Archive for February 2011

By Ryan Hurlbert

When I was starting out, a wallet full of credit cards was a sign of success--if you had five or six cards, you were obviously doing well. Like so many others, I got myself into a bit of a payment crunch; each minimum payment by itself was small, but when I lumped them all together each month, well, it was more than I had! I consolidated as many together as I could, took a second job, and paid, and paid, and paid.

Eventually, I paid everything off and now carry one general credit card and one gas card, although I have another account at a men's clothing store I use occasionally. In today's society, you can't buy anything on-line without one, can't rent a car without one, and try and find an airline that will let you write a check for a ticket!

It's easy to get caught up in the excitement of getting a credit card, and not read the terms. Luckily for you, the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 makes understanding your credit card easier than ever. Now, credit card companies have to post their disclosures on-line, and they have to be written in "plain English".

Now that understanding credit cards is made easier for you, here are five terms that you should be sure to understand when evaluating credit card offers:

• Grace period. You have to have at least 21 days from the

By Kelly Richardson

The topic of financial scams is one I'll never grow tired of researching or reporting, because I was a victim. A little over two years ago I went through one of the darkest financial chapters of my life--and it all started with a seemingly innocent email. Here's what happened.

I bank with one of the majors. It's not important which bank I use because the dangers are present with even the best online banks. Because I do most of my banking online, I'm used to seeing frequent emails from this bank. And the email in question was no different. It looked perfect. The bank's logo in the top right corner, legalese in fine print at the bottom--everything I, and you, would expect in an email from the bank.

And after clicking on the hyperlink requesting a verification of my account information, the damage had been done.

Why we fall victim to financial scams

While no one really knows precisely why we're lured by the empty promises and cardboard facades of financial scams, recent research has pointed to an entire range of physiological reasoning behind our actions. Research by the University of Exeter revealed these fascinating findings:

• Previous victims of a scam are more likely to show interest in responding again
• Recognizing and understanding the subject of a scam has shown to actually increase the risk of 'over-confidence'
• Victims aren't necessarily poor-decision makers but might be easily persuaded and less
  

By Richard Barrington

The words "IRS audit" are enough to send a chill down the spine of even the most conscientious taxpayer. They evoke Kafka-esque images of a relentless bureaucratic inquisition, but are they really as bad as all that?

Since most people have never been through an IRS audit (after all, only about 1 percent of all individual returns are audited), much of the fear of a federal income tax audit is simply fear of the unknown. To ease that fear by removing some of the unknown, here are answers to four fundamental questions about tax audits:

1. What does it mean to be audited? An audit is not an accusation of any wrongdoing, but just a request to review the numbers and supporting documentation of your tax return. While a tax audit is popularly thought of as a face-to-face process, most of them take place through the mail. Of 1,425,888 audits of individual tax returns in 2009, 326,219 took place in the field, and 1,099,639 were handled via correspondence.

2. What triggers a federal income tax audit? Lest you feel unfairly singled out if you receive notice of an IRS audit, keep in mind that some returns are selected for audit randomly. Another trigger might be computer analysis that shows your return to be an outlier from the norm in terms of things like the level of tax deductions claimed. A real red

By Jim Sloan

Southwest Airlines and Chase Card Services are raising the bar in the increasingly crowded field of airline rewards cards with the March 1 launch of the Southwest Airlines Rapid Rewards Credit Card.

The latest incarnation of the popular carrier's credit cards switches the currency of rewards from credits and reward dollars to points, and expands the opportunities travelers have for cashing in those points.

Spending your credit card points

In addition to redeeming points for free flights to any of Southwest's 69 destinations in 35 states, card members will also be able to redeem points for international flights on more than 50 airlines flying to more than 800 destinations. You can also spend your points on rooms in more than 70,000 hotels worldwide, rental cars, cruises and gift cards at more than 45 retailers.

You can earn points by using your Southwest card to buy everyday stuff, such as dinner at participating restaurants. You earn the most points (2 per $1) when you buy Southwest tickets or patronize one of their partners in the hospitality and car rental fields, but you can also earn a point for every dollar you spend on other purchases.

Unlike previous Southwest cards, this one has no blackout dates, so every seat that's available for purchase with cash is also available for purchase with your points. Your points won't expire--provided you have "at least one qualifying earning

By Joe Taylor Jr.

Take care of your credit, and credit card companies will want to take care of you.

Banks have put together some hard-to-find credit card offers to attract consumers with high FICO scores. If you've built a strong credit history, you can earn unusually high cash back rebates, travel perks, and low interest rates on balance transfers. According to CardRatings.com, five credit cards rank highest at offering great perks to consumers with excellent credit: ...

By Richard Barrington

Overdraft protection.

The words sound almost comforting--like an extra layer of security around your checking account--or perhaps a safety net to catch any mistake you might make in your account records.

Under certain circumstances, overdraft protection can be those things, but to many bank customers, overdraft protection is an exorbitant expense that just makes overdrafts worse.

Since one of the things you'll be asked to do any time you open a checking account is whether to have overdraft protection for your account, you need to know how overdraft protection works, and whether it is likely to work for you or against you.

Overdraft protection--how it works

An overdraft occurs when you use more money than you have available in your checking account. If you have overdraft protection, the bank will temporarily make funds available to you to cover the purchase--think of this as a short-term loan. This way, you are able to complete your transaction without having a check bounce or your debit card declined.

By helping you out in this way, overdraft protection can save you from inconvenience and embarrassment. However, there is a hefty cost for this service. According to economic research firm Moebs $ervices, the average overdraft fee is currently $27.50. These fees are charged per overdraft transaction, so if you use your debit card four times while your account is overdrafted, you would incur four overdraft fees.

Trends in overdraft protection

Over the years, overdraft fees