Are Department Store Credit Cards a Good Idea?

Image by MoneyBlogNewz via FlickrWhenever I  go out shopping, when it's time to pay I get the question from the cashier, "Would you like to open up a store credit card?" It's happening at more and more stores. Many stores bottom line depends on customers using store credit. Clerks are under pressure to push as many new cards as possible. There are major incentives to store employees to do this. Department store profits, from their own credit cards, amount to 30 to 40 percent of net income. 

It would be easy to turn down the request for the card but it usually comes with a generous discount for that purchase. It makes you stop and think a moment. Lots of people justify the new card by this discount and vow to pay it off immediately. The trouble is, and the stores know it, the majority do not pay it off. The stores know a percentage of its new card holders will go back to the store and continue to charge more.

Before opening that new credit card consider 5 things:

1. Store credit cards usually carry a high interest rate. You intend to pay it off but you don't. So you are doubly dumb by using the card and by paying higher than normal interest charges. Using one low interest card or your debit card for all credit purchases is a much better way to control your spending. 

2. Store cards encourage you to not shop around. The store card is a magnet to get you back into the same store. You are now limited to where you can shop. You feel obligated to come back to the same store over and over again. With a general purpose card you can shop at stores offering the best prices, you're not trapped at only one store.

3. You don't need a store card. Why start a habit of getting a store card. Are you going to get a card at every store you shop at. Just because you shop at a particular store sometimes, doesn't mean you need a card for there. A single credit card is best for all your shopping needs.

4. Are you really getting a great initial discount. Is ten percent really enough of a discount on a $100 purchase. Could you have gotten a better deal by just shopping around a little more and maybe getting a 20 percent discount on a sale, avoiding the credit card deal altogether. 

5. Opening a credit card should not be an impulse decision. Is opening a new credit card at the spur of the moment a responsible thing to do? Should you give it a little more thought than the 2 seconds it takes to respond to the offer. Are you being pressured at the cash register to take the card? It's no accident that it's done in that fashion. You are under pressure when you want to say no. But just say yes to be nice and not hold up the line of people staring at you.

Is there any reasons to take out a store credit card?

If you are making a large purchase at a home improvement store or you are buying a pricey electronic toy. If you are saving at least $100 it may be a good idea and worth taking on the new card. Only if you do find the cash to pay it off and close the account as soon as possible.

3 Alternatives to Rising Prepaid College Plans

Image via WikipediaThe costs of a college education continues to rise every year. Many parents fear that college tuition will someday be unaffordable. In Florida, we have two options that the state provides to pay for future college costs. We have a prepaid college plan and a 529 plan.

Over the last few year the costs of the prepaid plan have skyrocketed. Now to enroll in the plan it will cost you $49,293 for four years tuition at a Florida public university. That comes to $298 per month until October before the child graduates from high school.

Florida Prepaid administrators blame it on a law that allows public universities to make hefty increases in tuition and other fees. The universities blame it on the economy.

To put it in perspective, I purchased this plan for my 11 year old when she was born and it only costs me $61.00 per month. So you can see why the current fees are so crazy.

What to do?

There are always alternatives. The safety of the prepaid plan versus the market risk of the 529 are features that must weighed by the parents. The time span for accomplishing the goal is a big benefit. But a few ideas below will get you started.

1. Take half of the $300 and invest it in a tax-free 529 College Savings Plan. The $150 put away ever month, should after 17, grow to $54,00 at an interest rate of 6%. But their is always stock market risk to consider.

2. A cheaper Prepaid Plan for enrolling in a 2 year community college plan would only cost you $48.00 per month. This would get your child halfway there on a college education. You could either borrow the rest or work during the the first to years of college and save the money for the last 2 years of tuition.

3. You could do a combination of both plans . Saving in a 509 college plan and paying for one of the cheaper prepaid programs.

The time will be here before you know it. Saving for college comes down to putting away a little money each month. It's the consistency of saving regularly and the accumulation over time that will result in the goal.

3 Qualities of A Successful Insurance Salesman

Image by Kansas Sebastian via FlickrThis week I went over to see my insurance agent. I usually stop in so we can go over a few of my policies. What's great about my insurance agent is that he makes you feel like you're his only customer. It's customer service like that, which makes people feel, they are being served and not just sold. My insurance agent is very successful not for just recommending the right products but because he cares about his customers.

What makes a successful sales agent?

1. Integrity.
Our insurance agents have to be trust worthy. They must say what they mean and mean what they say. They hold our personal information and we trust them with their knowledge of products. We count on their knowledge and recommendations. Sometimes our future rests on their guidance.

2. Caring
A successful insurance salesman will care for their clients. They know it is the only way they will get returning customers. If a client knows they can talk to their agent at anytime and get results, the insurance agent will have a customer for life.

3. Being a People Person.
The insurance business has always been a person to person business. The customer cannot buy insurance unless they talk to a person. This means you have to be knowledgeable, provide solutions, and just help people.

If you have a great insurance sales agent be sure to recommend them to your friends and family, they will appreciate the business.

If you would like to read some great stories from successful sales agents in the life insurance industry, why not visit the American Income Life official blog

Veterans Day 2011 - Just Don't Thank a Vet Do Something

Image via WikipediaVeterans Day is the day we remember all the men and women who served in the armed forces. The millions and millions of people who served our country over the centuries gave their blood sweat and tears to preserve our freedom. Some went to battle and never returned. The ones who returned, we owe a debt of gratitude and more.

We observe Veterans Day only one day per year but a lot of them need us all throughout the year. Telling a Vet "Thank You" on this day is good, but it's not enough. What are some things we can do throughout the year to help them.

1. Learn about the issues that Vets are concerned about.
Read and investigate what problems and issues effect Vets in this country. Look for Veteran events in your community and find out what you can do to help. Go to VA.Org, the website for the U.S. Department of Veteran Affairs and see what issues are concerning today's veterans.

2. Veterans that are physically wounded from war, see how you can assist them.
Many veterans have been injured from battle. Visit the VA hospital and see their condition. Ask how you can help. Volunteer at the hospital or other facilities that care for vets. Find organizations that take care of vets special needs and write a generous check or volunteer there.

3. Hire a vet at your business.
Vets need to work just like anyone. Go out of your way and make it your concern to help them get a job. Seek out organizations that train vets new job skills and make it known you want to hire them when they are ready.

4. Some vets are homeless.
This is a terrible situation to have our vets homeless after serving their country. Check out your local agencies that help homeless vets with food and shelter. Veterans have a high rate of homelessness. Donate to local shelters who cater to the veterans. You have to help.

It's time to get serious with issues our vets have to go through everyday. There are many ways to help. Pick one and devote all you can to it.

Christmas Tree Tax - A Pointless, Misuse of Government

Image by K!T via FlickrThe Christmas tree tax will not be implemented this holiday season because of consumer outrage. Is the Department of Agriculture asleep at the wheel? This tax is a total PR blunder for the Obama administration. Just saying the word tax can get you in trouble. The truth is the Department of Agriculture was going to implement a 15 cent tax on every fresh cut Christmas tree. It's not the amount that is the concern. It's the how, why, and who is the real problem.

Who's to blame for the tax?

The Department of Agriculture's new Christmas Tree Promotion Board was set up at the request of the Christmas tree sellers. They want the industry promoted and want the growers to pay for it. The purpose of the Board is to run a “program of promotion, research, evaluation, and information designed to strengthen the Christmas tree industry’s position in the marketplace”. It's only for sellers who sell more than 500 tree per year.

What's the big deal, it's only 15 cents?

It really is insignificant for a once per year purchase. But that doesn't mean it makes sense or is right. The fact that much of the industry practically begged the government to impose the tax on them doesn't help either. The American Spectator reports:

"If they want to fund a promotional campaign for their product, they should do it themselves, without involving the USDA. "

"That goes for all similar checkoff taxes, such as the ones for beef, milk, soybeans, etc. There's no reason the federal government should be involved in shaping consumer preferences. The Christmas Tree Tax has done something useful in reminding us that the Commodity Promotion, Research, and Information Act of 1996 is a dumb law."

What if someone doesn't pay?

You go to jail. When you don't pay a federal tax you go to jail.

"What are you in for pal? I didn't pay my Christmas Tree Tax."

Whats wrong with the tax from a constitutional point of view?

• Could it violate the Free Exercise of Religion Clause because it effects Christians.
• The Equal Protection Clause for the same reason.
• Does the government have the right to tax local agriculture products?
• Is the Interstate Commerce Clause effected when the trees stay in state?
• Doesn't the Congress have the power to regulate taxes and not the USDA?

Here is an example of why people have a problem with government. Should government be involved with promoting Christmas tree sales. What happened to separation of church and state. Christmas is clearly a religious holiday or did the ACLU forget?

The administration should squash this issue right away and put the promotion of Christmas trees back onto the industry, where it belongs. This is only going to make a bad issue for President Obama's  opponents to use against him.

Consumer Outrage Makes Bank Transfer Day a Big Success

Banking customers from all over the country took their money out of the big mega banks and open new accounts in their local credit union. This is occurring because of the national movement called Bank Transfer Day, started by 27 year old Kristen Christian. It's a grassroots protest started on Facebook on October 4th in response to Bank of America's planned $5 debit fee increase. 

The Credit Union National Association has stated their usual new accounts per month averaged 80,000 but during October new accounts topped 650,000. 

According to Tropical Financial Credit Union marketing vice president Amy McGraw, "It's an opportunity for us to educate people about what a credit union is because 60 percent of consumers don't know." McGraw reports in this credit union alone new members opening accounts almost doubled.

Credit unions are finally getting the broad respect they deserve. The big banks are starting to see that lousy customer service, nickel and diming the customer, and treating the customer poorly will drive customers away to to banks that treat them with respect. 

How much of an effect this will take on the big banks we will eventually find out. Even if it only effects them 1%, thats still billions they lose over time. 

Bank Transfer Day was a big success because it gave the mega banks a public spanking for the way they mistreat their customers. Maybe they will learn something from it. Also, we should all thank Kristen Christian for efforts. Why not go over to her facebook page and write a note of appreciation.

Go to Bank Transfer Day at Facebook

Go to Credit Union Look-up for a credit union near you.