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By Rosemary White, August 20, 2010 4:32 am

So a friend emailed me last week about how to get copies of her credit report.  It’s been a while since I’ve blogged about this (and a while since I’ve gotten my own reports from the three credit reporting agencies) so I thought I’d mention it again.  Just something to take care of before Labor Day as everybody gears up for the fall.

   ·     You can do it online at www.annualcreditreport.com/cra/index.jsp .  This site is run by the Federal Trade Commission (FTC)

   ·    You can call:  1-877-322-8228

   ·    You can get a request form at the web site above and mail it to:  Annual Credit Report Request Service, P. O. Box 105281, Atlanta, GA  30348-5281

Don’t wait for an unpleasant surprise.  Know what on your credit report and stay in control of your finances.   Until next time, here’s to good planning!

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By Rosemary White, August 13, 2010 5:49 am

The Internal Revenue Service (IRS) announced last week that’s it’s going to stop releasing information about back taxes, child support or delinquent federal student loans owed by taxpayers.  Referred to as “debt indicators”, this information has been sent in the past to tax preparers by the IRS as an acknowledgement after a tax return was filed electronically.  The Agency, apparently,  letting the preparer (and the taxpayer) know the client’s refund may be redirected to pay these debts.  These indicators have been used by larger tax prep. companies to provide refund anticipation loans.  Those loans have been heavily criticized by consumer groups because they generally come with high fees and interest rates.  They are frequently offered to lower income taxpayers who need their refunds ASAP.

So, why’s the IRS dropping the debt indicator?  Since refunds can be direct deposited into a taxpayer’s bank account fairly quickly, the Agency figures it can still withhold a refund if back taxes are owed, and the Feds can move the money quickly…sometimes within ten days.   It may also reduce the number of refund anticipation loans, which would be a good thing, Martha.  I’m old fashioned.  I mail in my returns…and will continue to do so until it’s no longer an option.  Until next time, here’s to good planning!

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By Rosemary White, June 29, 2010 8:24 am

Being late, of course, isn’t a good thing when it comes to your credit report.  If you’re tardy too often, you may find yourself not getting that car loan or nice apartment.  But you will get a little help from your friends at the Federal Reserve.  Last week, the Fed approved a cap on those late fees.  Effective August 22, late fees generally can’t be over $25 (unless you are habitually late and then all bets are off).  Also, if your minimum payment is, say, $20, your late fee can’t be more than $20 also.  There are also new rules coming for the use of debit cards and all the past high fees if insufficient funds generates a high penalty.  Finally, a bit of relief for consumers who are continuing to have a tough time in this economy. 

Also on the chopping block:  multiple penalty fees based on a single late payment or other account violation.  This will put an end to the $39 fee for every day an account is in arrears.  Have you noticed that your credit card statement is easier to read…and understand?  That’s great progress.  It’s always better to use cash and just keep that plastic in your wallet.  Until next time, here’s to good planning!

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By Rosemary White, June 4, 2010 4:17 am

Now that it’s officially summer and many of you will be traveling, I thought it might be a good idea to hold out the yellow flag when it comes to using your debit card.  I use mine fairly frequently but it’s usually here in the hood at places that I frequent.  But if I’m on vacation or on a business trip, I keep Mr. Debit in my pocket, as I’ve found that cash and credit cards still work just fine.  Here are some concerns about using a debit card all the time:

   *  Unlike with a credit card, when you pay for something using a debit card, the cash comes out of your account in real time.  So, if someone uses your card fraudulently, that dough will be gone and you probably won’t get it back.  By the time you realize what’s happened, your bank may not be obligated to investigate or replace the funds.  Actually, federal law says you’ve got to notify your financial institution within two days of discovering the theft.  Otherwise, you’re left holding the bag

   *  If you order something online and it comes damaged, you may very well have trouble getting your money back if you return the item.  Once the vendor has your money, he may argue that you damaged the item.  So, going back and forth with the retailer will become a new career

   *  Overdraft charges are a problem.  Don’t assume your bank won’t approve a purchase if you don’t have sufficient funds in your account.   They will.  And they’ll be ever to sorry to charge you a hefty overdraft fee.  Starting in August, however, banks will have to give you the opportunity to “opt out” of automatic overdraft protection, so pay attention to your bank mailings…always

   *  When you use any type of plastic, double check to see if your entire card # is printed on the receipt.  That might make fraud easy for someone.  I’ve actually crossed out some of the numbers so it’s not entirely visible although most credit card terminals only reveal the last four numbers

So, while you’re (hopefully) planning your vacation, think about what plastic you’ll use where.   Keep your eyes peeled for anything that’s unusual.  Oh….and have fun!  Until next time, here’s to good planning!

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By Rosemary White, May 25, 2010 12:07 pm

…this will be of interest.  It’s got to feel like you’ve got a cinder block tied to your ankle…..graduating from college with tens of thousands in student loan debt.  I see it so often in my practice.  Not all professions lend themselves to a high income, so it’s been a real burden on many for years.  But now there’s help:  a federal program called Income Based Repayment, where loan repayments are income-based.  What took so long?

If you’re thinking about this, your discretionary income that goes to repay the loan is capped at 15%.  Sweet.  And if there’s anything left on your loan in 25 years, either principal or interest, it’s forgiven.  Those of you in public service jobs will have your balance forgiven after ten years.  Thanks for all your good work!  Undergraduates and graduate students alike can apply (yes, even those with loans for their medical or legal degrees). 

So, pull out your most recent tax return.  If your total amount of student loan debt is equal to or more than your annual salary, I’d be looking to fill out an application….like yesterday.  Here’s a web site with more information:  www.IBRinfo.org.  Good luck!  Until next time, here’s to good planning!

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By Rosemary White, May 18, 2010 12:27 pm

And I’m not talking about using a stick here.  But I do want to cheer on Congress for shining their legislative light on some of the onerous fees that we all pay.  Last Thursday night, the U.S. Senate passed an amendment to the Wall Street Reform Bill that would cap the charges on the so-called “interchange fees”.  These are transaction fees, usually between 1% – 3% of every purchase.   Mastercard and VISA, etc., take a small amount.  But the bulk of the fee goes directly to the credit or debit card issuer (usually a bank).  Need I say more?  Interchange fees amounted to roughly $35 billion in 2007, according to the government.   Under the amendment, the Federal Reserve will have the authority to determine what’s a reasonable fee.  It would also permit retailers to offer discounts to customers who use cards with lower fees.

The other great idea introduced as an amendment would cap ATM fees to 50 cents.   Currently, banks and other ATM operators can charge whatever they want.  Last year on vacation, an ATM wanted to charge me $3.  After I calmed down, I walked down the street to another financial institution and was proud to have paid $2.  Of course, if these fees go down, the number of ATM machines might decrease, too.  It’s easy to site more ATM machines when you’re making a killing every time someone pulls out some cash.  It may not be worth the banks’ while to maintain so many machines if they’re only “maiming”.  Go Congress….go Congress.  Until next time, here’s to good planning!

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By Rosemary White, May 7, 2010 9:30 am

Yesterday was a double whammy with some whiplash thrown in.   The Dow Jones Industrial Average dropped like a rock (998 points) in a short period of time and then recovered roughly two thirds of its loss by the close of trading.  Concerns about European debt and a stupid trading error in the U.S. appear to be the culprits.  I hope you didn’t do anything rash. 

The first whammy was Greece, a country with huge budget deficits. Things can’t continue there without belt tightening, tax increases and BIG spending cuts.  At least that’s what the country must do in order to have its debt guaranteed by the European Union (EU).  Protestors are trying to prevent the impending frugality, but they will not succeed.  There’s much at stake for the EU, because if Greece falters and can’t sell its bonds to raise money, Portugal, Spain and Italy may not be far behind.  Many believe this is similar to what happened in the U.S. after Lehman Brothers failed back in 2008.

Whammy #2 reportedly happened at Citibank, where a trader appears to have mistakenly sold Billions of shares of Proctor and Gamble instead of Millions.  That snowballed into the longest downward roller coaster ride for the Dow, in one day, in its history.  Now…..looking at my keyboard, I see that the “n” is the only letter between the “b” and the “m”.  I’m sure these traders are working fast, but this really shouldn’t happen.  Maybe that trader just has fat fingers and needs some cutbacks at the dinner table.  The market was able to come back up 650 points, which created the whiplash.  I’d say that’s just a little too much excitement for one day.  I’m hoping the Europeans pull together and help each other get through these tough times.  Typing classes at the big banks may also be a good idea.  With all those bonuses they’ve handed out, surely there’s some dough for that.  Until next time, here’s to good planning!

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By Rosemary White, April 2, 2010 3:46 am

Are you concerned about all those packages arriving from eBay?  You know you didn’t order that stuff.  Did you ever think about requesting a credit report on your spouse or significant other?  As helpful as it might sound to do so, the Federal Trade Commission (FTC) says only banks, debt collectors, landlords or those with a valid interest can pull a credit report.   And, effective today, there are new rules  for web sites that advertise free credit reports (the CARD Act of 2009).  They’ll have to direct consumers to the official government-approved site:  http://www.annualcreditreport.com where the credit reports really are free.

You are entitled to three free credit reports every year…..one from each of the three credit bureaus:  Equifax, Experian and TransUnion.  If you are the victim of identity fraud or are unemployed and looking for work, you can also request free reports.  Some prospective employers may ask your permission to pull your report, before they offer you a job, so it’s fair that you’d be able to get your report before you apply for work so you can see if there’s anything you need to be concerned about.  (If you live in Hawaii or Washington state, it’s illegal for employers to run such a check.  Several other states are considering similar laws.)

I’m sure you’ve heard of FICO, the company that developed credit scores.  But, being America and all, competition has spawned another company that also spits out credit scores: VantageScore. Who knew?  The credit bureaus love the competition because they’re now selling both firms’ credit scores to lenders.  Got any college loans?  Then maybe you’ve heard of the “Fako” scores, also known as the Experian’s PLUS score (try not to fall behind in your college loan payments).  And if you’ve applied for any other kind of credit lately, you know there’s way more hoops to jump through. Consumer reports now track driving violations, rental histories and check fraud and you don’t have to give permission for these to be pulled. Good luck. Until next time, here’s to good planning!

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By Rosemary White, February 16, 2010 6:56 am

February 22, 2010 is when the new credit card law takes effect (yes, that’s next Monday!).  Congress  passed the law last year and, sadly, gave the credit card companies ample time to prepare.  Consequently, I’m sure many of you have gotten notices with your statement that the interest rate is going up, the billing cycle is changing or now there’s going to be an annual fee big enough to choke a horse.  Here’s a few things to consider, suggested by Consumers Union, until then:

  *   If you’re thinking about getting a new credit card, wait until after the 22^nd because new accounts are protected from interest rate increases for the first year.  There may be some good deals out there

*  Have a backup card or two in case one of your card issuers lowers your credit limit or closes your account (without notice) in the next week.  This might be wise in case you need plastic for an emergency

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By Rosemary White, February 5, 2010 11:01 am

I’ve got some more ideas to get you thinking about getting your financial house in order (or tweaking it if you’ve done some stuff).   If you missed my first installment, scroll down and see Tuesday’s posting.   So, what about:

   *  Keep your important documents where you can access them.  While I keep my tax preparation records for seven years, I do keep every income tax return I’ve ever filed in my life (yes….there are a lot of them).  In case there’s a question about my Social Security contributions, I’ll have the answer.   My life, disability and long term care insurance policies are all in the portable safe.  The will is there, too.   It’ll be the first thing I grab if there’s a fire

   *  Reduce your debt.  The credit bureau Experian says the average American carried about $17,000 in debt, other than a mortgage.  Much of it is from credit cards.   List your credit cards with the highest interest rate on top and make a consistent effort to pay extra toward the balance.  This kind of debt can choke you, especially if you have an emergency or lose your job

   *  Check your credit score.   You should be entitled to one free credit report a year from each of the major credit bureaus (at least that’s the law in Massachusetts).   Take advantage of this and make sure there’s nothing there that doesn’t belong to you.   It happens all the time