Debt & Money Discussion at CreditMoneyBlog.com

If you have not filed taxes you will not be getting a stimulus check.  You must file taxes and select a check from Uncle Sam or a direct deposit to get the money thrown your way.

Also, there is another alert you might want to watch out for.  Identity thieves will have a new cash cow to go after when Billions of dollars flood the streets as free money from the U.S. Government this week.  You may want to check your mailbox frequently if you requested a check and make sure no one can steal it.  I have seen people stealing out of mailboxes when they know other peoples checks or credit cards are arriving in the mail.  Guard your mailbox by getting your mail immediately.

Did you stimulus check arrive this week?

There are many things you can do with the money.  I recommend paying off your debt or mortgage.  The retailers want you to buy, buy, buy.

Wal-Mart will let you cash your stimulus check for free.  Sony is offering $400 discounts on High Definition TV’s.  The number two retailer Home Depot is giving away big discounts on High Efficiency washing machines such as the GE HE’s.

The absolute best way to spend your Stimulus Check?

More important than paying off debt is actually feeding your family and keeping food on the table.  Kroger and Ralph’s will add 10% of the value to the rebate checks in increments of $300 to each gift card.  Albertson’s, SuperValu, and Shop N’ Save will give you an extra $30 for every $300 in rebate checks you put on gift cards.  Your family can look at this as an investment that will earn more than interest in a bank account and keep you eating during a threat of a recession.

Basically, all you have to do is go in your local store and purchase gift cards with your rebate checks and save huge money from that.  My family can spend $200 at least in one grocery trip so it adds up.

Normally I am not fooled by email scams because of past mistakes, viruses (trojans), and spyware problems.  I have been a victim of password theft to my important email account and lost it for a several earth shattering hours.  Sometimes making a few mistakes helps prevent us from a major theft of our hard earned money.

Today I almost fell prey again to an email that made it through my spam mail to my inbox.  It was asking for a survey that only takes two minutes and I would get twenty bucks added to my bank account at Capital One.  I just happened to have a Capital One bank account so I thought this was legit until I looked over the URL.

Some surveys redirect to third party sites so that is common but the fact that it redirected to a Verizon site that looked to be someones personal site I became weiry.  The URL for a Capital One survey went to a Mysite.Verizon.net.  That seems strange and I would advise anyone stay far away from even clicking on this link.

Dear Customer ,

The Capital One Bank Online department kindly asks you to take part in our quick and easy 5 questions survey. In return we will credit $20.00 to your account - Just for your time!

With the information collected we can decide to direct a number of changes to improve and expand our services. The information you provide us is all non-sensitive and anonymous - No part of it is handed down to any third party.

It will be stored in our secure database for maximum 7 days while we process the results of this nationwide survey. We kindly ask you to spare two minutes of your time and take part in our online survey.

I also noticed something else “phishy” about this email.  The copyright line at the bottom said members instead of member.

Capital One Bank (USA), N.A. and Capital One, N.A., members FDIC.

One more thing noticeable about this email scam is the FROM.  It says capitalsurvey@securenet.com instead of the URL that the link points to.  I would suggest not only looking over the URL that the emails link to before filling out any personal credit information by mousing over the link (not clicking on the link).  Also, check out the reply-to and from email headers.

Just as I am trying to log-in to my Paypal account that says it may have had some fraudulent activity and going through a zillion steps to put out that fire I read an email with some breaking news.  The article states that a ex employee of the loan company and a current company could have stolen live lead information and sold those leads to other mortgage companies.  I assume to make some money on the side.

The mortgage industry is already in enough hot water and this will just make it worse for companies such as CountryWide, LendingTree, and LowerMyBills. You can expect some big laws to come down harsh on the mortgage industry and extensive employee evaluations when hiring.

If Lending Tree does make this announcement it will be a big issue.  Another reminder that you should regularly obtain a credit report to see who could be selling your identity behind your back.  It is sad that you cannot trust some sites even with a privacy policy such as Lending Tree because their employees could be selling your Social Security Number and private information in the background.

I assume that the problem could be worse if you go in person to apply for a loan since your papers are sitting out for anyone to see going through different offices and filing systems.  I am still a believer in doing things online securely and safely and this will blow over in time.

Gas prices are climbing to all time highs right now at over $4 for diesel fuel and regular unleaded. The wholesale has reached new benchmarks at almost $120 a barrel. Possible invasion of Iran, Combat in Iraq, Demand, among hundreds of other reasons that gas prices will only climb from here on out.

The purchase of a 2010 Mitsubishi i MIEV Plug-In Electric is unlikely since that will probably not be around until 2009 for pre-order. You can invest your hard earned money in a hybrid car or SUV but that could also only save you in the long term which is not a bad thing.

My tips on saving money on gas might be different that the ones you normally read:

1. Drive Faster – Find tollways to drive on and pay the extra toll instead of driving down older roads or highways. You can normally drive faster on highways and avoid wasting gas sitting in several accidents or slower traffic congested areas.
2. Carry Several Gas Cards – If you have the credit then why not. I have a credit card for each gas station I live near so I can get 5-10% cash back at their stations. Exxon, Shell, and BP all offer great credit cards to maximize the money you spend at the pump. I also use the Chase Free Cash Visa at Sam’s Club and Wal-Mart purchases and the Chase Freedom Card for 7-Eleven and all other gas retailers.
3. Get Oil Changed Frequently – Make sure you keep up with the regular maintenance of your car.
4. Tire Pressure - Make sure your tires are in good shape and are aired up to the proper levels recommended in your manual.
5. Pull Technology From Business to Consumer – Do all you can as a consumer to contact companies to speed up their technology to get more vehicles such as biodiesels on the road. If you own a RV there are ways to convert it. Ask around and find out how you can convert your car, truck, or RV to take biofuels such as restaurant grease. This will speed up the free market process faster than the government tax credits.
6. Hypermiling - the more aggressive ways for gas savings.  One hypermiling way to drive is to tailgate the car in front of you using wind and resistance to down power your car.  I would not advise this method unless you have a standard shift otherwise you would have to turn off your car.  They also tell you to over inflate your tires which is also sort of risky behavior.

It is said that gas prices related to consumer spending and that many budget less spending when they go higher. There are many things that go into consumer spending besides gas prices but it does make airfare go higher, shipping, goods, and maybe even some service pricing increase.

This is an exciting time for America as we can learn to conserve foreign oil more and learn creative new ways to gain in technology. Using gas rewards cards, upgrading to toll roads, and biodiesels are the best solution to the gas price hikes. You might even see more people walking and riding their bike… a free diet called exercise!

Most financial related sites these days all ask for security questions or are finally getting on the bandwagon to make their sites more secure.  This would all be ok if they were doing this in a simple way of maybe one or two questions or possibly giving us a choice if we want this added hassle or protection. 

The trick is that if you answer the security questions the same on every site that you end up doing the same thing wrong as answering passwords on all the log-ins the same.  You want most of your secure log-ins to be different.  The problem is that there is no human way to remember all of these passwords and security questions for each banking, brokerage, bill payment, and credit card site.

You have to try and remember what you typed in for your first road your drove on, the first elementary school teacher, the hospital you were born in, and maybe even the name of the diaper brand your parents used on you.  I could go on and mention the name of your first pet or the one you picked could it have been your dogs name or the cats name or that horse your uncle owned.

Roboform comes in handy for the passwords but there is nothing that comes in to help for the security questions unless you somehow manipulate Roboform to do this.  If you have a Mac there is a 1Password and I have yet to find a way to answer security questions within that software.

TD Ameritrade sent an email this week saying that security questions were coming and that we needed four to log-in to their new system.  Emigrant Direct has a picture to recognize, a security question, and a birth date question.  The most annoying is HSBC Direct Banking where you have to use the mouse to put in your security word instead of typing it in and im sure this will catch on to other paranoid banks.

There is a problem with Identity Theft, phishing, and stolen passwords online but that is mostly due to using virus contaminated computers, going to fraudulent log-in pages by not making sure they say “https://”, and other avoidable instances.   The banks and credit companies already have highly secure sites that in most cases its not likely anyone can steal your information if you use Roboform where you normally do not have to type any passwords because it fills it in for you.

The personal and business finance companies need to back off with all the security because soon we will not be looking for lower interest rates or credit offers but for sites that do not take more than ten minutes to see our information.

My favorite day of the year.  April 15th… only if you are into torture.  You know the day the Uncle Sam a.k.a. grim reaper shows up at your door and takes half of all the money you have worked hard to earn so he can fund things such as the the War in Iraq, bailouts of failing mega-corporations, and many other items of government money well spent.

Whether you are starring at the computer trying to get your Quicken downloaded into your TurboTax or if you are just trying to get yourself to sleep because your taxes are due just think of the fact America does tax less than most other countries.  Even though it does not seem like it.  And know it will be worse next year so enjoy it while it lasts.

I did find some interesting reading on the IRS website today when a friend asked me a question about his medical deduction.  He asked me why the IRS sent him a letter telling him his medical deductions had been reversed from 2006.  We found that TurboTax did not catch an error.  You have to deduct only amount that is more than 7.5% of your adjusted gross income or it will be reversed.

If you have a OPEN from American Express Card you can use OfficialPayments.com/OPEN or Pay1040.com/OPEN to make your IRS Payments. This is a convenient way to pay online with your credit card but it can add another “tax” in a fee that can add up to thousands. The best way is just to pay by check and avoid all the surcharges. Discover Card now offers a business credit card with checks with no fees that would be handy for IRS payments to use as an alternative but its too late to apply for that unless you are planning for your quarterly payments.

If you don’t already know about eftps.gov, you set up an account (takes 15 days to get set up and get docs in the mail), but once you are in, you can send the IRS a payment anytime you want to. You can select which form to attach to the payment (1040 ES, etc). I typically send a payment every month and at the end of the year you can see all these credits that the IRS holds. The site is free and no processing charge.

Don’t let the recent IPO’s of Visa and MasterCard fool you.  There are a few reasons that some refuse to pay on credit or people that have been ripped off because of retailers who went bankrupted such as Sharper Image.  We may have to rethink the “cash is king” syndrome once more.  This explains about gift cards and the potential pitfalls.

Gift cards are a popular choice, both as gifts and even as rewards points and program redemptions. Unfortunately, sometimes this great idea is not as great as it seems. Gift cards can expire, companies can shut down or declare bankruptcy, or a multitude of other situations can arise that can entirely devalue your gift cards. There are several types of gift cards, and some may come with specific conditions, fees or other problems. Know what you are buying before you buy for the smartest gift card shopping…or simply fork over the cash and let the recipient decide how to spend it.

There are two basic types of gift cards. The first are store specific cards. These are the gift cards that you pick up at the check out on your way out the store. They might work at a single store or possibly at several stores; however, the actual options for these cards are rather limited. Some retailers allow you to use their gift cards online, while others do not. General purpose gift cards from Visa, MasterCard or American Express may be used at most retailers; however, there are some limitations, including airline tickets. While these general purpose gift cards offer great flexibility, they may come with many additional fees.

Some gift cards do come with an expiration date. Be certain to note the date if this is the case. You may be able to request a new gift card from retailers if yours expires, but there will be additional fees for this. Also, a few states have disallowed expiration on gift cards, and if you live in one of these states your gift cards will not expire. Service fees may apply when you buy gift cards, depending upon the state in which you live. You also may find that shipping fees for gift cards can be higher than is reasonable. Shop around to avoid these fees. Keep in mind when giving a gift card that businesses do find themselves in bankruptcy proceedings or simply shutting down. In these instances, gift cards may become totally worthless. General purpose gift cards may charge monthly maintenance fees after a certain period, or may charge additional fees for ATM withdrawals.

Gift cards can be a good option if you need an easy and appealing gift, but you should shop smart, or simply give cash to the recipient. Avoid cards with substantial fees, and choose cards that do not expire whenever possible. Be certain that you choose reliable retailers for store specific gift cards, and try to select cards that allow the recipient to shop online or in person for the most versatility.

This article today that compared apartment rent in Oklahoma City to New York City kind of amazed me. First, you normally cannot pick which city you can live in because of your career. I doubt most can move to Oklahoma City because their company may not even be found in Oklahoma if it is in a larger city such as NYC. Second, people who live in larger cities such as NYC, may not want to move to a small town that do not have a comparable social life or happiness. You must find where your career takes you and find a place where you will be happy.

One good point of this article is that it could open up the possibility of someone who has not considered having an easier life and working less if they lived in a smaller populated city. Then again you could move to New Jersey or even Albany, NY and save money on rent compared to living in Manhattan. I would even consider a move to Chelsea or Village area.

In a Manhattan apartment that costs $1,600 a month or more to rent, you’d be lucky to have a separate bedroom, a dishwasher and a living room that fits a full couch.

Get a job transfer to Oklahoma City and a 1,228-square-foot, three-bedroom apartment in a luxury development with its own clubhouse, hot tub and swimming pool can be yours for only $989 a month.

We all know that our income may change for the worse when we take out a loan. Rough times contribute to many loan defaults. Is this letter a good example of a change in personal finances or loan agreement? I would not be too quick to judge it but I think it needs more specifics (not that we could post those on here anyway).

To whom it may it concern:

This message is to let you know that due to a change in pay periods other issues with my personal finances, I will no longer be able to make the payments as per the original loan agreement. I have noticed different and varied amounts coming from lenders and I am unable to explain the amounts and to cover those amounts as per the original terms.

I have begun the process of counsel and they will be in touch with you soon to make payment arrangements so that this debt can be paid. Please note that I am not trying to avoid payment, I just need to make alternative payment arrangements and I have every intention of doing what I can to ensure that you are paid the fair amount that you are owed. You should expect that my counsel will be in touch with you in the 30 days.

In the meantime, I have notified the bank of my intent and the are aware that I am working on a way to get all of these items paid. However, the money will no longer be available through ACH debit. Also, I will not be able to be reached at my place of employment. If you need to contact me, you may leave a message on my cell phone and my legal counsel will be in touch with you soon to set up the appropriate arrangements.

Again, this is not an attempt to sidestep any debt, I am earnestly working to get this resolved and get you money that you are owed. Thank you for your patience and again, someone will be in touch soon to get this worked out. I hope that didn’t sound to harsh as I do intend to make arrangements to pay off this debt. Please accept my sincerest apologies.

“Sense of urgency” is one of the most important marketing tactics used by retailers. If they can make their customers believe that they have to buy a product now in order to satisfy an urgent need, they make more money. Creating a sense of urgency is easy—we see a brand new laptop on sale and we immediately want it—but it is more difficult to create the other side of the equation: How can our customers afford it?

Payment plans are the answer and they can be found in every retailer nationwide. No, the laptop doesn’t cost $2,000; it’s only $90 per month for twenty-four months! Nevermind that you’ll actually be paying more for the laptop because of the interest factored in.

There are plenty of opportunities to sign up for payment plans, thus meeting your desire for instant gratification, but should you commit to the terms of the payment agreements? Not always. Without payment plans, most Americans would be homeless and carless and generally without luxuries, but consumers must draw the line somewhere.

The Deception of Payment Plans

The most dangerous pitfall of payment plans is that they are deceptive. They make you feel as though you are hardly spending any money for a rather expensive item, so you don’t bother to factor that purchase into your budget. This is especially true if you put your payment plan on your credit card; not only have you put it out of your mind, but you’ll probably pay double interest.

If you’re going to sign up for a payment plan, consider the end price of the product as well as the monthly payment. How does that compare to the one-time price advertised by the retailer? It is sometimes more economical to simply save enough money to buy the item in one lump sum than to put yourself on a payment plan.

You can also talk with a manager and attempt to negotiate the interest on the payment plan. Sometimes this works and sometimes it’s out of the retailer’s hands. It never hurts to ask, however, and you might be able to swing a better price. After all, the store’s goal is to sell as much product as possible.

Beware the Extended Warranty

Another pitfall of payment plans is what I call the “Extended Warranty Scam”. Not only does the retailer want you to purchase the payment plan, but you are “strongly advised” to purchase the extended warranty as well. Reason being, if you don’t buy the warranty and your item breaks before you’ve finished making payments, you still have to make good on the payment plan and you’ll have to pay for repairs.

Under any payment plan, however, the consumer should receive free repairs for the extent of the payment plan at a minimum. Never purchase both because you’ll be taking money out of your own wallet. Instead, inform the store manager that you won’t buy the product unless the warranty is inclusive; otherwise, you’ll find the product elsewhere.

Longer Credit Terms – Longer Commitment

Since retailers want to sell payment plans as often as possible to collect the interest, they’re going to make the monthly payments as low as possible, which means a longer credit term. For example, 40-year mortgages have only recently been introduced to the real estate market, where twenty years ago, 10-year mortgages were fairly standard. This might seem like a benefit for the consumer, but it is really a sheep dressed in wolf’s clothing.

When you sign up for a longer credit period on a payment plan, you increase the amount of interest you’ll be paying on the item. Not only that, but your obligation is far longer to the retailer, and very few people can predict their financial futures. If you lose your job or are forced to take a pay cut, you still have to make good on the payment plan arrangement.

This is even worse with retailers who offer deals where you make no payments for several months to a year. This is becoming increasingly popular with furniture companies. Do you really want to be paying for your new leather sectional five years down the road? It’s important to think practically when considering payment plan options.

The Bottom Line

When you’re going to buy something anyway, payment plans can be a blessing, but you have to look at it logically. Don’t simply sign up for the first payment plan that presents itself; instead, shop around and find the most favorable terms for your investment. If you have good credit, you might be able to secure a no-interest period or even a no-interest purchase. If you have poor credit, you should be able to find a similar deal with a large down payment.

Debt isn’t something you want to leave to chance, so be smart about your finances. Don’t let fancy signs with low numbers tempt you into a purchase you can’t really afford, and don’t allow hard-sell sales pitches fool you.