Tag Archives: credit cards

Brace for the Holidays! Have a plan

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As Halloween passes, we know that the season of over-buying and over-eating is approaching, so it’s time to prepare.  You want to enjoy being with friends and family without having the hangover of overspending, or worse, going into debt to finance all the fun. 

Make the gift giving fit with your cash management

Over-buying does not make you happier and usually makes the recipient uncomfortable.  Also, over-spending is likely to make achieving your long-term goals more difficult, which can add to the depression some feel at this time of year.

For gifts, “it’s the thought that counts” rings true.  Most recipients appreciate being remembered for who they are and what they do.  Think back to what you enjoyed most in past holidays and let that guide you.  This can help you stick to your values as you think through the entire process and devise your holiday shopping plan.  The time spent together may be far more important and rewarding than unnecessary giving.

Have a plan

Technology and social media can make shopping easier, but they also make it easier to overspend and end up with credit card debt from funding your gift giving.  

Part of the reason is that many such purchases are spontaneous.  People often regret these unplanned purchases.  Over 70% of people in one survey exceeded their budget and over half bought items not on their list.  This can make the new year bleak (More than 3 in 4 Americans are stressed about going into debt over the holidays — and technology’s not helping ) Counter this by creating a realistic budget, lookout for sales, review your budget to make sure you are on track. 

Budget – If you determine what you can reasonably spend and allocate that to people for whom you want to buy gifts, or give holiday tips, then you have a spending plan that should get you through.  When devising your plan, go back to your financial goals to remind yourself why staying on track is so important.  Include time for present wrapping to avoid time pressure that encourages splurge buying.  Also, you may want to have small gifts on hand for unexpected guests.  You can use budget apps, such as NerdWallet, to create a budget.  When you do, stick to it! 

If the people for whom you are shopping have wish lists, follow them for ideas.  And leave items in your shopping cart overnight to take a second look and avoid regretting a splurge purchase.  Ask “does the person really want or need this?,” especially if you are shopping for yourself!  (It may be wise to avoid, or at least substantially limit, any buying for yourself.) 

Be Wary of Black Friday, Cyber Monday and other retailer tricks

If you do your homework, you can determine if waiting in line or buying on line will be best.  As stated above, create a budget and stick to it.   

Be on the lookout for retailer other tricks like flash sales, loyalty cards, incentives to return for more purchases, misleading refund policies.  Similarly, procrastinating can lead to splurge buying ruled by emotions such as the need to please everyone and get the shopping done.

Avoid scams

With the pressure of the holidays to address all the gift giving, parties and thank yous, stay vigilant for scams.  These can come in the form of bogus IRS and social security calls, credit card offers, computer software deals and fake invoices.  There are many phishing sites you can use to check out whether the offers are legit. 

Review our Holiday Tipping Guide

As for tipping, see our post Guidelines for Holiday Tips and Gift.

Remember, if you’re unable to tip or give a gift, a thoughtful thank you note will acknowledge those people who are important to you.  You can even make a donation in their name. 

Brace for over-eating and possibly even depression

This blog is does not profess to have any expertise in psychology.  Nonetheless, we have all heard how holidays can be disappointing if not depressing from some.  The Hallmark gatherings promised on TV or social media rarely happen in real life. 

If the holidays are depressing, consider volunteering somewhere, such as a soup kitchen, or getting out for some serious exercise.  Both can lift your mood as well as either help others or improve your health.  Allow time to rest and recover!  And try a warm drink, tea not bourbon, or a warm bath. 

Take care of yourself – it’s hard to help anyone else if you are not in good shape yourself.  But if you are really experiencing holiday depression, speaking to people can help, be that family, friends or professionals.

We wish you all the best for financially sound, and fun, holidays!  And let us know if we can help you plan.

How to stay safe after the Equifax data breach

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(as also appeared online at IRIS.xyz)

Equifax disclosed last week that the personal financial information of up to 143 million users had been exposed in a massive hack last July. This represents roughly two-thirds of all credit card holders, so you may be affected.

The delay in disclosing is troubling, and the hack raises questions about oversight of the credit bureaus and even about the impact on their management. We can see the impact on investors: the Equifax share price has dropped over 20%

While we can discuss these issues and more, the priority is shoring up your personal credit.

Impact

Was your data taken? There are links from Equifax, Norton and others where you can attempt to determine the impact on you personally. However, these sites seem to default to “you may be affected,” even if you put in bogus information.

The good news is that Equifax has responded to consumer pressure to make certain services free.

Act now

You will want to act as soon as possible to keep your financial information safe.

“There are so many entities who need to check your credit: when you’re renting an apartment, getting insurance, a new cell phone, utilities,” Liz Weston, a financial planner and columnist at NerdWallet, told BuzzFeed News. “But at this point the breach is so great” that taking measures to safeguard your identity is worth it. She recommends instituting credit freezes.

Equifax free service – sign up on line for the complimentary service being provided by Equifax, which provides the following:

  • three-bureau credit file monitoring with alerts,
  • credit report lock,
  • scanning of suspicious sites for use of your social security number,
  • Equifax credit reporting, and
  • $1 million identity theft insurance covering certain out-of-pocket expenses.

Monitor your cards – review your monthly credit card, bank and loan statements for suspicious activity. You have a right to free credit reports so obtain them and review for unauthorized activity.

Also, watch for unexpected calls or mail, such as debt collectors or people posing as IRS agents, because these may be signs that your information may be in the hands of thieves.

Credit freeze – request a freeze on your credit from all three agencies: Equifax, TransUnion, and Experian. Equifax will not charge you but the others will.

Requesting a credit freeze prevents thieves from using your identity to get loans or credit cards in your name, even if your personal information was compromised by the hack. You essentially pay to bar each of three credit reporting agencies — Equifax, TransUnion, and Experian — from providing a credit report without both your explicit permission and a personal identification number (PIN) that temporarily lifts the freeze. (Freezes do not affect financial institutions or companies you have an existing relationship with, only new ones.)

Make sure to place the freeze with all three bureaus and to keep your PINs for unlocking the freezes in a safe place.

“A credit freeze with only one bureau is incomplete protection,” Mike Litt, the consumer program advocate at the US Public Interest Research Group, a consumer group, said. Consumer experts recommended getting a freeze with all three agencies.

There are companies such as LifeLock that provide bundled services. If cost is not an object, that may be the best course of action. Here is the Lifelock response on Equifax.

Fraud alert – if you are certain that your information has been taken, place alert all three credit bureau websites. You can access the TransUnion site here. Some protection is free, but their premium package costs $9.95

If you are the subject of identity theft, there are many resources now that help you report and recover. The Federal Trade Commission website can help devise a recovery plan to implement.

PINs and passwords – the passwords and PINs you use could be the next issue. You may want to change what you use now and update annually, if not more often.

Updates – Equifax continues to provide updates on the status of the hack and their response.

And news sites continue to report on the hack – see this NY Times article.

Summary

There are many steps to take, and the information taken may not be used for some time. So, you will want to take some if not all the steps outlined above. If you have trouble doing so, or if you have questions, let us know.

And for more reading, the Better Business Bureau is one resource for tips on avoiding scams. And, the FTC is a good resource for identity theft.

Good luck and stay safe!

Amplify Cash Flow by Maximizing Credit Card Rewards – Playing the Rewards Game

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With a bit of planning and discipline, credit cards can provide users with real benefits.

These steps can help you maximize the available rewards:

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1. Reward types: Before you begin your search, determine the type of reward you are looking for: cash back, travel, gift cards, etc. Once you know what you are looking for, begin your search for the best card for each type of reward.

2. Strategy: After you review available cards and select one or more for the rewards you want, develop a strategy to use your cards to get the most out of their reward terms. You may find that some cards offer different rewards for different types of purchases. For example, a card my offer 6% back for food purchases, another may offer 3% for gas, while another may offer 2% back on all purchases. Develop your “credit card portfolio” based on what is being offered. Understand the cards’ rules and be prepared to play by them.

3. Fees: You want to avoid paying any late fees, which average $34, because these fees quickly undermine any rewards you may earn. On the other hand, annual fees may be worth paying depending on the rewards being offered. For example, if you earn 6% back on purchases, then a $75 annual fee may make sense. You can always call the company and try to have the fee waived. If you signing up just for the sign-up bonus, then you will probably want to cancel the card before the fee is incurred.

4. Apply: Once you have narrowed down the cards with the best offers for you, apply for the credit cards within a two day period to minimize the number of inquiries recorded on your credit report. Multiple inquiries may damage your score.

5. Tracking: Develop a method to ensure you are using the right card for the right purchases. This can be anything from notes, to an Excel workbook to using QuickBooks.

6. Card balances: Keep your credit usage to 20% to 30% of your available credit because your credit score is affected by the amount of credit you use.

7. Payments: Pay off your balance every month. If you allow yourself to carry a balance, the interest rates you incur will diminish or wipe out any rewards you earned.

If you try any of these ideas, let me know how they worked for you!

Keeping perspective while the debt ceiling “crisis” continues ….

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While Congress and the President continue the political battle on the “debt crisis,” here is more for proper perspective:

First, the yield on Treasuries if falling, not rising. If there were a serious issue about the US ability to repay, then US bonds would see high rates. That is, unlike Greece, which is in real trouble, or even Spain or Portugal, the US is still able to borrow at very favorable rates. So, the markets in general, up to this point, believe that the “crisis” has nothing to do with the economy or the strength of the US relative to other nations.

Second, the debt issues have come about after the extended bull market ended in 2008. That is, high stock values and prosperous markets yielded high tax revenues. With this, there were years of budget surpluses, even after tax cuts were enacted. But, post 2008, that has changed. The change in the economy and stock values, even with some markets approaching their 2008 high points, has led to much lower tax revenues.

Finally, from Floyd Norris in the New York Times, we have this summary:

“If rationality does prevail, the debt ceiling will be raised. For that matter, there is no good reason to have a debt ceiling other than to give politicians a chance to grandstand. The important decisions for Congress and the White House concern spending and taxing. Borrowing, or paying back debt as happened for a couple of years before the Bush tax cuts, is a result of the interplay of those decisions and the state of the economy.”
And
“There is a risk that many analysts now are making the opposite mistake. Deficits have skyrocketed in recent years for reasons that are clearly temporary, or that will be temporary if the economy recovers. In some of the debate, the short-term problems are mixed up with longer-term demographic concerns caused by the aging and retirement of the baby boomers and the rising costs of Medicare, the health insurance program for Americans over the age of 65.”

So, with fingers crossed for the prevailing of rationality soon, that is my update. Let me know if you have questions or comments