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The Rise of Prepaid Credit Cards
Tweet Share on Facebook January 30, 2009 Comment (11)Today's guest blog entry comes from Jeremy Simon, a reporter with CreditCards.com who writes about payment-card-related topics for consumers. He also contributes to Taking Charge, the website's blog.
As the recession encourages less reliance on credit cards by both consumers and banks, some experts predict that prepaid and secured cards could see their popularity grow.
Prepaid and secured cards are typically marketed to consumers who don't have enough credit history to qualify for a regular credit card. However, the current economic troubles mean an increasing number of consumers may find that credit cards have moved beyond their reach. According to Judith Rinearson, a stored value expert and partner with the law firm Bryan Cave, tightening credit could encourage a move toward prepaid and secured products. "I think there will be an increase of interest in these cards," she says.
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Podcast: Bringing 'Frugal' Back
Tweet Share on Facebook January 30, 2009 Comment (1)On this week's Alpha Consumer Podcast, I interview David Blankenhorn, founder of the Institute for American Values and author of Thrift: A Cyclopedia. He explains why frugality used to be "cool" and how it might be coming back into fashion. The Alpha Consumer Tip of the Week focuses on using websites, including Mint.com, 43things.com, and PriceGrabber.com to save money.
For an upcoming podcast, I will be giving budget makeovers to willing participants. If you are interested in being part of it, and are willing to share your basic budget information, please E-mail me at alphaconsumer@usnews.com.
LISTEN NOW: Bringing 'Frugal' Back
Subscribe to Personal Finance With Kimberly Palmer
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Sugar Daddies and the New Prostitution Index
Tweet Share on Facebook January 29, 2009 Comment (3)Perhaps the proliferation of stories related to selling sex for money could be dubbed the "Prostitution Index": When times are bad, do women inevitably turn to their bodies to generate extra cash?
First, we had Natalie Dylan, auctioning off her virginity for almost $4 million. Then, we had the DABA (Dating a Banker Anonymous) girls who, while not selling themselves for money, have been quite disappointed in the fact that their banker boyfriends can no longer support fancy vacations and dinners out. And today brings us sugar daddies.
Good Morning America featured an 18-year-old who is dating a 40-year-old in exchange for Las Vegas weekends and Manolos. He's married, but she's fine with the relationship because, as she puts it, "I live much better than the average girl." (No word on how the wife feels about it.)
Is this just a fluke, or is the recession really causing this sudden burst of pseudo-prostitution? -
5 Smart Upgrades for Tight Times
Tweet Share on Facebook January 29, 2009 Comment (6)My good friend from college and I recently bemoaned the fact that we can't afford all the upgrades we would like, or even that we expected to have by age 30. I thought that by now I would have purchased a home, or at least live in an apartment with a kitchen that's been updated since the 1950s. My friend, who lives in Portland, wishes she had more of an emergency savings cushion.
But the fact that the job market is tight, which means my friend is probably earning less than she otherwise would be, and the housing market is tumultuous, which has made me put off buying a home, has also let us focus on making smaller upgrades that probably make a bigger different in our daily lives.Here are a few of the investments that, though relatively small, pay off every day:
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In a Recession, It Pays to Give More
Tweet Share on Facebook January 28, 2009 Comment (3)When I ask money experts or psychologists how we can feel better about our own financial situations, they almost always have the same answer: Become more generous.
In a recession, giving to others becomes even more important, first because people and charities need more help, and second because we can use the psychic boost when we're feeling down on our own luck. But consumers typically reduce their giving by about 2.7 percent during longer recessions, according to the Center on Philanthropy at Indiana University. (The average household typically gives about $2,247 a year.)
Here are six ways to get your giving in gear:
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Inaugural Youth 'Scam' Controversy Continues
Tweet Share on Facebook January 28, 2009 Comment (20)Controversy continues to heat up around the Inaugural program for students that some are calling a scam. As parents press for reimbursements and apologies, the organizers are starting to respond by offering refunds and other remedies.
The Presidential Youth Inaugural Conference, held over President Obama's Inauguration, collected up to $2,900 from thousands of high school and college students for four days of lectures and events, some with high-profile politicians such as Colin Powell and Al Gore. But students say they were misled into thinking they would have tickets to the swearing-in and official Inaugural Ball.
In an August letter sent to attendees, the conference organizers said, "On the Mall, you will watch the new President take the oath of office and listen as he addresses the nation. You will then have an opportunity to view the inaugural parade as the new President, Vice President and their families make their way down Pennsylvania Avenue from the U.S. Capitol Building to the White House." -
Cashing In on the Obama-Industrial Complex
Tweet Share on Facebook January 27, 2009 Comment (7)J. Crew's website crashed from the multitude of visitors inspired by Malia and Sasha's outfits on Inauguration day. The designer Jason Wu, creator of Michelle Obama's Inaugural gown, is now practically a household name. Pepsi posted "all for one" and "yes you can" posters and Ikea broadcast "embrace change" and "domestic reform" messages on the Washington subway during Inauguration. Starbucks invited customers to watch the swearing-in at their local Starbucks and gave free coffee to anyone who pledged to do five hours of community service.
Is there any company that hasn't tried to latch onto the Obama brand?
There's nothing wrong with tapping into the current cultural zeitgeist. That's smart marketing. But at least one company has, in my opinion, crossed the line. -
Snuggie Blanket Captures National Attention
Tweet Share on Facebook January 27, 2009 Comment (10)Every now and then, a product becomes more than just a product. It becomes a national sensation. It happened with Beanie Babies, and now it's happening with the Snuggie blanket.
The blanket, as seen in the ad below, is built to keep the whole body, including arms, warm. It takes advantage of the fact that more Americans are staying at home to save money, and they want to be comfortable while there. Advertising Age reports the company sold more than 4 million blankets in three months, helped by the fact that Ellen DeGeneres wore one on her show and at least one attendee of President Obama's inauguration used one to keep warm (and was featured on Fox News doing so). The original advertisements have already spawned dozens of parodies and remixes on YouTube.
I don't want to knock it because I haven't tried it, but surely the creators could come up with something that looks a bit more stylish? Or perhaps the unique, monk-like garb is what is driving its popularity.UPDATE: One of my colleagues has just informed me of the Slanket, which is almost identical to the Snuggie. Let the brand wars begin.
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The Ethics of Accepting Freebies
Tweet Share on Facebook January 27, 2009 Comment (3)On a recent episode of CBS' Gary Unmarried, Gary's pretty new girlfriend brags about getting everything from valet parking to flat-panel televisions for free. Men, she implies, can't help but shower her with gifts because of her good looks and flirtatious personality.
But is it wrong to accept free goods and services? One could argue that in our tight economy, anything that trims costs should be embraced. But I can't help but feel that it's a bit wrong to do so.
First of all, nothing is really free. Accepting a television or even valet parking makes you somewhat indebted to the giver. You have to be extra nice to them, thank them profusely, and accept whatever it is they give you instead of what you may have wanted. -
Can You Afford a Baby?
Tweet Share on Facebook January 26, 2009 Comment (15)While I'm on vacation, I'm re-posting some older Alpha Consumer entries that still apply today.
From June 12, 2008:
If you're of a certain age and life stage, then you might be asking yourself: Should I have a baby? Before getting carried away with visions of Baby Bjorns and onesies, consider this: Babies cost more than ever. According to the Agriculture Department, middle-income couples spend an average of $11,000 during the first year of a child's life. By the time that newborn reaches his 18th birthday, he'll have cost his parents around $204,000. (Creative solutions such as relying on grandparents for child care and swapping clothes with friends can help ease the strain.) Here is the Alpha Consumer quiz to help figure out if you're financially ready to become a parent:
