Friday dailies

April 11, 2008 at 12:56 pm Leave a comment

There a number of articles I’ve read today that I wanted to comment on. Some were well written and researched, others, not so much. Let’s dive in.

Identity theft appears again, this time during tax season.
According to USA Today, identity thieves are now targeting your Federal Taxes. In the article, Identity thieves tax the system, posted today, USA Today features David Hodge, an apparent victim of identity theft. Someone had used his name and social security number to file their taxes. When Hodge’s accountant submitted his filings, the IRS rejected them. After some effort, Hodge was finally able to properly file his taxes and even received a return to boot. This incident would have been remedied easily had Hodge been able to submit copies of his birth certificate and social security card to the IRS within a 30-day window. In the article, it’s made clear what is required of him and I think 30 days is more than feasible a time frame to produce the information to the IRS. “Unable to comply by the deadline, Hodge says, he left “message after message after message” with the IRS seeking an extension, “But nobody called me back, ever.” It seems as though we’re supposed to feel sympathetic for his inaction. Sure, I feel for the guy for having to go through this ordeal. But, wouldn’t it have been easier if he had met the deadline? What was he doing in that 30-day window?

Fee-fee, and I’m not talking about French poodles.
CNN Money posted an article, Break free from wallet-squeezing fees, about banking, credit card, and cellphone fees and how to best avoid them. The article accurately outlined the rise in fees and every which way banks, credit card companies, and cellphone providers nickel-and-dime us. In all honesty, I’m not shocked. And you shouldn’t be either. Here’s a reality check, these aren’t non-profit organizations.

“In many business transactions, such fees have become customary. And as the fees grow, so does consumer frustration..But they have no idea what to do. It’s everywhere. It’s become an everyday part of life..Consumers paid over $38 billion in banking fees in 2007..One of the most common bank fees are bounced check fees, which grew three percent in 2007 to over $28”
I can definitely relate to this and it’s frustrating. The article’s recommendation to avoid overdrawn fees was to sign up for online banking, where consumers can monitor, on a daily basis, their bank account. While it’s a good recommendation, one of the best ways, completely remiss in the article, is for consumers to get on a budget. Budgeting eliminates nearly all overdrawn/insufficient fund fees. The other recommendation, and one I agree with, is to sign up for overdraft protection that’s linked to a savings account. The key, however, would be for consumers to have some money in a savings account in the first place.

“Credit card customers paid $63 billion in fees last year to the card issuers..That’s up from about $55 billion in 2006.”
While the article listed some interesting statistics and numbers, the consumer recommendations fell short. No one of any financial wisdom would tell a consumer to use a cash advance place for cash, instead of a credit card, yet that’s what this article states. While the fees for withdrawing cash with a credit card can reach up to 23% or higher, interest fees on a cash advance loan are 30% and higher. Of course, the recommendation is made with the assumption that the cash advance should be paid off immediately. From my experience, and many others, most people struggling with credit card fees, aren’t exactly the ones paying off balances in full each month. To expect them to do differently with a cash advance loan is just plain stupid.

Being a Dave Ramsey fan myself, I can tell you one way to get rid of credit card fees altogether. Let’s just say I don’t worry about it.

Consumer confidence is the lowest since Olivia Newton John topped the charts with Physical.
Most of the media sites are posting this interesting, not-so-interesting, article today. The gist: “Consumer confidence fell to its lowest in more than 25 years in early April, diving deeper into recessionary territory on heightened worries over inflation and jobs, a survey showed Friday.” [Source] Okay. While I know consumer confidence is low, I fail to see how it equates to a recession. Fact: Feelings have absolutely nothing to do with a recession and everything to do a recess in our Gross Domestic Product. Another fact: “The media’s focus on the negative side of everything surely helps explain people‚Äôs pessimism.” [Source]

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Entry filed under: Soap Box. Tags: , , , , .

Crap, we’re getting a tax return Credit card regulation is overdue

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