Education

Debt Management Credit Counseling Corp (http://www.dmcconline.org), a nonprofit organization (DMCC), announces new program to teach consumers how to increase their personal credit scores. Credit Score Analysis program includes a simulator that enables DMCC to provide consumers a written action plan custom to their personal goals. DMCC provides the program for free to its debt management plan clients, and charges other consumers $49 to cover its costs.

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How to make dish washing detergent and more

According to the latest government data, Americans spend an average of $659 a year on housekeeping supplies. The Bureau of Labor Statistics, which provides that figure, also says the average American earns about $787/week – which means many people are spending most of (if not more than) a week’s pay every year on dish soap, laundry detergent, and other cleaning products.

If that sounds expensive, here’s a better idea: Make your own dishwasher detergent for a third of the cost of the commercial stuff.

Recipes for cleaning products are as numerous as recipes for dinner. Here are just a few to help with dishes, clothes and more.

How To Make Dishwasher Detergent

Here’s a simple recipe for dishwasher soap:

• 1 cup of borax
• 1 cup of baking soda
• ¼ cup of table salt
• 2 packets (half an ounce) of unsweetened lemon Kool-Aid

You can try to save even more by buying ingredients in bulk, but another idea is to find smaller and much cheaper boxes at your local dollar store: a good idea to since you’ll want to try a small amount at first to see if you like the results. The amounts listed above are good for 16 loads – one tablespoon each – so even small batches will last a while.

Other recipes online vary. For example:

• 2 bars of shredded Octagon soap
• 1 cup of baking soda
• ¼ cup of washing soda
• ¼ cup of lemon juice

For this one, shred the soap into about 5 quarts of water and heat until it melts. Then add the other ingredients and pour it into a sealed container. It isn’t supposed to create a lot of suds, but it’s supposed to work well.

Laundry Detergent

Here’s an easy recipe for laundry detergent. You’ll need:

• 4 cups of water
• 1/3 bar of cheap soap, grated
• 1/2 cup washing soda (not baking soda)
• 1/2 cup of Borax (20 Mule Team)
• 5-gallon bucket for mixing
• 3 gallons of water

First, mix the grated soap in a saucepan with 4 cups of water, and heat on low until the soap is completely dissolved. Add hot water/soap mixture to 3 gallons of water in the 5-gallon bucket, stir in the washing soda and Borax, and continue stirring until thickened. Let the mix sit for 24 hours, and voila! Homemade laundry detergent.

Other cleaning products

If you like the results of your homemade concoctions on clothes and dishes, why stop there? The next time you’re at the store, instead of picking up a bottle of some expensive cleanser, grab these six items and make your own cleaning supplies:

1. Vinegar. It may smell a little weird, but vinegar can handle everything from dishes to laundry and even weeds. We’ve written about the wonders of vinegar before in Household Products Vinegar Can Replace.
2. Baking soda. Eliminates odors and helps with stains, and also works as a natural method of pest control – ants hate it.
3. Borax. This mineral salt beats bleach as a toilet cleaner and is also useful for scrubbing walls. And as you see in the recipes above, works with laundry, too.
4. Fels-Naptha soap. This one’s actually made by one of those big cleaning companies: Dial. They recommend it for “pre-treating” stains. In other words, “use this in addition to a bunch of our other expensive products, like Purex!” But you can turn the tables by using it as part of a recipe for your ownlaundry detergent, and they can keep the Purex.
5. Rubbing alcohol. Works as a disinfectant and is also a great glass cleaner. It also gets grime off plastic and metal surfaces like patio furniture or bathroom fixtures.
6. Lemon juice. This cuts through dish grease and is an ingredient for homemade furniture polish – but it’s not the easiest thing to preserve long-term.

If making your own cleaning products sounds a little extreme, there are still simple ways to save. The best? Buying generics. And if you insist on using name brands, at least clip those coupons.

www.moneytalknews.com

Return to Thrifty Spending Issue 97

FEATURE ARTICLE:  How to Buy Scratch-and-Dent Appliances

Often, you can find great deals on brand-new appliances at scratch-and-dent sales. The trick is first finding a store that sells them, then finding an appliance with flaws that won’t affect your use.

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MONEY SAVING TIP:  How to make dish washing detergent and more

According to the latest government data, Americans spend an average of $659 a year on housekeeping supplies. The Bureau of Labor Statistics, which provides that figure, also says the average American earns about $787/week – which means many people are spending most of (if not more than) a week’s pay every year on dish soap, laundry detergent, and other cleaning products. If that sounds expensive, here’s a better idea: Make your own.

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DID YOU KNOW…there are three things you should never buy a used?

A used mattress, tires and software.

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Things that consumers purchase that they can get for free.

1.  Free checking. Plenty of banks still offer free checking accounts.  Depending on where you live, SunTrust for example, offers a free plan with no minimum balance required. And you get free online and ATM service too. Check your local Wachovia and U.S. Bank to see if they have their own version of free accounts. Some Chases even offers $100 for opening such an account. Indeed, a host of banks and savings and loans offer free checking. So far. When you’re looking for lower fees, including free checking, always to look to smaller local banks and credit unions.

2. Free credit reports. You can go to AnnualCreditReport.com for a free look at your credit history once a year. If the Financial Regulatory Reform bill passes, you might also one day get a look at your credit score.

3. Free cash. If you can’t find an ATM near you for a free cash withdrawal, no worries: Plenty of stores will give you cash back with no fee when you use your ATM card to make even a small purchase. You can buy a candy bar or a Diet Coke and get back up to $100 in cash from Wal-Mart. Target will give you back $40 if you use your ATM card for a purchase. Grocery stores also offer cash back. And then there are iPhone and other apps that will help you locate ATMs.

4. Free information calls. Bing 411 (1-800-BING-411 or 1-800-CALL-411) allows you to find local shops and restaurants, as well as get driving directions, traffic reports, sports scores, stock quotes, and weather reports. 1-800-FREE411 allows you to get any number, business or residential, in exchange for listening to a brief ad.

5. Free scholarship search. Plenty of websites offer free searches for scholarships, such as Fastweb. There’s even a company called Free Scholarship Searches that offers links to 40 websites that offer free scholarship searches.

6. Free baggage. Sure, nearly all airlines are charging to check baggage but at least one doesn’t, Southwest. And remember carrying on bags is still free, except for on Spirit Airlines.

7. Free entertainment. Your local library and parks offer lots of free fun, from books to movies to concerts. Join their e-mail list to see what’s up. And of course, there’s the Internet, offering free games as well as magazine and newspaper articles. Just go to the website of your favorite periodical.

8. Free Water. While technically not free, tap water is about as close as you can get. If you’re concerned about water quality, buy a filter. But don’t ever pay for water at a convenience store.

9. Free TV. Thanks to sites like Hulu, you can now watch many popular television shows online for free. If your favorite shows are free on the web, why pay for cable or satellite? Do an Internet search for other websites that offer free television shows.

10. Free telephone calls. Services like Skype and AIM let you communicate with other users for free. Always calling a loved one long distance? If you both get copies of something like Skype, you can talk all you want without paying a dime. And with a service like Google Voice, you can get all of your cell phone calls free, too.

Return to Thrifty Spending Issue 96

Debt Management Credit Counseling Corp (http://www.dmcconline.org), a nonprofit organization (“DMCC”), has been approved by HUD to provide Reverse Mortgage counseling. Reverse mortgages provide seniors the ability to obtain cash utilizing the equity in their homes. Seniors interested in pursuing an FHA reverse mortgage should contact DMCC for a free loan estimate and information.

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FEATURE ARTICLE: Debt Forgiveness: Is it truly forgiven or is it transferred to one’s income tax?

Ever settle on a debt and wonder what will happen to the amount that was not paid? For example, if a credit card debt totaling $30,000 was settled for $7,000, what happens to the remaining $23,000? Is it just forgiven or is it taxable?

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MONEY SAVING TIP:  Things that consumers purchase that they can get for free.

1.  Free checking. Plenty of banks still offer free checking accounts.  Depending on where you live, SunTrust for example, offers a free plan with no minimum balance required. And you get free online and ATM service too. Check your local Wachovia and U.S. Bank to see if they have their own version of free accounts. Some Chases even offers $100 for opening such an account. Indeed, a host of banks and savings and loans offer free checking. So far. When you’re looking for lower fees, including free checking, always to look to smaller local banks and credit unions.

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DID YOU KNOW…there are good and bad times to use your car’s a/c in order to optimize your MPG?

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FEATURE ARTICLE:  Have You Bounced Yourself Out of a Checking Account?

Have you tried to open a checking account and been turned down? Or, did your bank close your account? If so, you’re not alone — and it’s important to understand why this can happen, and what you can do about it.

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MONEY SAVING TIP:  Homeowners Insurance and Car Insurance

By increasing the deductible of your policy from $500 to $1,000, you can see big decreases on your premium.

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DID YOU KNOW…that sometimes the extended warranty is not worth it?

The Manufacturer’s Warranty Is Often Sufficient

Just about all products on the market today come with a standard manufacturer’s warranty, which typically covers your purchase for one year. The majority of minor malfunctions occur within this first year, while major problems are more apt to occur much later, beyond the reach of an extended warranty’s term.

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Homeowners Insurance and Car Insurance

By increasing the deductible of your policy from $500 to $1,000, you can see big decreases on your premium, says Michael Barry, vice president of media relations for Insurance Information Institute in New York. “People pay about $880 a year, so if I can knock $88 off, it’s a start.” Regarding auto insurance, take a look at your collision insurance if you have an older car. If you have even a fender-bender, sometimes the cost to repair the car would be more than it’s worth, so perhaps you could cancel the collision insurance altogether. First, look up the value of the car at Kelley Blue Book, Edmunds.com or the National Automobile Dealers Association, then check the collision line on your auto insurance bill and see what it’s worth to you to keep that insurance. Also, if you don’t drive that car much, look for a discount. If you drive from 7,000 to 7,500 miles a year, you can often qualify for low-mileage discounts.

www.finance.yahoo.com

Return to Thrifty Spending Issue 95

FEATURE ARTICLE:  Car Ads too good to be true?

Every day consumers are bombarded with cars ads on the radio and on television that grab their attention and get them thinking about trading in their current automobile.  Consumers are targeted with special finance offers such as, “no money down,” or “if you work, you qualify” Some of those ads although true are sometimes misleading. The dealer neglects to state that the interest rates on these loans may be astronomically high, and the cars in these ads may be high mile models, or have a history that could include accident damage.

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MONEY SAVING TIP: Get a free energy audit.

Many utility companies will come out to your house for free or at a nominal cost and tell you how to save money.

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DID YOU KNOW…that when you open credit cards at your favorite stores in order to get the discount, you’re hurting your score?

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Get a free energy audit.

Many utility companies will come out to your house for free or at a nominal cost and tell you how to save money. If yours will, let them. And while they are there, ask if they have any off-peak, load-management or other savings programs.

Return to Thrifty Spending Issue 94

Debt Management Credit Counseling Corp (http://www.dmcconline.org), a nonprofit charitable organization (DMCC), announces new program to assist consumers struggling to repay payday loans. Program provides repayment plans with affordable monthly payments and suspension of collection calls. DMCC also approved by state to provide Florida residents a 60 day deferment of their loan payments.

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So if you decide to take the plunge and sign up for the membership, you’ll want to take full advantage of the best bulk-buying opportunities these stores have to offer. Here, then, are the things you should always aim to buy in bulk.

1. Toilet paper – meets the main criteria for bulk-buying: It doesn’t go bad, you’re always going to need it and you use it all the time. Just make sure you have room for it in your house, and that you buy a brand that you and your family actually like.

2. Bottled beverages – rather than buying individual bottles for $1.50 each, instead buy a 12-pack for $6.

3. Diapers – buying a 100-pack of diapers  might sound daunting – in addition to the logistics of fitting it in your car and then finding room in your house, it also reminds you that you’ll be changing 100 diapers in the coming weeks. Still, it is still less expensive than buying less diapers at your local store.

4. Dog food and treats – try a 14-pound box of large Milk-Bone treats, which can be had for around $10 and which is enough to last for two dogs for half a year. Also buy rawhide dog chews in bulk, but be aware they don’t last as long in the house.

5. Laundry detergent – buying laundry detergent in bulk, usually means two giant containers of liquid or powdered soap sold together.  To make the most of your purchase, follow the instructions and moderate your usage.

So if you decide to take the plunge and sign up for the membership, you’ll want to take full advantage of the best bulk-buying opportunities these stores have to offer. Here, then, are the things you should always aim to buy in bulk.

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DID YOU KNOW…It’s not good to maintain a balance of more than 30% of your limit?

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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