Qualifying for a credit card has become increasingly difficult under the dark cloud of the global credit crunch. The lending standards are getting tighter. If earlier credit card holders applied their energy to accumulating cash back or frequent flier miles, now they do their best to improve their credit scores. They understand that positive FICO score is their best guarantee of getting a credit card with beneficial features and terms in future.Just a year ago a customer with FICO score of 680 - 720 would get the best credit card offers with the best interest rates from many lenders. Now, as financial experts say, that bar has been raised to 720 - 750. The days of easy credit have gone. Many lenders are requiring higher scores to grant applicants credit cards. The reasons are obvious: the number of consumer defaults is rising. According to the American Bankers Association, in the last quarter of 2007 it reached the highest level since 1992.
As a result, banks are changing the rules of granting credit. They have stopped giving money away to anyone who needs a plastic. Having a good credit score is far more important now than it has ever been. Several years ago the applicants didn't need to have such high scores unless you wanted to get some really lowest rates card or even a No balance transfer fee credit card . A positive credit history is important not only when you are looking for a credit card. It could even affect your career. Potential employers, landlords and insurers take into consideration your credit reports and evaluate your responsibility and trustworthiness according to your borrowing-payment record.
Due to the new lending standards and to the rising level of credit education, people become more and more conscious about their credit card usage. Everybody understands how important is to maintain good credit score. It is the key your future successful financial future. That's why most people not to rush to apply for any card they like, but first compare interest rates and other important features online and choose the plastics that suit their life style and spending pattern best.Improving your FICO score is a time, patience and responsibility consuming process. The basic steps to build and maintain good credit have not changed: you need to pay your monthly bills on time and do not max out your credit limit. If you have debt, try to keep it less than 30% of your total available credit.
Another important step is to obtain a copy of your credit report. Make sure that there are no errors or inaccuracies. According to a survey by the U.S. Public Interest Research Group, more than a quarter of reports contain errors. If it happens, contact the credit bureaus and ask them to correct the data.
Don't be scared to apply for a new credit card if you are a responsible customer. Just control your spending and don't accumulate more debt than you can afford. Having no credit cards or keeping them inactive won't play into your hands. There will be nothing to report, so it won't help you to improve your FICO score. Related Posts
Visa Bulletin for May 2007 carried a glimmer of hope for stagnant EB categories. On April 20, 2007, Sheela Murthy spoke on an immigration visa panel with Mr. Charles Oppenheim, Chief Immigrant Visa Control and Reporting Division, Department of State Visa Office, at an American Immigration Lawyers Association (AILA) Conference. After the panel, Mr. Oppenheim discussed the future of visa numbers with Ms. Murthy. He acknowledged that an earlier dialogue during a previous DC AILA Chapter meeting with Attorneys Sheela Murthy and Aron Finkelstein, also of the Murthy Law Firm, had played an important part in ensuing discussions with other government agencies as to the factors impacting the use of Employment immigrant visa numbers during the summer months. Through his deliberations with the U.S. Dept of Labor and the USCIS, Mr. Oppenheim determined that it was appropriate to release some additional visa numbers by moving some of the May cut-off dates, and that movement for India and China is likely to occur, possibly as early as June or July 2007! On April 26, 2007, Mr. Oppenheim confirmed and reviewed this MurthyBulletin article with Attorney Murthy personally once again to ensure its accuracy with respect to the various discussions with the Murthy Law Firm and his estimates on the movement of worldwide immigrant visa numbers.
Visa Numbers Based on Demand
As regular MurthyDotCom and MurthyBulletin readers know, visa number movement is based upon a number of variables, one of which is the amount of expected demand. [The U.S. Department of State's Visa Bulletin chart is always available on MurthyDotCom.] The U.S. Department of State (DOS) must estimate this demand when it determines what cutoff dates, if any, to establish in the monthly Visa Bulletin. If the demand which DOS has anticipated does not materialize, it is possible that visa numbers will go unused. When asked, Mr. Oppenheim mentioned that this did happen last year and resulted in about 11,000 immigrant visa numbers not being used last fiscal year.
Demand Overestimated : Our Input
Attorneys Murthy and Finkelstein spoke with Mr. Oppenheim on February 28, 2007 at an AILA meeting. Mr. Finkelstein pointed out that, based on our firm's experience it appeared that the DOL figures were exaggerated. One of these reasons was that the DOL's Backlog Processing Centers (BPCs) were to be processing cases in a First-In / First-Out (FIFO) order. Thus, they already have processed many of the older cases with earlier priority dates. These older cases have already made their way into the USCIS system, if the employers are intending to move forward with their respective cases.
Additionally, many of the BPC cases are not moving forward to the USCIS, even after approval from DOL. Although the BPC sent out 45-day continuation letters to determine ongoing employer interest, many employers are no longer interested, given the lengthy delays in the DOL processing of cases. Many of the employees have moved on to other job opportunities. Thus, it is not appropriate to look at the number of cases in the BPCs and assume that each translates to a demand for a visa number in the near future. The ratio is actually fairly small for the cases that are being approved at this time.
Also discussed was the possibility that the labor substitution process will end in the near future. This would reduce some of the demand for visa numbers and the use of older priority dates. Without substitution, many of the older cases will simply be abandoned because the employers will not continue to sponsor the original beneficiaries for any number of reasons.
Expectations
Based upon these discussions, we expect some movement for India and China as early as the June or July 2007 Visa Bulletin. We do not have indications of how far forward the dates will move. The Visa Bulletin for June 2007 would usually be issued around the middle of May. We believe that any movements could impact both EB2 and EB3 petitions at some point. For now, people should continue as usual. Anyone eligible to file the I-140 petition, should likely do so. S/he should continue to extend his or her nonimmigrant status and not make any assumptions about the ability to file the I-485.
We would also note that, while forward movement is expected for the summer in 2007, it is also expected that the cutoff dates could move further back during the fall of 2007. Therefore, those who benefit by the movement need to take advantage of it while they can.
Flexibility of DOS Visa Office is Appreciated
We at the Murthy Law Firm extend our most sincere appreciation and thanks to Charles Oppenheim for considering our input and verifying our theories. We know that each visa number represents an individual with potential benefits flowing to all family members. We know that wasting even a single visa number means that an employer's needs go unmet and a person's dreams go unfulfilled. While we think it is abundantly clear that more visa numbers are needed, we are very pleased that the DOS Visa Office has determined that the cutoff dates will likely be shifted forward in an effort to avoid wasting visa numbers this year.
Here is the scoop on savings bonds in a nice question-answer format.
What type of savings bonds are available?
* Series EE. Paper Series EE bonds can be purchased at half face value. For example, you pay $25 for a $50 bond. Bonds bought online must be purchased at face value. You can buy up to $30,000 ($60,000 face value) in EE bonds. They come in denominations of $50, $75, $100, $200, $500, $1,000, $5,000 and $10,000. If you redeem bonds less than five years after purchase, you forfeit the three most recent months' of interest. There is no penalty after five years. * Series I. These inflation-indexed bonds can be bought only at face value in denominations of $50, $75, $100, $200, $500, $1,000, $5,000 and $10,000. The maximum purchase is $30,000. Like EE bonds you forfeit the three most recent months' of interest if you redeem I bonds less than five years after purchase. * Series HH. The Treasury stopped issuing HH bonds on September 1, 2004. Prior to that date, the only way to invest in HH bonds was by trading in your EE bonds.
How are the interest rates determined?
As of May 1, 2005, newly issued Series EE bonds will have a fixed interest rate, based on 10-year Treasury note yields. The rate currently is 3.5%. These fixed rates will be announced every May and November and the rate that is in effect on the day you buy your bonds will stick with them for at least the first 20 years. The Treasury will still guarantee that the value of an EE bond held for 20 years will at least double its purchase price. If a fixed-rate EE bond's stated rate won't get the job done, the government will make a one-time adjustment so that the average annual return over two decades will be the 3.5% needed to double your money. You can check the latest rates on the Treasury's savings bond Web site. If you happened to buy that bond in April 2005 before the fixed rate took effect, the rate on your bonds would change in October (and be based on the rate announced in May). I bonds earn interest based on a combination of a guaranteed fixed rate and the rate of inflation. The current fixed rate for I bonds purchased between May 2005 and October 2005 is 1.2% and will stay with the bonds for their entire 30-year lifespan. The inflation-adjusted portion of the yield, now 3.58%, and the fixed rate are set every six months. HH bonds, currently paying 1.5%, do not increase in value. Instead, investors are paid interest every six months and get face value for the bonds when they redeem them. The interest rate is set when you buy HH bonds and then again ten years after the issue date. They stop earning interest after 20 years.
Who can buy savings bonds?
Residents of the United States and its territories (as well as U.S. citizens living abroad) can buy savings bonds. Canadian and Mexican residents who work in the United States, have social security numbers and who can participate in the Payroll Savings Plan through work also can buy savings bonds.
How do bonds compare with other investments?
They're very safe (and conservative), and compared with a number of other safe investments, the yield isn't too bad. As of May 1, Series EE bonds earn 3.5%. That's about the same as a one-year certificate of deposit, beats money-market deposit accounts and certainly is more than the typical savings or interest checking account. The current combined rate for I bonds is a respectable 4.8%. This beats many other conservative investments. Savings bonds are also free of state and local income taxes, so that adds to your yield, too. Check out the effect on the tax advantages calculator. But keep in mind that you can't redeem savings bonds for the first year. And if you redeem them in less than five years, you lose the most recent three months' interest.
Do savings bonds earn interest forever?
No. But "people are under the misconception that savings bonds earn interest as long as they hold them," says Dan Pederson of the Savings Bond Informer, a bond consulting service. Americans sitting on bonds that have stopped earning interest are making an interest-free loan to the U.S. government to the tune of $9 billion. If you've got savings bonds and aren't sure whether they still are earning interest, the Bureau of Public Debt's Treasury Hunt database can help you find out. EE bonds earn interest for 30 years. Bonds issued after May 2003 are guaranteed to double in value within 20 years, which is referred to as the original maturity date. The new fixed rate for bonds issued after May 1, 2005, applies to those first 20 years then is extended for the next ten years unless the Treasury Department announces a different rate. I bonds earn interest for 30 years. The interest accumulates monthly and is compounded every six months. HH bonds stop earning interest at 20 years. The interest rate is set when you buy them then again at ten years after the issue date.
Bonds no longer earning interest as of April 2005
E May 1941 through April 1965 and December 1965 through April 1975
H June 1952 through April 1975
HH January 1980 through April 1985
Savings Notes May 1967 through October 1970
A, B, C, D, F, G, J, and K All issues
How can I find out what my bonds are worth?
You can use the savings bond calculator on the Bureau of Public Debt's Web site. You can also keep track of and value each bond with the free, easy-to-use, Windows-based Savings Bond Wizard program. If you don't want to manage your savings bonds yourself, you can get help. For example, U.S. Savings Bond Consultant (www.savingsbonds.com) offers online bond-management tool called Savings Bond Guru.
Does it matter when I cash in a bond?
Yes. Interest is added to savings bonds at specific intervals. If you redeem your bond before the interest is posted, you lose it. For example, if interest is posted in, say, April and October, redeeming bonds in September instead of October would cost you six months' worth of interest. To see when interest is added to your bonds, use these tables.
Should I cash in my oldest bonds first?
Not necessarily. When figuring out what bonds to cash when, you can't go just by date. Older bonds are not by definition worse than newer bonds. Some of them still earn a 4% guaranteed minimum rate. In addition, series E bonds issued before December 1965 have a 40-year maturity period, but starting in December 1965 E bonds began to be issued with 30-year maturities. (All series EE bonds and I bonds mature in 30 years.) A lot of bonds holders lose sight of that (and the government doesn't send statements) so they accidentally cash in bonds that are still earning interest and hold on to ones that aren't. When you want to redeem bonds, start with any that have stopped earning interest.
Will I have any tax liability if I use my social security number when I buy a bond as a gift?
No, you shouldn't. The social security number on the bond is used for tracking lost bonds, for instance, and other record keeping. The person who cashes the bond -- normally the owner or a co-owner -- should get the 1099 form reporting the interest for tax purposes. However, banks have been known to make mistakes, says Pederson. Just to be sure, try to use the social security number of the recipient.
What do I do if I've lost some savings bonds?
Complete Form PD F 1048.. Pederson suggests that everyone file this as a matter of routine to make sure there are no bonds belonging to you that you don't know about, such as gifts that were never delivered. The key to getting the best search is putting as much information as you can on the form, including as many forms of your name as you can, your old addresses, whether the bonds were bought through payroll deduction and at what company and so on. A search generally takes three to six weeks. The Bureau of Public Debt's Treasury Hunt feature on its Web site may also help you find bonds that were never delivered (but not lost bonds).
Can I buy savings bonds online?
You can buy them at any Federal Reserve bank or branch, your bank and, often, through a payroll deduction plan. You can even buy them online through Treasury Direct with an automatic withdrawal from your checking or savings account.
Minute monitor To see how many of your plan minutes you've used, dial *646# if your carrier is Cingular; *4 for Sprint; #646# for T-Mobile; #646 for Verizon.
Credit card hotline To report lost or stolen credit cards, the following numbers come in handy: 800-VISA-911 for Visa cards (800-847-2911), 800-MC-ASSIST for MasterCard (800-622-7747), 800-992-3404 for American Express and 800-DISCOVER for Discover cards (800-347-2683).
Your health insurer Heading to the emergency room or about to schedule some surgery? Ring up your carrier to make sure you're approved for coverage. It's a lot more convenient than lugging around that fat book of policy details your employer gave you -- and a lot less expensive than paying out-of-network costs.
ICE This is more a "peace of mind" tip than a money one, but ICE stands for "In case of emergency" and might help a hospital or cop reach your emergency contact person in a hurry. Put the acronym in front of the person's name (like "ICE -- Mom") in your speed dial and on your contact list. (Ignore e-mail hoaxes that say you'll somehow be vulnerable to virus attacks or extra charges for having an ICE entry. Those aren't true.) You also should have this information taped to or near your driver's license or whatever other ID you regularly carry, since that's likely to be checked first if you can't communicate.
If you pay your credit cards off in full every month (which you do, right?), you can give yourself an interest-free loan of a month or more on major purchases simply by charging big-ticket items right after your card's closing date.
Let's say your statement typically closes around the 20th of the month. You charge your big-ticket item the day after, the 21st.
The charge doesn't show up until the next month's bill, and you typically have 10 to 15 days from the closing date to pay it, effectively giving you a 30- to 45-day interest-free loan. (You'll want to confirm the closing date, since they can change month to month, but typically that just takes a visit to your card's Web site or a call to the 800 number.)
You can take this hack a step or two further by using three credit cards.
"Make sure their statement closing dates are evenly spaced throughout the month, say on the 1st, 11th, and 21st of the month (many cards do allow you to specify your closing date if you ask). Delay major purchases until the day after a card's statement closing date, and then use that card for the purchase."
Store Financing DealsHack
Warning: This is an expert hack, recommended only for folks who have good money management skills.
"Whenever I buy a big ticket item, I make sure I have the cash to pay for it. Then I wait for store financing offers -- same-as-cash or deferred interest for an extended period. I opt for the financing, put the cash in a (certificate of deposit) that matures just before the end of the promotional period, and pay it off before the deferred interest becomes due. It's like a free loan from the stores and I can earn interest while I enjoy the item!"
Obviously, this hack works ONLY if you keep your mitts off the invested money and if you pay the bill before it comes due; otherwise, you could pay a truckload of finance charges. If you do it right, though, there are benefits, as sneakers explains:
"Circuit City recently had a special (of) no payments until January 2008. I bought a flat-screen TV, the camera I've been ogling for two years, and a bunch of other little things I needed, like printer cartridges. Total $2,500. Put $2,500 in 2-year CD earning 5.25% APY. That's $262.50 I'll earn during that time."
Organizing Receipts Hack
Receipts now go in one of three compartments in my wallet. Receipts that I probably won't need for long, such as those for routine purchases, get stuffed in with the bills; receipts that require action, such as a rebate, get put in the center section; tax-related receipts and those for big-ticket items go in the third compartment. Every week or so I clean out my wallet, taking action on the middle-compartment receipts and filing the tax-related ones.
The "short-term" receipts get put in a folder marked "This Month." At the end of the month, I move them into the folder marked "Last Month," while the receipts from that folder get moved to the "Two Months Ago" folder and the contents of THAT folder get dumped in the trash.
This system ensures I keep receipts long enough to check against my credit card statements, if I need to, and to make any returns. But I no longer have to spend valuable time sifting and sorting.
Suze Orman is one of my favorite authors and financial adviser. About 4 years ago we started watching her show on CNBC and me and wife were hooked onto it. Taking her advise, we quickly got rid of our credit card debts, created an 8 month emergency fund and started saving almost 50% of our income.
Now we have started looking for a home. So with all thats going on about subprime mortgages, here's Suze's take on it.
Look out for more such posts while we make our way through this home buying experience.
Protecting Yourself from the Wrong Mortgage by Suze Orman
Talk about being late to the game.
After the past few months of mortgage delinquency rates and home foreclosures creeping ominously upward, a lot of government attention is suddenly being focused on the "shocking" fact that many borrowers ended up with nontraditional mortgages they had little chance of affording once the alluring introductory periods expired.
From recent congressional hearings to the passage of new federal guidelines on mortgage qualification rules, Washington is playing catch-up in addressing aggressive lending practices that have led consumers into an unaffordable debt spiral.
Do-It-Yourself Protection
I suppose we should chalk it all up to "better late than never," but I'm not so sure that government intervention is the real solution. Besides, who knows if and when any meaningful legislation will be put into place to help borrowers avoid mortgage deals they can't really afford.
Instead, the real solution is for borrowers to step up to the plate and assume full responsibility for understanding what they're agreeing to when they sign their mortgage documents.
Given that we're now heading into the home-buying season, here's what I recommend that every homebuyer -- and anyone contemplating a mortgage refinance -- should consider before signing on the dotted line:
1. Focus on the "what if" factor.
If you're considering any type of mortgage that has a special-payment deal for a few years before the loan adjusts, study what your payment could rise to after the initial teaser period expires. In fact, that's exactly what the new federal guidelines are designed to help out with.
When you opt for any type of "nontraditional" mortgage that allows you to defer the repayment of principal (and even part of the interest) in the early years of the loan, the new federal guidelines -- which, alas, are just guidelines -- stipulate that the lender consider your ability to repay the loan once the loan "adjusts" and you have to start repaying the principal.
If you can't handle that fully adjusted rate, in theory the lender should be reluctant to give you the loan in the first place. Even if a lender still offers you the deal, you need to really crunch the numbers and make sure you can afford it once the adjustment kicks in. One of the big reasons for the recent rise in delinquencies and foreclosures is that borrowers who took out the interest-only or negative-amortization loans are now stuck with much higher payments because their assumptions were flawed.
Those assumptions -- pushed by the same aggressive lenders -- were that the borrower's income would increase enough in the intervening years so that they would be able to handle the higher payments. Or that the real estate boom would continue, so that there would be ample increase in equity to allow the borrower to refinance out of the loan before the adjustment hit.
Well, that's not so easy right now, as home price appreciation has stalled in many of the once hottest markets, and not too many people have seen a 20 percent or 30 percent jump in income, which is often what's needed to keep up with rising mortgage payments.
I'm not going to issue a blanket statement that you should never ever use a non-traditional loan. But you need to take full responsibility for understanding the "what if" factor: What if your assumptions don't play out and you have to make higher payments? What's your plan for handling that? That brings me to my next point.
2. Know your limits.
It's up to you to set your housing budget, and it's absolutely irrelevant what amount a lender says you can qualify for.
Lenders make more money if you borrow more money; in other words, they aren't necessarily motivated to tell you to borrow less rather than more. And the rules of their business have changed over the past decade or so. It used to be standard practice to offer loans with monthly mortgage payments that, along with borrowers' other recurring debts, wouldn't eat up more than 36 percent of gross household income. Now that percentage can be as high as 50 percent.
If you stretch yourself that far, you're leaving yourself less wiggle room if any unexpected expenses come your way, such as unforeseen medical bills, a layoff, and so on. If you're even considering a debt load that eats up half your household income, you'd better make sure you have an emergency cash fund that covers you for six to eight months. Otherwise, the slightest financial glitch could send you down the path to foreclosure.
3. Lower your price target.
I know this sounds un-American, but the best way to keep your mortgage costs in check is to start out with a smaller mortgage. Ideally, this is where I suggest you save up for a nice down payment of 20 percent or so. That's still my best advice, but I know patience isn't exactly in vogue these days.
Here's my second-best advice: buy a less expensive home. That is, a home you can easily handle the payments on, rather than a home that keeps you up at night worrying about the mortgage. That can mean rethinking where in the country you live, or what neighborhood you can afford.
Or reconsider exactly how much space you need. I find it fascinating that the typical square footage of a U.S. home has increased more than 40 percent since the mid-1970s, yet our family size has actually decreased slightly during the same period. A big reason housing is more expensive is because it's so much larger. Set your sites on a comfortable but not king-size home and you'll have a more affordable mortgage.
4. Read the ARM fine print.
The interest-only and negative-amortization loans I mentioned earlier are the riskiest deals, but you can still get in plenty of trouble with a straightforward adjustable rate mortgage (ARM) if you don't plan ahead for when the rate adjusts.
Don't plan on just refinancing before the adjustment, either. That may be your intention, but, as I said, the recent uptick in delinquencies and foreclosures is due in part to folks who had just the same intention a few years ago.
Consider that a $250,000 mortgage financed with a 3/1 ARM in 2004 will see its payment jump about $300 a month when it adjusts this year. The best way to handle an ARM is to calculate what the payment could be at the first adjustment, and start saving now so you could handle that potential increase. Check your loan document to find out the maximum annual rate increase. Typically it's 2 percentage points, but be careful -- if you have a longer-term hybrid such as a 5/1 ARM, your initial rate increase could be much higher.
While you're studying up, check for the inclusion of a prepayment penalty. This little nugget has tripped up many homeowners in the past few years. A typical penalty can be up to six months' interest if you refinance within the first three years of a loan. On a $250,000 mortgage, that's potentially more than $25,000.
Here is some news regarding the new law thats been introduced, which affects green cards, H1B visas etc. [source MurthyDotCom]
Representatives Luis Gutierrez (D-IL), Jeff Flake (R-AZ) and other leading House Democrats and Republicans unveiled the STRIVE Act, a bipartisan comprehensive immigration reform bill, on March 22, 2007. The bill has been enthusiastically received by various governmental, public, and professional organizations, as it purports to provide a comprehensive solution to current shortcomings in the U.S. immigration policy. The full name of this proposed legislation is the Security Through Regularized Immigration and a Vibrant Economy (STRIVE) Act of 2007.
Overview of the STRIVE Act
The STRIVE Act is a piece of comprehensive immigration legislation, much-awaited by almost all segments of U.S. society; ranging from undocumented workers to immigration enforcement agencies. It contains most of the provisions that were introduced in the U.S. Senate Judiciary Committee last year. In addition, it contains provisions that would ensure improvements to border security until any legalization of undocumented immigrants could begin, as well as new requirements that undocumented immigrants leave the U.S. in order to return in valid immigration statuses.
The STRIVE Act contains seven titles, which include border security, strengthening interior enforcement, more stringent employment verification requirements, a new worker program, protection of families, avenues for earned legalization for qualified, hardworking individuals, and various miscellaneous provisions pertaining to the immigration court system, relief for immigrant victims of the 9/11 attacks and facilitation of naturalization for members of the armed forces.
Provision for Migrant Workers
Among most prominent features of the STRIVE Act are a new flexible worker program that provides for legal status for migrant workers, a way for undocumented immigrants to earn legal status, elimination of backlogs in family and employment-based immigration, and strong border security. The STRIVE Act incorporates the DREAM Act of 2007 and AgJOBS of 2007. The DREAM Act of 2007 is legislation designed to provide for legalization for children of "illegal" immigrants. The AgJOBS Act of 2007 provides for immigration status for agricultural workers.
Elimination of Family- and Employment-Based Backlogs
Of particular interest to MurthyDotCom and MurthyBulletin readers is Title V, which is aimed at both the family- and employment-based backlogs. Its provisions are designed to assist highly-skilled workers to immigrate to the United States, as well as address certain shortage occupations, such as nursing. Included in the provisions are increases in both family- and employment-based visa numbers, as well as creating exemptions from the limits for certain highly-educated foreign nationals. It also proposes to change the current system of counting one visa number per person to allow for counting one visa number per family, in most situations.
H-1 Cap Exemptions
The bill also includes increased H-1 cap exemptions to help address the H-1 cap crisis. Included are unlimited exemptions for persons with U.S. advanced degrees, as well as exemptions for all non-profit organizations. Persons with advanced foreign degrees would also benefit by H-1 cap exemptions for those with degrees in science, technology, engineering, and math.
Current Posture of this Bill
It is important to note that the STRIVE Act has not yet become law, and is only just beginning the legislative process. As explained in our August 2, 2002 article, The Legislative Process - How a Bill Becomes a Law, available on MurthyDotCom, this is a complex and lengthy process. Legislation, even if passed, often takes on various amendments and changes by the time it is passed - if it is passed - into law.
This article explains the pros and cons of debit cards and credit cards...pretty good eye opener! (provided by smartmoney.com)
Just last month, 1,000 Stop & Shop customers had their credit and debit card information stolen after thieves replaced store card-reading devices with ones that captured account data.
It's the latest incident in a string of high-profile credit- and debit-card data breaches that have affected companies as varied as T.J. Maxx and Marshalls, Citibank, and payment processor CardSystems.
The lucky victims -- if such a thing can be said -- are those who got their credit-card data stolen, says Scott Bilker, founder of DebtSmart.com.
Under the Fair Credit Reporting Act, your credit-card issuer can't hold you responsible for any of those unauthorized charges. "Usually, they give you a new card, a new account number, and that's that," he explains.
But consumers whose debit-card data gets lifted are subject to a different set of rules and regulations -- ones that may well leave you unprotected.
"You're in a fundamentally weak position angling to get the grocery money put back in your checking account," says Jean Ann Fox, director of consumer protection for the Consumer Federation of America.
Best-case scenario, you're out of cash until the bank investigates your claim. And there's a very real chance you could lose some -- or all -- of that money for good.
Debit transactions are regulated under the Electronic Funds Transfer Act. Under these rules, just how much you'll be able to recover depends on how quickly you discover the problem.
If you notify your bank within two business days of learning about an unauthorized transaction, your liability is $50, maximum. Between two and 60 days, your liability is $500; after that, it's unlimited.
Banks build on these rules with their own policies. These so-called "zero liability" policies claim to free the consumer from fees and losses should unauthorized purchases be made to your debit account. In most cases, the banks promise to fully reimburse you.
"But there's no law that says they have to," says Bilker. "It's all on their terms and their interpretations." Fact is, if the theft occurred for a reason that the bank deems your own fault, you're likely out of luck.
Even if you are eligible for reimbursement, don't expect to get your missing cash back quickly, says Fox. Some banks issue temporary credits, but it's a rare concession.
In most cases, before you can be reimbursed, your bank must assess the charges to determine the extent of your liability. That investigation can take as long as a week.
So when isn't a bank likely to honor some or even all of your claims? When you fall into any of the following four loopholes:
PIN vs. ATM Transactions
If the PIN was lifted along with your account number good luck getting reimbursed, says Fox. With the exception of Bank of America, Chase, and Wells Fargo, most major banks won't cover all unauthorized charges or withdrawals completed with a PIN. Signed purchases, on the other hand, are covered because they are processed through trusted credit-card networks.
So sign away whenever possible. While it takes an extra step, it offers an extra layer of protection.
Consumer Negligence
If your bank thinks you're to blame for your account number getting stolen, you can be held liable for losses in that account. MasterCard, for example, allows banks issuing its cards to assign liability when a consumer has not "exercised reasonable care in safeguarding the card," according to the details of its liability policy.
Good luck figuring out what that means. "The language is a little bit open-ended," says Joanne Trout, vice president of worldwide communications. "At the end of the day, it's the bank's call."
Carelessness, she says, could mean anything from letting your college kid borrow the card to shopping through an unsecured Web site.
The Domino Effect
"If someone cleans out your account, it's inevitable: checks are going to bounce," warns Bilker. The resulting overdraft fees won't necessarily be reimbursed.
Also, be aware that if your account is already overdrawn or in otherwise poor standing when the theft occurs, that may be another reason for the bank not to reimburse you. The idea is that you already weren't monitoring your account diligently.
Slow on the Uptake
Major banks require you to catch the unauthorized transaction within 60 days of receiving your monthly statement to qualify for the zero liability policy. Spot it later than that and you'll need to cite extenuating circumstances -- say, a hospital stay or a long trip abroad -- to be reimbursed.
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Here are some fundamental rules, not to become filthy rich, but live a comfortable life. The ones in bold are ones that I religiously follow, or at least try to.
For return on investment, the best home renovation is to upgrade an old bathroom. Kitchens come in second.
It's worth refinancing your mortgage when you can cut your interest rate by at least one point.
Spend no more than 2 1/2 times your income on a home. For a down payment, it's best to come up with at least 20%
Your total housing payments should not exceed 28% of your gross income. Total debt payments should come in under 36%
Never hire a roofer, driveway paver or chimney sweep who is going door to door.
All else being equal, the best place to invest is a 401(k). Once you've earned the full company match, max out a Roth IRA. Still have money to invest? Put more in your 401(k) or a traditional IRA.
To figure out what percentage of your money should be in stocks, subtract your age from 120.
Invest no more than 10% of your portfolio in your company stock - or any single company's stock, for that matter.
The most you should pay in annual fees for a mutual fund is 1% for a large-company stock fund, 1.3% for any other type of stock fund and 0.6% for a U.S. bond fund.
Aim to build a retirement nest egg that is 25 times the annual investment income you need.
If you don't understand how an investment works, don't buy it.
If you're not saving 10% of your salary, you aren't saving enough.
Keep three months' worth of living expenses in a bank savings account or a high-yield money-market fund for emergencies. If you have kids or rely on one income, make it six months'.
Aim to accumulate enough money to pay for a third of your kids' college costs. You can borrow the rest or use some of your income to help out when your child is in college.
You need enough life insurance to replace at least five years of your salary – as much as 10 years if you have several young children or significant debts.
When you buy insurance, choose the highest deductible you can afford. It's the easiest way to lower your premium.
The best credit card is a no-fee rewards card that you pay in full every month. But if you carry a balance, high-interest rates will wipe out the benefits.
The best way to improve your credit score is to pay bills on time and to borrow no more than 30% of your available credit.
Anyone who calls or e-mails you asking for your Social Security number or information about your bank or credit card account is a scam artist.
The best way to save money on a car is to buy a late-model used car and drive it until it's junk. A car loses 30% of its value in the first year.
Lease a new car or truck only if you plan to replace it within two or three years.
Resist the urge to buy the latest computer or other gadget as soon as it comes out. Wait three months and the price will be lower.
Buy airline tickets early because the cheapest fares are snapped up first. Most seats go on sale 11 months in advance.
Don't redeem frequent flier miles unless you can get more than a dollar's worth of air fare or other stuff for every 100 miles you spend.
When you shop for electronics, don't pay for an extended warranty. One exception: It's a laptop and the warranty is from the manufacturer.
For explaination of these rules please read the original article here
