Check, Credit Card or Debit Card? Choosing a Payment Method for Security and Convenience

September 2007

How do you pay for everyday purchases or bills? Cash? Check? Credit Card? Debit Card? If you are like most people, you use a combination of these methods—and more. The advent and growth of electronic banking has encouraged many people to move more and more from paper (cash, checks) to plastic (credit cards, debit cards). All these payment methods have roles to play in personal financial management today.

All have their advantages and drawbacks. All can be used securely with proper precautions. All have consumer protections should fraud or theft occur, but those protections may vary depending on what the issuing institution offers you. This report offers a brief overview of the facts you need to make wise choices for your circumstances.

Why Not Buy a Car on eBay or Another Online Auction Site?

August 2007

eBay has become the gorilla of vehicle sales virtually overnight—they’ve facilitated over two million vehicle sales since starting their program. What’s not to like about that?

A lot of things. Before you even head to the eBay site to simply poke around, think about this:

• When you buy on eBay, you’re typically buying “sight-unseen.”
• You usually don’t get to drive the vehicle.
• You’re typically buying from total strangers, and they are usually far away.

Payday Loans—Still the Most Expensive Way to Borrow

July 2007

Countless advertisements on storefronts, on TV, in print media, and over the Internet entice cash-strapped consumers with offers of “cash today” with “no credit check”—just borrow against your next paycheck. Since my 2004 StraightTalk Report on payday loans, the industry has continued to grow dramatically, particularly on the Internet.

Payday lenders hawk their loans as a useful “service” that helps consumers meet short-term, emergency needs for cash at a modest cost. The facts tell a different story. About ninety percent of revenue for payday lenders comes from borrowers who can’t pay off their loans at the end of their two-week term and pay additional fees to extend or “flip” the loan, according to a well-researched report by the Center for Responsible Lending. Annual percentage rates (APR) typically range from 400% to over 1000%. Borrowers of a $300 loan often end up paying back well over $700.

Thinking about Buying a First Home or Moving Up to a Larger Home?

Lessons You Can Learn From Today's Housing Market

June 2007

The housing market has been much in the news recently. After years of steadily rising home values, the market has cooled. In many areas, home values have leveled off; and in some areas, home values are actually going down. At the same time, a record number of home foreclosures have been reported to date in 2007. The press is full of news about rising default rates, particularly for “subprime” mortgages.

As some of the heavily marketed “creative” financing products such as Option Adjustable Rate Mortgages (ARMs) “reset,” many homeowners suddenly face higher monthly payments they can no longer afford. The impact appears to be unsettling to the whole market.

If you are thinking about buying a first home or perhaps a larger home to fit your growing family, what can you learn from what’s been happening in the housing and mortgage markets? For savvy consumers, recent events offer many sound lessons that lead to smarter decision-making.

Tips for Improving Your Credit Score

May 2007

Whether your credit is already good or could use some improvement, managing your personal finances in ways that enhance your creditworthiness is always smart. Adopting sound practices that enhance your credit score is a good place to start.

The topic of credit scores has been in the personal finance news since credit reporting agencies began to make such scores available to consumers a couple of years ago. Of course, this event also opened the door to a number of Web-based companies that offer to provide your score and charge outrageous fees for what may be inaccurate information and for what you can get yourself for much less. The StraightTalk Report, “What is a Credit Score, and How Can it Affect Your Credit?” explains credit scoring and tells you how to get accurate info about your scores for a reasonable fee.

What Is a “Credit Score” And How Can It Affect Your Credit?

April 2007

Credit Scoring is a system of statistically analyzing credit reports that provides a simple three-digit score comparing an individual’s past and current credit performance to that of similar consumers. Your credit score provides lenders, or other potential creditors such as insurance companies or landlords, a quick, fairly objective way to assess your creditworthiness—or likely ability to pay back a loan or mortgage or pay the rent. Knowing your credit score (along with regularly checking your credit report) is a smart thing to do.

What is a credit score?

A “credit score” is often called a “FICO score,” after the Fair Isaac Company, which developed the most widely used analytical system and software. It may also be called a “credit rating.” Although individual credit bureaus or credit reporting agencies (CRAs) adapt, add to or modify Fair Isaac models to suit their needs and provide their own credit score, most use the FICO score or system as a foundation.

Want a Quick Federal Tax Refund? Think E-File

updated March 2008

Expecting a refund on your 2007 federal income tax return? Want it quickly? Then e-filing your return is a smart choice. Get it even faster by having your refund deposited directly in your credit union checking or savings account. You may even qualify for free e-filing. How does e-filing work? This month's report profiles e-filing.

Advantages of E-Filing

There are various reasons to file your taxes electronically. Here are a few:

• Receive your refund faster. With direct deposit, your refund typically reaches your checking account in 10 to 14 days. If you want a check mailed to you, most refunds arrive within 3 weeks or usually sooner. Compare that with 6 to 8 weeks for a paper return.

Financing Higher Education—Checking Out Education Loans

February 2007

The cost of post-secondary education—college, university, community college or career or trade schools—continues to rise. But pursuing higher education can be worth the investment. A recent report "Education Pays 2006" from the College Board found that in 2005 women (aged between 25-34) with bachelor's degrees earned 70% more than women in the same age group who had only a high school diploma. Men in this age group with bachelor's degrees earned 63% more than male high school graduates. And on average how much more did the college grads earn? $14,000 a year.

Most important, there are many sources of financial aid to help you pay for post-secondary education. The College Board reports that approximately two-thirds of all students receive financial aid. Although at the mention of "financial aid" most of us think "scholarships" or "grants" (assistance that does not need to be repaid), in fact, education loans of many types make up a substantial portion of the financial aid available to many students. This report takes a look at the most common loan opportunities available for higher education and provides information on how you can learn more.

Shopping Safely Online

January 2007

Throughout 2007, the number of people shopping online and the number of purchases online is expected to continue to grow rapidly. Whether you buy online frequently or just occasionally, online shopping isn't risk or hassle free, however. As you start the New Year, here are some good pointers and tips for shopping safely on the Internet.

How should you pay for your purchase?

Always make payment for your purchase through the shopping cart or payment service setup by the website. If any seller wants you to make other arrangements to send the payment don't complete the transaction.

Thinking of Donating Your Used Vehicle to Charity?

December 2006

Dozens of radio and TV ads from many different charities are currently flooding the airwaves suggesting that you donate your used car or boat. Are you considering it? If so, then you need to know how the 2005 changes in IRS rules might affect the tax deductibility of your gift. You also need to know how to check out the charity you're considering. This month's review will help you do these things wisely. Planning to donate to a charity but not necessarily a vehicle? You'll want to read this review too. I'm going to start with the most important thing—how to check out the charity so that you know your dollars will go where you want them to. Then, I'll share the technical details about vehicle donation.

Bankruptcy — An Updated Fact Sheet

October 2006

Consumer debt, not including mortgages, in the U.S. has climbed to over $2 trillion and continues rising. Part of this surge represents growing credit card debt. Meanwhile, the Federal Reserve's campaign to keep inflation in check has forced interest rates higher. Rising interest rates in turn make credit card debt more expensive to pay off. To add pressure, the housing boom also appears to be cooling and in some areas growth in housing values has not just slowed, but declined. Higher interest rates and lower housing values make home equity loans harder to get and less attractive. In real life, all these economic "trends" mean that many consumers are getting deeper in debt and may be finding it harder to make ends meet. Some of these consumers may be considering bankruptcy.

Read More...

Do You Know Where Your Financial and Important Papers Are?

September 2006

Do you know where your financial and important documents are? If you had to leave your home quickly, could you easily find them? If something happened to you, could someone else find all of your important papers? If you answered yes to all of these questions, congratulations, you are well organized. For the rest of us, this review profiles how to put your important records in order.

Which documents are important?

Documents that prove identity, ownership, insurance coverage, and other various legal documents are important and should be kept in a protected but accessible location. These documents include, but aren't limited to, the following:

Using Home Equity to Consolidate Credit

June 2006

Are you carrying balances on high interest rate credit cards? Have you been tempted by all those ads in print, on TV, and on the Internet that urge you to "consolidate your debt—lower your payments in one easy step"? Many of these ads tout home equity loans, second mortgages, or home equity lines of credit as the best or easiest way to consolidate your credit card debt. Could it be right for you? Maybe and maybe not. You need to do a little homework before deciding. My report this month takes a brief look at what you need to consider before using your home equity to consolidate credit card debt.

Getting the Most for Your Travel Dollars

May 2006

Whether you are traveling for pleasure or business, making travel arrangements that fit your comfort criteria and your budget is every traveler's goal. The many online services make achieving those goals easier than they've ever been, if you learn the ropes. As a dedicated traveler, I share some tips and insights I've learned in covering hundreds of thousands of miles.

Be clear about your travel requirements.

Before you even begin to shop for a vacation destination, airline tickets and a hotel, ask yourself what criteria are most important to you?

Do You Have a Personal Savings Plan? Why saving is important and how to get started.

April 2006

How much Americans save—or don't save—has been in the news since the U.S. Department of Commerce reported that the U.S. personal savings rate in 2005 was a negative 0.5%. Debate has boomed about whether the savings picture is actually so bleak because the calculation doesn't take into account any capital gains from investments or increases in home equity that citizens may have. The calculation only looks at personal income and spending to determine the savings rate. But even if the savings picture is rosier, common sense says that as a nation of consumers we are probably not putting enough away for a rainy day or a dire emergency. And of course, there's the question of saving toward something important such as a down payment for a home or a fund for higher education or retirement.

E-Statements and Managing Your Financial Accounts Online Can Offer Big Benefits

February 2006

CCU members are very savvy about online banking. Many CCU members take advantage of CCU's Home Banking to manage many aspects of their credit union accounts online. That's terrific.

If you regularly read Remar's Reports, you know that I'm a big fan of managing your personal financial business online. Having online access to all your financial accounts (beyond your checking account) can offer increased convenience, efficiency, and, above all, security. Using e-statements, instead of paper statements, can also offer benefits. Of course, as the "end-use" consumer, you must follow good security practices, just like CCU and other reputable financial institutions do. This review profiles some of the potential benefits of managing most of your financial business online, including using e-statements, and provides tips for doing it safely.

How to Review Your Credit Report...and correct it when necessary

September/October 2005

Because your credit history can affect so many aspects of your life—from your ability to get a mortgage or auto loan to the rates you're charged for insurance or whether an employer will hire you or landlord will rent you an apartment—wise consumers keep a close watch on the accuracy of their credit reports. Regular review of your credit report is also one of the best ways to spot certain attempts at identity theft.

In August's Remar's StraightTalk Report, we looked at the importance of your credit report and the pros and cons of using a credit monitoring service. But whether you monitor your credit report yourself or subscribe to a credit monitoring service that alerts you about changes or suspicious activity, you must still know how to read your credit report, interpret the information in it, and take steps to correct errors. Only you can do these things. This report shows you how.

Interest-Only Mortgages — Are They a Good Deal?

July 2005

Interest-only mortgages have become as hot as the booming housing market in some areas of the country. In the U.S. in 2001 interest-only mortgages made up 1.6% of residential mortgages; that figure ballooned to 31% of residential mortgages in 2004, according to a May report in Fortune Magazine. Maybe you've seen ads for interest-only mortgages? If you've been shopping for a new home, maybe an agent or developer has mentioned the possibility.

The popularity of interest-only mortgages has been rising steadily particularly in hot housing markets where home prices have been soaring. This type of mortgage isn't new—it's been around at least since the 1920s—but its availability to a wide range of buyers and its combination with adjustable-rate mortgages (ARMs) are recent developments. Boosters of interest-only mortgages tout their ability to offer more home for a lower payment (at least for the first few years). Most personal finance experts warn that interest-only mortgages come with very real dangers and aren't appropriate for most homebuyers. This report provides a brief overview of interest-only mortgages and profiles the potential pitfalls and pluses.

Considering Consolidating Credit Card Debt? Promises and Best Options

June 2005

Are you carrying balances on high interest rate credit cards? Are you tempted to move that debt by enticing credit card offers? 0% for 6 months! 2.9% till August 2006! No fee for balance transfers!

Such enticing "promises" come from your existing credit card accounts and from new credit card offers. In many cases consolidating credit card debt may make sense, but credit card offers like these often have many consumer traps lurking within the tiny print of the agreement.

How to Say NO to Investment Scams and Fraud

Fake Check Scams Are Targeting Your Wallet

Learn the Warning Signs and Avoid the Traps

January 2005

Getting burned by counterfeit checks is something that happens to your local merchants or to other consumers, but not to you or your friends and neighbors, right? Wrong! Some new variants of a very old scam are victimizing many innocent people. Typically, the con artist strikes when these folks are just trying to sell an item on the Internet; others may be trying to start a new business venture, find employment, make a date or locate a roommate to share an apartment. Here are a couple of stories.

Flexible Spending Accounts—Used Right They Can Save You Money

November 2004

How would you like to reduce your taxable income while saving money that you can spend immediately to meet health care expenses not covered by your health insurance plan or day care expenses for your children under age thirteen? If your employer offers Flexible Spending Accounts (FSA) as part of the employee benefits, then you may have a good opportunity to do just that. Like most potentially good deals, however, you need to find out the facts and do a little homework to see if an FSA is right for you and your family.

Is Your Checking Account Saving You $$$$ or Costing You?

September 2004

All checking accounts are not created equal. Depending on your personal financial needs and habits, selecting the right checking account can save you up to several hundred dollars annually. Select the wrong account, and even a “free” account can cost you big bucks. The following questions can help you take a look at your current bank or credit union checking account.

Is the “free” checking really free? Some financial institutions promote “free” checking accounts that may have no “monthly service charge” but milk a customer’s account for lots of per-service fees every time you use a service. Such fees include ATM fees (including balance inquiry fees), bounced check fees, per-check fees (over a limited “free” number), check card fees, phone transaction fees, online banking fees, etc. In contrast, a checking account that has a small monthly service charge but then does not charge separately for a range of useful services can be a much better deal. CCU’s Value Account offers checking with no minimum balance and no monthly fees.

Managing Your Personal Finances on the Internet

An Introduction to Electronic Financial Transactions

June 2004

Computers and the Internet allow us to have all of our financial information at our finger tips 24 hours a day, 7 days a week. We don’t have to wait for business hours to make transactions. Businesses and financial institutions also benefit. Among many possible activities, you can check account balances, receive statements, pay bills, and transfer money.

This brief introduction provides basic information and some tips on using these services.

Car Shopping? Consider the Cost to Insure and Drive That New Vehicle

April 2004

If you're in the market for a new or used car, then you're probably spending a good bit of time trying to discover what vehicle's right for you. If you're shopping the StraightTalk way, then you've figured what you can afford to purchase and are previewing models and makes in your price range in the ads, on the Internet, and down at the dealerships. In the shopping excitement, however, many buyers overlook one crucial question: Can you afford to drive the vehicle after you bring it home?

Would it surprise you to know that even if you are looking at two vehicles in the same class—say two compact pickups, midsize sedans, or minivans—that the cost to own the two similar vehicles can vary widely. Smart buyers will check out the cost to own and operate that great set of wheels. You'll need to consider these factors.

Making an Effective Consumer Complaint

March 2004

When you purchase a product that is defective or doesn't perform properly or perhaps you receive a service that is unsatisfactory, how do you make a consumer complaint that will get results? Experts recommend using the following steps and tips to resolve a problem.

Be prepared. For any purchase or service, keeping supporting documents is very important. Keep sales receipts, contracts, manuals, warranty information, and any other information that comes with the product or service. Users manuals, warranty paperwork and contracts may describe the process to be followed for complaints. If so, follow those steps. If not, these steps will work.

Act quickly. Some companies may limit their responsibility for responding to complaints to a certain time period.

Are You Ready to Prepare Your Taxes?

February 2004

Note that the tips in this report are useful no matter what year: just replace 2003 with 2007 and 2004 with 2008.

As certainly as winter brings cold weather, it also brings the signs (like W2 forms) that tax time is not far away. Rather than waiting until April 15 draws near, it is smart to pay some attention to 2003's taxes as soon as possible. Here are some tips to help you prepare to do 2003's taxes and get a head start for planning 2004 taxes.

Gather Up Your Records

As tax time creeps nearer, most of us think first of gathering tax records. The basic records you need include:

Giving Charitable Gifts As an Informed Donor

November 2003

When the calendar turns to November, 'tis the season for appeals for charitable gifts. Between November 1 and the end of the year, the typical American home will receive dozens of mail, phone, and even door-to-door solicitations for gifts. The Federal Trade Commission (FTC) notes that more than 700,000 federally recognized charities exist. And each year individuals contribute more than 80% of all money raised by charitable causes. Wise donors want to make sure that their charitable gift dollars are used wisely and responsibly. They also want to avoid those scam artists and phony charities that prey on people's generosity.

Beware of Consumer Traps in Credit Card Offers

September 2003

They arrive in the mail three or four times a week—enticing credit card offers: 0% for 6 months! 2.9% till July 2004! No fee for balance transfers!

Don't such offers sound too good to resist? That's exactly what the card issuers hope you'll think—and act on! But before you grab a pen to fill in the application, consider all the following consumer traps lurking within the tiny print of most credit card offers. After a little study of these gimmicks, the smart consumer will rip up the great majority of the offers and toss them.

What's the Truth About "No Interest...No Payment" Retail Financing Offers?

August 2003

"No interest until ...next year!"

"No payments until ...2006!"

"180 days or 6 months same as cash"

Furniture, appliance and electronics retailers, in particular, love to throw out these teasers, hoping to entice you into buying something big. Or just to get you into the store where you may at least buy something. But before you jump off the couch and head to the store, you need to ask, "What's the catch?" Because there's always a catch. Behind the headlines are the asterisks and the small print with the real deal. Here are the most common "catches" with these offers:

Get the Most from your Long Distance Dollars

Ads for "dial-around" (10-10) numbers are everywhere on TV. Prepaid phonecards hang by the checkout in almost every store. Can these long-distance services actually save you money? Are there other ways to save? The answer is yes—but only if you do some comparison shopping and stay alert for hidden charges.

Dial-Around Numbers

"Dial-around" numbers are the access numbers, such as 10-10-xxx or 101-xxxx, that provide access from your home phone to a long-distance carrier other than your selected home long-distance service. The charges for these services appear on the monthly bill for your local service.

Dozens of dial-around services are available in any given geographical area, and one might be right for you. But in checking out and comparing services, use the following tips to look for policies and charges that can make the calls much more expensive than their advertised rate.

Stay Alert for E-Mail Scams

Not long ago, the Federal Trade Commission launched a campaign to alert consumers to the growing problem of e-mail chain letters—you know, the kind that promise you can make thousands of dollars in 90 days or so, if you just send $5.00 to the four or five names at the top of the list, then add your name to the top of the list, delete the bottom name and send it out as they instruct. Many letters even say that such chain e-mail is legal and has been approved by the FTC. Wrong on all counts!

Such chain letters (and any pyramid or ponzi scheme) is illegal. Plus, folks who send off their $20 or $25 usually just kiss it goodbye. Making big money for the suckers who respond is the last thing this old scam in a new guise will do. But chain e-mail is just the beginning.

Con artists are increasingly using e-mail

“Quick Tax Refunds” What's Real? What's Really a Loan?

Updated March 2008

You’ve seen similar ads and posters from income tax preparation services:

Quick Income Tax Refunds
Rapid Refunds
Instant Money from Tax Refunds
Get Your Tax Refund Money Today

Some check cashing services are also featuring similar promotions. And what about auto dealerships that urge you to use your refund for a down payment on a new vehicle or retail establishments who want you to put that refund toward new furniture, appliances, or entertainment centers? To help you do that, they’ll be happy to help you prepare and electronically file your taxes.

Zero! Zero! Zero! The Real Story

Zero down! Zero interest! Zero payments for Six Months! It seems like everyone is jumping on the "zero" bandwagon these days! What can go wrong with a deal like that?

Just about everything. You need to know the facts, starting with the fact that these promotions, in my opinion, are some of the most deceptive and unfair I've seen in years. By using word games and by deliberately obscuring details, the promotions hurt unwary consumers' pocketbooks in big ways. Read the very fine print and you'll see this: