WHY DO CREDIT CARD COMPANIES CHARGE SUCH HIGH INTEREST RATES?

I'm writing this on Sunday, January 17th, 2010 just after I took a look at the latest statistics on interest rates published by the Federal Reserve.  I'm not going to clutter this page with statistics but here's what you should know:  corporations are borrowing money at about 5% and mortgage rates are at about 5% and banks are paying about 1% or less on savings accounts.  So why are credit card interest rates as high as 30% or more?

Again, here's the question: Why do credit card companies charge such high interest rates?  The answer is: because they can.

As you know, new rules about credit cards are taking effect but there still is no law saying that credit card companies must lower their interest rates to match the other low rates in our economy.  But I think it's time that this happened.  If the credit card companies say they can't make money charging 10% or 15% interest -- and they must charge 19% or 30% -- then let them go out of business.  And if the credit card companies say they can't lend money to high risk card users unless they charge those high risk card users 30% or more, then tell the credit card companies not to make those loans because they'll be doing those consumers a favor.

When interest rates in the economy are so low, and when banks are paying out so little on deposits, it's time to bring back the usury laws and put a cap on interest rates.  The days of credit card companies charging "mob rates" must end -- and it's time for them to end. 

So join our fight-- go to our "Contact Us" page and tell us you're "in" and we'll get the campaign started.

By the way, watch your credit card statements for a change.

A new entry on your credit card statment will tell you "how long it will take to pay off your balance."  The Federal Reserve says:  "your monthly credit card bill will include information on how long it will take you to pay off your balance if you only make minimum payments.  It will also tell you how much you would need to pay each month in order to pay off your balance in three years."  And that info might get a lot of consumers to wake up about the true high cost of plastic. 

TIPS ON HOW TO PURCHASE AND USE GIFT CARDS

Gift cards are always popular gifts and here are some important things to keep in mind.  First, store gift cards and general purpose gift cards which might be issued by a credit card company have different rules of operation.  Store gift cards are good at a particular store or chain of stores.  While a general purpose gift card issued by a credit card company can be accepted wherever that card is accepted.  There may be a fee or purchase price added to the cost or value of general purpose gift cards, but store gift cards generally have no fees.  Store gift cards usually have no monthly fees, but gift cards from credit card companies might have fees that start after six to twelve months.

Consider buying gift cards that clearly disclose their costs, fees and information about how the cards to be used.  Don't leave anything to guess work.  You might want to find out if a refund is available on the gift card balance that is not used. 

Can you get help with your gift card questions?  Yes, you can call the Federal Trade Commission at (877) FTC-HELP or the California Attorney General's Office, but the quickest way to check on the gift card is to get the store's or gift card company's rules in writing before you buy them. 

And remember don't lose the gift cards -- because they are like losing cash for the most part.  Some other tips: try to use the entire balance within six months because this way you're more likely to use the balance before it's forgotten.  Always keep track of your balance -- because it's your money. 

Starting in August 2010 new federal rules take effect on gift cards that prohibit fees if the card is used within the previous 12 months, and cards can't expire for at least five years.

IT'S TIME FOR THE YEAR-END FINANCIAL CHECK-UP

Certified financial planner Brian Gilder in the video below gives you some ideas about what financial records you should be checking as we approach the end of the year.  Actually, checking these things now wouldn't hurt.  He also suggests checking your financial safety cushion, your beneficiaries, what stocks you might want to sell at a loss to save on taxes, and carefully check your insurance policies to see that you are protected against accidents.

MORE PHISHING FOR BANK ACCOUNT INFO

These crooks never give up -- they keep sending out emails asking me to confirm my login information for my bank account.  But these crooks must be idiots, or they can't speak English, because their email notifications always have bad grammar or misspellings.  I am going to highlight the bad grammar and misspellings from the latest "alert" phishing scam email:

During our usual security enhancement protocol, we observed multiple login attempt error while login in to your online banking account. We have believed that someone other than you is trying to access your account for security reasons, we have temporarily suspend your account and your access to online banking and will be restricted if you fail to update.

Okay, now for our phishing grammar lesson for the crook.  It should be "multiple login attempt errors to your...."  And "we believe that someone other than you...."  And instead of writing "is trying to access your account for security reasons,"  Mr. Crook should have written "someone is trying to access your account and for security reasons we have temporarily suspended your account, and your access to online banking will be restricted if you fail to update your login records."

Maybe these crooks will learn proper grammar and sentence construction and spelling while serving long terms in prison.

DO THE MATH, BECAUSE SOME BUSINESSES CAN'T

Posted May 20, 2009

When I first started in TV as a consumer news reporter, the "hip thing" to do was to expose businesses for their goofs and for misleading consumers.  For example, measuring how much water was in a can of peas.  If you found a company that packed too much water and too few peas in  their cans it was a "big story."  Wow, did the consumer advocates on the TV news go hot and heavy with that story.  I remember the anchorman on the newsbreaks saying it -- "our consumer advocate (fill in the name here) says you're paying too much for water in your can of peas.  Film at 11."  Go get 'em, you consumer advocates, go get 'em you pitbulls of investigative journalism.  

One of my favorite stories was comparing the number of raisins in different brands of raisin cereal.  I actually counted, one by one, all of the raisins in a national brand, and counted all of the raisins in a "supermarket private label brand" of raisin cereal.  The supermarket's cereal had the exact same number of raisins as the national brand.  That was in the 1990's.  I wonder what would happen if I repeated that test today?

Well, now I must wonder if companies can do the math -- if they can count, if they can multiply, if they can figure out percentages accurately.

The other day (May 19, 2009) I went to the drive thru of the McDonald's restaurant on Santa Monica Boulevard in Century City and ordered a ten-piece package of Chicken McNuggets.  I opened the box and found there were only 9 -- not ten -- McNuggets in the box.  Gee, McDonald's has workers who can't count to ten?  It wasn't worth driving back to the restaurant to get my tenth McNugget.  So I just ate my lunch with 90% of the ten-piece package of McNuggets I ordered.

A few days before I stopped at the McDonald's drive thru at Primm, Nevada, in the casino and shopping area on the I-15.  This restaurant actually charges extra for the dipping sauces for those McNuggets (other restaurants usually give one or two packages of dipping sauce at no extra cost).  I ordered two packages of Hot Mustard dipping sauce but when we got the bag at the drive thru window we checked -- and there weren't any.  Gee, all the worker had to do was count "one, two" packages.

I don't mean to pick on McDonald's.  Frankly I like McDonald's.  When my kids were young I even bought them shares of McDonald's stock.  McDonald's is a great company and a lot of people must know how to count or else they couldn't post those signs about "billions and billions served."  But gee, did they really serve "billions and billions" or just 90% of billions and billions?

Some other companies don't know how to count, or how to do the math, either.  At least that's what it looks like after buying their products and doing the math myself.

At CVS, the big drug store chain, I bought a big box of their antibacterial moist wipes.  I like them, and always use them.  They're handy, especially when I go through a drive thru at a McDonald's.  What I liked about the purchase of this box of wipes is that it had in bold lettering "25% MORE FREE."  And the printing on the box says "60 WIPES FOR THE PRICE OF 45."  Well, I did the math and found it wasn't 25% more free.  If the basic box of 45 had 25% more, then the box should have 56 and a quarter wipes.  Well, when you go from 45 wipes to 60 wipes, it's an increase of almost 33%.  CVS, thanks for the deal but you are cheating yourself.  You could have said "33% MORE FREE" and you might be selling more of those Antibacterial Moist Wipes.

By the way, CVS, if you reduced your box of wipes from 60 wipes to 45 wipes that would be a reduction of 25%.

Another company that can't seem to count is Van deKamp's which makes frozen fish sticks.  I love their frozen fish sticks.  I've been eating them forever.  My wife the other day bought me a large box of Van deKamp's with 30 frozen fish sticks.  Well, thirty is too many for me to eat at any one time, and so I portioned out my meals.  I had ten fish sticks the first time -- and then ten more the second time.  That's twenty so far.  And then tonight I made the rest of the Van deKamp's fish sticks -- and 13 remained in the box.  Hmmm... that's a total of 33 fish sticks.  I guess I got a deal.