Wednesday, October 28, 2009

GMAC Needs More Money



More news from the nightmare that is GMAC:

WSJ: GMAC Asks for Fresh Lifeline

Really. It Just. Never. Ends.

At least now I understand why the goldbug investors think the way they do.

And remember, folks: I noted back in April that the brainiacs at GMAC ramped up subprime auto lending again. FICO of 600? Sure! Let us put you in a new car!

Cash for Clunkers? You betcha! GMAC was feeding at the trough on that one, too.

Seriously: When is enough ... enough?

The U.S. government is likely to inject $2.8 billion to $5.6 billion of capital into the Detroit company, on top of the $12.5 billion that GMAC has received since December 2008, these people said. The latest infusion would come in the form of preferred stock. The government's 35.4% stake in the company could increase if existing shares eventually are converted into common equity.


And as the article above notes, the FDIC's on the hook for GMAC, too. It's backing $4.5 billion of GMAC debt from earlier this year ... and is about to back another $2.9 billion of issued debt for this pathetic excuse for a company. (Good thing the FDIC is already in the red. At least this way, they sort of know how GMAC feels.)

These days, all roads truly do lead to the taxpayer.

No wonder fiat currencies have such a fabulous track record.

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— Posted by Michael @ 8:08 AM



Wednesday, August 05, 2009

Electric Orange Debit Card Limits




Click here to start saving with ING DIRECT!
An email I received yesterday informs me that ING Direct has recently changed the transaction limits on their Electric Orange debit Mastercard. (More specifically, they've changed the limit for signature-based debit-card transactions.)

So, as of today, here are the current limits for the Electric Orange debit Mastercard:


  • Signature-based ("Credit") Transactions: $5,000 per Day

  • PIN-based ("Debit") Transactions: $25,000 per Day

  • ATM Withdrawals: $1,000 per Day



And here's the text of their email:

Important Update:
Electric Orange Debit MasterCard Transaction Limit


The new daily limit for all signature-based Electric Orange Debit MasterCard transactions is now $5,000. A signature-based transaction is any card transaction where you don't enter a PIN or choose 'Credit' versus 'Debit' at checkout. Keep in mind that this update does not affect the daily limit on PIN-based transactions, which is $25,000.


Since we're on the topic, here are some other relevant Electric Orange limits as well:


  • "Person2Person" Transfers: $5,000 per Day

  • "Bill Pay," "Mail a Check," "Overnight a Check": $100,000 per Transaction



Way more info than you probably ever wanted to know can be found at ING's Electric Orange Terms and Conditions. Also, curious souls may wish to check my Electric Orange review for my thoughts on Electric Orange checking accounts. (I love mine!)

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— Posted by Michael @ 8:10 AM



Thursday, July 09, 2009

Credit Card Changes Appearing



As I mentioned in my "Credit Card Predators Unite" post, there are changes coming to the credit-card industry. Since most of these changes focus on consumer protection, we can be fairly certain that the suits at Citibank, Bank of America, Chase, and all the rest have been putting in late nights, trying to decide how they're going to circumvent the upcoming rules ... or at least try to make up for lost revenues. (Overdraft charges will only take you so far these days.)

In late June, we saw an opening salvo from Chase:

LA Times: Chase Increases Minimum Payments

And now JP Morgan and Bank of America are switching their fixed-rate card offerings to the variable-rate variety:

Bloomberg: JP Morgan, BOA Adopt Variable Rates

Same basic story in this one, again from the LA Times:

LA Times: Credit Card Firms Try End Run Around New Fed Rules

My first thought? Mostly, it's that if you didn't see this sort of bank tomfoolery coming, then you haven't been paying attention.

According to the second LA Times article above, Chase is doing the variable-rate thing as well. (What self-respecting Banking Mega-Conglomerate would allow its Bailout Buckz brethren to outdo it in the credit-card reform realm? None, is what I'm thinking.)

So here we go, kids. The credit-card rules revamp — sure to be a fun time all around — starts now!

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— Posted by Michael @ 9:22 AM



Friday, May 29, 2009

ING Checking: $50 Bonus




Click here to start saving with ING DIRECT!
The offer hit my email inbox today. Unfortunately, since I'm already an ING DIRECT Electric Orange account owner, I can't take advantage of it.

But if you're not yet an Electric Orange user, well, you might want to start now. There could be a free $50 in it for you!

Here's a summary of their promotional email:


  • In order to qualify for the $50 bonus, you must open your ING Direct Electric Orange account by June 20, 2009.

  • When opening the account, use Reference Code EM274. (Apparently this code varies across ING's mailing list, as other bloggers report receiving different reference codes.)

  • Use your Electric Orange debit MasterCard to make at least 3 signature-based transactions within the first 45 days.

  • On Day 50, ING will post a $50 bonus to your Electric Orange account.



If I weren't already a happy EO user, this bonus would probably get me to jump in the paperless-checking account water. Fifty bucks is fifty bucks, after all.

Those of you who are aren't totally familiar with ING's Electric Orange checking accounts might wish to read my Electric Orange review as well.

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— Posted by Michael @ 9:08 AM



Thursday, May 21, 2009

Electric Orange ATM Limits




Click here to start saving with ING DIRECT!
You'd think that, having opened my ING Direct Electric Orange checking account way back in early 2007, I'd know what ING's ATM daily withdrawal limit is by now.

Well, their ATM limit is $1,000 per day. But I didn't know that until yesterday.

No, I didn't find out the hard way. And no, I wasn't trying to withdraw $700 or $800 or anything, only to find my efforts electronically rebuffed by ING.

Rather, my need for ATM cash is so negligible, and our use of credit cards and electronic bill-pay services so pervasive, that I had absolutely zero need to know ING's withdrawal limits until here lately. Since we have a couple of local-institution bank accounts in addition to our EO checking account, it's easier for us to get ATM cash from those accounts than it would be for us to pull it from Electric Orange. There are way more free ATMs around here for the local banks than there are for ING Direct and its Allpoint network.

Here's the related snippet from Electric Orange's terms and conditions:

3. ACCOUNT TRANSFER LIMITATIONS. You are not limited in the number of transfers that you may make into or out of your account(s). However, there are limits on the dollar amount of withdrawal transaction(s).

Any one “Free Bill Pay” transaction or “Send Paper Checks” transaction (including expedited checks) cannot exceed $99,999.99. Total Card purchases (including cash back amounts) and cash advances made using an EO Card are limited to $25,000 per day. This does not include withdrawals from an ATM. Withdrawals from an ATM made using an EO Card are limited to $1,000 per day. “Send Electric Checks” (person-to-person transfers) transactions are limited to $5,000 per day.


So those of you who are wanting to use your EO checking account to send $7,500 bets to your local bookie via Electric Check ... well, you might want to rethink that.

Labels:

— Posted by Michael @ 8:15 AM



Monday, May 04, 2009

Mattress Money



Mattress Stash!
Okay, I admit it: I've made a practice of keeping some money "under my mattress."

CNN/MONEY: Money Under the Mattress?"

How much money, you ask? Well, enough for me to feel (for lack of a more precise term) moderately "secure" about it. More than two dollars. Less then two thousand.

Where do I keep it?

Uhhh ... hidden. (And no, it's NOT under our mattress.)

Am I a crazy, "end times are a-comin'" nutjob?

Not usually.

Rather, I'm a realist. I like to be prepared for various contingencies.

You Just Never Know

Yes, I'm quite familiar with FDIC insurance. I'm glad it's there. After what happened to my grandparents' generation in the 1930s, FDIC insurance serves a vital purpose. It's there to stabilize the financial system; i.e., to prevent bank runs. Pure and simple.

In the article above, author Gerri Willis notes:

And remember, if you think your bank might be in trouble, don't panic. As long as your bank is a member of the FDIC, your money is protected up to certain limits. Through the end of this year, individual accounts are fully protected up to $250,000, and the same goes for all retirement accounts, including IRAs.

If you're over the limit, spread out your money at different institutions, or consider joining a credit union. Credit unions are just as safe as banks. Instead of the FDIC guarantee, you have the National Credit Union Association to back up your accounts.

One of the worst moves you could make is pulling your money out of a regulated institution and holding the cash yourself.


I'm good with all that. You'll note that I haven't yanked ALL my money out of any of my banks; rather, I just keep a little chunk very close to home. It wouldn't take an all-out financial-system meltdown for that "little chunk" to come in handy, after all.

Suppose banks DID end up being temporarily closed for some reason. Hey — at this point, I'm willing to take NO possible outcomes off the table. Not next week. Not next year. In such a case, I'd be somewhat relieved to have a cash stash readily available. (Key word: "somewhat")

ATM network failure? Sure. Could happen. Terrorist attack, maybe? Computer virus gets a running start from Europe, perhaps? Neither one seems so outlandish to me.

Or maybe the scenario's even worse: Maybe the pizza guy shows up at my door ... and I can't find my wallet.

Yup. Again, "mattress cash" would be handy. Bank failures are nasty, but ticked-off pizza guys?

Whew. Good luck to ya.

In any case, it simply seems to me to be a good idea to keep some cash handy at the ol' homestead.

ATM's are a divine invention, certainly. But foolproof?

The realist in me says "Nope!"

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— Posted by Michael @ 8:42 AM



Wednesday, March 18, 2009

A Bank With No Bad Loans? Bad Bank!



This is exactly why I fear for our country.

This.

Right.

Here.

Fox News: FDIC Criticizes Massachusetts Bank

Here's the gist: A community bank in Massachusetts which has managed to have precisely ZERO bad loans on its books was sternly, uh, wrist-slapped by the FDIC recently.

[Strict attention to credit quality] has allowed East Bridgewater Savings Bank to stand out among a flurry a failing banks, with no delinquent loans or foreclosures on its books, the Journal reported. East Bridgewater Savings didn’t even need to set aside in money in 2008 for anticipated loan losses.

But rather than reward [bank CEO] Petrucelli's tactics, the FDIC recently criticized his bank for not lending enough, slapping it with a "needs to improve" rating under the Community Reinvestment Act, the Journal reported.


This is a joke, right?

The problem, according to FDIC data, was that from late 2003 through mid-2008, East Bridgewater Savings made an average of 28 cents in loans for every dollar in deposit — a sharp contrast to the 90 percent average loan-to-deposit ratio among similar banks, the paper reported.

"There are no apparent financial or legal impediments that would limit the bank’s ability to help meet the credit needs of its assessment area," the FDIC wrote in the CRA evaluation.

The agency also faulted the bank, which does not have a Web site, for not promoting its loan products enough, the Journal reported.


You mean to tell me this bank was actually working to make sure its loans were going to be paid back?

Astounding.

In a world where a bank "meeting its community's credit needs" is FDIC jargon for "flushing depositor funds down a black hole," you just gotta wonder when it was that our society became so out-of-its-mind in love with (and dependent on!) ever-increasing debt levels.

I mean, with such diligent loan underwriting, East Bridgewater Savings will never get its hands on any of the Bailout Billionz the feds are shovelling out the door to the banks that were, uh, "doing it right."

I'll say it again: We're in trouble, kids. The problems are systemic.

Labels:

— Posted by Michael @ 8:09 AM



Wednesday, December 24, 2008

Mmm ... Irony



I do loves me the poppin' fresh irony.

For instance: This week, we have an institution named "Flushing Financial Corporation," located in "Lake Success, New York" tapping the TARP for $70 million.

Now, I know what you're thinking. You're thinking:

Man, someone has to be making this stuff up. Flushing Financial? Lake Success?

Alas ... 'tis no "making up" going on here.

Here's the pdf: Merry Christmas, Baby (Banking Edition)

And the Treasury's press release: More Salvation Army Efforts (for Banks)

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— Posted by Michael @ 8:24 AM



Tuesday, October 28, 2008

ING's Electric Orange $20 Promo



Just received an email from ING Direct regarding an easy $20 bonus for my Electric Orange checking account...

According to the promo, if I use my Electric Orange debit card to make at least five purchases of $10 or more during the month of November 2008, ING Direct will spiff me $20. Not bad. If you have an EO account, be on the lookout for this:

Electric Orange Offer


I don't use my Electric Orange debit card at all — we prefer to put everything on our cash-back credit card, and pay the balance in full each month — but for an easy $20 like this, I'll darn sure use the ING debit card.

If you don't yet have an Electric Orange account but are interested, you can read my Electric Orange review for more info on ING's paperless checking account (with which I'm very pleased, by the way).


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— Posted by Michael @ 8:04 AM



Wednesday, February 27, 2008

Overdrafting Again



My post regarding my disdain for Overdraft Whiners has garnered a fair string of comments — more than any other recent post on this blog, to be sure.

Readers who consider me to be on the wrong side of this issue ("You're an a#&hole!") will no doubt be up in arms against The System when they get a load of a recent post at the credit- and bankruptcy-related blog, Credit Slips:

Credit Slips: Ripped Off by the Banking Industry

Here's a no-doc, no-income-verification rundown of the Credit Slips article:

Thanks to her participation in the Consumer Bankruptcy Project of 2007, a woman named Erica (not really) was nominated for an additional $100 payout due to her particularly inspirational story.

Erica looks past her own misfortune and sees the positive things in life and others. She is very brave and strong and creative and incredibly unselfish. She takes in stray kittens, cooks home-made soup for her elderly neighbors, rolls pennies to buy gas for her husband's truck, and even gets her antibiotics from her veterinarian if she can, so she doesn't have to spend money on a doctor's visit.


We're told that Erica is 46 years old, a previous BK filer, and afflicted with multiple sclerosis; to her credit, she has already outlived her doctor's initial prognosis by five years. Most of us can only imagine the physical and financial struggles Erica must contend with on a daily basis.

So what happened when Erica got the CBP award check?

She [Erica] got her check a couple of days ago and had her husband deposit it in the bank. They barely cover expenses each week so she was thrilled to encourage him to put more than $10 gas in his truck, pick up some milk and bread at the grocery store, pay a little bit on a bill they owed, and buy another item they needed. Then when she checked their balance at the bank yesterday, they had over $100 in overdraft charges, something like $33 for each of the items he had bought. She called the bank and they said they were holding the Harvard check for 5 days, so it wasn't available for them to spend when he made the purchases.


Well, that's fun. But there's more.

She asked to talk to a supervisor and was transferred here and there and finally she said she was hooked up with someone she was sure was in India, because she could barely understand her. When she insisted that they had never held any other checks on their account, the lady told her that they often do that for checks from out of the country. Erica asked her where the hell she thought Harvard was and then just gave up.


Here We Go...

Once more, Credit Slips author Debb Thorne tells us, greedy banks have seriously overstepped their bounds by charging Erica three separate $33 overdraft fees. Know what I think?

I think: Given what I've read about this, I have great sympathy for Erica's physical and financial situation. However, the overdraft fees — all of them — were valid. (Caveat: This is unless the bank has somehow violated Reg CC. This was noted as a possibility by Adam Levitin, who commented on the post at Credit Slips. But we don't have enough info to know whether this is the case or not.)

"HOW CAN YOU SAY THE CHARGES ARE VALID?" readers will scream. "HAVE YOU NO HEART?"

Hold on. If I were the bank manager, I'd look into the matter. At the very least, I'd educate Erica and her husband on bank policies. And then I'd refund the overdraft fees.

Once.

There is simply no argument about this: Erica needs that $99 far, far more than the bank does. The bank can earn back that $99 quickly from someone or somewhere else. The same cannot be said for Erica and her husband.

Again, this is simply what I would do, if it were up to me. But it isn't.

Erica is likely out that money.

"But they never held her checks before, remember?" people will point out. "How is it right for them to start now?"

Well, I've never read word-for-word the deposit policies of any financial institution I've ever dealt with. Even so, I'm well aware of the likelihood that just because you desposit a check — any check — it doesn't mean you have immediate access to that money. It's standard bank operating procedure, folks.

From my end, I don't try to spend money that I just deposited that same day. Ever. It's called being conservative, and erring on the side of caution.

Admittedly, it's also a luxury that Erica probably cannot afford.

Doesn't matter, though. The bank makes the rules.

Some Questions I Wish to Answer

In the article, Ms. Thorne asks a few rhetorical questions regarding bank fees and such. I'd like to take this opportunity to answer them — from my non-expert viewpoint, of course.

Why in the world is holding a check drawn on a leading bank common practice?


Don't know; don't care. All I know is that it is. And if you don't want to shell out thirty-dollar overdraft charges, you'd better grasp the concept, too. And pronto.

$33 for a single overdraft? What the heck??? Who in their right mind thinks it is acceptable to charge that?


I do. In fact, given the rate at which people continue to not give a crap about how they manage their money, I'd go so far as to say that overdraft fees should go higher.

Banks aren't charities. They exist to make money. Account-holders take heed: If you give most banks the slightest chance, they will bend you over and apply their own special brand of Stimulus Package. The sooner you learn how to avoid this, the better off you'll be.

If my memory serves, checks I write are deducted IMMEDIATELY from my account — thanks to technology, it simply is not possible to float checks anymore. Yet deposits I make are not recognized for days. Why?


Because the banks run the show. Their game; their rules. Suck it up, buttercup, and stop whining.

And why in the world aren't our elected officials calling hogwash on this?


Oh, please. You know the answer as well as I do. Bankers and politicians get along very, very well. Cash, meet pocket.

It's unethical and it should be illegal.


Whatever. When you screw up with your money, when you can't follow your financial institution's policies, then you should pay.

Screw up repeatedly? Pay repeatedly.

The same rule should apply to bankers, of course, but it won't. (See the previous question.)

So go ahead, readers: Tell me how you feel.

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— Posted by Michael @ 8:40 AM



Tuesday, February 19, 2008

Death by Payments



Life is hard. But it's sure great to know that the guys at Chase (who hold my mortgage) are behind me every step of the way.

How do I know this?

Well, because they tell me so.

For rock-solid proof of this, why just this weekend I received a quaint laser-printed love-letter from them. It informed me that:

As a mortgage customer, you have a special opportunity to refinance your current mortgage, fast and simple. Why refinance now? One smart reason — debt consolidation.

Tap into your home's equity for the cash you need to consolidate your high-rate monthly payments into one lower monthly payment. A debt consolidation loan from Chase can combine your credit cards, auto loans, and other high interest loans into one easy, time-saving monthly payment. Here is an example of how much you could save each month.


Below that was a chart that looked pretty much like so:



Wow! Chase loves me so much, they customized the numbers for their example by checking my credit report! Sure, the figures are old now, but they were in the ballpark at one point. (What they don't know, of course, is that any credit-card debt they see on my report is paid in full each month. So much for that "high interest" they love to guard me against.)

But what a great deal, huh?

Chase pegs my current monthly payments at $880. Because they're looking out for my wellbeing, they've created an offer that'll drop my monthly payments to $390. I'd be saving $490/month in payments just by signing up!

Are these guys pals, or what?!

Put a Spreadsheet to It

Ah, Excel, how I love thee.

One nice thing about being a Money Dork is that, unlike so many consumers, I don't think in payments. Since I work in the auto industry in my Day Job, I'm well aware of the Most Common Finance-Office Customer Declaration:

"Sure, we'll buy the new GMC Behemoth SUV. So long as the payments don't go much over [XXX] dollars per month."

Guys, that kind of thinking makes for a quick trip to Bend-Over-Ville. And it's evidenced nicely by plugging Chase's refi numbers above into an Excel amortization spreadsheet.



Neat how that works, isn't it? Chase's example has me refinancing ALL my debt — even the plastic, which I pay off every single month — into a 30-year fixed mortgage at roughly 6.25 percent.

Never mind that my current mortgage is of the 15-year fixed variety, at 5.5 percent — which is further reduced to 2.75 percent thanks to an MCC federal tax credit which I'd lose if I refinanced again.

In Chase's plan, my monthly payments would drop by $490. That'd give me "savings" of $5,880 per year ... so they say.

With Savings Like Those, Who Needs Expenses?

But over those 30 years, I'd be dropping an estimated $77k onto their balance sheet in interest charges. Which looks particularly nasty when compared to the interest charges I'll pay if I stick to the terms of my current loans (mortgage and auto):



Who's Zoomin' Who?

Let's see: With Chase's humble generosity and debt-consolidation help, I can reduce my monthly payments by $490. In the process, though, my debt-payoff period will bungee to a length of 30 years, and I'll spend over $77k in interest before the loan's paid off.

If I simply continue paying my debts according to current terms — which, by the way, ain't gonna happen; our Accord will be paid off this year, two years early — I'll fork over a "mere" $8,207 in interest.

Hmmmm. Should I pay $77k in interest ... or $8k?

Tough call, it isn't.

Come to think of it, maybe "behind me" isn't exactly where I want these Chase guys. Or any other bankers toting such "special opportunities."

Death by Payments: It truly is all around us.

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— Posted by Michael @ 8:24 AM



Monday, November 12, 2007

Electric Orange: Printing a Voided Check




I've had my ING Direct Electric Orange checking account open since early September, and I've been quite happy with it. The one and only issue I've had — and with online-only checking accounts, it's purely the nature of the beast — is that coming up with checks for spur-of-the-moment items (think kid's PTA fundraisers and workplace canned-goods drives) is pretty much impossible.

If you're looking to go online-only with your checking account, well, you'd better have a backup plan in place for such things. (The cynic in me hates doling out cash to individuals for short-notice fundraisers, so quick ATM access isn't my preferred solution here.) In my case, I hold a small amount of money (~$200) in a local checking account. I keep that checkbook with me at all times.

Something that's come up a few times now — and to be honest, I'm writing this mostly so I can remember how to do it — is printing a voided check for the Electric Orange account. If your employer is like mine, you'll need a voided check to set up direct-deposit. Also, a few online savings accounts (namely Emigrant Direct) require that you mail them a voided check from your funding account when you add it.

So here's how to print a voided Electric Orange check:

  1. Log into your Electric Orange account.


  2. Click the ELECTRIC ORANGE tab.



  3. Click "Go to Account Details."



  4. Click "Account Maintenance."



  5. Scroll down to "Useful Forms" and its subtopic "Voided Check."


  6. Click the hyperlink to print a voided check.




And there you go. One voided Electric Orange check ready to print!

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— Posted by Michael @ 8:26 AM



Monday, October 29, 2007

Quicken: Enter Transactions by Hand



Longtime readers know that I'm a huge fan of Quicken, having used the program since the mid-1990s. I think I'm fairly unique, though, in that I don't EVER let Quicken download my transactions electronically. I input everything by hand.

Quicken Premier H&B - Save 20% + Free Shipping


I don't do this because I have piles of free time in my life. Rather, I believe that entering transactions manually has its advantages:


  1. You get a better "feel" for your spending. I've always believed that inputting purchases by hand allows me to stay "closer" to my own spending habits. It's harder to ignore your own Money Stupids when you have to physically punch in, say, the credit-card purchases after you've left Best Buy. (A particular place of weakness for me.)


  2. You can skip some software glitches. When folks have spoken to me about their complaints and aggravations with software like Quicken and MS Money, it sure seems as if the transaction-downloading abilities of the programs leave a lot to be desired. Is it a problem with the banks? Is it a problem with Quicken? I dunno. But it doesn't matter to me, 'cause I don't utilize e-downloads.


  3. Waiter changes my tip? Receipt total gets changed? I'll catch it. I almost always pay for my dining-out excursions with cash-back credit cards. And yes, my tip gets added to the bill that's charged to my card. I keep my copy of the final receipt, obviously, because I have to punch it into Quicken when I get home (or at least toss it into our Cash Flow box for entry later). And yes, I do actually reconcile all my Quicken accounts to their respective statements when they arrive. The Control Freak in me wouldn't have it any other way.

    So, if a server decided to modify my tip — get a load of this Fatwallet thread — I'd catch it when I reconciled the account. After all, the amount on the statement wouldn't match the amount I'd input. Danger, danger.



So yeah — I'm one of the few remaining Quicken users who don't download transactions from financial institutions. There's probably a nice twelve-step program out there for me. But my denial is strong. I'm not joining.

Automatic transaction downloads? If that's a necessary facet of the Wired Life, then you guys will just have to go on without me.

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— Posted by Michael @ 10:28 AM



Tuesday, October 16, 2007

ING Direct's Electric Orange



I've now posted my Electric Orange review over at the main site.

At first I sort of figured I'd just open ING's newfangled checking account and play around with it just long enough to write up my review. But now I'm having second thoughts: I'm gonna keep it for a while. Not only that, I believe I'll make it my main checking account — at least for a few months.

The simple fact is that I write fewer than 2 or 3 paper checks per month on average. And of those two checks, ING has already shown me that they can pay one of those bills electronically. (I could've paid it electronically, too, directly thru the company's website. But I would've had to pay a $1.00 service fee to do it. Don't even get me started on that crappy setup.)

Being able to pay individuals with Electric Checks will actually come in handy this week, as I need to send some money to an out-of-town family member who made a purchase on my behalf. Thanks to Electric Orange, I can do this without mailing a check, and the relative won't have to make a trip to the bank to deposit a check. A few clicks from me, a quick email response from her, and ING gets the money into her account 100% electronically. Pretty nifty.

I've had my main credit-union savings account since the 1970s. I've had its corresponding checking account since ... well, since I was old enough to open one. ING Direct's Orange Savings Account was the first account to largely snag my savings funds away from this particular credit union.

I suppose it's only fitting that they also be the ones to acquire my checking-account business, too.

At this point, I'd say the odds slightly favor Electric Orange.


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— Posted by Michael @ 9:42 AM



Wednesday, September 19, 2007

ING Direct's CEO Rulez



I just happened to be flipping channels last night, and got lucky and caught Nightline's interview with ING Direct CEO Arkadi Kuhlman:

ABC News: CEO Who Turns Customers Away

I know some folks are down on ING Direct, but I still use my Orange Savings (review) every month for my Freedom Account transactions. I've never had so much as Problem One. And not a month goes by that I don't thank them for starting up the whole online-savings thing, and making life just a little tougher on the stodgy bricks 'n' mortar banks.

Anyhow, the more I hear from ING Direct CEO Arkadi Kuhlman, the more I admire him. That's a guy I'd love to work for, or with ... or whatever.

I'm not going to give someone a house because they've got a paycheck. What does it make sense to anybody that you can get a $400,000 house to live in, just because you've got a paycheck? You've got no equity. When you have hairdressers one day becoming mortgage brokers the next day, did anybody think that was going to be a good deal?
— Arkadi Kuhlman

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— Posted by Michael @ 9:28 AM



Wednesday, August 15, 2007

Capital One Direct Banking Money Market



I'm not sure I really needed another online bank account, but what the heck — I've signed up anyway.

I'm now an owner of a Capital One Direct Banking High Yield Money Market Account. (Say that five times fast ... then read my fully-detailed Capital One Money Market review.)

As of today, the Capital One Money Market account's current interest rate is very competitive with other large banks' online accounts. I've been having a great time "test driving" all these online bank accounts, and I figured it wouldn't be fair of me to leave out Capital One.

Way back when, before I started using only credit cards that paid me cash back, I used to really like my Capital One No-Hassle Visa. It wasn't so much that the card did anything special for me; rather, I just really liked their online interface. It was so darn clean and simple — way better than what I saw from the Chases and Citibanks of the world.

With Capital One, making payments (and doing pretty much anything else) was a snap. I don't know why, but the layout really made sense to me, and I liked it.

I guess I was hoping that their Direct Banking setup would be the same. I was pleasantly surprised. Here's a quick glimpse of their interface:



As has become standard with online accounts, the Capital One Direct Banking Money Market has no fees, no minimum balance, and easy account-to-account transfers. Unlike some other online savings accounts, though, Capital One goes a bit farther and offers free checks and an ATM card*.

As for transfer times, so far I've only moved money into my Capital One Money Market account. That initial transfer left my bank account on Thursday and appeared in my Capital One account the following Tuesday. I'll be testing out times on withdrawals later this week and next.

Unless I find something about this account that I really dislike, I believe I'm going to stick with it for a while. I know some folks out there just despise Capital One, but all my experiences with them to date have been just peachy.

Let's see how it goes now that I'm letting them handle a bit of my non-credit-related banking activities, too.

* Note that federal regulations limit this account to six withdrawals per calendar month, three of which may be by check.

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— Posted by Michael @ 9:13 AM



Friday, June 22, 2007

Maxed Out: My Review



I'm going to keep this short and sweet, because much better pf-bloggers than I have already taken James Scurlock's documentary film Maxed Out out back and smacked it around. I watched the DVD last night, and here's what I took from it:


  1. When you watch a 1.5+ hour documentary focusing on the U.S. credit industry and the TREMENDOUS DESPAIR IT HAS SO SAVAGELY WROUGHT UPON US ALL [/sarcasm], and the only time anyone contemporary in the film mentions "personal responsibility" to ANY appreciable degree is in the "Special Features" tacked on at the end, then you know the "Wahhhhh Factor" is totally in play. And it was.

  2. If you're on the wrong side of consumer debt right now, you'd better do whatever it takes to get the hell out. Do it yesterday. Because when it comes to "getting the hell out," the deck is 150% stacked against you. And it will only get worse.



And was it just me, or did anyone else walk away wondering about the (for me) significant amounts of context that didn't make it onscreen? Slices of Senate hearings and dollops of Greenspan-speak don't mean squat to me when I don't have their full context. And juxtaposing this stuff with the tearful faces of debtors and debtors' families just exaggerated my unease. I had this feeling over and over again in the film ("Okay ... but what was the background to that?"). It was gosh-darned unnerving, I tell you.

Netflix can have this one back tomorrow ... without so much as a second viewing on my part.

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— Posted by Michael @ 10:06 AM



Monday, June 04, 2007

I Hate Overdraft Whiners



I simply cannot convey the level of contempt I hold for 99% of Overdraft Whiners. Seriously.

Who are Overdraft Whiners? Well, these are the hapless, woe-is-me folks you see commenting IN DROVES on articles like these two:

Red Tape Chrons.: "Bank Overdraft Fees: Help May Be on the Way"

Red Tape Chrons.: "Double Trouble for ID Theft Victim"

Rarely will a card-carrying, finger-pointing Overdraft Whiner miss an opportunity to lament how "ridiculous" or "unfair" or "egregious" his or her bank's overdraft policies are. The astounding number of comments attached to the butt ends of those two articles will attest to this undying truth.

For about ten or fifteen seconds there, as I read through way too many of those comments, I considered leaving a comment of my own. But then I realized I'd have lots more space to piss off the Overdraft Whiners by simply creating a blog post about them. So here goes.

Sympathy? Sorry. I'm Already Overdrawn.

Let me state here, early and unequivocally, that I have ZERO sympathy for folks who endure overdraft charges in circumstances where:


  • ...the bank processed a high-amount transaction first so that the deluge of smaller-amount transactions behind it would all garner overdraft fees. Whiners love to trumpet this one. You know what? It sounds fine to me. Check your bank's charter and what you'll find is that they don't exist to give you a blankee, back rub, and hold your cuddly little hand while you muddle through Financial Life. The Overdraft Whiners here were, no matter how you slice it, spending money they didn't have. And now they have even less. Those red numbers in your account? They're the marks left by Reality when it smacked you across the face. Were you paying attention?

    Balancing a checkbook properly, coupled with not spending money that isn't there, would fix this.


  • ...an overdraft of $.07 resulted in "ridiculous" bank charges in excess of $35. Excellent news. I'm all for it. Sure, if you were to figure what a fee like this equates to in, say, APR terms, then you'd have a calculator that'd probably run out of spaces for all the zeros. But I'll conveniently disregard this fact since Overdraft Whiners so often (apparently) conveniently forget to use their calculators to see what their real-life account balances are.

    Again: This is easy to fix with a properly-maintained check register and some attention to detail. Of course, not everyone's willing to undertake this sort of slave labor.


  • ...the Overdraft Whiner thought the balance the [ATM machine / phone teller / online-account screen] showed them was the REAL balance. No, silly. You can find your REAL account balance in only one place: your diligently-utilized check register. Have I mentioned how much I adore Quicken and programs of that ilk? Avoiding overdraft charges FOREVER is just one of the many things your computer can help you accomplish.


  • ...the bank "should have" denied the debit-card charge because it was beyond the available balance. Nope. You screwed the pooch first. You should've known your real-life balance and then NOT swiped or handed your debit card to the cashier.


  • ...your bank didn't "warn" you that you were already overdrawn, and continued to let purchases go through. Blankee, back rub, hold cuddly little hand, and so on. Not the bank's responsibility. Knowing your account's true balance, and not spending money you don't have? Your responsibility.


  • ...the bank's service charge caused you to overdraft. Then you're just not good at paying attention, are you? Or at finding a bank or credit union that doesn't suck?


  • ...the Whiner deposited a check from a known perpetually-broke friend. The check bounced, and overdraft charges ensued. Surprise, surprise, surprise. The Whiner rolled the dice, and he lost. Time to pay the house.


  • ...the only excuse left is the hallowed one: "I can't help it. I live paycheck-to-paycheck." If this is the case, then those thirty-plus-dollar fees are truly a financial head-wound for you. Even more reason to pay attention to what you're doing and not count on someone else to pick up the slack. I was a broke college student once, too. And after that, a broke young adult. Know how many times I overdrafted?

    Zero.

    Even then, I knew how to use a paper check register (and later, Quicken).



Now that I think about it, this post goes keyboard-in-keyboard with my previous post about the stuff you hear from people who suck with money. So here's #13: "Can you believe what my bank charged me for this three-cent overdraft?"

But There Are Times When...

In what situations might I exhibit a wee bit of compassion? If you deposited a paycheck, it bounced, and you then incurred overdrafts because of it, I'd echo the chorus: "Yeah, that sucks."

Hmmm. There are probably other scenarios, but I can't come up with them just now.

Public Service Message to Overdraft Whiners:
Get A Free Excel Check Register

That's right. I said free.

I'm quite aware that not everyone has the cash to run out and purchase Quicken or MS Money. So what we have — yeah, I'm reaching here — is a vicious circle: You could avoid all those nasty overdraft charges if only you had Quicken to help you do it. But you need money to buy Quicken. And of course you'll never have any money, because The Nasty Bank makes you keep paying Nasty Overdraft Charges. Sounds good, right? (We're still deflecting at least some of the fault.)

Tough situation. Someone Really Should Do Something.

So please — allow me to intervene. Today, right now, I will help folks take that monumental first step toward Overdraft Whiner recovery. This is where I point you toward my 100% free Check Register spreadsheet.

All you have to do is log your transactions when you make them. All that troublesome math afterward? Figuring your current balance? The spreadsheet handles it. You're golden.

What's that you say? You don't have Excel, nor the financial resources to acquire it? Okay. That's understandable. So here's what you do. Right now, once and for all, you are going to finally stick it to The Man:


  1. Download my free Check Register spreadsheet.

  2. Get your free (there's that word again) office suite at OpenOffice.org. This suite will include Calc, a free (every time I use this word, see, an Overdraft Whiner excuse bites the proverbial dust) spreadsheeting program which somehow, some way, manages to run my free Check Register spreadsheet pretty much every time I fire it up. Weird, ain't it?

  3. Use the spreadsheet diligently. Enter all transactions when you make them. Pound it through your head that "float," where checks and debit cards are concerned, does not exist. Forget about any "account balance" that you found anywhere other than what's in your register.

  4. Spend less than you make.



No more $35 bank overdraft fees for you. Just imagine, Mr. Overdraft Whiner, how much it's going to piss off your banker when he figures out that you can suddenly go more than a week without dropping $30 or $40 in pure-profit fees in his lap. I bet it makes him so mad he drops his morning raspberry danish on the floor. And then, just to vent a little frustration, he'll fire the first teller he sees.

There. Someone else is out of a job, and you're all the happier for it. And all without the slightest need for government intervention. (Which is what that first article above pointed toward, by the way.)

Okay, I'm done.

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— Posted by Michael @ 11:07 AM



Wednesday, May 09, 2007

Banco Fortuna: Emigrant Aims for Growth



Banco FortunaIf there's one thing banks love to do, I guess, it's grow.

I found out last week that Emigrant Direct (review) is launching Banco Fortuna, its online banking division aimed at Spanish-speaking customers. This, I suspect, is a move that will garner them yet another sizeable client base — a client base that I've not yet seen any of the other online savings account "Big Boys" specifically target.

After poking around the English-language version of Banco Fortuna, I've not been able to find much in the way of differences between it and the Emigrant Direct I'm so familiar with. Well, aside from some graphics and logos, I mean. This, in my opinion, is a good thing. My opinion of Emigrant Direct has been very, very favorable.

We've already seen that as Emigrant has grown (and grown substantially), they've been less and less apt to play the part of Rate Leader in the savings game. It's the same path followed by ING Direct (review) before them: Use higher-than-everyone-else rates to snag vast numbers of customers (and millions in customer deposits), and then, over time, simply find a comfy rate plateau where you can balance between keeping your "Lazy Holders" and losing some of your "Rate Chasers."

As much as I'd love to see Emigrant (and by extension, Banco Fortuna) bump their savings rates, it's tough to see why they'd need to do so right now. They've earned a large enough client base, and built a strong enough rep, that it's fairly unnecessary.

It'll be interesting to see what pain, if any, they feel from the 6% newcomers like FNBO Direct.

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— Posted by Michael @ 5:46 PM



Monday, May 07, 2007

Email Addresses For Fun and Security



I was reading FatWallet finance forums one day a while back, and one of the regulars made a post mentioning that she created a unique email address for every online account she had. In other words, whenever it was time to open a new account of some kind — banking or shopping or whatever — she created an email addy to be associated with that account, and that account only.

I can be a pretty dense guy, so I didn't think much of her tactics at the time. This past weekend, though, I began to see the light.

Here, Phishy, Phishy ...

Here's what happened: My wife and I both have credit cards with Bank of America. She received an email PURPORTEDLY from BoA, informing her that online access to her credit-card account had been closed, and that she needed to follow the link in the email to re-input her account info and password, and ... well, you get the idea. Phishing. This was a nicely-built reproduction of BoA's emails, though. I'll give the creators credit for that. (Yes, we did report it to BoA.)

Anyway, it took a few minutes, but the first "dead giveaway" was that the suspect email was delivered to an email address of my wife's which was NOT associated with her Bank of America account. (I have little "groups of use" for our email addys, and this one wouldn't ever be used for financial accounts.)

Beauty of Unique Emails for Each Account

Suddenly I understood the wisdom in the FatWalleter's methods above: If all your online accounts have a unique email address associated with them, you'll be able to spot the phishing attempts pretty much instantly.

So, if you owned a domain (dirt cheap) like I have no game.com, and along with that domain came your ability to create about 50,000 email addresses, then when you opened an account with, say, HSBC, you could create and give them (and them only!) a contact email of "HSBC@ihavenogame.com" or some such. For Amazon, you'd have "amazon@ihavenogame.com" or something similar.

Then, whenever you received an email from "Bank Of America," but it was sent to your Gmail email address, well, you'd be the Smart Cookie who didn't give that phishing attempt a second thought, wouldn't you?

You needn't create actual mailboxes (with usernames and passwords and all that) for these emails — simple forwards should work fine. Nifty, huh?

Other benefits:

  • With "unique use" emails such as these, when you start getting spam at one of your addys, you'll know precisely which companies or other online entities either (1) sell their email lists to guys with names you couldn't pronounce if you wanted to; or (2) have had their data compromised. Not a bad thing to know, yes?

  • No more wondering which online registrations are associated with which email accounts. Once one of your unique-use addys becomes a spam magnet, you'll know which one to kill off, and you won't have to wonder which other businesses have that address listed as your contact point.

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— Posted by Michael @ 10:28 AM



Tuesday, May 01, 2007

FNBO Direct: New Online Savings?



I hadn't heard of FNBO Direct until last night, anyway. And only then because of a big banner ad across the top of a Bankrate.com page. But in any case, if you're a Certified Rate Chaser™, it looks promising:


  • Online savings currently paying 3.5% APY (as of August 25, 2008, at least)

  • Link up to 3 external accounts

  • No fees, no minimums, blah blah blah...

  • ATM card available



Anyone have any experience with them? Emigrant Direct is still my online savings account of choice, but I'm always willing to scoot to a better deal ... if it really is a better deal.

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— Posted by Michael @ 10:31 AM



Tuesday, April 17, 2007

ATM & Debit Card Tips



One of my more-frequent topics on this blog has been the use (and misuse) of ATM and debit cards. I have ATM/debit cards on all my bank accounts, but anymore, I use them only for ATM deposits and withdrawals. Purchases, monthly bills, and everything else earn the use of either my credit cards, checkbook, or automatic electronic withdrawal.

This month my credit union's account statement included a flyer discussing the use of ATM and debit cards. They laid out "Four Rules of Debit Card Use," and given my personal experience, I found them to be pretty darn on-target. Here's how it went:

Always have another form of payment available.

I'm glad this was their first "rule," because it's Number One in my mind, too. "Another form" could be credit cards, cash, travelers' checks, or whatever. Actually, I'd recommend always having at least two forms of payment available, no matter what your first choice may be.

Let's face it: All types of payment cards can become demagnetized or compromised inadvertently. And never think the payment network systems are infallible, because they aren't. Network or phone problems could cause your cards to be denied, too. (Usually at the worst possible time.)

If your ATM/debit card suddenly does not work, your card may have been compromised.

According to my credit union, they immediately cancel debit cards as soon as they're notified by VISA that the card may have been compromised. You, the customer, will likely not be notified so quickly.

"We apologize for this inconvenience," they wrote. "We do also immediately order a new card and PIN. We try to notify all members whose cards have been compromised."


Notify your financial institution before traveling to another state or country if you will be using your ATM/debit card.

"VISA alerts us when cards are used outside of the normal usage areas," the flyer read. "If we cannot contact you, we may suspect fraud or theft and cancel your card, thus causing you inconvenience. By notifying us of your travel plans, we can better serve you."

Pretty much says it all, I think.

Be aware of the daily purchase and withdrawal limits.

Man, if I could get people to grasp this concept, I'd be on Cloud Nine. I have yet to come across a bank or credit union who doesn't have daily limits on debit-card purchases and withdrawals. But at least once per month I run into a customer who's unaware of their bank's policies, and who blows a gasket when the payment network DENIES their $839 debit-card charge to pay for a repair bill.

Keep in mind, too, that the "purchase limit" and the "withdrawal limit" are likely not the same amount. In my credit union's case, their daily purchase limit is $1,500. The daily withdrawal limit (like via ATM), though, is only $500.

So if you're not sure what your debit card's limits are, grab the phone and find out. Do it yesterday.

Sure beats having two blown gaskets — the one in your car, and then the one in you when you can't pay the bill!

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— Posted by Michael @ 12:19 AM



Wednesday, April 11, 2007

MyFICO Promotional Code




See How Lenders See Your FICO Score
A few days ago I decided it was about time to check my FICO score (or, at least, my FICO at one of the three credit bureaus). I closed out my latest credit-card arbitrage play earlier this year, and I wanted to make sure my credit score had recovered. (It had; it's now back above 800.)

In any case, I had to call MyFICO to fully verify my identity, and after going through all the usual questions, the rep kindly gave me the following MyFICO promo code. It should garner you a 10% discount toward any product from their site:


FICO5466


The rep told me that the promo code must be entered exactly as above (upper case). According to her, there's no expiration date, nor any usage limits.

I'm sort of curious about their ScoreWatch offerings, but as I have credit monitoring through another service already, I think I'll hold off for now.

Customary Affiliate Link: Check Your FICO Scores at MyFICO ...

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— Posted by Michael @ 10:20 AM



Tuesday, March 13, 2007

New Century of Irony



As we all wait with baited breath for New Century Financial, the nation's second-largest subprime mortgage lender, to Bite the Big One, does the following passage strike anyone else as quaintly ironic:

New Century has received about $975 million of financing from Morgan Stanley. Part of the money from the New York-based securities firm was used to pay Citigroup Inc. about $717 million on March 8, after Citigroup demanded repurchase of its loans, New Century said in today's filing.


That's from this Bloomberg news story.

As subprime borrowers juggle their many debts, so does the now-failed lender who saw fit to dish out piles of money to them. The only difference, it seems, is the size of the debts the two groups are juggling.

What goes around ...

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— Posted by Michael @ 3:12 PM



Wednesday, February 28, 2007

Buy Suze Orman's Book, Open Account, Get $100...



... in a year.

That's the promo-thing attached to Suze Orman's newest book, Women and Money. I haven't yet bought the book, so I can't say for sure how the deal works, but it looks to go something like this:


  1. Buy Suze's new book.

  2. Get offer code from book.

  3. Head to www.saveyourself.com and click to open a "Save Yourself" account at TDAmeritrade.

  4. Open account with at least $50.

  5. Sign up to make automatic monthly deposits of at least $50 to the account.

  6. Wait a year. Watch account balance creep upward (hopefully).

  7. Pocket the $100 TD Ameritrade gives you for doing all this, plus the interest on the account (4.59% APR as of right now).

  8. Spend your newfound $108 (you sold Ms. Orman's book on eBay shortly after purchase, right?) on beer and cheap thrills.



Well, maybe she didn't draw it up that way. But her way is probably boring. And who am I to follow Suze's admonitions now?

Note: Oh, and like Suze practically screams at us, I also don't make a penny from TD Ameritrade. Unless you count the Roth IRAs and other brokerage accounts I have with them. Because, like, you know, they pay me interest and stuff.

By the way, Suze Orman is gay.


Yeah, it's an old rumor, and I don't think anyone out there could be truly surprised by this. My thoughts?

Who.

Freaking.

Cares.


That is all.

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— Posted by Michael @ 6:56 PM



Monday, February 26, 2007

Interview: Clear Checkbook's Brandon O'Brien



For anyone who's interested in reading a pretty long article, swing over and check out my interview with Brandon O'Brien. He's the guy who created Clear Checkbook, a pretty new site that allows folks to track and manage their financial accounts, track their spending, and set up reminders ... for free.

ClearCheckbook.com

And to think I actually used to use a paper checkbook register.

Sheesh.

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— Posted by Michael @ 2:39 PM



Friday, February 02, 2007

ING's Electric Orange Checking: I'm Invited!




Click here to start saving with ING DIRECT!
Lucky me. I just received an invite to open an Electric Orange checking account with ING DIRECT. Boy, do I feel special!

(All you other folks who got your invites last year — you just keep your mouths shut. Let me bask in my imagined sliver of glory for just a moment, will ya?)

Anyhow, I've adored my ING DIRECT savings account (review) ever since I first opened it in early 2003. So I'm super-curious to see what they can do for checking accounts, too. They're promoting Electric Orange as "America's first all–electronic, paperless checking account," so we'll see if ING can pull this off and do for checking what they did for savings (which, in my opinion, was a lot).

Methinks I'll be adding yet another bank account to my Quicken Account List this weekend. Stay tuned for all the gory details!

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— Posted by Michael @ 9:29 AM



Sunday, November 19, 2006

Ordering Checks on the Internet



I'll be honest: I can't remember the last time I wrote more than five checks in any given month.

I handle probably 95% of my monthly purchases and transactions with a cash-back credit card, paying the balance in full every month. Everything else is handled either with online- or automatically-scheduled debits.

I can't drop checks from my financial arsenal entirely, though, because I use checks at Sam's Club, and because two of my monthly utility bills are payable only by cash or check. (Well, one of them actually is payable via online bank-account debit, but I'd have to pay a $2 "Convenience Fee" per transaction in order to do this. And I'm not about to pay two bucks for that. Talk about a huge rip-off.)

So while I don't have to order checks very often, I do have to order them on occasion. And, unlike pretty much everyone I know, I order my checks online — not through my credit union or bank.

Why Order Checks Online?

Because it's easy. And because it's probably cheaper than what I'd pay to order thru my bank. And because I can get those kick-butt, side-tear checks:



I will state here unequivocally that side-tear checks Freaking Rule. They are unbelievably superior to the traditional style of checks — those that are perforated along the top, and Specially Handcrafted to Frustrate the Living Crap Out of You when you try to dislodge them from their backing.

And yes, I am one of the 12 remaining humans who are so completely boring that they still use Safety Blue checks. With no special monogram. Or typestyle. Or Personalized Quote above the signature.



Until yesterday, the only check-printer I've ever used has been Designer Checks. Along with the side-tear feature, I like my checks to have carbon duplicates. Through Designer Checks, two boxes of such checks seems to run me about $30 plus shipping.

I've now also stumbled upon Checks In The Mail. I'll give them a shot this time, not because Designer Checks has ever given me a good reason to do so, but just to see how they do. Go ahead: Call me a risk-taker.

If any of you readers have other sources for your checks, or comments regarding check-ordering in general, I'd like to hear them!

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— Posted by Michael @ 7:41 PM



Saturday, September 30, 2006

Debit Card Hazards ... Again



Lisa at Contentment is Wealth has a very nice post entitled "The Final, FINAL Word on Debit and Credit Card Liability."

Her post is complete with links to FTC pages and interview questions posed to actual HUMANS at that same government department. (Yeah, I know. I was shocked, too.)

We money-bloggers have absolutely beaten this topic to a pulp. This is good, because Dave Ramsey is still out there touting his "exact same protections afforded to debit cards and credit cards" spiel. Well, as blog readers know, Dave is wrong. (And this isn't the first time.)

I suspect that Dave makes this stand mostly because he's looking to blow up any and every excuse ("Money Myths," as he calls them) for someone to swipe a credit card rather than pay with cash they already have. His audience won't whip out the "But in some ways, credit cards are safer than debit cards" retort because Dave's position on this is so well known ... and nobody wants to argue with him about it any longer.

If you'd like to read more on the topic of debit-card fraud, check out my Interview with Debit Card Victims. Also, at the bottom of that article is a list of my related posts on this topic.

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— Posted by Michael @ 8:39 AM



Sunday, July 02, 2006

Debit Card Fraud Interview



Bank debit cards are a topic that I seem to return to quite often.

My opinion, I think, has been pretty well documented: Financial gurus (namely, Dave Ramsey) who suggest that people should entirely shun credit cards and use only debit/ATM cards for purchases are flat-out wrong.

Debit cards bring great convenience, yes. But the benefit they offer that's so fabulous for consumers — immediate access to available funds — is also their greatest liability. That immediate access is available to anyone who gets their hands on your info, too. And your Hometown National Bank almost certainly does NOT maintain the same security measures for card usage as do the large banks who manage your credit-card accounts.

Anyhow, I had the opportunity recently to interview a young couple whose checking account was compromised, thanks to debit-card fraud, to the tune of roughly $500. If you're interested, you can read the interview here:

Interview with Bob and Sue Smith, Debit-Card Fraud Victims

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— Posted by Michael @ 6:30 PM



Monday, May 08, 2006

Does My Debit Card Have a Daily Limit?



I've received a recent influx of Google searches from folks wondering if their debit cards have a daily purchase limit on them — aside from the obvious one, which is based on the balance in the account. Google drops them off at my "Death of a Debit Card" article, which is fine.

But I'd like to answer the question here, too, since Google seems to think more of this blog, ranking-wise, than some other spots on my site.

Yes, Your Debit Card Has a Daily Spending Limit!

Or, at least, it's very, very likely that it does. The amount of the limit varies from bank to bank, or from credit union to credit union. Sometimes it's $500. Other times it's $2,500. Or more.

What this means is that even if your checking account balance is $10,500, if your bank's debit-card daily purchase limit is $1,000, then your $1,025 nuclear-powered GPS navigation and automobile missile-defense system purchase at Best Buy isn't going to go through. You'll be left standing at the register, dazed, confused, and GPS-less.

So if you aren't sure what your bank's daily purchase limit is for their debit cards, you might want to call them and find out. It could save you a fair amount of hassle down the road. It's also worth knowing whether this is something that, in a pinch, they could override with a phone call.

And oh yes — be sure to inquire how long such an override would take. (In my experience, it takes about 3-5 minutes for the override to kick in with the Visa/Mastercard system. But I've heard a few banks tell customers that they'll have to wait 'til the next business day to make use of a temporary higher limit.)

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— Posted by Michael @ 8:52 AM



Sunday, November 20, 2005

Debit Card Danger ... Again!



It's a topic I've touched on several times: Debit cards have their uses, but high-dollar ("Death of a Debit Card") and online purchases ("Debit Card Peril") aren't among them.

This morning my wife received an email from one of her online acquaintances — I'll call her Barbara. Barbara's letter read like this:

Unfortunately, I have become the latest victim of internet fraud. Even though I thought I was taking enough precautions to make online shopping safe -- I use McAfee Firewall Protection, VirusScan, Ad-Aware, and ZoneAlarm to protect myself from viruses and hackers and made sure I was using "secure" sites -- somehow the crooks still managed to steal my information.

It happened this week when I purchased theater tickets from telecharge.com using my Visa CheckCard. I ordered the tickets on the 16th - total $353.50. Yesterday, I saw the purchase posted to my account, but I also noticed a pending transaction for the same amount on the same date for an "Oliver and Wildgoose," a company I never heard of. After spending hours on the phone with the bank and with Telecharge, I discovered that Oliver and Wildgoose is the name of a liquor store in the Bahamas.

I thought that since the transaction was listed as "pending," I'd caught it in time to "stop payment," like you can do with a check. It doesn't work that way with a check card. "Pending" means the funds have already been extracted -- they are just not officially posted to the account yet. So, the money is gone. Today I have to go to the bank to file claims, open a new account, order checks, etc. -- I've been told it could be up to 90 days for the investigation to be processed. Hopefully, I will be able to recoup the $350. I also need to file a police report and put a fraud alert on my credit report in case this individual (who is evidently partying it up right now in the Bahamas) plans to steal my identity, too.


Ain't online life grand? I consider stories like this — and it isn't the first debit-card disaster I've heard — just more ammunition to strafe away at Dave Ramsey's admonitions that "All you need is a debit card." Here's a little tidbit from DaveRamsey.com, in fact:

If you "have to" use plastic, I suggest a debit card. I use them for travel and the occasional convenience of ordering something over the Internet or phone. Other than that, I use cash.


Knowing what I do, I'll state here and now that preaching "debit card exclusivity" is stupid advice. It's horribly naive, in my opinion, and laughably unrealistic.

The last part of Barbara's email also bears repeating here, I think:

The lessons I've learned that I'm passing on:

1. Don't use a check card for any online purchases!!!

2. Don't use a check card anywhere where you can't physically watch the salesperson swipe the card -- restaurants and gas stations included.

3. If you're going to make an online purchase, find out if your credit card company offers a "disposable" number designed for one-time use. If you're a Visa customer, sign up for Verified by Visa.

4. Monitor your accounts closely (luckily I do) and keep all receipts in a safe place.

5. Make sure you have up-to-date hacker protection!

6. Find out the privacy policies and security measures of any online merchant you use. Know that even "secure" sites can be hacked.

7. If you use a check card, find out what your bank's policies are when it comes to filing fraud claims.

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— Posted by Michael @ 6:16 PM



Monday, August 22, 2005

Why Credit Cards Can Be Helpful ... And Debit Cards Perilous



Readers may recall that last week, I purchased a new Dell laptop. I wasn't the only person I know to pad Dell's bottom line last week, either. A coworker — my guru-in-training, actually, who goes by the name of Matt — here at work bought one also. (Although his notebook will be tons nicer than mine.)

When I purchased my laptop online, I charged it to my rewards-paying credit card. Everything went ultra-smooth. Matt, conversely, billed his order to his debit card. (Without a general-use credit card, he didn't have much choice.) And thanks to that, he received a first-person lesson in why debit cards can lousy choices for large purchases.

I detailed this problem with debit cards in another article, entitled "Death of a Debit Card." I'm sure not the first person to note that big purchases and debit cards don't always get along real well.

Since this particular instance hits a little closer to home, I'd like to run through it here. The blow-by-blow went something like this:

Tuesday, Aug. 16
  • Matt visits his bank, depositing funds in bank account and requesting withdrawal-limit raise.
  • Places order for computer, using debit card.
  • Dell attempts to withdraw entire purchase amount (~$1900) from account. This fails.
  • Matt receives email from Dell, notifying that the withdrawal failed.

    Wednesday, Aug. 17
  • Matt checks his account. Full balance shows as available. Calls Dell.
  • Over the phone, Matt authorizes Dell to withdraw one transaction of ~$950 (roughly half the invoice amount) from his checking account. He is to call back the next day to authorize the second installment.
  • Later, another email arrives from Dell, identical to that of Tuesday. They had attempted to preauthorize the funds, it said, and failed.

    Thursday, Aug. 18
  • Matt's account now shows two separate $950 transactions from Dell, for a total of ~$1900. He calls Dell, checking to make sure that everything is okay — and that he isn't going to be billed for yet another $950, as per the previous day's phone call. Dell says that everything is fine, and that they will resolve any problem with his bank.
  • Matt calls the bank to explain the situation. The banks tells him that Dell attempted to debit the full order amount ($1900) from his account, then later tried to debit half the order amount ($950). The bank tells him that the 50% amount is just a preauthorization, and that it may not go through. Even if it does, they assure him, they will not charge any overdraft fees.
  • At roughly 10:30pm, Matt attempts to use his debit card at a restaurant. It declines.

    Friday, Aug. 19
  • Matt tries to use his debit card for lunch; it declines again. He heads for the bank to withdraw some cash via teller. The teller informs him that his balance is -$441.
  • Back at work, Matt checks his account. It now shows three preauthorized charges of $950 each. The bank tells him he must wait another 24 hours before he can have access to funds. (Standard banking procedure to allow for any preauthorizations to clear.)
  • Evening finds Matt borrowing money from a friend for gas and food.

    Saturday, Aug. 20
  • Checking account returns to usable status.

    So what might one do to avoid a mess like this?

    (1) Use a credit card for large purchases. And pay them off before interest accrues, of course. Even though guys like Dave Ramsey swear there is absolutely no need to own a credit card, I'm here to say that that's a stupid idea. Thanks to Matt's situation above, as well as my job, I've seen debit-card users unnecessarily inconvenienced way too many times. So I cannot encourage a debit-card-only existence. A general-purpose credit card, coupled with some financial discipline, takes care of the issue entirely.

    (2) Open a second checking account, and use it for nothing other than large purchases. Another coworker employs this plan, and it's been successful for them so far. Whenever she plans to make a big purchase, she transfers money from her savings account to a second checking (debit-card enabled) account with the same bank. She uses the debit card associated with that second account to make the purchase. This way, if there are problems, only the second account is tied up, leaving her main checking account free for all the usual stuff.

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  • — Posted by Michael @ 12:28 PM



    Monday, April 25, 2005

    The Annoying FSA



    I've made ample use of my employer-given ability to pretax my family's medical expenses through a Flexible Spending Account (FSA) for the past several years. (If you're unfamiliar with FSAs, there's a fine write-up and example use of FSA accounts at PFBlog.com.)

    Now, our plan is a bit funky, in that it runs from April through March, rather than January through December. But no matter — the savings are worth it.

    For this plan year, however, my employer switched administrators for our FSA plan. The previous administrator, they said, had given several employees a "hard time" when it came to reimbursement of qualifying expenses. Personally, I absolutely adored the service I received from the old provider. Their plan debit card worked like a charm every time. On those occasions when I couldn't use the card and instead had to pay with my own funds and then submit for reimbursement from the FSA, the reimbursement check usually arrived at my mailbox within 8-10 days of my faxing the receipts.

    After one month of dealing with The New Guys, I fear for what the future may hold.

    April 1 came along, and I was in need of a few prescriptions. We hadn't been issued our FSA debit cards yet, so I had to follow the "pay out-of-pocket / fax receipts / wait for reimbursement" routine.

    Monday, April 4: Bought the prescriptions at Wal-Mart pharmacy.
    Tuesday, April 5: Faxed the receipts and prescription tags.
    Saturday, April 9: Checked FSA account online. Account balance shows debit for amount of presciptions. Status: "Authorized."
    Friday, April 15: No check yet. Call FSA adminstrator. Inquire as to status of claim. Interrupted quite rudely by remark that "Sir, reimbursement checks require ten days for processing and authorization." My response, at this point, was probably far too timid.
    Monday, April 25: Huh. Still no check.

    I should've known there'd be problems when I first logged onto the administrator's web site and had to wait for three Flash sequences to download before I could even select whether I wanted a Flash-enabled site or not. Couple that with the fact that the site offers download of manual-claim reimbursement forms only; nowhere can I find the form for debit-card tranaction validations, save my employee-benefits packet from work.

    At this point, my plan is to see what the mail brings tomorrow afternoon. If there's no check, I plan on making a second call to the administrator. I probably will not be as kind and deferential this go-around.

    If someone from my employers' corporate office needs to make the call — say, the someone in charge of determining what FSA administrator we use next year — that can most certainly be arranged.

    Labels:

    — Posted by Michael @ 11:56 PM



    Thoughts on my personal finances, goals, experiences, motivations, and accomplishments (or lack thereof).

    My financial life began turning around when I took responsibility for it.
    — Dave Ramsey


    100%

    Start (2005-12): ~$21,900
    Currently: $0
    [About Our Debt Paydown]

    100%

    Savings Goal: $15,000
    Currently: ~$15,115
    [About Our Liquid Savings Goal]