Mind Your Business

Since I became credit card debt free I only kept one card, which I pay off each month. I haven't carried a balance nor paid interest on this card in several years. There are stories all over the blogosphere and financial pundit sites that warn against the subliminal trickery of the banks to (1) circumvent the recently enacted credit card rules, (2) increase their revenue to offset the colossal amount of bad debt write-offs and other losses and/or (3) find innovative ways to increase their fee revenue ... which has become a major source of income for the banks during the heyday of credit abuse. Well, let this be a warning to you citibank, I shall not be a victim, scapegoat or random target for any foolishness.

It was my idea that I'd keep one credit card for travel and online purchases. Plans changed and I actually use the card for everyday purchases such as gas and eating out. Although my monthly bill is NOT very high, I often have MANY transactions ... many. Such was the case for last month's bill, which included the usual suspects as well as Christmas and holiday what-nots. Much to my surprise when I looked at all of the transactions prior to paying the bill, I noticed a $37.01 charge. Hmm? I looked closer and realized that it was a finance charge. What? So I looked over prior month's bill to see if I paid it after the due date, and therefore incurred a finance charge. Nope. The bill was paid 1 week prior to the due date. Next step ... call Citi immediately! I called, the rep agreed that the finance charge was an error and immediately corrected the account.

Thanks Citi, you get an A for customer service, but an F for effort. I'm sorry. Maybe I've bought into the financial conspiracy theory, the one that suggests big mega monster banks are sneaky, evil and prey on the unsuspected. Perhaps it was an honest mistake because after all, mistakes do happen. Mistake or not, I wonder how many of these "mistakes" go unnoticed by the customers. Hmm, yes, we all should exercise personal responsibility so I dare not lay all of the blame at the feet of the banks. This is just another example about why we must be vigilant about our personal financial affairs. As the saying goes, pun intended, mind your business!

***ps, thanks for all of the comments on my "bored" post. I'll stick around for now. I'm finding more inspiration now that I'm no longer forcing myself to always talk about finances. Oh, and my very first troll ... ha, thanks! I appreciate you too;-).

How Ridiculous

I stopped eating beef over 10 years ago and never looked back. Every few months there's another food recall related to E. coli, salmonella, botulism, and whatever other food borne illness that's out there. Beef is not the only culprit, we've seen veggies such as spinach and other staples, such as peanut butter, take a hit as well. Perhaps it's just me, but I'm a tad bit concerned with the blatant lack of responsibility being displayed in the food industry and co-signed by the gov't. Okay, I may have stretched it with the botulism, but you get the point;-).

For example, here's an excerpt from consumer advocate Clark Howard's syndicated radio show related to a recent beef recall:

Nov 17, 2009 -- Ground beef recall results after plant stopped E. coli testing
More than 500,000 pounds of ground beef was recalled late last month after two people died and estimated 500 were sickened by an E. coli outbreak, according to The New York Times.

The tainted beef came from a meat-packer in Ashville, N.Y. that reportedly stopped testing for E. coli two years ago at the request of beef suppliers (are you kidding me?!). Surprisingly, E. coli testing is not required by the Department of Agriculture. It's only recommended sans any legal enforcements for not doing it (okay, so we're just relying on self policing in an industry that can give a rats boom boom about anything other than profit?! Yeah, that's great and comforting to know. ***side note, this is just one example why relying on Gov't to "take care" of you is such an awful idea!)

The recall has prompted Trader Joe's to stop sourcing its meat from the affected plant (aah, my beloved Trader Joes. Way to go, take action!). The grocer also now wants its other suppliers to test all ground beef for the deadly bacteria.

Costco Wholesale is the only large national retailer that mandates E. Coli testing. Perhaps Costco can do so because it uses its own grinding facilities. (How sad. Great for Costco, sad that no one else gives a hoot.)

Too often it seems like the Department of Agriculture feels its responsibility is to protect processing plants and beef suppliers, not the American consumer. (yep, and amen.)

Clark is an unabashed free-marketer, but he knows that there needs to be some referees in place for capitalism to work optimally. The marketplace suffers when there's no cop on the beat. Consumers need to feel confident that the feds are on the case to make sure their food is safe.

***It's my plan to venture into a little square foot gardening this spring. We'll see if my plans come to fruition. Oh, and one last thing, if you haven't done so, you should check out the movie Food, Inc. I thought it was pretty well done.

Bull Anyone?

Well, well, well, we knew it, didn't we? We knew that the banks would pull some magic out of their hats before the credit card reform laws take effect. A few provisions went into effect in August, but the lion share of the provisions are not scheduled to start until February 2010 (I'm hearing that Congress is working on a bill to move the effective date up to December 1, 2009 but I'm not sure if or when that will pass). Mind you, this credit card reform act was signed into law in May 2009 - why the long wait before it's enacted, beats me ... perhaps I need to brush up on my legislative knowledge. Anywho, a few of the new laws are:

• Raising Rates: Banks have to give 45 day notice before raising a consumer's rate (unless you're on a variable rate card which most of the banks have begun switching customers to)
• Penalty Fees: Banks can't charge over-limit fees unless the consumer has asked for this additional credit.
• Youth Marketing: Banks can't extend credit cards to people under 21 without verifying their ability to pay (i.e., proof of income) or obtaining parental permission.
• Unfair Billing: The practices of universal default and double-cycle billing are no longer allowed.
• Disclosures: Banks must clearly disclose how long it will take to pay off the balance if only the minimum payment is made.

Because the banks have long since made a boat load of money off of their fees, they have gone back to the drawing board to find new ways to assess fees on their beloved or hated customers. For example, BOA is "experimenting" with charging customers an annual fee of $29 - $99. Other banks such as JP Morgan and Citigroup are implementing similar practices. There are even talks that we may see additional fees on other traditional banking products like checking accounts.

Are these not the same banks that taxpayers bailed out less than a year ago? This is absolutely ridiculous. You have our tax dollars, we saved your tushes, and this is how you thank us? I only have one credit card that I use solely for online purchases and travel. If my card issuer (Citi) comes to me with an unsavory offer of bull crap, aka, an annual fee, I'll glady return the favor by asking them to close my account ... immediately ... with the quickness ... like do it right now! I don't care how many rewards and incentives a credit card offers, I am not going to pay annual fees to use their card, period.

If I Could, I Would

If I could, I would make personal finance a mandatory competency in our educational system. It doesn't matter who or where you are in life, everyone participates in the economics of this society. For goodness sake, I have a business degree and still came out of school not knowing diddly squat about how to manage my own finances. If I didn't get it in a business program, where is it being taught? I'm not crapping on my school because I think the problem is universal. And yes, it would also be nice if some of this was taught at home as well.

How often do we hear, "if I knew then what I know now ...?" For me the ellipses would say, "I would not have spent my entire 20's getting in and out of debt." Certainly I'm not alone in that. Why can't personal finance, which is a fundamental life skill in my opinion, be as important as the other primary subjects such as math and science?

Furthermore, I'd love it if those who were in government offices that influence fiscal policies and/or spend taxpayers dollars were required to have some sort of higher level of personal finance training. No where else in this county can you legally write a blank check other than Washington, D.C and other state capitals. Each year my local newspaper publishes an article that lists all of the elected officials who are delinquent with their taxes. What in the ham sandwich are they doing in elected office, governing fiscal policy for a state, and they can't govern their personal finances? Maybe, just maybe we wouldn't have so much waste in government if financial education was a requirement. Maybe we wouldn't have social services that have run amuck if everyone (with the mental capacity to do so) had some sort of basic financial understanding. Maybe the real estate crash could have been avoided or at least tamed. I can go on and on but I think you get the picture. Do I think financial education is a panacea - no, it's just a good place to start.

Another Fabulous Interruption

I interrupt the regularly scheduled programming to bring you this message .....

WHAT IN THE (BEEP) IS GOING ON?! I'M SO (BEEP) FRUSTRATED WITH ALL OF THESE (BEEP BEEP) FINANCIAL INTERRUPTIONS. ONE (BEEP) THING AFTER ANOTHER. ******SCREAMING INSIDE*****

What's the deal you ask? Well, my car's thermometer went all the way to high on Friday. Yes, Friday before the 4th of July holiday, leaving me stranded for the weekend nonetheless. I called Honda and was told that Tuesday would be the earliest that they could get me in due to the holiday. Okay, no big deal, I have some items in The Playbook that I need to work on anyway. No biggie, I'll just take this lemon and make some lemonade.

Fast forward 5 days later to today at approximately 11:30 am EST, I get a call from Honda and am told that my head gasket is blown. After 45 seconds of silence, I asked this question in a very soft, firm and deliberate voice "what does that mean?" The service guy replies "thedhlas eioghe ghlsgehs jetighwl atighaldt llkthaydat cozithlzight and that will be $1,278, added to the other stuff that you wanted us to take care of, your total cost is $1,752." Huh!

Okay, now that I've gotten that off of my chest, I feel so much better. Thank you for letting me vent . Your thoughtfulness is greatly appreciated;-).

beep translation: What in the heck is going on? I'm so daggum frustrated with all of these cotton pickin financial interruptions. One freakin' thing after another. I used the "beeps" because I thought they repped (i.e. represented) more for my true feelings;-).

FICO Frustration

At what point should a person's FICO score take a back seat? In my line of work I cannot tell you how often I hear someone say "I don't want to ruin my credit." Okay, I get it. But listen Mr. & Mrs. keep my credit perfect no matter the cost, your electricity has been disconnected. Credit scores have their place but they are not to be worshipped (I personally don't care about it that much, but that's just me). You know you need to dethrone King FICO when you ...

1. Allow your car insurance to lapse because you used the money to pay credit cards.
2. Illegally connect to your neighbor's electricity because yours has been disconnected.
3. Go to restaurants, eat, then plant something in your food so that you won't have to pay for the meal.
4. Sell the title to your vehicle, the only one you have to get back and forth to work.
5. Pawn your wedding rings

...And for what, so that you can pay the creditors and not have a late payment on your credit report.

Even though I don't manage my credit score like a pit bull, I do review my credit report at least annually. Having been a victim of identity theft, I understand the importance of knowing what's on my report. It saddens me to know that people are so caught up in protecting their credit score that they'll prioritize paying creditors over the necessities of life ... such as utilities and insurance. Trust me, I do get the importance of a healthy credit score, but when is enough enough?

***p.s ... I didn't make any of those examples up; they are all real life situations.

I Don't Get It (pt 2)

I promised that I'd share the inspiration for last week's post so here goes, true story:

Amy: I really need to talk to you, I need some help.

Me: Sure, what's going on?

Amy: We're facing foreclosure if something doesn't happen soon. We're 3 months behind on our mortgage.

Me: Oh no, what happened? Did one of you lose your job?

Amy: No, we just got behind.

Me: But I don't understand, yall make a pretty decent income. What happened?

Amy: Well, we just did some stupid things. We knew better, I have no idea why we did it, we just didn't do the right thing.

Me: Okay, we've all done stupid things, but I still don't understand. What happened?

Amy: I'm telling you, we did some stuuu-pid things. We owe the IRS for back taxes and we've been trying to get that straight for several months. I know you don't know this - we filed bankruptcy last year, but we kept the house.

Me: So why is the home in foreclosure. I'm very confused now. You have a decent income and all of your debt except for the house and the IRS was discharged. You really have to tell me what happened because I'm not getting it.

Amy: Well, see, our daughter got married in September and we had to pay for the wedding.

*****crickets******

Amy: We paid cash for it (the inflections in her voice suggested that she was quite proud of the fact that they paid for the wedding in cash, despite the fact that the mortgage went unpaid.)

****crickets*******

Amy: And then Christmas came around a few months later and we had to pay for that as well.

****crickets*******

Amy: So see, we just did some dumb stuff. We're trying to get out of this hole.

Me: Well what is it that I can do for you? You know what to do, why you didn't do it is beyond my understanding.

Amy: Yeah, you're right. We were just stupid.

****crickets********

And again I say, I don't get it! I know this is pretty extreme but I promise you that it's a true story. Just crazy. And yes, this person knows better. Is it possible to know something and never act on that knowing? Is it possible to know something and constantly do the opposite. Maybe it's just me but I think actions demonstrate what you really know. Perhaps she doesn't know as much as she says. She says all the right things, but gosh doggit, did you read the decisions she and her husband have made recently? I don't get it! (sighing).

***Amy is not the person's real name so if there is an Amy reading this, chances are that I am not talking about you:-).

I Don't Get It

Someone please help me understand the psychology of money. Please help me understand why some people (those who "know" better) use credit to purchase things they could have paid for with cash - when I say credit, I don't mean use credit and pay it in full when it's due, I mean use credit and make payments? Please help me understand how paying 18% or more a month in interest payments while earning less than 3% of interest in a savings account makes sense. And while you're enlightening me on that, please don't forget to share with me how purchasing nonessential depreciating items on credit makes sense when you have other outstanding debt - i.e, balances on credit cards that you cannot account for. Yes, I need a tutorial, I need some understanding.

Now before anyone thinks that I'm being snooty or "forgetting" where I came from, please understand that I have done almost every dumb thing you can do with money. I've gone into debt for some of the most ridiculous reasons ... BUT ... that was before I had any knowledge or understanding about money. Once I learned how to handle my finances, I didn't look back, not once. I continued to make mistakes until I learned - with each book I read, each CD I listed to, each website I perused, I made better decisions. So no, I'm not talking about those who honestly may not know better, I'm talking about those who can talk personal finance with the best of them. I'm talking about those who openly profess and proclaim their pursuit towards financial independence one minute but then justify their ridiculous spending with one made up excuse after another the next minute. News flash, you can always conjure up a reason to spend, that's not hard. Heck, 15 reasons just ran through my mind for spending some of my savings.

It seems as if frugality is the latest vogue; it's a movement, it's in, it's hot, it's even sexy. I guess everyone wants to be in but not everyone wants to pay the price. If you're not ready to pay the price, then don't pretend, just be honest, if not with others, then at least be honest with yourself - that's what matters most.

One day soon I'm going to write about the inspiration for this post, but before I do, I want to know if I'm missing something - so someone please help!

Mondays

Are you one of the many people who dread Monday mornings? When I was a member of that group I used to get the downers around 6:00 pm every Sunday evening. I remember dreading Monday mornings and the start of another work week. Today I don't feel that way. The heaviness that used to settle in the pit of my stomach every Sunday evening no longer comes to visit. After I became consumer debt free I made some life adjustments that allowed me to rearrange my work schedule so my Mondays became much better ... however there is a new threat lurking.

Nearly 2.6 million jobs were lost over the course of 2008, the highest yearly job-loss total since 1945. The job-loss reports continued to climb in January, which saw over 200,000 job losses. January 26th was the day that some labeled as Bloody Monday because several fortune 500 companies announced over 65,000 job cuts combined. Those companies included Caterpillar (20,000 jobs), Pfizer (20,000 jobs), Sprint (7,000 jobs) and Home Depot (7,000 jobs).

Monday February 2 - Macy's announced that they will cut 7,000 jobs. Other companies announced job cuts later that week (Panasonic 15,000 jobs, and PNC Financial 5,800 jobs).

Monday February 9 - Japanese automaker Nissan announced 20,000 job cuts (technically it was announced Sunday but it hit US mainstream news Monday).

Flag on the play! Who wants to start the week hearing about the infinite number of jobs being lost everyday? And why on Monday? If there has to be a weekly announcement I suggest that companies do it on Friday when most of us are floating high at the anticipation of the weekend;-). I shall not be recruited back into the Monday morning blues. I know we're in a recession, I know the economy is shaky, I know the markets are extremely volatile, yes, I know all of these things. I also know that I do not want to begin each week with Monday's gloom and doom report so effective immediately, I am replacing Monday morning news with Curious George and Clifford the Big Red Dog.

Catch 22

The metro area I live in experienced somewhat of a severe water drought over the last couple of years. Some of the measures taken by local and state officials included water restrictions (i.e. only being able to water your lawn on certain days), incentives for companies and households to install low flow toilets, legal battles with two neighboring states over water from a shared lake, etc. During the most severe times there was no shortage of information and tips on how each person could help to preserve water.

Apparently the message got through to many of the citizens. Even now I'm very cognizant about leaving water on while brushing my teeth, waiting until I have a full load of clothes to run the washing machine and other little tidbits to do my part with conserving water. Sounds good right, well here is the catch 22. All of this water conservation has no doubt dipped into the revenue stream of the water companies (ran by municipalities). So guess what, they are raising rates to make up for the loss of revenue due to consumption! Are you kidding me? Maybe we should inundate them with information on how they can better manage their money, how to spend less than they make and how to budget accordingly.

The Credit Crunch Strikes

Here is a message that I received from Mint (I will post about my new love affair with Mint later).

Hi there,
The interest rate on your XXXXX credit card has increased by 7.59%. As of January 14, your old rate of 11.4% is now 18.99%. You may want to investigate ... Here is their number: 1-800-XXX-XXXX.
Cheers,
The Mint Team

Can you believe it, a whopping 7.59 percentage point increase. For goodness sake that is a 66% rate increase! Are they crazy? Is it me or has the Fed continued to lower the rates, which technically should have translated to a lower rate for borrowers. I thought the bailout money (and my credit card is with a recipient of those funds) was supposed to help liquidity in the credit markets. How are you helping liquidity when you're making money more expensive to borrowers? How are you increasing liquidity when you're putting the squeeze on credit card holders?

Oh well, my rant is partially in vain, but not really. It is the principle of the matter. Thankfully I saw the need to get out of credit card debt a few years ago so I'm not financially impacted by the rate increase. However, I loathe the idea that the credit card companies are universally raising their rates when the Fed is cutting them some slack AND giving them my hard earned dollars. For the record, I have never been late on a payment and I do use the card but I pay it off each month. As the old saying goes, something in the milk ain't clean!

Oh and guess what, the trifling bank has yet to send me any notification of the increase. Had I not registered with Mint, I would not have known, at least not this soon.

Ah crap, I don't know why I'm trying to be all discreet, the offender is Citibank. There, I said it. Has your rate increased on your credit cards?

Bailout Joke

Last week the porn industry had the audacity to ask Congress for a $5 billion bailout! Think I'm kidding...check out this story. The entire "bailout" was a joke from the beginning, another twisted chess move in the game of corporate abuse and greed. Seriously, who gets to run a business in the ground and then get a $350 billion bonus from the taxpayers - with no accountability might I add. There has been no real accountability from the financial institutions who received this money and Congress has no idea how the money is being used, none. Oh and one more thing, President Bush is in the process of asking Congress for the remaining $350 billion. Yeah, since the financial institutions have done such a fine job with the first distribution, let's give them the remaining. Are you kidding me?! Dreadful, just dreadful.