After recently discovering twofoods.com, a food nutrition comparison site, I realized right away how the ability to compare foods can save people money. Think about it: you’re buying food for its nutritional value (hopefully), therefore you want to get the most nutritive bang for your buck. As we’re all aware, food is money.
So, visit twofoods.com and compare foods. The interface couldn’t be simpler. Just enter two grocery items, one per window, then those foods are automatically compared. You can compare foods on the basis of total calories, carbohydrates, fat and protein. The analysis doesn’t go deeper and it’s not rocket science. But, still, you’ll probably find that twofoods is a very useful moneysaving tool.
And what about comparing apples and oranges? That’s super-easy. If you’re a tightfisted Cheapo — or if you’re dieting or trying to maintain a healthy weight — go with oranges. An orange contains slightly fewer calories, less fat, fewer carbs and more protein than an apple. Also, depending on weather and crop success (or failure, as seen last season in Florida), oranges are cheaper. Example: California Valencia oranges can be purchased 3 for $1 at a Brooklyn supermarket, while ordinary Red Delicious apples are $1.29 per pound.
Especially when traveling, credit card cash advances are a convenient way to access funds. We all know that these cash advances are expensive, however, and we should not get a cash advance unless there is no other option. Nevertheless, most of us have been in cash-strapped situations, particularly while vacationing. Just remember to use those credit card cash advances wisely. Banks and other credit card issuers make a fortune providing instant gratification. Keep in mind that credit card cash advances must be avoided, if possible.
What Are Credit Card Cash Advances?
A credit card cash advance is simply an easy way to borrow money. It is an option that cardholders may use to access cash, which is applied to their current balance — as opposed to using the card for an actual purchase. For most credit card users, the amount of funds available for cash advances is a percentage of the overall credit limit. Monthly credit card statements issued by banks will usually show two spending limits: the overall credit limit and the limit for cash advances.
Obtaining Credit Card Cash Advances
Your credit card can be a powerful and effective tool for managing your financial situation. It can protect you from buying defective products by allowing you to use the goods before paying for them. It also reduces the need for cash or checks when you’re far from home. It can also allow you to manage personal and business transactions using the Internet, phone or postal mail. Like all tools, however, your credit card must be used carefully. This is especially true when using your credit card’s greatest power: getting large amounts of instant cash.
Some routine ways of obtaining credit card cash advances are: 1) ATM withdrawal; 2) writing out a check that is frequently attached to your credit card statement; 3) filling out forms at a bank branch to collect the money. Each of these methods can provide the cash you need — but that doesn’t mean that they’re all equal. If you must obtain a credit card cash advance, avoid using ATMs. ATMs charge an additional fee for credit card cash advances. This fee is charged by the financial institution that operates the ATM.
Finance Charges on Credit Card Cash Advances
There is another common problem associated with each method of obtaining credit card cash advances: finance charges. No matter which method you use to take the money, you will be charged interest fees and finance charges for the transaction. Credit card cash advances begin accruing interest quickly and are not subject to a grace period. Therefore, even if you pay your credit card balance in full upon receipt of your bill, you will be accessed finance charges for the credit card cash advances.
Just last year, the amount of cash borrowed from one major credit card issuer totaled more than $104 billion. That figure represents an eight percent increase over the prior year, which tells us that credit card users are relying on plastic as a substitute for traditional forms of borrowing — such as personal loans from banks and credit unions. Not surprisingly, credit card companies have become increasingly willing to loan cash. Credit card issuing companies are also increasing fees and interest charges associated with cash advances.
Your monthly statement reveals some of the specifics on how these finance charges are billed, but, in most cases, it will not divulge what those charges are. If you don’t know, it is always a smart idea to ask. Call the customer service phone number on your monthly statement and ask questions. Understanding the terms of credit card cash advances is no different from shopping for the best interest rate on a bank loan before you sign on the dotted line.
The Cost of Borrowing Cash
Whenever you use your credit card for a pair of new shoes or a DVD movie, those items are yours to own. You can keep them for years to come and pay for those purchases over a few months, if you wish. On the other hand, when you get a credit card cash advance to pay for daily necessities (like gas and groceries), you will spend much more for that privilege. You simply must pay off credit card cash advances as soon as you can.
Making a quick payment is not all you need to worry about. By reading the fine print on your monthly statement, you will discover that, in most cases, payments to your credit card company are applied first to interest charges, before they begin eliminating your debt for borrowing cash. For example, if your revolving balance of $2,000 includes a $1,000 cash advance and you pay off $400 per month, it will take three months before your payments even begin to cover the actual advance. That’s three additional months that the credit card issuer can charge a higher interest rate for the goods and services you bought with advanced cash.
The Moral of the Story
Use a credit card cash advance wisely and only borrow enough money to settle your immediate financial obligations. After you resolve the issue, set a goal to pay off credit card cash advances fast. Be smart about using credit card cash advances.
Earlier this month, new federal legislation regarding automatic overdraft coverage went into effect. Banks are still allowed to offer overdraft protection on checking and debit card accounts, but it can only be provided as an opt-in service. It’s no longer automatic or set up by default. As a result, banks are getting more and more aggressive get you to sign up. Why? Because automatic overdraft coverage nets the banking industry (literally) BILLIONS of dollars annually.
For the past few months, my bank has sent me countless paper notices to get me to sign up for automatic overdraft coverage. (So much for the “green” business practices, right? Perhaps the bank’s environmental concerns are not so important, after all. Or maybe they’ve just forgotten about the planet in their blind pursuit of more and more fees.) I shake my head and laugh when receiving each of these stupid notices and, of course, I recycle them.
No sooner did I become oblivious to banks (and the tidal wave of pleading ads about automatic overdraft coverage), when I noticed at least one bank now offering a $50 bonus for signing up. Yep, 50 bucks. M & T Bank — a regional bank serving the mid-Atlantic states — is actually paying people to opt into automatic overdraft coverage. The desperation has reached a new level of, well, desperation.
I must confess, this $50 bonus tactic is very smart and will probably fool many clueless account holders. M & T Bank may not be the first bank to gamble $50 on automatic overdraft coverage. Nevertheless, I expect that other banks will follow suit. Of course, my strong advice to you is a familiar refrain: JUST SAY NO! Don’t be fooled by the crisp bill with Ulysses S. Grant’s picture on the front. It’s a trick! Banks like M & T are simply betting that you’re more desperate than they are. Prove them wrong.
If you’re thinking you can take this bonus and outsmart the bank, think again. So-called bank account “bonuses” often never materialize. When customers are ignorant enough to take the bait, the bank will employ one of two scenarios: 1) they’ll refuse to add the bonus to the account or neglect to do so; or 2) they’ll flag the bonus accounts and figure out how to recoup it. Either way, you can count on the fact that automatic overdraft coverage always works in the bank’s favor. You can also count on overdraft fees in the future, if you’re exposed to automatic overdraft protection.
Just in case you need a reminder to say no, here’s a recent video from Consumer Reports about why you should decline automatic overdraft coverage.
Apple stopped short of issuing a consumer product recall for the iPhone 4.
After iPhone 4 users raised concerns that dropped calls and bad reception might warrant a consumer product recall on Apple’s newest gadget, Apple CEO Steve Jobs spoke at a rare press conference on July 16 to reassure iPhone 4 users. While stopping short of issuing a consumer product recall for the wildly popular phones, Jobs announced that everyone who bought a suspicious iPhone 4 will receive a free “bumper,” a silicone ring that slips around the phone and seems to solve the bad antenna/dropped calls problem. Apple iPhone 4 customers will escape a consumer product recall.
Despite iPhone 4′s sleek look and top-of-the-line functionality, its usefulness was compromised by something as simple as users holding the iPhone 4 in a position that cut off the antenna’s reception.
There’s a lesson here. While it’s tempting to jump on the iPhone 4 bandwagon, or that of any super-new, ultra-modern tech gadget, buyers can avoid dealing with the potential consumer product recall — and save money in the long run — by waiting until other users have road-tested the product.
By waiting a few weeks, or months, before buying the current model and adopting a wait-and-see attitude, you let other consumers do the quality assurance testing for you. If they run into bad reception and a consumer product recall, they’ll have to deal with sending the defective product back to the manufacturer while you remain in possession of your hard-earned cash.
If you’re one of the few people who can get along with a cellphone that just makes calls (like me), you’ll save even more money and avoid the dreaded consumer product recall even when you upgrade over the long term. The life span of personal electronics has decreased proportionately with the speed at which newer, shinier products are released on the market. As a result, older models are often vastly cheaper than the newest model and won’t be in danger of a consumer product recall anytime soon.
Sometimes companies drop the price of its latest gadget to compete with similar gadgets from other manufacturers: see Barnes and Noble lowering the price of its e-book reader Nook to get a leg up on Amazon’s Kindle, the market leader. That’s good for all consumers — except the ones that paid top dollar for a Nook.
So the next time you’re pressing your nose to the glass at the Apple store, waiting for a glimpse of the latest tech toy, consider the potential for a consumer product recall. Wait a week or two: you’ll avoid the headache of a consumer product recall and save your dough.
Airline fees will play havoc with your travel budget.
The Associated Press published a report today about airline fees — hidden charges that make it more difficult for consumers to find the cheapest deal on a flight. Congressional investigators have observed that sizable airline fees on baggage and basic amenities are not part of the ticket price. As a result, consumers often don’t know about these airline fees until they show up at the airport.
Airline fees can easily go undetected until it’s too late for the traveler to shop around. Why does Congress care about these fees? Because billions of dollars’ worth of airline fees are tax-exempt and lawmakers would like to get their hands on that money.
Regardless of the government probe, sneaky airline fees hurt consumers — if you travel, you should know about them. Airlines, travel agents, online travel sites and other ticketing venues should be required to disclose airline fees for checked luggage, reservation changes and other services in a clear-cut, fair and consistent manner, according to the Government Accountability Office.
During the past three years, airlines have initiated new fees for services that used to be part of the ticket price. These unprecedented airline fees have restored airline profits in a tough economy but provoked the anger of travelers who see themselves nickeled and dimed to considerably higher costs. In addition to checked bags, some airlines charge customers for seat assignments, extra leg room, preferred status in boarding lines, blankets, pillows, beverages and meals.
It’s the position of the airlines that these fees are really for the passengers’ benefit, since they let airlines reduce ticket prices while consumers pay only for services they use. If this is the logic of their argument, how about charging airline fees for screaming babies? Or guys who lunge all the way backward in their seats, shoving a tray table into their rear neighbor’s stomach? Or gum-snapping teenagers who want to trade seats with you so they can sit next to their boyfriend/girlfriend?
All joking aside, airline fees amount to serious coin. American, Continental, Delta, United and US Airways all charge $25 for the first checked bag and $35 for the second, as reported by the online reservation site Kayak. JetBlue charges $10 plus for extra leg room. AirTran charges $6 for advance seat selection and assigns exit row seats for $20. Snacks aboard most airlines range from $2 to $5 — meals cost you a little bit more.
The Department of Transportation could call for airlines to publish two ticket prices to passengers: a “full fare” with only the mandatory charges (such as taxes) and “full fare-plus” with the extra airline fees. As of now, the airlines won’t supply the travel industry with their fee schedules. This is why consumers can’t get this information when comparing airline ticket prices online. Of course, no one wants to be the first to disclose airline fees that would put themselves at a competitive disadvantage. Therefore, until the government mandates full disclosure of airline fees, we consumers are still on our own.
Next time you book a flight, go to the airline’s official site and read the fine print. Airline fees will play havoc with your travel budget, so don’t neglect due diligence. Remember the famous Latin proverb, caveat emptor = “buyer beware”.
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