Fresh Personal Finance

Have any of you ever used Mint? It turns out that in all the time that this blog has been around, not a single person has ever covered the site, and I find that to be a shame. It has been mentioned here and there, but there has never been a full-on review. I say that changes now, because Mint is an incredibly easy to use and powerful tool to help you whip yourself into shape. Let me tell you about it and how you can fit it into your life.

First and foremost, let me express my intense hatred for two things: software and banking websites.

I hate software because it’s the 21st century. Why am I downloading things when I have a vast internet where I can do anything I want, plus Javascript, Flash, and HTML5 to emulate virtually anything I could do on my computer anyway? The only thing my hard drive should be used for is downloading media, and even then I am not a fan of that. That’s one reason to love Mint. It’s all browser-based and there’s zero reason to download a thing.

Banking websites, meanwhile, suck without exception. Okay, I do like ING for ease of use. But it isn’t exactly an analytical tool. Even though Discover Card has started to offer spending analysis, I have four credit cards. There’s no reliable way to analyze all my spending. In fact, according to Discover Card, all I did was buy a computer last year. That doesn’t encompass my unfortunate takeout addiction and my predilection for purchases. Thanks, but no thanks. Also, that doesn’t nearly help when I just withdraw money to stuff singles into some sweaty college kid’s g-string at the club or tip an inappropriately surly bartender.

Mint covers all that plus some. I entered all four of my credit cards, both bank accounts, my student loans from Sallie Mae and from the federal government, and even my Roth IRA. Instantly, I had account information stretching back three years into my past and was able to see that I had spent an embarrassing sum of money on delivery. I suddenly had an urge to start cooking for myself, especially because I had shamefully ordered grilled cheese to the tune of $10 a pop three times in one week. I have a firm policy of only ordering food I can’t make myself.

Yes, I discovered I’m not in a great spot in terms of credit, but that’s okay. Mint even broke down my spending into a budget, so I found that I was spending more than I was earning. I could plug holes in my spending by altering my behaviors, not just tweaking some abstract numbers. The less I called my local deli, the lower my restaurant budget went until my earnings outpaced my spendings. That’s precisely where I needed to be.

It’s a powerful tool just for spending analysis but even more helpful if you want to knock together a budget. There are shortcomings, however. I have a couple phantom charges that I cannot ascertain nor delete, and often I look pretty awesome because Mint inexplicably tracked my credit card payments but not their debits, so I came out a couple hundred dollars ahead when I’d really broken even. Until Mint finally allowed me to use custom tagging, I’d filed all cash purchases under porn (well, ‘entertainment’) because I had no idea what they were, despite some being legitimate purchases. Fortunately, Mint has fixed that issue and even allowed me to split cash into nearly infinitesimally small chunks, so yes, I could theoretically track which singles are currently pantyliners for some gogo twink and which are being collected by a grinchy barkeep. Not that I would, but I could.

Do you use Mint? Or do you have alternatives? I’d love to hear from you. Let me know!

Are You Unintentionally Hurting Your Credit Score?

A Money 411 clip on the Today Show last week had some really surprising comments about things that could be hurting your credit score.

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Some of the factors weren’t surprising – late payments, or mistakes on your credit report. But the idea that going to a mental health therapist was really beyond the realm of reality to me. That shouldn’t be something that is allowed to be viewed by anyone but you, your therapist, and your insurance company. What about HIPAA? And would this actually show up in a credit report if you paid cash, or only if you used a credit card to pay your bill? I’m really curious. Read the rest of this entry »

Credit cards are for transactions; not to borrow money

In a recent post about credit card interest rates, Philip Brewer at Wise Bread explained:

I use credit cards for transactions, not to borrow money.

One of the smartest things you can do for your financial health is to pay off the total balance each month on your credit card. Whenever we use a credit card, we’re borrowing money. Interest gets added to the balance if we don’t pay off the total amount we owe each month.

The big money-maker for credit card companies is consumer interest. They want us to carry a balance. But they don’t make us. A lot of people just do. Why?

Please don’t say it has to do with how much money one makes. At the age of twenty-two, I never carried a balance; nor do I now at forty-two. Just because I have an available credit limit doesn’t mean it’s my money to spend.

What makes some people get this concept and others don’t? Behavior and money… sometimes it just doesn’t make sense to me.

Photo credit: stock.xchng.

FICO 101

Have you ever wondered what in the heck is a FICO score? Do you know what FICO is, but you don’t know how it’s calculated? I caught up with Jason Alderman of Visa, Inc. Jason runs the company’s global financial literacy initiative, which includes the award-winning “Practical Money Skills for Life” and “What’s My Score?” programs. These are his words . . .

1. What is a FICO score?
A credit score is a complex mathematical model that evaluates many types of information in your credit history. Lenders use credit scores to help them determine whether they want to open an account with you or lend you money – that is, whether you are a good credit risk.

Credit scores are three-digit numbers, typically ranging from about 300 to 850; the higher the number, the better your credit rating is.

The most commonly used credit scores are called FICO scores, named for Fair Isaac Corporation (FICO), which developed the proprietary software used by most credit bureaus to create your scores. (The three major credit bureaus from which most lenders purchase credit scores are Equifax, Experian and TransUnion.) Read the rest of this entry »

Surviving the Recession: How to Weather the Economic Storm

I participated on a panel this week at the Campus Progress National Conference in Washington, DC, and the topic was “Surviving the Recession: How to Weather the Economic Storm.” The panelists addressed a ballroom packed with college students who were all eager to hear how they could avoid the traps of credit card and student loan debt. But we also answered questions about basic financial literacy. Given that we were up against a hiphop panel at the same time, I was really encouraged to see so many young people taking an active interest in their finances.

Much of the advice we gave will be common sense to Queercents regulars: avoid credit card debt, prioritize your spending, pay your bills on time, and track your expenses. However, all of these tips are worth repeating, even for the seasoned finance veteran.

Jason Alderman from Visa, Inc. advised the audience to know their FICO score and to check their credit reports on an annual basis. He also recommended placing credit cards on an automatic payment system so that consumers don’t wreck their credit score for simply forgetting to make one payment. Joseph also advised people to be proactive about talking to their creditors if they have gotten themselves into trouble, because it’s better to initiate the conversation about a repayment plan than to wait for the creditors to start hounding you on the phone. Read the rest of this entry »

End Run Around “Do Not Call” and “CAN-Spam” Acts…

…or at least that’s what I thought when I opened my credit card statement from Chase and out fell (along with all the annoying advertising flyers) another “Change in Terms” mice type folder.

Do any of you bother to read these things? I do. I hate surprises.

All the usual jack ups… universal default to apply to all accounts you have with them or related companies if you have a problem with any account with them… increase in minimum interest fee to $1.50… interest rate going up (no balance, don’t care..yeah I’m a “deadbeat”)… they reserve the right to refuse to pay any balance transfer checks for whatever reason they want… balance transfer fee upped to 5%, no limit, $10 minimum… and the one that pulled me up short and even had me calling customer service (in greater than mice type size):

…if you change your name, address, or any other contact information such as any telephone number or email address you must notify us immediately in writing at the address shown on your billing statement. Numbers and addresses you provide include those you give us and/or those from which you contact us. We may, at our option, accept mailing address changes from the United States Postal Service and obtain telephone number, mailing address and e-mail address information from third parties.

So let’s address this portion… it’s required of you to give them mail, phone, and email contact info. If you call them from work, then they have the right to call back at your work number even if you don’t want them too. If Aunt Sally or Uncle Joe answers and give them your private cell number they can call you anytime they want. Read the rest of this entry »

Advanta Closes a Million Small Business Credit Card Accounts

As  of May 30, 2009, Advanta is closing all its small business credit card accounts. I first learned of this on Tuesday of this week when I got an email from Advanta telling me that my account would be closed this week.  It was such a shock that I literally thought it was a Phishing scam. So, I headed right over to their website to find the notice there.  A day later I received a snail mail letter informing me of the same.

At Queercents, we’ve talked about the chaos that ensues when a bank or credit card company fails and when a bank suddenly cuts the limits on a home equity line of credit (HELOC), and with some lively discussion I might add.  Yet, as a small business owner I can’t begin to say what a hassle this notice is.

Most small businesses use credit cards to manage cash flow, pay vendors, and sometimes simply cover the bills when times are tough.  Having a large chunk of your credit shut off on short notice is a royal pain.  At a time when small businesses are seeing their credit crunched from all sides, it is especially troubling. Read the rest of this entry »

Will You Pay To Keep Up Your FICO Score?

Well, President Obama signed into law the CARD Act, reforming the Credit Card Industries practices. What he signed is amazing, but it still didn’t go far enough to corral some of the more abusive practices.

I’ve read about possible responses by the card issuers, and two of them in particular perturbed me and made me think about how many cards I have, even though I don’t carry balances. (Yeah… I’m a deadbeat according to the card companies.) What set me thinking was the probable return of Annual Fees. Please let me pay you $75 a year so you can abuse me!

The other possibility is that grace periods on purchases may disappear – interest accrues from day one.

Or there is the possibility that you will get to choose one or the other – annual fee or no grace period.

Loss of the grace period is easy to overcome – pay your card forward. In other words, estimate how much you spend on a card every month and send in enough money to carry a negative (credit) balance so that there is no “balance” that can accrue interest. This is what I will do if I get an option on the cards for no grace or no annual. Read the rest of this entry »

Does This Debt Make Me Look Guilty?

Debt is the little black dress in everybody’s wardrobe. You may not want it, it doesn’t really excite you, but you’re encouraged to have one because you never know when you might need it. Debt usually starts off being called credit, and credit is supposed to be a good thing to have. A British friend of mine recalls arriving in the United States, some years ago, without a credit record. His finances were in scrupulous order, he didn’t owe anybody a dime, he paid his bills on time, and he had a well-paying job. The trouble began when he tried to engage in any substantial financial transactions – without a credit record in the United States, you simply don’t exist. He ended up having to buy things he didn’t want, on credit cards he had no desire to own, all in the name of “building up a credit history.” As he put it wryly, “I had to borrow money I didn’t need in order to prove they could lend me money I might need.”

Today, vast numbers of people in the U.S. are in debt, and I happen to be one of them. Sometime in 2008, I got sick and tired of paying the credit card company money I didn’t have. Eventually, I was taken to debtor’s court and, at this point in time, the creditors and I face each other with somewhat different agendas in mind. They’d like to collect what they’re owed, and I’d like to make more money. My experience in debtor’s court, which I’ll write more about in the coming months, revealed that while there may be no official debtor’s prison, people who incur debt in the United States are in fact caught in a system that is, for all intents and purposes, not all that different from the nightmarish conditions described in Charles Dickens’s novel Little Dorritt. When I made the comparison, a friend reminded me that there were no shackles and chains involved these days. She’s right, of course, although even that might be changing, if recent stories about debtors being put in prisons are any indication. Read the rest of this entry »

Vlog: How to Use Credit Cards Responsibly

Good afternoon, Queercents readers.

Last time on my vlog, we discussed credit cards–how to get ’em, how to keep ’em, and what to do with ’em. I asked for ideas on what to do, and Lynn brilliantly responded that she’d like to know how to use credit cards responsibly. There’s always a psychological component to spending, so today, that’s precisely what I will talk about.

Check it out:

If you have any ideas for future entries, please leave them and any questions in the comments below!