Previously, I posted about the ongoing issues with some banks now charging for debit card use allegedly due to the cap on swipe fees. I've been continuing to follow the news since we are a debit card family.
Back during the debate on swipe fees big retailers, like Wal-Mart and 7-11, promised that prices would be lowered if swipe fees were capped. That promise has not been fulfilled because the new swipe fee caps don't apply to credit cards nor do they apply to debit cards from smaller banks. Credit cards, especially reward credit cards, have very high fees for retailers and those fees are not limited by the swipe fee cap. So how would a retailer pass on the savings? Well they could provide a discount for using cash, since the Dodd-Frank act passed it has been legal for retailers to charge a different price for those willing to pay cash, but so far I've not seen any cash pricing except on gas. It is understandable that retailers wouldn't want the hassle and the cost (yes there is a cost) of having two prices.
So now come the banks, the big banks, who are starting to charge for debit card use and, according to this article, pushing people back to credit cards. Eeeek! Why would banks push consumers to credit? Well, as explained above, there is no cap on the swipe fees, rather retailers are charged a percentage of the purchase price. If you are using a great rewards card, the retailer is charged more. Plus the banks earn interest and fees on credit cards. While there are lots of responsible people who pay their credit card bills in full each month, 46%. according to a Consumer Reports article (sadly could not find link) carry a balance.
What are you going to do if your bank starts charging for debit card use?
Thursday, October 27, 2011
Friday, October 21, 2011
401k Changes
The maximum amount one can contribute to a 401k is increasing from $16,500 to $17,000 in 2012. If you max out your 401k, you'll need to make a contribution adjustment in January to increase your contributions.
Friday, October 14, 2011
One Day Left
If you requested an extension from the IRS to file your 2010 taxes then you are running out of time, the deadline to file, with an extension, is Monday October 17, 2011.
I mailed out our taxes yesterday, so we are a whole two (2) days ahead of schedule. Unfortunately, we owed money to Uncle Sam, but we did not owe as much as last year. My goal is to owe Uncle Sam, but to owe him less than a $1000, because owing more than that throws off our monthly budget.
We ended up using our same CPA because we ran out of time. If you've read this blog long enough, you'll remember that we were audited in 2010 and said audit and IRS liability was the result of mistakes made by our CPA. As a result, one of our goals for 2011 was to interview and hire a new CPA. That is still a goal, we have two names of possible CPAs and we need to get going and interview folks and hire someone new. But, we were too late in the game to get that done this year.
I mailed out our taxes yesterday, so we are a whole two (2) days ahead of schedule. Unfortunately, we owed money to Uncle Sam, but we did not owe as much as last year. My goal is to owe Uncle Sam, but to owe him less than a $1000, because owing more than that throws off our monthly budget.
We ended up using our same CPA because we ran out of time. If you've read this blog long enough, you'll remember that we were audited in 2010 and said audit and IRS liability was the result of mistakes made by our CPA. As a result, one of our goals for 2011 was to interview and hire a new CPA. That is still a goal, we have two names of possible CPAs and we need to get going and interview folks and hire someone new. But, we were too late in the game to get that done this year.
Thursday, September 29, 2011
Boo BOA!
Startled by the news that Bank of America will begin charging $5 a month to customers who use debit cards. BOA is trying to recoup some of the $2 billion in swipe fees that Congress outlawed beginning next month.
I expected, and previously posted, that banks, including my own Wells Fargo, were doing away with debit card reward programs, but I'm flabergasted that banks are actually going to start charging for debit card use.
And as a regular debit card user, I'm not sure what we'll do if Wells Fargo rolls out such a program that applies to our accounts.
I wonder if the merchants who promised to reduce prices if swipe fees were reduced will live up to their end of the bargain. Somehow, I think prices will stay the same and the consumer will end up paying both the merchant and the bank.
I expected, and previously posted, that banks, including my own Wells Fargo, were doing away with debit card reward programs, but I'm flabergasted that banks are actually going to start charging for debit card use.
And as a regular debit card user, I'm not sure what we'll do if Wells Fargo rolls out such a program that applies to our accounts.
I wonder if the merchants who promised to reduce prices if swipe fees were reduced will live up to their end of the bargain. Somehow, I think prices will stay the same and the consumer will end up paying both the merchant and the bank.
Rental Refi
Happy to report that we were able to refinance the loan on one of our rental properties.
We went from an interest rate of 6.25% to 4.625%, balance of loan increased by about $4000 since we rolled closing costs into the loan balance rather than pay upfront. Monthly mortgage cost is reduced by @$150. The refinance costs will be paid for in just over two years. And as long as we keep the home rented during this time period, the tenants will be paying the costs.
Refinancing this property has been a goal of ours since 2009, when we refinanced our home, but its been difficult because lenders are more stringent on non-primary home loans. Additionally, we were uncertain as to whether the home would appraise for what we needed.
Glad to have this behind us and I'm glad that Mr. Sam took the lead on this one (since I normally handle the finances of the rentals and he handles the rest).
We went from an interest rate of 6.25% to 4.625%, balance of loan increased by about $4000 since we rolled closing costs into the loan balance rather than pay upfront. Monthly mortgage cost is reduced by @$150. The refinance costs will be paid for in just over two years. And as long as we keep the home rented during this time period, the tenants will be paying the costs.
Refinancing this property has been a goal of ours since 2009, when we refinanced our home, but its been difficult because lenders are more stringent on non-primary home loans. Additionally, we were uncertain as to whether the home would appraise for what we needed.
Glad to have this behind us and I'm glad that Mr. Sam took the lead on this one (since I normally handle the finances of the rentals and he handles the rest).
Wednesday, September 21, 2011
Travel/Vacay
I'm heading out of town for a long weekend trip with one of my girlfriends. I have to post to say how much fun it is to plan a quick trip and to have travel and fun money in our ING accounts just sitting there waiting for me to spend it.
Travel is so much more fun when the trip is already paid for and I have "fun" money available for shopping, spa and eating out.
Travel is so much more fun when the trip is already paid for and I have "fun" money available for shopping, spa and eating out.
Tuesday, September 20, 2011
Section 8
We are in the middle of renting one of our properties. The property has been cleaned and turned and is ready for move in. The property is listed and this past weekend we had three applicants. One of the three applicants is an individual with a Section 8 housing subsidy voucher.
We have a friend who has several properties and he regularly rents to folks who use Section 8. He spoke very positively about the program, in fact he prefers to rent to folks with Section 8 vouchers. Our friend has explained that the Section 8 funds are paid directly by the government to the landlord and the tenant/landlord lease relationship is not altered by the Section 8 housing voucher. If the tenant fails to pay his or her share of rent due, the eviction process would be the same regardless of whether the tenant has a housing voucher. We understand that we would have to have the property inspected by the local HUD office, but otherwise there are really no additional hoops to jump through.
Our concern, and one that we apply to all applicants, is ability to pay. We generally want to rent to a family or roommate group where the amount paid for housing costs (rent plus utilities) is 1/3 or less of take home pay (or other sources of income, Social Security, child support, etc.). In this instance, even adding in the Section 8 voucher ($1000 a month), this candidate does not meet our 1/3 rule. But looking at the Section 8 guidelines is seems unlikely that a Section 8 candidate would ever meet our 1/3 rule because then they would not qualify for Section 8.
We've never rented to someone with a Section 8 voucher so I'm wondering if anyone has any experience with this program? If so, I'd really appreciate hearing from you regarding your experiences, positive and negative.
We have a friend who has several properties and he regularly rents to folks who use Section 8. He spoke very positively about the program, in fact he prefers to rent to folks with Section 8 vouchers. Our friend has explained that the Section 8 funds are paid directly by the government to the landlord and the tenant/landlord lease relationship is not altered by the Section 8 housing voucher. If the tenant fails to pay his or her share of rent due, the eviction process would be the same regardless of whether the tenant has a housing voucher. We understand that we would have to have the property inspected by the local HUD office, but otherwise there are really no additional hoops to jump through.
Our concern, and one that we apply to all applicants, is ability to pay. We generally want to rent to a family or roommate group where the amount paid for housing costs (rent plus utilities) is 1/3 or less of take home pay (or other sources of income, Social Security, child support, etc.). In this instance, even adding in the Section 8 voucher ($1000 a month), this candidate does not meet our 1/3 rule. But looking at the Section 8 guidelines is seems unlikely that a Section 8 candidate would ever meet our 1/3 rule because then they would not qualify for Section 8.
We've never rented to someone with a Section 8 voucher so I'm wondering if anyone has any experience with this program? If so, I'd really appreciate hearing from you regarding your experiences, positive and negative.
Friday, September 16, 2011
Do You Use Coupons?
I am not much of a coupon user, although I will look for a coupon once I have selected a particular item for purchase. So when I buy something on-line, which I do with some regularity, I look for a coupon for that site, or I'll hold my purchase until they have a coupon or a sale. Same for in store purchases, I appreciate receiving coupons from retail establishments that I frequent, i.e. Ann Taylor, Pottery Barn and the like.
But, when it comes to coupons for the grocery store, I don't normally bother. First, most coupons are for products that I'm not interested in, like prepared foods, cold cereal, sports drinks, etc. Second, I'm a very loyal consumer, there are certain products I like, not necessarily brand products (I am a huge fan of almost oall of the Publix store brand food items), and a coupon will not nudge me to try something else. Third, I don't really have the time or inclination to clip coupons.
However, I have watched, somewhat in awe and somewhat in fear, the Extreme Couponing show on TLC in which regular folks often end up buying carts and carts of grocery products for $10 or less due to their coupon use. I'm in awe that folks can be that organized, diligent and successful in obtaining hundreds of dollars in products for little to nothing. I'm in fear, because many of these extreme couponers have garage, basements, rooms filled with products that, in my opinion, they will never use or need. I saw one show in which a consumer cleared a grocery store shelf of mustard, it was clear to me that this household would never use all this mustard so I just didn't understand the point and some of these folks seem more like hoarders (I like that show on TLC as well, highly motivating to watch while cleaning the house).
Now I see that grocery stores and manufacturers are pushing back on the extreme couponing, limiting number of coupons per visit, limiting use of competitor coupons, and eliminating the doubling of coupons.
What say you, do you use coupons and if so what are your habits and patterns?
But, when it comes to coupons for the grocery store, I don't normally bother. First, most coupons are for products that I'm not interested in, like prepared foods, cold cereal, sports drinks, etc. Second, I'm a very loyal consumer, there are certain products I like, not necessarily brand products (I am a huge fan of almost oall of the Publix store brand food items), and a coupon will not nudge me to try something else. Third, I don't really have the time or inclination to clip coupons.
However, I have watched, somewhat in awe and somewhat in fear, the Extreme Couponing show on TLC in which regular folks often end up buying carts and carts of grocery products for $10 or less due to their coupon use. I'm in awe that folks can be that organized, diligent and successful in obtaining hundreds of dollars in products for little to nothing. I'm in fear, because many of these extreme couponers have garage, basements, rooms filled with products that, in my opinion, they will never use or need. I saw one show in which a consumer cleared a grocery store shelf of mustard, it was clear to me that this household would never use all this mustard so I just didn't understand the point and some of these folks seem more like hoarders (I like that show on TLC as well, highly motivating to watch while cleaning the house).
Now I see that grocery stores and manufacturers are pushing back on the extreme couponing, limiting number of coupons per visit, limiting use of competitor coupons, and eliminating the doubling of coupons.
What say you, do you use coupons and if so what are your habits and patterns?
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