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DON’T GET SUCKED IN BY CREDIT CARDS WITH UP FRONT FEES

September 15th, 2009 · FEES FOR CREDIT CARDS

 

            A credit card is useful to have even when you’re trying to stick to a budget and get bills paid off. It can get you over a hump, so long as you pay your bill every month on time and don’t let the interest build.

            But if you have poor credit, and have cut up all your cards, you know getting a new card is very difficult, if not near impossible. Some banks and credit card companies have come up with two possible ‘solutions’ for this. One is a SECURED card for which you deposit a given amount, say $500. Then you have that much credit to draw on.

            Another is a card that charges you an up front fee. It is a real credit card  that you can charge on. Typical of these is the First Premier Bank cards. Located in Sioux Falls, South Dakota, First Premier touts itself as “a different kind of bank,” with most services available completely online.

            It offers two fee based credit cards—a platinum and a gold.  Both are basically the same, offering a 9.9 percent interest rate. Not bad today. You can go to the gold card site at www.firstpremierbankgold.com.  The platinum site is at www.premierplatinumcards.com.  If you do go to one of these, make sure your pop-up blocker is on and in top notch shape. You’re going to get hit with a bunch.

            The blurb on the home page of the gold card touts a $300 credit limit to start, with regular increases if you make payments on time. The platinum offers the same. However, the fine print states there is a minimum credit limit of $250.

            Ah, but there is a real kicker. There are up front fees totaling almost $179. That breaks down like this:

            Account set up fee–$29

            Program fee–$95

            Annual fee–$48

            Monthly servicing fee–$7

By the time all this is charged on your card, which it is, you are already in debt $179 and you haven’t charged a thing! And it leaves you only $71 available credit.

            Such a deal!

            There are other little uh ohs in that fine print. If you are late on one payment your interest rate jumps to 19.9 percent. And that periodic increase in your credit limit—its $75 each time—comes with a $25 fee. So much for that.

            Up front fees for credit just don’t work.

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You’re Still Responsible for ‘Charged Off’ Debt

September 2nd, 2009 · charged off debt

             If you’ve had a debt you just couldn’t pay, and your creditor finally told you they were ‘charging it off,’ what did you think that meant? Did you think it meant you were no longer liable for it?

            That’s what most of us would think, but that is not the case. Charging off a debt simply means the creditor is making an accounting entry, indicating they don’t expect to collect the debt and will take a loss on it. It also is a tax deduction for them.

            They will report the charge off to the credit bureaus, and it will have a negative impact on your credit score.

            But they will probably do something else. They will probably sell your debt to a collection agency, for less than the actual amount you owe, sometimes just pennies on the dollar. That way at least they get some of their money.

            Then, however, the collection agency will attempt to collect the entire amount from you. They now own your account. You still owe the money and are still liable for the debt so they have the legal right to do so.

            If after some time they are unable to collect from you, the collection agency may sell the account to another agency. Again, they make a little money from it, and the new agency begins the collection process.

            At some point an agency may offer to negotiate a settlement at half or even less the original amount or your debt. You may want to settle, but remember, that will not remove the bad notation from your credit report. That will remain for seven years.

            There is one factor you should consider. All states have a Statute of Limitations (SoL) on any debt. Unsecured debts, such as credit card debt, usually have the shortest SoL. You can look up your state’s SoL at http://www.bcsalliance.com/y_debt_sol.html.

            Collection agencies may continue to attempt to collect after the SoL expires. If that happens, don’t talk to them or admit to the debt. Send them a letter stating that the SoL has expired.

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Oil and Gas Price Disconnect

August 26th, 2009 · oil/gas prices

The disconnect between oil prices and natural gas prices, in large part, stems from the Obama administration’s takeover of the U.S. auto industry. At the beginning of this year, there was a significant crusade to develop natural gas as fuel for vehicles. But the Administration and Congress had hooked their wagon to the development of electric cars, and funded development of battery technology. Natural gas technology, which had been in the mix for funding, was dropped.

When GM and Chrysler became Government owned entities, they were ‘encouraged’ to pursue electric vehicles. Natural gas vehicles were left at the curb.

Investors saw this and realized the demand for natural gas originally thought to be in the pipeline was not going to be there. Oil on the other hand was going to continue to be in increasing demand as China’s and India’s economy continued to grow. And even in the U.S., the demand would grow, because with relatively lower prices, consumers were driving more. Even the push for electric vehicles would not significantly reduce the demand, because for the foreseeable future, most such cars would be hybrids, still using gasoline engines for much of the work.

Investors pulled their money from natural gas and put it back into oil.

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Seniors will Pay

August 18th, 2009 · health care reform, medicare advantage

I am greatly concerned by the President’s insistance on doing away with Medicare Advantage plans. In Montana, he called them a subsidy to the insurance companies. They are not. They are in fact, if anything, a subsidy to seniors.
My wife and I are on an Advantage plan. If that is taken away from us, we will have to purchase a Medicare supplement plan and a separate drug plan. The basic AARP Medicare supplement is $135. The viable drug plan is $73. That is for one of us. That comes to $416 a month for the two of us.  We pay “out of pocket” $54 a month–for the two of us–for our Advantage plan. And that is not actually out of pocket as it is deducted from our Social Security payments every month.
 
As background, Advantage plans take the $93.50 that is deducted every month from every Medicare beneficiaries Social Security for Medicare, and pays it to the beneficiary’s chosen  insurance provider. That, with our “out of pocket” payments, covers our premiums.
 
The AARP is featuring an article on its web site right now from the LA Times that is full of inaccuracies about Medicare Advantage and Obama’s stance. I will briefly touch on a couple of the most glaring.
–As noted, Advantage members do pay some of the premium. The article states they pay nothing.
 
–The article quotes a Medicare agency as stating that Advantage costs are 14 percent greater than Medicare’s. This does not compute as our provider pays only the costs authorized under Medicare’s payment schedule.
 
–The article states the President is proposing ‘cuts’ in Advantage programs. No, he clearly stated he would do away with it. I saw that live on FNC.
 
At any rate the difference between $54 and $416 is more than we could absorb. To be candid, we simply could not afford it. I am disappointed AARP is not fighting this proposal.
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Hello world!

August 7th, 2009 · Uncategorized

Welcome to the Yovia Network.
This is your first post.

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