August 2010 Archives

Have you ever had the strong urge to give your hard-earned money to someone strumming "Dust in the Wind" out of key at a vacant intersection? Well, neither have I. But London-based issuer Barclays hopes our apprehension will disappear with its new approach to street charity: a wireless, touchless, credit card accepting guitar.

The financial institution unveiled the instrument Thursday, Aug. 26, in London during a publicity stunt promoting its "contactless technology." People passing by a street musician -- known as a "busker" in the UK -- were handed prepaid cards loaded with £5 and were instructed to wave it near the head of the guitar. The money was then taken off the card and donated to the Help a London Child charity.

Contactless cards aren't exclusive to Barclays's, but they all work the same: By using radio-frequency identification, or RFID. The card data is stored in a chip inside the plastic and is transmitted using short-range electromagnetic waves emitted by the contactless-card reader. Tollbooths, garage door openers and workplace ID fobs are a few devices that use RFID technology today.

Despite officially starting June 1, hurricane season is about to kick into high gear. While meteorologists have scaled back their predictions a wee bit, there are still some major storms coming our way, according to Reuters. There is double the chance this year that a hurricane will hit the U.S.'s Northeast Coast, making the area just as risky as Florida and the Gulf Coast.

My colleagues Dan and Connie know a thing or two about hurricanes; before they moved to Texas, they both lived in Florida and dealt with major hurricanes every year. Anyone who has experienced a natural disaster like this, whether earthquakes or blizzards or floods, knows the absolute importance of preparation.

Besides needing to stock up on the obvious stash of batteries and non-perishable food items, you need to be equally prepared with your finances. Always have a stash cash on hand! If the power goes out for days, credit and debit cards won't do you any good when it comes to buying gas or food. You also don't want to lose any important documents to floods, so make sure they are protected from water.

In the mean time, read on learn even more personal finance tips and tricks from some of my favorite blogs in the past week!

On Wednesday, American Airlines got creative and announced a new fee for "Express Seats," according to a press release. Are these new, fancy seats they've installed? Nope -- now you just pay extra if you want to sit in one of the first few rows of coach (including the bulkhead seats) on domestic flights.

I assume they use the word "express" since you're the first group to get off the plane after first class. That's not all, though: "Customers who purchase an Express Seat are able to board with group 1 of general boarding for their flight, providing them the convenience of being among the first Coach customers on and off the plane," says the press release. Big deal.

Yikes. When I look up airline prices online, I'm always shocked when I realize how much more it costs after just the basic taxes and fees. Now we have to pay for bags, and then you pay no less than $19 per way to sit toward the front of the aircraft.

Read on to learn about my top 10 favorite personal finance blog posts from the past week.

Jennifer Aniston's former beautician could be doing the hair and nails of a different type of clientele if convicted of stealing credit card information from a variety of A-list celebrities.

Maria Gabriella Perez, owner of the Beverly Hills salon Chez Gabriela Studio, was arrested Wednesday and accused of fraudulently charging hundreds of thousands of dollars on cards belonging to Aniston, Liv Tyler, Anne Hathaway and Melanie Griffith, according to court documents and news sources.

Records claim Perez charged about $280,000 to celebrity cards in just one year; $214,000 of that was charged on two of Tyler's American Express cards over a five-month period alone. The U.S. Attorney's office in Los Angeles says she initially got the card details by providing legitimate services, and later dug up the information and entered it manually for the fraudulent charges.

My boss forwarded me a study called "Women, Debt and the Recession," and asked if I'd like to blog about the topic. Maybe he thinks I know a thing or two about being a female in debt and weathering the recession. Seeing as I just wrote about my new frugality (or lack thereof), perhaps I would have some insight about the rather startling statistics revealed in this recent CareOne Debt Relief Services' survey.

We have written extensively about the issue of online gambling, since the most popular way to pay for that habit has been credit cards.

A 2006 federal law, the Unlawful Internet Gambling Enforcement Act, placed the onus on credit card issuers to make sure their cards weren't being used for online gambling.

Now, in a twist, California Attorney General (and gubernatorial candidate) Jerry Brown has announced that his office will start using the Web to prevent problem gamblers from going into cardrooms. Instead of being part of the problem, his office is trying to make the Web part of the solution to problem gambling.

My thanks to Jason over at the blog Live Real, Now, for including the blog post by our editorial intern, Cara Henis, in the 270th edition of the Carnival of Personal Finance.

I got a kick out of the carnival's theme: Elvis is dead.

News that book retailer Barnes & Noble may be up for sale shouldn't send consumers speeding to the nearest store, gift card in hand.

Barnes & Noble announced on Aug. 3 that it was considering a possible sale of the company. But a potential change in ownership won't leave its gift cards valueless, Barnes & Noble and an independent expert say.

"The fact that the board is exploring strategic alternatives has nothing to do with the day-to-day business," says Mary Ellen Keating, the company's senior vice president of corporate communications. Barnes & Noble is continuing to accept its gift cards as usual, Keating says.

This summer, VH1 aired a new reality show called "You're Cut Off." It starred nine rich and spoiled ladies who go through "princess rehab" to teach them how to be responsible and value their families' money that they spend so carelessly.

At first, the princesses were told that they were going to be on a reality show called "The Good Life" all about their exorbitant lifestyles. The clips from this segment is hilarious--one girl is in a hot tub with nice champagne being poured down her mouth who later brags about her hundreds of thousands of dollars of credit limit spread across multiple cards. Another is a girl getting into a private car in New York while swathed in a massive fur coat. Another getting Botox injections, while another shows off her four luxury cars. Then the girls are informed that they are on a very different show where they are being cut off from their families and forced to "live like normal people."

I hope these nine princesses tune in and read this roundup of some of my favorite posts from personal finance blogs from the past week.

Thanks to Mary over at the blog Simply Forties for including my post, "Pat Bagley piratically skewers the credit carrrrrd industry," in the blog carnival she hosted today.

Susie Supalo's six-year quest for Super Bowl tickets came to a joyous end Friday.

Supalo was one of thousands of Bank of America credit cardholders who were stunned by the banking giant's announcement in July that after August 31, 2010, the reward points they'd earned on their officially licensed NFL credit cards would expire. After the announcement, I wrote a blog on the topic, which prompted this comment from Supalo a few weeks later:

"I have been saving NFL points for 6 years for Super Bowl tickets. I had enough points last Super Bowl for upper level seats but decided not to redeem them because I had been saving for so long I thought I would wait for lower level seats. I have enough points for lower level seats and now I can't redeem them. Obtaining Super Bowl tickets with my points has been my goal for 6 years. I think BofA and NFL should have given us more notice. I would have redeemed my points last Super Bowl. Is there anything I can do? I feel cheated by the NFL, B of A and the Chicago Bears! How can they get away with this???"

This debit card overdraft problem is eerily reminiscent of the subprime mortgage fiasco, which nearly imploded the U.S. economy in 2008. Mortgage lenders made unsuitable loans to low-income families knowing full well they didn't have the means to make the payments.

Unfortunately, there was a financial incentive for everyone along the mortgage lending pipeline to continue to issue subprime loans.

Now, with debit cards, there is a financial incentive for banks and credit unions to sign a certain segment of debit card users up for overdraft protection services -- so that the lenders don't lose a large source of revenue.

The more customers screw up their accounts, the more overdraft revenue a bank collects. All sorts of alarms should be going off here.

Somewhere along the line, the image of the credit card industry changed from friendly enabler of fun and granter of freedom to pillaging raiders of the open wallet. If this were "It's a Wonderful Life," it would be like watching warm-hearted George Bailey devolve into the money-grubbing Mr. Potter.

Award-winning editorial cartoonist Pat Bagley of the Salt Lake Tribune made that point visually today with his cartoon.

It notes both the avaricious reputation of the industry, and the limits to the added layer of consumer protection from the Credit CARD Act of 2009 and the recent Wall Street reform law.

We've all heard stories of financial windfalls not working out as expected. There are shows on television that talk about how lottery winners felt miserable because all their friends and family wanted a piece of the earnings. Sometimes we get our tax refund check the same day our hot water heater breaks. Life can be funny that way. Have you ever had an unusual windfall?

Please read on to learn about some of my favorite personal finance blog posts from the past week. These include some great tips on saving money on back-to-school shopping, information about check scanning and iPhone and Droid financial apps.

"What can we do to make our credit card your No. 1 card?"

I was stumped by the question posed by a cheery-voiced customer service rep last week. I had called my credit card issuer to request a copy of the credit card agreement for one of my cards.

My colleague Jeremy M. Simon was writing an article about how several credit card issuers, including Bank of America, were no longer revealing penalty interest rates to potential and existing customers and he wanted to see an agreement.

For those who don't know, a penalty interest rate is the rate that you will be charged if you screw up and miss payments. It is a higher rate than the normal APR for purchases. It's also known as a default rate.

I have yet another confession to make. Even though I often tell others to read their credit card agreements, I have never done so until now. And I'd be lying if I told you I got much further than the first page.

It's not that I have an aversion to reading. In fact, I love a good book, editorial etc., but there is a reason that I don't reach for my credit card agreement when I want to unwind. It's seriously the most boring and tedious text I've ever tried to understand. And I think that says a lot coming from a recently graduated journalism/neuropsychology student.

Apparently I'm not the only one who has trouble stomaching the fine print. The average credit card agreement is written at a 12.37 grade level, making them incomprehensible to approximately 80 percent of Americans, according to a recent study by CreditCards.com.

I read above a 12th grade level. I've been tested. But even still, skimming my contract made me wonder whether or not I'm in need of some remedial classes. What tripped me up were the insanely long sentences and the feeling that traps lurk within every paragraph.