Apr
2
Get Your Share of the Foreign Transaction Fee Settlement
Filed Under Credit Cards, Financial News | 1 Comment
Late last year, I received a notice from Visa informing that I was eligible to receive funds from their foreign transaction fee settlement. MasterCard and Diner’s Club were also part of the settlement. If you haven’t applied, or don’t know about it, here’s what you need to know.
Foreign Transaction Fee Lawsuit Background
The suit argues that Visa, MasterCard, and Diner’s Club (together with several issuing banks) colluded to set and conceal foreign transaction fees on credit card purchases. It also argues that they inflated the exchange rate on those transactions. The suit applies to the period between February 1, 1996 and November 1, 2006.
Although they deny wrongdoing, the banks and issuers have agreed to a settlement, which means you’re entitled to receive settlement funds if you used an eligible credit card in a foreign country during that period.
How to Apply for Settlement Funds
The application process is very simple. Just go to the Credit Card Conversion Fee Settlement website, and click the “Submit Your Claim” button. If you have your refund ID, enter it there. If not, click the tiny “I do not have a Refund ID” link to continue.
You have three settlement options:
Refund Option 1: An Easy Refund of $25. This is best for people with less than one week of travel, or total transactions of less than $2,500 between 1996 and 2006.
Refund Option 2: A Total Estimation Refund. This is based on your typical spending habits during travel. Use this if you traveled for more than a week, or spent more than $2500, but don’t have complete records to back up your claim. The refund will be a maximum of 1% of your estimated foreign transactions.
Refund Option 3: An Annual Estimated Refund. If you have records and traveled extensively, or used a company card, then use this option. You have to provide a year-by-year spending estimate, but your refund will be a maximum of 1% to 3% of foreign transactions.
My husband and I only had one trip during that period. We checked our records and found that our charges were less than $2500, so we opted for the simple $25 reimbursement. My parents travel extensively, and have their documentation, so they used option three. My sister lived abroad for a few months, so she also used option 3.
If you think you’re eligible, apply now. It’s free money and applying doesn’t take a lot of effort. The deadline to apply is May 30, 2008.
Feb
7
After a few days of tousling over a much larger package, the Senate has passed the economic stimulus bill passed by the House. There are a few differences that will be ironed out over the next few days and then the bill will be sent to the President for his signature. He’s already said he’ll sign it. Previously, the IRS said it would take them several weeks to start printing the checks because they’re in the midst of tax season, however they expect to be able to distribute the funds faster this time. Most people can expect to receive checks or direct deposits starting in May.
Most blog readers will know this, but you may want to warn elderly relatives to ignore the tax rebate scams already underway. Under no circumstances should they reveal personal information in order to get their rebates.
Jan
24
Tentative Tax Rebate Deal
Filed Under Financial News, Taxes | Leave a Comment
This morning, several news organizations announced that the White House and Congress have come to a tentative agreement on the economic stimulus plan. The main part of the plan is tax rebates for singles earning under $75,000 and couples earning under $150,000. Each person will receive at least $300, plus an additional $300 per child. There will probably be a cap in the range of $1200 per family. Some sources say the checks could be as high as $600 per individual, with the cap still at $1200. You would have to have earned a minimum of $3,000 in 2007 to qualify.
According to a report I saw on Good Morning America, the IRS says it could be May or June before the checks start going out. They haven’t said if they’ll need to do it in batches like they did with the rebate in 2001. If they do, that could mean I won’t have my check until July or August. That’s fine with me, but I don’t see how eight months down the road is “emergency stimulus.”
Personally, I also don’t see how this will truly stimulate the economy. This probably isn’t enough to save anyone from foreclosure. I plan to use the rebate for debt payments, as do most people I know. That means it’s not money flowing back into the system. Other families may choose to add it to their household budgets and spend it on food, fuel, energy, and other household costs. I doubt many people are going to buy big screen TVs or go on a shopping spree.
I’m leary of the whole idea of using consumer spending to save the economy. Isn’t consumer spending the very thing that dug us into this hole in the first place? If we truly want to fix the economy, we need to reduce consumer debt, reduce the national debt, and balance the budget. Stopgap measures are just political mumbo jumbo meant to make us feel good about our politicians.
This does still have to pass the House and Senate. It’s expected to easily pass the House, but the Senate may want to do some tinkering. It could be up a month before the final bill is passed.
Jan
23
The LIBOR and Fed Rate Fall: What that Means for You
Filed Under Financial News, Investing | 2 Comments
Yesterday, as you probably heard, the Federal Reserve Bank cut the key overnight interest rate by 75 basis points. The LIBOR (London Interbank Offered Rate) has also been dropping due to credit concerns. So, you may be wondering what this means for you. The answer is that it depends on how your finances are arranged.
Credit cards: You may see your credit card interest rate fall slightly, but probably not by much. This is one place where lenders can actually make money.
Mortgages: If your prime-rate, adjustable-rate-mortgage is pegged to a Treasury rate, the Fed rate cut could reduce your mortgage rate. Unfortunately, many loans are pegged to the LIBOR instead. This is especially true of subprime and ALT-A loans. Although the falling LIBOR may help some of them whose interest rates are resetting, the decline is too incremental to make a big difference in their ability to pay.
If you’re in the market for a new fixed-rate mortgage or a fixed-rate refinance, this cut is excellent news for you. Contact several lenders to find out their current rates and offers. They may ask you to jump through a few additional hoops, but it’s worth it if the home you want to buy is reasonably priced and you can lock-in a low rate. Nickel discussed the low mortgage rate he received just today.
Student Loans: If you have a variable student loan, you may or may not see a reduction in your interest rate. Like many mortgages, student loan rates are often now linked to the LIBOR.
Auto Loans: If you’re in the market for a new car, check out the different rates available. Although offers from dealers may not change much, your local bank or credit union may be offering a reduced rate.
Employment: The Fed rate cut was partially intended to encourage corporate borrowing. Lower rates make it easier for banks to find money to lend, and corporations are the largest borrowers. That said, a rate cut probably won’t affect your employment directly. Many experts aren’t predicting large lay-offs even if a recession does occur. Your employer may reduce spending on optional projects, but your job is probably safe unless you’re in the banking/housing industry.
Savings: The Fed rate cut does mean the interest rate on savings accounts, CDs, and other accounts will fall. If you have a CD that is about to expire, research your options carefully before rolling it over into a new one. You may find better vehicles for your savings right now.
Investments: If you’ve checked your portfolio recently, you know it’s hurting. The rate cut was intended to stimulate the market, but the experts I heard on NPR weren’t sure how effective it would be. They did say that it may have been enough to avoid a panic sell-off, but it probably won’t send anyone’s stock soaring. Monitor your investments, but don’t make any sudden moves if you’re investing for the long haul.
The Fed may cut the rate again in two weeks, but for now, continue your frugal habits and don’t stress about the fluctuations of the Fed.
Jan
17
The Personal Impact of the Consumer Price Index
Filed Under Debt, Financial News, Marriage and Money, Personal Finance | 1 Comment
Yesterday morning NPR reported that the consumer price index had risen 4.1% since December 2006. They also reported that although wages have risen, they’re actually lower than they were in 2000 when adjusted for inflation.
I exhaled a stunned breath when I heard the first part. That’s a hefty jump for one year. According to NPR, it’s the biggest increase since 1990. When I heard the second part, I instantly felt poor and angry. I know my salary is higher than it was in 2000, but thanks to massive student debt and other debt, my husband and I both feel poorer than we did in 2000.
The continued rise of fuel prices is a big part of the problem for us. I drive less than 100 miles a week and have a fairly small tank, but pumping $29 into it when I used to only have to add $15 is frustrating. I have to fill it at least twice a month, so my fuel costs have effectively doubled in the last four years. When gas hit $3 the first time, it started to affect my choices. I now see some of my friends less frequently and attend fewer events because I don’t want to pay for the gas to get there.
Rising food costs also comprised a large part of the increase in the CPI. Those haven’t affected us as much because we don’t buy many wheat or dairy products, but it’s had some impact on our budget. The CPI was only up 2.4% when food and energy are excluded. Many economists choose to exclude those numbers because food and energy are not considered “discretionary spending.”
Now, realistically, when I look at my finances, I know I’m not poor, but I definitely don’t feel well off, or even completely secure. Our income has increased almost 1200% since we got married in 2005 (remember, we were both grad students, and thus actually poor. Not “top ramen for every meal” poor, but “spending all our money on groceries, gas, and books” poor.) We can put food on the table, we can pay our monthly bills, and we can even afford to live comfortably, but rising prices also make us feel more restricted in our choices.
Someday soon I hope that we’ll reduce our debt enough to a level where I will feel more secure even in the face of rising inflation and stagnating wages. Unfortunately, it’s hard to see that day coming when I hear news like this.
