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Student Credit Cards: Useful or a Trap?
Tweet Share on Facebook June 30, 2008 Comment (10)At a hearing on credit card practices affecting college students, Democratic Rep. Carolyn Maloney of New York, chair of the House Financial Services Subcommittee on Financial Institutions and Consumer Credit, last week asked Benjamin Lawsky, special assistant to New York State Attorney General Andrew Cuomo, to tell what his office's investigations had uncovered.
Lawsky began by warning the committee that he could not disclose much. While Cuomo's investigations had found "highly lucrative" and "somewhat secret" agreements between credit card companies and colleges that allowed the companies to market on their campuses, the bulk of the investigation would need to remain secret until an unspecified future date.
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Starting Over, Financially
Tweet Share on Facebook June 27, 2008 Comment (18)Dear Alpha Consumer,
I lost a very good job with benefits and everything. I lost it. Then I got into an accident requiring $40,000 surgery, and I started a business that failed.
Not a good trifecta. I went from a 700 credit score and money to spare to having $100,000 debt, little to no income, and Chapter 7 bankruptcy.
I am very upset. I feel like I threw my life away. I basically lost everything—my home, my fiancé—and now I'm in school and living at my parents'. (I'm over age 30.)
I don't want to sound like a baby. I know it's not the end of the world, but I would love if you could tell me why it isn't.
What an experience you've been through. In retrospect, maintaining health insurance through your former employer's COBRA plan might have helped avert some of the debt pile-up, but there's no point in looking back now. It's time to start over.
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Student Loan Fraud
Tweet Share on Facebook June 27, 2008 Comment (3)My colleague Kim Clark reported in our On Education blog that the Federal Trade Commission has some new tips on avoiding loan fraud:
Just in time for the college loan shopping season, which starts July 1, the Federal Trade Commission has posted a guide to avoid rip-offs.
One of the most important tips is to be very skeptical of any solicitation that looks like it is coming from the federal government. The U.S. Department of Education "does not send advertisements or mailers, or otherwise solicit consumers to borrow money. If you receive a student loan solicitation, it is not from ED," the FTC warns. U.S. News documented some misleading loan ads here and, in partnership with Simple Tuition, offers a tool to help you compare student loan prices.
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Where to Stash Long-Term Cash
Tweet Share on Facebook June 26, 2008 Comment (3)Dear Alpha Consumer,
I have a $10,000 bank certificate of deposit that matures in a month. I don't expect to need this money anytime soon, and CD rates have dropped so much that they're not attractive. Would it make more sense for me to use the money to pay down the principal on my 5.75 percent fixed-rate mortgage? My concern is that doing so would lower the mortgage-interest deduction on my income taxes. Any ideas?
Since there's never one right answer to this kind of question, I asked several financial experts to weigh in on what they would do. It turns out they all agreed that investing it—and not paying off mortgage debt—was the best approach. Here's what they had to say:
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Last Call for Book Club Questions
Tweet Share on Facebook June 26, 2008 Comment (1)It's the final call for questions for Rob Walker, author of Buying In, the first selection for the Alpha Consumer Book Club. (It's also the last chance to win a free copy of his book, which will be given to a randomly selected questioner.) Either post your question below, E-mail me at alphaconsumer@usnews.com, or join the book club on Facebook. Rob Walker suggests this site for readers looking for an overview of the book.
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This Summer, Nesting Is Cool
Tweet Share on Facebook June 25, 2008 Comment (3)Are you settling in for a summer of nesting? There's been a lot of buzz about people opting to stay home instead of traveling to exotic locations because of high gas prices. According to one Kmart television ad, "This summer, there's no place like home," and the company's website is promoting patio furniture and camping equipment. I recently received an E-mail offering an interview with a Comcast executive to discuss the cable company's growing entertainment options, including over 10,000 on-demand programs and thousands of movies a month, designed to cater to consumers who are planning to spend a lot of time on the couch.
Many of us seem to be embracing that idea: In May, Merrill Lynch reports, the share of consumers who said they would buy a new television in the next six months shot up to just over 12 percent. And a survey by Better Homes and Gardens found that 80 percent of respondents liked the idea of a "staycation," or spending more vacation time close to home.
I know that I'm looking forward to exploring several local water holes this summer, as well as making healthy use of my Netflix subscription. What about you? Are the gas prices keeping you home? If so, what activities are you looking forward to?
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How to Make a Budget
Tweet Share on Facebook June 25, 2008 CommentI recently spoke with Felicia Taylor at Retirement Living TV on how to make a personal budget. One tip: Think long term, in terms of the year instead of the month or the week, to make it easier to anticipate costs that come up less frequently.
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7 Easy Ways to Lower Your Summer Cooling Bill
Tweet Share on Facebook June 24, 2008 Comment (6)This guest post comes from Kyle James of Rather-Be-Shopping.com:
I live up in the northern part of the Sacramento Valley in Redding, Calif., where it gets hot! By hot, I mean I sweat just going out to get the mail. Come mid-July, 110-degree days are fairly common. The weather currently is starting to warm up, and thoughts of scorching days are rattling around in my head like a bad dream. Fortunately, the rattling has stopped long enough for me to think of some frugal and easy ways to lower your cooling bill this summer. Here are some tips that I use with great success.
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Audio: Parents and Money
Tweet Share on Facebook June 24, 2008 CommentOver the weekend, I chatted with WTOP on how parents can teach their kids about money. Listen now, download in
iTunes, or subscribe to the 
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New York Collects Saving Tips
Tweet Share on Facebook June 24, 2008 CommentThe New York Consumer Protection Board is collecting all kinds of tips from consumers about how to save money. So far, the board has released lists of ideas for saving on groceries, gas, and household costs. Among the suggestions: Buy in-season fruits and vegetables, avoiding filling up the tank before a holiday or weekend when prices are higher, and unplug appliances not in use. The board is still accepting ideas, so submit away!
