Daily Consumer Tips

Omaha, Nebraska Is Number One

A new year brings new beginnings. With the Us unemployment currently at 9.3%, many job seekers and people with low wages would be better off living in cities that are affordable.

For this year, Forbes Magazine has compiled a list of the of best and most affordables US cities. And the City of Omaha, Nebraska is number one in that list. Other most affordable cities in America for 2011 include:

2.Buffalo, New York
3.Detroit, Michigan
4.Indianapolis, Indiana
5.Cincinnati, Ohio
6.Pittsburgh, Pennyslvannia
7.Minneapolis-St Paul, Minnesota
8.Cleveland, Ohio
9.Oklahoma City Oklahoma and
10.Houston, Texas.

From the list, it is clear that the most affordable cities are in the MidWest and none from the West. Except Houston, there are no southern cities either.

Possible Customer Data Breach at T-Mobile

A report in USAToday says that a hacker has stolen undetermined customer data from T-Mobile's customer database. The claims were made Saturday on the Full Disclosure security mailing list. T-Mobile has not responded to the purported security breach. Back in 2006, a cyber thief stole 17 million T-Mobile customer records. If you are customer with T-Mobile, what do you do?
1. Contact T-Mobile and determine if you are among the customers whose data has been breached.
2. Contact all three credit bureaus and request a security freeze on your account to prevent identity theft.
3. Check all your financial accounts to ensure that there has been no suspicious activity.

Consumers=10, Credit card Issuers=0

New rules designed to protect consumers against issuers of credit cards such as banks were wrapped up Wednesday by the House and sent to President Obama to sign. The Credit Card Reform Bill passed by an overwhelming 361-64 vote. The rules will not take effect until nine months after the Bill is signed into Law. Among the changes to come include:
1. A requirement that cardholders receive a 45 day notice before their interest rate is raised.
2. Anyone under 21 must prove that they can repay the loan or have a parent or guardian cosign for the credit card.
3. Bills must be mailed 21 days before the bill is due and the cut off time is 5.00 pm on the due date.
4. Payments will now have to be applied against the card with the highest interest rate first. Currently, issuers apply payments to the account with the lowest interest.
5.Promotional or teaser rates must last for at least six months

The Law Firm is the new Bill Collector

If you are behind on your bills, there are some developments that you need to be aware of. Because of the recession, some law firms have resorted to bill collection. How does this work? Law firms buy old collection accounts from creditors and then proceed to sue for payment. The system works like this: law firm buys old accounts for pennies on the dollar. Then they will send the consumer a demand letter for payment. Sometimes the demand letter is mailed to an old address once used by the consumer. The consumer might not respond in time because the letter was mailed to the wrong address or they did not get the notice. What happens next is that the law firm proceeds to sue in court for payment. The sermons for the lawsuit might be served to the wrong address as a consequence and the consumer might not be aware that they are being sued until the garnishment on their paycheck starts. What does a consumer do?

1.      Pay your bills on time. If you are going through hard financial times, talk with your creditors and arrange to pay a smaller percentage of the total bill as paid in full.

2.      Check your credit reports to see if there are any discrepancies. Some of these law firms have been known to collect on accounts that are past due the statute of limitations as defined by law.

3.      If you are ever sued, make sure you respond to the sermons. If you do not respond, the judge will return the verdict in the law firm’s favor. The judgment can be renewed every 7 years. The best thing to do if you are ever sued is to seek the advice of a lawyer.

Is the FICO score necessary?

A FICO score is a credit scoring system developed by Fair Isaac Corporation and is used by lenders when determining who to lend to. FICO Scores range from 300 to 850 A low score means that you get a higher interest rate when you apply for a loan. Higher scores on the other hand will ensure that you get a lower interest rate on your purchases. Apart from loans, FICO scores are used by landlords when screening applicants and by employers when making hiring decisions. FICO scores are determined by your payment history, the amount of debt you carry, the length of your credit history, and amount of new credit taken. Is the FICO score necessary in order to enjoy life? I do not think so. Let us say that you have enough money to pay for all your purchases free and clear, you do not need a FICO score. If you can pay for your house, car and any daily needs in cash, there is no need for a FICO score. This brings me to the next point. If you cannot pay for something in cash, then you do not need it. You just WANT it. If you cannot pay for your furniture in cash, then perhaps you should wait till you are able to. The same applies to other things like cars and houses. If you cannot pay for your car in cash, then find another mode of transportation such as taking the bus. How about the house? Just rent and save enough so you can buy your house in cash. What if I still want to have a FICO score? There are different scenarios:

1. If you are in the higher credit score category, lenders will keep increasing your credit limits. What they are subliminally trying to tell you is to buy more and keep the debt cycle going perpetually. At this FICO score, lenders want you to buy a bigger house, boat, car or motorcycle.
2. At the lower FICO credit score, sub-prime lenders rush in. They will bait you with low introductory interest rates that can be raised at any time as they so wish. Beginning interest rates will be as low as 3% but they have no qualms about raising it to 33%.
3. With very low FICO scores-usually below 600, the baits are even worse. The interest rates are usurious, the fees ridiculous and the terms mind boggling. An example is a credit card that is currently being offered with an initial credit limit of $300. The annual fee is $99. One time enrollment fee is $79.Account opening fee is $29. Monthly maintenance fee is $6.50. Most people opting for these kinds of credit cards can barely make ends meet. Is this trouble all necessary so you can have a FICO score? Please let me know.