Filed under: Banks, Budgets, Cards, Debt, Saving, The Dolans

Ken and Daria Dolan, America’s First Family of Personal Finance, answer your questions every Friday.

Ken and Daria,

I’m transferring my credit card debt to cards with a 0% introductory interest rate. There are a few fees involved, but I figure I’m saving more on the interest charges. Is this a smart idea?

Jeff

Great question, Jeff (and you might be surprised at our answer). The credit questions are really pouring in, so be sure to check back as we’ll be answering many more of them in coming weeks. Click on the video below for this week’s answer!

Ken and Daria Dolan offer expert advice on debt management and living credit smart at Dolans.com.

Click here to ask Ken and Daria your question.

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Filed under: Borrowing, Debt

Federal Reserve Chairman Ben Bernanke has suggested he’s amusing the thought of more interest rate cuts. He states that cuts are possible this year to help the housing downturn and problems in the credit market.

What does that mean for you? Well “interest rate cuts” don’t directly affect consumers. When the Federal Reserve talks about a cut, they’re talking about the rate at which banks lend money to one another overnight. All day long the banks are cashing checks and taking in deposits, and at the end of the day they have to settle up between themselves. At night, some banks are short on cash and some have extra. The Federal Reserve determines the rate at which they will loan money to each other overnight. That’s what rate we’re talking about.

But even though the “interest rate cut” doesn’t affect consumers directly, it affects them indirectly…. and you can benefit! You will typically see consumer lending rates go down when “the rate” goes down. Most likely, those of you with a home equity line with a variable interest rate will see a drop in your rate. Those who are looking to refinance debt might likely see lower rates from banks and mortgage brokers. So if you’re a borrower, you should be happy to see that your rates could go down a bit this year.

Now if you’re a saver, a drop in the interest rate actually hurts you, because the rates on your savings account and money market will probably go down. Sorry. There are always winners and losers in the consumer finance game. Don’t let it stop you from saving though. You may need those funds for a rainy day.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Bookkeeping, and is the author of Essentials of Corporate Fraud.

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Filed under: Borrowing, Debt, Retire, Wealth

As someone who was born at the end of the Baby Boom and who’s been paying into the Social Security system since I got my first McJob as a teenager in 1982, I’m worried that when it comes time for me to get my cut, there’ll be nothing left. After all, according to USA This day, I’m one of 80 million Americans born between 1946 and 1964 who could qualify for Social Security and Medicare in the next 22 years.

The first wave of Boomers broke into the Social Security system this week, when 62-year-old Kathleen Casey-Kirschling — whose midnight birth on Jan. 1, 1946, makes her America’s first Boomer — signed on for benefits. This opened the floodgates for the 3.2 million citizens who hit the massive 6-2 next year, making them eligible for early retirement. According to the Center for Retirement Research at Boston College, the average age at which workers in this country begin receiving Social Security is 63.

Those who’ve crunched all these numbers state that if this trend continues, Social Security rolls will increase by 34 million by 2030, and Medicare by 35 million. The Social Security trust fund will begin paying out more benefits than it collects by 2017 and is projected to deplete its reserves by 2041.

While the good folks in Congress all seem to agree that something needs to be done to save Social Security, our elected officials are at loggerheads as to exactly what this something should be. It’s hard to say if this will change under our new president: Of the two parties’ front-runners, Obama, Clinton and Huckabee all favor keeping Social Security solvent, while McCain wants to develop a plan to would grant workers to invest a portion of their payroll tax in private accounts they’d manage themselves.

Given the dearth of solutions coming out of Washington, the Concord Coalition was inspired to organize a “Fiscal Wake-up Tour” to make voters more aware of the Social Security situation and ask us what compromises we’d be willing to make to ensure that future generations get their bennies. the coalition is also asking presidential candidates to explain how they plan to address the long-term fiscal challenges they’ll face if elected.

The tour has caught the attention of the White House. At a recent press briefing, Jim Nussle, director of the Office of Management and Budget, said, “This Fiscal Wake-Up Tour, I think, has been one that has been waking up members of Congress. And you see that in a bipartisan way.”

How Congress will answer this wake-up call remains to be seen.

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Euroshares flat at open; Asian recovery offsets Wall St losses
Forbes - Shares in French banking group Natixis led the fallers here, dropping 8.53 pct, after the group’s shock warning last night. Keefe, Bruyette Woods put their ‘market perform’ rating under review, expecting a sharp correction in opening deals. ABN Amro

Fed’s forecast: gloomy
Seattle Times - Bernanke told the Senate Banking Committee the serious housing slump and a credit crisis triggered by rising defaults in subprime mortgages had greatly strained the economy. “The outlook for the economy has worsened in current months and the downside

New Databook from the Technology Trends Service Helps Vendors to
Forbes - Research and Markets (http://www.researchandmarkets.com/reports/c82809) has announced the addition of “IT influencers in retail banking H2 2007 (Databook)” to their offering. Degree to which particular roles within retail banks make IT purchasing

Friday’s Agenda, Feb. 15
Miami Herald - Items contributed must be received at least two days in advance at Calendar Desk, The Miami Herald, 1 Herald Plaza, Fifth Floor Newsroom, Miami, FL 33132-1693. Or e-mail your items to newscalendar@MiamiHerald.com . No faxes, please. To search for

Hot market helped Ferris skirt takeovers
Baltimore Sun - by Minneapolis-based RBC Dain Rauscher marks another step in a consolidation process that began in 1975, when Congress allowed brokers to cut the price of stock commissions, and accelerated in the 1990s with the fall of barriers between banking and

Northern Rock, Tate & Lyle, Volex: U.K., Irish Stock Preview
Bloomberg - Europe’s largest bank is to hire 500 staff in Hong Kong to meet rising demand for banking and wealth-management services, the South China Morning Post reported, citing HSBC. The stock added one pence, or 0.1 percent, to 747. Northern Rock

Water managers balk at developers’ offer
Miami Herald - Developers hoping to build outside Miami-Dade’s Urban Development Boundary pitched a ‘’solution” Thursday to address water managers’ concerns that the county lacked enough water to supply their projects. The offer: They’d concur not to turn on their

House panel extends Andean tariff cuts
Miami Herald - (AP) — A House panel on Thursday approved a 10-month extension for a trade program providing reduced tariffs for exports from the four Andean nations of Bolivia, Colombia, Ecuador and Peru. The Ways and Means Committee agreed by voice vote to extend

4th person pleads in W.Va. torture case
Miami Herald - A fourth defendant has pleaded guilty to charges stemming from the suspected torture of a young black woman who authorities say was held captive last summer for days. Frankie Brewster, 49, faces 10 to 25 years in prison after pleading guilty

US economy officials loosen their lips
Forbes - WASHINGTON (AP) - Could the nation’s top economic officials be abandoning the colorless, cryptic language of Fedspeak in describing the say of the economy? Well, it seemed that way at times during a Senate Banking Committee hearing Thursday

Woman’s dolls broke color barrier
Miami Herald - In December 1948, a white woman named Sara Lee Creech paused outside the Belle Glade post office to watch two little girls playing with baby dolls in the back seat of a Buick. The tiny girls were black. Their dolls were white. And Sara Lee Creech

TV’s Judge Alex defends ‘99 testimony
Miami Herald - A former Miami-Dade judge who now has his own syndicated television show was criticized by Florida’s highest court, saying he should not have testified in court on behalf of a Miami man who was nearly murdered. But former Circuit Judge Alex Ferrer

China banking sector assets 52.6 trillion yuan in 2007
Xinhua News Bureau - BEIJING, Feb. 15 (Xinhua) — The assets of China’s banking sector rose to 52.6 trillion yuan (7.32 trillion U.S. dollars) in2007 from 43.9 trillion yuan in 2006, the China Banking Regulatory Commission (CBRC) reported. The state-owned Bank of China

Indonesia’s Rupiah Gains to 3-Month High on GDP Growth, Upgrade
Bloomberg - Presumably Fitch’s upgrade as well as the interest rate gap between the rupiah and the U.S. dollar are prompting foreigners to purchase the rupiah,” said Tetsuo Yoshikoshi, an analyst at Sumitomo Mitsui Banking Corp in Singapore. The yield on

Shelter from the Storm
BusinessWeek - It was the beginning of a life in banking, serving a largely Hispanic clientele. By 1979, he was a vice-president at Metropolitan Bank & Trust. He also picked up the nickname “Ticketmaster.” He explains: “I was always selling tickets to Boys & Girls

Police shoot store owner, state he didn’t drop weapon
Miami Herald - Jose Rodriguez wasn’t one to stay in bed while his business was being threatened. So when the alarm company called in the middle of the night about a burglary in progress, he armed himself and drove to the store, ready for a confrontation. Miami-Dade

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