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Monday, December 29, 2008

Another Involuntary Credit Card Cancellation!

Barclays, A UK-based bank, cancels my BJ's Visa credit cardMy wallet just got a bit lighter. I found that I was carrying two BJ's credit cards around: an old one from Chase that I should have shredded a long time ago, and one from UK-based Barclays bank, which has just been canceled.

I am not pleased about this latest credit card cancellation. My BJ's Visa had a $8,500 credit line, and with this credit no longer available to me, I'm worried that my credit score will sustain a serious ding. I very recently suffered the involuntary cancellation of my WaMu (Chase) Premier Platinum Protect Visa® credit card, which had a credit line of about 11K. So what exactly is going to happen to my lovely 804 FICO® credit score now that my available credit has been reduced by about $20,000? Who knows. Stay tuned to find out. I'm still able to login to my now-cancelled WaMu credit card account, so maybe I'll have free access to my credit score for a while. That would be cool.


Dear John letter from Barclays
My favorite line in the above Dear John letter is, "To help you better manage your credit accounts, we have closed your account." Ha! Like that has anything to do with it. We all know how careful banks are being these days, so why don't they just write something honest like, "You credit score is fantastic and you appear to be a responsible user of credit, but we're worried that this recession may cause you to lose your job or close your business, which would make you a credit risk." Hey, Barclays, thanks much for your concern, but I don't need help managing my credit accounts! Not that kind of help anyway. It's like getting a Dear John letter from a college girlfriend, and she includes, "In order to give you more time to study and get good grades, I've decided to break up with you..."

Bottom line: the cancellation of this credit card account is just annoying and that's about it. I don't need the credit, and I don't take advantage of the rewards. The rewards program was decent, but not as good as the credit card I use for just about everything these days. Why settle for a $20 rewards check every once in a while -- that can only be used at BJ's Wholesale Club! -- when I can get a $20 or $50 (depending on my spending) statement credit every month with my favorite card?

The other day I cleared the cob webs from my oldest consumer credit card account, an account I haven't used in over 2 years, and used it to purchase five MP3's from Amazon @ $0.99 each. These were songs I was going to buy anyway, so I was cool with it. I was happy to find that the card was still working (whew!) This card has a very high credit limit, so losing it would be a very bad thing.

Why Amazon and not iTunes? I like the way Amazon allows me to quickly and easily preview each song before I buy, so I can get an idea of the sound quality, and I can also make sure I'm downloading the version I want. Preview functionality exists in iTunes, but I can't get it work for some reason. Must be a Mac-software-on-a-Windows-machine thing.

That's it for now. Thanks for reading and good luck to all in 2009 (I think this recession is going to be brutal. I sincerely hope I'm wrong.)

Happy New Year!
Happy New Year!

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Saturday, December 27, 2008

Total Christmas Spending for 2008: $3.20

KB Toys: Out of BusinessI don't like KB Toys. There's one in my local mall, and whenever I would go in there with my daughter, she would want to play with everything. She's five, and that's what five-year-olds do. In other toy stores, kids play with everything, and the employees / managers don't care, which is the way it's supposed to be. In KB, however, my daughter would play with stuff, and within five minutes the manager would walk by and give me a stern look like, "hey, buy something you deadbeat! Your daughter needs to stop playing and start buying!" Needless to say, I never opened my wallet in that store. Even if that grumpy manager turned into Snow White, I doubt I would have ever spent money there: the prices at KB have never been competitive.

My daughter spent Christmas Day with her mother. When I called to wish her a merry Christmas, I promised that we would go shopping when I picked her up for her usual every-other-Saturday visit; I told her that she could pick out a present for herself. She was very pleased with my plan, and I was pleased about the prospect of taking advantage of after-Christmas sales.

So, earlier today, we visited the local mall and started window shopping. When we reached the KB Toy store, she tugged at my hand to signal that she wanted to go in; she also added, "Daddy, it's a going-out-of-business sale. Let's check it out!" I was surprised and delighted that she understood the significance of a going-out-of-business sale; could it be that she understood that a going-out-of-business sale meant that her raison d'etre -- toys -- could be obtained at a great price? Does she really understand value? I asked her, "why is a going-out-of-business sale a good thing?"

"Because, Daddy, they're going out of business," she replied in a very frank manner.

Oh well. I tried to explain why it was a good thing, but I don't think any of it registered. She was already locked into full toy shopping mode.

We browsed the isles a few times. Most of the store shelves looked like a tornado had hit them. There were plenty of employees around so there was really no excuse for the mess. Then again, how could I expect them to care when they all knew that KB was about to close its doors forever? Bottom line: I believe in professionalism, right up to the very end. If I was forced to go out of business, I would provide my clients or customers the best products or services until the last second of my business's existence.Noisy machine gun: $2.99

My daughter eventually ended up with two items in her clutches: a very cheesy replica of a star wars light saber ($2.99 after 50% off), and a plastic machine gun that makes lots of noise but doesn't fire anything (also $2.99 after 50% off.) I told her to choose one and she chose the gun (pictured.) I handed her some cash to pay the cashier (she really likes handling such transactions) and we were on our way.

Some people might think it strange to buy a toy gun for a five-year-old girl. But what does it matter? If that's what she wants, then why not? She likes playing with toy guns, but she also like playing with baby dolls and other "girly" toys. Her mother doesn't like her playing with toy guns, so I suggested to my daughter that she keep her new toy at Daddy's house, and that we keep the toy as our little secret.

My daughter has been asking for a Nintendo DS handheld gaming system for a long time, but it's too expensive considering that she would either break it, lose it or fall out of love with it in no time. I was seriously considering buying her one of those battery-powered cars that we sometimes see in the park. Too expensive for my current financial status, but I knew she wouldn't lose it or lose interest in it, and I'd be with her every time she played with it, so I was thinking it could be worth the (gulp) credit card purchase. I was also highly motivated by a very embarrassing and excruciatingly ignominious (for me anyway) episode from my daughter's life in which she chased a young boy -- a complete stranger -- who owned one of these cars (similar to the one pictured below) and was having a ball with it in a grassy field next to the jungle gym at our favorite park. My clueless daughter decided that it would be a good idea to run alongside this car and plead for the driver to stop so that she could join him in his fancy ride (it was a tiny Cadillac.)
battery-powered car for kids
He didn't stop.

It had been an easy, fun and sun-drenched fall day in the park until I had to chase my daughter down, pull her away from that bewitching situation and give her a lesson in dignity.

I will buy her a similar car as soon as the weather warms up. She's a good kid and she deserves it. Would Suze Orman approve? No way! If I was a guest on her show I'm certain my plan to buy my #1 girl a $250 car would be met with a resounding DENIED! But that's TV, and I live my life according to my own philosophies (and Suze has no kids, so how can I expect her to relate?) Yes, this recession has hit my business hard, but I'm not broke, and I have a lot of confidence in my strategy to increase my income during 2009. For me, striving for a picture-perfect financial profile is important, but it's not my top priority. Childhood years should be fun and full of happiness. Over the years, I've noticed that the well balanced, well adjusted adults I've come to come to know well all had one thing in common: a happy childhood. Does a $250, battery-powered car = childhood happiness? Of course not! But I know my daughter quite well, and I'm quite certain it's a gift that she would really enjoy. Besides, I like the idea of keeping her busy with something that I can easily keep my eye on (I'll buy one with loud, obnoxious colors) while I sit on a park bench and listen to Marketplace on my portable radio.

So, all in all, it was a good day. We spent the rest of the day at Dave & Busters playing skee ball, air hockey, pool and other games. I am glad I spent less than $5 on my daughter this Christmas. No, not because I'm stingy. It's because I was able to buy my daughter a present that made her happy, and her contentment had nothing to do with how much it cost. I will buy her that car when spring arrives, not because it's Christmas or her birthday. I'll buy it for no other reason than I like to see my daughter happy. That's a good enough reason, isn't it?

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Thursday, December 25, 2008

EDITORIAL: Does God Want America To Bail Out the Big Three?

SUV's in Church: props used to beseech God for a bailoutOf all the states that are struggling as a result of the U.S. economic crisis, we know that Michigan is being hit the hardest. Our state economy is so dependent upon the automotive industry that the collapse of any of the “Big Three” automakers could mean the difference between prosperity and poverty for thousands of families. This would put a heavy burden on government to increase state-funded assistance, which would increase taxes and further penalize non-automotive workers and professionals who are already enduring hard economic times. So, it’s safe to say that many Michiganders of faith have been praying for a miracle.

One church took that to the next level.

You may have seen Bishop Charles H. Ellis III, pastor of Greater Grace Temple of the Apostolic Faith in Detroit, Michigan on FOX News earlier this month. Bishop Ellis gained national attention by holding a prayer service for the Big Three with three hybrid SUV's on the altar (yes, the sanctuary at Greater Grace Temple is that big). The three sport utility vehicles were actually parked on the altar as ministers prayed for Congress to bail out Ford, Chrysler, and General Motors. Bishop Ellis appeared on FOX News to share with the nation his rationale and perspective as a clergyman concerning the will of God in Michigan’s economic turmoil.



If this is the first time you have heard this story, I’m sure you are a bit shocked and possibly even conflicted about the question of appropriateness or rightness of such an event. Before I saw this story, I already had conflicting feelings about whether or not the Big Three should be bailed out by American tax dollars. While it would help keep friends and family from going under, it goes against everything I believe politically. After the story first aired on local news here, my stomach really started turning.

You see, until I got married and moved 150 miles west of Detroit in 2004, Bishop Ellis was my pastor.

My wedding, officiated by Bishop Charles H. Ellis IIIBishop Ellis married my husband and I, and we received our marriage counseling from him. I was an active member at Greater Grace when I was attending the church, and spoke to my pastor on a regular basis. It’s pretty safe to say that I know this man about as well as a layperson can know their leader. So, being respectful of his spiritual office and my knowledge of who he is as an individual, I had to take a long, hard look at whether or not the hand of God was at work against my conservative values, which, ironically enough, are rooted in Christian faith. My politics are different than that of my former bishop, but we are of the same faith; we love and serve the same God. Yet, my convictions leaned right while his leaned left. I had to ask myself a very serious question:

Does God want America to bail out the Big Three?

While you may not be a Christian, I think that we can find our answer in the video clip of Bishop Ellis’ interview. He basically conveyed that it is his job to represent the interests of the people before God. I know that it is also his job to convey the interests of God before the people. Godly logic says that while the Lord’s perfect will would involve everyone taking full responsibility for their own actions and suffering the consequences nobly, the mercy of God dictates that the level of suffering must be bearable in order to be effective. Michigan is being chastised, but it does not appear that God wants us to be destroyed. Grace would not be grace if it were deserved. While Republicans like myself can argue that the automakers deserve to go bankrupt, maybe God is giving Michigan ‘greater grace’ than what politics would call for.

Maybe God heard his people saying, “Lord, have mercy”, and he decided to grant their request.

As it stands now, it appears to be inevitable that General Motors and Chrysler will receive most of the funds that they are requesting. George Bush needs some brownie points before he leaves office, and it looks like this is going to be the issue he tries to use to get them. Politics as usual. However, no matter how you slice it and what you may or may not believe, I can say one thing for sure:

Apparently, my God really does answer prayer.

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Monday, December 08, 2008

Chase Cancels My WaMu Credit Card

Chase canceled my WaMu credit card!I hadn't used my WaMu credit card since the first quarter of 2006. Back then, it was a Providian credit card. But then Washington Mutual (WaMu) bought Providian, and, just recently, Chase bought WaMu.

Now, the reason I wasn't using this card is because a) it didn't have a competitive interest rate for purchases and b) the rewards program attached to it wasn't anything special. I had plenty of cards to choose from, so why would I choose one with a high APR and a very ordinary rewards program? I used this card to take advantage of an attractive 0% balance transfer deal, then, when the interest-free period expired, I paid the card down to zero. I kept the account open because the $11,000 worth of credit available to me with this account was helping to keep my credit score high.

Another reason I liked having this account was because I had free access to my Bankcard FICO credit score (provided by TransUnion.) No other card in my wallet (and I have plenty) offered this unique benefit.

Last month, I received a letter in the mail informing me that Chase was closing my WaMu credit card account because I hadn't used it in more than 12 months. The letter was short and to the point:


Chase closes my WaMu credit card account
I wasn't happy about this. First of all, my FICO® credit score would likely drop due to the decreased amount of credit available to me. Second, I liked having free access to my credit score. Who wouldn't?

So my first reaction was to try and use the card to see if Chase had deactivated it yet. I tried to buy a song from Amazon ($0.99) but the charge didn't go through.

Next, I called the customer service number on the back of my card. Despite the late hour, I was able to talk to a customer service representative (CSR) right away. I asked the CSR to reactivate my card. I told him that I wanted to do some Christmas shopping with it immediately (which wasn't a lie. I would have spent some money on the card to keep it open.) The CSR said he couldn't do it (listen to the MP3 audio here.) He explained that WaMu had closed 1.3 million inactive accounts. The CSR anticipated that I would complain about the negative effect this action would have on my credit score, so, before I could say anything, he went on to say that this action, "will not appear as a negative mark on your credit bureau report." I complained a bit, then he explained that because the account was closed due to inactivity, and because my account had a zero balance, I had nothing to worry about.

I did not see any point asking for a supervisor, but I did call back a few hours later (their CSR's are available 24/7) to see if I would get a consistent response to my reactivation request. The second CSR gave the same canned response to my appeal for reactivation, but also added that I could apply for a new WaMu credit card account if I wanted to (MP3 audio here.) This suggestion made sense to me even though I wasn't happy about it. The "don't worry about it" nonsense that CSR #1 gave me was insulting, because we both knew that my score will be affected. I'm just going to hope that the ding to my score is a mild one.

My credit score is 804 right now and I want it to either stay there or rise. So, should take my time and find a really great credit card and apply for it?

Having thought about it for a few seconds, I've decided to apply for another WaMu (Chase) card, because I want my credit score to stay high and I want free access to my score. According to the WaMu website, all WaMu cards still provide free access to the accountholder's FICO.

I found that I can still login to my WaMu account online, so I visited WaMu to see if they had any credit card offers ready and waiting for me. I found no offers in there.

I will try to find a good WaMu card and apply for it. I'll post again after my application is processed.

So I may end up with another WaMu credit card account after all this, which would be a silly waste of time and resources (paper, plastic, phone calls, etc.)

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Friday, December 05, 2008

How Lack of Car Insurance Can Lead to A Repo

lack of car insurance led to repoIf you watch TV or surf the internet at all, chances are you have seen one of the many commercials aimed at convincing consumers to compare rates for their car insurance. Everyone says that they have the best coverage for the best price, but some companies even offer rate comparisons at their expense to help you make the right decision. All of the geckos and Jackie-O-esque spokespersons can make one shy away from actually getting the quotes because of the constant bombardment of advertising. But what if the big corporations have a point?

My husband discovered a while back that maybe all of that pushing is actually a push in the right direction. He learned the hard way that not having affordable auto insurance can ultimately lead to getting your car repossessed. It sounds like a stretch, but it really happens, as it happened to my husband Lee once upon a time.

The story goes like this: Lee was performing a juggling act with his debts, and soon realized that he simply had more expenses than he had income. The automobile insurance he had on his SUV was too high for him to keep up with, so he let it lapse. His intentions were to catch up as soon as he could and stay off the road as much as possible until the situation was cleared up. Unfortunately, he didn’t get the opportunity to put his plan to the test. Midwestern-based ALF Insurance had a different plan in mind.

The insurance company reported to Lee's credit union that he was uninsured.

In a surprising but completely legal move, ALF Insurance gave LSI Credit Union the heads up on how Lee's insurance had lapsed, which took things from bad to worse. We all know that if a lending institution holding a lien finds that the borrower does not have proper insurance, they can slap their own expensive insurance plan on them without warning. LSI Credit Union did just that, and told Lee that if he didn’t want their sky high rates he should find his own insurance. Needless to say, that was easier said than done, not because the geckos and 60s receptionists weren’t there waiting with a quote, but because he couldn't afford what he had before, much less the new payment. Now the newly imposed car insurance was attached to Lee’s car note, which put the vehicle in jeopardy. He couldn’t manage to get a new policy and pay for the one that was now attached to his car loan. After months of struggling to make the new, inflated note, he had to submit to a voluntary repossession of his truck.

As a married guy with a pretty smart wife (if I must say so myself), Lee has grown from the experience and does a different juggling act these days. Instead of juggling debts, he is a bargain shopper, always with an ear to the ground on the best deals in commodities, food, retail items, and insurance, making 'the switch' whenever it is advantageous to do so. Considering the circus that is our current American marketplace, it's an act that's a lot more fun to watch.

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Wednesday, December 03, 2008

Don't Forget: There Is A 3 Year Moratorium On Tax Liability For Debt Forgiveness

The Mortgage Forgiveness Debt Relief Act of 2007On December 27, 2007, President Bush signed the Mortgage Forgiveness Debt Relief Act of 2007 (HR 3648) into law.

This law established a 3 year moratorium that prevents any debt forgiven by a lender from being counted as income by the Internal Revenue Service (IRS). Basically, if a homeowner negotiates a short sale or any other type of debt forgiveness with a lender, the homeowner will not be liable for any taxes on the forgiven debt.

For example, if a homeowner in foreclosure gets a bank to agree to take $400,000 for an original loan amount of $500,000, then the homeowner will not have to pay any taxes on the forgiven $100,000 ($500,000 minus the $400,000).

The Mortgage Debt Relief act also extends the private mortgage insurance deductions through 2010. The deduction for private mortgage insurance allows families with an adjusted gross income of $109,000 or less to deduct all or some of their premium payments.

As it stands, the Mortgage Forgiveness Debt Relief Act only applies to a primary residence. So second homes and investment properties are out. Still, even with a second home or an investment property you may not have to pay any tax on the forgiven debt, so long as you can prove to the IRS that you were insolvent at the time. Which may or may not be tough to do.

With the Mortgage Forgiveness Debt Relief Act of 2007, as long as it’s your primary residence, you don’t have to prove anything to the IRS.

If a short sale is the best option, then this is the time to negotiate one.

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