I received a letter from my credit card issuer today stating that since I had not used my card for “an extended period of time” that they permanently closed my account. My goal in not using my cards was to improve my credit score. My question is since the issuer was the one that closed the account, will it reflect negatively on my credit report?
-Lori, New Jersey
It seems logical right? Don’t use your card, you won’t have a balance and you won’t have to worry about paying it off. Unfortunately however, that’s not the case. “Card issuers have been closing out millions of inactive accounts…they are doing this in order to limit their risk as they are facing mounting losses related to card members who are unable to make payments on their credit cards,” says CardRatings.com’s Curtis Arnold.
If you don’t use your credit card over about a six-month period, it may be considered inactive and your issuer may cancel your account. Unfortunately, this will impact your credit score. “Closing out an account that you haven’t used in a while on the surface may seem like a prudent thing to do, but doing so will likely adversely affect your credit score,” says Arnold.
The decreasing of your score has to do with a little something called your utilization ratio. More…
Earlier today, CNBC’s Sharon Epperson and I teamed up to answer your money questions. Watch the video below for tips on what to do with your extra savings, how to deal with the financial impact of unemployment and more.
HOW: “I always loved to bake since my first easy bake oven and I also loved art. Once I combined them both into decorated cookies I knew I had found my niche,” says Corso. When Corso had trouble finding a unique gift to send to a friend who had a baby, she decided to take matters into her own hands. The result? A million dollar business. “I decided to send her some cookies decorated like flowers in a basket. She loved them so I started making them for thank you gifts…they created quite a buzz around town. Every time I sent cookies out the recipient would want me to make more to send to someone for them. It seemed to be a snowball effect,” says Corso.
Working as a real estate agent, Corso used part of her commissions to fund the start-up. “I would go to the store, buy a pound of sugar and ten pounds of flour pretty much every other day. Then I’d wait to get paid on one bouquet to go out and do it again,” said Corso. The fledgling cookie business received its biggest boost from its first large order. “One thing that really helped was an order for 5,000 heart shaped cookies from the American Heart Association. We didn’t have any equipment for this. We had to do all the rolling by hand. I called every relative I had, every friend I had to help. With that order, the money we made helped us get things really started,” says Corso. A new and improved website also helped Corso’s Cookies gain exposure. “Once we got a really good website up, other companies started coming to us wanting to sell the bouquets on their site,” says Corso. Today, Corso’s Cookies are sold on over 100 websites, including ProFlowers and Amazon.
As orders kept getting larger and more frequent, Corso decided to leave the real estate business behind and pursue her true passion. “Within 6 months of starting cookie bouquets, the cookies just dominated. The tipping point for leaving real estate was my getting three hours of sleep a night,” explained Corso. But Corso wasn’t the only one burning the midnight oil—her husband Peter Hess also worked overtime to get the business off the ground. “My husband worked a full-time job to support us and worked with me in the evenings and weekends to prevent us from having to hire an accountant, janitor or salesperson. He kept on top of business matters and I More…
Question: My wife’s birthday is coming up and she asked that I donate to a charity in her name instead of buying a gift. How can I be sure that the charity I choose is legitimate?
Unfortunately though, there are a number of false charities looking to capitalize on the good nature of those looking to donate their hard earned cash. Thankfully, there are websites out there designed to help you vet charities you’re considering donating to. Here are a few of my favorites:
Charity Navigator: An independent charity evaluator, Charity Navigator offers information on over 5,400 charities in the United States. Charity Navigator assesses charities based on two factors: how responsibly it functions from day to day and how they expect the charity to be able to sustain their programs in the future.
Guidestar:Guidestar combines information provided by the actual charities with data from several other sources. More…
Why should you “Pay It Down?” Last week I took part in Portfolio’s “Business Beat” podcast to answer that very question and talk about the new, credit crunch edition of “Pay It Down!”. Listen in on the interview below for my answer.
What’s the best way to find a broker? Should you sell your silver bullion or hang on to it? We tackled these questions and more on this morning’s Money 911 segment. Watch the video below for our answers.
Tomorrow I’ll be speaking at The Women’s Conference 2009, a gathering of over 25,000 women with appearances and speeches by over 100 news makers and world leaders. Hosted by California First Lady Maria Shriver and Governor Arnold Schwarzenegger, the conference aims to inspire women across the globe. Take part in these days of empowerment and education by watching the conference live by clicking here.
HOW: “Much of how we got here feels like serendipity,” says Scherl. Both former successful marketing and strategy consultants, Scherl and Jaensch focused on women’s issues for most of their careers. “We focused on women-driven businesses – birth control, health and beauty, fertility– servicing leading companies including Johnson & Johnson, Wyeth and Church & Dwight,” says Scherl.
Knowing about their passion for women’s issues, a venture capitalist friend showed them a business plan for Zestra. “He said, ‘This opportunity, this category is for you’,” says Scherl. In April 2008, the pair met with the company’s higher-ups hoping that they could potentially manage the company. They was under the impression that Scherl and Jaensch were coming to the table with funding to back the troubled brand. “We parted ways believing that our interests were not aligned,” says Scherl.
Although the meeting didn’t turn out the way they hoped, Scherl and Janesch’s walked away with their curiosity piqued. “As we looked at the category, which we now define as sexual satisfaction, it looked like the “perfect storm” from a marketing perspective,” says Scherl. The pair noticed how many women were looking for More…
QUESTION: “I’m a single, pre-kindergarten teacher that loves her job but I have trouble making ends meet, especially during the summer months. I get paid twice a month—roughly $1,200 each paycheck. My take home pay per year is about $24,000. What can I do during the school year so I can live comfortably during the summer and not worry about my finances?”
-Jennifer, New York
ANSWER: Summers off, lots of vacation time, a nice benefits package…being a teacher definitely has its perks. In fact, according to MetLife’s annual Survey of the American Teacher, 62% of teachers surveyed said they were very satisfied with their careers.
The downside to teaching? Once the summer rolls around the paychecks stop appearing in your mailbox, making budgeting—at least for a few months—a bit of a headache.
WHO: Tina Corso-Hess
As orders kept getting larger and more frequent, Corso decided to leave the real estate business behind and pursue her true passion. “Within 6 months of starting cookie bouquets, the cookies just dominated. The tipping point for leaving real estate was my getting three hours of sleep a night,” explained Corso. But Corso wasn’t the only one burning the midnight oil—her husband Peter Hess also worked overtime to get the business off the ground. “My husband worked a full-time job to support us and worked with me in the evenings and weekends to prevent us from having to hire an accountant, janitor or salesperson. He kept on top of business matters and I 
WHO: Rachel Braun Scherl and Mary Wallace Jaensch
QUESTION: “I’m a single, pre-kindergarten teacher that loves her job but I have trouble making ends meet, especially during the summer months. I get paid twice a month—roughly $1,200 each paycheck. My take home pay per year is about $24,000. What can I do during the school year so I can live comfortably during the summer and not worry about my finances?”
