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Thrifty Spending Issue 52

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FEATURE ARTICLE:  Over 4.0% APR on my Checking Account? No way!

Consumers frequently search through the newspapers and surf the web searching for a place to park their money and get that higher APR. Not wanting to tie their money up in a CD for 5 years to get 2.9%, or put it in a money market account for a whopping 2.0%, and consumers definitely have no problem finding that .5% APR at their local bank or even from some of the large national banks. But here’s a little secret, Credit Unions and High Yield Reward Checking Accounts. These accounts are usually found at local community banks or credit unions. They offer a great rate of return in exchange for maintaining a minimum balance, with a few exceptions. These exceptions include doing a certain number of online or debit transactions or using direct deposit.

As of 5/4/2010, the Royal Bank of Missouri is offering a 4.3%APR for up to $25,000 on their checking account, and First New England Credit Union is offering 4.1% up to $15,000. As of the printing of this article, there are 9 institutions offering 4.0% APR or better. Consumers can read more about the best cd and savings rates plans and the name of the institution by going to www.ratebrain.com . Some institutions require you to live in their state and others open accounts nationwide, so take the time, read up and start making some money.

But is your money safe? High Reward Checking Accounts opened at your local community bank are FDIC Insured, while your funds in a Credit Union are insured by the National Credit Union Administration. Go to www.ncua.gov and read the regulations.

Most local banks and credit unions are doing well in these tough economic times, which is great news if you are looking for a High Yield Reward Checking Account.

MONEY SAVING TIP:  Do you know if you are banking smart?

Request that the bank provide you with a complete list of fees that are charged on these accounts. Also, inquire about getting free banking if you choose to do direct deposit or agreeing to ATM use only. However, keep in mind charges may still apply for using an ATM that is not associated with your financial institution. You can save more than $100 a year in fees by choosing a free checking or savings account that requires no minimum balance requirements. For example: $12 monthly maintenance fee = $144 per year!

DID YOU KNOW…that the perfect credit does exist?

Pursuit of excellence is often wise, but does “perfect” exist? Yes, says Craig Watts, the public affairs director for Fair Isaac “Several thousand consumers do, in fact, have the highest possible FICO score.”

Though most people won’t reach the credit score apex (850), you can get close by consistently following three simple guidelines:

  • Pay all bills on time.
  • Keep credit card balances low.
  • Take on new credit only when you really need it.

Don’t obsess over small credit score variations. “Lenders decide what score they will accept for

their best-interest-rate product,” assures Watts. “They genuinely don’t care if your score is 50 or 100 points higher than that.”

Clearly, A-plus credit has its advantages, but there is no reason to go overboard. Find a balance between attentiveness and fixation by understanding what those numbers can do for you and knowing how you can improve them. And remember: Credit scores gauge your borrowing history, not your value as a person.

Thrifty Spending Issue 51

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FEATURE ARTICLE: Your credit report may be costing you money

Most consumers know that negative information on their credit reports affect the offers they receive when applying for credit or the type of credit granted to them. But how far can low scores affect a consumer? What aspects other than mortgage or credit card interest rates are negatively impacted by a poor credit rating?

Employment. With your acknowledgement, employers are looking at your credit reports to determine whether you are the appropriate candidate for their work place. An education helps to get the job, positive work history is also a plus but unless your credit report is good, the employer may think you are more of a risk than you are worth.

For example, let’s say you graduated from college with honors and a debt of about $20,000. Unfortunately, the debt may cancel out any positive education experience. The fear behind this decision is that the debt could cause problems at work. Will you be distracted? Will your creditors contact your employer? Will your paycheck be garnished?

Employers are consumers themselves, therefore the odds are in your favor. However, if your debt is sufficiently high, they have the option to not hire you. Larger businesses seem more likely than small ones to check your credit report. It also depends on the type of job you are applying for.

Utilities. Do you ever wonder why the power company or the cable provider wants your social security number? It is not just so that they can report a delinquent account but also to check and see what kind of consumer you are. Do you pay your electric bill on time? Are you late paying the telephone or cable company?

You may not be turned down for services but you will be asked for a hefty deposit if your credit score does not measure up.

Housing. It is no surprise that your credit reports are checked thoroughly for a home loan, however, if you plan on renting also plan on having a good score. Negative information on your credit report as well as high debts can prevent you from renting. Not many property owners or associations like to have tenants who have had or currently have financial issues. Chances are, if the consumer has had problems paying their previous bills or are facing a large debt, the risk of them making rent on time may be high and therefore not favorable.

Auto loans. If you are planning to purchase a car and you have low credit scores, understand that this may mean extremely high interest rates and consequently high monthly payments.

Consumers with low credit scores can expect to acquire an interest rate ranging anywhere from 19 to 26 percent. Where as, individuals with better or good credit ratings are going to receive an interest rate of about 6 to 7 percent.

Auto Insurance. With a good credit score, you are most likely going to be eligible for a low premium (other factors are considered, such as diving record, type of vehicle, etc.). However, if you have a low score and poor credit history, your credit record will get noted on your insurance application making you a consumer who pays between 20 to 50 percent more in premiums.

What’s the logic behind all this profiling?

Lenders and business that grant services depend on your credit history and/or score to determine how likely you are to pay them back. Does your history show a responsible, credit worthy consumer or have you fallen into a financial gap and therefore seem more of a risk?

If you have not ordered your credit reports within the past year, go to www.annualcreditreport.com and receive all three, for free. Evaluate what creditors are saying about you. Make sure the information is correct. If you find errors, fix them. All of the credit reports have contact information for the credit bureaus and the creditors. Do not delay in making corrections as this could be costing you money.

Many consumers struggle with the negative effects of poor credit reports. Although it does not have to be that way forever. Improving your credit history and score is a matter of organizing your finances. Take the time to sit with your expenses and develop a budget that you can stick to. A budget is key to improving your financial health. Continue to practice your new financial obligations and goals until they become a habit. Within six to twelve months, you could have a much improved credit score and change those high interest rates and premiums to amounts that you can handle.

MONEY SAVING TIP:  Wants vs. Needs

Instead of focusing on saving for a specific product with this ezine, we would like to challenge what you think your wants vs. your needs are. If you want to save money, do not make the mistake of confusing a want for a need. Needs are simple to identify: shelter, food, clothing, transportation. Wants are items that enhance or improve our life. Clothes for instance are a need, but wanting to shop at a particular store for a particular brand is a want. A vehicle might be a need, depending on where you live. However, a sports utility vehicle is a want. Do not neglect yourself from the things you want, but if you are finding it hard to stick to a budget or cutting expenses, practice only spending money on needs for just a month….you will be surprised how much you save.

DID YOU KNOW… that there are things you can do to help boost your credit score?

While there is nothing that can be done about the accurate negative information on your credit report, there are things you can from this point forward to improve low numbers.

Order a copy of your credit reports. You may get a free one from each of your credit bureaus every twelve months be visiting www.annualcreditreport.com

  • Fair Issac Corporation states that 35% of your score comes from credit payment history; therefore, paying bills on time is the key to making your scores go up. Regardless of how many bills feature on your credit reports, making sure that they are paid on time will help your score.
  • Avoid acquiring more credit. This is especially important if you haven’t had credit for very long.
  • If you have questionable credit history, open a new credit account, use it responsibly and pay it off on time.
  • Do not open credit accounts you do not intend to use.
  • Keep your balance low in relation to your available credit.  Keeping your balance below 25% of your limit, will improve your debt to income ratio.
  • Pay off credit card debt rather than moving it around to lower rate cards.

Please note these tips will not clear your credit report right away. It took some time for your credit to appear the way it does and it will take some time to clear things up and improve your score.  Never-the-less, be consistent with your efforts and the rewards will undoubtedly happen.

Thrifty Spending Issue 50

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FEATURE ARTICLE:  Banking over the Internet

The Internet offers the potential for safe, convenient new ways to shop for financial services and conduct banking business, any day, any time. However, safe banking online involves making good choices –decisions that will help you avoid costly surprises or even scams.

If you are thinking about or already using online banking systems then the information provided below will help you.

• Confirm that an online bank is legitimate and that your deposits are insured.
Whether you are selecting a traditional bank or an online bank that has no physical offices, it is wise to make sure that it is legitimate and that your deposits are federally insured. Here are tips specifically designed for consumers considering banking over the Internet.

• Read key information about the bank posted on its Web site.
Most bank Web sites have an “About Us” section or something similar that describes the institution. You may find a brief history of the bank, the official name and address of the bank’s headquarters, and information about its insurance coverage from the FDIC.

• Protect yourself from fraudulent Web sites.
For example, watch out for copycat Web sites that deliberately use a name or Web address very similar to, but not the same as, that of a real financial institution. The intent is to lure you into clicking onto their Web site and giving your personal information, such as your account number and password. Always check to see that you have typed the correct Web site address for your bank before conducting a transaction.

• Verify the bank’s insurance status.
To verify a bank’s insurance status, look for the familiar FDIC logo or the words “Member FDIC” or “FDIC Insured” on the Web site. Also, you should check the FDIC’s online database of
FDIC-insured institutions. You can search for an institution by going to the FDIC’s home page at
www.fdic.gov and selecting “Is My Bank Insured?” Enter the official name, city, and state of the bank, and click the “Find My Institution” button. A positive match will display the official name of the bank, the date it became insured, its insurance certificate number, the main office location for the bank, and its primary government regulator. If your bank does not appear on this list, contact the FDIC. Some bank Web sites provide links directly to the FDIC’s Web site to assist you in identifying or verifying the FDIC insurance protection of their deposits. Also remember that not all banks operating on the Internet are insured by the FDIC. Many banks that are not FDIC-insured are chartered overseas. If you choose to use a bank chartered overseas, it is important for you to know that the FDIC may not insure your deposits. Check with your bank or the FDIC if you are not certain

• Know where to get more information about FDIC insurance.
Don’t worry about your deposit insurance coverage if you or your families have less than $100,000 in all your accounts combined at the same FDIC-insured bank. But if your accounts total $100,000 or more, find out if they’re within the insurance limit. Contact your bank for more information. For additional assistance from the FDIC about the legitimacy of an institution or the insurance of your deposits, call the FDIC’s Division of Compliance and Consumer Affairs toll-free at 800-934-3342 or send an e-mail via the FDIC’s online Customer Assistance page at www.fdic.gov/consumers/questions/customer/index.html.

It is important to note that only deposits offered by FDIC-insured institutions are protected by the FDIC. Non deposit investment and insurance products, such as mutual funds, stocks, annuities and life insurance policies that may be sold through Web sites or at the bank itself, are not FDIC-insured, are not guaranteed by the bank, and may lose value.

• Keep your personal information private and secure;
Some consumers may want to know how their personal information is used by their bank and whether it is shared with affiliates of the bank or other parties. Starting July 2001, banks are required to give you a copy of their privacy policy once you become their customer, regardless of whether you are conducting business online or offline. You may also see a copy of it posted at the bank’s Web site. By reviewing this policy you can learn what information the bank keeps about you, and what information, if any, it shares with other companies. Banks may want to share information about you to help market products specific to your needs and interests. If you do not wish to participate in information sharing, however, you have the right to prevent your bank from sharing your private personal information with parties not affiliated with the bank, except in certain limited circumstances. Your bank should provide a clear method for you to “opt out” of this type of information sharing. You may have heard that some companies track your Web browsing habits while at their site, to understand your interests and then to market particular services or promotions. You may want to ask whether your bank tracks your browsing habits if these practices concern you. Also, your Web browser may enable you to block the ability of outside companies to track your browsing habits. Your bank and your Internet service provider may have more information about how to protect your privacy online.

Help Keep Your Transactions Secure

The Internet is a public network. Therefore, it is important to learn how to safeguard your banking information, credit card numbers, Social Security Number and other personal data.

• Look at your bank’s Web site for information about its security practices, or contact the bank directly.

Also learn about and take advantage of security features. Some examples are:

• Encryption is the process of scrambling private information to prevent unauthorized access. To show that your transmission is encrypted, some browsers display a small icon on your screen that looks like a “lock” or a “key” whenever you conduct secure transactions online. Avoid sending sensitive information, such as account numbers, through unsecured e-mail.

• Passwords or personal identification numbers
(PINs) should be used when accessing an account online. Your password should be unique to you and you should change it regularly. Do not use birthdates or other numbers or words that may be easy for others to guess. Be careful who you give your password to. For example, if you use a financial company that requires your passwords in order to gather your financial data from various sources, make sure you learn about the company’s privacy and security practices.

• General security over your personal computer such as virus protection and physical access controls should be used and updated regularly. Contact your hardware and software suppliers or Internet service

For More Help
Answers to your questions.
Many regulations provide consumer protection for both traditional and online transactions. If you have any questions or concerns, first try to get answers from your bank. If you are still not satisfied, contact the appropriate federal regulator. For a brief overview of the regulations, log on to the FDIC’s Consumer Rights Web pages at www.fdic.gov/consumers/consumer/rights/index.html. If you would like to review the regulations, you can look them up at www.federalreserve.gov/regulations/.

Where to file a complaint.
If you know your bank’s primary regulator, you may file your complaint online or via e-mail using one of the following methods. If you are not certain where to file your complaint, you may contact any of the agencies listed below and they will direct you to the appropriate office.
Federal Deposit Insurance Corporation:
www.federalreserve.gov/pubs/complaints

Where to report a suspected fraud.
Contact the FDIC at www.fdic.gov/bank/individual/online/spcious.html if you have been a victim of banking fraud, or if you have visited a bank Web site that appears to be fraudulent.

For More Information
For more information about online banking in general, write or call the following banking regulators or visit their Web sites:

Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
(800) 934-3342
www.fdic.gov

Board of Governors of the Federal Reserve System
20th and Constitution Avenue, NW
Washington, DC 20551
(202) 452-3693
www.federalreserve.gov

Office of the Comptroller of the Currency
Customer Assistance Center
1301 McKinney Street, Suite 3725
Houston, Texas 77010-3031
(800) 613-6743

MONEY SAVING TIP:  Gifts

  • Make your own greeting cards.
  • Make your own wrapping paper.
  • Offer to give a service, like a night of free babysitting as a gift, instead of buying stuff.
  • Give baked goods. Everyone loves cookies!

Learn the art of the re-gift. If you get something that you don’t like, keep it and give it to someone else later. However be careful to keep track of who gave you what. You don’t want to give a gift back to somebody.

DID YOU KNOW…that on February 22, 2010 the Credit Card Accountability Responsibility Disclosure Act of 2009 will go into effect?

What does this mean? Before you apply for a new credit card, you may want to wait until after this date because accounts will be simpler to manage and carry fewer whammies from the card issuer.

What you can expect with this CARD Act:

  • No increase of interest rates on existing balances unless the consumer is at least 60 days late.
  • The card issuer will have to provide clear disclosure of terms before the consumer opens an account. This means letting the consumer know if they are signing up with an introductory rate and that these rates must last at least six months.
  • The consumer will have 21 calendar days from the day a card statement is printed to pay the bill.
  • If the consumer makes a payment that is more than the minimum requested, the excess will be applied to the highest interest balance first.
  • No over the limit fees without the consumer’s consent.
  • No charges for payments made by phone, mail or electronic transfers.
  • The elimination of double-cycle billing.  This is the practice of basing finance charges on the consumer’s current and previous balances. This prohibits the issuer from charging interest on the debt paid the previous month.
  • The end of universal default practices.  Here the issuer could raise the consumer’s interest rates for being late with payments to other creditors while staying current on their account.
  • The issuer will have to provide an estimate of how long it will take to pay off a balance at the minimum payment rate.  If this amount of time is too long for the consumer, the issuer will also have to provide a number to a nonprofit credit counseling agency to assist the consumer in paying off the debt faster.

Thrifty Spending Issue 49

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FEATURE ARTICLE:  Have a New Born in the Family? Here are Some Easy Ways to Save Money.

As the cost of the most basic goods and services have increased with the size of the American economy, so too has the cost of raising a child. The US Department of Health & Human Services estimates the cost to raise a newborn to the age of 18 to exceed $250,000 with the first two years to be the most expensive. The cost of clothing, medical care, child care and food add up very quickly. Here are a few simple ways to save.

Make Your Own Baby Food
Making your own baby food can be a nutritious and low cost alternative to purchasing commercial brands. Although commercial baby food is safe as well as convenient, it is also higher in starch, sugar and water then what homemade baby food. Additional resources on how to prepare baby food can be found at http://www.wholesomebabyfood.com/

Use Cloth Diapers
Using cloth diapers may generate concerns about diaper rash and allergic reactions. However, according to the Journal of Pediatrics, the report of rashes during use of cloth diapers is 10% less frequent then during use of plastic diapers. Even though the plastic diapers will hold larger amount of liquid and won’t need to be changed as frequently, the increased use of cloth diapers from changing still results in a savings of $25 to $55 per month.

Share Toys and Clothing
If friends or family with children may have baby toys or clothes that may be usable. Even if you receive a couple of outfits or toys, the savings certainly add up. Always remember that the first step in preparing a budget is knowing your expenses and what can be reasonably lowered. It is important to make sure that quality isn’t sacrificed, especially with children. Although the cost of raising a child can be high, the joy of a happy and healthy baby is immeasurable.

MONEY SAVING TIP:  Saving for School

  • Check out study supplements from the library. Don’t buy them.
  • Buy used text books.
  • Take advantage of free pens and pencils at business conferences.
  • Keep track of your pens and pencils. You ’ll spend less on them if you don’t lose them all the time.
  • Buy back packs that your kids can use for years. While they might think the Sponge Bob Square pants one is cool in 2nd grade, they probably won ’t think it’s cool in 4th.

Do you know how to Budget for the Holidays?

Thanksgiving will be here quickly and it seems within days Christmas will be here and we know what’s next. Remember last year when you were trying to figure out how you were going to pay for everything and you promised yourself that this year it would be different. It is time to make good on your promise and start planning. Remember that rent, car payments and groceries and other bills you have been paying for the last 11 months must be paid during the holiday season. So if you are going to buy gifts and hold a Christmas or New Year party this season plan for it from now.

Here are a few tips to help you along.

Take out your monthly budget form you have been using for the past year and review how you can reallocate money you can put aside for the holiday season. If you have been thinking about having a Christmas Party, you could have started saving from September. If you are spending $100 per month on entertainment expense you may decide to stay at home and set those funds aside for your party expenses. Tally it up and think hard about whether you can afford to spend that much. If the total figure makes you uneasy, think about areas in which you might cut back. Then stick to your budget.

If you’re buying gifts, start listing items that you plan on purchasing. It’s likely that you don’t know what everyone on your shopping list wants, so start asking. Many people will start their gift buying late in the summer when merchants are slow and the savings are substantial. You may also be able to buy items for your party long before the prices are marked up for the last minute shoppers. Try to buy gifts using cash and keep the credit card at home.

Don’t forget about such minor items as wrapping paper and holiday greeting cards. They’re not widely available yet, but they will be soon. Keep your eyes open for sales. If you start early, you can buy these items a little at a time and store them, instead of having to spend a lot of money all at once.

If you’re planning on serving guests, plan ahead. Things like cake mixes, spices, canned goods, and liquor can all be purchased a little bit at a time and placed aside until it’s time to use them.

Are you creative or artistic? Consider making some of your gifts instead of buying them.

Split the cost of major items with friends or family. For example, if someone you know wants a new TV, pitch in with two or three other people. It will save all of you money, and the person who wants the TV will be happy to get it.

Avoid the mall if you can. Everything is more expensive there. If you must go to the mall, look for sales.

If something is not affordable, don’t buy it. This is often easier said than done, but remember the holidays are not a spending contest, they’re supposed to be about spending time with people you care about. Emptying your checkbook won’t make them any more special.

Buy gift certificates. Let your friends and family get what they want. This not only helps you control how much you spend, you can avoid long holiday lines by purchasing them early.

Leave your credit card at home. You are more likely to make expensive purchases with your credit card than with cash. Credit cards make those expensive purchases even more expensive. For instance, let’s say your holiday shopping costs you $2,000. If your account had an 18% interest rate and you paid the minimum payment due, it would take you approximately 18 years and cost you more than $5,600 to repay. Don’t use your credit cards unless you can pay the balance in full when you get the bill.

During the holidays, it’s very common for stores to offer discounts to anyone who applies for their credit card. Don’t do it. First of all, an entry called an inquiry is made to your credit report every time you apply for credit. If you have too many inquiries, you can hurt your credit rating. Second, store credit cards come with notoriously high interest rates, so unless you pay the balance in full, your “discount” actually results in an unnecessarily high bill.

As you can see, planning ahead and shopping wisely can save you a lot of money and keep your budget intact. Start now!

 

Letter from the Executive

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Dear Client,

It is with great pleasure that I can inform you that DMCC has recently been approved by both the U.S. Department of Justice as an approved provider of bankruptcy counseling and education, and by the U.S. Department of Health and Urban Development as an approved Housing Counseling Agency. These approvals follow a long and thorough application process, which our staff worked diligently on to achieve.

As an approved provider of bankruptcy counseling and education, DMCC is able to issue the certificates required by the U.S. Trustee from all consumers filing bankruptcy in the United States. Consumers filing bankruptcy are required to receive budget counseling prior to filing and complete a personal financial management course after filing. DMCC is approved to provide both of these required services and issue consumers the completion certificates they must submit to the bankruptcy court.

DMCC’s initial approval from HUD is to provide personal budget counseling to consumers, which has always been an integral part of our charitable mission. Over the next few months, several members of the DMCC staff will be trained in additional housing areas in order to expand our HUD approved services. These new services will include pre-purchase home buying counseling, reverse mortgage counseling and home mortgage loss mitigation.

Recognition by these government agencies as approved providers of their regulated services is a significant accomplishment for which we should all be proud. However, we truly hope that as existing clients of DMCC, you will never need most of these new services.

Sincerely,

Phil Heinemann
Executive Director

Thrifty Spending Issue 48

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FEATURE ARTICLE:  Are You At Risk of Predatory Lending?

Predatory lending is most commonly associated with mortgages, but it also affects consumers seeking other types of loans. Knowing credit and lending terminology helps to avoid misunderstanding or otherwise deceptive practices and a through list of these can be found on our website at www.dmcccorp.org. Click on “Educational Materials,” and then refer to the credit terminology in the educational handbooks.

What is predatory lending?
With millions of consumers hard hit by fallout of the sub-prime lending market, people are losing their homes and their investments because of predatory lenders, appraisers, mortgage brokers and home improvement contractors who:

  • Sell properties for much more than they are worth by using false appraisals.
  • Encourage borrowers to lie about their incomes, expenses or cash available for down payments in order to get a loan.
  • Knowingly lend more money than a borrower can afford to repay.
    Charge high interest rates to borrowers based on their race or national origin and not on their credit history.
  • Charge fees for unnecessary or nonexistent products and services.
  • Pressure borrowers to accept higher-risk loans such as balloon loans, interest-only payments and steep prepayment penalties.
  • Target vulnerable borrowers to cash-out
  • Refinance offers when they know borrowers are in need of cash due to medical, unemployment or debt problems.
  • “Strip” homeowners’ equity from their homes by convincing them to refinance again and again when there is no benefit to the borrower.
  • Use high-pressure sales tactics to sell home improvements, and finance them at high interest rates.

What tactics do predators use? Predatory lenders or investors insist that they are your only chance of getting a loan or owning a home.

Take your time to shop around and compare rates, prices and homes. Buying a home will be one of the largest financial activities a person can make and will require much deliberation. Here are some signs that you could be dealing with someone who is not considering what is in your best interest:

  • The house you are buying costs a lot more than other homes in the neighborhood, but isn’t any bigger or better.
  • You are asked to sign a sales contract or loan documents that are blank or that contain information that is not true.
  • You are told that the Federal Housing Administration insurance protects you against property defects or loan fraud; it does not.
  • The cost or loan terms at closing are not what you agreed to.
  • You are told that refinancing can solve your credit or money problems.
  • You are told that you can only get a good deal on a home improvement if you finance it with a particular lender.

Protect yourself!

  1. Don’t take the lender’s word for it that you qualify. Scrutinize your finances to make sure that you can repay the loan.
  2. Watch out for prepayment penalties. Occasionally, a respectable lender will charge a fee for paying off a mortgage early – when the house is sold, for example, or when the borrower wants to refinance. But a predatory lender charges excessively large fees to pay off a mortgage early. If those fees are on top of balloon payments and mortgage life insurance, you’re being set up to have your house repossessed if you can’t make the payments.
  3. Don’t sign forms with blank lines or spaces. If you sign blank documents you run the risk of somebody adding costs and fees you never agreed to.
  4. Make sure the lender signs and dates all papers. Get your own copies of all papers and immediately confirm that the information is correct and that it matches what was promised to you.
  5. Pay attention to fees and points. A lender might offer a good interest rate, then charge thousands of dollars in fees and require you to pay an excessive number of points.
  6. Don’t be intimidated by jargon. If you don’t understand, ask the lender or refer to the credit terminology section in the educational handbooks online at www.dmcccorp.org.
  7. Request references from people who have borrowed from your prospective lender.
  8. Hire a personal attorney to be present with you, or to review any documents before signing them, if you feel that the lender may be taking advantage of you.

MONEY SAVING TIP:  Low cost ways of making extra money Sell your old stuff, like CD’s and books on eBay and Amazon.

  • Turn your hobby into a business. Pretty much anything you do can be turned into a business of some sort.
  • Sign up with an online survey company like Survey Spot.
  • Become a mystery shopper.Not only can you make some extra money, you might get some free stuff as well.
  • Have a yard sell.
  • Start a blog and put Adsense on it. You might only earn 4 cents a week, but it’s something.
  • Become a consultant. Do you know a lot about a particular skill? Put that knowledge to work by helping others.
  • Do freelance work on the side. If you’re a good writer, photographer, artist, or programmer you can make some extra money by selling your talent to companies.
  • Start an errand Service. Offer to pick up groceries or dry cleaning for others.
  • Waiting service. People these days don’t have time to wait on the plumber of cable guy. Charge by the hour to do the waiting for other people.

DO YOU KNOW….If  That Deal is Really a Deal?

Have you ever been enticed by a great offer? It is particularly alluring if the product being sold is something you really need. Before you sign on the dotted line, make sure you review the fine print first. Understanding the terms and conditions, billing policy and disclosure statements are imperative to benefit from these types of offers. Otherwise, that special promotion you signed up for may not be a great deal after all.

A good way to understand what you are getting yourself into is to examine these offers and what they really mean. Take for example, the popular promotion given by furniture and home good stores for “no payments, no interest until the year 200X.” It may seem like a great deal, but careful examination could make you think twice. A few questions that may help you decide are:

Does interest accrue until the promotion expires? How high is the interest rate and is it a fixed rate? What does the interest rate increase to if you miss a payment? Will the interest be added if the item isn’t paid in full at the end of the promotion? Is the savings that you are supposed to receive lost in the financing deal?

Fortunately for you, it is the law to disclose all of the financial terms and conditions along with billing methods. You will be well informed if you read and understand the contractual agreement. Most importantly, ask a customer service representative to explain anything that is unclear to you. Especially inquire if you must qualify for the offer. They may refer to this clause as, “other details may apply.”

Furthermore, you want to make sure that the “deal” is actually a deal. If you can find the
merchandise for less money somewhere else, why even bother? Some retail stores may honor their competitor’s promotions. Always make sure you know who else is selling the same product and at what price to really get the best deal.

Let us suppose you visit the local furniture store and get excited about a living room set which will cost you close to $3,000. You plan to take full advantage of their offer and make no payments for one year. Once the statements arrive you have planned to pay $75 per month. The chart below illustrates how long it will take you to pay the furniture back and the actual cost of your furniture.

You spent $3,000.00 on November 1, 2009
You plan on paying $75 per month starting November 1, 2010
Interest Rate: 23.99%
Option 1:
Monthly Payment: $75.00
Total Interest Paid*: $3,091.88
Duration of Loan: 82 months (6.8 years)
Total Paid: $6,091.88
Option 2:
Monthly Payment: $100.00
Total Interest Paid: $1,626.06
Duration of Loan: 47 months (3.9 years)
Total Paid: $4,626.06
*The above example assumes that interest is not accrued during the year of the promotion.

The ideal situation would be to submit payments before the offer expires and you are required to make payments. Unfortunately, this option is not what makes these promotions popular.

Finally, do not be timid if you feel that you are not getting the best service from a store or financial institution. Speak up. Other businesses will be happy to accommodate you and perhaps match an offer you have previously explored. Whatever decision you make in regards to credit, always be certain that the monthly payments will fit into your budget. Make sure that you have explored all of the other financing options available and that the one you choose is the best for your lifestyle.

 

Thrifty Spending Issue 47

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FEATURE ARTICLE:  Gearing up for the Holidays

Gearing up for the holidays seems a little silly when Halloween hasn’t even arrived. The truth is the sooner you start the better you will be financially. Waiting until the last minute to do holiday shopping causes many consumers to overspend. A good way to begin preparing for gift shopping is by revisiting your budget and making sure you have your financial obligations taken care of so you know exactly how much money you have left over to shop for friends and family.

If you need assistance getting started with a budget, click here you can follow along with the categories on this worksheet or simply use it for ideas or reminders of your own expenses. Remember to always put something in savings. Even if the amount you are putting away is modest, it will continue to increase the funds in your account and get you closer to those financial goals you have in mind.

Continue your planning by making a list of those gifts you would like to purchase. If the list gets overwhelming, think of other ways to make this holiday season special without having to purchase gifts. Get crafty and make something for your friend or frame a special picture.

If after reviewing your budget you realize that you need to cut back on some expenses, check out the list below for ideas on savings.

Energy costs. If your electric bill is out of control, take a stand and purchase a economical, programmable thermostat. Prices for these start around $50 and even though that doesn’t sound cheap, it will eventually save you much more on your heating and/or cooling bill.

Brown bag it. Instead of purchasing lunch every day, which can cost anywhere from $8 to $10, plan ahead and make your lunch the night before. It might require a little extra time on your part but the calculations speak for themselves: $8 x 20 days (4 week month) = $160 x 12 months = $1,920!!! (for $10/day = $2,400).

Negotiate your rate. Here’s the most costly of your expenses if you have a credit card with a balance – your interest rate. If you have tried lowering this APR on your own and have had no luck get in touch with a reputable credit counseling agency that can negotiate the rate for you and get you out of debt soon. For more information on how to get this started visit http://www.dmcccorp.org/ .

MONEY SAVING TIP:  Save Money While You Shop

  • Visit your local library. People don’t really go to the library anymore, but they should. If you’re trying to cut costs and you like to read or watch movies, then this should be your next stop. If you rent a movie per week or buy a book per month, this could mean up to $30 in savings.
  • Forget the gym. All of the exercises you do at your costly gym can be done for free either in the comfort of your own home or outside. Some cities even have community centers that offer exercise classes for free.
  • Review your auto policy. If you haven’t reviewed your auto insurance policy in a while, check it to see if it’s still the coverage you need. If it is, call your insurance company to see if there are any discounts you qualify for, such as, safe driver. Or, check out http://www.insweb.com/ to compare other rates in your area.
  • Shopping Avoid impulse buying. Practice tantric shopping.
  • Buy as much as you can online.
  • Negotiate the price on big ticket items like cars, electronics, and large appliances.
  • Use cash as a negotiating tool. Nothing makes a seller ’s mouth water than cold hard cash in their hand.
  • Before you buy something, ask if the item will be put on sale in the near future.
  • Don ’t buy extended warranties. Eighty percent are never used, and they’re a major profit item for the vendor. That’s why they push you so hard to buy them!
  • Keep receipts and send in rebate slips.Very few consumers actually return rebate coupons. Which is, of course, exactly what the manufacturers are hoping for.

Here are some websites that give you good discounts:

www.dealcatcher.com
www.pricegrabber.com
www.shopping.com
www.mysimon.com
www.shopping.com
www.shopzilla.com
www.nextag.com

Did you know… that the online banking information about your account may not be accurate?

Because of all the electronic transactions that may take place on your account, online banking has become complicated. Deposits may show before they are actually available, and some withdraws or purchases may take up to 48 hours or longer to post to your account. Gas stations and restaurants are just two business that put holds on funds which can make it tricky to get an accurate balance online.

The best way to make sure you have an accurate balance on your account is for you to keep track of it. If you use your debit card, write a check, make a deposit or withdraw funds from your account – write it down! Non-sufficient-funds (NSF) fees are high these days and one small purchase can trigger multiple NSF charges resulting in havoc to your account. Yes, some banks will do a courtesy adjustment and forgive one or two of these charges (if you beg), but don’t expect this to bail you out every time. This type of courtesy only occurs one time per year.

If you share an account with someone, the best way to make sure you both are not overspending is by taking out an allowance. Give yourselves enough money for the week and leave the rest of the funds in your account alone. If you must tap into that account, inform your banking partner of your move to prevent overdrafts.

DMCC delivers supplies to a unit in Iraq

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Boca company delivers supplies to a unit in Iraq

Employees at Debt Management Credit Counseling Corp (DMCC), a not-for-profit corporation in Boca Raton, have donated much- needed items to the 46 Engineer Battalion, a Louisiana Army Unit. This Battalion is currently stationed in Iraq.

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Pennies can add up for some VBHS students

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PUBLISHED – YourHub.com (Produced by Scripps Publishing) – April 17, 2006

PENNIES CAN ADD UP FOR SOME VBHS STUDENTS

Vero Beach, FL – Jason Athas arrived at Vero Beach High School early. He knows his day will be filled with questions about the financial future of some young faces and he wants to make an impact.

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DMCC donates 300 books to Palm Beach high school

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FOR IMMEDIATE RELEASE

Delray Beach, FL– DMCC donates 300 Financial Literacy books to Palm Beach County high school students on Monday, January 30.

Debt Management Credit Counseling Corp (DMCC), a 501 c(3) Not-for-profit corporation donates 300 Debt, Money & Credit Concepts books, a Financial Literacy Program, to Atlantic High School in Delray Beach.

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DMCC donates books to high schools students

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Pompano Beach – DMCC donates financial literacy books to Broward County high school students on Wednesday.

What: Debt Management Credit Counseling Corp (DMCC), a 501 c(3) Not-for-profit corporation donates 140 Debt, Money & Credit Concepts books, a Financial Literacy Program, to the Marketing, DECA and NFTE programs at Blanche ElyHigh School.

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Non-profit organization brings gifts to Florence Fuller Child Development Center

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Boca Raton non-profit organization brings gifts to the economically disadvantaged children of the Florence Fuller Child Development Center.

Boca Raton, FL – December 21, 2005 – Debt Management Credit Counseling Corp., a not-for-profit credit counseling agency, provided Christmas gifts for the children of Florence Fuller Child Development Center. DMCC employees participated in donating unwrapped toys and clothing to the economically disadvantaged kids. A party was held for the children with Santa Claus handing out the gifts, juice and cookies.

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Boca High gets a lesson in budgeting from local debt and credit counselor

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PUBLISHED – The Boca Raton News – December 2, 2005Contact: Jessica Stokes, Education and Research Coordinator
jessica@dmcconline.orgBoca High gets a lesson in budgeting from local debt and credit counselor.

“Does anybody here have a credit card?” asked Jessica Stokes, to students attending a business systems and technology course. Boca Raton Community High School senior Dorothy Pierre- Louis offers a debit card. “My mom advised me not to get a credit card just yet, and if I did I should use it only for emergencies,” Pierre- Louis said. That was the message Stokes wanted to convey during the crash course in budgeting. Stokes is an education and resource coordinator for Debt Management Credit Counseling Corporation, a non-profit organization that counsels people who are in debt. During the hour-long class, Stokes discussed how to make a budget, how credit cards work, and how to avoid identity theft.

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DMCC provides educational program

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PUBLISHED – The Boca Raton News – October 10, 2005

Boca Debt Management Firm provides educational program.(Educational and Charitable Services supplies free counseling for teenagers.)

BUSINESS NEWS

Boca debt management firm provides educational program Educational and Charitable Services supplies free counseling for teenagers
Published Monday, October 10, 2005 1:00 am
by By Corey Siggins

A Boca Raton debt management firm is becoming well known for its educational programs that endorse the act of properly maintaining one’s personal finances. This is particularly true, the firm says, for young people – often the target of credit solicitation, and without the tool to assess the benefits and risks.

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Another student is awarded the DMCC scholarship

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Jupiter, FL – October 7, 2005

Debt Management Credit Counseling Corp., a not-for-profit credit counseling agency, awarded another student with the Debt Management Credit Counseling Corporation Honors Scholarship at Florida Atlantic University. DMCC has been involved in assisting students at the Harriet L. Wilkes Honors College since 2001

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Non-profit brings financial literacy to local high school students

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PUBLISHED – The Boca Raton News – June 12, 2005

Boca nonprofit organization brings financial literacy to local high school students.

 

BUSINESS NEWS
Boca nonprofit organization brings financial literacy to local high school students
Published Sunday, June 12, 2005
From Staff Reports

Debt Management Credit Counseling Corp., a Boca Raton not-for-profit organization, has introduced their Financial Literacy Program to high schools as a way for students to gain valuable skills that will help them make smart financial decisions.

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