Posts Tagged ‘economy’

Did you know that you can pay your tax bill with a credit card? Here are some benefits to doing so.

Convenience. Imagine this: It’s April 15, 3 p.m. There’s no way you can make it to the post office in time. You don’t get paid until April 25 and you don’t have enough money in your account to cover your payment. What do you do? Don’t write the government a bad check — that’s illegal. Instead, pay your taxes online with a credit card.

Safe and secure. Worried that Uncle Sam will wipe out your credit card? Don’t sweat it. The IRS uses third-party service providers that store your credit card information on secure servers. The IRS never finds out your account numbers, so you can rest easy.

Earn rewards. Paying your tax bill is a great way to earn rewards. Whether you have a cash-back credit card, a credit card that pays down your mortgage or earns airline miles, you can rack up the benefits and pay a critical bill at the same time.

Confirmation number. When you pay your taxes with a credit card, you will be given a confirmation number. This confirmation number will allow you to show that you did indeed pay your tax bill should a dispute arise. This is extremely useful.

Paying taxes isn’t the highlight of anyone’s year. However, paying your tax bill with a credit card is an easy way to make sure that your debt to Uncle Sam is paid on time. In addition, you will have a confirmation number to show that you did pay your bill and you will even earn rewards through your credit card company.

Meg G.

Have you ever tried to read a piece of legislation only to ask yourself, “What the heck did that even mean?” Official decrees from Washington are notoriously verbose at the best of times. The latest credit card bill, the Credit CARD Act of 2009, is no different. Fortunately, the kind folks at CreditCards.com have created a far more user-friendly guide to understanding just what the credit card bill is all about.

The Credit CARD Act of 2009 multimedia guide breaks down each title, section and legislative reference into digestible chunks just about anyone can understand. The guide also allows credit card holders to find the sections that apply to them directly through an easily navigable list of subtopics.

A multimedia breakdown of the Credit CARD Act of 2009 is ideal for this credit card bill because, let’s face it, the same text pasted into a PDF document would be almost as difficult to wade through as the legislation itself. By designing the guide with clickable links and breaking down the text into terms, quotes from politicians and even links to related stories, the site ensures that consumers will not be overwhelmed by impenetrable text. Even better, CreditCards.com has also included the original text of the Credit CARD Act of 2009, so those who believe in thorough research will be able to relate the simplified information to the transcript of the law.

Credit CARD Act of 2009 Multimedia Guide: A Closer Look

The major sections of the credit card bill are broken down into five simple headings:

• Rates, terms and fees
• Youth and credit
• Disclosure
• Studies
• Other

Each of these is further divided into numerous subheadings to help you navigate the text.

Many are unfamiliar with the jargon of the credit card industry — from double-cycle billing to grace periods — terms that the Credit CARD Act of 2009 understandably references frequently throughout its text. Naturally this means many consumers are unable to understand the credit card bill even if they can manage to wade through the wordy transcript. Fortunately, the multimedia breakdown of the Credit CARD Act of 2009 defines all of these terms as you roll your mouse arrow over each one.

This type of legislation affects everyone differently, depending upon spending practices and credit history. This handy tool can help consumers understand the Credit CARD Act of 2009 and, more importantly, comprehend what the credit card bill means for them.

Now, if only someone would do this for every other piece of national and local legislation, perhaps there would be a better understanding of our government throughout our great land.

Steve Thompson

Going to college is the first step towards independence for many young adults. Many attend colleges in their home state, living on their own in dorms or apartments. During these college years a student’s main concern should be on studies and how to pursue a career upon graduation. Unfortunately, rising debt lurks in the shadows for many of these students and when they graduate, the harsh reality of this debt brings puts a tether hold on some of their plans and goals.

College Debt

It used to be that credit card debt was the big culprit for the debt college students had upon graduation. However, with the Credit Card Act of 2009, that debt won’t be a factor. But the debt of college students will still be as high as before and some instances higher. In recent years college students have been borrowing more money than they ever have in the pursuit of higher education. So many students’ borrowing has increased to keep up with the costs of rising tuition.

Tuition Hikes the Main Culprit

There used to be a time when a person entering college fresh out of high school only needed to take out a college loan for a couple of thousand dollars each semester. However, with the cost of tuition rising significantly each year, students are borrowing twice as much just to pay for an education. In fact, college tuition hikes have passed the rate of inflation. According to the College Board, between the years of 1999 to 2000 and 2009 to 2010, college tuition has increased at an average annual rate of 4.9 percent over the general rate of inflation.

Life-Altering Effects of Increased Student Borrowing

Federal Direct and Stafford loans typically give graduates a six-month grace period before they have to begin repaying their loan. However, with the current economic situation and unemployment still high, finding good paying jobs is becoming difficult for some. Even when a decent-paying job comes along, plans such as getting married and purchasing a home are put on the back burner, as graduates find themselves living paycheck to paycheck.

There may not be a way to avoid borrowing for college tuition. However, if college students are made knowledgeable about how student loans affect their lives after college, they can be better prepared to handle the debt. Financial education on debt and borrowing can benefit students a great deal and help them develop a plan to handle the debt college tuition helped them to accrue.

ShawnTe Pierce

With consumer spending at record lows and fewer credit card purchases during the 2009 recession according to the Federal Reserve, elite credit cards are feeling the pinch. Several premium credit cards that have been offering exclusive benefits to cardholders were born during the economic boom and have been struggling ever since. Social lending organizations have been trying to find unique ways to position their credit card programs ahead of the competition, but are still having trouble attracting and retaining cardholders.

Here’s a close look at some of the elite credit card programs that are struggling — or dying — during these turbulent economic times:

Ill: Visa Black Card from Barclays

The Visa Black card was originally pitched as an exclusive credit card with many similar benefits to the Amex Black. While the Visa Black was significantly different than Amex Black, it was still designed for elite cardholders who met certain income criteria. Cardholders pay an annual fee of $495, have access to a luxury concierge service 24 hours per day and earn rewards points for their purchases. Still, this program has fizzled since its launch, failing to offer truly exclusive and elite benefits for its cardholders.

Terminal: The Stratus Rewards Visa White Card

The Stratus Rewards Visa White Card was designed to compete with the Amex Black — after all it is white — boasting more travel features and other perks than Amex. However, this card simply didn’t get much traction or interest from consumers, and failed as a social lending program for avid travelers and VIP shoppers. Today, Stratus’s relationship with US Bank has expired and they’re negotiating with other issuers.

Passed: Sotheby’s World Elite MasterCard

The Sotheby’s World Elite MasterCard was among the most attractive exclusive cards available, and was “specifically tailored for those who earn over $250,000 per year and have over $2 million in investable assets.” This card offered complimentary admission to museums,and VIP services including concierge travel services abroad and access to airport lounges. The card ceased to exist as of September 2008 in the midst of the tumultuous economy.

From the Visa Black Card to Sotheby’s World Elite MasterCard, elite credit cards are struggling to stay afloat during the drop in credit card spending in recent years. Many cards are simply disappearing since consumers are no longer interested in the VIP services and exclusive benefits. Issuers may need to find new ways to attract cardholders and roll out programs that offer a wider range of perks and benefits.

Sabah Karimi

Good Careers in a Bad Economy, Part 3

A career in environmental “green” technology? Scientific research? Health care? Education? Transportation? Construction?

America’s deep economic recession is making an impact on career plans for teenagers and young adults. So is the $787 billion American Recovery and Reinvestment Act, better known as the economic stimulus package, that President Barack Obama signed in February.

The recession, with official unemployment at 8.1 percent at the end of February 2009, is causing many young people to pursue recession-proof careers. They don’t want to fruitlessly study or train for jobs that will scarcely exist in what is shaping up to be a new economy. They want to go where the action is.

As a result, many young people are looking at the priorities established in the economic stimulus package as laid out on Recovery.gov, the Web site that Obama’s team established as part of its promise for an open and public process.

Stimulus Plan is Temporary and Limited

Young people should exercise caution in placing too much stock in the stimulus package for guidance. Some of the stimulus priorities, such as green energy investment, indeed reflect long-term priorities — Obama has pledged $150 billion beyond the initial stimulus over a 10-year span. But other stimulus money, such as for roads and bridges and housing, may represent short-term fixes that will not endure.

Those who are building Recovery.com acknowledge on the site that they are engaged in a work in progress. There really are not a whole lot of specifics.

For example, the primary Obama pledge is to “create or save” 3.5 million jobs during the next few years, a number that gradually has risen from 2.5 million without much explanation. There is no breakdown to indicate how many jobs will be created, as opposed to how many will be saved.

Furthermore, the Web site does not count the numbers of jobs to be created or saved in specific career areas such as how many jobs in energy, how many in housing, etc. The lone breakdown is a map that shows the total number of jobs estimated for each state.

Not all Stimulus Money Goes for Jobs

Good Careers in a Bad Economy
Part 1: Graduating in a Recession
Part 2: According to the March 2009 Bureau of Labor Statistics
Part 3: Potential Careers Arising from the Stimulus Bill
Part 4: Career Forecast: Look for Overlapping Opportunities
Part 5: Career Planning: The More Things Change, the More they Stay the Same

A young person considering a job in health care will enter a field that is generally considered recession-proof. After all, people aren’t going to stop being sick and injured, and shortages are reported, especially a shortage of nurses.

Someone considering the health professions may feel encouraged to note that the stimulus plan contains $147.2 billion for health care. However, little of that money will go toward creating new health care jobs. A chunk of $86.6 billion alone is targeted to helping cash-strapped states catch up with their Medicaid reimbursements.

A career in education often is described as recession-proof, but there still is cause for doubt. The New York Times recently reported that Education Secretary Arne Duncan will use the lion’s share of $100 billion from the stimulus bill to prevent “hundreds of thousands of job losses in schools that had been projected for the fall because of growing state budget deficits caused by a steep drop in tax revenues.” Therefore, a young person considering career plans in education may ask what’s in store for the years ahead, when stimulus payments may not be available.

In the same vein, a project to modernize the nation’s electrical grid may be finished before today’s students and trainees enter the job market. The same goes for road and bridge projects, and for housing improvements.

On the other hand, good jobs could arrive in unexpected places. Financial services may seem a dead horse at this point, but at the point when recovery may occur, financial services could return to high demand.

Sound confusing? The Web site HRworld.com recommends “multifaceted” career plans: “If you don’t put all of your eggs in one basket … numerous failures have to happen before you’re really in trouble.”

Michael Thompson

Good Careers in a Bad Economy, Part 2

Young adults who pursue good careers in a bad economy will encounter not only skeptics, but also cynical humorists.

U.S. News & World Report, for example, placed “federal judge” at the end of a list of the best recession-proof careers. The joke is that federal judges, unlike their state and local peers, are appointed for life.

Then there’s the occasionally morbid “Top 25 Careers to Pursue in a Recession” on HRworld.com. These include careers in casino management, because desperate people will gamble more often, and in distribution and sales of alcohol, because unhappy people will drink more often. Also listed are debt collection and bankruptcy law, for obvious reasons.

For young adults facing the tightest job market since the Great Depression, these wisecracks may not seem so funny.

But chin up. Teens and young adults still should pursue their ideal dream career. If that dream career is also a recession-proof career, all the better. If not, a recession-proof career can offer security in case a dream career becomes a dream deferred.

Bureau of Labor Statistics Tells the Story

The U.S. Bureau of Labor Statistics reported a grim official unemployment rate of 8.1 percent at the close of February 2009, up from 4.8 percent a year ago. Even the most optimistic economists predict a continued rise to at least 9 percent, while the glass-half-empty analysts are forecasting 12 percent or higher.

More insight is gleaned by perusing the Labor Bureau’s specific breakdowns. To get the bad news out of the way, here are some of the dimmer prospects, comparing February 2009 unemployment with February 2008 unemployment (in parentheses):

• Manufacturing: 11.5 percent (5.0 percent)
• Leisure and hospitality: 11.4 percent (8.5 percent)
• Professional and business services: 10.8 percent (6.2 percent)
• Hourly: 9.6 percent (5.5 percent)
• Transportation and utilities: 9.1 percent (4.6 percent)
• Financial services: 6.7 percent (3.4 percent)

On the brighter side, consider education and health services unemployment at 4.1 percent today, compared with 2.9 percent a year ago, and government jobs at 2.6 percent versus 1.7 percent in 2008. These figures still reflect unemployment increases, but the outlook still is more optimistic.

Information technology is a mixed bag, with unemployment in February 2009 at 7.1 percent compared with 5.8 percent last year. This is a case where you may need to be more specific. A report on Examiner.com notes that a number of entry-level information technology jobs are shipped overseas, but computer security still is generally managed by career American employees.

Government Careers? Focus on the Feds

Good Careers in a Bad Economy
Part 1: Graduating in a Recession
Part 2: According to the March 2009 Bureau of Labor Statistics
Part 3: Potential Careers Arising from the Stimulus Bill
Part 4: Career Forecast: Look for Overlapping Opportunities
Part 5: Career Planning: The More Things Change, the More they Stay the Same

For the government employment outlook, the most recession-proof careers are at the federal level. The reason is simple: The federal government can (and does) run up debt, while states and localities are forbidden to do so. Compare the federal response to the recession under President Barack Obama with job creation under legally allowed deficit spending, to the California response under Governor Arnold Schwarzenegger, with job losses required to balance the books.

Another good reason for choosing the federal government is that opportunities are so vast. The quest for alternative “green” energy during the next decade will match the NASA buildup of the 1960s. Even the FBI and CIA have opened their doors with ad campaigns for career employment applicants.

In education, the career outlook is good. However, to truly have a recession-proof position, a specialty in math and/or science is best. This is where the shortages and pay incentives exist.

Payscale.com suggests that the best way to pursue your career dream, and to remain recession-proof at the same time, is to be versatile. This can be compared to an athlete in a team sport who is capable of playing at multiple positions. The more irons in the fire, the better.

Michael Thompson

Today’s college and high school students listen to adults discuss “the worst recession since the Great Depression.” They hear their elders air concerns about what type of world their children and grandchildren will inherit down the road.

Guess what, elders: The next generation already has inherited its first hardship from the economic crisis: career uncertainty.

Today’s teens and young adults are receiving guidance to pursue “recession-proof careers.” This is in contrast to their baby boomer parents, who did not face such a rocky career road.

Will the next generation be the first to inherit a lower standard of living compared with their parents?

Geared to young adults and teens, this five-part series will outline both the best career prospects and the potential dead-ends in today’s job market. And yes, there will be advice on recession-proof careers. But the main intent is to demonstrate how members of the next generation still can pursue career dreams, while remaining realistic at the same time.

Employment Statistics Are Scary

The U.S. Bureau of Labor Statistics reports more than 4 million job losses since January 2008, including 2.6 million from November 2008 through February 2009. The official unemployment rate was 8.1 percent at the end of February, up from 4.8 percent a year ago, and this doesn’t count an estimated 2 million people who are long-term unemployed.

Consider the Labor Bureau’s unemployment figures based on education compared with a year ago. The official count for high school dropouts is 12.6 percent, up from 10.4 percent. For high school graduates, 8.3 percent, up from 4.7 percent. For people with “some college,” 7.0 percent, up from 3.8 percent. For people with bachelor’s degrees and other advanced degrees, 4.1 percent, up from 3.1 percent.

Good Careers in a Bad Economy
Part 1: Graduating in a Recession
Part 2: According to the March 2009 Bureau of Labor Statistics
Part 3: Potential Careers Arising from the Stimulus Bill
Part 4: Career Forecast: Look for Overlapping Opportunities
Part 5: Career Planning: The More Things Change, the More they Stay the Same

These Labor Bureau stats reinforce that it’s still in a young person’s best interests to pursue higher education, in spite of the increasing challenges involved in meeting tuition costs. A typical college graduate now takes about six years to attain a so-called four-year degree, according to the nonprofit College Board, because they take breaks or reduced credit hours to work.

Still, the question lingers: Pursue a dream career or a recession-proof career? Payscale.com suggests that college students can do both. The recession-proof career is described as a “parachute,” just in case the dream career doesn’t work out.

The Department of Labor’s “Dictionary of Occupational Titles” contains 28,800 listings. Among those, there should be room for both a dream career and a recession-proof parachute career.

Michael Thompson

Bad credit credit cards can be…bad.  When applying for one, beware of offers that require payment before acceptance.

If one has bad credit but needs a credit card—to buy airline tickets, make hotel reservations, rent a car, shop online, etc—there are options. With a secured or prepaid credit card, a deposit is made to the account and a credit line equal to the amount is available. Since it’s prepaid, the credit is not really credit. But the cardholder is given flexibility to use the card instead of paying cash, as well as make reservations or provide security deposits.

There are also credit cards specifically for people with bad credit. But before accepting one of these bad credit credit cards, the applicant should understand the terms and conditions.

The bad is in the fees

With some bad credit credit cards, there is an acceptance fee and a monthly participation fee. For example, for a $200 line of credit, you could be charged an acceptance fee of $144 and a monthly participation fee of $6, leaving you with a $50 line of credit to start. Basically, the new cardholder receives the card already owing $150. Beware of bad credit credit card issuers that charge you a fee before you accept the card. This is illegal and the Federal Trade Commission has ordered a crackdown on telemarketers offering “guaranteed” credit cards with upfront fees prior to acceptance.

In addition to fees, bad credit credit cards may carry a higher interest rate. Consumers should carefully review the credit card agreement and be sure to understand all the terms and conditions before accepting it. Under the federal Truth in Lending Act, credit card issuers are obligated to provide certain information in all credit card offers they make.

Schumer knows

The Schumer box should appear with every credit card offer. All card issuers are required to have this box–it outlines the fees and rates of cards. The information to be provided must include the APR (annual percentage rate of interest), the different rates that are charged (purchases, cash advances and balance transfers), as well as all penalty rates and the actions that trigger them. If the interest rate is variable, the information in the Schumer box must explain how the rate is calculated.

Other information in the Schumer box includes finance charges, annual fees, fees for credit insurance, the minimum payment required, how an outstanding balance is calculated, credit limit, the grace period and the name of the company offering the credit, which may not be the same as the company doing the marketing.

The best use of a bad credit credit card is to help someone rebuild their credit. To do so, the cardholder’s history with the card–such as amount charged and payments made–should be regularly reported to the three major national credit bureaus: Equifax, Experion and TransUnion. But in order to repair credit, one must be sure to not to repeat the behavior that causes bad credit.

Kevin Hagen