CreditCards.com

Facebook IPO blog gets Mother's Day nod

2012-05-14T14:48:21Z

My blog about hoping to get in on the upcoming initial public offering (IPO) of Facebook stock was selected for the 361st edition of the Carnival of Personal Finance.

Hosted by One Cent at a Time, the carnival had a Mother's Day theme.

Blog carnivals are collections of blogs about certain topics, such as personal finance. Each week, a different blog acts as host and selects the best of the blogs submitted to showcase in the carnival.

The Facebook IPO blog recounts my quest to be one of the "small" -- emphasis on small here (think tiny) -- investors eTrade is allowing to bid on IPO shares of the social media giant. I don't yet know if I will be one of the chosen few. If you agree with many of the analysts who say Facebook is overvalued and its earnings aren't likely to grow, then you'll probably congratulate me for NOT getting in on the IPO.

When it comes to marriage, how much debt is too much?

2012-05-11T16:53:33Z

Would you call off your wedding if you just found out your partner was deeply in debt? How about if he missed a couple of credit card payments and now has a black mark on his credit report?

It's an uncomfortable question, and the answer you get depends on the person you ask -- and the depth of the financial damage, according to a recent study by TD Ameritrade.

According to the study:

Women are a lot less forgiving than men when it comes to major financial problems, such as bankruptcy and foreclosure. Asked if bankruptcy would cause them to call off or postpone their wedding, 42 percent of women said it would definitely be a deal-breaker. Only 24 percent of men said the same. Thirty-two percent of women also said they'd bolt if their partner lost a house to foreclosure. Of men, just 21 percent agree.
Women are also more likely than men to think twice about walking down the aisle if their partner's ability to financially contribute appears compromised. For example, 31 percent of women said that they would call off or postpone their wedding if their partner was unemployed. But just 17 percent of men were willing to make the same call.
Savings also matter more to women. Twenty percent of women say that if their partner didn't have enough saved for retirement, that would be a serious cause for alarm. Just 6 percent of men felt the same.
Run-of-the-mill debt appears to be less of an issue for both genders. About an equal number of men and women (21 percent and 23 percent, respectively) say that high credit card debt would cause them to think twice about marriage. However, just 9 percent of men and 15 percent of women say that bad credit would scare them off. Meanwhile, only 4 percent of men and 6 percent of women think student loan debt would be a serious enough issue to rethink marriage.

Serious financial baggage is a messy topic, and it can be difficult to honestly discuss it. However, financial experts say that couples need to talk openly about their finances well before they exchange vows. "One of the most common challenges newlyweds face is how to merge their finances," Carrie Braxdale, managing director of investor services at TD Ameritrade, said in a statement. "We know that more people are getting married later in life, and as a result, they are bringing more financial history into the marriage -- from credit card debt and student loans, to 401(k)s and other investments. This makes it even more important for couples to have the money discussions before they walk down the aisle."

Curious, I did an informal survey of a few of my officemates who work in personal finance and so are extra sensitive to these kinds of things. Some said they'd steamroll ahead, no matter what financial hiccups were hidden in their partner's closet. Others were more hesitant, particularly when it came to bigger financial issues, such as missed child support payments or significant debt.

"It depends," said my colleague and senior writer Connie Prater. "There's a hiccup and then there's pneumonia." If your partner has a low credit score, then you can work together to rebuild it, she explained. However, if they just declared bankruptcy, then that can severely crimp your lifestyle for years to come.

"A lot of it is about character," added managing editor Julie Sherrier. "Take a recently divorced person who got the rotten end of the divorce stick -- it doesn't mean they're fiscally irresponsible. It's the truly fiscally irresponsible people who you should do a double-take on."

I recently became engaged myself, and struggle with my own answer to the question. My partner and I traded credit scores and personal debt figures well before we became engaged. And I knew from our first date that he was the kind of guy who saved every receipt he had and entered the receipts into Quicken. But after spending a decade in school getting his doctorate, he also has a significant amount of student loan debt and very little saved up for retirement.

It's not a deal-breaker for me (my own retirement savings aren't something to brag about either). However, I'm well aware that unless we win the lottery, our finances will always be precarious. And that's scary for us both.

The romantic in me knows that I would walk down that aisle no matter what financial challenges we may face. I'm also confident that we'll manage our uncertain future just fine. However, I don't blame the more practical-minded fiances who admit that a partner's blemished finances are a serious enough issue to at least postpone their wedding -- if not call the whole thing off.

Mom's financial advice sticks for many of us

2012-05-11T16:20:29Z

What do you remember about what your mom told you about managing your money?

If you're lucky, you had a money-wise mom who taught you the importance of saving something for a rainy day or a nest egg. Not everyone was blessed with such mentoring -- from either parent. If that were the case and the advice stuck, we would all be like Warren Buffett, the billionaire investment guru.

Mom's most memorable words
A survey published this week in time for Mother's Day found that the most popular of mom's words of wisdom remembered over the years were: "Money doesn't grow on trees." Surely, many of us recall this from mom or grandma or some other caregiver, perhaps when we left the water faucet running too long or left an empty room with the lights on.

"Teaching children about finance early in life will pay off for everyone in the long run," notes Carrie Schwab-Pomerantz, senior vice president of Charles Schwab & Co Inc., which commissioned the poll as part of its quarterly retirement survey.

According to the results, 42 percent of the respondents recalled the "Money doesn't grow on trees" wisdom. That was followed by:

"A penny saved is a penny earned" (identified by 23 percent of the respondents).
"Give generously to those in need" (15 percent).
"Wait for it to go on sale" (9 percent).
"Spend like there's no tomorrow" (3 percent).

Things I remember
Growing up in South Florida with relatives who were raised in the South, I heard and absorbed lots of money-related sayings that have stuck with me through adulthood. My mom, uncles, aunts and grandmother had prize expressions that always seemed to make sense to my young ears.

I could add some of my own phrases that apparently didn't make the Schwab survey:

"I'll think about it." Translation: We won't buy it now and perhaps never will.
"You can't get pee from a tree." Alternative usage: "You can't get blood from a turnip." This applies to money or life circumstances in general when the impossible is presented as an option.
One of my favorites was used to describe a family member or other person who spends money recklessly without regard for whether they can pay it back: "Doesn't have a pot to piss in or a window to throw it out." I heard this frequently in my childhood. The subliminal message that I got: Don't be that guy or that girl.

Today, I'm happy to say that I have both a pot and a window, several windows and pots, in fact. Rest assured for anyone who has dined in my home, I don't use my cooking utensils for bladder relief. LOL.

Good and bad advice
I blogged last year about how a mom's influence on our own financial habits can be good or bad based on a CreditCards.com poll. Mom was identified as the family member with the most influence over how we manage our own money. Dads were a close second. We know that children learn from bad financial habits, too, if mom hid credit card accounts or was a compulsive shopper for instance.

Little ones are influenced more by what they see us doing than by what we tell them. But moms and dads should keep on talking to their children about money and finance. What we say and do, good or bad, is bound to sink in.

See related: 7 lasting money lessons from mom, Poll: Dad's a pushover for kids looking for big debt help

Emily's list: Mother's Day edition

2012-05-11T12:00:22Z

I love my mom for many reasons. Just one reason is because she raised me to be so responsible, especially when it comes to my finances. She showed me the importance of savings and having an emergency fund. She uses her credit card only when necessary and pays it off in a timely manner. She meets with a financial planner whenever she undergoes major life changes.

My elementary school did a banking program through Bank United for kids to help teach money basics at a young age. I remember my mom going with me and enrolling me with a small starting amount. She and my dad started giving me an allowance. I was raised Jewish, and every time I was at Sunday school, they passed around a tzedakah box. The money is collected for charity. When I was a wee one, my weekly allowance was $1 for my savings account at the bank, $1 for fun spending money and 50 cents for tzedakah. As I got older, those amounts increased. But in retrospect, that was such a smart way to teach me the various ways money can be used smartly.

When I started college, my mom took me to Bank of America and got me a new account for college students. She took one for the team and linked her checking account to mine, so if I overdrafted, it would automatically transfer money from her account to mine. It saved my behind many times, and every time it happened, I paid her back as soon as possible. Sure, I struggled with managing my finances a bit when I first got out of college and had my own income, but I've found a good balance and gotten into the swing of things. And I have my mom (and dad) to thank for setting me up for success. Did your mom help give you a good financial start?

Continue reading for this week's roundup of my favorite personal finance blog posts.

1. If you haven't bought a Mother's Day gift yet, don't fret. Barbara Friedberg Personal Finance suggests several cheap gifts perfect for moms that don't seem cheap. Many of which can be done at the last minute.

2. Mr. & Mrs. Not Made of Money provides tips on how to have fun and be entertained on a small budget.

3. On a similar note, Thousandaire offers tips on how to save money on a date.

4. So Over Debt explains why it's so important not to spend money before you have it and why it's a common behavior.

5. Live Real, Now uses a personal anecdote to convey the importance of having an emergency fund at your disposal.

6. Good Financial Cents shares four easy steps that new college graduates can use to manage their money, especially when it comes to debt.

7. Just because home prices are low right now doesn't mean you should be buying one. Million Dollar Journey explains how to know if you're ready to be a homeowner.

8. Narrow Bridge Finance discusses how anyone can travel if they put their mind to it and how to prioritize their budget for travel expenses (and an airline credit card helps!).

9. Dinks Finance discusses the urge to spend money, especially when there is no particular reason or thing you want to buy.

10. Enemy of Debt lists the four "P's" of debt reduction according to her experience.

I want a piece of the Facebook IPO, but I'm just a small potato

2012-05-08T16:46:58Z

Call me crazy, call me a "sucker," but don't call me too late for the Facebook initial public offering (IPO).

Full disclosure: I'm one of the half billion daily active Facebook users. I was excited when I heard that Facebook Inc. was finally setting an estimated price range (of $28 to $35 a share) for the IPO on its stock. This is the most anticipated stock offering in years. I want a piece of it -- even if it's only a single share.

But, as many people know, IPOs are almost always the realm of high-volume, high-roller institutional investors. The folks who walk away with money in the deal are the big investment banks that underwrite the deal and the company reaping the proceeds of the stock sales.

Everyday folks -- mom and pop investors like me -- rarely get a chance to buy stock at those low initial offering prices.

For the 100 or so people on the planet who don't know, Facebook is an Internet juggernaut, but it sits on the top of a continually shifting social media ladder. Any little wind could send it toppling over and into the has-been basket with MySpace.com and AOL.com. They are so five years ago.

There are 901 million monthly active Facebook users. Some 300 million photos are uploaded onto the site each day. During the month of March 2012, there were 526 million daily active users -- not bad for a company founded eight years ago by an anti-social Harvard student. (Watch the movie based on founder Mark Zuckerberg -- "The Social Network" -- to see Hollywood's version of how it came together.)

Letting the little guys and girls in on the deal
In what some are calling a public relations move and others a sucker bet, Facebook is setting aside a small chunk of its IPO for "retail investors." In theory, those are smaller-scale investors who buy and sell stock using two of the more popular low-cost trading portals: eTrade and TD Ameritrade.

Yesterday, I got an email from eTrade -- (I've had a little stock account with them for years) -- inviting me to get in on the Facebook IPO.

I got excited -- then I read the fine print. eTrade is offering to let me make a "conditional offering" to bid on the Facebook stock it receives in its retail allotment. You have to buy a minimum of 50 shares and placing this conditional bid by no means guarantees you'll be able to buy. The winning purchasers will be selected in a "subjective" process by eTrade taking into consideration the "asset level of your account," the trading history and tenure of the account and the available cash in the account.

Well, that probably killed my chances. My account is still small potatoes compared to others who will be seeking a chance to buy. Other brokers are setting the bar even higher for the so-called "small" investors, requiring accounts with at least $500,000, reports CNNMoney.

Hmmm ... Who do I know at eTrade who can get me in on this? Absolutely no one. I submitted a bid anyway, just to see what kind of rejection letter I might get:

I imagined it would go something like this:
"Dear Ms. Prater: You didn't really think they meant small investors, did you? Your daily devotion to Facebook will afford you absolutely no standing to buy into this game. Besides, haven't you read the 212-page prospectus? Buying Facebook is a gamble best left to the experts and their algorithms that tell them the exact time to dump the stock to maximize profits. You and your kind will probably hang on to it much longer than you should in a pathetic, emotional way that screams 'amateur!' Best take your money and continue to play in the minor leagues. Sincerely, Two percenters screening committee."

My paltry portfolio is nothing to brag about. I have followed the strategy of "buy what you know" and have had successes and failures. Since I don't invest on a large scale, neither the ups nor downs have fazed me. The one exception to that was Google. I was giddy about that stock because I bought it in 2008 when the market was tanking and sold it in 2011 for a tidy profit. I followed the stock price daily as it rose and fell but then rose again. I had a single share. (Hey, I said I was small potatoes.)

A roller coaster ride ahead
I want Facebook now so I can follow it with the same passion -- even though analysts point out that its revenues are leveling off, even though there are questions about its ability to grow future earnings to push stock prices higher, and even though a newcomer on the social media scene could knock it off its pedestal. What difference is there between buying Facebook stock and going to blackjack or poker tables in Las Vegas? It's all a gamble to me.

Forbes.com blogger Matt Schifrin calls me and other retail customers who want to buy Facebook stock "suckers" in his recent blog. But he notes that letting retail stock purchasers in on the Facebook IPO may help stabilize the stock.

Says Schifrin: "If ever there were a company where millions of people are poised to become emotionally attached it is Facebook. Most of us love the website and consider our Facebook pages our personal real estate/ homestead in cyberspace. We understandably want the company to succeed. If Facebook disappeared tomorrow it would create a big hole in many people's lives. I think my teenager would be walking around like zombie wondering what to do with his time."

Risky business? Sure
Of course, there are risks to buying any kind of stock. eTrade certainly points them out on its website.

Facebook is upfront about its biggest vulnerability: a mass user exodus. "If we fail to retain existing users or add new users, or if our users decrease their level of engagement with Facebook, our revenue, financial results, and business may be significantly harmed," the company states in the IPO prospectus.

No kidding. There isn't a day that goes by that someone isn't denouncing the evils of Facebook, deactivating their accounts or swearing to never sign up for it. In the social media world, there are people who love and hate Facebook -- sometimes at the same time.

Defection to another up-and-coming social site could put a halt to the steady rise of the Facebook empire. Remember MySpace and AOL? The new Facebook could be just around the corner. It acknowledges the threat is very real: "Our business is highly competitive, and competition presents an ongoing threat to the success of our business."

A massive security breach could also bring the site to its knees. With so much personal information stored in the Facebook databases, there's an enticing challenge to hacking in.

Virtual credits means real dollars
Just as there are risks, there are potential opportunities as well for the social giant. Facebook's virtual currency is growing in popularity. Facebook credits were one of the up-and-coming new age payment methods cited by Payments Views blogger Russ Jones this week.

If you're playing Zynga's FarmVille (a hugely popular and addictive Facebook game that allows you to buy virtual tractors and other items to help tend your crops) or any of the Facebook-based games, you know how often you're bombarded with "opportunities" to buy more credits or chips to continue playing.

Purchasers use their credit cards or other payment methods to buy digital goods from platform (game) developers, such as Zynga. In the case of Texas Hold'em poker, another Zynga game on Facebook, they give away a certain amount of chips for free (I think it's to get you hooked) then the up-sale pitch comes shortly afterward.

According to the prospectus, "In 2011, our platform developers received more than $1.4 billion from transactions enabled by our Payments infrastructure." Facebook gets a cut of every one of those sales. In 2011, Zynga game sales and advertising on its game pages accounted for 12 percent of Facebook's revenues, according to the company's S-1 filing with the U.S. Securities and Exchange Commission. Revenues from payments and fees totaled $557 million in 2011.

Writes Jones: "Facebook also recently launched a limited test of 'Facebook Credits for Websites' which we presume is the first step toward moving credits beyond the Facebook platform out into the open market. And don't even get us started on the number of potential users."

So, I think I've done my due diligence. I didn't get through the entire 212 pages of the prospectus, but I got through a lot of it. I still want in to this "sucker" bet.

Surely, someone will think my small potatoes are worth something. Hello, is anyone from eTrade out there listening? If I get in to the IPO, I'll blog about how my roller coaster ride goes.

See related: Debt collectors' use of social media raises concerns

Why women pay more for credit card interest rates makes colorful list in blog carnival

2012-05-07T21:35:26Z

Thanks to MoneyTalksCoaching.com blogger Ashley for selecting our blog on why women might be charged higher credit card interest rates for this week's Carnival of Personal Finance.

A blog carnival is a roundup of blogs written about a certain topic, such as personal finance, that publishes on a weekly or biweekly basis. The carnival features a different host each week. That person selects the best blogs to feature. This week's theme was, "The Color Wheel."

Thanks Money Talks!

Emily's list: Groupon Rewards edition

2012-05-04T12:09:52Z

We all know that many credit cards come with reward programs that allow you to earn points, cash back or air miles with your spending.

The famous deals site Groupon.com just hopped on board with an innovative program called Groupon Rewards. When you're a Groupon user, you can have several credit cards on file so that when you're ready to purchase a deal, your information is already there (how convenient!).

Groupon is soliciting local businesses to sign up and post a virtual sticker that says "We Reward Our Best Customers." Then when you use a credit or debit card that's registered on your Groupon account, it will keep track of it. Once you've spent a minimum amount, you unlock exclusive rewards at the business.

When I hit my Groupon Rewards landing page for the first time, it showed me the last four digits of all of the credit cards I have on file (many of which are expired or canceled due to fraud). Next to them it says, "Make sure to use these cards whenever you shop, or add more cards so you never miss out on rewards!"

The minimums are quite high. At one Austin, Texas, restaurant, Hyde Park Bar and Grill, you have to spend $100. But once unlocked, the deal is $15 off -- not too bad. Though for one spa, you have to spend $300 before you get just $35 off. And at a framing store, you have to spend $1,050 before you get your $175 discount.

Some of these seem unrealistic, but at the same time, it's nice that it's encouraging repeat visits to individual businesses. I've talked to several Austin business owners who have done a Groupon offer or another similar deal site and received loads of business from it, but many of the Groupon customers were in it only for a deal and never returned. Groupon Rewards encourages people to continue going back. Initially, I wondered how Groupon benefited from this. But then I realized that they win by having many of your credit cards on file. It makes it so easy to log in and click "buy now" without having to re-enter your credit card information.

I thought this concept was really interesting and something I hadn't seen yet. Do you think you will use Groupon rewards?

Keep on reading for my list of my top 10 favorite personal finance blog posts from the past week.

1. Fiscally Sound provides some suggestions for teaching your kids how to be financially responsible.

2. Buck$ome Boomer discusses the financial lessons she hopes to pass on to her 7-year-old son as he grows up.

3. Frugal Dad lists several ways to save money on entertainment expenses, several of which are completely free.

4. On a similar note, My Dollar Plan shares six tips for frugal foodies who need alternatives to expensive dining at restaurants.

5. Newlyweds on a Budget discusses how it's not the price of a gift that makes it matter, but the thought that goes into it.

6. Wondering why you're never getting a raise at work? Money Crashers provides an excellent guide on how to score a raise or promotion at your job.

7. One Money Design reveals 10 ways you can save money on gas this summer, one of which is using gas credit cards.

8. Money Spruce writes a great post about why you shouldn't wait until you're retired to start traveling.

9. Simple Finance Blog explains what you should do if debt collectors come to you seeking payment.

10. Mother's Day is this weekend! If you still haven't gotten around to buying a present, Frugal Confessions suggests several affordable gift ideas.

Women hit with higher credit card interest rates? Let's get to the bottom of this

2012-04-30T20:34:26Z

A new study from FINRA Investor Education Foundation caught my eye with its conclusion that women with low levels of financial literacy were more likely than similarly situated men to screw up their credit card management.

My first reaction was: Not me. But, then, I'm not the typical female credit card holder and I'm definitely not financially illiterate.

Why higher APRs for women?
A curious finding from that study was that women were more likely to have higher credit card interest rates than men.

According to the study, "Females pay half a percentage point more in credit card interest rates than men, regardless of financial literacy level. And both men and women with low levels of financial literacy pay more in credit card interest rates than those with high financial literacy."

The data found a half a percentage point difference in the interest rates (APRs) paid by women over what men pay (15 percent for women with low financial literacy versus 14.5 percent for similar men). That may not seem like a lot, but as the study notes, "over the course of a lifetime a female consumer could pay hundreds of thousands of dollars more in borrowing costs relative to a male with the same demographic characteristics."

Why is this? Gender is not a consideration in credit card offers or approvals -- or it shouldn't be.

It's worth noting that the Federal Reserve's monthly consumer credit report (called the G.19) shows average interest rates on credit card accounts assessed interest was 13.04 percent in February 2012 -- slightly lower than the rates reported in the FINRA study.

As that study notes, credit card management can be influenced by a number of things, namely, unemployment (you might miss a payment or two if you're stressed out, looking for a job or juggling to stay afloat on the monthly bills), income (living paycheck-to-paycheck and overspending), and race (often tied to where you live or income).

Higher interest rates are a function of how well you manage your credit card account. One potential reason for a higher APR is late payments. Federal credit card laws allow banks and credit unions to hike interest rates on existing balances if users miss more than two payments (are more than 60 days late making a payment). The laws allow for a "cure" of that hike for good behavior.

Retail credit cards?
We all know women shop more than men. Moms do most of the family shopping in the average U.S. house. (It's true that there are "Mr. Moms" out there, but they are the exception.) Could it be that women have more store branded and co-branded retail credit cards, such as Macy's, Sears and Bloomingdale's? These cards carry higher than average interest rates.

As the CreditCards.com 2010 retail credit card survey indicates, retail card APRs can be as high as 27.99 percent. Shoppers at retail outlets such as Target and others can be bombarded in the aisles or at the register with offers to save 10 percent on that day's purchase if they sign up for these high-interest store credit cards. Women are in the line of fire of these promotions and that may be one explanation they pay higher rates.

Women earn less?
We've seen the wage and income studies over the years about how female workers make on average a fraction of what men earn. The latest figures released in January 2012 by the U.S. Bureau of Labor Statistics shows for every dollar men earned in full-time weekly wages, women on average made only 81 cents in 2010. Those lower wages often pay the full boat for day care and child rearing costs, especially for single mothers. We know that in divorce, women are often -- but not always -- far worse off financially than men and left to care for children. Court-ordered child-support payments are sometimes years in arrears.

Women with tighter family budgets may struggle more to make ends meet and pay credit card bills on time each month to avoid incurring penalty fees. Are financially-strapped women making more payment mistakes and thus getting zapped with higher APRs? Maybe.

Poorer credit ratings?
Another factor affecting the interest rate you pay on a credit card is your credit rating. Could it be that more women than men have had train wrecks with their finances? People with bad credit pay more than average consumers because they are at greater risk of defaulting on their loans. First Premier Bank's whopping 79.9 percent interest rate offering may have lured more female than male applicants. It's just a guess on my part. But a lot of factors I've already mentioned (lower earnings, more difficulties making ends meet) may contribute to lower credit ratings.

Gender profiling?
Of course, we can't rule out subtle or outright discrimination from credit card issuers. It wouldn't be the first time. The Federal Reserve found in 2010 that banks based credit decisions in part on where consumers shopped, what they bought or who held their mortgages. A 2008 study by the Federal Reserve of Boston -- "Credit Card Redlining" -- found that people living in white neighborhoods were more likely to be approved for credit cards than those living in black areas.

If Target can figure out that a woman is pregnant based on her shopping habits -- as reported by Charles Duhigg in the New York Times -- then banks can probably also figure out gender-based ways to zing users.

As they say in the research world, more studies are needed to explain this gender gap. FINRA concludes that both women and men would benefit from greater financial literacy and information about proper management of their credit card accounts to avoid late fees and higher interest rates.

See related: Study: Women get stuck with higher credit card interest rates

If you're uninsured, don't get sick

2012-04-27T21:46:57Z

A few years ago, I had a nagging pain that felt like a runner's stitch on the right side of my stomach. It didn't hurt much, but it wouldn't go away. Feeling nauseous and tired, I decided to stop by an urgent care center after work just in case.

Several hours later, I was wheeled in to an operating room at my local hospital for emergency surgery. It turned out I had acute appendicitis and if I had waited any longer, I would have been doubling over in pain.

The surgery was quick and uncomplicated. I was out of the hospital in a few days. However, as the medical bills drifted in for the next few months, I was astonished. The total cost for that routine but medically necessary procedure was more than I made in a year.

Luckily, I had health insurance through my employer and only paid a small fraction (meaning, several thousand dollars) out of pocket. But then just a little over a month after the surgery, I lost my job at a company that was too tiny for me to qualify for COBRA and was forced to scramble for bare-bones insurance to make due.

Suddenly, the timing of when I got sick felt much more poignant. If I had gotten appendicitis when I was unemployed, I would have been stuck with medical bills so high that there's no way I would have been able to pay them on my own.

Medical debt is one of the leading causes of bankruptcy, according to a study released in 2009 by the American Journal of Medicine. And it's no wonder.

Now, a new study published this week in the Archives of Internal Medicine has found that the bills Americans get stuck with for routine procedures such as appendectomies vary widely across hospitals -- and even between patients.

According to the study:

Charges for a routine appendectomy at hospitals in California range from $1,529 to a whopping $183,000, depending on the hospital.
The median charge for an appendectomy in California is $33,611, which is more than a lot of people make in a year.
Older patients, those with Medicaid and the uninsured were stuck with the highest hospital charges.

The authors of the study concluded that hospital costs are so complex and unpredictable, it's nearly impossible for consumers to figure out how much they'll have to pay for a procedure.

"We talk about 'consumer-driven health care' and how patients should 'shop' for care," said lead author Renee Y. Hsia in a news release. "But right now, our system isn't set up at all for allowing patients to act as consumers. It is nearly impossible -- even for me, as someone who studies this -- to predict what someone's hospital bill will be."

For me, the study also drives home another point. Healthcare costs have become so obscenely high these days that unless someone is fabulously wealthy or has an ultra-secure job with killer benefits, they're just a run of bad luck away from financial catastrophe.

It's hard to imagine being uninsured and getting stuck with a $183,000 bill for a short stay in the hospital. However, far too many people know exactly what that feels like.

Emily's list: Pinterest edition

2012-04-27T12:02:24Z

While Pinterest.com was launched well over a year ago, it didn't become mainstream until a few months ago. When it did, it caught on like wildfire, growing faster than any previous social network and delivering more traffic to companies than most other social networks combined. The Huffington Post article "Pinterest traffic growth soars to new heights" sums up the growth nicely.

For the uninitiated, Pinterest allows you to create collections ("boards") of photos. You pick the topic for each board, and you can have as many or as few boards as you wish. While you can upload your own photo, that isn't really the point. It's meant for you to find pictures you like around the Web and "pin" them, which adds them to your board of your choice. You can also re-pin other peoples' pins, which is equivalent to a Twitter retweet.

The beautiful thing about Pinterest is that it's all visual. While you can write a brief caption for each image, it's all about pinning photos that you like. It's a refreshing break from social networks such as Facebook and Twitter, where most people just post about themselves and what they're up to. Pinterest doesn't facilitate that. You don't have a wall or status. It's a place where you post about things that interest you and things that inspire you.

This is where things get interesting: While many people use it to collect recipes or DIY craft ideas, the site is used by most people in a very aspirational way. Many users create boards with pictures of places they want to travel to one day. One of the other most-common themes I see is images of peoples' future dream homes, some of which are excessively over-the-top (such as a huge whirlpool bathtub that fills from the ceiling and overlooks a private beach). It's also common to see boards about fashion items or products that people want. Another common one is "dream wedding" boards.

Which leads me to wonder: Is Pinterest encouraging people to idealize a lifestyle that is impractical or unattainable? I worry that spending all of this time making boards of dream trips, dream homes, dream weddings, dream closets, etc., is going to make people want to spend money on things they don't have more than ever or crave things that aren't practical. It's fun to have things to look forward to, but I worry that the aspirational use of Pinterest might cause some people to lose control of reality when it comes to spending. Though who knows. Maybe I'm just a paranoid personal finance writer! What do you think?

Keep reading for my top 10 favorite personal finance blog posts from the past week!

1. Young Family Finance lists five ways you can save money on your grocery bill.

2. A guest post on Young Cheap Living shares some inspiring reasons for being debt free, such as having better relationships and being able to donate money.

3. Did you receive a major tax refund? Per$onal Finance Journey discusses some of the wisest ways to use an unexpected windfall .

4. Smart Family Finance makes the case for why debt is not always a bad thing, and can actually be a good thing for some families.

5. Paying your bills on time can be harder than it sounds! 20s Finance offers several tips on how to make sure you pay your bills on time.

6. Finance Fox lists 10 signs that you need help with your money and should take action now.

7. Tackling Our Debt reveals many different ways to easily reduce your daily living expenses.

8. Modest Money discusses some of the most common credit card mistakes people make and jokes that the fees associated with these mistakes benefit the rest of us.

9. Money Infant lists five ways you can decrease your debt and boost your savings.

10. Christian PF provides readers with several strategies for how to save money for nearly anything.

Jean Chatzky: Join the fight against financial illiteracy, create successful, stable families

2012-04-24T12:31:25Z

Jean Chatzky wrote this article to mark Financial Literacy Month and in support of the New York City financial literacy program, Literacy Partners.

Did you know that more than 70 million Americans are "underbanked"? That means they lack all or sufficient access to mainstream financial institutions and use cash, money orders and a mix of check cashing, payday loans and other costly, nontraditional arrangements to manage their finances on a day-to-day basis.

What's more, a recent iVillage study shows that 61 percent of moms are primarily responsible for their household finances. Nearly half of those moms wish they were more informed about managing money and being financially responsible so they can pass this knowledge along to their children.

Even the Girl Scouts recognize the need for information on this issue, and are now offering financial literacy merit badges -- 13 in all -- for everything from budgeting to good credit to philanthropy.

As a mother, author and personal finance expert, it's been clear to me for a long time that there is a growing need for basic financial literacy instruction for parents and children, especially those in lower income brackets. But it's even more necessary in this troubled economy. Being educated on fundamental personal finance issues -- from how to open a bank account to how to establish a household budget -- can make a major impact on both the financial future and overall stability of the entire family.

As a longtime supporter of Literacy Partners, New York City's only nationally accredited adult literacy program, I've seen firsthand the impact of their financial literacy program on individuals, parents and families. One of the first lessons taught as part of their Economics for Life program is about the differences between needs and wants, perhaps one of the most essential things to understand when managing personal and household finances. Often this conversation sparks a real "Ah-ha" moment for students, marking the first time they've thought about this difference. By the end of the program, on average, over 80 percent of students have created and are using a household budget and 68 percent have opened a bank account. I have seen similar situations with some of the families I have coached. The impact of adopting one simple habit -- tracking where your money is going -- is huge. Once families see how much of their disposable income is flowing unconsciously, they can take back control and make smarter choices.

So how can we as individuals make an impact on financial illiteracy? I recommend starting at home. I encourage you to review my basic Money Philosophy and talk to your kids about managing money -- where money comes from, how they can earn it and what they can do with it once it's in their pocket. Helping the community is the next step, by donating your time or financial support to established organizations like Literacy Partners. Finally, support funding for financial education, in K-12 schools and through adult education initiatives, by letting your local representatives know this is an important and growing issue, in your community.

Emily's list: I'm a frequent flier edition

2012-04-20T11:37:29Z

I feel as if I've finally hit a credit card milestone: I bought my first plane ticket on frequent flier miles!

When I was in high school, my mom took my two siblings and I to London and back using Continental OnePass miles. While she had accumulated some of the miles from prior travel, one of the main ways she earned them was by using a Continental-branded credit card on most of her day-to-day purchases (and of course paying them off right away).

Before that trip, she set us up with all of our own OnePass accounts so that we would begin earning miles for our own travel. A few years ago, once my freelance writing business was well established, I knew I needed a business credit card. I got a Chase Continental card so I could keep racking up miles with the same airline. I use it for all of my expenses -- everything from my website's hosting fees to a flight for a business trip. I set it up so that my phone bill is automatically charged to it each month. I always pay it off within two months, though usually no more than a couple weeks. I also enjoy the annual benefits, such as two passes to the fancy airport club and first checked bag free.

A while ago, I hit a point where I was eligible for a free domestic flight. I decided I would rather keep saving up points for an international flight, since those can be cripplingly expensive. Finally, the time has come!

My mom just won a grant to study in Ireland for a few weeks this summer. She asked me if I wanted to come spend a week of that time with her. I started looking up flights on United (it just merged with Continental, and thank goodness, my miles transferred over). During certain days or times, you can get flights for fewer miles, but I'm going in the midst of peak season, so there were no lower options. I was disheartened to find out that my flight would cost 110,000 miles, and I only had 108,500 in my account. Then I realized I could purchase those extra miles for less than $100. After that fee and some other fees, I purchased the flight for $150! I looked up the retail price after, and flights were starting at $1,400. There's no way I could have afforded that without my miles.

This was a happy moment for me to realize that yes, when used wisely, frequent flier cards really can get you free (or close to free) flights. It's not just marketing mumbo jumbo. I wouldn't be able to go on this trip if I hadn't diligently earned and saved those miles. Many credit cards have such huge sign-up bonuses that you can sometimes earn a free flight simply for being approved, and I've thought about doing that so I have more than one frequent flier card, but at the moment my soon-to-be-Irish eyes are smiling and I'm feeling really loyal to the one I have.

I hope you'll continue reading for my roundup of my 10 favorite personal finance blog posts from the past week, the first of which is right on topic!

1. Dough Roller reviews Manilla, a website that can help you track your reward miles and points across many different airlines.

2. Not Made of Money reveals that buying in bulk doesn't always save you money and offers tips to make sure it does.

3. Dinks Finance offers advice on how to choose a financial planner who is perfect for you.

4. My Journey to Millions proclaims that there are many gray areas in life and lists some of the money rules that should not be considered holy.

5. Hosting house guests isn't cheap. My Dollar Plan explains how you can host visiting friends and relatives without blowing your budget.

6. After getting married just over a year ago, I can tell you that weddings get very expensive frighteningly fast. Moolanomy shares some awesome tips on how to keep the costs down.

7. A writer on Money Crashers does an excellent job of explaining precisely why gas prices have been rising -- something that I have been very curious about.

8. Len Penzo shares how he uses a ledger system to help his children learn about money.

9. Financial Highway lists six things you should leave off your weekly grocery list and what you can use as an alternative.

10. Young and Thrifty discusses how placing a priority on savings can help you achieve your major goals in life.

Emily's list: prepaid card fee edition

2012-04-13T12:11:11Z

The other day, I was reading the website of my local newspaper, The Austin American-Statesman. There was an article about a local prepaid debit card company, NetSpend, partnering with entertainment company BET Networks. I checked out the official press release, and it turns out the companies are partnering to offer a new prepaid MasterCard, the Control Card, geared towards "millions of African Americans who are either unbanked or underbanked."

In the press release, NetSpend adds that "nearly 22 percent of African American households do not have bank accounts." I love supporting a local business, and that sounds mighty admirable, but it turns out it's not such a great deal.

Cardholders pay a $7.95 monthly account fee, plus a $2.50 fee for every ATM withdrawal (plus any ATM owner fees). An instant bank transfer costs $1.95 (though it's free if you don't mind waiting a few days), and you're charged a 50 cent fee every time you make a balance inquiry on the phone or at an ATM.

If you direct deposit at least $500 in a calendar year, you're upgraded to the "discount fee plan," in which your monthly account fee goes down to $5. The only other difference with this plan is that it's free to check your balance with the automated toll-free phone number, though you'll still pay if you want to talk to a person or check on an ATM. The card does have a cash-back program and, fortunately, there is a $10 "purchase cushion" that protects cardholders if they go $10 over their limit.

Prepaid credit cards can be a good starting place if you never had credit or have bad credit and can't qualify for a standard card. But with those fees, it seems that these companies are just taking advantage of people who are already down and out. What do you think?

Keep on reading for my list of my favorite personal finance blog posts from the past week!

1. Bucksome Boomer lists 10 expenses that you may not see coming and should plan for now.

2. Money Crush encourages readers to not be afraid of doing things on their own, and assures them that it's OK to not know how to do something or make a mistake.

3. Dinks Finance questions whether a freeze on your credit report is more hassle than it's worth.

4. So Over Debt discusses how it's not uncommon to worry about meeting your basic needs and what it says about you if you can't.

5. Sometimes a "good deal" isn't really one when you consider factors other than basic price. Money Beagle lists five examples of when a good deal really isn't worth it.

6. Are your finances looking bleak? Broke Professionals explains how to give yourself financial hope and shares how her family endured years of frugality.

7. It's a myth that eating healthy costs a fortune. Brip Blap lists 10 foods that are extremely healthy and very affordable.

8. My Journey to Millions shares six ways you can give your finances a thorough spring cleaning.

9. Money Under 30 reveals 10 very common misconceptions about money. I was happy to see that several of them are about credit and debt!

10. You may have heard that Baby Boomers aren't ready for retirement, but do you know why? Boomer & Echo discusses the events and cultural attitudes that likely led to this situation.

Who still walks into a bank to do business?

2012-04-11T17:00:33Z

Who still goes into a bank anymore and what are they doing in there?

I pondered that question on a recent drive in to work. On my roughly 15-minute commute to work, I drive past about a dozen bank branches for large national banks as well as regional and state banks and credit unions. In many major cities, banks are on every other corner of major thoroughfares.

Not the typical banking customer
I may not represent the typical banking client, but I'm pretty sure I'm part of an increasingly large number of them who bank electronically. If I go near a bank, it's to drive through the ATM lane. On the now-rare occasions when someone gives me a paper check (yuck!), I use the drive-up teller to deposit it. I can avoid the drive by using a scanner to send and deposit the check. My brother does that and he, too, rarely goes to his bank branch anymore.

I recall the days when I did venture into a bank. There were ALWAYS long lines at the teller window and I always seemed to be behind a customer with some complicated transaction that required the teller and his or her supervisor.

I am paid electronically and pay my bills the same way. I have opened accounts at online banks and never physically went anywhere to do so. I guess I've become spoiled. I don't ever want to go back to the days of standing in line at a bank.

Even when I applied for my mortgage loan, I never went into the bank. Everything was conducted over the phone and online. Sweet. When I applied for and got a new credit card? It was all online.

Money order?
I remember my family reunion last year. The cousin who organized the event requested the event fees in the form of a money order. A money order? Again, who is still using these? It required me to schlep on down to my bank, park the car and, gasp, go inside.

I lucked out and there was only one person in line ahead of me. I requested the amount that I wanted and after some hesitation (and a check with a supervisor) the teller informed me that there was no charge for the money order because I had several accounts with the bank, including my mortgage. It probably took 20 minutes of my time, including the drive to and from the bank.

It would have taken only a minute, if that, to transfer the money to her online. I hesitated to ask my cousin if she had PayPal or to give me her bank routing info so that I could just send her the money electronically. I don't think she is that tech savvy.

Branch banking undergoing a transformation
Banking executives probably don't want to hear that I'm avoiding going to the bank. But they need my feedback. I'm sure they're probably already getting it.

As Mercator Advisory Group, a card and banking industry consulting firm, notes in new research, the banking business is evolving from one that was teller-focused offering a variety of services to walk-up counters to one that is embracing new models of service delivery to customers. Some banks and credit unions are adapting hybrid service models that focus more on self-service with financial advice and traditional teller service thrown in the mix.

I know that older consumers still want to walk in to the bank and fill out that deposit slip because that's what they're used to. They probably know the names of the tellers' children and use that visit as a chance to socialize. I'm the type of customer who doesn't need hand-holding and puts a premium on saving time.

Once I got my money order for the family reunion, I had to get an envelope -- and a stamp. Sigh.

I rarely use those these days either.

Update: After filing this blog, I went home and in my mailbox was -- a paper check (pictured above). Sigh.

One millennial's take on leading a credit card-free life

2012-04-11T16:58:47Z

I have a confession to make. I work for CreditCards.com and I don't actually have a credit card.

When I was in high school, around the age of 17, I remember getting dozens of credit card offers in the mail on a regular basis. Before the Credit CARD Act of 2009, card companies loved the 17-year-olds of the world. We were financial idiots. To me, though, those credit card offers seemed like spam mail unworthy of even being acknowledged -- and I didn't.

I guess I never understood the concept of spending money I didn't have. I was given a small allowance as a teenager, and if I spent it all by Tuesday -- well, then, that was just tough luck. It wasn't until I went to college that I was forced to face the world of money-borrowing.

It wasn't long before I was rolling deep in student loan debt and NOT pursuing a degree in engineering or anything else ultimately leading to a high-paying career.

With all that loan money/debt racking up, opening up a credit card was the last thing on my mind. I did, however, open one credit card at a clothing store to buy a pair of jeans because doing so took about 10 bucks off the price or something like that. I paid it off online the next day.

Now, here I am, at 23, with zero credit cards and thus, zero credit card debt. Is that really a good thing though? I mean, of course it is for the obvious reasons -- I don't have that extra couple thousand dollars looming on top of all my student loan debt. But, I'm not building any credit, either, which is going to be important when I start doing "adult" things -- like buying a car or a house.

It's nice to know, at least, that I am not alone in this. Studies show that now, more than ever, people my age are relying heavily on debit cards to make purchases. According to an article called "Millennials are Key to Debit's Success," we use debit cards more than any other demographic. The article attributes this to our technology-savviness alongside our need for convenience. However -- for me, at least -- it's because that debit card is where my money is. The money I've earned from working. The money that I have to find a way to make last. And doggone it, make it last I will! But not by opening up a whole world of trouble through new debt.

I can assure you that credit cards are in my near future. It is an essential part of growing up. You have to build credit. That's just the way it is. But for now, I'll stick to debit.