Money General Talk | money news blog

19 07 2008

People would prefer discuss sex with strangers than credit cards

Posted by: in Money General Talk

Filed under: Cards, Debt

A GfK Roper Public Affairs and Media for CreditCards.com poll found that people would be rather speak about anything with complete strangers before they discuss credit card debt. Religious views, politics, age, weight and health problems are more popular topics.

Obviously it’s difficult to find solutions to a problem when you can’t even talk about it. But it may be even more damaging. The rise of consumer credit has made it almost impossible to tell a person’s financial situation without looking at their tax returns. Remember the LendingTree commercial with the guy who has a dream home and a nice vehicle but is in debt up to his eyeballs? That’s a very common situation. That guy you envy probably leases his automobile, is upside down on his house, and pays for his haute couture with a wallet full of credit cards.

But you have no way of knowing that, and so you end up feeling a need to keep up with the Joneses, although the Joneses are broke. There’s nothing you can do about people’s unwillingness to speak about their debt, even though you certainly should think about opening up about your issues with a few trusted friends. You might find out they have similar problems. But keep in mind that most people are probably in far worse financial shape than you’d think from meeting them. We live in an age of conspicuous consumption.

Continue reading Compulsive shopping - I’ve a book about it in one of these boxes

19 07 2008

Compulsive shopping - I’ve a book about it in one of these boxes

Posted by: in Money General Talk

Filed under: Debt, Shopping

The garage was stacked with thousands of dollars of merchandise still in original packaging. There were 100% cotton t-shirts studded with rhinestones (2 per package - $5.00), stacks of heavy knit sweaters in pastel colors (8.00), boxes of shoes and boots still wrapped in tissue paper ($10.00/pair). It was a yard-sale shopper’s feast, distinguished by the fact that everything was new. It was also - as the niece running the sale explained - a display of her aunt’s full-blown QVC shopping addiction.

How many days or nights had a probably sad and lonely woman sat in front of the television set, ordering two of these and six of those? How many UPS deliveries had arrived? What percentage of the purchases had actually been worn?

Closets of clothes with price tags still attached are one of the signs of compulsive buying. This one was hard to miss.

Much more common in women than in men, compulsive shopping often appears in a cluster of other addictions - alcohol, drugs, eating disorders. It can show itself as a symptom of depression as well as of bipolar disorder. It may also be associated with a trauma history or emotional deprivation in childhood. Like other addictions, compulsive shopping and spending initially makes a person feel superior then ultimately much worse. When it comes to on the web addiction, what is frequently found is women shopping, men viewing pornography, and teens playing games.

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19 07 2008

Michael Vick files for bankruptcy protection

Posted by: in Money General Talk

Filed under: Debt

In the midst of a 23-month prison sentence on dog-fighting charges, former Atlanta Falcons star quarterback Michael Vick has filed for bankruptcy protection. The bankruptcy filing states that Vick owes between $10 million and $50 million to creditors.

It’s hard to know what to say here besides the obvious: Michael Vick is a complete moron. He jeopardized his career and freedom by participating in animal cruelty and mismanaged his money. Is there some facet of his life that Vick hasn’t messed up royally?

In the bankruptcy filing, his lawyers said that Vick hopes he “can, after the conclusion of the bankruptcy case, rebuild his life on a personal and spiritual level, resurrect his image as a public figure, and resolve matters with the NFL such that he has the ability to resume his career.”

Anything’s possible. He’s broke and in prison, so there’s nowhere to go but up. Perhaps he has the ability to make a comeback as a late-night televangelist.

Continue reading Money Mistakes of the Rich and Famous

19 07 2008

Money Mistakes of the Rich and Famous

Posted by: in Money General Talk

Filed under: Banks, Debt, Tax, The Dolans, Wealth, Bankruptcy

Madonna Walk past a newsstand these days and you’ll see dozens of glossy magazines with the faces of the rich and famous staring back at you. Glamour, fame, fortune! But behind the fancy clothes and re-touched pics, celebrities are just people who, like us regular Joes, make serious mistakes. No, not bad plastic surgery or making the Worst Dressed list, we’re speaking about making serious money mistakes.

Here are nine that have made headlines recently…

Money Mistake #1: Not Signing a Pre-nuptial Agreement
If the rampant rumors are true, Madonna and Guy Ritchie might be the latest celebrities calling it quits–and the latest to potentially end up in a nasty fight over money since the Material Girl apparently didn’t have a prenuptial agreement. This puts Madonna’s estimated $600 million fortune at risk. Remember, earlier this year another British court ordered Sir Paul to pay ex-Heather Mills a whopping $48.7 million, so this could cost Madonna dearly.

You don’t need to be filthy rich to need a pre-nup. If you bring assets to your partnership that you want to be sure you keep 100% of if things don’t work out, it’s essential you work out a pre-nuptial agreement before you are married.

Money Mistake #2: Not keeping your will up to date.
Actor Heath Ledger’s tragic death was compounded by the fact that neither his girlfriend, Michelle Williams, nor their daughter, Matilda, was included in his will. That wasn’t a slight…Ledger just hadn’t updated his will since 2003, well before either was in his life.

We all get busy, and visiting a lawyer to update your will isn’t at the top of anyone’s “fun” list, but it’s one of the most important things you can do to protect your loved ones should something unexpected happen to you. Be sure you update your will to address any major life event, such as marriage, divorce or the birth of a child or grand-child.

Money Mistake #3: Losing a home to foreclosure
You’ve probably seen former Tonight Show host Ed McMahon in the headlines lately. In a sad turn of events, McMahon, once famous for knocking on people’s door to make their dreams come true, is now facing the nightmare of losing his home to foreclosure.

Records show McMahon is $664,000 behind in payments on his Beverly Hills mansion. How could this happen? Simple: McMahon got caught by the housing bust just like so many other Americans. He bought a large home and took out a home equity loan when banks were saying “yes” to nearly any request. Meanwhile, the value of his house went down with a very weak real estate the market, and he got behind in his payments.

Other celebs to lose their homes this year include queen of soul Aretha Franklin and disgraced baseballer Jose Canseco, who simply abandoned his $2.8 million pad — just walked away and let the bank take it. (See a gallery of current celebrity foreclosures here)

Money Mistake #4: Going Bankrupt
We know, we know, cry us a river, right? It’s hard to muster much sympathy for celebrities who made a fortune and squandered it all, but the list of celebs forced to declare bankruptcy is surprisingly long. The newest member to join this unfortunate club is rapper MC Hammer, who burned through $30 million with his penchant for fancy cars, homes and a large entourage. Other bankrupt celebs include boxer Mike Tyson, figure skating darling Dorothy Hamill and Debbie Reynolds.

Keep reading to learn about the two superstars who are in danger of adding their name to the list…

See the full list

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19 07 2008

Card limits slam credit scores: not fair!

Posted by: in Money General Talk

Filed under: Cards, Debt, Recession

As lenders realize that they spent the last few years throwing cash at anyone with a pulse and an IQ over 20, they’re slicing back credit limits for a lot of people, even those who have never been delinquent.

Here’s where it gets really bad: one component of your FICO score is the amount of credit you currently have drawn down divided by the amount you’ve available. Lowering your limits decreases the denominator and can swiftly send your credit score plunging — although you didn’t miss a payment, open a new account, buy a Ferrari, or do anything else to draw the ire of the credit gods.

So millions of people have seen their credit card stories go something like this: use credit card, make regular payments to build strong FICO score, see your credit limit slashed because of broader macroeconomic conditions, be required to pay a higher interest rate because of changes in your credit score caused by something the bank, not you, did. Oh, and you’ll also have to pay a higher interest rate if you borrow money from someone else to purchase a home, which cost you thousands of dollars over the years.

The conspiracy theorist in me thinks that that’s exactly how it’s supposed to work out: lend someone money, reduce the limit, and then lend them more money at a higher interest rate. It’s brilliant!

I would be nice to see the Fair Isaac take some action to prevent these credit limit cuts from increasing the cost of credit for people who have behaved responsibly. Somehow I doubt that will happen.

18 07 2008

What’s wrong with a used sub-compact anyway?

Posted by: in Money General Talk

Filed under: Debt, Transportation

If achieving financial security is important to you — and it probably is if you’re reading WalletPop — the totally worst source of information is the Madison Avenue marketing genius. If you want to be rich and happy, you would do well to take a sledgehammer to your television.

But even by Madison Avenue standards, the message behind the funny FreeCreditReport.com commercials is bad. Here are the lyrics to catchy song I recently found myself humming:

Well I’m shopping for a new vehicle, which one’s me? A cool convertible or an SUV.

Too bad I didn’t know my credit was whack, so I driving off the lot in a used sub-compact.

F-R-E-E-E, that spells “free”, credit report dot com baby. Saw their ads on my TV. Thought about goin’ but was too la~zy.

Now instead of lookin’ fly and ridin’ phat, my legs are sticking to the vinyl and my posse’s getting laughed at.

F-R-E-E-E, that spells “free”, credit report dot com baby …

I’ve stated before that I oppose the idea of automobile loans for the vast majority of consumers, and this commercial makes abundantly clear why they’re so stupid: mortgaging your financial future to prevent strangers from laughing at your posse is … well let’s just state that my thoughts on that one sentence would have to be edited considerably to qualify as merely vulgar.

Here’s my advice for automobile shoppers: pick them like upwardly mobile executives pick wives. First get the automobile you can afford, and then upgrade when your fortunes are improved.

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Continue reading IRS confiscation of rebates isn’t just for deadbeats…it’s for me!

18 07 2008

IRS confiscation of rebates isn’t just for deadbeats…it’s for me!

Posted by: in Money General Talk

Filed under: Debt, Tax, Fraud

I’m all for the government cracking down on collecting child support payments, and taking the money directly out of IRS payment seems like a winning plan. But the $2 billion that the government has collected so far isn’t all from deadbeat fathers. I, for instance, am part of the 39% of those who had money withheld for an unpaid federal debt. And I still don’t know why.

I apparently owed the federal government $89.49 and they took it from my rebate check. I got a letter in the mail from the Department of the Treasury that told me, “As authorized by Federal law, we applied all or part of your Federal payment to a debt you owe.” Then it gave an address and phone number for a Birmingham, Ala. processing center.

I called, of course, and all they could tell me is that the Transportation Security Administration had taken my money. They said they could give me their main number. They might as well have offered to give me the number for the White House to ask President Bush what was up with my payment. I didn’t figure you could just call a mammoth government agency and get any kind of response.

Continue reading How to lose your vehicle without hardly trying

17 07 2008

How to lose your vehicle without hardly trying

Posted by: in Money General Talk

Filed under: Borrowing, Debt, Transportation, Bankruptcy

Nobody needs a home to fall on them (any more) to know that taking out a subprime mortgage is a lousy idea.

But vehicle title loans — there doesn’t seem to be a lot of attention paid to these yet.

And so I just thought I’d mention that car title loans — which are illegal in some says like Florida — are a rotten idea. Sure, this is my opinion, but if you know nothing about them, read on, and see what you think.

Continue reading Where’s my economic stimulus check? In hand at last!

17 07 2008

Where’s my economic stimulus check? In hand at last!

Posted by: in Money General Talk

Filed under: Debt, Saving, Shopping, Tax, Recession

What do you know? The check really was in the mail.

After a long wait for my economic stimulus payment, the check appeared in my mailbox yesterday, June 23.

After all the confusion about when we’d be getting the money, and in what form, I wasn’t exactly holding my breath June 20, when the paper check was due, according to the IRS website. And indeed, the day came and went and there was nothing but junk mail and catalogs in the afternoon mail.