Debt
Bank of Mom & Dad's Money Coach: The truth about debt
Filed under: Credit, Debt, Kids and Money, Saving Money, Health, Bankruptcy, Video, Credit cards
Ask the Dolans: Can my credit card company change the terms on account I have closed?
Filed under: Credit, Debt, The Dolans, Video, Credit cards
Click here to ask Ken and Daria your question
Credit card companies are on a tear, raising rates, slashing credit lines, increasing minimum payments and closing accounts in advance of the new credit card legislation that will restrict their more outrageous behavior. Today, Ken and Daria Dolan of Dolans.com help a WalletPop reader decide if she has any recourse against her credit card company's latest trick.
Dear Ken and Daria,
We got a letter from our credit card saying they were changing the terms on our card. We still have a balance on the card, but we opted out and closed the account. They STILL upped the minimum payment required on our balance. Can they do that?
You'll find simple, proven solutions for managing your credit card debt at Dolans.com.
Recession tales: Saving vs. spending a tough battle
Filed under: Borrowing, Credit, Debt, Saving Money, Recession, Credit cards
There's no doubt that the current downturn has changed people's spending habits. Since the peak in housing wealth, homeowners lost more than $5 trillion in equity and 15 million homeowners own homes that are now underwater (worth less than they owe). Unemployment is hovering near 10% with no clear signs of falling.
Homeowners' previous piggy bank -- home equity -- is no longer available for spending. Even if people still hold a job, many are worried that their jobs are at risk and won't spend except for necessities.
People, afraid for their future also changed their savings habits. In the first quarter of 2008, before the recession took hold people saved about 1% of disposable income. By the second quarter of 2009 the savings rate soared to 5% of disposable income. But now that we appear to be near the end of the recession the savings rate dropped back to slightly above 3% in the third quarter of 2009, as people see the end of the recession in sight.
While economists now don't believe this recession will be as deep as the Great Depression, its depth and length will certainly change people's spending and savings habits for a long time to come.
Recession tales: Forget housing as an ATM
Filed under: Debt, Home, Real Estate, Recession
Will the American Dream of home ownership go the way of the myth that our streets were paved in gold? Home ownership has long been a milestone rung on the ladder of success. Much as we use birthdays to measure our personal progress toward life goals, buying a home of your own has been the way we announce to the world that we have arrived.
Throwing in tax incentives like mortgage interest and property tax deductions just sweetened the pot. If you wanted to keep up with the Joneses, you added a bigger deck whether you needed one or not.
Credit card addiction: How to spot the warning signs and break the habit
Filed under: Credit, Debt, Recession Diaries, Credit Reports, Economizer, Credit cards
With more than $40,000 in credit card debt and more than 20 credit cards to her name, Diana Ryan didn't think she had a problem -- even though her husband had no idea just how many pieces of plastic she had tucked in her wallet. "It sounds cliche," Ryan says, "but I thought I could stop at any time."
But the lure of special offers and other card deals was much stronger than Ryan's willpower. "I couldn't say no when a cashier asked if I wanted to open a new card to get an instant in-store savings or receive a new promotion," she says.
Ryan represents a growing number of Americans who've passed the point of merely overspending and have entered into the realm of addiction. And, in doing so, they're maxing out a record number of credit cards.
Credit card issuers in support of debt repayment program
Filed under: Debt, Credit cards
The actions of credit card issuers have come under close scrutiny of late. In attempt to gain some positive press, 10 of the major credit card companies have announced changes in debt management plans allowing consumers the chance to lower payments and qualify for enhanced benefits in recognized credit counseling services programs.
This new tiered system qualifies consumers for special benefits they might not otherwise be able to tap into. Among the highlights: lower interest rates, waived late fees and minimum payments. The goal is to help consumers pay off their high-interest credit cards.
Walletpop round-up: Worst credit cards
Filed under: Credit, Debt, Economizer, Credit cards
Break out the rotten tomatoes. This is Walletpop's roundup of the priciest, sneakiest and just plain lousiest credit-card deals out there. Trust us, there are a lot of cards floating around the bottom of the barrel, so it took a lot of effort to find the ones you probably want to avoid at all costs.Interest rate: If your credit isn't stellar, you can be looking at paying 20% or more for the privilege of whipping out the plastic. (Even if you have great credit, some cards will be oh-so-happy to sock you with a rate of 15% or so.) For real sticker shock, we checked out co-branded store cards, which typically have higher rates. Case in point: The Gap Visa card has rates that start at 18.24%. That could tack quite a bit onto the price of that pair of khakis. We also looked into the Best Buy Reward Zone MasterCard, issued by HSBC, but they won't even give users information about interest rates until they actually apply! Thanks, HSBC; you've forced us to leave it to our imagination, and what we're imagining is pretty scary.
Annual fee: To be fair, several American Express cards made our best list, but we've got a worstie here, too. With a whopping $5,000 initiation fee plus a $2,500 annual fee, the American Express Centurion Card wins this one, hands down. Luckily, this card is issued by invitation only, so you'll probably never be faced with the agonizing decision of whether or not to drop the price of a cheap used car every single year for the privilege of using this card. For that reason, we're nominating a second worstie in this category: the Visa Black Card issued by Barclays. It's got an annual fee of "only" $495 and an APR of 13.24% -- a higher rate by several percentage points than our best pick.
The for-profit college student loan nightmare
Filed under: College, Debt, Student Loans
Over at Washington Monthly, Stephen Burd takes an extended look at one of the biggest -- and least reported on -- financial crises facing young people: unethical for-profit college foisting massive debt loads on their students. These debt loads often carry exorbitant interest rates and lack any consumer protections whatsoever.The stories Burd tells are egregious: Slick, misleading advertising luring prospective
How to avoid 'pulling a Gosselin' with family finances
Filed under: Debt, Relationships, Celebs & Money
On Monday, Jon Gosselin said he returned $230,000 in funds to a joint account shared with his estranged wife, and reality show co-star, Kate Gosselin.
He did so because earlier this month, a Pennsylvania judge ordered Jon to return these funds, even as he continues to criticize Kate for not being forced to return money she allegedly withdrew from the couple's account.
While Gosselin has a fighting chance of quickly coming up with that much coin (through media appearances and sponsorships), most regular Janes and Joes in the midst of a divorce aren't usually able to pony up large chucks of cash all at once.
Consumerism Commentary launches second season
Filed under: Debt, Extracurriculars, Saving Money, Technology, Economizer
Listening is a great skill, one that will get you far in life and far in relationships. It will also help you become better at your personal finances. There are many personal finance and consumer podcasts out there, including WalletPop's podcasts, but one of my favorite podcasts is the Consumerism Commentary. Consumerism Commentary, which kicked off its second season interviewing Baker from Man Vs. Debt, is consistently a must listen to podcast because the show brings in interesting guests who share great advice and cool new tools and tips to better manage your life and finances.
Poor Pam Anderson: Foiled by shiny tiles
Filed under: Debt, Home, Real Estate, Recession, Celebs & Money
Former Baywatch babe and rocker wife, Pamela Anderson is having money woes. The actress is reportedly $4.8 million in debt because of expensive renovations on her Malibu, California dream home.
Anderson's been reportedly sobbing over the thought of having to sell her gilded palace complete, which comes complete with mirrored mosaics and platinum tiles surrounding the pool. The original price tag for the property was a modest $1.3 million and change. But renovations have led to Anderson being sued by five contractors because of unpaid bills.
In an interview with British TV personality, Joe Swash, Anderson said she had been hit by the recession and let down by a string of investments. "I'm a little girl with two kids - how could you screw me?" she added.
Anderson bemoaned "I'm going to sell it. I hate it" explaining that construction projects can destroy relationships and even cause some to commit suicide. "It rips your heart out" she said.
Sarah Lawrence once again tops list of pricey colleges
Filed under: Borrowing, College, Debt, Kids and Money, Saving Money, Career, Wealth, School, Economizer, Personal loans, Student Loans
Think your kid's college bill is pricey? Think again. For the second year in a row, Sarah Lawrence College has the dubious distinction of being the nation's most expensive place to attend college -- a whopping $54,410 for the current 2009-10 school year, including tuition, plus room and board, according to data compiled by CampusGrotto.com.Of course, for that price, students get the distinction of attending one of the finest colleges in the country. Most of the colleges in the 100 most expensive colleges ranking are private liberal-arts universities in the Northeast.
CampusGrotto notes that while the current school year saw one of the smallest increases in costs in decades, expenses still rose 4.3%. By contrast, the annual rate of inflation in the United States fell 1.3% in September. Many of the colleges on the list now cost around $50,000 a year to attend.
Debt collection practices act needs updating
Filed under: Credit, Debt, Credit cards
How often have you gotten a robocall or other annoying call from a debt collection agency for a debt you never incurred?I get them regularly because someone who had my telephone number before me didn't pay her bills. Some of them just won't believe I'm telling them the truth that I'm not that person and just keep calling my number. I quickly report them and their number to the FTC. And my story is tame compared to the case brought by Dianne McLeod in which she says her husband died because of credit collection calls.
So why is that happening more often? The U.S. Government Accountability Office (GAO) just did a study on the Fair Debt Collection Practices Act and found that the Federal Trade Commission (FTC) has limited ability "to address the concerns related to the adequacy of account information, collectors' use of modern technologies, and other issues that arise in an evolving marketplace." The GAO definitely thinks it's time to update the act.
As the numbers of people who are late on their payments continue to rise, we're seeing the highest rate of past due accounts in 18 years, the GAO found. To recover this delinquent debt, credit card issuers use their own collection departments, outside collection agencies, collection law firms or they just sell the debt to someone else.
The Upside: Habits of the rich and thin
Filed under: Budgets, Debt, Entrepreneurship, Food, Career, Health, Credit cards
Since the recession began, we've all been tightening our belts, but only metaphorically. As our finances have grown leaner, Americans' bellies continue to grow larger. Therefore, the question of how to increase net worth while decreasing net girth has been on my mind for a while -- like about 20 years.You see, I've been both rich and poor as well as fat and thin. Say what you want about the best things in life being free and money not being able to buy you happiness; in my experience, rich and thin were way better. What's more, for me physical and fiscal fitness seem to go together.
For instance, with the help of Jim Karas' The Business Plan for the Body I lost more than 60 pounds in a year by applying the skills I learned from running a successful small business. Since then, I've noticed that the challenges and benefits of following a diet mirror that of following a budget.
Financial literacy site encourages people to get involved in their community
Filed under: Budgets, Debt, Kids and Money, Saving Money, Wealth, Economizer
The recession has exposed America's dirty secret that many Americans are financially illiterate. And it would be difficult to find someone who doesn't agree that Americans could use more financial education at the student and adult levels.
There are a variety of Web sites aimed at improving financial literacy in America, but one new site hopes to go beyond offering the usual tools for learning to budget, paying off debt, boosting savings, etc. GetFinancialFinesse.org hopes to equip people with tools to clean up their own finances and get involved in efforts to improve financial literacy in their communities. The site is operated by Financial Finesse, a financial education company.


