Credit (Re) Building Tip--Secured Credit Card

Sometimes I think the "American Dream" in today's world is having a good Credit Score.  A Credit Score, which is based on information on our credit reports, determines if we get a loan, what interest we pay, our car insurance rate in some states and perhaps unfairly-whether or not we are offered employment.

One tip to either build good credit or rebuild credit is to get a secured credit card. Most banks and credit unions offer them. Basically, you take the minimum amount required, often $250-$300 to the financial institution and pay a fee for the card. The money is deposited into an account--you don't touch it and the financial institution doesn't touch it. That's what makes it different from a debit card that is connected to your checking account. Then you get a credit card with a spending limit of the amount in the account, without the option of going over the limit. That is what makes it secured--the financial institution has no risk--if you violate the terms of the agreement such as running up purchases on the card and not paying, then the financial institution can take the money out of your account and cancel the card.

The way a secured credit card helps to build your credit is that all the activity on the card is reported to the credit reporting bureaus on your credit report. If you manage the card well--pay on time and keep your balance under 30% of the available credit, it will help you positively build your credit. For a comparison of secured credit cards and more information, check out Consumer Action's Secured Credit Card Survey.

Joining A Health Club?

It's that time again--New Year's resolution time--if you're like thousands of other Americans, you might be thinking of fitness resolutions and contemplating joining a Health Club. I admire your goal of working out and encourage all of us to be active and healthy.  However, it's staggering how many consumers buy a gym membership with the good intention of using it but end up dropping out months later and spending hundreds of dollars for something they don't use. So before you sign that contract, take a few minutes to complete this Checklist:

1. I've checked my Spending Plan and I can afford the monthly fee
2. I've checked to make sure the Health Club/Gym is properly licensed
3. I've checked with my local consumer protection agency and the Better Business Bureau to see if there are any complaints 
4. I talked with current members to see if they're satisfied
5. I walked through the gym to see if the equipment is all working and the environment is clean
6. I have reviewed my calendar and scheduled work out time to make sure I will use the membership
7. I have read the contract and all the services mentioned by the sales staff are included
8. I have checked the cancellation policy

If you've completed the Checklist and you're totally satisfied that you will use the Health Club to help meet your fitness goals, then get going! One more note--try to avoid signing up for automatic payment for your membership fee. Those automatic payments may be challenging to stop if for some reason, you have a dispute with the company.  For more info, check the FTC's Health Spas: Exercise Your Rights

"Button Batteries" Warning

Do you know what a "button battery" is? Or how dangerous it can be if swallowed? It's aptly named--a small round battery the size of a button and is found in hundreds of children's toys, our remote controls and in those singing cards. You might think that because it's so small, it might not be a problem if a child swallows it--that it might just pass through.  Tragically sixteen children have died from ingesting these batteries, according to the National Capital Poison Center. If the battery becomes lodged in the child's esophagus, it can cause serious injuries in as little as 2 hours.

Children are very curious and often are able to take these batteries out of toys, greeting cards and remotes so tighten all the screws on the battery covers of their toys, put the remote out of reach and be sure to monitor children with the greeting cards. For more information and safety tips on button batteries, go to www.cpsc.gov.

What's Really Scary

Halloween is upon us but here's what's really scary:

• Not knowing how much money is in your checking account before going shopping 
• Not knowing your credit score before shopping for credit
• Believing that the person on the other end of the phone really is your bank and giving them your checking account number
• Sending money to a "company" because they can get you a "work at home" opportunity
• Not knowing where your debit card is
• Not doing your homework to make sure you get the best quality item for the best price
• Being oblivious to the thousands of recalls on household products
• Being under--or un--insured 
• Not saving money for emergencies and retirement

Don't let this Spooky Season scare you as a consumer--Protect and manage your money so you can meet your financial goals. Safeguard your family and home from dangerous products. Enjoy the trick or treating with a peace of mind knowing that you're a Savvy Consumer!

Wanted--Good People with Bad or No Credit??

On several vacations recently, in different states, I have come across car title loan shops, check cashers, pawn shops and this sign at a car dealership. "Wanted, Good People with Bad or No Credit". Clearly the economy is suffering still. This advertisement is meant to entice those of us who have a bad credit score to apply for a loan at this dealership--presumably because they like us (bad people need not apply) and want to help us out. As opposed to the true motive--that they'll charge us exorbitant interest rates and make a ton of money off of us--and then when we miss a payment since we probably shouldn't have gotten into this loan in the first place, they'll repossess the car and start over with someone else. I'm not feeling the love. Using these types of financial services/products is a costly consumer decision. A better strategy would be to get ahold of our finances--create a Spending Plan, spend less than we earn, accumulate some savings--clean up our credit by using some tips from the FTC, get a checking/savings account from a financial institution and wait for a loan until we can get one with an interest rate that favors us. For more info:
FTC "Knee Deep in Debt"
www.mymoney.gov