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The Do's and Don'ts of Debt Consolidation

By Bob Brooks

August 21, 2014

 

Question:

Dear Bob

I am looking for the best way to try and consolidate about 30k in credit card debt. Any suggestions? My credit is pretty good now and I am making my payments on time, however, my monthly payments to all my creditors exceed $1000 per month.

 

Answer:

When you have quite a bit of debt that you are paying off, it is without question a huge blessing to have good credit scores. That gives you options - This reader has good credit scores - so should she consolidate? 

There are only two reasons that you consolidate - 

  1. Better interest rates - The amount of interest and the amount of money you are paying each month are going to be the two key determining factors as to how long it takes you to get out of debt.

Obviously, you want to pay back as much as you can.  Higher interest rates will require you to pay back much more.

  1. 0% plans - great concept however, you have to do the math. Does it make sense after you evaluate the interest you are paying after the 0% period plus factoring in the 3% transfer fee? You need to make absolute sure that you can pay back a bulk of that money during the 0% time period. 

When should you not consolidate?

  1. For the sake of convenience - in the email it sounded to me like the thought of one payment sounded much better than multiple.
  1. To lower the payment - if you consolidate into another plan and the payment is much lower, one of two things are occurring -you actually did get a much lower interest rate which is good or they extended the term of the note out further which is something that you don't want to do. 

Paying back debt is no fun.  However, staying the course and making a commitment to that high set of payments as well as making sure your interest rate is as low as possible insures that you get out of debt as quickly as possible.  

 
5 Ways to Save on College Textbooks

August 20, 2014

I was sent this by consumer expert Andrea Woroch.  Andrea is a nationally-recognized consumer and money-saving expert for Kinoli Inc., who helps consumers live on less without radically changing their lifestyles.  For more information click here.


 

Among the biggest and most important purchases college students make, textbooks top the list of pricey needs. In fact, the U.S. Public Interest Research Group found the average student spends as much as $1,200 each year on books and supplies -- with some books costing as much as $300 alone. This expense has become so great that 65 percent of students opt against buying a textbook, even though they fear their grades will be in jeopardy.

There's no reason to risk your GPA to save your budget. Before you head to the campus bookstore, consider these five ways to saving on textbooks.

1. Buy Used
Publishing new editions of textbooks every four years (or so) works to devalue used textbooks, as students fear buying anything but the newest editions. Though used textbooks in the current edition go for 50 to 60 percent off, the older edition can save you even more.

Most updates are minimal but speak with your professor before buying. Then, check outHalf.com, Textbooks.com and eCampus.com for used book options.

2. Rent Textbooks
Many students look forward to selling their books at the end of the semester, but the payout is paltry compared to what was paid for the original book. To avoid this predicament, rent textbooks through sites like Chegg and CampusBookRentals.com and save over 80 percent. If you go this route, be sure to keep the book in pristine condition so you're not charged any fees when you return it.

3. Grab a Coupon
Whether you're renting or buying a new textbook, don't forget to look for printable coupons and online coupon codes for savings. Sites like CouponSherpa.com offer 10-percent off at Half Price Books, and FreeShipping.org has codes for free delivery from Textbooks.com. Even a general search for "textbook coupons" can yield savings, so do your research!

4. Download What Your Need
Since few classes require students to read every page of a textbook, you can get away with downloading only the necessary portion from such websites as CourseSmart.com and Open Courseware from MIT. You can also find hundreds of free-domain books for use on e-readers through the Project Gutenberg website.

5. Avoid Bundles
Bundling high-margin multimedia CD-ROMs with texts tends to push up the price of new books. However, federal regulations have restricted this practice so you have the option of buying what you need and nothing more. Check with your professor or teaching assistant before you buy the whole bundle since buying the textbook alone is typically cheaper.

 

 
Alert – If You Went to a Hospital in this System, Your Personal Information Might be Compromised

By Bob Brooks

August 19, 2014

You might want to pay attention to this story.  Unfortunately, this story is a big deal and one that is getting hardly any press.  According to a regulatory filing from Community Health Systems, Chinese hackers have stolen medical records for 4.5 million patients.  Community Health Systems runs 206 hospitals in 29 states. 

Over the course of 2014, I have written about some pretty major security breeches.  However, this is by far the worst because of the type of data stolen - social security numbers.  Most of these thefts involve credit card information, emails, etc.  This particular one is significant because not only the millions of people who have been compromised but also because of what thieves can do with this information.  The social security number is the entry into identity theft.  In order to open a credit account, all you need is a social security number.

Unfortunately, the company is concerned about Texas because of the number of hospitals in the state. Supposedly, the company is going to contact anyone that they feel has been compromised.  I wouldn't stick around for that.  If you know you have been to one of these hospitals in the last 5 years, you are at high risk for identity theft.

The company will probably inform you with a sense of urgency.  Rarely, do they give the right advice as how to proceed.  Here are the steps I would take:

1)     If you have the luxury to do so, set up an identity freeze on your 3 credit report files. 

This is the ultimate protection because you in a sense put a lock and key on your credit file.  You are the only person that can access your credit files.  There is a cost associate with the locking and unlocking of your files.  However, I believe that if you were involved in a security breech that you are able to lock them down for free. 

2)     Get identity theft monitoring for all 3 credit reporting agencies

This is the first line of defense against identity theft.  If someone is trying to access your credit, a good service will notify you immediately and you can take the action to stop it. 

What about these other companies who claim to protect you on every level? 

This isn't an industry with a stellar reputation.  Until a company like Lifelock can explain how they are going to figure out one Joe Smith from another or determine ahead of time that someone else is using your credit card fraudulently, I wouldn't waste the money.  After all, Lifelock's first "no.1 identity theft system" was simply to call the credit reporting agencies and put a fraud alert on your file and continue to renew it.  Eventually they were successfully sued and told to cease and desist. 

Miraculously they came up with another state of the art system.  Maybe it is the cynic in me. I find it hard to believe that it is worth the money.

Once again, if you are contacted by this company for the reason of potential identity theft, I would take action.  If you know you were at one of these hospitals in the last 5 years I would be proactive.

 
Best and Worst Buys of August

By Bob Brooks

August 11, 2014

Kiplinger’s Magazine put this together – great consumer information!

August is a great month for bargain hunters. You’ll find lots of sales on summer-related items this month as retailers try to make room for fall inventory. And as kids head back to school, there will be plenty of sales on school supplies along with back-to-school  sales tax holidays in 15 states.  Here are some of the items with a full list here. 

  • Dorm furniture—look for big-box retailers to mark down furniture for students heading off to college. For example, Walmart offered futons for as little as $89 and computers desks for $29 last year. Even if you or your child aren’t heading off to school, dorm sales are a great time to find deals on storage items and bedding, in addition to furniture.
  • Grills—department stores, home-improvement stores and big-box retailers will cut prices on grills by as much as 50% this month and September. Look for coupon codes to be released by retailers on their sites around Labor Day to score even deeper discounts.
  • Laptop computers—August is one of the best months of the year (next to November) to find deals on laptops. Look for prices on mainstream 15-inch laptops to be as low as $380. Even Apple is offering discounts for students on its Mac laptops.
  • Patio furniture—typically the best deals on patio furniture don’t show up until late August or early September. But many retailers are already discounting outdoor furnishings. So if you wait until September, the pickings might be very slim.
  • School supplies—several retailers started advertising back-to-school sales in July, but prices tend to drop even more in August. These sales are also a good opportunity to stock up on supplies for a home office.
  • Summer apparel—with summer clearance blowouts, back-to-school sales and tax-free weekends, there’s a huge opportunity to save money on warm-weather clothing. Look for discounts of at least 40% to 70%-- as well as coupons you can use to lower the price even more.

Wait a little longer to buy…

  • Apple phones and tablets—Apple typically releases new models of its iPhone and iPad in September or October. So wait until then to find deals on current models when new versions are released.
  • Fall apparel—fall fashion is just hitting the stores, which means the prices are at their highest. Steer clear of cool-weather clothing for as long as you can. The sales will begin in a few months.

To view the full article, click here.

 
Advice: Change Your Passwords

By Bob Brooks

August 8, 2014

 

It was announced that 1.2 billion sets of credentials (usernames and passwords) were stolen in what is the largest cyber-crime on record. Russian Hackers stole the information from approximately 420,000 web-sites. They also managed to obtain 500 million email addresses.

This was discovered by a Milwaukee-based firm Hold Security. According to their web-site:

“After more than seven months of research, Hold Security identified a Russian cyber gang which is currently in possession of the largest cache of stolen data. While the gang did not have a name, we dubbed it “CyberVor” (“vor” meaning “thief” in Russian).

The CyberVor gang amassed over 4.5 billion records, mostly consisting of stolen credentials. 1.2 billion of these credentials appear to be unique, belonging to over half a billion e-mail addresses. To get such an impressive number of credentials, the CyberVors robbed over 420,000 web and FTP sites.”

In a Fox News article they wrote: “there's no need to panic at this point-- Hold Security, the firm that discovered the theft, says the gang isn't in the business of stealing your bank account information. Instead, they make their money by sending out spam for bogus products like weight-loss pills.

It's really not that impactful to the individuals, and that's why they were under the radar for so long," Holden said. "They've ignored financial information almost completely."

 

Well I don’t know about you but I don’t think that I am going to sit around and just trust that they don’t want anything with my financial information. In the event that Mr. Holden’s confidence in “nothing will happen” is wrong, it would make sense to change your passwords.

In addition, it makes no sense to store credit cards on consumer based sites. Find them and remove them. Yes, it is convenient to have your credit card stored. At the same time you don’t want to make it that easy for a hacker to get a hold of your credit card information. Apparently, companies who claim their sites are secure are appearing to not be so secure at all.

If you haven’t noticed, cyber-crimes have been in the news a lot lately. The Russians are very good at this type of crime. We are in a day and age where you have to be more intentional about security and your personal information. So, don’t panic as Mr. Holden said – however, change your passwords. There is no harm in doing so.

 
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