Beware of This Jury Duty Scam

Ahhhh, the con men of the world never cease to amaze me. Especially when they get flagrant in their tactics. This time, they’re pretending to be court officials. They’re calling people on the phone, and berating individuals for allegedly failing to report for jury duty. Problem is: the people being called haven’t really missed a jury duty notice. The scammers on the phone just want to scare people into thinking they’re in trouble with the law. And of course, the caller on the phone has a quick solution: Just pay your court fine immediately and this problem will go away. Oh, and did I mention that they need your credit card number to pay that fine? If you get a call like this, hang up on these greedy (albeit bold) villains. This is just another identity theft scam. Read more about this financial hoax in this article from the FBI. http://tinyurl.com/z2aq9

What to Expect if Your Bank Closes

A Facebook fan read about some local banks closing, and wanted to know how – as an account holder – this will affect her. Here’s what you need to know if your bank fails.

So far this year, 115 banks have collapsed in the U.S., and many of them are local banks. The Federal Deposit Insurance Corp. maintains a “watch list” of problem banks, those with troubled finances. In August 2009, that watch list contained 416 banks, so experts predict that half or more of those banks could also fail. Once a bank that is “undercapitalized” get taken over by federal regulators, it is either run by the FDIC, as is the case with IndyMac, or the institution gets sold off by the FDIC to another bank.

Here’s how bank failures affect you and other consumers.

If you currently have money sitting in a deposit account at a bank, and that bank is FDIC insured, then your money is protected up to $250,000. In 2008, during the height of the biggest financial crisis most of us have ever experienced, the FDIC raised the limits on insured accounts to $250,000 from $100,000. This $250,000 limit – per depositor, per account – will be in place until Jan. 1, 2014, at which time it is scheduled to go back to $100,000. The FDIC insures so-called deposit accounts, which include the following:

• Checking Accounts
• Savings Accounts
• Negotiable Order of Withdrawal Accounts (also called NOW accounts, which are savings accounts that allow you to write checks on them)
• Time Deposit Accounts, (including Certificates of Deposit or CDs)
• Negotiable Instruments (such as interest checks, outstanding cashier’s checks, or other items drawn on the accounts of the bank)

The good news for most people is that even if your bank goes out of business, if you’ve put your money in a FDIC-insured institution, you can rest assured that your money – up to the limits described – is perfectly safe. In fact, since the FDIC’s inception, not a single dime of insured deposits has ever been lost.

Got a financial question? Ask The Money Coach! You can reach me here on Facebook: http://www.facebook.com/themoneycoach

10 Ways to Save on Your Purchases — Reader Participation Required for Success

A step toward becoming debt free is to cut your spending and maintain your new lifestyle. Some people feel it is too hard, say, to stop smoking, cut coupons and then remember to use them, or do your own home maintenance. So start with what you can handle.

You know your own vices and where you waste money when you could be saving. I can tell you what to do, but sometimes in order to motivate yourself, you need to take charge. As a result, I am giving you an exercise to determine how you can save on purchases or cut your overall spending for your own household. Come up with 10 ways to save and share part or all of your list with other readers by leaving a comment. Here’s a list of three to get you started.

Charge only what you can pay off. Getting a low interest rate on your credit cards can save you hundreds, even thousands of dollars a year in interest, but you can save even more if you don’t carry a balance. When you make purchases on your credit cards, be aware what you have in your checking account. If you will not be able to pay off the entire balance at the end of the month when the bill is due, then don’t buy the item.

Choose take-out or eat at home. Have you ever paid more than $5 for an omelet when you know a dozen eggs cost under $2? What about $15 for a plate of pasta when a box of Rigatoni and a jar of Ragu at your grocery store would feed at least four people and cost you less than $7 total? Eating at home can save you a ton of money. However, if you feel you really crave restaurant food, try buying take-out, and save on tips. You can even double your savings by getting take-out at lunch time when many restaurants charge less for the same meal they serve during dinner hours. Just save your lunch take-out for dinner.

Buy generic brands. Buying generic brand products, especially staples such as cereal, sugar, flour and other items can save you several dollars at the checkout lane without compromising quality or taste. Opting for generic prescription medicines are also a great way to keep money in your pocket.

You Can Stop Debt Collector Harassment

Many people are well behind in paying their bills, but that doesn’t give debt collectors permission to harass you at work, late at night, after you’ve asked them to stop, or under other conditions.

What Debt Collectors Cannot Do

• Cannot contact you before 8 a.m. or after 9 p.m. your local time unless you give them permission or they have a court order to do so.
• Cannot call you at your job if you tell them your employer prohibits such calls.
• Cannot contact you if you tell them you have a lawyer representing you.

These, and other protections are spelled out in the Fair Debt Collections Protection Act (downloadable PDF file). I will highlight more of your rights over the course of this month.

Send a Cease & Desist Letter
To stop a debt collector from contacting you, write them a Cease and Desist letter telling them to stop all contact with you.

The first sentence of your letter should say: “I am unable to pay this bill because….” or “I refuse to pay this debt because….” and explain your reason. You also have the option of not giving a reason at all.

The second sentence should state: “I hearby assert my right under Section 805-C of the Fair Debt Collection Practices Act to request that you cease any further communication with me.”

After the debt collectors receive your “Cease & Desist” letter they cannot contact you except to indicate that the collection process against you has stopped or that legal action against you is moving forward.

For a sample Cease & Desist letter, see my book Zero Debt.

 

3 Steps to Back-to-School Clothes Shopping on a Dime

Found on the Racks of Crossroads Trading Co., July 11 in Sacramento: "Anchor Blue" shirt: $10.50; "BDG" shorts, $11.50; Herringbone hat, $8.50; Nike Dunks shoes, $26.50.

Unless your child attends a private or parochial school with mandatory uniforms, you’re probably clothes shopping right about now to find new outfits for the kids to wear this school season.

Discount stores such as Target and Wal-Mart are a good place to head, however, consignment and resale shops are even better if you’re looking to save a buck. Here’s how to get the most for your money in three easy steps.

1. Get Rid of the Old. If your children are need of new clothes this Fall, that could be in part because they outgrew last year’s clothes. Raid your child’s closet to find those items that are too small, but don’t contain tears or several missing buttons or broken zippers. The same goes for shoes. Pile as many of these items into bags and boxes as you can.

This "Moth" sweater was priced at $13.50 on Aug. 6 at the Crossroads Trading Co resale shop in Chicago's Lincoln Park

2. Find a resale shop near you. Whether it’s a consignment or exchange shop, look for a store near you that sells and buys gently used clothing. These places will determine the resale value of the items you just pulled from your closets and storage and will offer you a percentage of that value in cash or as store credit in exchange for your items. Some shops with locations nationwide include Buffalo Exchange, Plato’s Closet, Once Upon a Child, or Crossroads Trading Co.

3. Purchase Gently-Used Items. With the cash you earned from your trade-ins, purchase stylish clothes that fit from these same shops. Some, like Plato’s Closet and Crossroads, carry a lot of name brand items.

Involving children in the resale shopping experience teaches them about the importance of budgeting.

Tip: Involve your child in the process. Whether it is a young school-ager or a teenager, have your child help select items to sell. Set a shopping budget based on the money they receive from the store, supplemented by a few dollars from their allowance or money you paid them for participating. Let them go shopping within this budget. You’re not only teaching them a valuable lesson, but quickly you’ll see how unimportant certain items become when they have to spend their own cash.

How Credit Card Reform Impacts You

By Lynnette Khalfani-Cox, The Money Coach

Overall, credit card reform is a huge win for consumers, but there are a few downsides for consumers.

Starting today, big changes will impact you and your credit cards, thanks to the credit card reform legislation that President Obama signed into law earlier this year.

The goal of credit card reform was to stop or prevent unfair or deceptive lending practices by banks and credit card issuers.

The two provisions of the legislation that kick in today are:

• Banks and credit card issuers will now be required to give you 45-days notice before an interest rate hike. (Currently, they only have to give you 15-days notice)
  • NOTE: If you reject a rate hike, you will have the right to pay off the debt over 5 years at your original rate)
• Credit card companies must give you more time to pay your bills because banks must now mail your bills 21 days before due date; not 14 days, as is currently the case.

Even bigger changes will come in February 2010, when you’ll see a host of other benefits. For example, in the future, the credit card reform law:

• bans retroactive interest rate increases (unless you’re 60 days or more late paying your credit card)
• restricts default rates to 6 months if customers pay on time
• outlaws universal default (although this is officially banned starting Feb. 2010, but many banks have already stopped this)
• mandates that payments be first applied to the highest rate balances (this will really hit bank profits; but again, it’s not mandatory until Feb. 2010)
• requires anyone under 21 to have a co-signer to get a credit card
• forbids credit cards from being issued to people under 18
• sets rules for how quickly banks must apply payments
• prohibits fees on payments made via phone and the Internet
• puts a 5-year lifespan on gift cards and eliminate their hidden fees
• requires better disclosure of payment due dates and late payment penalties
• prevents issuers from establishing early morning payment deadline (no due dates before 5 p.m. on any business day; starting in Feb. 2010)

Here’s my take on the new law:

The downsides – or potential risks – to consumers include:

• limited or no grace periods
• more credit cards with annual fees
• stricter credit practices (harder to qualify for cards, higher rates, slashed credit lines or outright closing of accounts)
• creative fees or questionable practices until 2010
• more junk mail in your mailbox (because banks will try to make up for lost profits by attracting certain new customers.)

Overall, I think credit card reform is a huge win for consumers.

I don’t buy the banking industry’s contention that it will be unjustifiably hurt by the changes. Sure, they’ll have diminished profits. But that’s after having reaped many billions of dollars in profits based on questionable fees and unfair practices.

Nor do I accept the industry’s claims that “low income” people will be the most to suffer, because of reduced access to credit.

Only time will tell, but my best guess is that banks will tighten up the rules, as they’ve been doing lately, and hit customers with more fees in the short run …

Banks compete
But in the long run, banks will become more competitive with one another, and try to stand out to consumers by dropping those fees, etc.

And when one bank stops imposing annual fees, or quits nickel and diming credit card customers, and that starts to win over clients, then the rest of the industry will take notice and try to do the same.

Lastly, it’s important to note that banks still exert a lot of power. For example, they can close your account any time they want, without notice and for any reason.

And they can also still lower your credit line without advance notice — providing they don’t impose any fees or hike your interest rate.

So credit card reform is essentially a way to create a more level playing field, and to bring more fairness into credit card lending and marketing practices.

Savings for Back-to-College

Although the amount of money expected to be spent to furnish college dorm rooms and off-campus housing is up 3 percent to $618.12 per student, overall college spending is expected to decrease to nearly $30 billion, according to the National Retail Federation.

This decrease actually means the college-bound shopper can get more for their money, as retailers slash prices and ramp up marketing to lure buyers.

TIP: Start your comparison shopping online. Retailers are maintaining dedicated websites that will make the comparisons that much simpler. Here are two of the biggest retailers with college subsites:

TARGET
Target has www.target.com/college. At this site you can shop by price category. “Under $20,” “Under $30,” etc., at the click of a button. There is also a color-coded, downloadable checklist that lets you mark off all the necessities, such as dental floss, can opener, night light, as you purchase them. You can even shop sections by gender. Don’t forget to click on “Daily Deals” to find sale items not otherwise available online or in the store.

WALMART
Walmart has www.walmart.com/college. At this discounter’s site is interactive. There is a Q & A section, a photo of the day of student shoppers, and even a tip of the day. (Today’s: If you can avoid it, don’t buy textbooks from the college bookstore. Check sites such as half.com and others that allow you to buy used books at half the cost.) Wal-Mart also has checklists, include a road trip safety check list, as well articles. For further savings, check out its “Value Bundles” on small appliances, desk sets, electronics, etc.

Back-to-School Season Sees Cautious Spenders

Americans are expected to spend $47.50 billion to send kids K-12 and college-bound back-to-school equipped with essentials, gadgets and clothing.

The Back-to-School shopping season is underway. Americans are expected to spend $47.50 billion to send kids K-12 and college-bound back-to-school equipped with essentials, gadgets and clothing.

The average family with students in grades Kindergarten through 12 is expected to spend $548.72 on school merchandise, a decline of 7.7 percent from $594.24 in 2008, according to the National Retail Federation.

The economy is having a major impact on back-to-school spending. Four out of five Americans (85%) have made some changes to their back-to-school plans this year as a result, according to a consumer survey released by the National Retail Federation.

Some of those changes impact spending:

• 56.2 percent of back-to-school shoppers are hunting for sales more often
• 49.6 percent are planning to spend less overall
• 41.7 percent purchase more store brand/generic products
• 40.0 percent are planning to increase their use of coupons.

In looking for deals, Americans are heading mostly to discount stores and drug stores.

• 74.5% are shopping discount stores
• 54.4% are shopping drug stores
• 41.2% are shopping office supply stores
• 22.2% are shopping online
• 18.2% are shopping a thrift store

Although 18 percent is a fairly good number for those who are more budget-conscious, I do believe there are more deals to be had of quality merchandise at thrift stores than many people realize.

But whether it’s a thrift store deal or not, for the next two weeks I will post several articles about back-to-school shopping and saving. So check back next week for tips for the K-12 children or college bound.

4 Tips for Avoiding Airline Baggage Fees

Airlines seem to be going ala carte. They are charging passengers for every bag they check, if they exceed the 40 lb or 50 lb weight limit, or bulge beyond the 40 linear inches allowed. Some are even charging extra if you check a bag at the gate.

If you learn to pack lighter when you fly, you’ll be able to save money in more ways than one. For example, if you travel with just one carry-on, you will not have to worry about tipping a bell hop for carrying your bags or holding them in storage after you check out. You will be more free to take a bus or train to and from the airport rather than the more expensive taxi or shuttle service.

Here are 4 tips on how to avoid airline baggage fees:

1. Use small, light luggage. Pack everything in one bag that is at or less than 40 linear feet (width + height + length). Most airlines limit carry-on sizes to 40 linear feet. If you choose a bag at this size be aware, however, that if you over stuff the external pockets by even an inch, your bag can be sent to the belly of the plane, with a charge to you.
2. Weigh your bags. Airlines will also charge you extra if your bag is too heavy. Check on the weight limits for your airline and before you head to the airport make sure you stay within the guidelines, which is typically a 40- or 50-pound limit for most airlines.You can try setting a bag on a bathroom scale, or hold it in your arms while you step on, and then weigh yourself again without the bag. The difference is numbers is the weight of the bag. If you don’t trust your bathroom scale, there are portable scales available just for this purpose. You can find such scales at travelonbags.com, magellans.com).
3. Board early. It is quite frustrating to have all of your belongings squeezed into the possible smallest bag so that you can avoid chcking luggage, only to board the plane and learn that the groups that boarded ahead of you used up all of the available overhead compartments and there is no space there for your bag. You then turn to slide the bag under the seat at your feet, but it just won’t fit. Feel the panic as the airline attendant approaches you and says, “Sorry, it seems we’re going to have to check your bag because there just isn’t any more room.”
   The easiest way to avoid the “cabin’s too full” issue, is to be among the first to board. Some airlines determine your boarding order by how early you confirm your flight. If you confirm your flight online within seconds of the time the airline says you may do so online, you’re apt to be one of the first for your boarding section. So, often the key to getting on board early is to reserve your seat online, and confirm your seat online as early as you can, and then arrive to the gate early enough so that you’re able to be first in line for your section.
4. Choose the dreaded middle seat. Most people prefer window or aisle, but when it comes to assuring you make it on with your luggage in hand, choose the middle. Middle seats have more under-the-seat storage. Window seat under-seat floor space is smaller because the sides of the planes are curved, and the aisle seats are smaller because over the years aisles have been made larger. So just in case all the overhead bins are taken by time you board, you’ll be assured enough space under the seat for a medium bag if you seat in the middle.

Be Aware of Baggage Fees before You Pack

 

Travel light with one carry-on to avoid the airline charging you fees for checking any luggage.

In a move to help force passengers to travel lighter and to curb its costs, most airlines began charging fees for luggage you check. Typically, an airline for domestic U.S. flights charge $15 for the first checked bag, $25 for the second and anywhere from $50 to $125 for the third.

 

If you must bring more than a carry-on, be aware of your airlines fees for checked baggages.  Airfarewatchdog.com offers a chart of most major airlines and their baggage fees.