Just checking in...

Just wanted to post a quick update. Yesterday we went down to NY to pick up my son from his extended visit with friends, and went out to dinner with some of our family as well. It was a really great day for us, although my son had a somewhat different view. He isn't happy about our move to PA and being so far from his friends. Hopefully time will help with that.

We have a lot to do today, so I probably won't get to post again until later. Hope everyone reading is having a good day. :-)

Sphere: Related Content

Finally, a bit of sanity...

I don't know if anyone else has been following this story, but it had gotten me twisted when I first read it, and I'm glad to see that finally some common sense has prevailed. Even so, it still took far too long...

http://news.aol.com/story/_a/bottom-slapping-case-dismissed/20070820171109990001?ncid=NWS00010000000001

So, here's the short version for those who haven't read about this before. There were a couple of teenage boys in Oregon who had engaged in what most of us would consider to be normal teenage boy behavior - butt slapping, teasing girls, and trying to get their sweaty palms on someone's breast.

Now, most of us would agree that this is what boys that age do, and that while it is inappropriate and should be discouraged, it's not a crime - nor should it result in branding these young men for life as sex offenders. Yet that is exactly what almost happened in this case.

A few complaints were made to the school staff, and this is where it got stupid. Not only were the boys disciplined at school and by their parents, but the police were called in. Felony charges were filed, including felony sex abuse. For six months the boys and their parents have had to wonder not only if they would go to jail (yes, jail), but if they would forever be labled as sex offenders - seriously limiting their chances of getting admitted to college, finding a decent job, or even being able to live peacefully in any community.

Luckily, after tons of public pressure, including pleas by the alleged "victims" that they never felt that violated, the judge and prosecutor have shown some common sense and dismissed the charges. From the story, the boys did apologize to the girls they offended, have to pay a small fine to each girl, and will be given some kind of "boundaries" counseling (what is with this new fad of going to rehab for everything from racism to being a sexually curious and somewhat obnoxious teenager?).

But the bigger issue in this is the fact that America can't seem to ever find a happy medium. We don't want our kids to get hooked on drugs, so we turn teenage girls who bring a Midol to school because they have cramps into drug felons. We don't want our kids to get molested, so we accuse anyone who comes near them of being a sexual predator - even if it's as innocent as a teenage boy liking a girl, or a small child giving a hug to a friendly teacher.

Isn't it time we all got a grip on reality and stop making a federal case out of things that shouldn't even be an issue?

Sphere: Related Content

Credit vs Debit - Part 2

Earlier I posted my own views on the credit vs debit card issue, and in that piece I referred to something I'd read on AOL that was touting the use of credit cards as a better option. AOL was very accommodating (although I'm sure it was unintentional) in featuring that same piece again today, as a link on one of the welcome screen panels. The information actually comes from an article in The Street, which is a money and finance publication.

Here is the link to the story:
http://money.aol.com/thestreet/banking/credit-cards-vs-debit-cards

So, now that I have the full article handy, let me tackle their points one by one...

1. Fraud protection:
The article claims that there is more fraud protection on credit cards than on debit cards. This may be true to an extent - but both credit and debit cards put a long list of restrictions in their fraud protections which, in the long run, could easily mean you aren't protected at all. Further, the article claims that if you aren't timely about reporting a lost or stolen debit card, you could be out of luck. The same is true for credit cards - and really, why would you delay? If my card goes missing, you can bet I'll be on the phone to cancel it even before calling the police. Better safe than sorry.

2. Merchant Disputes:
The article claims that using a debit card puts you in a weaker position if you have a dispute with the merchant about the item purchased. But let's face it - no matter how you paid for the item, the merchant is not going to be happy about giving you a refund. When the dispute is settled, however, it can still take up to 2 weeks to get the money refunded to your card, no matter which one you use. The primary difference though, is that if you used a credit card, you're likely to have incurred interest charges on that purchase before the amount is refunded. The merchant isn't going to cover that, and while you can dispute the interest with the credit card company, the process is long, complicated, and designed to be more trouble than it's worth so that you'll opt to pay the interest rather than going through the hassle.

You won't have that problem with a debit card. There are no interest charges, so when the money is refunded, it's all yours.

3. Personal Account:
The article claims that using your personal funds (via a debit card) puts you at risk for a cascading default on all your other payments should there be fraud or a dispute over a purchase. Nevermind that the only way that can happen is if you were overspending in the first place, or if the card is stolen and used by the thief (in which case the fraud protections should kick in if you report the theft immediately - which also helps you avoid any problems with late or bounced payments due to the theft).

If anything, you're far more likely to end up in default on a credit card than by using debit cards for all your transactions. Let's face it - if you didn't have the money to buy that HDTV in the first place, then you're not likely to have the money to pay for it when the bill comes in either.

4. Rewards:
The article claims that the rewards offered by credit cards are more "valuable" than those offered by some debit cards (most debit cards still don't offer rewards). However, it's important to weigh the actual value of those rewards to your own life and circumstances. For instance, I don't fly, so frequent flyer miles or points are not valuable to me. When I lived in NY, I used public transit, so gas rewards were useless too.

The only reward that seems universally valuable is cash back, but even that is such a small reward (usually 1% or less) that it's almost negligible. Do I really care that much if I get 89 cents back on a $89.00 purchase? Yes, over time those cash back rewards do add up, but you'll be waiting a very long time before you earn enough cash back to even buy lunch.

Most of all, it's important to remember that those "rewards" have a price of their own. You have to spend a lot to get a little back. Basically, it's a gimmick they use to encourage you to buy things you can't afford with their credit card, which earns them far more in interest and fees than you will ever get back in rewards.

5. No Added Services:
The article claims that credit cards offer added services such as extended warranties and insurance on rental cars. But there is much they leave out, such as the fact that these benefits are usually only available on higher level cards (gold or platinum), which is the way they encourage users to increase their spending limits (and then max them out). Those same services can be purchased from the merchant (extended warranties are offered at almost all major stores these days - even on small ticket items like a blender) or rental company. Yes, you will pay for them - but you're paying for them when you get them from your credit card too (it's called interest, annual fees, maintenance fees, etc.). You're also paying for them when you buy the product or service, as the price is often increased to cover the cost of those "benefits".

6. Tracking Spending:
I found this to be one of the most laughable claims made in the article. The author claims that it can be difficult to keep track of your balance when using a debit card if you aren't "diligent about writing down" every transaction. Excuse me? Isn't this the age of online banking? Any time I want to check my balance, all I have to do is log into my bank's account services - which I can do from my pc, laptop, library pc, or even my cell phone. Further, many debit card charges are processed in real time, so by the time you get home and fire up your pc, the transaction is complete and the new balance is reflected in your account. Some are not processed as quickly, but it's a simple matter to keep your receipts, add up any that haven't been processed yet, and subtract that total from the balance reflected in your account. This isn't rocket science, folks.

7. "Banks May Trick You Into Fees":
Are they kidding or what? Like credit card companies don't do this? In fact, credit cards are far more likely to hit you with unexpected fees than your bank. Their terms and conditions are so convoluted you'd need a whole firm of lawyers to sort out what fees you'll be charged, when, and why or how to avoid them. Banks are a bit more straightforward. They will charge you an overdraft fee if you bounce a check or spend more than you have in your account, and they charge you for using some ATM's as well. But that's all, and if you're careful about your spending (and take your cash back at the local supermarket instead of the ATM), you can avoid those fees entirely.

8. Credit History:
The article claims that banks do not report your transactions and payments to credit monitoring agencies like Equifax the way credit cards do. However, it fails to mention that this has a negligible effect on your credit rating. As long as you're paying those bills on time, your credit rating won't suffer because you paid them with a debit card or check. Those you owe money to - whether it's your local utility company or your mortgage - WILL report you if the payments are late or you default on the account (which is far more likely when you use credit cards for everything, as you're likely to find yourself in more debt than you can pay back).

So, to keep your credit rating in good standing, the best thing you can do is pay your bills on time. What card you use for that is irrelevant.

9. Not Always Accepted:
The article claims that you cannot always use your debit card for certain things, such as renting a car. The article does not list any companies that refuse debit cards, and I have found no instance in my own experience where that was the case. My husband and I have reserved hotel rooms and rented a U-Haul truck and storage space, all with a debit card. The primary factor is whether or not the limit on the card is sufficient to cover the fees and any security deposit.
It is true that you often have to wait several days or a week to get that security deposit back - but that is true no matter which card you use, and again there is the risk that you'll be charged interest on that deposit if your credit card's billing cycle ends before the refund is made.
____________________________

So perhaps now you can see why I felt the article was commissioned (and perhaps paid for) by a credit card company. The fact that it appeared in The Street, a publication dedicated to influencing the continued health of the stock market, makes the article even more suspect. After all, if more Americans stick to using their debit cards, then the credit card companies will make less profits, and that would have a detrimental effect on their stocks - often a major player in the portfolios of the affluent among us.

But, I'm not a financial advisor. I'm just a consumer who has learned from experience that buying anything on credit is a ticket to financial disaster, especially when so many of us are living paycheck to paycheck these days. One illness, one layoff, or one emergency like a car accident or broken refrigerator can easily set you on the path to bankruptcy as those credit card fees keep piling up faster than you can pay them off.

I won't ask you to take my word for it. Just think about it, and don't let yourself be manipulated by misleading advertising or articles with an agenda that does not include your best interests.

To help you in making your decision, I recommend you read the following article, also featured on AOL (on the same day!):
http://money.aol.com/top5/credit/credit-card-costs-to-avoid

Sphere: Related Content

Credit vs Debit Cards

I recently read an article on AOL regarding the alleged "drawbacks" to using a debit card instead of a credit card for purchases. The article claimed that making credit purchases were "safer" because there were more protections on credit cards than on debit cards. It even went so far as to claim that using credit cards can save you money because of all the perks they offer, like travel discounts; and that you can "earn" money by keeping your cash in an interest bearing account until the time comes to pay the credit card bill.

As I read the piece, I could not help but wonder if the author's paycheck was being signed by an exec at Visa. After all, who benefits the most from convincing consumers that it's better to use their credit cards?

So here's the other side of the story:

When you use a credit card to make a purchase, what you are doing is spending someone else's money. Needless to say, the credit card companies are not going to "loan" you their money without getting something in return, in the form of interest, fees, penalties, etc. Because of all those fees, and the good chance that you won't be able to pay off the whole "loan" at the end of the billing cycle, that blouse you bought "on sale" for $20 is likely to cost you twice as much by the time you pay it off. As for keeping your money in an interest bearing account, what the article doesn't mention is that you're likely to earn about 2-3% interest on your money, but pay anywhere from 12-30% interest on those credit card purchases.

Saving money? I don't think so.

Debit cards are different. Although most now carry the Visa or Mastercard logo, and work exactly like credit cards for making purchases either online, over the phone, or at your local mall; what they don't do is loan you money. The money you spend is coming from your own checking or savings accounts - which helps ensure (provided that you are responsible about paying your primary bills before going shopping) that you cannot spend more than you can afford, as your spending limit is equal to your bank balance. Further, most banks do not charge a fee for using a debit card, unless you use it to take out cash at an ATM. But you can avoid that fee entirely by taking cash back when you use the card to pay for groceries or other items at your local store instead.

Most importantly, debit cards help you live within your means, which is the best possible way to avoid ending up thousands of dollars in debt and risking bankruptcy. As for security, although most terminals will only ask you for your PIN number when using a debit card for a purchase, you can select an option to sign for the purchase as well, which offers much more protection than using the PIN alone. Or you can simply select "Credit" even though you're using a debit card. Most terminals will process the card under the type you select, as long as it has the proper logo/encoding.

Personally, I don't own a credit card, nor does my husband. We have debit cards attached to our checking account, and that is all we use for everything from paying the electric bill to buying food and gas. We can easily check our balance online or by phone at any time, and we never pay a penny in interest or late fees. When we want to purchase something that we can't currently afford, like a new TV or refrigerator, we save up for it and watch the sales circulars. When the time and our finances are right, we buy it. This makes managing our money simple, and ensures that we don't end up in debt.

Depending on the circumstances, some may feel it's good to have just one credit card for emergencies, like if your car breaks down three days before you get paid. But the problem with this is human nature. Little by little, things that really aren't urgently needed will seem like they are, because you know you have the ability to get them on someone else's "dime". Because of this, it's highly likely that when your car does break down, you'll already have used up your credit limit and have to get an increase, loan, or second card to cover the cost of fixing it.

It may take decades before we can actually elect someone who will be responsible about managing the federal budget. But if they won't set the example for us, perhaps we should set the example for them instead. So I recommend that you cut up those credit cards, pay off the balances,and live within your means. It may take a while, but in the long run I think you will find you actually have more money left over at the end of the month that way.

Sphere: Related Content

Commercials

Have you ever noticed that TV commercials seem to spend more time trying to pressure you into buying their product than actually telling you why you should? This is not really a new phenomenon, but it's one that I thought would eventually fade out as consumers became more savvy and less prone to pressure sales tricks. But that doesn't seem to be happening, and so I thought it was time to enlighten the reading public to how they are being manipulated by advertising.

The other night really clinched this for me. In just one commercial segment, I was yelled at by a guy selling a knife sharpener - and then by the same guy selling some kind of car product. Through both commercials he is literally bellowing at you about the product, making claims that the visuals seem to support (but we all know such things can be faked), and topping off his pitch by urging me to call "right now" lest I should miss out on his "incredible" offer. Nevermind that it was 3am, or that I've seen the same commercials for more than a month - indicating that they are not likely to run out of the product, or retract the offer, any time soon.

Right between these ads were two others - one for Hair Club for Men, and the other for some male "enhancement" product. (Okay, 3am is not prime time for commercials either, but some of these run during the day too.) The Hair Club ad really ticked me off. My husband is bald. So what? It doesn't bother him, and it certainly doesn't bother me. In fact, I love that I can lean over and kiss the top of his head without getting hair in my mouth.

But do the folks at Hair Club care that many bald men are quite happy with their appearance and don't wish to spend thousands of dollars trying to look like someone else? Of course not. In fact, they don't just hawk their products - they use their commercial to try and make bald men feel bad about their appearance. They don't come right out and say it, of course, but everything they DO say is geared toward making a balding man feel that he's somehow lacking in looks, manhood, confidence, etc. - just so he will pay them to restore the self-esteem they took from him in the first place.

The male enhancement ads do the same thing. They claim that their product will make the guy bigger, better, etc. Guess what? Size really does not matter. What does matter is what you do with what you've got. Big or small, a man's best tool for being a great lover is his own imagination and ingenuity - neither of which can be bought. It also doesn't hurt if he's actually interested in pleasing his partner, rather than just getting his own satisfaction and then rolling over for a nap.

Such commercials are pretty obvious in their aims, which are clearly to make the viewer feel that their life is incomplete unless they buy and/or use the product being sold to them. But mankind has survived for millions of years without the need for hair replacement, male enhancements, Viagra, a car wax so tough you can burn coal on it without leaving a mark, or a knife so sharp you can cut concrete with it. Our kids do not have to dress like supermodels in order to do well in elementary school, nor do they need a laptop, cell phone, PDA, and MP3 player in order to get through college.

We really don't "need" all the products being sold to us, no matter how much the advertisers try to tell us we do. At a time when Americans are sinking under billions in credit card debts - much of which was spent on products that the buyer was told they just had to have "right now", and that often do not live up to the hype in their commercials - isn't it time that we started pressuring these companies to stop wasting money on inane advertising that treats Americans like idiots and spend that money on improving the quality of their products instead?

What do you think?

Sphere: Related Content