The Pitfalls of Using Debit Cards. How To Protect Yourself

Debit Cards are not govern by the same laws than Credit Cards.

You should know, under the Electronic Transfer Act:

1.Your loss is limited to $50.00 if you notified your financial institution within two business days. Waiting longer than two business days to report and request a debit card chargeback can increase your liability to $500.00.

According to the Electronic Transfer Act, once the error has been reported, the financial institution will:

1.Investigate your claim and provide resolution usually within 45 days of your report.
2.If the investigation takes less than 10 days to finish and is determined to be a valid claim, a debit card chargeback will be processed. Your financial institution will notify you either way of the results of your claim. You have the right to see supporting documents used to determine the outcome of the investigative decision.
You should know the Electronic Transfer Act has limitations. Some of these limitations are outlined here:

1.The Act does not apply to many preauthorized transactions (i.e. monthly subscription plans)
2.Not all transfers are covered. Ask your financial institution for policies related to this as policies do vary from bank to bank.
3.You do not have the right to “Stop Payment.”
From sources I have read, credit card chargebacks may be easier than debit card chargebacks. I understand this is because liability policies are different with credit cards.

If there is fraudulent use on your debit card, and you notify the financial institution in time, you can still be out those disputed funds for up to 20 days. Therefore, you want to have some money in reserve to cover any outstanding debts that have not yet cleared your account. Once you start bouncing checks, you start negatively impacting your credit.

Know the Law
If you do not notify your financial institution within 60 days of your card being lost or stolen, there is NO LIMITATION on your liability of fraudulent use.

Keep in mind that a thief does not necessarily need to have your card in his/her possession in order to use it. Many companies take mail and phone orders on debit cards.

The Chargeback - Using Your Credit Card for Dispute Resolution

Many of us have been in a situation where we did not get a product or service we paid for or received something defective. For example, when companies declare bankruptcy or go out of business people are often unable to use pre-paid purchases, such as plane tickets and gift certificates. The increase in internet shopping has also created difficulties for many buyers, who cannot simply go to the store and complain if they have a problem with their orders. However, by using your credit card for purchases you have a remedy if you experience problems later.

Fair Credit Billing ActUnder the Fair Credit Billing Act you can dispute credit card charges for goods and services you never received and, under certain circumstances, for unsatisfactory goods or services that you did receive. This right is time-limited. The creditor must receive a letter from you within 60 days after the bill containing the charge is mailed to you. The creditor has two billing cycles or 90 days, whichever is less, to investigate your claim. You do not have to pay the disputed portion of the bill while the creditor is researching the claim, but you still must pay any undisputed part.

If the creditor agrees with your dispute they will remove the charge from your bill and reverse payment to the merchant you bought the product or service from, called a chargeback. If the creditor disagrees with your dispute they are required to send you a letter explaining why. At this point you must pay the disputed amount and any finance charges that have accrued, or you will be marked late on your credit report. To dispute the findings you must write to the creditor within ten days of receiving their letter.

Debit CardsThe Fair Credit Billing Act only applies to credit cards, not debit cards. However Visa and MasterCard offer the same chargeback service for debit cards transactions where you choose the “credit” option (as opposed to the “debit” option). Still, even though you can request a chargeback on some debit card transactions there is an important difference between debit cards and credit cards. With a credit card you do not have to make the payment while the company is researching the charge. With a debit card the money is taken out of your checking account right away, and you have to wait to get your money back.

Credit Card Advantage
In addition to stricter liability laws, credit cards offer more consumer protection on purchases made. Use credit cards for very large or fragile purchases and for objects that will be delivered to your home after the purchase. This gives you added insurance in case the purchase is damaged in route.
One final advantage of credit cards is that they are helpful for consumers seeking to establish or reestablish an attractive credit history. Responsible credit card usage can improve one's credit rating, which will improve your chances of obtaining favorable credit terms (low interest rates, low fees, etc.) for automobile loans, mortgages and personal loans.

Driver shocked by $835 parking ticket (by cops obviously)

Driver shocked by $835 parking ticket

 

Buyers Being Picky With Their Home Choices

In the current buyers' market, many people interested in purchasing a home are staying away from properties that require any kind of renovations, regardless of how minor they may be.

Some buyers will tolerate nothing and may very well consider walking away from a value-priced home just because it needs a bit of work. Conversely, homes in perfect condition have started bidding wars between multiple buyers.

Among the home renovation I highly recommended my clients to paint the walls, clean or change carpets, and eliminat clutter and all personal stuff. It is also very important to consider the exterior, THE CURB APPEAL.

"Curb appeal is very important, and the front door, the garden, the front gate is the first thing prospective buyers see. Often time some of my clients go check out the property from the outside to see what they think before I get them in, with my electronic key. If they do not like the outside, they will never bother asking me to see inside.

Sellers whose homes need some work may want to consider taking out a small home equity loan to pay for these renovations. Fixing any visible issues may make their home sell quicker, and get a higher offer. 

Remodeling Your Home: Where to invest

http://www2.nbc17.com/business/2011/may/06/remodeling-your-home-return-investment-ar-1010062/

The Sobering Facts about America’s Middle Class

Here are just some of the sobering facts:

• There are 8.5 million people receiving unemployment insurance and over 40 million receiving food stamps.
• At the current pace of job creation, the economy won't return to full employment until 2018.
• Middle-income jobs are disappearing from the economy. The share of middle-income jobs in the United States has fallen from 52% in 1980 to 42% in 2010.
• Middle-income jobs have been replaced by low-income jobs, which now make up 41% of total employment.
• 17 million Americans with college degrees are doing jobs that require less than the skill levels associated with a bachelor's degree.
• Over the past year, nominal wages grew only 1.7% while all consumer prices, including food and energy, increased by 2.7%.
• Wages and salaries have fallen from 60% of personal income in 1980 to 51% in 2010. Government transfers have risen from 11.7% of personal income in 1980 to 18.4% in 2010, a post-war high.

The middle class is shrinking, which threatens the social composition and stability of the world's biggest economy.

 

Top Ten Things to Do Before Retiring

From Inside Personal Finance
Here’s what to do now if retirement is on your horizon.

1. Decide how you are going to spend your time. What are you going to do during the first 6 to 12 months in retirement, and what do you plan to do for the rest of your retired life?
2. Determine (realistically) how much money you will spend monthly. Remember to include periodic expenditures such as gifts, vacations, taxes, an occasional new car, and emergencies.
3. Anticipate the cost of health care. You’ll have no employer to pay this for you; Medicare, MediGap, and private insurance are all up to you.
4. Buy long-term care insurance. Now.
5. Refinance your mortgage. Many people are shocked to discover that they either cannot borrow money after they retire, or they are forced to pay higher rates.
6. Boost your cash reserves. Make sure your rainy day fund is enough to cover at least six months’ worth of expenses.
7. Evaluate your sources of income. You have already figured out what you’ll spend on a monthly basis. Now figure out where that money will come from.
8. Revise your investment strategy. The way you’ve handled your investments over the past 30 years is not how you should handle them for the next 30. While preparing for retirement, you were focused on asset accumulation. When you’re in retirement, you need to focus on income and on keeping pace with the increasing cost of living. Assets must be flexible and liquid so you can meet needs you did not anticipate. New words will enter your vocabulary: rollovers and lump sums.
9. Review your estate plan. Review your will and trust. Don’t have them? Get them. These documents can protect you and your assets while you are alive and benefit your spouse and children when you pass on.
10. Perhaps the most important thing of all. If you are not excited about retirement, then don’t. Many people quickly become bored after retiring. It’s OK -- even exciting -- to return to school or the workplace. Many do this, often in completely new fields.

In Time for Buying Season, Rates Reach Yearly Lows

The 30-year fixed-rate mortgage, a popular choice among buyers, sank even lower this week, matching its yearly low of 4.71% from January, reports Freddie Mac in its weekly mortgage market survey. Last year at this time, the 30-year fixed-rate mortgage averaged 5%.