Share Your Best Grocery Tip and Win $100!

I hate grocery shopping.

I dread it, and I procrastinate. Except when I make the occasional outing to Whole Foods (appropriately nicknamed Whole Paycheck), which is fun while it lasts. But I always feel guilty when they total my bill, and can't help but chide myself for buying too many expensive gourmet goodies that the rest of my family won't touch.

I shop with lists...sometimes.

I clip coupons...sometimes.

I stock up when items I know I'll use are on sale...most of the time. (I've got a bag of my favorite chocolate marked down 75% after Valentine's Day, but I don't know if that really counts.)

So any hints on how to get my grocery bill and my stress level down are more than welcome.

This past week I signed up for Ben's Grocery Challenge where savvy shoppers get to enter their the best grocery tip, readers vote, and the winner gets $100. A new winner is chosen each week from February 19 to April 15, 2007.

The contest is called Ben's Grocery Challenge in honor of Ben Franklin's 300th birthday last month. He was into technology and frugal living, and I would guess, would have plenty of tips to share on the site if he were still around today.

Here's how you can win:

   1. Visit mygrocerydeals.com or TheDollarStretcher.com and look for Ben's picture.
   2. Click on it to enter your money-saving grocery tip or vote for your favorite one.
   3. The tip with the most votes that week wins $100! One lucky voter will also win $100!

I don't expect to win $100 for entering a tip. But I am voting, and learning from other's tips. Or at least being reminded of tips I know but forget as I get lost in the aisles trying to figure out what to make for dinner that week.

I also recently signed up for the MyGroceryDeals.com service and am starting to get familiar with the site. When you join (for free) it develops a profile for you, then you can either skim the fliers from your local stores and make a list of the best deals, or make your list and then find out where the bargains are. My favorite feature is the one-click access to the nutritional information for any item. (I do read labels!) I still don't have my grocery shopping down to a science, but every bit helps.

If you've got a grocery shopping tip that you think would make Ben proud, share it with Ben's Grocery Challenge, and feel free to add it here too. You might get my vote!

Reminder: Cash in those Christmas Gift Cards

Remember the holidays? It's incredible that 60+ days have already passed since we were gathered around the tree or menorah with family members. While our lives are rushing ahead at the speed of light, don't forget to cash in any remaining gift certificates you may have from the holidays.

Some gift cards may start charging inactivity fees after 90 days or may even expire in the next few months. And each year, nearly 70% of gift cards are left unredeemed. That adds up to about $2 billion in money lost. Don't let your gift go to waste!

I just used the last of my holiday gift cards while shopping last night. If you can't redeem your remaining gift cards in person in the next few weeks, take a few minutes to investigate your options. Some retailers, including Gap and Target, allow you to use a gift card for an online purchase. Other retailers may let you register the card online, at least protecting you if the card is lost in the future.

Reader Question: How to Investigate and Dispute a Collection Debt

As a credit geek, I'm asked questions about personal finance and money issues by friends, acquaintances and strangers all the time. My least favorite question is "What can I do about this collection account?" The answer is almost always, "Not much."

I hate having to break the news that their credit will be damaged for 7 years and there is nothing they can do to change it. So when I read the first line of this email question, I groaned and braced myself for another let down. Good thing I kept reading!

I have just been contacted by a collection agency saying that I owe over $4,000 plus 7 years interest adding up to $3,000. It looks like this account was opened in 2000.  I asked for more information but only got the amount and my last 4 digits of my social security number.   I checked my credit reports and it shows no account throughout these years with that company. 

I believe that someone has used my name and Social Security number to be a co-signer and since they have not collected from the primary, they are now coming after me.  What are my options on handling this problem?  My credit is excellent - I don't want that ruined. 

Finally! A question about collections accounts that could have a happy ending.Checking her credit reports right away was a very smart move. Since the account appears to be either fraudulent or inaccurate, her next step should be to file a dispute with the collection agency.

She only has 30-days from the day she received the letter to send back a written letter disputing the claim under the Fair Debt Collection Practices Act. Under the same law, the creditor must also tell her the name of creditor that originally had the debt. Using that name, she should be be able to track down the original account and see if it really was in her name. If it turns out to be identity theft, she should immediately follow these steps to report and remove the account.

During this whole process, she should keep detailed records of her correspondence with the collector and her investigation about the account. She may need these notes to dispute with the credit bureaus in the future. Although, it sounds like the account is too old to appear on her credit report anyway.

Next question?  Send your questions about collections accounts, credit, debts and more to tidbits@credit.com anytime. 

Credit Cards Mean Never Having to Tell Yourself, "No."

"Love means never having to say you're sorry," was the most memorable line from Erich Segal's book and motion picture, Love Story.  I don't know if I quite agree with him as I still bumble along and find myself saying, "I'm sorry," from time to time. Luckily, I do it less frequently than when I was younger. 

I grew up in an era before credit cards where, if you wanted something, you had to save your money and buy it. This was in a world before mandated Minimum Wage Laws and the going rate for teen-age employees was $.25 per hour. The main exception was the Christmas Rush jobs at the Post Office which paid almost $1 per hour. They were highly sought after.

In 1961 I got one of the first general purpose credit cards, called BankAmericard. You can read about how it morphed into Visa online here.  Of course, back then, their main job was to sell retailers on their use, which was probably made tougher by the fact that the retailer had to, and still has to, pay the credit card company a fee when a customer uses it.

That all changed when the retail industry realized that there were millions of people who didn't have enough cash money to buy what the store was selling, but would buy using a credit card if give them opportunity. That made them eagerly buy into the credit card concept. Of course, some customers would even buy irresponsibly but that wasn't the stores' problem.

Now here we are in 2007 and the outstanding credit card debt in our country is now about $850 billion dollars.  That figure is for revolving debt and does not include non-revolving debt like auto loans, which is even greater. Total non-mortgage consumer debt is getting close to $2.5 trillion.

There is no doubt that credit cards are convenient, sometimes necessary. Don't try to rent a car without one.  But all too often the weak-willed can "spend themselves to glory" if they have a credit card. Some people haven't figured out that just because the credit card company would LET you borrow $5,000 as the maximum limit on a card, it doesn't mean you have to go out and SPEND $5,000.

I have seen instances of addiction to buying that is exacerbated by the availability of easy credit. At interest rates in the 18% range, of course, the company wants you to have as much outstanding debt as possible because that maximizes their earnings.

There is also no question that buying "neat stuff" releases endorphins that make you feel good.  Psychologists have demonstrated that some people almost completely disassociate the buying, which feels GOOD, from having to pay for it, which feels BAD. That BAD can be made to feel awfully remote. Bottom line, America’s love affair with credit cards is never going to end.

I would just implore readers to try to understand themselves and their behavior and then take steps toward long-term financial responsibility.  Those credit cards talk to you and they ALWAYS tell you, "Yes, it's OK!  You have me to help you feel good." But I will guarantee that you that over the long haul, you will feel a lot better when you listen to the responsible part of yourself that says, "No."

Funny Money Friday: Real, Simple Financial Advice

Money doesn't have to be boring! Each week, CreditBloggers.com takes a look at the lighter side of the personal finance world in a series called Funny Money Friday.

I've spent entirely too much time this week researching "financial celebrities." You know the type: the Learning Annex speakers who promise to make you a millionaire in one weekend for $299, the personal finance authors whose book covers come covered in all caps and lime green quotes, the experts who will show you how to get rich for only $49.95. Donald Trump, Tony Robbins, David Bach, Robert Kiyosaki, Suze Orman, Dave Ramsey, Jim Cramer...it's enough to make you dizzy!

After all of this, it was so refreshing to revisit Scott Adams' simple 9-point financial plan. Adams, the creator of Dilbert, outlined this plan in his book "Dilbert and the Way of the Weasel:"

1. Make a will
2. Pay off your credit cards
3. Get term life insurance if you have a family to support
4. Fund your 401k to the maximum
5. Fund your IRA to the maximum
6. Buy a house if you want to live in a house and can afford it
7. Put six months worth of expenses in a money-market account
8. Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund through any discount broker and never touch it until retirement
9. If any of this confuses you, or you have something special going on (retirement, college planning, tax issues), hire a fee-based financial planner, not one who charges a percentage of your portfolio

I would add one more easy tip to this list:

10. Know your credit scores

That's about it! That was 100% free and you didn't have to sit in a hotel conference room all weekend. I feel better already :)  Happy Friday!

Are you Ready to Pay your Taxes?

It seems incredible to me that tax season is here already. Wasn't it just Christmas a few days ago?

Being the money geek I am, I've already finished my taxes and mailed off $1,400 to Uncle Sam.  Those payments sting a little bit, but fortunately I had some money from a holiday bonus to help pay it off. Inversely, my boyfriend always waits until April 14th to complete his filings!

Are you prepared for the sting of tax season? If you are not sure what you'll owe or get in returns this year, take a few minutes to do a quick tax estimate using this free MSN tool. If you need to write a check to the IRS this year, now is the time to think about where that money is going to come from. Let's evaluate tax payment options:

Cash - Paying your taxes directly from your checking account is certainly the simplest and cheapest option. However, be sure to check your balances and consider the impact before you sign the check. If paying your taxes with cash is going to leave you unable to pay your rent, mortgage, credit card bills, etc. consider other options. Also, remember that it can take a while for your check to be processed by the tax agencies.

Savings - Reaching into a savings account can be a smart move for paying taxes. Just be sure that you won't have to pay any special penalties or fees for the withdrawal. It can take a few days to transfer your savings to your checking account so don't wait until April 14th if you want to use this method. Avoid tapping 401(k) or IRA accounts for your taxes.

Credit Card - Taxpayers may be tempted to use a credit card for the simplicity, extended repayment period and rewards points. But those benefits are quickly lost when credit card processors charge you a 2.49% to 3.93% convenience fee for the transaction. Suddenly, that 1% cash back offer doesn't seem so appealing.

Installment Plan - The IRS offers an installment plan for consumers who can't afford to pay their balance in full. It's not cheap though: you'll be charged $105 ($52 if you are paying electronically) for a set up fee and $45 for a user fee along with a 5% interest rate and 1% monthly no-payment penalty. Even the IRS clearly explains that this installment plan isn't a great deal.

Personal Loan - Personal loans from your bank, credit union or online allow you to borrow up to $15,000 fairly affordably. A private personal loan may offer lower fees and more flexibility than the IRS installment plan. However, taxpayers with bad credit may have trouble being approved and could actually be better off with the IRS program.

Family Loan - Can a parent or relative help loan you the money you owe? If so, you might want to make the loan official using a program like Circle Lending. This system helps you manage a loan between relatives and removes a lot of the emotional landmines that come when you blend family with money.

Extra Earnings - If you know that you're going to owe some money in April, see if you can increase your income by working overtime, taking on a temporary second job or accepting more hours. Even holding a garage sale or selling a few things on eBay could help you gather the cash you need for your taxes.

How do you plan on paying for your taxes this year? Share your tips and feedback in the comments section below.

The IRS's Dirty Dozen: 12 Tax Schemes to Avoid

The IRS just released the twelve top scams to avoid this tax season. In the hope that it helps you save money and avoid grief, my translation of the IRS's explanations follows. 

1. Phony phone refunds being claimed as part of the special Telephone Excise Tax Refund available to most taxpayers this year. The IRS says it's "actively investigating" tax preparers who are preparing inflated refund requests. We may not like them, but the folks who work for the IRS are not jerks. I wouldn't want my return to look out of line in this area.
2. Abusive Roth IRAs: Don't bite if someone proposes a scheme where you shift under-valued property to Roth IRAs to save on taxes.
3. Phishing, a technique familiar to regular Creditbloggers, is used by identity thieves to acquire personal financial info from unsuspecting folks so that they can run up charges on stolen credit cards, or apply for loans in the names of those they've scammed. Sometimes pretending to be from the IRS itself, these crooks send out emails trying to trick consumers into disclosing private information. If you have any doubt about whether a contact from the IRS is authentic, call 800-829-1040.
4.   Shell corporations are becoming active in certain states to disguise ownership, avoid paying taxes, and under-report profits. The various branches of government are working together on this. Here's hoping … but really … is it so hard to find a way to do something legit?
5. Zero Wages: This scam is a little dizzying to me, probably because of all the bureaucratese it entails. Somehow,  a Form 4852 ("Substitute Form W-2") or a "corrected" Form 1099 is submitted that shows zero or little income. Sometimes, taxpayers are encouraged to rebut past wages and taxes, refer to the IRS Code sections 3401 and 3121, and include a reference to a fear of IRS retaliation for bureaucratic mistakes. Clear as mud, huh? Stay away!
6. Tax Preparer Fraud: Dishonest preparers can cause a lot of grief. They make money by skimming some of their clients' refunds and charging inflated fees. They promise huge refunds – from not only this year, but past years, too.  "If it sounds too good to be true, it probably is." Choose wisely, based on personal recommendations from people you trust.
7. American Indian Employment Credit: While there's an Indian Employment Credit available for businesses that employ Native Americans or their spouses, there is no provision for its use by employees. So Native Americans, watch out for this scam – and also for the good old standby, where you're told you aren't subject to federal income taxation. The latest variation has gone online. (See the advice on phishing, above.)
8. Trust Misuse: While some trusts makes sense for tax and probate avoidance purposes, there are plenty of scammers out there promising to reduce income taxes and raise deductions -- as well as cut estate taxes -- if you sign on the dotted line right now. Not so fast!  Take the time to get plenty of expert advice before you set up a trust.
9. Structured Entity Credits: This one, newly identified by the IRS and crooked through and through, really burns me up! According to the IRS, scammers set up partnerships to own and sell "state conservation easement credits, federal rehabilitation credits and other credits. The purported credits are the only assets owned by the partnership and once the credits are fully used, an investor receives a K-1 indicating the initial investment is a total loss, which is then deducted on the investor’s individual tax return."
10. Abuse of Charitable Organizations and Deductions: The IRS keeps its eyes on the tempting practices of using tax-exempt organizations to "improperly shield income or assets from taxation." Don't put an unrealistic price tag on what you donate, and don't expect a non-profit to let you continue to control your gift. Finally, "the IRS is noticing the return of private tuition payments being disguised as charitable contributions to religious organizations." I'm not sure how this would work, but if you're doing it, you better stop.
11. Form 843 Tax Abatement: This is another popular bureaucratese scam that, according to the IRS, "rests on faulty interpretation of the Internal Revenue Code." The filer asks for the abatement of previously assessed tax using Form 843. "Many using this scam have not previously filed tax returns and the tax they are trying to have abated has been assessed by the IRS through the Substitute for Return Program. The filer uses the Form 843 to list reasons for the request. Often, one of the reasons is: 'Failed to properly compute and/or calculate IRS Sec 83-Property Transferred in Connection with Performance of Service.'" I say stay away from Form 843!
12. Frivolous Arguments: Typical statements including:
    

•  The Sixteenth Amendment concerning congressional power to lay and collect income taxes was never ratified
•  Wages are not income
•  Filing a return and paying taxes are merely voluntary
•  Being required to file Form 1040 violates the Fifth Amendment right against self-incrimination and/or the Fourth Amendment right to privacy

Uncle Sam says doesn't believe these or other similar claims. "These arguments are false and have been thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law."

The best piece of tax advice that I know comes down from Judge Learned Hand: "There is nothing sinister in so arranging one's affairs as to keep taxes as low as possible …" To which I add this helpful reminder from an old hippie friend of mine: "Don't do the crime if you can't do the time."

What tax advice do you have to offer – to do or not to do?!

Terror Risk Scoring: Analytical Crime Prevention of the Future or Gross Violation of Consumer Privacy?

Over the last decade, consumers have become increasingly educated and aware of the impact of credit scores on their lives. Once kept top-secret by the lending industry, consumers can now review their Equifax, Experian and TransUnion credit scores when ever they want and can use this knowledge to correct mistakes or negotiate deals.  It's hard to believe, but this disclosure of credit data to consumers was once very controversial.

Now a new controversial credit score has entered our lives: the Secure Flight Terror Risk Score. This score is designed to calculate your risk of being a terrorist much in the same way that traditional credit scores calculate your risk of defaulting on a loan. In order to generate the Terror Risk Score, the Department of Homeland Security has been mining data on virtually every person entering or leaving the US. Your travel records, ticket payment, DMV records, seat preference and even in-flight meal choice goes into the calculation.

Millions of Americans now have Terror Risk Scores. Consumers are not allowed to see or dispute their score and the record stays on file for 40 years. Legislators have critiqued the program and called for investigation into the data accuracy and privacy measures.

I happen to be a true believer in the power and accuracy of analytical scoring. When applied correctly, scoring algorithms can help businesses make smarter decisions and can reduce the costs for consumers. But visibility is a key and necessary part of scoring. A scoring system that has no way for consumer review, dispute or audit isn't going to be accurate or fair to Americans. I'm torn on the use of Terror Risk Scores because they have great potential for preventing crimes but also call up very serious privacy, civil liberty, data security and law enforcement concerns.

What do you think about terror risk scores? Take our poll today:

Get Free Opinion Polls

If you have concerns about Terror Risk Scores, you can contact Homeland Security's Privacy Office.  The department has agreed to review their policies based on consumer comments they receive over the next 90 days. You can share your thoughts with the Privacy Office by email at privacy@dhs.gov, by phone at 571-227-3813 or by fax at 571-227-4171.

Listen and Watch CreditBloggers.com Experts Online!

Our team of credit and personal finance experts are real "media mavens" this month! We posted a clip of John Ulzheimer, our credit scoring expert, talking about kids and money on the 13th last week.  And we had a clip of Gerri Detweiler, our personal finance guru, debunking "buy now, pay later" deals on the 15th.

Just this morning, Emily Davidson was interviewed on KNX-1070 NewsRadio in Los Angeles. Emily spoke with Bob McCormick, the host of Money 101, for an hour about credit, debt and financial bad habits. You can listen to the show by clicking on the image below and clicking on the "Making your Credit Score Soar" link on the right:

Credit.com's president and our identity theft specialist, Adam Levin, appeared on TheStreet.com TV. This interview for the 60 Seconds Savings feature discussed the right way to use your credit cards. Click on the image below to watch that clip:

Of course, you don't need to watch TV or listen to the radio to get access to our team of credit experts. Just send us an email at tidbits@credit.com anytime!

Decoding the Burger King BK Crown Card Offer

A Burger King sign caught my attention this weekend when I was pumping gas. Being the credit nerd that I am, I immediately ran across the street to get some photos for further investigation. The sign  said, "Bad Credit? No Credit? New BK Crown Card. Pay Now, So You Can Eat Later." Click to enlarge the photos below.

What the heck is Burger King trying to do here? A quick internet search showed that the BK Crown Card is nothing but a re-loadable gift card for Burger King purchases. It has nothing to do with "bad credit" and isn't a credit card. Read the BK Card FAQ (PDF).

For a re-loadable gift card, the terms of this deal are actually pretty good. There is no maintenance fee or expiration date, and Burger King will replace the card if lost or stolen. But I have a major problem with the way Burger King is marketing this offer.

By saying "Bad Credit? No Credit?" the Burger King card is posing as a deal that would require a credit check and that would in turn be something that could help boost your credit history. The ad makes it seem like the BK Crown Card is a real credit card. Someone who is already struggling with their credit would be very tempted to "apply" for this card, not realizing that is just a gift certificate in disguise.

What do you think? Is this Burger King ad misleading? Share your feedback in the comments section below.

Funny Money Friday: Money Facts About Washington and Lincoln for President's Day

Money doesn't have to be boring! Each week, CreditBloggers.com takes a look at the lighter side of the personal finance world in a series called Funny Money Friday.

President's Day weekend is here again! It's time to celebrate the birthdays of Abraham Lincoln and George Washington. Thanks to presidential historians and researchers, we've been able to find all sorts of interesting credit and money facts related to these great leaders:

George Washington
America's first president came from a wealthy family and was land-rich, but cash-poor. His tobacco plantation often lost money, leaving Washington in debt to British businessmen. Washington had to borrow money to get to his first inauguration in New York.

Washington also played the part of the lender; granting loans to friends and employees with no interest and often not being repaid. And in politics, Washington  oversaw the development of a funded national debt and the launch of the Bank of the United States.

Washington initially refused to take the $25,000 presidential salary offered to him, but eventually accepted to ensure that the office wouldn't be only open to independently wealthy politicians in the future.

Abraham Lincoln
Lincoln's financial history is very different than Washington's. While Washington came from a wealthy family, Lincoln grew up in a very poor (and at one point basically homeless) family.

In his youth, Abraham Lincoln worked as a credit reporting correspondent collecting information on businesses for Dun & Bradstreet. Lincoln is one four presidents who worked for this pioneer in the credit industry.

Lincoln supported a national banking system that would provide affordable credit to American industry. He often served as a consumer advocate against predatory lenders and other scammers. Lincoln was also very savvy about lending money to friends and family. His letter denying an lazy step-brother an $80 loan and instead offering to match his salary is a must read.

Which president are you like? Are you more like Washington: well off but with some debt problems? Or more like Lincoln: frugal and savvy?  Either way, happy President's Day to you! We'll be back on Tuesday next week with more credit news, answers to your personal finance questions and general money geekiness!   

Are Buy Now, Pay Later Deals a Good Idea?

Electronics stores, mattress retailers, furniture dealers, even WalMart.com all offer some version of the famous "Buy Now, Pay Later" deal. An offer that is listed as having no payments until 2008 and no interest on the balances can sound like a no lose deal to many consumers.

Personal finance expert and CreditBloggers.com contributer, Gerri Detweiler, recently appeared on San Francisco's ABC news to warn consumers about the traps associated with these buy now, pay later deals. Click on the image below to watch the KGO video clip and read the transcript:

 

Like Gerri said, there are a lot of traps hidden in the fine print of buy now, pay later offers. And if the deal involves opening a finance company account (which most do) you could be causing some long term damage to your credit scores. Our credit scoring expert, John Ulzheimer, wrote about why you should avoid finance accounts on the blog back in 2005.

In most cases, you are better off with the old fashioned "Buy Now, Pay Now" routine! 

How Much Does It Cost to Say "I Love You"?

Love may be priceless, but saying "I love you" on Valentine's Day isn't cheap, according to the Edelman Valentine's Day Index™, published annually by financial planner and author Ric Edelmen. He says that Cupid would spend $2,662 this year to score points with their special someone.

Granted, Cupid would be going all out here with the following Valentine's Day gifts:

$4 - Valentine's Day card from Hallmark
$42 - One pound box of Godiva chocolates
$80 - One dozen roses from FTD Florist
$179 - Gold heart locket and chain from Zale's Jewelers
$500 - The whole works, a day at Elizabeth Arden Red Door
$99 - Silk nightie from Victoria's Secret
$500 - Dinner for two at Ruth's Chris Steak House
$399 - One night stay at the Ritz-Carlton
$859 - A surprise three-night escape to Caesar's Palace, Las Vegas
Total: $2,662

Edelman suggests instead you "just tell your beloved, 'I love you' and put the cash into his or her IRA. Saving for your true love's future proves that your love is eternal."

Great idea financially, but it's hard to feel all warm and fuzzy about an IRA deposit. So if you really want to score points, at least put that deposit receipt in a box of chocolates. A heartfelt romantic note or poem is also a sweet way to show you really care.

How much are you spending for Valentine's Day? What's the best Valentine's Day gift you ever received? Share your suggestions here.

Send a Valentine to Your Credit Card Company

Happy Valentine's Day! According to the National Retail Federation, men are spending an average of $135.67 and women are spending $68.64 to celebrate Valentine's Day today. This translates into about 180 million roses and 36 million heart shaped boxes of chocolate.

Wow! Credit card companies must be really feeling the love this year! Just in case they aren't, I've put together a couple of cheesy valentines for my favorite, and not-so-favorite, financial institutions:

Do you have a message of love (or some other emotion) you'd like to send to your financial institution? Email it to us at tidbits@credit.com and we'll post a special Valentine for you online today!

How to Stop Unwanted Credit Card Annual Fees

One of my oldest credit cards recently changed issuers and has been undergoing a rocky transition. Along with problems that included not being able to log into my account, I also received a statement last night saying that I owed a $60 annual fee payment. Over my dead body!

I immediately called and said that they needed to either remove the late payment or cancel my account. Tough words, but 90% of the time the credit card issuer will chose the former instead of loosing the customer. Here are some guidelines if you need to take it to the mattresses with your credit card issuer:

• Be serious - Be a shrewd negotiator on your behalf. Credit card issuers have special departments set up just for customers who want to lower their APR's or remove their fees, they can take it. If you say that you are ready to cancel the account, you should mean it.
• However, avoid canceling the account if at all possible - Closing credit card accounts can have a negative impact on your credit score, especially if the account is one of your oldest or one of only a few you have open.
• Ask if the change will cause an inquiry - Once you get the credit card issuer to agree to your demands, ask to make sure that the change in your APR or terms will not cause a hard inquiry to appear on your credit report. This isn't a big deal if you are not applying for major credit in the next year, but can lower your score.
• Follow through - Make sure that the change occurs when the credit card issuer said it would by checking your account regularly. If it doesn't happen, call the credit card company again.

This negotiation tactic works with other companies too. Cable providers are notoriously easy to negotiate with and I recently heard a story from a co-worker who was able to lower her interest rate on a personal loan.

Video Clip: Teaching Kids About Shopping Online

Credit.com's credit scoring guru, John Ulzheimer, recently appeared in a Connect with Kids segment on how children can learn financial responsibility while shopping online. Click on the image below to view the clip and read more advice for parents.

Do you let your kids shop online? Do they use your credit card for their purchases? Share your tips and feedback in the comments section below!

Households and Housing

I saw a news report last week that said that a majority of women now live alone without a spouse. Now I know enough about the warping that can occur in the collection of statistics and I know that writers love to grab something sensational for a headline, but this one interests me.

First, it appears that the study included widows who live alone. That certainly warps the result, by which I mean that you weren't thinking about that possibility when YOU read the statistic. It also doesn't mean that women in general aren't getting married.

This is just a reflection one of the demographic changes underway in out society. Some are huge! How about the Baby Boomer Generation hitting retirement age? That's a biggie.  We also have young people deferring marriage until their careers are a little more developed.  We also, certainly, have men and women who either don't want to get married or who want to but it just won't turn out that way for them.

What it does do, in my mind, is illuminate the fact that a "typical household" isn't what we used to think it was: a man and his wife and two kids and a Cocker Spaniel. It turns out that that description fits fewer than 20% of households today.

But my perception of American homebuilders is that they are still building a majority of their homes for that family. It may be that they are right, that regardless of the difference in households, it's that IDEAL family who shows up as homebuyers at the model home complex.

There are ways of meeting the needs of different segments of the marketplace. I can remember a homebuilder in Irvine, CA, pretty much a Yuppie town, who included some models whose floor plans include a two bedroom home with two identical master bedroom suites. They intended to sell to two homebuyers who didn't want to face the issue of two adult homebuyers who had to say, "We're buying this together but who gets the big bedroom and who settles for one designed for the kids?"

I thought that was innovative and I hope builders do more imaginative thinking like that.

I would especially like to hear from people who either haven't found a floor plan that suits their needs or have found some creative builder who has done something different that did meet those needs.

It's Monday, Do you Know Where your Data is?

This seems like one of those situations where you have to decide between the risk you know and the risk you don't. Although, you don't really have a choice in this case.

A press release from ChoicePoint caught my eye this afternoon. The headline: ChoicePoint Sells Bulk Bankruptcy, Liens and Records Business. The lead:

"ChoicePoint announced today that it has sold part of its public records operations, specifically the businesses that collect bankruptcy, lien and judgment (BLJ) records and provide them on a wholesale, bulk basis to commercial enterprises around the country.  The terms of the sale and the buyer were not disclosed..."

You might remember ChoicePoint as the background check company that accidentally sold 145,000 sensitive consumer records to an identity thief in 2004. The company was fined $15 million for the event and their case led to new data breach notification laws. And ChoicePoint has tried over the past year to become a security leader in their industry.

But now, consumer public bankruptcy, lien and judgment records are going to be handled by a different company?  An unnamed company that we don't have any information about? That will be selling consumer data in bulk to big companies?

I can't help but feel nervous about this announcement. And I don't even have any of those public records in my name! What do you think?   

Reader Question: Why do I Need a Credit Card for a Free Credit Report Order?

This is a pretty common question that we get at CreditBloggers.com. It can be hard to sort through the myriad of free, supposedly free and not really free credit report offers out there. Reader, Lela T, asked last week:

With free credit report and score offers, why do you need a credit card number to get the score?

Lela's question could be referring to two different types of free credit report offers. Let's break it down:

Free Credit Report & Score Offers with a 30-Day Trial - These are the offers you see advertised all over television, radio and the internet. Every credit bureau and credit report retailer offers some version of this "free" product. It usually includes one credit report, one credit score and a 30-day trial of a credit monitoring service. These offers always ask for a credit card with the order because they need to be able to bill you if you don't cancel in time. They're misleading, but can be a great deal if you are good at remembering to cancel. You can compare the features and prices of free offers like these in this chart.

Free Credit Report Disclosure - All three credit bureaus are obligated to provide you with a free credit report once every 12 months. They do this online at www.annualcreditreport.com. You don't need a credit card to get your report, but you will need to enter it if you want to add on your credit scores for about $6 each. This system can be complicated so we've created a step-by-step ordering guide complete with screenshots.

So, that is why you are asked for a credit card number in either type of free credit report offer. Don't forget that a credit card isn't necessarily required. Every retailer I've seen allows you to use a debit card instead with your order. TransUnion and TrueCredit even let you pay online by check.

Next question! Send your credit, debt, personal finance and loan questions to our team of credit experts at tidbits@credit.com.

10 Easy Things you Can Do to Prevent Fraud after National Consumer Protection Week Ends

National Consumer Protection Week 2007 officially comes to an end tomorrow. We've had a great week on CreditBloggers.com talking about the different scams and frauds that are out there. Now, let's conclude the week with a list of 10 simple things anyone can do to prevent fraud. This list was compiled by our team of credit experts as part of our National Consumer Protection Week materials:

1. Put a shredder in your kitchen. A recent Staples study found that most junk mail ends up in the kitchen trash, not in the office. Make sure that all your credit card statements and other sensitive mail are shredded before being thrown away.
2. Don’t pay money to get money. The most common scams right now involve asking consumers to wire money in order to supposedly get a larger amount in return.  Credit.com posted a warning about one of these scams surrounding loan offers a few months ago.
3. Opt-out of pre-approved offers.  Call 888-5-OPT-OUT or go online to OptOutPrescreen.com to dramatically reduce the number of credit card offers you receive in the mail.  For any you do receive, shred them immediately.
4. Check your credit reports regularly. It bears repeating; it’s a crucial step to guard against identity theft. Order your free annual reports at www.annualcreditreport.com or sign up for a monitoring program that scans your credit data automatically.
5. Help relatives check their credit, too. Children and the elderly are often targeted for scams. You can check your children’s credit reports by contacting the credit bureaus’ fraud offices. And you can lend your internet expertise to help elderly relatives check their credit data online.
6. Know thy scams.  Become aware of frequent fraud offenses. For a quick cheat sheet on the top ten scams of 2006, visit ConsumerAffairs.com. 
7. Protect your home computer.  Install security software to foil identity thieves against high-tech viruses and spyware.
8. Audit your information. Check your desk at work, home office, and online accounts for potential security risks. Data stored in emails and unlocked files could be exposing you to fraudsters. Try to reset your online passwords regularly.
9. Investigate online. If something seems suspicious to you, see if\ you can find some information about the company or offer online before deciding to proceed. Reliable companies should have plenty of records online and should be easy to contact in person.
10. Report close calls. The FTC tracks consumer fraud complaints and uses this database to assist law enforcement around the world. If you are contacted by a fraudster, add your report to this library of data.

Have a great weekend! We'll see you back here on Monday when we resume our normal blogging on debt issues, credit scores, loans, credit cards, personal finance and more!

Funny Money Friday: National Protection Week Anagram Challenge

Money doesn't have to be boring! Each week, CreditBloggers.com takes a look at the lighter side of the personal finance world in a series called Funny Money Friday.

Whew! This has been a long and Productive National Consumer Protection Week. Over the last few days, we've covered so many consumer fraud topics. Hopefully, you've learned something new about the risks that are out there today. I know I have!

For Funny Money Friday this week, I've prepared an anagram challenge with some common fraud and scam terms. (I feel like Will Shortz!). Can you decode the five terms below?

1. Champing Hiss
2. Ditty Feet Thin
3. Retake Lofty
4. A Emergent Kilt
5. A Darn Foul

Post your answers in the comments section below. I'll put up the results at the end of the day. Happy Friday!

Vote for the Worst Credit Criminal of the Year

We've been talking all week about the most common and heinous scams of 2006. As we near the end of National Consumer Protection Week, let's see who gets your vote for the worst credit criminal of 2006. In our definition, credit criminals are the scammers, con artists and general bottom-feeders who try to steal from innocent consumers using deception. Cast your vote today!

Get Free Opinion Polls

Don't see your pick for the worst credit criminal on this list? Share your nomination for the worst of the worst in the comments section below.

Women are More Concerned About Identity Theft than Men

A new survey released today by the National Crime Prevention Council (the McGruff folks) has found that identity theft once again the top crime concern for Americans. The National Consumer Protection Week report also found that:

• More women (66%) than men (47%) see identity theft as a major problem.
• Identity theft outranks concerns over other crimes including credit card fraud, burglary & robbery, but most consumers are not taking immediate steps to prevent it.
• 14% reported that they had been a victim of identity theft at some point and 24% knew someone who had been a victim.
• The African American community seems to experience more identity theft than other groups. 31% reported being victims and 45% knew someone who had been a victim.

I find that point about women being more concerned over identity theft than men particularly interesting. I wonder if it has to do with the fact that a women usually hold primary responsibility for the financial activities of their families. If so, good job! Keep crunching those numbers and shredding those statements, ladies.

What about your household? Who takes responsibility for your family's finances and identity theft prevention measures? 

True Story of a PayPal Phishing Victim

Earlier in our National Consumer Protection Week coverage we posted some information from PayPal's security director about phishing scams. Now, let's hear the other side of the story. Suzanne wrote in this morning with a true story of what it is like to fall prey to PayPal phishing scammers:

I was the victim of a "spoof" email, allegedly from PayPal.  It started out innocently enough; the email was on PayPal stationery, and asked to update my account information.

Naturally, I did so, giving out my credit card number (with expiration date and "back of the card" information), bank routing and account numbers, etc.

The next day, I received a bona fide email from PayPal, indicating that my screen name had been changed!  I was dumbfounded, and called immediately to inquire about the change.  They gave me a purely idiotic Yahoo screen name, and informed me that I had been "spoofed."

I sweated out the night, and went to my bank first thing the next morning to cancel my account and open a new one. When I got home, I called my credit card company, and numerous charges had been made THAT DAY on the card.  I explained my situation, and they agreed to cancel that account and issue me a new card.  Thank goodness I was not liable for those charges!

It just seems that it's too easy for hackers (or whatever they are) to get private and confidential information on the Internet.  I just wish there were some way to verify what is a real email from a real entity that one deals with