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In today’s consumer driven society, many retail stores have become experts at separating consumers from as much of their money as possible.  Some of the tricks that they are using to entice consumers into their stores and get them to purchase much more than they intended to are very devious and created by consultants that have been paid thousands of dollars to review shopper’s habits and develop ways to squeeze every last dollar that they can from the pockets of these consumers.  The best way to fight against these practices is to be aware of them and not let these retail rip-off artists take advantage of you any more.

Retail Rip-off Number 1 – The “Price Only Good For Today” Sale
Many retailers will send out an advertisement that they have a great deal on their items, but these amazing prices are only good for one day or within a certain time period.  They will have a limited supply of the items that they have offered for sale because the real goal of the advertisement is to get consumers in the door so that the retailer can sell them more items or another item at a higher price.  If you really want the item that has been advertised, go to the store to purchase that item only and resist any attempts by a salesperson to steer you towards another item or a higher priced alternative.

Retail Rip-off Number 2 – The Delay Tactic
Some retailers that sell higher priced items or items that you can negotiate the price on will tell the consumer that they are going to check paperwork or run a price by their manager so that they can leave the consumer to stew in silence alone for long periods of time.  They know that the longer that they can keep you in the store, the more time that you will have invested for purchasing their product and the less time that you will have to comparison shop at other retail stores.  After hours of waiting, you may be so tired of the process that you will sign anything to purchase the item and stop the shopping process.

Retail Rip-off Number 3 – The Wrong Price Ploy
This one is very common in places where a person typically purchases a lot of items at once, like at grocery stores, mass merchandisers, or clothing retailers.  They will advertise a sales price for the item on the shelves but when the purchase is rung up at the register, the price rings up as much higher.  Most retailers are betting that you do not notice until you get home and then consider it too much of a hassle to return to the store to get your money back.  If you do notice the higher price while still at the store, the store will take one of two tactics; politely adjust the price at the register while apologizing or telling the customer that they cannot adjust the price at the register and send you to customer service department, which is often located in a different part of the store, to try and get the price adjusted to the right amount.

Retail Rip-off Number 4 – The “Oh, We’re Out Of It” Tactic
Some retail stores will advertise a desirable item at a low price to draw consumers into the store, but will only have very few of the items on hand, not nearly enough to satisfy the demand that they have created with the low sales price.  When a consumer comes in to buy the sold out item, the salesperson will regretfully tell them that they are all out of that particular item and will try to steer the person to a higher priced item instead.  If you complain enough, they may give you a rain check for the item that you wanted but many stores will have a disclaimer that no rain checks will be given for a sale item that is out of stock.

Retail Rip-off Number 5 – Trying To Scare You Into An Extended Warranty
Some retailers make more money by selling the extended warranty than they do selling the product so they will push hard for the consumer to purchase the warranty, even if it really isn’t feasible for the item being purchased.  In some cases, the price of the extended warranty is much more than it would actually cost to repair the product in the event that something did go wrong, but the salesperson will not tell you that.  If it seems like the salesperson is trying much too hard to sell you the extended warranty or are using words such as “costly”, “regret”, or “valuable protection”, chances are the warranty is not worth what you are paying for it.

Many people around the nation are finding themselves deeply in debt and do not know how to get themselves back on secure financial footing.  As they become more desperate for a solution to their problems, a large number of these people fall for debt elimination scams that promise to eliminate their debt and help them to start anew, but often lead to the person being deeper in debt, sued by their creditors, or even thrown in jail.  Scam artists have become quite savvy at taking advantage of people in dire financial situations, but there are some common indicators that you can look for to determine whether the programs being offered to help you eliminate your debt is a scam.

Scam 1 – Giving You A New Credit Identity
There are a number of companies out there that offer to eliminate a person’s total personal debt by giving the person a new credit identity.  This is typically accomplished by creating a fake social security number and new credit profile for the person.  The company promises that the person will now be able to apply for credit and other types of loans using the new credit profile so that the creditors will not be viewing the person’s bad credit history of the past.

The main problem with this type of scam is that it is very, very illegal.  If you are caught using a made up social security profile to obtain credit under false pretenses, it is considered to be a federal crime and you could be prosecuted and sent to jail.  Obtaining a new credit profile is not worth a felony conviction, jail time, and a potentially ruined life when you are finally released from jail.

Scam 2 – The “This Debt Is Illegal” Ploy
Some of the companies that offer debt elimination services tell their customers that some of the fees that have been charged on the person’s debt are illegal or that there is a fundamental flaw in the credit agreement on the part of the creditor that would make the entire amount of the debt void.  Some of these companies will even go so far as to tell the person that the company has agreed to discharge their debt because of the flaw or that the company has filed a lawsuit on behalf of the customer and for them to stop paying the creditor until the lawsuit has been resolved.

This technique never works because the premise that the company is basing its solution on is not true.  Even if you were able to prove beyond the shadow of a doubt that some of the fees that were charged to the account were in error, you would still owe on the rest of the balance of the account.  People that fall for this type of scam often find themselves much deeper in debt with no legal recourse at a later date or find themselves sued by the creditor for the balance of the account, all related interest payments, and hefty penalty fees for not paying their payments on time.  The person’s credit score will be destroyed and they will not be able to obtain any type of credit account for a very long period of time.

Ask any financial expert in the country what the biggest problem facing the people of this nation is today and they will say that it is the high level of personal debt that many of the people across the nation are carrying.  Since this century has begun, many people have been spending more than they can afford to live a lifestyle funded by home equity loans and credit cards.  Now that the days of easy and plentiful credit are gone and the values of many homes across the nation are plunging, people are beginning to see just how deep the financial hole that they were digging is and are having a great deal of trouble extracting themselves from that hole.

What Happened?

Over the last twenty years, the culture of the nation has switched from a culture of savers to a culture of spenders.  People were told that it was their national duty to go out and spend money because that is what caused the economy to grow and keep moving.  If you did not have the cash to spend, there were no worries because there was always some credit card company that was willing to give you a credit card so that you could spend more money now and could worry about paying it back at a later date.

Commercials for items became more prevalent over time, with companies trying to convince people that they had to have items that they really didn’t need and taught the children of the country that if they didn’t convince their parents to buy them the latest and greatest things, then they would become social outcasts among their peers.  Of course, the parents that would do anything for their loving children put these new expensive items on their credit cards so that their children would have the same items as all of their friends.  This resulted in many middle class children sporting $200 shoes, $150 jeans, and a new cell phone every several years.

Add this to people purchasing larger homes than they could afford without having to document their income or provide a down payment and college kids having credit limits of thousands of dollars on multiple credit cards and you can see why the nation is facing the problem that it is in today.  Now those payments on earlier purchases are coming due, people are unable to take equity out of their homes to pay off their debts, and they cannot support their current lifestyle on the money that they are making at their job.  This is driving people deeper and deeper into debt as interest payments and penalty fees continue to increase the amount that is owed.

The housing crisis has caused many problems for personal finances as well.  Houses are losing their value quickly because of the housing bubble that inflated prices beyond all reason so people that would like to purchase a home cannot afford to buy them at the current prices.  People that need to sell their homes because they cannot afford them cannot find buyers willing to pay a high enough price to cover the amount of money the owners owe on or have invested into the home so they are stuck in a home that they cannot afford.

The problem is going to become worse before it gets better, as more and more people fall victim to the forces of the economy that are against them.  Over time, the economy will stabilize and reason will return to the financial sector of the country, but not before the many excesses of the current decade have been shed and people that have spent more than they could afford either make the sacrifices that are required for them to regain their financial footing or they declare bankruptcy so that they can begin again new, but with a serious disadvantage.  The problems are not too big to surmount, but it will take time and the cooperation of the entire nation.

One of the easiest and fastest ways to lower your interest rates and keep more of your own money in your pocket is to correct any mistakes that can be found on your credit report.  It is estimated that as many as 25% of the credit reports generated by the three major credit card bureaus contain some type of mistake that could have a negative effect on your credit score.  By having these mistakes fixed, you can raise your credit score which in turn will lower your interest rates for credit cards and other types of loan products.

Step One – Check Your Credit Reports
It is very important that you check your credit reports from the three major credit bureaus on a regular basis to look for any mistakes that may have been made on your credit report.  Each of the three credit reports can be obtained for free once per year at annualcreditreport.com per a law passed by the United States Government to protect consumers from fraudulent information being placed on their credit reports.  Reviewing the credit reports on a regular basis will help you find mistakes quickly while they are still easily corrected.

Step Two – Nicely Ask To Have Mistaken Items Reviewed And Corrected
Credit reporting bureaus are required by law to investigate any claims of mistaken items entered onto a credit report if the person requests that an entry be validated.  Calling and harassing the person that you need to help you will only make them less inclined to assist you and may make it even harder to get your credit report corrected.  Talk to the person that is trying to help you in a calm, clear manner and let them know exactly why you believe that the information incorrect and what proof you may have to validate your claim.

Step Three – Keep A Log Of Who You Talked To And When
Although many mistakes that are commonly found on credit reports can be taken care of quickly and easily, in some cases it will take multiple calls to multiple people to have the situation corrected.  It is very important for you to keep a log of who you talked to at what company while trying to take care of the issue so that further down the road you will have an accurate account of the steps you have taken to attempt to correct your credit report.  This will also allow you to sound intelligent as you move up the ranks of the company from the customer service reps to the managers because you will be able to tell them which employees from their company you have already spoken to.

Step Four – Check To See If You Have Any Independent Verification Of Your Claim
Most of the cases of incorrect information being placed on the credit report are a result of a company claiming that they never received a payment that has been paid.  In these cases, you may be able to prove that you have paid the company the money that was owed by producing a bank statement or a check receipt indicating when the company was paid and when the money was taken out of your account.  If an account for you had been opened for an address that you have never lived at, residency documents can prove that you had never lived at that address and the account is fraudulent.

Step Five – Prepare To Argue Your Case In Court
If all other reasonable avenues of dialog with the company have failed, you may need to prepare your case to be taken to court.  This is where records and detailed logs become helpful as you will be able to show the judge that you have done everything possible to have the issue resolved through other means and that you are truly dedicated to having the issue resolved.  For many cases, the company will be willing to settle and fix your account rather than having to prove their case in court, especially when they are the ones that are wrong.

According to a recent report the majority of credit card holders in the UK who have rewards based credit cards are more interested in the type and level of rewards that they receive from their credit card than in the rate of interest and other fees that are charged on the card. It is estimated that around 50% of rewards based cardholders are more interested in what they can earn on the card rather than on how much interest they are likely to pay.

This could be because many of those with rewards based credit cards tend to clear the balance within the interest free period anyway, which means that the APR charged will not affect them, as they are able to avoid paying interest charges. Those that plan to spread repayments on their credit card balance should look at other options, such as a 0% purchase credit card, as otherwise the interest that they pay will far outweigh the rewards that they earn on the card.

One industry official stated: "Credit card rewards programmes clearly remain an important element in attracting and retaining card customers. However, consumers need to ensure they choose the right programme to suit their spending habits and lifestyle. Issuers need to understand that consumers want more control in redemption but the trade-off is that rewards programmes do not have to be as rich in benefits as they have been. I think we’re entering a new era for rewards programmes in the UK and many of the traditional propositions need radical review."

There are many different types of rewards based credit cards on the market, and consumers are urged to find the one that best meets their needs, and offers rewards that they will use and find valuable.

Risk is something that everyone will experience when trying to plan for their financial future.  Many things that have to do with finances are uncertain from year to year, making it difficult for a person to predict how events will affect their financial stability.  Sometimes, circumstances beyond the person’s control can wreak havoc on their financial planning, such as an illness or death in the family or the loss of a well paying job, but in most cases, predictable events have the greatest effect on the person’s financial situation.  By reviewing these predictable events and adjusting your finances before these events come into play, you can effectively manage the risks you are taking with your financial future.

Now, not all risk is a bad thing when planning for your financial future.  Taking some risks with your finances can help them to grow more quickly, such as purchasing good stocks in the stock market, but the trick is knowing when to hold on to the risky assets and when to reduce the risk to prevent the devastation of your account balances.  Managing the risks that you are taking can be difficult and many people will make a few mistakes before they get the hang of managing their risk effectively.

How Much Risk Should You Be Exposed To?

When planning for your financial future, the amount of risk you should be exposing yourself too should be directly related to your age at the time.  Workers that are younger can accept more risk into their financial planning because if the deal goes bad, they will have more time to replenish their finances before retirement.  As a person becomes older, the level of risk that they are exposed to should be reduced until there is virtually no risk to their finances in their retirement years.

If a mistake is made and the person finds themselves facing a large loss, the answer is not to take on more risk to try to recoup their losses quickly.  People that choose to go this route almost always find themselves facing significantly larger losses than they began with.  The correct reaction would be to chalk up your losses as a learning experience and reduce the amount of risk that your finances are exposed to until you have rebuilt your accounts to their previous levels. 

In order to manage your financial risk successfully, you must do your research before making any major financial decisions.  Do not buy a stock without researching the company simply because someone has told you that the stock is hot and you will obtain a sizable return on your investment.  Stocks that rise fast can also fall fast, taking your financial stability with it if you have invested too much of your money in the company.  Take the time to weight the pros and cons of each financial decision and that way, you will never really be surprised by the outcome.

Refinancing your home is an important decision that can have many negative consequences if the timing is not right.  If you are considering a refinance, it is very important that you take some items into consideration before making a final decision on whether to refinance or not.  Refinancing a home loan without taking into consideration whether the timing is right can cost you thousands of dollars in penalty fees and interest payments over the life of the mortgage loan.

1. The Reason For Refinancing The Loan
Refinancing a home loan for certain reasons is always a bad idea and you should avoid falling into these traps at all costs.  A home loan should never be refinanced to pay for an expensive vacation or to pay off credit card debt so that you can charge more items to your credit cards.  Using the equity in your home in this manner is a phenomenal waste of money and if you cannot pay for these items in any other way, it is a good bet that you should not be going on the vacation or purchasing any more items that are not absolutely necessary.

2.  How Interest Rates Are Moving
Right now, mortgage interest rates are steadily rising in all parts of the country and the type of mortgage loan product that you currently have will determine what steps you should take next.  If your current mortgage loan is a traditional, fixed rate loan then it may be cheaper for you to stay in your current mortgage to prevent your mortgage payments from increasing due to the higher interest rates.  However, if you took out an adjustable rate mortgage loan to pay for your home, it may be best to try and refinance into a fixed rate mortgage to lock in the current interest rate and mortgage payment before the rates rise further.

3.  Length Of Time You Will Be In The Home
A home loan should only be refinanced if you are planning on staying in your home for at least five more years.  Any length of time shorter than that and you will find yourself paying the mortgage company hefty prepayment penalties for paying off the loan early, often costing thousands of dollars.  The prepayment penalties required for getting out of the loan will take away from the amount of money you will have for placing a down payment on a new home, not to mention the fact that you will be giving a great deal of money to the mortgage company for nothing.

By thinking about these items before you decide whether or not to refinance your home loan, you will reduce the risk of refinancing at a bad time and losing thousands of dollars on the deal.

Although credit reports have been around for a very long time, many people still do not understand what their credit report contains and how it will affect their lives.  Because of this lack of understanding, many people dismiss the importance of their credit report and neglect to review it for inaccuracies or negative information.  The truth is that a credit report is one of the most important financial instruments used today and it can have a bigger impact on your financial future than any other item in your life.

What Is On A Credit Report?

Your credit report is a very important part of your financial future because this is the information that most creditors look at when determining whether you are credit worthy or not.  Your credit report contains a history of every account that you have ever opened and the status of those accounts, whether they are current or have had late and missed payments in the past.  Your credit report also details any credit obligations that you have defaulted on in the last 7 to 10 years, with balance amounts and the length of time since the account has received a payment listed beneath the name and address of the creditor.

Your credit report details your credit history which is used to determine your credit score.  If there are numerous defaults and late payments listed on your credit report, then your credit score will be decreased for every piece of negative information that is reported to the credit bureaus to be listed on your credit report.  Even having a creditor pull your credit report to determine your credit worthiness can decrease your credit score by 5 points per occurrence.

How Does This Affect Me?

If there is a lot of negative information listed on your credit report, it could cause a number of problems in different areas of your life.  Creditors, such as mortgage lenders, credit card companies, and car dealerships, may deny you credit because you are considered a credit risk and they do not know if you will pay back any loan that they extend to you.  Obtaining a credit card from a retail store may be difficult as well, as they also determine whether they should give you credit based on your credit report and credit score.

Credit reports are used in other areas of your life as well.  Some employment positions use your credit report as an indication of your level of personal responsibility and may be reluctant to hire someone that has a bad credit report.  People have also been turned down for apartment rentals because of a bad credit report indicating to a landlord that you have trouble paying your creditors and may not pay your rental payments on time.  Your credit report is very important to your economic future because it can affect so many significant areas of your life.

This week’s carnival of personal finance is at YouNeedABudget.com.  Our article about 3 Credit Card Tricks that Keep More Money In Your Pocket has been included in the carnival, as well as a number of other great personal finance readers.  Here are some that I liked:

• American Consumer News 5 Untruths About Your Credit Report
• Money Answer Guy gives 5 Mistakes to Avoid When Buying a Car From a Dealership.
• DJ from The Family Wallet presents Turn Closet Cleaning into Cash.
• AJC takes issue with paying your mortgage off as quickly as you can.
• 7 Millionaires … In Training! thinks you need to think again if you’re of the opinion that 100k means you’re ‘rich’. 

Are you interested in getting out of debt and stopping the monthly payments you must make to your creditors?  If so, you are in the company of about 75% of the population that has found themselves with more debt than they are comfortable with.  There are certain steps that can be taken to eliminate the debt that you have and prevent you from accumulating more, which is the only way to truly realize debt freedom.

Step 1 – Changing The Way You Think About Debt
In recent years, debt has become an acceptable way to get the things that you want quickly, instead of saving up for the items over time as our parents did and only purchasing the things that you can afford.  This has translated into the highest level of consumer debt in history and millions of people across the nation filing for bankruptcy protection from crushing debt.  In order to become debt free, you must begin to think of debt as something to be avoided at all cost and conduct your life accordingly.

Step 2 – Stop Digging The Hole That You Are In
The biggest step in eliminating your debt is to stop creating more debt.  You will never eliminate the pile of debt you have accumulated if you are adding to the total each month by purchasing more items.  If you have credit cards, put them away somewhere that they are not easily accessible and stay away from the stores where you know that you always purchase more than you intended to.

Step 3 – Make All Of Your Payments On Time
Nothing increases debt faster than penalty fees on an account and you are not receiving any benefits from the extra money that you are paying to the companies.  Penalty fees assessed against an account for paying the bill late can range from $5 for the cable bill to $39 for a credit card bill.  If you are being assessed numerous penalty fees on several different accounts each year, you could end up paying thousands of dollars extra to these companies in a very short period of time.

Step 4 – Cut Out The Convenience Fees
There are many different things that people do without thinking that could be classified as a “convenience fee”, such as the $2.50 paid for the convenience of using an ATM that is not branded to your bank or the $4 paid for the convenience of purchasing a coffee instead of brewing your own at home.  Over time, these convenience fees can add up to thousands of dollars that could have been saved by taking a few minutes out of your busy schedule to do things for yourself or to plan ahead for the things that you will need throughout your day.

Step 5 – Save Money For Emergency Expenses
One of the biggest reasons that people fall into debt and remain in debt is that they spend all of the money that they make and do not have a cushion to use in the event of an emergency.  If you have no savings when an emergency financial situation arises, you are much more likely to charge the amount to your credit card, where you will pay up to 30% interest, or you will take out a payday loan, which charges 390% interest packaged to look like a fee and can trap you in a cycle of debt that may take months to release yourself from.  By placing some money aside in a savings account, you can ensure that you will not have to use either of these options when a financial emergency arises.