by Kristin on February 23, 2010
A bunch of new credit card regulations took effect yesterday. Some of them should be interesting.
One of the most eye-opening new changes requires credit card companies to let customers know how long it will take them to pay off a credit card if only paying the minimum balance each month. According to the Associate Press, if you have a $3,000 balance at 14%, it will take you 10 years to pay off the balance if you only make the minimum payment. How’s that for a wake-up call on your bill each month? They are also required to tell customers how much it will cost. I hope people begin to realize just how much their credit card debt is costing them. Hopefully, it will motivate people to get on a plan to reduce their debt.
Other regulations include limitations on interest rate increases, even for late payments, and lengthening the time you’ll have to pay your bill after the statement closing date. There is, however, no limit to the interest rates the credit card companies can charge. The only limit is how they can implement those increases. The credit card companies will also not be allowed to let you charge over your balance unless they have your authorization.
Economists predict that this legislation will cost credit card companies hundreds of millions each year. Therefore, the credit card companies are getting creative with their fees. Watch your statements for new annual fees, statement fees and rewards program fees. If you pay your bill late, you risk losing your rewards points or airline miles unless you pay a reinstatement fee.
Whether this legislation will be good for consumers is still up for debate. Many issuers have cut back their credit lines or cancelled them all together. My hope is that people will stop carrying balances and learn to save for the things they want. Maybe after seeing how much that trip is really going to cost, the American people will save for that next vacation.
Do you think the new credit card legislation will help or hurt consumers?
by Kristin on February 19, 2010
Well, maybe not your radio, but your local radio stations’ websites.
While listening to the radio yesterday, I heard the DJ talking about half price deals on their website. I decided to go check it out. I was quite impressed. The station offered a number of half off gift certificate deals for local restaurants, stores and entertainment venues. I decided to check out a few other stations in the area and many of them also offered their own deals. One station in Western Massachusetts even has an upcoming deal for a CDL training school.
I would encourage you to check out your local radio stations to see if they offer half price deals. The stations I went to were WCCC (Hartford), WHYN-AM (Springfield, MA), and WRKO (Boston - under traffic and more).
If you find any good deals in your area, let us know!
by Kristin on February 18, 2010
I have been getting reports from some of my friends on the internet regarding larger than normal tax bills this year. This is due to a change in the tax code last year. In order to avoid a surprise in April, I suggest that you get your taxes done early this year. Here’s why:
In 2009, the Congress passed and the President signed the American Recovery and Reinvestment Act. In addition to other provisions, this act contained a provision called the Making Work Pay tax credit. This credit changed the withholding tables for working Americans to allow for a $400 per person ($800 if you are married) tax credit. Instead of mailing everyone checks, this credit gave everyone a bit more money in each paycheck. When people do their taxes this year, they may see some problems with this change in the withholding tables.
If you make more than $75,000 or $150,000 married, you don’t qualify for the credit and therefore must pay it back.
If you worked more than one job, you may have had too much taken out of your paychecks since the credit is $400 per person, not per job.
If you work a part-time job and are also on Social Security, you would have received a check for $250 last year, plus had the extra money withheld from your check, but the maximum credit is $400 so you might owe as well.
Make sure that when filing your taxes, you complete the new Schedule M or you won’t get any credit for the tax credit.
If you are penalized for underpayment of taxes, you can appeal based on the Making Work Pay credit. According to the IRS, they will waive penalties related to this credit.
I urge you to get your taxes done early this year so that you can plan in case you do end up owing. Also, do not go out and make a big purchase because you think you are going to get a large refund this year. Wait until you have your refund in hand before spending it.
Please feel free to post questions here or email me at kristin at klingtocash dot com.
