Tired Of Being Jerked Around by your Credit Card Company?

A friend called me up recently and said “OK, Ms. Personal Finance, what are these people doing? I have been paying down my credit card balance, but all the card company keeps doing is reducing my available credit.” I said, “Welcome to the new credit card world, if you can, you should try to find a new card company. Not only is the practice inconvenient, but it may even be hurting your credit score.”

The credit card companies are attempting to make as much hay as they can while the sun shines. They are scrambling to ensure they can eke out the maximum revenues possible from you, their “clients” before the new credit card reform goes into action full-force.

As I was doing some research to help my friend find a new card company, I stumbled upon Rob Lieber’s article in the New York Times “It May be Time to Find a New Credit Card” and since I agreed with him for the most part, I’ll let you read it yourself, via a link at the bottom of this article.

I do believe that this moment in our economic life, gives us the space to put better financial practices into place. One practice I would definitely suggest is reducing the grip of credit cards.

Folks who are considered “good credit card customers” by the credit card companies, are generally folks who have “bad credit card practices,” they make late payments, go over their credit limit, pay minimum balances – all the things that provide lots of revenues for the card companies. Yet, the card companies are clamping down on both good and bad customers alike. For instance, they are reducing the available credit on cards and they are closing down cards that you use infrequently. They are also hiking up your interest rates – putting into effect that “universal clause” that allows them to hike the rate on your credit card, even if you have never missed a payment on that card. The universal clause allows the card companies to raise your interest rate, if you are late on any other bill that is reported to a credit reporting agency. Sneaky, huh!

So why are the card companies clamping down on these people? Well, in a good economic climate, these folks would keep on paying their minimum payments, their late fees, their over the limit fees etc., while the credit card companies continued raking in big bucks, but in a more murky economic climate, there is a real possibility and lets say probability that many of these users may not be able to continue paying these extra charges, because with fewer dollars all around, who can keep up this practice long term. The card companies certainly do not want to be left holding the bag. Even for folks who do not abuse credit cards, by necessity, credit cards may become more of a life-line and less of a convenience, until this meager period passes on.

So lets get back to basics. Make a plan to get out of the grip of those credit cards. Pay those balances down, but also think about which card company you want to do business with. Make these changes work for you.

Ron Lieber's article: It May be Time to Find a New Credit Card.

Hurry, Last Day for DTV Converter Box Coupons

This is it. Last Day for DTV Converter Box Coupons

If you still have analog TVs in your arsenal, today is the last day that your application for a subsidized coupon will be accepted. You can apply via FAX, mail, phone or online.
Mailed applications must be postmarked by today, July 31st.

Coupons expire 90 days after they have been mailed.

Here's a Way To Get That New Car

Cash for Clunkers!!!

Update on 8/5/09: The House and Senate have passed a bill to increase the "Cash for Clunkers" program by $2 billion. Its now available for the President to sign. So you have a FEW weeks to cash in on this program. Remember, if you can privately get more than $4500 for your trade, you may be better off, selling your car outside of this program.

Update on 7/31/09: Oops... I was mistaken, it was $250m left, not used after just one week of the CARS program. The program will be extended by another billion dollars or so, but the restrictions may get tightened, so hurry in...
Woohoo!!! Here's a great opportunity to trade in that low gas mileage auto that you have had for years. The government program will give you a voucher for $3500 to $4500 if your old car or truck has a combined mileage of 18mpg or less.

Tax Planning - First $2,400 of Unemployment Benefits Tax Free for 2009

If you receive unemployment benefits this tax year (2009) all or part of it may be tax-free.
The American Recovery and Reinvestment Act, makes the first $2,400 of unemployment insurance exempt from tax. So you can exclude the first $2400 of these benefits when you file your tax return next year. If you are married, the exclusion applies to each spouse separately.

Tax Planning for 2009 Tip 422

New Car on the Brain?

If you purchased a new vehicle* after Feb 16th of this year, 2009 -- or if you plan to purchase one before January 1st, 2010 - you may qualify for a deduction of the state and local sales taxes paid on the vehicle, with a purchase price of up to $49,500.

You qualify for the deduction even if you do not itemize.

The deduction is phased out between $125,000 and $135,000** if you are an individual, and between $250,000 and $260,000** if you are filing a joint return.

You'll claim the deduction on your 2009 return.

This may be as good a time as any to satisfy your desire and help the economy out at the same time. Can you say win-win?

* car, light truck, motor-home, motor-cycle.

** your modified adjusted gross income (MAGI).

Left Money on the Table?

Love to find some hidden money?
If you think you may have overpaid the IRS over the last couple of years, you may be right.
Take a look at your tax returns for the last two years, 2006 and 2007, and you may even go as far back as 2005, if you filed an extension for that year. There may be money hiding there. Can you think of a better time to go get it?
Think back.
Did you take all of your deductions?

Who's First on Your Payroll?

Some think of it as a platitude, I think it is a major financial tenet - what am I talking about? Pay yourself first. Your ability to build wealth should not be placed on the back burner, it should not be an afterthought, it should not be somethng you get around to after Peter, Paul and Mary have been paid, it should be your first priority.

An easy and painless way to do this is to have your payroll department deposit a fixed amount or percentage into a specific savings account. You can also request that a portion of your tax refund be placed into that account [the IRS will direct deposit your refund in up to 3 accounts - use Form 8888]. From this holding fund you can make your investment decisions at intervals that are appropriate for your financial goals.