Hi Jean—I caught the end of your segment on the Today show a few weeks ago where you were talking about credit cards. You said that one should never CANCEL a credit card, as it negatively affects your credit score. Instead, you said cut up the card and don’t use it. HOWEVER, what do you do in a case where the credit card company charges an annual fee? If you cancel, your credit score suffers; if you don’t, you’re stuck paying the annual fee. How do you handle that situation?
-Pat Bosha, Schnecksville, IL
You’re right-if you cancel your card; your credit score will take a hit. If you don’t, your creditor will force you to pay the annual fee for being a cardholder… and that’s something creditors are doing more frequently to mitigate the effects of the Credit Card Reform Act, whose first wave of reform took effect today. According to Synovate, a company that tracks direct mail, credit card issuers are sending fewer credit card offers to households, yet a higher number of those offers now have fees attached to them.
So which is worse, paying the annual fee or having a credit score that’s a bit lower? According to Credit.com’s John Ulzheimer, over the years, it may actually cost you more money if you keep paying the annual fee, versus cancelling the card and potentially paying a higher rate on an auto loan or a mortgage.
If you’re absolutely sure you want to cancel the card and avoid the annual fee, Ulzheimer suggests that before you close the account, replace your soon-to-be lost line of credit with another card (that doesn’t have an annual fee). Doing so will protect your More…
Today, the average undergraduate student leaves college owing over $22,000 in student loans. If you, or someone you know is struggling with paying them back, tune in tomorrow (at 12pm EDT on XM 156 or SIRIUS 195) as Jean talks with FinAid.org’s Mark Kantrowitz about changes that have been made to make repayment just a bit easier.
In case you didn’t catch this morning’s Money 911 segment on Today, here’s a video. Watch it to learn more about 401(k) loans, the importance of 529 plans, and whether a home equity loan is a good way to pay off credit card debt.
I joined Carlos Watson on his MSNBC show this morning to talk about the huge credit card data theft that was in the news yesterday. Watch the video below for more – and be sure to read my blog post from yesterday to find out how to protect yourself.
It’s no secret, retirement, as we know it, is changing. Join Jean tomorrow (at 12pm EDT on XM 156 or SIRIUS 195) as she talks with aging expert and Age Wave CEO, Dr. Ken Dychtwald about how you can use your money wisely now to prepare for these changes in the future.
As if — with the market taking a turn for the worse today, and the healthcare debate raging on — you didn’t have enough to worry about, there’s this little nugget of news: The largest hacking and identity theft case ever prosecuted. Some 130 million credit and debit card numbers gone. Poof.
So here’s the underlying question. Clearly, it’s becoming tougher and tougher to prevent your credit card and debit numbers and other information from being stolen. What CAN you do to protect yourself?
- Monitor what’s happening in your accounts. Unfortunately, you may not be able to prevent your information from being hijacked. But, by carefully monitoring what is happening in your credit files, you can shut down thieves before they get too far. How do you do this? There’s a low-cost way and a higher cost way. The low cost way is to get — for free — your credit report once a year from each of the major credit bureaus. Do this at annualcreditreport.com. You can also, for free, put fraud alerts on your accounts at the credit bureaus. That way, if someone wants to take out credit in your name you’ll be notified. (The hitch is that if YOU want to take out credit, you’ll have to lift the alerts first.) The higher cost way is to sign up for a credit monitoring service which will let you know of any action in your credit accounts.
- Remember who placed the call (or started the interaction.) Scam artists come out in a bad economy and they do business by calling unsuspecting folks and getting them to give out personal information over the phone, and also by phishing — sending you an email that looks like it’s from one of your financial institutions and then requesting personal information. Unless YOU placed the call or YOU initiated the transaction with the website, do not give out any of your details.
- Leave no breadcrumbs. A huge number of id thefts are perpetrated each year by “dumpster divers” and other people who get More…
On tomorrow’s show, Jean chats with radio host, filmmaker and entrepreneur-extraordinaire Kathleen Slatterly-Moschkau about how she went from a career in pharmaceutical sales to making a movie starring award-winning actress Katherine Heigl. Tune in tomorrow at 12pm EDT on XM 156 or SIRIUS 195.
Tune in tomorrow to hear Jean weigh in on listener’s most pressing financial questions. You can catch her at 12pm EDT on XM 156 or SIRIUS 195.
This week pirates invaded my town. Trust me though; this isn’t as scary, or as strange, as it sounds. Every summer, Alexandria Bay, my small, tourist town in the summertime paradise known as the Thousand Islands (read the NY Times story on the area here), hosts one of the country’s oldest pirate festivals. For ten days, pirate invasions, pirate parades, and skits to reenact the antics of Bill Johnston (seen with me in the photo at left)-an actual pirate who hid from authorities in a cave in one of the Thousand Islands for almost a year- entertain thousands of tourists.
But what does a pirate festival have to do with money? Well, in a word, lots. For my town, this festival is a major economic driver of an economy that relies, for the most part, on income generated during the summer months. While people from all over attend Bill Johnston’s Pirate Days, this year, many people from not-so-far-away see the festival as the perfect opportunity for entertainment while on a “staycation.”
“Staycation”, seems to be the buzzword of the summer. A staycation is defined (yes, I said defined…staycations have become so popular, that they now have their own dictionary entry) as a vacation where one takes time off at or close to home. According to a recent poll by Harris Interactive, almost 60% of Americans say they are looking for ways to find less-expensive activities to fill up their summer days. Nearly 50% of survey participants said they’d take vacations closer to home.
In an economic climate where everyone’s trying to save a little more, staycations are a chance to take a break from the everyday, without spending a bundle of money. If you’ve yet to take a staycation this summer, there’s still time. Here are some tips for finding cheap fun that’s close to home:
Find a Festival: Visit Festivals.com, where you can search for festivals in your area by city or state, many of which are low-cost or even free.
Fun at the Fair: There are very few places where you can eat a deep fried Oreo, take in a concert by a big-name entertainer and marvel at a sculpture made of butter all in one day. Tickets to your state fair will cost around More…
On tomorrow’s show it’s a full-hour of Jean’s expert money tips. Tune in to Tune in at 12pm EDT to XM 156 or SIRIUS 195 to hear advice on listeners personal finance issues.
