Archive for 2010

Summer is the time for lemonade stands, painful sunburns and yard sales. It’s the best time to clean out those items that have been languishing in your garage or attic for the last ten years and give them a new home. But is there a better way to keep track of the money you make than that old, traditional standby: the cash box?

As it turns out, there is. You can accept credit cards at your yard sale with an iPhone, an Android phone or a simple computer with an Internet connection. It’s easy enough to use simple merchant accounts to swipe those credit cards, and you’ll be the hit of your block because, after all, who carries cash anymore?

Smart Phone

Arguably the easiest way to accept credit cards at your yard sale is by using an iPhone or Android phone and an application like SquareUp. It also works on the iPad, iPod Touch and Droid phone, and the process is easy enough for even the most technologically-illiterate user to master.

To start accepting credit cards at a yard sale, sign up for a SquareUp account. You can do this via their web site from your computer or smart phone. They will send you a free card reader and SquareUp sticker, as well as an Internet address to get you started.

From there, you can accept credit card payments for anything by giving it a name and even a photograph on the application. The card reader attaches to your phone via the audio input jack, and you’re good to go. You don’t even have to worry about losing receipts to the summer breeze because records of each transactions are sent to you via e-mail.

Internet Connection

If you’ve got a powerful router signal or a particularly long cord, you can also use your Internet connection to accept credit card payments at a yard sale. Using an existing web site or a free Google Site, you can start taking credit cards with a simple PayPal account.

Set up your Google site and decide who can view it and what template you want to use, if any. Then, go to PayPal.com and register for an account. Once it is open, you can click on the Merchant Services button in the upper task bar, then on the “Buy Now Button” at the top of the screen.

From there you will enter the specifics for this Buy Now button, including the name of the item and its description, as well as its price. PayPal will give you a unique code for your Google Site, which you simply cut and paste.

During your yard sale, you’ll need to keep your desktop computer or laptop within easy reach to process credit card transactions. Let customers know that you are using a secure service through PayPal if anyone has any concerns.

These simple merchant account solutions will allow you to accept more payments at your yard sale and keep track of transactions more easily. Of course, you might want to keep that handy cash box on hand just in case one of your customers wants to go the traditional route.

Steve Thompson

During “Confessions of a Shopaholic,” Rebecca Bloomwood (Isla Fisher) says she fell in love with shopping as a little girl, a time when she saw grown women using “magic cards” to buy things. For a long time, most people shared Rebecca’s love for the plastic money known as credit cards, but the unstable economy has made folks more cautious about what they carry in their wallets.

Before filling out an application, it is important to look at the four basic types of credit cards:

• Charge cards
• Credit cards
• Check cards
• Debit cards

Be sure to weight the pros (credits) and cons (debits) of each.

Charge Cards

A Forgotten Wallet Leads to the First Official Charge Card

Frank McNamara gets the credit for creating Diner’s Club, the first official charge card. After he forgot his wallet and was unable to pay the check at a popular New York City restaurant in 1949, McNamara came up with the charge card concept, where diners would sign for meals during the month and then settle up just one tab at the end of the month.

Although McNamara’s first card was made of cardboard, the charge card became a hit, inspiring the American Express Corporation to come up with their own charge card designed with business travelers in mind. Credit cards are still king with consumers, but the charge card continues to thrive.

• Credits: Typically, charge card issuers set no upper limit for purchases, which means no worries at the checkout line. Because the balance must be paid in full at the end of the month, you aren’t carrying a debt load from month to month. Annual fees tend to be high, especially for premium American Express cards, but these cards come with personal concierge services.
• Debits: With no ceiling on the credit limit, it is all too easy to overspend each month. Companies like AMEX also offer the option to carry a balance on many of their cards, which means paying monthly interest.

Credit Cards

From Babylon to Bank of America

Historians have said that credit was extended as far back as 3,000 years ago with the “bill of exchange” in places like Babylon and Egypt. In the 20^th century, Mr. McNamara once again gets the credit for creating one card that could be used to purchase goods and services at various businesses. Instead of maintaining credit accounts at several places, consumers needed just one or two credit cards like McNamara’s Diner’s Club.

These days, Citigroup, Bank of America and other issuers have several different credit products, some tailored to students, business travelers and those who covet frequent flyer miles. You can get a card tailored to your exact business and personal needs.

• Credits: Merchants around the world accept MasterCard and Visa, making them an invaluable credit product. Other cards, such as Citigroup’s Chairman, carry excellent concierge services and allow the cardholder access to special events.
• Debits: Until the new credit card reforms started taking effect on August 20, credit card companies had a pretty free hand with their products. If you missed making the minimum monthly payment just once, for instance, your interest rate might skyrocket. Late fees also could, in some cases, be more than your regular monthly payment. Even with the new reforms, lenders are warning that interest rates might increase to compensate for lost revenues.

Carrying a balance from month to month also increases the cost of an item purchased on credit. Banks sometimes mail out cash advance checks with a low interest rate, but if you miss a payment, that super-low interest rate goes up.

Check Cards

Cards to Access Your Bank Account

The 1990s became the decade of the debit card, which is linked to your checking and/or savings accounts. Instead of writing a check, you simply swipe the debit card, which carries the MasterCard or Visa logo, and the money is automatically drafted from your account. Debit cards also work like traditional ATM cards, allowing cash withdrawals.

• Credits: A debit card offers consumers a way to control their spending because you typically can’t charge more than your account balance. This piece of plastic carries much of the weight of a credit card without the crushing interest rates.
• Debits: Debit cards are just as vulnerable to fraud as credit cards. If thieves steal your account number, they could wipe out your entire checking account in short order. When using a debit card to secure a hotel room, the front desk will “block out” a certain amount of money in your account to cover room charges. Even if you don’t charge anything to the room, it takes several days for this hold to go away.

Debit Cards

A Reloadable Credit Card

More than ever before, consumers are having trouble getting credit cards because of their credit history. People need plastic to rent cars and make airline reservations, which makes the reloadable or prepaid card an option for those with a history of late payments or defaults. Walmart even offers incentives to consumers who cashed their paychecks at a local store and put the money on a prepaid card.

• Credits: A reloadable card is good for people who have a habit of misusing credit because you can’t spend more than the amount available on the card. To get a prepaid credit card, you simply have to open an account and deposit money into it.
• Debits: The fees required to open an account, monthly maintenance charges and the cost of reloading the card can add up quickly. Merchants such as Walmart do offer free reloads, though, if you set up a payroll direct deposit.

Do the Debits Exceed the Credits?

When weighing the pros and cons of each type of card, the biggest factor to consider is your own spending habits. If you are a careful shopper and a good saver, a credit card could be your best option. If your credit score is below 600, however, preloaded and debit cards can give you all the power of plastic.

Steven Bryan

Getting out of credit card debt is very important. Out of all the types of debt to have, credit card debt can be the most expensive and the hardest to pay off. However, with a little hard work, determination and discipline, it is possible to eliminate your credit card debt once and for all. Here are five things you can do to begin your journey to financial freedom.

1. Pay more than the minimum amount

Making the minimum payment indicated on your credit card bill isn’t going to get you anywhere when you are trying to rid yourself of this debt. How long it takes to pay off a credit card by only paying minimum payments will depend on your interest rate and debt load. Use this calculator to figure out how long it will take to eliminate your debt by only paying minimums. Use this as a motivating factor to send in those extra payments each month.

2. Don’t use your credit card

Once you are determined to pay off a balance, stop using that card. In fact, place the card in a place that is difficult to get to. Carrying it around in your wallet is only going to make it that much more tempting to use. It will become harder and harder to eliminate a balance if you keep adding to it. If you must use your card for a purchase that only accepts credit cards — pay off that purchase amount immediately.

3. Ask for an interest rate reduction

Sometimes, a simple call to the credit card company will yield you thousands of dollars in savings. Sometimes, companies will lower your interest rate to keep your business. Every little bit helps, and this will ensure that the payments you make are devoted to paying off your principal balance instead of paying the company’s fees.

4. Never go over your limit or pay late

Going over your limit or paying your card late can trigger astronomical fees. In addition, your interest rate can adjust to the default rate, which is sometimes as much as 25 to 30 percent. If this happens, you can only imagine how long it will take to pay off your debt. Pay on time. If you are forgetful, schedule your minimum payments to draft monthly from your bank account.

5. Pay off high-interest cards first

If you are trying to pay off multiple cards, focus on the debt that is most expensive first. If you have two credit cards — one at 8 percent and the other at 12 percent — pay off the 12 percent balance first, even if it’s significantly lower than the balance on the 8 percent card.

Paying off credit cards can be somewhat intimidating. However, with a little determination and discipline, you will discover that it is a lot easier than you think.

Meg C.

By now, most people either use Twitter to communicate online, or at least know what Twitter is. What you might not know is that Twitter founder Jack Dorsey is now out to release technology that could drastically change the credit card industry.

Enter SquareUp.com, a program operated by Dorsey’s new venture, Square, that allows users to make and accept payments with their Apple iPads. It’s billed as a simple, secure way for money to change hands, whether you are paying or getting paid. Simply download the free iPad app and enter your mailing address when prompted. You’ll be delivered a tiny plastic device to attach to your iPad that allows you to swipe a credit card, and the transaction is processed via the company’s Web site. Over time, any mobile device with the ability to access the Web could be used with Square.

So what does this mean for the credit card industry?

Low cost

Traditional credit card processing equipment can be expensive, from the card readers to the software required to operate them. Then there are the costs involved with operating a credit card merchant account. With the Square service, you pay only a few dollars for the software, nothing for the tiny “Square” device, and a small fee for each transaction.

True mobility

The Square service means that business owners are no longer tethered to their stores or offices. With their iPads, they can accomplish just as much on the road as they can from work, including processing credit card payments. Those who sell wares from stalls, at farmers markets or any other mobile area can now accept payments from anybody who has a credit card.

Not just for merchants

Square also enables individuals to pay back small debts and lend each other money quickly and easily.

Another major benefit of Square is that it cuts down on the paper used during a transaction. Receipts are e-mailed or sent to you by text message so that you can choose to print them or not as needed.

With the iPad release, Square closed its iPhone Beta phase so the iPad is currently the only device that runs the app. However even with the iPad, Square could potentially benefit regular cardholders, business owners, traveling sales professionals and anyone else for whom credit cards are part of daily life.

Steve Thompson

Thomas Wolfe once wrote a novel called “You Can’t Go Home Again,” whose title emphasizes how much people and places change, no matter how fondly we remember them or how much we wish they would remain as we once knew them. For Deputy U.S. Marshal Raylan Givens, the antihero of the FX original series “Justified,” going home entails discovering how much he, his hometown and his credit score have changed.

From Florida to Kentucky in One Shot

The son of a notorious con man, Givens left his home in Harlan County, Ken., as a young man, hoping to escape life in the coal mines. As a U.S. marshal, Givens specialized in fugitive retrieval in Miami until he shot a known gun thug in a restaurant.

During the media frenzy that followed, Givens’ angry superiors sent him back home to Harlan County, the very last place that he wanted to go. According to a pay scale published on Indeed.com, Givens was making approximately $51,000 per year in Miami, which is about 5 percent less than the national average.

Since the transfer to Harlan County also is a demotion, Givens probably sees his pay grade reduced to an even lower level. The government pays its marshals based on their geographic location, so Raylan’s annual salary could easily take a $10,000 hit thanks to that one careless shot and his transfer back to Kentucky.

Relocation Costs Can Affect Credit Scores

In a turbulent economy, many people must pack up and move to a different city to take a new job. Relocation is stressful enough, but Givens has to leave Miami in a hurry, which means he may have to leave some essential things behind and have them shipped later. If he takes an apartment or rents a house in Kentucky, that means additional credit checks, and too many of those can lower a credit score to an unacceptable level.

Suits, Stetsons and Sidearms

Even at the top of his game, Givens is a man of simple tastes, with the exception of his clothing. Cultivating a modern cowboy look, Givens is rarely seen without a tailored suit and a well-fitting Stetson hat; his ever-present sidearm and holster complete this ensemble. The Stetson Retro Fedora that Givens favors costs around $50, but a more stylish Stetson Brewer Panama Fedora carries a price tag three times that price.

Raylan also enjoys wearing cowboy boots and, depending on the material used to make them, these can become a pricey accessory. With Givens’ devotion to Cowboy chic, it is a safe bet that he carries at least one credit card from a men’s specialty shop or department store. Department store cards like these tend to carry an annual interest rate that exceeds 20 percent.

Rebuilding a Reputation, Career and Credit Score

In the blink of an eye, Deputy U.S. Marshal Raylan Givens lost nearly everything he had worked for. Given a second chance, Givens has to live on a lower annual income and avoid the credit traps that come with relocation. If he doesn’t scale down his fine taste in clothing, though, he may watch helplessly as his credit score spirals out of sight.

Steven Bryan

It comes as no surprise to today’s moms and dads that parenthood is expensive. Some parenting choices, such as a stay-at-home parent or private-school tuition, can add considerably to the costs of raising a child. “Parenthood,” NBC’s new drama based on the Steve Martin film of the same name, offers a fine example of what it costs to juggle family life with a professional career.

Julia Braverman-Graham is one of the four Braverman siblings around whom the series is based. Julia, played by Erika Christensen, is a high-powered corporate lawyer in Berkeley. Her husband Joel stays home full-time and raises their 5-year-old daughter Sydney. The family lives in a beautiful and immaculate home, send their daughter to an expensive private school, and spend money on expensive meals, auction items and lessons for their daughter.

How Much Does a Lawyer Like Julia Make?

Working in the private sector in California, Julia will make substantially more than her public servant counterparts. SchoolAAH notes that 2007 Berkeley Law School graduates working in the private sector have an approximate starting salary of $160,000 a year. With some experience under her belt, Julia will make at least $200,000 a year.

What Debt Would Julia Have?

A pricey house in Berkeley like the one that Julia and her husband own probably costs at least $1 million. In addition, her law school debt could be upwards of $100,000, though it appears likely that she has paid off some or all of that debt at this point in her career. In addition, Julia and her husband send their daughter to private school, which could run $15,000 to $20,000 a year based on estimates from the Online Guide to Bay Area Private Schools.

What are Julia’s Spending Habits?

Though Julia spends much of her time working or trying to grab a few minutes with her daddy’s-girl daughter, you do see them spending money rather extravagantly. In order to show off in front of a threatening woman at her daughter’s school, Julia spends almost $2,000 on a premium parking space. In addition, the family has their daughter enrolled in various lessons and classes, decorates their home beautifully, drives nice cars and dresses well.

Are Their Spending Habits and Financial Outlook Realistic?

Based on what we see on “Parenthood,” Julia and her husband have some pretty expensive tastes, striving to keep up with the rest of the families on the block and to provide their daughter with the best life possible. Thankfully, Julia’s career choice does allow the family to afford some of life’s finer things. However, they should remember to save money and invest well and use their credit cards only when they can pay off items immediately. Otherwise, expect that when college tuition, retirement or future children arise, they won’t be as comfortable as they are now.

Kelly Herdrich

Spring 2010 has sprung and so have the season’s new credit card designs. In keeping with the spring season, these credit cards sport vibrant colors, fresh backgrounds and novel patterns. They are the credit cards that will have you thinking about making a fresh start this spring.

#5: Facecard Prepaid MasterCard

The Facecard Prepaid has a soft, green background that will have you thinking of lime sorbet and freshly cut grass. The green background emphasizes the MasterCard orange and red logo, which is nestled in the lower right corner. The Facecard logo is located at the upper left. Credit card numbers are raised and outlined against the gentle background.

#4: ACE Pink Visa Prepaid Debit Card

This Visa Prepaid Debit Card shows a delicate pink background with a large white ribbon to the right. This design is meant to help support breast cancer awareness and detection. Located at the ribbon’s lower right side is the blue Visa logo. The ACE Pink Visa Prepaid Debit Card offers a great design for a great cause.

#3: First PREMIER® Bank Secured Credit Card

This Secured Credit Card showcases a vibrant green and yellow background. On this background, the MasterCard orange and red logo, located at the card’s bottom right corner, is emphasized. The soft green “P” of PREMIER Bank is set at the card’s center like a fresh spring bud. You feel like you can make a fresh start with this newly designed credit card.

#2: Zync from American Express^SM

The Zync from American Express has no spring colors to speak of. Instead, it features a fresh white background. The American Express wording remains at the top of the card in dark blue letters, while its graphic resides at the card’s center. This card is ideally suited to fresh starts and new beginnings.

#1: UPside Visa Prepaid Card

The UPside Visa Prepaid Card portrays gentle waves of greens and blues. This sea of colors gives way to orange and red waves on the left side of the card. The orange and red waves are indicators of the hotter days ahead. The blue Visa logo remains visible at the bottom right.

Hally Z.

With increasing rates of identity theft, many consumers choose to freeze their credit reports so that the credit report cannot be shared with potential creditors. When you freeze your credit reports, a lender or creditor who makes an attempt to check your credit history will not be able to order a report using your name and Social Security number.

How a Credit Freeze Works

To freeze your accounts, you will need to contact each of the three credit reporting agencies — Equifax, Experian and TransUnion — and provide them with identifying information such as your name, current and former address, Social Security number, birth date and a copy of your driver’s license. The request for a freeze can be made by certified mail or online.

Initiating a credit freeze costs between $3 and $10 per person per bureau, and you will likely receive written confirmation that the freeze is in effect after the credit bureau has received all the information they need. Check your state’s security freeze requirements and fees schedule for specific fees.

If you want to open a new credit account or apply for a loan, you have the ability to lift the freeze for a certain period of time so that the creditor can pull your credit report. Each credit bureau charges a fee (approximately $5 to $10) to lift the freeze temporarily, so you need to select a specific date and let the credit reporting agency know which creditor will be ordering a credit report.

Keep in mind that freezing your accounts will not lower your credit score, and will not prevent you from receiving pre-approved credit offers. If your spouse shares a credit account with you, both parties need to freeze their individual credit files separately for the entire account to be frozen.

When to Freeze Your Credit

You probably should freeze your credit if:

• You’ve been a victim of identity theft and had your accounts compromised.
• You’ve lost your credit cards and Social Security card or driver’s license.
• You simply suspect that you have been the victim of identity theft and want peace of mind that your credit report isn’t in the wrong hands.

When Not to Freeze Your Credit

There are some situations where it’s not a good idea to freeze your credit. If your job requires you to access your credit reports regularly to open new accounts, it can be very costly to lift the freeze every time you need to pull your report. If you’ve lost a single credit card or had a credit card stolen, you may only need to contact your credit card issuer to investigate the account and close it as needed.

Another drawback of freezing your credit report is that your credit report won’t be updated with your current name or address until you personally send that information to the credit bureaus. You will need to update your contact information on your own any time you move or make a name change.

Sabah Karimi

If you’re into social gaming, there’s a new form of payment for the variety of virtual goods available in many online games: Kwedit.

The Concept

Here’s how it works. Gamers create a Kwedit account, complete with a Kwedit score. Just as in real life, the score enables them to take on debt. However, in this case it is virtual debt, established by purchasing “items” online such as enhanced abilities for their characters. Upon purchase, the user agrees to pay a certain amount of real money within a few days. Money can be paid through the mail, or users can print out a bar code that can be scanned and paid for at 7-Eleven convenience stores. If a user is unable to make a Kwedit payment, they can opt for the “pass the duck” option, where the user asks a friend or family member to make the payment on their behalf.

With more completed purchases, the user’s Kwedit score goes up. Conversely, if a user simply looks at this as a great opportunity for stealing virtual products and doesn’t make good on their Kwedit promise, that user’s Kwedit score goes down. In that case, the user will find it harder and harder (just as in real life) to take on debt in the online gaming world.

So, what’s in it for game designers looking for a payout? Kwedit does actually encourage gamers to keep up a high Kwedit score if they want to continue using the system. It is also a payment system for users (especially young users) who may not have a credit card or other online payment system available to them. And if those users end up not paying? Likely not a big deal, since the goods purchased were virtual anyway, so no money is actually lost in that instance.

The Kwitic

Kwedit was recently skewered on the Colbert Report. To defend themselves, the company removed its duck mascot Kwedie and the CEO posted a response on the site’s blog.

Will Kwedit become the new PayPal? Probably not. For one, it deals strictly with the virtual world, hence the ability to easily buy now but pay later (or skip payment altogether). Because of this, it doesn’t scale well to a real world application. But for younger computer users looking to experience what earning an actual credit rating is like, and the effects of poor credit management, it may indeed be a popular choice. However on March 3rd, 2010, Kwedit received $3.3 million in a second round of financing led by Maveron.

Currently, games powered by Social Gold accept Kwedit payments, including FooPets, Puzzle Pirates, Greenpatch, Tetris Friends, Island Paradise and hundreds more.

Eric Fleming

With lenders tightening their standards, and with new credit card rules, many are finding that it is not as easy as it once was to get a credit card. Indeed, proof of income is needed, and for the best credit cards you will need a credit score that is at least fair to good. If you do not meet these qualifications, you may need a co-signer to get a credit card.

What is a Co-signer?

A co-signer is someone who accepts responsibility for the loan or credit card if you cannot pay. If you do not have good enough credit or a high enough income to qualify for a credit card or some other type of loan, a co-signer will vouch for you, taking on the responsibility for the loan. This person should have good credit and sufficient income.

When someone co-signs for a loan, it means that he or she is basically taking on the debt. You should still make your payments on time, but if you don’t, the creditor can come to the co-signer to fulfill the debt. Additionally, the co-signed debt shows up as part of the co-signer’s debt burden, so their debt-to-income ratio rises. A co-signer is taking on risks when he or she backs you up, agreeing to pay on the loan if you default. If there is a chance that you will default, or if there are doubts about whether you are responsible enough to pay on time, you may have a hard time convincing someone to co-sign for you, since most of the risks are taken on by the co-signer.

Choosing a Co-signer

If you are responsible but you do not have established credit or a full-time job, you might be able to convince someone to co-sign for you. This person is usually a relative, often a parent. You might also find a very good family friend to co-sign on a credit card for you. When looking for a co-signer, you should find someone who has good credit, a low debt-to-income ratio, and who is not planning major purchases for at least six months. This is someone who is likely to handle the debt well, and who can afford to co-sign for your credit card.

Once you have your credit card, you should show your appreciation to your co-signer by using it responsibly, paying on time, and in full.

Jean Marquit