Good Signs for the Economy

WASHINGTON (Reuters) -- An index gauging the U.S. economy's prospects increased for a third straight month in June, suggesting the recession was drawing to a close, a private research firm said Monday.

The index of leading economic indicators, which is supposed to forecast economic trends six to nine months ahead, rose 0.7% in June following a revised 1.3% gain in May, the New York-based Conference Board said.

Wall Street economists had forecast a rise of 0.5% after an initial 1.2% May increase.

Over the first half of the year, the index has increased at a 4.1% annual rate, the research group said.

"The recession has been losing steam since the spring, although very large job losses continue," Ken Goldstein, a Conference Board economist, said in a statement. "Nevertheless, confidence is slowly rebuilding."

"If these trends continue, expect a slow recovery this autumn," he said.

Debt Buster:Jayden James

U.S. Auto Sales Show Signs of Stabilizing

DETROIT (AP) - U.S. car and truck sales showed signs of stabilizing in June after a year of sharp declines, but every major automaker except Honda Motor Co. reported lower sales than in May.

Still, year-over-year declines last month slowed for four of the six major carmakers, with Ford Motor Co. reporting the smallest drop in a year at 10.7 percent when compared with June of 2008.

Even Chrysler, which emerged from bankruptcy protection early in June, saw its year-over-year sales decline shrink, and analysts say that's among the signs that an auto industry slump that began with $4 per gallon gasoline last summer could be leveling off.

"It is unlikely things will get any worse," said Jesse Toprak, executive director of industry analysis for the auto Web site Edmunds.com.

Factors such as a slowly improving economy and government incentives of up to $4,500 to trade in inefficient clunkers for new vehicles could lead to modest improvements in the second half of the year, he said.

And while Chrysler's sales results were dismal, the figures were roughly in line with analyst estimates and reflect a company that is in a major transition following bankruptcy protection and new focus on more fuel efficient vehicles.

"At a time when they are emerging from bankruptcy and trying to reinvent themselves, it is not a huge surprise," Toprak said.

Toprak said affordability and gas prices that rose from $2.28 per gallon in May to $2.64 in June boosted sales of sales of compact cars, hybrids and compact sport utility vehicles.

Families and consumers looking for larger vehicles are also leaning more toward minivans because of the practicality when compared to alternatives like low gas mileage SUVs, he said.

Economists say there are signs that the economy is recovering, with housing starts rising more than expected in May and wholesale prices remaining in check. But the Conference Board reported Wednesday that consumer confidence fell unexpectedly in June.

"We're making steady progress," Jim Farley, the company's group vice president of marketing, said in a statement. "We remain grounded, however, given challenging industry and economic conditions."

Ford's year-over-year sales drop was the smallest of the six largest automakers. General Motors Corp. sales slid 33.4 percent despite incentives and discounts on its Pontiac brand, while Toyota Motor Corp. sales were off 32 percent. Honda Motor Co. saw a 30 percent decline because of extremely strong small-car sales last June when gasoline was above $4 per gallon. Nissan Motor Co. reported a narrower decline than in previous months, down only 23 percent.

GM's decline improved when compared with previous months even though it entered Chapter 11 bankruptcy protection on June 1. GM plans to sell or close Pontiac, Saturn, Hummer and Saab to focus on four core brands — Chevrolet, Cadillac, GMC and Buick.

At Chrysler, though, the company sold only 68,297 cars and trucks last month as it emerged from bankruptcy protection, and many of those were due to strong incentives of more than $4,800 per car, according to Edmunds.

Analysts predict that June sales, adjusted for seasonal variances and multiplied to determine an annual rate, could top the 10 million mark for the first time this year. During several months earlier in 2009, U.S. car and truck sales dropped to a rate of about 9 million vehicles, a huge reduction from more than 16 million as recently as 2007.

But any jump in the annual rate could be fueled by fire-sale prices at 789 Chrysler dealers that were fired by the company during the bankruptcy process and told to get rid of their inventory by June 9. Also, with GM dropping its Pontiac brand, incentives will rise on those models.

Toyota's top-selling Camry midsize sedan saw sales fall 37 percent while Corolla compact sales plunged 53 percent.

One bright spot for Toyota was its recently released third-generation Prius, which saw sales rise 10 percent. Prius sales had suffered in recent months as gas prices plunged from more than $4 per gallon last summer to below $2 a gallon in the winter.

Nissan's decline narrowed largely because of stronger sales of its top-selling Altima midsize sedan. The automaker sold 2,137 units of its boxy Nissan Cube in its first month of sales.

Dearborn, Mich.-based Ford 154,873 cars and light trucks last month, with strength in its midsize Fusion and the Flex crossover vehicle. That was still less than the 161,197 sold in May, traditionally a stronger sales month than June.

Chrysler said it sold only 68,297 vehicles last month, despite fire-sale prices at 789 dealerships that the company terminated.

Ford's surprisingly low decline came after a string of months in which it and other automakers reported year-over-year drops of more than 40 percent. Ford's sales were down 24 percent in May and off 37 percent for the first five months of the year.

Ford is the sole U.S. automaker to avoid bankruptcy protection and it's the only one not receiving government loans to keep from running out of money. GM and Chrysler are receiving billions in loans, and GM inching its way closer to escaping Chapter 11.

In anticipation of increased traffic at dealers and higher sales later in the year, Ford announced Monday that it would boost its third-quarter production by 25,000 vehicles.

Money Motivator:Kagney Linn Karter

Mortgage Rates Rise

June 11 (Bloomberg) -- Fixed U.S. mortgage rates rose to the highest since November, signaling that the Federal Reserve’s plan to lower borrowing cost is stalling.

The average 30-year rate jumped to 5.59 percent from 5.29 percent a week earlier, Freddie Mac, the McLean, Virginia-based mortgage buyer, said today in a statement. The 15-year rate averaged 5.06 percent.

Rising rates may deepen the U.S. housing slump by sidelining people who want to refinance or purchase a house. U.S. mortgage applications fell last week to the lowest since February and shares of the largest homebuilders have dropped 11 percent since May 1 on concern more expensive home loan payments will turn away prospective buyers.

“The economy doesn’t need higher mortgage rates because that will depress the level of home sales, cut off refinancing, and keep consumer spending sluggish,” said Patrick Newport, an economist with Lexington, Massachusetts-based IHS Global Insight.

The increase in rates announced today was the biggest weekly jump since October. Rates were last higher in the week ended Nov. 27, when they were 5.97 percent.

The Federal Reserve said March 18 it would purchase as much as $1.25 trillion in securities from mortgage-buyers Fannie Mae and Freddie Mac to help drive borrowing costs lower. Yields on Fannie Mae and Freddie Mac mortgage securities rose yesterday to a level not seen since the Fed announced its plan. The program helped push rates to a record low 4.78 percent twice in April.

Now rates are climbing along with Treasury yields on investor concern that a greater supply of government debt being sold to fund federal spending will fuel inflation.

Buying Program

The central bank’s purchases of mortgage bonds guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae initially brought down the yields on those securities, allowing lenders to reduce rates on new loans and still sell them at a profit.

The Fed has bought a net $507.1 billion of mortgage bonds so far, including $25.5 billion in the week ended May 27, according to Bloomberg data.

Rates are rising as home prices continue to drop and foreclosures rise. U.S. foreclosure filings surpassed 300,000 for the third straight month in May and may hit a record 1.8 million by the first half of the year, RealtyTrac Inc. said today.

A total of 321,480 properties received a default or auction notice or were repossessed last month, up 18 percent from a year earlier, the Irvine, California-based seller of default data said in a statement. One in 398 U.S. households received a filing last month.

Home prices in 20 major metropolitan areas fell more than forecast in March as defaults surged. The S&P/Case-Shiller home- price index decreased 18.7 percent from March 2008, matching the drop in the year ended in February. The measure declined 19 percent in January, the most since data began in 2001.

The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan dropped 7.2 percent to 611 in the week ended June 5. Purchase applications rose 1.1 percent while requests to refinance fell 12 percent.

10 Tips for a better Savings Account

1. Know where to investigate. Go to Bankrate.com and click on “Compare rates.” Select “Checking & Savings” as the product you want to check, then click on “MMAs/Savings Accounts,” then “Search by 100 Highest Yields.” Keep choosing MMAs and savings accounts as you click through, and you’ll arrive at a list of banks offering above-average yields.

2. Check the safety rating. Some banks offer unusually high yields because they’re trying to drum up business and increase deposits. To make sure you’re dealing with a financial institution that isn’t too shaky, check the “Safe & Sound” rating it’s been given by Bankrate.com.(You’ll also see “Safe & Sound” ratings in the form of a star system in the overall bank list mentioned in Tip No. 1. One star is the lowest rating; five stars means “superior.”)

3. Look for government-backed insurance. Opt for an institution that is insured by the Federal Deposit Insurance Corp. (FDIC) or the National Credit Union Share Insurance Fund (NCUSIF). That means up to $100,000 of the money you deposit will be insured by the federal government.

4. Understand how it works. Online banks and bank divisions save millions on operating expenses because they don’t have branches to maintain. They are able to pass that savings on to customers in the form of higher yields on deposits.

5. Don’t be duped. Online divisions of well-known banks should be federally insured, but it’s still a good idea to check. Some sneaky copycat sites look and feel similar to the sites of real banks, so examine the bank’s name carefully and make sure it’s legitimate, with headquarters based at a real, verifiable address.

6. Prepare to link up to your checking account. If you open an online savings or money market account, you won’t need to cancel or close your existing accounts at your current bank. In fact, the online entity most likely will want to link your new account to your existing checking account so you can transfer money back and forth with ease.

7. Don’t get too hung up on precise rates – unless they won’t last. You could spend a lot of time and energy hunting down an interest rate that is, say, 0.03 percent higher than another rate, but that won’t make a huge difference in your overall yield. Just try to get a big enough rate bump that you’re losing less money to inflation every year. Here’s one rate-related detail that really does matter, though: Make sure you’re not being seduced by a high teaser rate that will plummet in three months or so. The idea is to keep the higher yields rolling in month after month.

8. Examine the fees. Some online accounts require high minimum balances to avoid monthly fees. Be certain you’ll be able to deposit enough money – and keep enough money in your account – to avoid getting walloped. Also check to see whether you’ll be hit with fees when you make deposits at a brick-and-mortar bank branch or use an ATM card to withdraw cash.

9. Choose challenging passwords. When selecting passwords for your online accounts, avoid obvious ones such as your mother’s maiden name, your date of birth, the last four digits of your Social Security number or a series of consecutive numbers. Opt for a hard-to-guess combination of letters and numbers.

10. Be a savvy computer user. Update your virus protection software regularly, don’t download files or click on hyperlinks sent to you by people you don’t know, use a firewall program and use a secure browser for online transactions. Also, avoid storing financial information on your laptop. (Laptops are much too easy to steal.)

GM Says Bankruptcy want affect the Volt

As General Motors finally caved this morning, waved the white flag and filed for bankruptcy, those following electric cars immediately wondered what this all would mean for the long-awaited Volt. For years now, GM has steadfastly affirmed that it was moving forward with production regardless of what else was going on within the company and the economy at large. According to Technology Review, a GM spokesperson confirmed again this morning that 'the filing will have no impact on the company's plans to start selling the Volt at the end of next year.' That said, we have to wonder how much such a statement really means; reports have stated that the US government may up holding as much as 60 percent of the company, and if the primary goal is to bring the outfit back to profitability as soon as possible, Obama and Company may not feel that pouring even more into the high-priced Volt is a good idea.

Restore Your Credit For Free

Lately it is not uncommon for folks to have a few problems getting the bills paid on time, considering the loss of job and reduction in pay. Now that you are finally back on your feet you are wondering what you can do to repair the damage that your credit suffered.

You have got plenty of company. There are more than 30 million people in the United States with credit blemishes severe enough (and credit scores under 620) to make obtaining loans and credit cards with reasonable terms difficult.

Or maybe your credit is OK, but you would like to make it better. After all, the better your credit, the lower the interest rates on your on mortgages, car loans and credit cards.

Understanding Your Credit Score

In order to improve your credit score, it's important to know where you stand currently. Despite all the media attention given to free credit reports, you still have to pay to find out your credit score, the three-digit number ranging from 300 to 850 that is the key to your borrowing costs. You can obtain your FICO credit scores, the ones lenders use, from MyFico.com. Or you can get Experian's "consumer education" version here. Once you know what your score is, let the restoration begin.

Now you are ready to take the steps to speedy credit repair:

1) Pay your credit cards down. Paying off your installment loans (mortgage, auto, student, etc.) can help your score, but typically not as dramatically as paying down -- or paying off -- revolving accounts like credit cards.

The credit-scoring formulas like to see a nice, big gap between the amount of credit you are using and your available credit limits. Getting your balances below 30% - 40% of the credit limit on each card can really help.

While most debt counselors recommend paying off the highest-rate card first, a better strategy here is to pay down the cards that are closest to their limits.

2) Use your cards lightly. Hefty balances can hurt your score, regardless of whether you pay your bill in full each month.

You typically can increase your score by limiting your charges to 30% or less of a card's limit. If you are having trouble keeping track, consider using a check register to track your spending, logging into your account.

3) Know your limits. Your score might be artificially depressed if your lender is showing a lower limit than you have actually got. Most credit-card issuers will quickly update this information if you ask.

If your issuer makes it a policy not to report consumers' limits, however -- as is the usual case with American Express cards and those issued by Capital One -- the bureaus typically use your highest balance as a proxy for your credit limit.

You could go on a wild spending spree to raise the limit, but a more sober solution would simply be to pay your balance down or off before your statement period closes. Check your last statement to see which day of the month that typically is, then go to the issuer's Web site about a week in advance of closing and pay off what you owe. It won't raise your reported limit, but it will widen the gap between that limit and your closing balance, which should boost your score.

4) Do not close out an old card. The older your credit history, the better. But if you stop using your oldest cards, the issuers may stop updating those accounts at the credit bureaus. The accounts will still appear, but they won't be given as much weight in the credit-scoring formula as your active accounts, said Craig Watts, an executive at Fair Isaac & Co., one of the leading credit scorers.

Begin to take small steps and watch you credit score increase rapidly

How to Restore Your Credit

Believe it or not, there are millions of people with bad credit worldwide. But just because there are millions of others who have bad credit does not mean you shouldn't do anything to improve your credit rating. If anything, improving your credit rating can help you improve the quality of your life. Having bad credit can take its toll on you financially and emotionally. Having collectors hound you and not having the opportunity to acquire loans for various purposes can be tough. The good news is, there are ways for you to improve your credit and you do not need to hire the services of a credit repair company to clear your debt. With dedication and patience you can clear yourself from the red and gain financial strength.

So do not wallow in desperation, take comfort in the fact that you are not alone and you don't have to be in that situation for life. One of the most important things you need to do to restore your credit is to continue making payments on your debt. Make sure that your payments are sufficient and prompt. This can be difficult when you are strapped for cash but it is the best way to improve your credit rating. To be able to do this, you must stick to a budget and even live below your means. You must monitor every single expense you make and cut down on the things you can clearly live without. This may mean cutting down on dining out and even coffee-to-go.

Cutting down on unnecessary expenses can mean a lot when you have debts to pay. In the beginning it can be very difficult but once you get the hang of it, sticking to a budget will come easy to you. Another important thing you must do is to review your credit rating even when you are not applying for a loan. You should request for a copy of your credit report annually. This will ensure that you are able to file disputes when there are inaccurate information in your credit report. This will also help prevent your identity from being stolen or used by other individuals.

If you can help it, avoid having too many credit cards account open at the same time. This may mean you are carrying on debt from multiple creditors that you are unable to pay. It is best to have limited credit cards with available credit in them. Having maxed-out credit cards can negatively affect your credit score. If you have credit cards, do not use them if you can avoid it. You may have trouble keeping your finances afloat when you have too much credit card debts that are earning interest. It may be wise to avail of free credit counseling so that you can work out a payment scheme that will help you get out of debt. Creditors are also more understanding of individuals who have a program worked out in paying debts. This shows the individual is committed to paying debt. Many creditors are even willing to work out a realistic payment scheme with the borrower if the borrower is clear about his intentions of paying and understands his financial position.

Should You Save for College or Retirement?

A senior financial advisor at Ameriprise says you should fund retirement accounts first

Choosing how much of your savings to spend on a child's education while also planning your own financial future is a challenge every parent faces. Evelyn Dinkins, a senior financial advisor for Ameriprise Financial, has a daughter in college, but is also saving for her own retirement. Dinkins recently spoke with U.S. News about why you should fund retirement accounts before paying the bursar. Excerpts:

debtinsider

How should you prioritize saving for your children's college education and funding your own retirement?

The prioritization is a very personal thing. Typically retirement comes first and education is a close second. There is only one way to save for retirement and that's for you to do it. There aren't many pensions left out there. Never leave 401(k) matching money on the table. That's free money. Fully save for retirement and if there is money left over, then save for education. There are a lot of ways to pay for education. There are loans. There are scholarships. There are grants. There are also so many ways students can keep costs down. Students can go in state and live at home. Too often we see people who haven't saved for education and use their retirement accounts. If you do that you may end up having to delay your retirement.

Are many parents able to completely fund their children's education while still keeping retirement plans on track?

A lot of times they can't fund the whole college experience and pay for retirement. They can only fund some amount of the college education. A lot of times their own experience has helped them decide how much college they want to fund. Sometimes parents come in with a very definite idea like, "I had to pay for college or my parents paid for me." We always start planning with the end in mind. Tell me what retirement is going to look like. Tell me what you want your child's college experience to be like.

Should you level with your child about the family's finances?

Have a discussion with the student when they are about 16 or 17. They should start looking at various schools and get a feel for all these costs. You don't want the student to have unrealistic expectations. At the age of 16 or 17 they are capable of understanding what it's going to cost and where it's going to come from and what the family's finances are. Even if you could afford to pay for everything, it's important for the student to understand how much college costs. My daughter looked at one particular school and I just had to say that can't be on your list unless you want to come out with a massive student loan. Unless the kid can get a scholarship, they often don't go to the expensive schools. Expensive schools do have large endowments and the average student doesn't even pay the full amount because they have so much money to give. You need to check with the school. Typically you can find out on their website what the average student is actually paying.

How does saving for college and retirement affect how much financial aid a student is eligible for?

Money that is set aside in retirement accounts is not considered money that is even available to go to a college education. 100 percent of that money is going towards your retirement. Don't put all of your savings into a 529 plan. The 529 plan is all for college and it can skew your financial aid. If you're counting on financial aid it may not be the best route.

How much do you need to save to finance four years of college and retirement?

You need to be saving probably 20 percent of your income for retirement if you are going to be saving well for retirement. Most people are saving 5 or 6 percent for retirement. College always costs more than you think it's going to cost. If it says the university costs $10,000 a year, assume it costs more than that because you are going to be spending more money. You're going to need to have auto insurance, additional food, and what if they don't want to live in the dorm? It's going to end up costing more. You can find out what it costs and then I think you should add another 10 to 20 percent over what you think it is going to cost.

Now this helps main st

Credit card bill closer to Obama's desk

Congress on Wednesday sent to President Obama a bill that makes it tougher for credit card issuers to raise fees and interest rates.

The move caps a years-long crusade by consumer groups and Democrats to rein in what they say are abusive practices that prey on consumers. The approval came despite strong objections by banking industry advocates, who say it could result in tightened credit to Americans.

The House voted 361-64 in favor and also approved by 279-147 an unrelated measure allowing people to carry guns into national parks.

The Senate passed the credit card bill, along with the unrelated gun measure, by a 90-5 vote on Tuesday.

President Obama will sign the bill on Friday, a White House spokeswoman told CNN.

The credit card rules would take effect in February. The bill is moderately tougher on banks and card issuers than are new Federal Reserve rules set to take effect July 2010.

The legislation make it harder for people under age 21 to get credit cards. It would also ban rate hikes unless a consumer is more than 60 days late - and then restore the previous rate after six months if minimum payments are made.

"Over the past three years as I have labored on this bill, the need to stop credit card abuses has become ever more apparent with every passing billing cycle," said the bill's House sponsor, Rep. Carolyn Maloney, D-N.Y., on Tuesday.

The bill marks a major loss for the banking industry.

Financial services representatives have decried the bill, saying it would exacerbate the credit crisis and force banks to drop some risky credit card holders. The American Bankers Association said the legislation would prompt banks to reinstate annual fees and higher interest rates for all card holders, an outcome that would penalize those with good credit who pay their bills on time.

Some House members voiced those concerns Wednesday.

"At a time when Americans are struggling to pay their mortgages, groceries and health care costs, why would we want to make credit more expensive and less available?" said Rep. Jeb Hensarling, R-Texas.

The credit card legislation has been a long work in progress. The House passed a bill in 2008 and again earlier this year. The legislation, which stalled in past years, was propelled by public outrage and pressure by President Obama.

Maloney added that she thought it was "unfortunate" that the measure to allow concealed weapons in national parks remained as part of the credit card measure. She and several other Democrats voted against the gun measure.

In recent months, credit card companies have been raising fees and interest rates. From November 2008 to February 2009, rates increased from an average to 13.08% from 12.02%, according to a Federal Reserve Board report.

At the same time, more people are not able to make their credit cards payments and are walking away from debt, according to a Federal Reserve report.

However, Treasury Secretary Tim Geithner said Monday he was not concerned about a consumer debt "bubble."

"Americans are going to be reducing how much they borrow, improving their balance sheets, saving more," he said. "Banks are still going to have losses they're going to have to adjust to. And that's what's going to make the process of repair here longer .... But that's a necessary, healthy process of adjustment for us to go through.

Credit Cards That may not be too bad

Are you mad as hell at your credit-card issuer? Take a number.

Recently we've gotten e-mails from Kiplinger readers complaining of dramatic interest-rate hikes (in one case from 9.9% to 17.9%), fixed interest rates being converted to variable rates, sudden account closures and other changes in terms. Most of the letter writers are mystified -- they say they pay their bills on time and send more than the minimum monthly payment.

Debt Insider

A survey released in March by Credit.com found more than one-third of cardholders surveyed were somehow penalized by their credit-card companies. Fifteen percent reported higher interest rates, 11% said issuers had raised their minimum payments, 9% said due dates were changed, and 8% said their credit limits were lowered or their rewards program cut back. Seven percent of cardholders had their account closed.

Times are tough, say credit-card companies, and a rising tide of delinquencies and defaults leaves little choice but to toughen up on consumers. But fueled by populist anger, lawmakers on Capitol Hill are determined to pass legislation that gives consumers more rights, and President Obama has outlined his support for reform.

The House passed a Credit Cardholder's Bill of Rights on April 30, and the Senate has its own reform bill pending. Despite the powerful banking lobby, legislation could well be signed into law as early as this summer, although implementation of many provisions may be delayed until next year. At a minimum, a new law will likely incorporate Federal Reserve regulations scheduled to take effect in July 2010. It's a good bet you'll see an end to arbitrary rate hikes on existing balances, for instance, and issuers will likely need your permission for approving charges that exceed your credit limit, triggering fees.

Debt Insider

Consumer-Friendly Cards

Some lawmakers are calling for a freeze in rate hikes until new legislation protecting consumers is enacted or new regulations kick in next year. But for now, credit-card issuers are free to arbitrarily raise rates and cut benefits. Still, smart credit users with good credit can assemble a hard-working portfolio of cards -- especially by applying for cards from community banks and credit unions, which often have lower rates than money-center banks.

Credit unions by law must cap interest rates on any type of lending at 18%, but most credit-card deals are much better. One of our favorites: Pentagon Federal Credit Union's Visa Platinum Rewards card. There is no annual fee, and you get a 5% rebate on gas, 2% on groceries and 1.25% on everything else. The card, with an interest rate of 13.99%, is usually best for holders who pay off the balance each month. But it also has a balance-transfer offer with a 2.99% rate good for the life of the balance, with a maximum transfer fee of $100.

Another balance-transfer offer worth considering is a Visa Classic card from Pulaski Bank & Trust (soon to be known as Iberia Bank), in Little Rock, Ark. The 0% balance-transfer offer is good for six billing cycles, and there is no transfer fee.

These days, especially, it's nice to get a little something back from your credit card. The BP Visa gas card earns a 5% rebate on gas, 2% on travel and dining, and 1% on everything else. Plus, you get double rebates for the first 60 days. We also like the Simmons First Visa Platinum Travel Reward card. You earn one point for each dollar spent; it takes 22,000 points for a plane ticket anywhere in the 48 contiguous states.

Despite a $35 annual fee, for a low rate it's tough to beat Iberia's Visa Classic cards, with a purchase rate fixed at 6.5%, compared with a national average of about 13%. Farm Bureau Bank's no-fee Platinum MasterCard currently carries a low, 5.24% variable rate. We like Pentagon Federal's card among those that give you cash back, as well as the American Express Blue Cash card. With the latter, you'll earn a 1% rebate on grocery, drugstore and gasoline purchases, and 0.5% on all other purchases until you spend $6,500. After that, you'll earn 5% on groceries, gas and drugstore items and 1.25% on the rest.

A flock of new cards is tapping into our new, frugal zeitgeist by helping you pay off your mortgage, rebuild your retirement fund or save for college. For each $2,500 you charge on your Wells Fargo Home Rebate card, the bank applies 1% of that amount to the principal of your Wells Fargo mortgage. Fidelity Retirement Rewards American Express card gives Fidelity account holders a 2% rebate that can be deposited in any Fidelity-managed individual retirement account. The Schwab Bank Invest First Visa card sweeps a 2% rebate into your Schwab IRA or brokerage account.

The new Upromise World MasterCard deposits a 1% rebate on all purchases in your Upromise college-savings account, then adds another 10% rebate on spendng at drugstores and groceries. Depending on the card, you can add to your Upromise account from rebates on gas purchases or dining. Fidelity's 529 College Rewards American Express card earns a 2% rebate that can go into any Fidelity-managed 529 account.

Evaluate the Cards You Have

"Frankly, we're in extraordinary times," says Adam Levin, former director of the New Jersey Division of Consumer Affairs and founder of Credit.com. Such times call for a thorough evaluation of every single card in your wallet -- and the cards stuck away in your drawer, too.

Start by regularly monitoring your accounts online. Pay attention to credit limits and annual percentage rates, and, above all, read any notices that come in the mail. If you spot a change in terms for the worse -- especially if you can't remember a likely trigger, such as making a late payment or exceeding your credit limit -- get on the phone and work your way up the supervisory chain. A computer may have swept your account into a portfolio review. But humans have the capability to override automatic changes.

Recognize that you have the right to reject new terms, but think twice before you do so. If you opt out, your account may be frozen while you pay off your balance under the old terms, and then closed. Closing the account can have repercussions, especially if it is one you've had for a long time. Longevity of your credit history accounts for 15% of your credit score.

Be aware that balance transfers aren't what they used to be. Credit standards are stricter for 0% offers. Whereas a score of 720 used to suffice, 750 now seems to be the cutoff, says Ben Woolsey, of CreditCards.com. Terms that used to last 12 months have been cut to six.

Balance-transfer fees are rarely capped these days, and some companies -- including Bank of America, effective June 1 -- will jack fees from 3% to 4% of the transferred balance.

President Obama Tackles Credit-Card Fees

By AMY SCHATZ

WASHINGTON -- President Barack Obama will soon turn his attention to high credit-card rates, giving a potential boost to congressional efforts to put limits on the industry.

The president is "going to be very focused, in a very near term, on a whole set of issues having to do with credit-card abuses," White House economic adviser Larry Summers said on NBC's "Meet the Press" Sunday. He said abuses include charging consumers "extraordinarily high rates that they wouldn't have paid if they knew what they were getting themselves into."

Mr. Summers is scheduled to meet with the heads of several of the largest U.S. credit-card issuers at the White House on Thursday.

Democratic lawmakers have already begun advancing legislation to curb certain credit-card fees and other practices. It is unclear whether, or how, the White House's efforts might differ from the measures being pushed by Rep. Carolyn Maloney of New York and Sen. Christopher Dodd of Connecticut.

White House spokeswoman Jen Psaki on Sunday declined to say what specific measures the administration might take. "Addressing abuse in the credit-card industry and standing up for consumers is a priority for the president and his economic team, and we look forward to working with Congress on these issues," she said.

Banks have come under increasing pressure over raising their credit-card rates in recent weeks. Consumer groups are particularly critical of those that raised rates on some existing card holders even as the banks received federal bailout funds. Banks have said credit-market conditions and changes in borrowers' credit scores necessitated the increases.

Consumer advocates want legislation that would limit rate increases on existing balances and require card companies to provide more information on their rates.

In December, the Federal Reserve finalized new rules that limit some credit-card rate increases. Those rules don't take effect until July 2010, however. Legislation pending in Congress would accelerate implementation of the new restrictions.

The banking industry has said the White House and Congress should wait for the Fed's new rules to take effect before taking any additional action.

"The [banking] industry understands the concerns about credit cards, but the administration should fully recognize the impact of the Federal Reserve Board regulation, which is one of the strongest consumer- protection regulations ever adopted," Edward Yingling, president of the American Bankers Association, the banking industry's lobbying group, said Sunday.

"As we go forward we need to be careful about piling on rules that very much may have the impact of restraining the availability of credit," he said.

I Missed the April 15 Tax Deadline. Now What?

You are subject to a late-filing penalty, but since the penalty is based on any unpaid tax at the due date, if your return shows that you will be getting a refund, there would be no penalty. For this purpose, the stimulus refunds do not count.

If your return shows that you still owe taxes, you may be subject to a penalty of 5 percent of the unpaid amount for each month, or part of a month, that your return is late, but not to exceed 25 percent. So be sure to file your return by May 15.

The late-filing penalty may not be imposed if you can show that your failure to file on time was due to a reasonable cause and not willful neglect. If you still owe taxes with your return, enclose a letter explaining your circumstances and asking forgiveness from the late-filing penalty.

Debt Consolidation

Financial Freedom
It's the American way—charge now, pay later. We are endowed with certain inalienable rights—among these are Life, Liberty and the Pursuit of Happiness. This translates into charge, charge, charge! With this “right” comes a certain amount of cockiness—especially among the young—that credit and charging is not a privilege, but an absolute entitlement.

Somewhere, something goes wrong with the American psyche—the average American is $25,000 in debt—and soon this “entitlement” becomes a handicap bringing about credit card abuse. Knee deep in debt, unable to maintain even minimum monthly payments, the philosophy continues with, “Oh, well! They can’t get blood from a stone.”

“They” are the credit lenders who have graciously empowered you with a product (department stores) or service (school tuition, rent, utilities etc.) and extended these to you immediately in return for your promise to pay them back in the near future (usually in 30 days).

Extending credit (banks, credit card companies, mail-order catalogs) is a dollar amount advance which comes with interest attached to the original amount granted. For example, paying the minimum each month on an advance or credit of $1,200 soon turns into $1,404 within a year with interest. If you miss paying a month, the interest compounds and before you know it, you’re drowning in debt.

As quickly as you became king of the hill, you’re suddenly a fugitive from collection agencies— not opening mail except from family and friends, screening your calls and quite often even disguising your voice. From the dizzying heights of charge, charge, charge, the tumble from the top finds you on the bottom of the bills, bills, bills heap.

There is a way to get out from under the heap with debt consolidation. Debt consolidation combines all of your unsecured monthly bills—credit cards, rent, telephone and utility bills, federal and state income taxes, property taxes, fuel bills, tuition, alimony and child support—into one lower monthly payment at a lowered interest rate.

Credit Card Debt

Credit cards, we can't live with them and we can't live without them. For most of us thats how it seems. You're going through the line at the grocery store and see the person in front using a Visa, the person behind has their Master Card ready and you are going to use cash. Makes you feel out of place doesn't it. When was the last time you paid cash for gas? For a lot of us it's been a long time. The pressure to acquire and use credit cards is very intense. For sure Visa and Master Card use some of the slickest advertising to be found. The question is do you pay the entire balance off each month and almost never pay any interest? If you have the ability to do so and do it, good for you! By the way, credit card companies really don't care for customers who pay everything off on time, or in some cases, ahead of time. This is, why lending institutions are moving away from grace periods, to make sure everyone pays. Grace periods used to be a full month, over time thats been cut to around 20 days. Now some credit cards have no grace periods at all and more lenders are going that way.

Federal Reserve reports America's consumer debt has topped $2 trillion. Consumer debt is primarily for purchases of goods and services on which interest payments are not deductible, unlike the interest on mortgage payments.

If you are one of millions who does not pay off all your debt each time a credit card statement comes in don't feel bad, you are not alone. Then information on this page is intended to provide a little insight on credit card math and highlight some of the terms and conditions listed on your card holder agreement, usually found in very small print. We'll talk about the rules that can come back to haunt you. Credit cards are useful and in many cases necessary, but if one is not knowledgeable in the ways and means of credit card debt, life can be very difficult. It is very important to have a healthy respect and a little fear when using credit cards. When lending institutions play hardball they get the gloves and you don't. Not really much fun.

$8000 1st time homebuyer credit

As all this legislation can be overwhelming to weed through, here is a list of FAQ’s to help clarify this Home buyer tax credit:

What is the $8000 Tax Credit for 2009? It is available for first-time homebuyers for the purchase of a principle residence between January 1, 2009 and December 1, 2009. Any home purchased for $80,000 or more will qualify for the full amount, and homes less than this value will be eligible for 10% of the purchase price.

Who is Eligible? Any first-time homebuyer, which is defined as a buyer who has had no ownership interest in a home for the past three years from the date of the 2009 purchase.

Are There any Other Restrictions? There is also a limit on the amount income that a purchaser claims in the tax year that the credit is applied for. Single (or Head of Household) filers are eligible if their income is less than $75,000; Married couples filing jointly must not exceed $150,000.

Explain how the Tax Credit Works. A tax credit directly reduces your income tax liability dollar-for-dollar. Thus, at the end of the year when you complete your income tax return and figure out your total tax owed, you will apply this tax credit to reduce the total tax bill.

What if Your Tax Liability is less than the Credit Due? You will be eligible for “refundable” credit- the IRS will provide a check to the taxpayer for the difference. Sweet!

Are there any Financing Requirements or Restrictions? No, the majority of financing arrangements are acceptable and will not affect eligibility for the tax credit.

How does an Individual Apply for the Credit? All eligible purchasers simply claim the credit on their IRS Form 1040 tax return. The credit will be reflected using a new Form 5405, which like all the forms and publications are available at www.irs.gov.

Get Coupons off ebay

Yeah, yeah, another article about coupons. But really, this one is unique! I recently ran across an article on buying coupons through eBay. I had no idea this kind of thing went on, but why not? There aren’t many things that can’t be bought or sold on eBay and I had some fun checking out the ebay coupon market for myself.

eBay can be a great source for multiple and/or high-value coupons if you know what to look for. The “cost” of the auction is for compensating the clipper for their time clipping, for one can’t really buy a coupon - they are offered for free by grocery stores or manufacturers. Here are some tips the article suggests in finding the best clipper for my money, along with some of my own:

1. Be as specific in your search as possible. I entered the search terms “Coffee coupons” into ebay and received the following listings as results: Coupons for free Starbucks drinks and $2 off on “buy 2 bags of a particular brand of coffee”. This may not help you if you are only looking to save on a particular coffee brand purchased at grocery stores. Adding more terms like “Folgers” to your initial search of “Coffee Coupons” may help refine your search.
2. Shipping should always be the cost of a first class stamp (or less!) Many eBayers make their money off of shipping charges, so don’t get caught up in this trap. I mean, how much do those coupons actually weigh?
3. Don’t pay for what you don’t want. Since many people sell packages of coupons, you won’t be able to totally avoid receiving coupons that you might not be interested in. Bid only on the value of the coupons you want within a coupon package. For instance, if you want diaper coupons, bid what you think the diaper coupons alone are worth in a package of coupons. The rest is gravy.
4. Don’t buy internet-printed coupons you could find on your own. This one is pretty obvious, right? Check out the most common internet coupon sites and see what you can get for free before laying down cash for the same coupons.
5. Know what you are bidding on! I did a general search on “grocery store coupons” and looked at some of the results. In some cases, the listings did not even include a description of the type of coupons or even the types of products, just the expiration dates.
6. Watch Out for Coupon Clipping Services Many of the results I received back in my search results for “Coffee Coupons”, were not actual coupons, but people offering to look out for and clip coupons for you and send them to you. I would be a little leery of these listings.
7. Pay attention to expiration dates. This one should be obvious, but in your “excitement” (ok, that may be too strong a word) you might forget. We’re just providing you with a complete checklist.
8. Do the math to see if purchasing a coupon makes sense. This one is also kinda obvious, if a coupon is only worth a dollar discount at the store, don’t pay 99 cents plus shipping on it. You’re going to lose money. Read as much of the fine print on a coupon as you can. Do you need to buy 2 of something to get a discount?