Archive for the ‘Manage your Credit’ Category

Every great marketer knows that to be really successful, you need to hook your target market when they’re young. From Joe Camel hawking smokes to the “first one’s free” approach used by Marcelo (my local purveyor of street-grade recreational pharmaceuticals) it’s a time-honored and proven approach to building a client base for life.

Now the debt-industrial complex has it’s own cant-miss program featuring its own cute and cuddly character standing ready to teach the kiddies about the joys of spending money you don’t have. Please allow me to introduce you to (drumroll, please) Kwedit.com.

Kwedit is a new service that allows users to purchase online goods and services without a credit or debit card.

When a game or other site offers Kwedit Promise, they will deliver virtual goods immediately in exchange for a promise to pay for them later. Sites determine how much Kwedit to offer to use right away to buy things.

When someone accepts a Promise to pay, they are allowed a few days to pay off your Promise. Here’s where it gets even more fun – you then get to manage your Kwedit score. Yes, your Kwedit score.

If you pay your Promise on time, your Kwedit score rises, and the next time you play, you may get a larger Kwedit allowance on this and other Kwedit-powered games.

The site’s owners take pains to say that Kwedit Promise is not for children, but instead a service for adults and teens, 13 and older. That’s a big relief, recognizing that financially savvy and fiscally prudent young teenagers are. Unlike, you know, children.

This sounds very similar to the tobacco companies and candy cigarette purveyors.  Not for kids, seriously, we mean it. Never mind the cute duck, bright colors and section devoted to reassuring parents.

And if those teens can’t pay, they can hit up those parents to get them off the hook and pay on their behalf using the “Pass the Duck” feature.  The adults can then break out the credit or debit card to pay.

On a positive note, Kwedit does not charge any vig for Kwedit Promise, perhaps because that would actually be illegal where minors are concerned and regulated for everyone else.

You are a Fool.

Well, at least you should be. I’m talking about fool with a capital “F”, which is what fans of the personal finance website The Motley Fool are known as.

The Fool was founded in the early 1990’s by David and Tom Gardner in Northern Virginia and has since grown to become one of the most well-respected multimedia financial-services and investment communities on the web.  The Motley Fool reaches millions of people each month online and has branched out into books, newspaper columns, television appearances, and subscription newsletter services.

Which brings us to the subject of my latest Required Reading.

The Motley Fool Personal Finance Workbook : A Foolproof Guide to Organizing Your Cash and Building Wealth takes the Fools away from their usual conversations on stocks bonds and dives into the blocking and tackling concerns of basic money management. Well known for their humor as well as for their financial savvy, the Gardners try to keep it light when helping you look at money management in a new light. (We know it’s boring, the authors say; “that’s why we’ve hidden crisp five-dollar bills throughout the pages.”)

The dreariest of money matters-budgets, debt, insurance and taxes-are addressed in reassuring prose, illustrated with charts and further detailed with checklists that you can work through and goal graphs than you can adopt.

Even reluctant readers will be coaxed to face financial realities through the Gardners’ encouragement and the helpful budget planning worksheets. You won’t find dazzling new insights on how to hire a financial planner or buy big-ticket items, but they will find very friendly advisors who crack jokes as they dispense wisdom. The substance here is well-tread ground, as it should be, but the style is straight from the Fool’s funny bone.

Check out this book and also visit the Fool’s website and become a free member. Getting out of debt is just phase one. When you’re ready to build wealth, you’ll wan to do it Foolishly.

The long-awaited consumer credit protection laws known as the CARD Act go into effect today. While it’s no Fourth of July, today should be remembered as the day when more Americans became liberated from onerous credit card rate hikes and other sleazy bank practices.

Some of the major changes you’ll notice include:

1. Easy to read statements that clearly show finance charges and how long it will take to pay off the balance when only the minimum payment is made
2. Credit card companies can’t generally increase your interest rate in the first year that you have a card
3. No over-the-limit fees unless you opt-in to allow those transactions in advance
4. Some interest rate hikes will apply only to new charges, not existing balances and
5. Students and other people under the age of 21 who had been a cash cow for credit card companies will now need either a co-signer or evidence that they have enough income to make monthly payments

But just like the Declaration of Independence and Revolutionary War failed to provide a full measure of freedom to southern slaves and Native Americans, there are more than a few loopholes that still allow card companies to take advantage of their customers.

These include rate hikes for variable rate cards and those with promotional rates, major interest rate increases if two payments are missed (i.e. you are 60 days late) and hefty penalty fees. You’ll also start to see more inactivity fees charged for customers who don’t use a card and don’t carry a balance.

But this is a start.

The new regulations look to save consumers biliions in interest charges and fees, and you can bet the bank that credit card companies will use every opportunity and dirty trick to recapture that lost revenue.

So you’ll still need to stay vigilant and recognize that no matter how favorable the new laws are to you as a credit consumer, the best bet is to get out of credit card debt.