The Low-Maintenance Preppers

donna freedman photo (smaller)By Donna Freedman

I just went shopping in our basement, bringing up several items that were missing in our upstairs cupboards: catsup and ibuprofen (both from Costco), a jar of homemade jam, a can of chicken soup. It always tickles me to see how much we’ve got stored down there, from the kale we grew and dried to bedpillow-sized sacks of dried beans.

Since I live in a really seismic state, the stockpile also makes me feel safe and prepared. Well, as prepared as one can ever be for another Good Friday Earthquake. (And yes, I’ve thought about what might happen if the house collapsed into the basement: Anger, panic and finally rueful laughter.) That’s probably why an Everyday Cheapskate post called “Don’t be scared, be prepared” resonated so much and got me thinking, once again, about food preparedness. The post’s author, Mary Hunt (who also runs the Debt-Proof Living site and writes lots of books), noted that “as a nation we have little to no warehousing backup in the event of a supply shortage.” That’s because our stores tend to get daily shipments vs. having large stockpiles in the famous “back room.” Hunt talked with a Costco exec who figures that even in that emporium of excess the shelves would be emptied “within three to five days” in the event of a disruption in the food distribution system. Is such a disruption possible? You bet. Is it likely? Who knows? What if….? We think about these things in places like Alaska or Hawaii, where the majority of food gets flown or barged in. The difference between the 49th and 50th states, though, is that Hawaiians can raise quite a bit of grub (and livestock) in their own back yards. Alaskans really have to work at it, and there are some things we just can’t grow without serious greenhouse use.

Last year I attended a press open house at the National Weather Service, during which a representative for the National Tsunami Warning Center opined that another well-placed, high-Richter earthquake could put a world of hurt on Alaskan pantries. That’s because it might spawn monster waves that would wipe out the shipping areas in Washington and California – from which come most of the barges that supply Alaskan stores. So yep, I’ve been thinking along those lines. So has my boyfriend, who actually experienced the Good Friday Earthquake and who also spent his formative years in villages where the Bureau of Indian Affairs shipped food to teachers once a year. The upside of that: His parents, both educators, saved a lot of money because there was simply nowhere to spend it. The downside: You got food only once a year and filled in with seal, moose, fish or whatever else you could get your hands on. Is it any wonder that we buy flour by the 50-pound bag? Or that we have probably 40 pounds of dried beans and 30 pounds of rice stashed downstairs? Or jugs of vinegar and olive oil and loads of canned fruit, tomatoes and vegetables? We’ve even bought chickens on sale and pressure-canned them in jars, in order to have a shelf-stable protein that doesn’t require cooking. When someone gave us salmon that went into jars, too. Prudent or paranoid?

My former MSN Money colleague Liz Weston has long been a proponent of a well-stocked larder, calling it “the emergency fund you can eat.” I always had a fairly deep pantry even in my one-bedroom Seattle apartment, all of it bought on sale and/or with coupons. We also make our own yogurt, wine and beer, and preserve such vegetables and fruits as we can grow or glean. Maybe you, like me, consider this prudent rather than paranoid. If so, here are a few tips for low-maintenance food preparedness: Bulk buys. Not everyone can (or wants to) belong to Costco. But some grocery stores have bulk-bin items that can be noticeably cheaper than the stuff in the regular aisles. Even here in Anchorage I can buy oatmeal for $1.09 per pound vs. $5.99 for the 42-ounce box of Quaker over in the cereal aisle; the price dropped to 99 cents in January so I bought about 20 pounds, storing it in gallon-sized glass jars in the basement. When un-degermed cornmeal went on sale for about 59 cents a pound, I bought a year’s worth and stored it in the freezer; currently I’m working my way through the last bag and keeping an eye out for sales. Manager’s specials. I routinely check the scratch-and-dent bin at the back of the store and have gotten some decent prices on slightly marred cans or boxes/bags of food that have had corners torn or crushed. A fair amount of the yogurt I enjoy is made from close-dated milk that’s bought at 50 percent off; I freeze it if I can’t use it quickly enough. Then there’s the “used meat” section, as my boyfriend inelegantly calls it; these sell-it-now cuts are often tremendously discounted. Just use them right away or freeze them. More how-tos Loss leaders. If something you eat a lot of is advertised cheaply, get as many as you’re allowed. Simple enough. Learn to preserve food. We can’t all be Martha Stewart, but how hard is it to freeze produce that you’ve grown or gotten at rock-bottom prices during the height of summer?

The National Center for Home Food Preservation is a tremendous resource that will walk you throw the canning, drying, freezing, jamming and jerkying of flora and fauna. We canned fish that someone gave us, chickens we bought on sale, carrots we grew, jam made from home-grown or gleaned fruit, and jars of pickled red cabbage so tasty that we’re doubling our output this summer. Hit the bakery outlet. A few extra discounted loaves or some cheap tortillas in the freezer can go a long way toward padding emergency foods like peanut butter, canned soup and refried beans. Preserve commercially grown food. Once blueberries hit $2 a pound at Costco, we bought and froze them. When I found mandarin oranges for an unbelievable $3.88 per bag, you bet I wanted to preserve that price – you just don’t see citrus that cheap very often up here. Those of you who live near farms may be able to score good deals if you’re willing to buy more than a couple of pounds at a time. At times you may find low prices on local green beans or tomatoes even at the supermarket. Shop around. Watch for coupon specials. Last fall the Fred Meyer chain offered 20 percent off the total bill if you purchased $50, $100 or $150 in a single trip. We bought things like house-brand teabags, on-sale canned tomatoes, crackers (a frequent menu item at Café Awesome) and a few Christmas gifts (but not from the “gift” aisle, aka “the marked-up stuff aisle”). We’re still using up those groceries. Don’t just hoard it Speaking of which: This stuff won’t do you any good if it sticks around indefinitely. Write use-by dates on the fronts of cans and boxes (not on the tops!) with a black marker, and make it a point to use these items regularly. You can refill as you find sales and specials. A great deal of peace of mind comes with knowing you’re stocked up, especially if you’ve done it frugally. To paraphrase Thoreau, the food saves you money twice: once in the inexpensive outlay and again when you don’t find yourself running to the supermarket for a can of tomatoes (because do you ever really get out of the store with just that one item?) or, worse, ordering out because there’s nothing to eat. If the big one hits in our lifetime, one of the things we won’t have to worry about is how we’ll eat. Relatives who live nearby will also be taken care of if necessary; they’re welcome to bring sleeping bags and camp out here. There’s a certain amount of comfort in knowing that we’d all have enough to eat. And while we’re not as prepared as the Mormons or the preppers, we probably won’t have to buy teabags for at least another six months.

This article originally appeared at DonnaFreedman.com

Donna Freedman won regional and national prizes during an 18-year newspaper career, and earned a college degree in midlife without taking out student loans. She now writes the Frugal Nation website for MSN Money, blogs at DonnaFreedman.com, and freelances for national magazines.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

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 March Madness
How It Can Help Prioritize Your Finances

Jana CastanonBy Jana Castanon

Even if you’re not a college basketball enthusiast you have heard about March Madness. Avid fans research team’s stats and players capability before filling out their brackets. They examine strengths and weaknesses and rank their teams accordingly. You can look at your personal finances in the same way.  There are areas where you are doing well and other areas where you might want to focus.

Sometimes finances can be overwhelming and you don’t know where to begin. Here is your own Personal Finance Championship Brackets to help you prioritize 8 areas of personal finance to help you get started. As you move through the brackets choose between the options in the area that you feel you need more improvement in. At the end you will know where you need to focus to get your financial situation in a better place. Once that is under control take a look at the previous bracket and start working on those items. Before you know it you will have all 8 areas of your finances working together to help you achieve your goals.

Long Term Savings – Start small think big. What are some of your long term goals? College education for your kids? Homeownership? Don’t let the prospect of the amount you need to save overwhelm you and prevent you from doing it.  Through the magic of compound interest, even depositing small amounts over a period of time can add up. So next time you get that pay raise or that tax return put it in an account designated for your long term goal. You might be surprised at how fast you can get there.

Manage Debt – Take the time to sit down and add up all your debt obligations. Separate them out into categories: mortgage debt, installment debt (something you are paying off – student loan), revolving debt (credit cards), and other debt (payday loans, personal loans, etc.). Did that number surprise you? The best way to manage your debt is to create a spending plan and allocate any additional money to debt repayment. Apply that amount to the account with the lowest balance, or highest interest rate, and when that balance is paid off apply it to the next account. If there is no additional income you might need to prioritize your debt. Your house payment should be the first thing you pay, followed by your installment debt – credit cards and other debt are at the bottom of the list.

Improve Credit Score – A low credit score can cost you hundreds of dollars. Not only will you be paying a higher rate of interest on loans and credit cards, many services and insurance companies look at your credit report to determine your premiums or deposits. You might even get denied housing if your credit is poor. But the good thing about your credit score is what you are doing today has more influence on your score than what you did in the past.  So, most importantly, pay your bills on time and keep your balances low and your score is bound to go up.

Retirement/401K -   Regardless of your age you need to be planning for retirement. Start by figuring out what you want your retirement to look like and how much it will cost to maintain that lifestyle.  Once a year, you receive a statement indicating what your expected Social Security benefits will be. However, be cautious when planning your whole retirement on that amount as some experts predict this benefit won’t be around forever. If possible, consult a financial planner to help manage your plan. They can evaluate your situation and guide you to meet your financial goals.

Monthly Spending Plan – That is a fancy way of saying “budget”.  However, “budget” implies that you are either on it or off it. Having a spending plan is something that is changing as your life changes.  Start by tracking your spending for a month. After that you will have a good idea where you are spending your money. Then, take your total household income and allocate it to a specific expense. Make sure you are setting money aside for your irregular expenses like car repair, gifts, clothes, etc. There is only so much money so you need to prioritize your expenses. What are the things you have to pay, (mortgage, food, insurance, etc.) and what are the things lower on the list that you can cut back on, (cable, cell phone extras, clothes)? If you are having a hard time making it balance there are only two things you can do – increase income or decrease expenses.

Savvy Consumer – Being a savvy consumer means knowing what you don’t know. For example, when buying a car, researching the best vehicle that meets your needs and shopping for the best price and loan. It also means being aware of people who are trying to take advantage of you and taking precautions to protect yourself from identity theft and scams.

Frugal/Smart Spender – To be a frugal spender you need to know what you have to spend and find the best way to get it at the lowest cost. That might be shopping sales, cutting coupons, or knowing what restaurants the kids eat free at. There are many apps and websites that offer discounts or can assist you in comparison shopping. But the best thing that you can do is shop with a purpose. For example, when you go grocery shopping know what you have at home that you can use and shop with a list.

Emergency Savings – Most experts agree that you should have 6 months of living expenses saved up for an emergency. Don’t let that dollar amount intimidate you. Start by saving your change and gradually build on that. Don’t spend your change; only use dollars so you can have more change. Transfer a realistic amount into your savings account monthly if it is only $20 and if you don’t withdrawal it that amount will add up over time. Don’t have access to your savings account via online or ATM to make it difficult for you to access those funds. You will be surprised how fast your savings can grow if you add to it a little at a time.

Jana Castanon is Media Relations/Outreach Manager for Apprisen. Apprisen is a member of the National Foundation for Credit Counseling. To schedule an appointment with a certified financial professional call 800.355.2227, or visit Apprisen’s website at www.apprisen.com.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

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 Retirement Planning?
It’s Not As Far Off As You Think

GailCunninghamBy Gail Cunningham

Do we really need to worry about retirement in our twenties?

The NFCC and USA Today have partnered to give you the opportunity to ask NFCC Certified Consumer Credit Counselors and Educators everything you’ve ever wanted to know about credit. USA TODAY will host weekly Twitter chats every Wednesday from 3:00-3:30 pm ET with a dedicated NFCC Certified Consumer Credit Counselor participating in each chat. The last topic in the series will be:

March 19: Retirement Planning: What you should be doing in your twenties to prepare for your sixties and beyond. With Sheri Stuart of Springboard Nonprofit Consumer Credit Management Inc., tweeting from @CreditDotOrg.

You can submit questions ahead of time by e-mailing USA Today reporter Hadley Malcolm at hmalcolm@usatoday.com or connecting with her on Twitter at @hadleypdxdc. If you’d like your question to remain anonymous, please say so in your e-mail. We encourage you to log into Twitter at 3 pm each Wednesday to follow the chats live by using the #millennialmoney hashtag.

Gail Cunningham is Vice President of  Public Relations with the NFCC.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

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 Foreign Money Transfers
Just Got Safer

alderman_color_1By Jason Alderman

If you’re among the millions of U.S. residents who each year send tens of billions of dollars to family, friends, or foreign businesses overseas, here’s good news: The Consumer Financial Protection Bureau (CFPB) recently instituted new rules governing international electronic money transfers to better protect consumers against hidden fees and improve dispute resolution policies.

The CFPB was given oversight over international money transfers as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Up until then, federal consumer protection rules did not apply to most “remittance transfers,” whose exchange rates, processing fees, and taxes often vary widely and can be hard to decipher.

Here’s an overview of the new remittance transfer rules:

In general, most foreign money transfers for more than $15 sent by money transmitters (like Western Union and MoneyGram), banks, credit unions, and other financial services companies that consistently send more than 100 international money transfers each year are covered under the new regulations.

These institutions are now required to fully disclose their fees, taxes, and foreign currency exchange rates so consumers will have a clearer picture of the true cost of transactions and be able to more easily comparison shop. (Although, as explained below, you still need to do a bit of math to make apples-to-apples comparisons.)

Also, once a transaction has been concluded, the company now must provide a receipt that repeats this same information, as well as shows the date when the money will arrive and directions for reporting any problems with the transfer.

The new regulations include several additional protections:

  • Consumers are allowed 30 minutes (and sometimes longer) to cancel a transfer after they’ve paid — in which case, they’re entitled to a full refund. (However, if the recipient has already picked up the funds or had them deposited into their account before 30 minutes have passed, the refund guarantee is voided.)
  • If the wire was scheduled in advance, you can cancel it up to three business days before the transmission and receive a full refund.
  • Senders have 180 days to report any errors they later uncover. By law, the company must investigate such reports within 90 days. For certain errors (e.g., if the money never arrived), you can ask for a full refund or have the money resent.

While the new regulations are certainly welcome, they don’t go far enough when it comes to helping customers compare the net costs of making money transfers at different vendors. You’ll still need to carefully weigh each company’s exchange rate (which fluctuates frequently) and fees (which vary depending on how much you’re sending, how quickly you want the money to arrive and the funding method) to determine which one provides the best value — the so-called “effective exchange rate.”

One company may have a more favorable exchange rate than another but charge higher fees. Depending on how much money you’re trying to transfer and by what method, however, the balance could shift over which transaction is more cost-effective.

To calculate various effective exchange rates, add the amount you’re sending (in U.S. dollars) plus all fees; then divide that into the amount of foreign currency to be delivered. The company with the highest result provides the best value.

For example, say you want to send $200 to Mexico: Company A charges $10 in fees and has an exchange rate of 12.69 pesos per $1, while Company B charges $7 in fees and has a 12.57 exchange rate. Their effective exchange rates are 12.09 and 12.14, respectively, making Company B a slightly better value. (You’d save about $0.89.)

However, if you wanted to send $1,000 to Mexico, the outcome would be different: The exchange rates stay the same but Company B charges an increased fee of $15, while Company A’s fee remains at $7. Thus their effective exchange rates become 12.50 and 12.48, respectively, making Company A the slightly better value -a $1.88 savings.

For someone who makes a lot of transfers over time, these differences could really add up. If you don’t trust your math skills, the money transfer company Viamericas has a handy comparison tool that lets you plug in fees and exchange rates for up to three additional vendors and it will calculate their effective exchange rates. Use the tool’s manual comparison option to allow for more choices. Here are a few tips for lowering the cost of sending money overseas:

  • Check whether it’s cheaper to use a vendor’s walk-in location versus their website.
  • Don’t pay extra for a rush delivery if getting there a day or two later doesn’t matter.
  • Avoid extra transfer fees by making fewer, larger transfers if that’s financially feasible. (Just make sure the higher amount doesn’t increase the fee too much.)
  • Avoid automatic transfers, which may occur when exchange rates are less favorable.

For more information on the new remittance transfer rule, visit this CFPB site.

To participate in a free, online Financial Literacy and Education Summit on April 2, 2014, go to Practical Money Skills for Life.

Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney

This article is intended to provide general information and should not be considered legal, tax or financial advice. It’s always a good idea to consult a legal, tax or financial advisor for specific information on how certain laws apply to you and about your individual financial situation.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

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 Homeowners and Renters
Both Pay for Upkeep

20051110PX Gary Silverman (4)By Gary Silverman

Rent or Buy?

When someone asks me any question, my most common answer is “I don’t know.” When I do know (or think I know) a good deal about the subject, more often my answer is “it depends.” So, when it comes to the question of buying or renting a home, my response is, “it depends.”

What does it depend on? To start, consider what it costs to own a home. Obviously, there’s the price of the home. If you take out a loan to pay for it, there is the price of interest. We’ll ignore both for a bit. Because first I want to look at the cost of the home after you own it.

When you own a home you have to pay taxes on it. Unless you are stupid, you will buy insurance for it. You’ll want to maintain it. This might include plumbing, electrical, the roof, and a host of other issues. Oh, and you might want to paint it now and then. We won’t talk about the yard…mine’s looking bad these days.

When you rent a home, you have the exact same expenses. “No way,” you may say, “I thought the landlord was responsible for all of that.” You are right. But if the landlord has to pay for it, don’t you think he’ll pass that on to you in your rent payment? So just because you don’t own the home doesn’t mean you aren’t paying to keep it up.

Add to that the landlord has to prepare for potential problems like foundation issues, mold, and termites. A renter might trash the place on their way out. The property might not rent for several months. All of these possibilities will not happen. But the landlord knows that if he rents long enough eventually something will happen that will take extra money. So he adds a bit to the rental charge to cover it.

The landlord also needs to make a profit, adding even more to the rent. This is why, over the long term, renting will normally be more expensive than buying. And it should be. After all, you are paying for the convenience of not having to worry about all that stuff. That convenience might not make renting cheaper, but it may make it a better option for you.

Don’t want to worry about painting? Rent. Don’t want to worry about the hot water heater leaking? Rent. Don’t want to worry about what the hail storm did to your property? Rent.

Then there is the time horizon. Depending who you ask, when you purchase a home, you should plan to be in it  at least 3-5 years to make sure that the gains over time cover the buying and selling expenses. Only going to be around a couple of years? Rent.

Now, before all my real estate friends get mad at me, I’m a homeowner and want to be. While it’s not the most fun in the world, I don’t mind being responsible for house upkeep and repair. My plan was to be in my home a long time. So far that has lasted two decades.

I like being a homeowner, even though it’s not for everyone. I’ll explore that in a future article.

Gary Silverman holds the Certified Financial Planner (CFP®) license, and is a member of the Financial Planning Association (FPA®). Gary is the founder of Personal Money Planning, a retirement planning and investment advisory firm. Find out more about Personal Money Planning at the company website or follow on Facebook.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

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 The Top 8 Overlooked Causes of Debt

Lauralynn 2013By Lauralynn Schueckler

Debt doesn’t always appear as flashy spending sprees; most often, it is built slowly and silently until it becomes the elephant in the room…that squashes the household. While job loss or medical expenses are well-known reasons for high debt and possible bankruptcy, here are the top eight often overlooked causes of debt:

1. Not Following a Budget
While most people have budgets, the act of following them is another matter entirely. Having a budget often creates a false sense of security; it’s only in the implementation that debt is avoided. Make a budget and stick to it every month!

2. A Booming Economy 
During a tough economy, many experience lean times and obviously feel frustrated at their lack of spending power. But the real harm often occurs during times of economic growth, when money seems abundant. During these times of unrestrictive spending, many people rack up debts that haunt them when belts must be tightened.

3. Constant Upgrading
These days, it may feel abnormal to keep a phone or vehicle for longer than a year, but constantly upgrading possessions can really put a dent in one’s finances, by rolling debts into one another until they seem insurmountable.

4. No Waiting 
Previous generations waited much longer to accomplish personal goals, ensuring financial security in the process. When once a person would have saved for a starter home and only later in life upgraded to a larger house, the current culture demands a higher standard of living much earlier in life.

5. All or Nothing
It can be easy to fall into the “All or Nothing” trap–if one can’t save $500, why save anything? But even saving $10-$20 a month can create a reserve that will save you during a financial crisis.

6. Temporary Setbacks
When a financial setback seems only temporary, it is tempting to maintain one’s lifestyle and way of living. But expenses should be reduced at the first sign of tough times, before debt can balloon. It’s called living within your means. If your income decreases, then your spending should decrease with it.

7. The Little Things
Large expenses can seem overwhelming, but daily indulgences are often what’s clogging up the credit card. Cutting back on little expenditures can make a big dent in debt. Forget about that daily expensive latte, buying bottled water all the time, and the little things that you buy with your credit card because it’s convenient.

8. Lack of Knowledge
From researching funds to knowing what’s in the checking account, one will always be more aware of potential debts when he or she maintains a view of the overall financial picture often. As the late Thomas Jefferson once stated, “Knowledge is power!”

Lauralynn Schueckler is the Online Marketing Specialist at Advantage Credit Counseling Service. She is the author for Advantage CCS’s Blog called Dollars & Sense. Advantage Credit Counseling Service is a member of the National Foundation for Credit Counseling. Contact Advantage Credit Counseling at 866.699.2227, or visit them online at www.advantageccs.org.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

 

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 Credit Questions? We Have Answers!

GailCunninghamBy Gail Cunningham

Have you ever wondered what a credit score means and why it matters? Or how your significant other’s finances could affect your future together? What about protecting yourself from fraud? And do we really need to worry about retirement in our twenties?

The NFCC and USA Today have partnered to give you the opportunity to ask NFCC Certified Consumer Credit Counselors and Educators everything you’ve ever wanted to know about credit. USA TODAY will host weekly Twitter chats every Wednesday from 3:00-3:30 pm ET with a dedicated NFCC Certified Consumer Credit Counselor participating in each chat. The topics will be:

March 12: Protecting Yourself: Everything you need to know about giving your personal information away, identity theft, how to detect fraud, and what to do about it. With Jonathan Gedeon of ClearPoint Credit Counseling Solutions, tweeting from@KnowYourMoneyUS.

March 19: Retirement Planning: What you should be doing in your twenties to prepare for your sixties and beyond. With Sheri Stuart of Springboard Nonprofit Consumer Credit Management Inc., tweeting from @CreditDotOrg.

You can submit questions ahead of time by e-mailing USA Today reporter Hadley Malcolm at hmalcolm@usatoday.com or connecting with her on Twitter at @hadleypdxdc. If you’d like your question to remain anonymous, please say so in your e-mail. We encourage you to log into Twitter at 3 pm each Wednesday to follow the chats live by using the #millennialmoney hashtag.

Gail Cunningham is Vice President of  Public Relations with the NFCC.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

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 The Pros and Cons
of Freezing Your Credit Reports

John Ulzheimer New head shotBy John Ulzheimer

Given the number of recent data breaches the topic of protecting your credit has been all over the place. That’s the silver lining of all of these retailer’s data breaches. The two most commonly referenced methods of protecting your credit is credit monitoring and a credit freeze, more formally known as a security freeze. A security freeze takes your credit report out of circulation, and only allows your existing creditors access to it and your credit scores. Collection agencies can also get access for their skip tracing activities. Credit monitoring, on the other hand, tracks your credit report or credit reports for changes that are indicative of credit related fraud, like new addresses, newly opened accounts or new inquiries, among other changes.

Monitoring Over Freezing

The premise behind freezing your credit reports is that if a new creditor can’t get access to them then they will never open an account in your name, thus preventing the fraud. The premise with credit monitoring is that if something on your credit report changes because of fraud you’ll be notified about it very quickly and can do something about stopping the presses on the fraudulent activity.

Credit monitoring is most effective when the service is monitoring all three of your credit reports (Equifax, Experian and TransUnion). But, “tri-bureau” credit monitoring isn’t free. The cost of tri-bureau credit monitoring subscription services is normally around $15 per month, give or take.

There are some free options on the market, but they only monitor one of your three credit reports, which is certainly better than a stick in the eye but not comprehensive. If you’ve been a victim of fraud, credit freezes are free thanks to state law. If you’ve not been the victim then you can still freeze your reports but it’s not free although it’s pretty inexpensive. The fees vary by state but at worst it’s $15 to freeze your credit reports (times 3 if you freeze all three of your reports). In some states it’s as cheap at $3 per report. And, that’s not reoccurring like credit monitoring subscriptions. Once your credit reports are frozen you don’t have to worry about new accounts being opened in your name. It just isn’t going to happen. No lender in their right mind would ever extend credit without first looking at your credit reports and scores. This gives the security freeze extra marks for effectiveness as a proactive solution.

Freezing Over Monitoring

Credit monitoring is autopilot credit protection. You sign up and then forget about it. The credit bureaus do the work for you by passively tracking your credit reports every business day for suspicious activity. And, if something happens they’ll notify you via email or via text message so you can get involved and stop the fraud before it gets out of control.

Credit freezing is not autopilot and requires you to be more engaged with your credit reports especially when do something that involves some sort of credit report or credit score review. The freezing is so effective that if you were to apply for credit, insurance or a job (all of which can lead to your credit report/s being pulled) you may find yourself denied because the lender, employer or insurance company couldn’t get access to it because of the freeze. And while freezing is likely less expensive in the long run than credit monitoring, there is a fee to thaw and refreeze your reports. Because only you control the thawing of your frozen credit reports you’d have to do so before applying for credit. When you place the freeze you would be asked to set up login credentials, something you’ve probably done dozens of times in your life. To thaw your reports you’d log in to your security freeze account with the credit bureaus’ websites and thaw them and then re-freeze them once the lender has accessed them. So, there’s more engagement than with credit monitoring.

John Ulzheimer is a nationally recognized expert on credit reporting, credit scoring, and identity theft. In addition to being a contributor for the National Foundation for Credit Counseling, John is also a credit blogger for CreditSesame.comMint.com,CreditCardInsider.com, and VantageScore Solutions. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. You can follow John Ulzheimer on Twitter here:http://twitter.com/johnulzheimer.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

This was originally published on Mint.com.

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 For A Better Credit Score
Should You Carry A Balance On Your Cards?

MarkFoster_CCOABy Mark Foster

A question our financial educators are often asked by people is if it is better for their credit score to carry a balance on their credit cards every month instead of having a zero balance. Actually, that is one of the most popular credit myths – that it’s better to carry a balance. The truth is that the FICO credit scoring company likes that you have credit and that you use it, but the less you owe, the better your score. So carrying a balance will not help your score; in fact, it will hurt it.

Additionally, you may think that owing half of your credit limit – such as $1,000 on a $2,000 credit card limit – is perfectly fine and that you’re playing by the credit scoring rules. However, this is a common mistake that many people make. It may seem perfectly fine to owe half of your available credit line – you’re not over-the-limit and not maxed out – but the rules of the credit scoring game say otherwise. Owing 50 percent or more of your available credit is, to quote FICO, “a score killer.” Many people take a serious hit on their credit score because they’re unaware of how the credit scoring game is played. To have a good credit score, you do need to have credit and use it, but –again – the less you owe, the better your score.

Mark Foster is Director of Education with Credit Counseling of Arkansas (CCOA). CCOA is a member of the National Foundation for Credit Counseling. Contact CCOA at 800.889.4916, or visit CCOA online at www.CCOAcares.com.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

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 NFCC Provides Daily Financial Tips
During National Consumer Protection Week

GailCunninghamBy Gail Cunningham

In recognition of National Consumer Protection Week March 2-8, the NFCC offers consumers five tips to improve their level of financial protection. By executing one of the following steps each day, consumers will put themselves into a much safer financial position in just one week.

  • Protect personal information. In 2014 identity theft once again topped the list of complaints to the Federal Trade Commission (FTC), and has held the top spot for over a decade. Identity theft has grown to include taxes, medical records, and establishing an identity in a child’s name.  No one can prevent ID theft, but consumers can and should take steps to protect themselves.  Start by reviewing tips from the FTC at http://www.consumer.ftc.gov/features/feature-0014-identity-theft, and can report fraud-related schemes by calling call 877-FTC-HELP (877-382-4357).
  • Review your credit report. Credit reports are not only the gateway to loans, mortgages and credit cards, but are often reviewed by landlords, cell phone providers, and utility companies. The report reflects a person’s financial track record, and can strongly influence a lending decision. Be your own personal watchdog by routinely reviewing your credit report. Consumers can access a free copy of their credit report once every 12 months from each of the three bureaus, Experian, Equifax and TransUnion, by going to www.AnnualCreditReport.com.
  • Have an insurance review. Protect yourself against costly surprises. Making a claim only to discover a loophole in coverage can be financially devastating. Set an appointment with your insurance agent to confirm that the coverage is adequate, and review opportunities to save on premiums.
  • Get to know your credit card. Many people don’t realize that certain protections are part of their credit card agreement. For instance, the Fair Credit Billing Act allows consumers to seek a refund if a product purchased was unsatisfactory. Cards may also offer return protection and extended warranties. There are many Federal laws in place to protect your rights when interacting with a credit card company. For a list of credit protection laws, go to http://www.federalreserve.gov/creditcard/regs.html.
  • Know your rights. Congress established the Consumer Financial Protection Bureau (CFPB) which works to give consumers the information they need to understand the terms of their agreements with financial companies. Part of their job is to protect consumers by carrying out federal consumer laws. Among other things, the CFPB restricts unfair, deceptive or abusive acts or practices, promotes financial education, and accepts complaints.  Submit issues with a financial product or service to the CFPB online at http://www.consumerfinance.gov/complaint/.

No one wants to be taken advantage of, especially financially. Consumers who are educated about the many rights and protections available have a greater peace of mind when making financial purchases or decisions. To learn more about protecting your financial future, reach out to a NFCC member agency and inquire about the Sharpen Your Financial Focus program. To be automatically connected to the agency location closest to you, dial 855-3-SHARPEN (855-374-2773), or go online to www.SharpenToday.org.

Gail Cunningham is Vice President of  Public Relations with the NFCC.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

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