save about $700 a year on electricity. Last year, Vargas points out, Americans saved about $17 billion on energy bills and reduced green house gas emissions by nearly the equivalent of 30 million cars. Using data compiled by EnergyStar, MainStreet breaks down your energy bill and identifies the biggest wasters to help you save money (and reduce greenhouse gas emissions!) this winter.

HVAC Systems 

If you really want to cut back on your energy use, you need to focus on heating and cooling your home,” Vargas says. That’s because these two categories combined account for 46% of your overall electric bill. While most homeowners can’t afford a complete overhaul of their homes’ heating, ventilating and air-conditioning (HVAC) systems, some changes can increase energy efficiency and include:

• Installing a programmable thermostat, which lets you set temperatures for specific times of day. These devices can save about $180 each year on energy costs.

• Change air filters regularly. The harder your HVAC unit has to work, the more energy it eats away. Filters should really be changed out monthly, especially during the summer and winter months when the HVAC unit has a heavy workload. If you find this tedious, EnergyStar suggests changing filters a minimum of every three months.

• Seal your heating and cooling ducts, especially those running through the attic, crawlspace, unheated basement or garage, as that improves the efficiency of your HVAC unit by as much as 20%.

Water Heater

According to EnergyStar, your water heating system accounts for 14% of your energy bill. Monetarily speaking, the average household spends $400-$600 per year on water heating. To reduce this expense, lower standby losses, such as heat that escapes the water heater and seeps into the surrounding basement area, as well as the amount of hot water you use in your home.

When set too high, or at 140 degrees Fahrenheit, your water heater can waste anywhere from $36 to $61 annually in standby heat losses, and more than $400 thanks to overall consumption. Lower that expense by bringing the heater’s thermostat to 120 degrees Fahrenheit or below.

Lights Out

In EnergyStar’s breakdown, lighting accounts for 12% of bill, but it also represents one of the easiest fixes. In fact, by simply replacing five of your standard incandescent light bulbs with compact fluorescent light bulbs, you can save $70 a year.

Hot Stuff

Appliances only account for 13% of electric bills, so naturally, most people don’t upgrade to an energy efficient toaster. Still, if you are committed to reducing the amount of energy you use, you need to focus on larger appliances that use a heat coil, such as a refrigerator or washer and dryer. To do that, make sure that your fridge’s filters are cleaned regularly, and consider using only cold water to wash laundry loads. That can save $30 to $40 each year. But don’t be too stingy, Vargas says. Replacing a major appliance, like a refrigerator that is 10 to 15 years old, may help you save in the long term as new technology is constantly subject to federal standards that adjust every year.

Energy Vampires

Any appliance or device that sucks up energy when it’s plugged in, despite being turned off, is one of these money-draining culprits. According to EnergyStar, this includes most electronic devices, especially those that use some sort of display, like a television, laptop or DVD player. Slaying energy vampires won’t lower your energy bill significantly — electronics only account for about 4% of the total cost — but it’s important to keep them in mind, as they consume 75% of the electricity used to power home electronics and appliances.

Powering Down

The best way to eliminate this phantom menace is not only to turn energy vampires off, but unplug them. This may be easier said than done, but unplugging a laptop in between uses isn’t particularly problematic. However, doing so with your television would require you to wait for the cable to reboot every time you wanted to watch a program.

As an alternative, EnergyStar suggests plugging your television and/or DVD player into a power strip and then turning that off when your television is in stand-by mode. Put your computers on sleep mode, or manually turn off the monitor inbetween visits, as opposed to utilizing a screen saver, which, contrary to popular belief, does not reduce energy output. Also, make sure you unplug a battery charger of adapter as it continues to draw energy even when the product no longer needs it.

Put Stand By on Stand by

The final 11% of your electric bill comprises devices that don’t exactly fit into any particular category. This includes dehumidifiers, external power adapters and video game consoles, which are all considered energy vampires.

An Xbox 360, for example, if left on the draws approximately 1,000 kWh/yr. The PS3 draws 1,300 kWh/yr. According to EnergyStar, these values drop dramatically when users routinely turn the device off after use, lowering annual energy levels down to 110 and 120 kWh/yr, respectively. Since it costs about 12 cents per kWh/yr in the average residential home in the U.S., it costs $120 if to leave your Xbox plugged in for the entire year.

To lower these costs, unplug the devices when you are not playing and only resort to stand-by mode as, well, a stand-by. Energy Star estimates that stand-by power accounts for more than 100 billion kilowatt hours (kWh) of annual U.S. electricity consumption, and $11 billion in annual energy costs.

MONEY SAVING TIP:   Plan a pantry week

Challenge yourself to get through one week every quarter (or more often, if you can) without setting foot in the grocery store, says Mary Hunt, author of “Debt-Proof Living.” Use leftovers, unbury freezer items and clean out your pantry. Chances are, you have more food on hand than you think. Use the money you’ve saved on groceries to pay down debt, bolster your savings or even make a contribution to charity.

DID YOU KNOW…a budget can help you build growth?

Once you have a clear view of your overall financial picture, you can shift your focus to aggressively eliminating debts and building wealth. Once I solved my personal debt issues, I was already in the habit of putting a certain amount monthly toward debt. So rather than change that habit, I simply redirected those funds toward my savings.

As my savings and investments build, I’m able to generate a passive income from interest payments and capital gains while still using my actively generated income to budget for monthly expenses. In other words, I’ve been able to increase my total income simply by being smarter about how I use my regular paycheck.

www.usnews.com

FEATURE ARTICLE:  You can expect more bank fees in 2012

Banks will continue to experiment with fee increases in the New Year, according to our own analysis and industry experts, as they attempt to make up billions in lost revenue due to the bad economy and new regulations.

Here is some of what you can expect for 2012:

• Higher penalty fees: Overdraw your account, and you’ll probably pay more. It costs banks just a few cents to handle a debit-card transaction, but when an account is overdrawn and the bank has to figure out what happened, the cost can escalate to $13. 
• Less-favorable rates: Banks could try to reduce their losses by increasing the interest-rate margin—the spread between what they pay to borrow money and what they charge to lend it. That could mean higher lending rates, especially on credit cards and other unsecured loans, as well as on auto loans.
• Charges for premium services: Customers could see new or higher charges for premium services, such as safe-deposit boxes, online budgeting tools, or person-to-person payments, such as Chase’s QuickPay service, which allows you to send money to someone else using just an e-mail address or cell phone number.
• Move toward electronic banking: Banks save when you serve yourself, just like gas stations do when you pump your own. So expect them to push computer and mobile-phone banking. That means you might pay more if you use a teller or speak with someone on the telephone. Some banks might present the changes as a perk, not a fee.
• Big credit-card push: Banks are likely to encourage the use of credit cards, says Bill Hardekopf, CEO of LowCards.com, a consumer resource for credit-card information in Birmingham, Ala. They get a swipe fee when someone uses a credit card, and so far those fees have escaped regulation that has made debit cards less profitable for banks. 
• More relationship accounts: Banks will probably dangle more carrots and brandish more sticks to get you to consolidate your accounts at a single institution, which will mean more fees. But you can avoid them by, for example, having direct deposit of your paycheck or linking your savings and investments.

www.consumerreports.org

MONEY SAVING TIP:  Form a wholesale buying club

Families — not just businesses — can band together and form buying clubs to purchase groceries at wholesale prices.

There are some logistics required, but a buying club could make sense if you don’t have a warehouse-club type store nearby. Club representatives fax or e-mail a group order to the wholesaler, arrange for delivery and divvy up the goods. Generally, items are purchased by the case, then shared. Many wholesalers offer produce, organic items, baby supplies and paper goods in addition to nonperishable food items.

To find a club in your area, search online for “grocery buying club” and your city’s name, or check sites like unitedbuyingclubs.com or CoopDirectory.org.

DID YOU KNOW…that buying generic is super smart?

When it comes to stocking up on basic ingredients like flour, salt, sugar, rice, and milk, you’ll barely notice a difference in taste between the generic and the brand-name equivalent. In many cases, the only real difference is the colorful packaging and presentation of the product. You’re buying the exact same item with virtually the exact same composition of ingredients whether it has a fancy label on it or it’s the supermarket’s own brand. Make the switch to more generic products and you’ll be able to shave a few dollars off your grocery bill.

www.usnews.com

FEATURE ARTICLE:    Six tips for saving money on airfare

With fees, fine print and blackout dates, locking in a low price on your plane ticket can seem impossible. We have some tips that can help cut the cost of flying, plus help organize your search for the best deal.

In addition to setting up alerts to track fares and searching for domestic flights three and a half months prior to booking (five and a half for international), you should also buy your ticket early—you’ll pay a premium if you wait to within 14 days of travel. Also, when comparing flights online through sites such as Expedia, Kayak, Priceline and Travelocity, be sure to check the airline’s own site, which can be cheaper because there is no commission.

How to get rock-bottom rates:

1. Look beyond discount airlines: Keep in mind that discount airlines are not always the cheapest. Airlines cannot afford to be more expensive than their competitors for comparable flights at comparable times.
2. Buy at 3 p.m. on a Tuesday: Most sale fares kick in on Monday at 8 p.m., and end on Thursday at 8 p.m., and according to Rick Seaney, co-founder of FareCompare.com, the greatest number of cheap seats will be available at 3 p.m. on Tuesday.
3. Avoid flying on weekends: Be mindful of booking weekend flights because these are popular with both business travelers and vacationers. More specifically, you should avoid flights on Friday afternoon through Monday morning, if you can.
4. Fly hungry: The least expensive flights tend to take off at dawn, or around lunchtime, as well as after 6 p.m.
5. Consider a connecting flight: Connecting flights can be substantially cheaper than flights that are non-stop, especially for international travel.
6. Shop for one seat: Reservation systems are programmed so that if there’s one too few cheap seats for your group, all members get bumped up to the next price level. So if you’re traveling with a group, establish the base price fro one passenger and compare it with the price for all.

MONEY SAVING TIP:  Shop at the drugstore

Savvy shoppers can score huge deals on groceries and household supplies by shopping at drugstores like Walgreens, CVS or RiteAid Pharmacies. As an incentive to get you in their doors and back again, these stores offer rock-bottom sales on everything from canned soup to cleaning supplies. Combine the sales with store and manufacturers’ coupons and many of your purchases may be free, says blogger Kirby. “I haven’t paid a dime for shampoo or toothpaste in more than two years,” she says.

How it works: At Walgreens.com, click the “weekly ad” tab; certain advertised items offer register rewards you can use like cash on your next Walgreens purchase. At CVS.com, click on the “extra care” link to sign up for a free store card. When you use it, you’ll earn 2 percent in “extra bucks” (CVS store credit) on every store or online purchase. Certain purchases, noted in the “weekly store ad” link, also generate extra bucks you can redeem on your next visit. At RiteAid.com, click the “single check rebates” icon. That site requires you to submit receipts to earn monthly rebates.

Extreme couponer Crystal Paine of Moneysavingmom.com offers helpful tutorials for the Walgreens and CVS programs and countless others on her site.

www.bankrate.com

DID YOU KNOW…Uncle Sam can help pay for child care?

Married and unmarried parents who work can qualify for a child care credit to help with the costs of providing child care. Certain cafeteria plans allow participants to contribute to a flexible spending account (FSA) that can be used for child care expenses. Expenses paid with FSA money cannot be claimed for the child care credit. Also, the maximum expenses eligible for the child care credit are reduced by the FSA paid expenses.

Expenses for a child in nursery school, preschool, or similar programs for children below the level of kindergarten are expenses for care, even though labeled education. Expenses to attend kindergarten or a higher grade are not expenses for care; however, before- and after-school care expenses do qualify until age 13.

The maximum you can put into the FSA is $5,000. The maximum expenses eligible for the credit when you have two eligible children is $6,000. However, the $6,000 is reduced by the $5,000 from the FSA, so your maximum eligible credit is $1,000. Use Form 2441 to compute the child credit and FSA exclusion.

www.bankrate.com

Debt Management Credit Counseling Corp. http://www.dmcconline.org, a nonprofit credit counseling organization (“DMCC”), provides tips to consumers on removing common errors off their credit reports. Credit report errors can cost consumers thousands of dollars in higher interest rates and lost job opportunities. Consumers with past due credit card accounts may want to consider a debt management plan to obtain lower payments and have the accounts reported as current.

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FEATURE ARTICLE:  Get rid of bank fees once and for all

There’s nothing worse than getting punished for doing the right thing. And that’s just what happened to a mom and her 18-year-old son when he opened a checking account at a local bank in McCullom Lake, Ill. His mom encouraged him to open the bank account as a way to teach him how to handle a bank account. And that’s when the trouble began.

After moving some money from checking to savings, Daniel Ganziano’s checking account balance fell to $4.85. Because of the low balance, the bank levied a $9.95 maintenance fee. The fee overdrew the account by $5.10, which triggered another fee of $28 that the bank charged daily. In just two weeks, the fees totaled $229.

This story, reported by the Chicago Tribune, is yet another example of banking fees gone wild. There are, however, a few simple steps you can take to eliminate banking fees once and for all.

1. Don’t assume small banks have small fees: With the Occupy Wall Street movement, there has been a big push to move from big banks to small, community banks. While smaller banks may be a great option for some, don’t assume they are free. Small banks, including credit unions, charge fees, too. And in some cases, they may not be the best option. Nothing replaces researching banks and making the best decision for your financial needs.

2. Go online: Some of the best banking options come from online financial institutions. Because online banks don’t have the cost of building out a network of physical branches, they often charge less in fees and pay higher interest rates.

3. Watch minimum balance requirements: It’s not uncommon for a bank to waive a monthly maintenance fee, but often you must maintain a minimum balance. It’s important to understand the terms of the maintenance fee before opening an account. And if a minimum balance is required to waive the fee, make sure you meet this requirement.

4. Monitor your account: There are a lot of good reasons to monitor your bank account. Of course, one of the most important reasons is to watch for unauthorized transactions. But keeping a close eye on your account will also help you spot bank fees that can sneak up on us. Because bank fees tend to multiply quickly if the account is overdrawn, addressing the issue as soon as possible is paramount.

5. Your bank may not be best for your children: Accounts designed for children often pose special problems when it comes to fees. Because most children do not keep a lot of money in an account, fees can quickly erode what little money they have. As a result, a parent’s bank may not be the best option for children. I’ve found that the best bank accounts for children are often online banks with no fees.

If you are wondering what happened to the bank fees charged to Daniel Ganziano, the bank eventually waived them. But it took the involvement of Jon Yates (he writes the “What’s Your Problem” column for the Chicago Tribune) before the bank would budge.

www.usnews.com

MONEY SAVING TIP:  Stockpile sale items

Many avid couponers stockpile large amounts of nonperishable groceries and toiletries purchased on sale. Carrie Kirby, who blogs for Chicagonow.com/frugalista, once filled the entire cargo hold of her Subaru with cans of her favorite soda. “My basement shelves hold enough of things like toothpaste and cereal — often purchased for 25 cents or less — to last our family six months to a year,” she says.

And if a family member gets ill or loses a job, you’ll have a nicely stocked food pantry during a rocky time.

www.bankrate.com

DID YOU KNOW…to add back in the income tax when determining how much it costs you to buy things?

The sales tag on the leather jacket you want says that it costs $1,000. You know to add in the sales tax to determine the full price, which is perhaps 5% higher, or $1,050. But even that is not the true full price.

You can’t buy the leather jacket by earning $1,050. You need to have $1,050 in take-home pay to buy it, and that means that on a pre-income-tax basis, you need to earn a good bit more, perhaps $1,250.

It’s true, of course, that the money that goes to income tax is not yours to spend or save. Refraining from buying the leather jacket will not get it back for you. The other side of the story is that paying income tax hinders your effort to win financial freedom early in life as much as paying sales tax. Mentally adding back the income tax helps you appreciate how many hours of labor it takes to obtain a jacket with a nominal price tag of $1,000.

FEATURE ARTICLE:  How to Get the Saver’s Credit

Low income workers who save for retirement using a 401(k) or IRA can earn a tax credit worth up to $1,000 for individuals and $2,000 for couples in 2011 and future years.

The saver’s credit can be claimed by workers whose modified adjusted gross incomes are up to $28,250 for singles, $42,375 for heads of households, and $56,500 for married couples in 2011. In 2012 those income limits will increase to $28,750 for singles, $43,125 for heads of households, and $57,500 for couples.The first $2,000 workers contribute to an IRA, 401(k), or similar workplace retirement account can count towards the saver’s credit. The credit can be used to increase your refund or reduce the tax you owe. This tax credit is available in addition to the tax deferral you get for making a traditional 401(k) and IRA contribution and any 401(k) match you get from your employer.

Consider a married couple who earned $30,000 in 2011 and contributed $1,000 to an IRA. They will be able to claim a $500 tax credit for their $1,000 IRA contribution.

Saver’s credits totaling just over $1 billion were claimed on approximately 6.25 million individual income tax returns in 2009. The credit varies based on your income and tax filing status and ranges from 10 percent to 50 percent of the amount you saved up to $2,000. Most taxpayers received modest tax credits for their retirement account contributions. Saver’s credits averaged $121 for single filers, $159 for heads of households, and $202 for married couples. “Though the maximum saver’s credit is $1,000, $2,000 for married couples, it is often much less and, due in part to the impact of other deductions and credits, may, in fact, be zero for some taxpayers,” the IRS says in a statement.

Awareness of the saver’s credit is increasing, but remains low. Just 21 percent of people earning less than $50,000 say they are aware of the saver’s credit, according to a Transamerica Center for Retirement Studies online survey of 4,080 workers age 18 and older at for-profit companies, but that’s up from 12 percent in 2010.

The saver’s credit was first added to the tax code in 2002 as a temporary provision, and was then made permanent in 2006. Income limits are now adjusted annually to keep pace with inflation. Workers under age 18, full-time students, and individuals claimed as dependents on someone else’s tax return are not eligible for the credit. Rollovers and trustee-to-trustee transfers into retirement accounts don’t count toward the credit. Your eligible contributions may be reduced by recent distributions you have taken from a retirement account.

Workers interested in getting the saver’s credit in 2011 must make 401(k), 403(b), 457, or Thrift Savings Plan contributions by the end of the calendar year. However, retirement savers have until April 17, 2012 to add money to an IRA that will allow them to get the credit in tax year 2011.

www.usnews.com

MONEY SAVING TIP:  Pursue goals of intense concern to you and you alone.

Have you ever had the experience of enjoying a nice dinner out with your spouse or a good friend, commenting that you were too full to have dessert, and then found yourself wavering when the waiter came by with the dessert tray? If you love cheesecake, and you see that this place makes a good cheesecake, you want some, whether in theory it is a good idea for you to order some on this particular occasion or not.

You need to want to save the way you want to eat cheesecake (if you love cheesecake), or the way you want to eat a chocolate brownie (if you are a chocolate brownie lover), or the way you want to eat an apple cobbler (if you are an apple cobbler lover). A general desire to save is like a general desire for desert — it’s not compelling enough to inspire action. Find what you’re passionate about and make your savings account turn it into a reality. The trick to becoming an effective saver is identifying that something, the saving goal that provides you with the motivation needed to get the job done.

People trying to sell always try to hit the emotional hot buttons with their sales pitches. They do this because it works. It works on the saving side too. To save well, you need to direct your money management energies to the pursuit of a goal that hits your emotional hot buttons.

DID YOU KNOW…You need to protect yourself in a short sale?

After a short sale, the mortgage lender often will report to credit bureaus that the home loan was settled for less than the full amount. In addition, it can also note the amount of the deficit as “balance owed” on the credit report, even though the obligation has been finalized and no additional money is owed.

In other words, if you have a $300,000 mortgage and sell your house for $250,000, the bank could report a balanced owed of $50,000.

While the short sale will damage your credit score dramatically (as much as a foreclosure, according to examples recently released by FICO), you can mitigate the damage slightly by arranging with the lender not to report a balance owed.

The best time to negotiate this with the lender: before or during the short sale process, says Ulzheimer. While you can attempt it after the fact, that’s not as practical.

“After it’s been paid, the lender starts to lose interest in speaking with a former customer.”

www.bankrate.com

Debt Management Credit Counseling Corp http://www.dmcconline.org, a nonprofit credit counseling organization (“DMCC”), awards Endowed Scholarship to Ricardo Wehrhahn, a student from The Harriet L. Wilkes Honors College of Florida Atlantic University (FAU). The DMCC scholarship fund has awarded an FAU student for 11 consecutive years. The scholarship was established in 2001 to help students strive for excellence and achieve academic success.

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