Great article on Clark Howard’s website today:

The dangers of gift cards this holiday season

There are so many warnings about how dangerous it can be to buy gift cards this Christmas. Under current law, if a restaurant or retailer goes bust, it falls to the bankruptcy court judge to determine the rights of gift card holders. But most judges have been unanimous in wiping out gift card holders.

Now Clark has learned that various consumer groups are petitioning the FTC to issue guidelines that would require retailers and restaurants to escrow gift card money. This would protect consumers and safeguard them from getting burned in the event a business goes bust.

There is one kind of gift card that Clark likes — the kind where you get more than you pay for. For example, some restaurants might offer $125 worth of food if you buy a $100 gift card. Yet even Clark has gotten burned on this type of gift card once.

The real solution? Use the penny-pincher’s no-gift-card certificate!

Great article on Clark Howard’s website yesterday:

Last week, Clark explained how the banks were petitioning the government to be allowed to write-off a big chunk of consumer credit card debt. He was certain this measure would be adopted, at least on an experimental level at first. However, the banks’ request has been denied by the government.

That means if you are facing impossible debt, your options remain the same: default or bankruptcy. Many people are doing both as delinquency rates rise and bankruptcy looks set to hit an all-time high in 2009.

Moving on to something positive, the government has belatedly rolled out its plain English disclosure statement for when you’re shopping a mortgage or refinance.

Lenders have fought such a proposal for years; there’s simply too much money to be made when people are ignorant about their loan terms. Of course, there is a lot of shared responsibility here. Many people didn’t want to hear about what a lousy loan they were getting into.

But going forward, HUD is making its good faith estimate form available, along with a settlement statement. (Editor’s note: Both links are pdf files.)

Clark loves disclosure in capitalism. After all, how can you make good choices if the info is not made available to you in a simple way? One caveat here, though: The banks have a year before they’re required to start using this disclosure form. That gives them plenty of time to try to get it killed! Stay tuned…

Great article on Clark Howard’s website about Circuit City and GM:

Just days ago, Clark shared a recap of his anger over Circuit City’s 2007 decision to fire all their knowledgeable employees and managers in an effort to cut the company’s bottom line.

The fruit of that decision has now been revealed: Circuit City has filed for bankruptcy. “The intelligent choice” was once the company’s slogan. The intelligent choice? Get real, people.

Circuit City gift cards are still being honored — for now. But as The Wall Street Journal points out, now is great time to use any Circuit City gift cards and take advantage of their special closing-out sales.

Now let’s turn to GM. Analysts have found that GM stock has sunk to the lowest level since WWII. Oh, how the mighty have fallen. GM’s market value is back to where it was when we had just defeated the Nazis. The company’s CEO now says they will need a bailout from the lame-duck Congress. They can’t even survive until Obama gets in office.

Read the full story at Clark Howard’s website.

Clark Howard was talking yesterday on his show about how the FDIC Chairwoman, Sheila Bair, and the HOPE NOW initiative have come up with a way to help struggling homeowners facing foreclosure.

Bair has made it known about her belief that the federal government should play a strong role here. After the FDIC took over IndyMac, Bair put a moratorium on foreclosures for the failed bank’s customers. Then she implemented a system to determine if a workout should be done. The jury is still out about the FDIC’s re-dos of mortgages.

Meanwhile, there’s been a big tug of war between the FDIC and members of Bush’s team who resisted the initial mortgage modification plan. So a compromise has been announced, effective Dec. 15.

If you are delinquent, there is a new formula to determine whether or not you can refinance into a more affordable loan. Under the compromise, your payment will be reduced to 38% of pre-tax income. That includes taxes, insurance, HOA/condo fees, etc. All outstanding late fees will be waived.

In order to be eligible, you have to be at least 3 months past due; must be an owner-occupant; and can’t have more than 10% equity in the home. There’s even a flow chart detailing every step of this streamlined modification program. (This is a pdf file.)

I was listening to Clark Howard yesterday and he says that the number of bankruptcy filings is likely to hit an all-time high in 2009.

Clark also says that according to The New York Times, banks are buying “trigger lists” from credit bureaus and independent data management firms. These lists compile info about who is in bankruptcy or otherwise in desperate financial shape. Once a bank obtains a trigger list, they target the people on it with horrible come-ons for new lines of credit.

Wouldn’t you think that banks would have learned their lesson by now?  Isn’t this the sort of shit that got us into this economic mess?  You know, giving people lines of credit who already can’t or couldn’t make their payments and also have a low income.

Their “second chance” pitches offer you another shot at rebuilding your credit by opening more of it! One industry insider in the Times article referred to this segment of the market as “creative lending products.”

You’re typically expected to pay hundreds of dollars to apply for a credit card that may have annual fees of up to $200. Then you’re given a credit line that’s equal to what they charge you in fees — so that the risk to the bank is nada. In addition, they charge you massive rates of interest.

Equifax has a proprietary way of culling names for trigger lists called the TargetPoint Predictive Triggers system. Basically, the bureau analyzes data to see a customer’s propensity to open new lines of credit within 90 days. The exact formula, however, remains a “secret sauce,” according to a spokesperson in the article.

Trigger lists are also common in the world of mortgages. When you apply for a mortgage, your info can be sold so that other marketers can call you and solicit your mortgage business.

This is so far out of line, according to Clark. Here we are in a time when we need to heal both the banking sector and our family budgets, and everybody is trying to slice and dice us to figure out how to take advantage of us. Shame on all involved parties.

Clark wants you to know about this so you can resist the temptation of “second chance” pitches. It’s not a lifeline they’re offering; it’s an anchor around your neck that will make you financially drown.

Read the full NY Times article.

Clark Howard was talking this past Friday about a story he was reading in The Washington Post about how a  crooked employee at the U.S. State Department who worked with a criminal ring to steal personal info from passports.

What kind of info is available in a passport record? Basically everything that a criminal could want to steal your identity and open false lines of credit. That includes Social Security number, physical description, names and places of birth of your parents, etc.

The D.C. police stumbled onto this ring back in March when they stopped a 24 year old smoking marijuana in a car. They had probable cause to search the vehicle and found passport applications, multiple credit cards and more. It was the tip of the iceberg of cracking this ring that potentially had access to the records of up to 192 million Americans who have passports.

The State Department is now sending letters to the several hundred people who actually did have their identities breached, and they’re offering free credit monitoring for a year. But they refuse to talk to the media on record about this employee breach.

So what can you do?  Clark say’s there is only one imperfect remedy — but it works: Do a credit freeze. See Clark’s guide to credit freezes for detailed info.

One other thing.  If you have been reading my blogs for awhile, you should already know that I support the death penalty.  This type of action by anybody deserves the death penalty because these people are out to destroy someone’s life.  This is such BS!  But we’re such pussies in this country anymore that alot of idiots out there will be crying that the punishment is to severe.

Read the full Washington Post story.

Here was an intereting article from Clark Howard’s website:

Newfound thrift can create a wealthier America down the road

We have changed so much about how we shop in these tough economic times. We’re buying more generic and store brands than ever seen before. This trend has cut across income levels and even affects what people who have not been pinched in the wallet are buying.

The October retail sales figures were pitiful for stores selling mid-range and high-end goods. Just about the only retailer looking good is Wal-Mart. No surprise there!

Meanwhile, Whole Foods — a real symbol of people wanting a fancier grocery shopping experience — has had to close stores and cut back on new store openings. They also needed a private injection of $425 million to stay afloat.

Clark’s wife loves shopping at Whole Foods, which Clark derisively calls “Whole Paycheck” because of their expensive prices. Thankfully, they have a defibrillator near the register for the penny-pincher when he accompanies his wife! Clark is hopeful that Whole Foods can figure out a good value proposition for their customers. But they face a threat from Trader Joe’s, which always seems to open near Whole Foods locations and siphons customers away.

In the long run, if we continue our newfound emphasis on thrift, it will help make a wealthier America. Yes, it hurts retail in the short term and makes our current recession deeper. But the recovery down the road will be ironclad.

If you were upset about the $700 billion bailout, get ready to really blow your top.  Clark Howard was talking yesterday on his show about how Cerberus Capital Management, which owns Chrysler and a joint stake in GMAC, received a $5 billion bailout from the feds in the days leading up to the election. That’s because GMAC — the financing arm of GM — had become a wounded duck thanks to a spate of foolish mortgage lending.

The only reason they got money is because of who they are; they count former Vice President Dan Quayle among their ranks.

Cerberus next wants to engineer a merger of Chrysler and GM, which would require more taxpayer money. It’s being marketed as a way to stop imminent job losses. No way, says Clark. If we allow them to merge with our money, the real purpose will be to help the fat cats at Cerberus. Workers will lose their jobs anyway; we’re way oversupplied in the car market and have too many factories as well.

If you’re an autoworker who’s now mad at Clark, realize that he truly doesn’t believe your jobs would be safe with a bailout. The bailout would be solely to save the wealthy influentials.

One last thought: What kind of example do we set for the rest of the world when we start bailing out losers with the money from the winners? That’s crony capitalism, that’s a Third World kind of capitalism.

Read about the secrecy behind this bailout.

Read financial weeks article here.

With all the fever surrounding Election ‘08, Clark wants to throw his hat in the ring with a presidential bid for 2012! His platform probably won’t get him elected, but still wants to lay it out for your perusal.  He’s got my vote!

• Spend only what you make — In a Howard administration, your president would pass a balance budget amendment to the Constitution. We’d become a pay-as-we-go country — instead of doing the opposite as we have for years.

• A flat income tax policy — The flat tax would be somewhere around 18%. There would be a high standard deduction so that those with lower incomes don’t get pinched. A flat income tax would also eliminate the corruption in Washington and let you know what tax burden you have.

• No more employer-provided retirement plans — Goodbye to the 401(k), 403(b) and any other form of employer-provided retirement. Your president would require that every dime on a dollar your earn goes into a personal retirement account with ultra-low management costs and simple investment choices.

• Just say no to socialized medicine — In a Howard administration, there would be just 12 health plans offered: 3 HMOs, 3 PPOs, 3 HSAs and 3 of the traditional 80/20 splits.

Every insurer would have to sell identical plans. That way you could switch to another insurer’s HMO plan No. 2 if your insurer’s HMO plan No. 2 is too costly. You would pay your premium based on age, and there would be no redlining based on your past medical history. You wouldn’t be required to have health insurance, but you wouldn’t be allowed to buy it when you’re sick; instead, you’d have to wait 18 months.

A word about Medicare: Seniors would buy healthcare from private insurers in one of the 12 plans, but the government would subsidize catastrophic care at ages 55 and older.

Is it possible to simultaneously achieve the first 2 platform points? Of course not. By 2020, the costs of Social Security, Medicare and Medicaid will exceed what is today the entire federal budget, according to Forbes. So we would either have to raise taxes to an unconscionable level or tell people the truth that we can not afford to be Santa Claus to everybody.

In a Howard administration, we would all need to do a hard reset about the issue of personal responsibility vs. what we expect from government. Santa’s sack is getting less and less full, so you’ve got to be your own Santa. Clark will be running on the Ebenezer Scrooge platform for 2012!

Visit Clark Howard’s website.