SAVINGOpportunities Lost
CONSUMERS ARE LOSING $30 BILlion or more in interest by keeping too much money in low-paying savings accounts, says the Consumer Federation of America. Savers are stashing $1 trillion in bank savings accounts that average just 2.1 percent a year in interest.
Even conservative investors could better without giving up their Federal Deposit Insurance Corporation protection, says Stephen Brobeck, the consumer group’s director. They could move their funds to a banks money-market deposit account, now paying better than 6 percent interest at hungrier institutions. Even Uncle Sam is paying 4.9 percent on inflation-proof bonds. What’s the difference? Squeezing 3 percentage points more out of your bank every year will net a $25,000 account an extra $11,000 in interest over 10 years.
ATMSWho Owns That Machine?
FORGET PLAIN unmarked bills. Now there are plain, unmarked automated teller machines. Some big banks–notably Bank of America and BankOne–are putting unlabeled ATMs in places like convenience stores. They figure they won’t have to provide free access to their own account holders.
Not so fast, says Seattle lawyer Adam Berger. He’s filed a class-action suit against Bank of America on behalf of customers who have been paying to use the machines, even though their agreement provides for free ATM access. The banks say the pay rent on these machines and should be able to recoup that with fees. Consumers should be able to swing by their local branches before the stop at the 7-Eleven.
VOTINGInvestors Can Play the Punch Card
A CLEAR WINNER HAS EMERGED from Florida’s ballot fracas: it’s Global Election Systems, Inc., the only major publicly traded manufacturer of voting equipment. GES is trading at its 52-week high. Investors who want to play the punch card have few other choices. The other publicly traded firm, Sequoia Pacific Voting Equipment, is a small piece of Jefferson, Smurfit Group. Two other contenders–Election Systems & Software Inc. and Election Resources Corp.–remain privately held. Hopeful investors could wait for a president and an IPO.
title: “Money Notes” ShowToc: true date: “2023-01-24” author: “David Patton”
Drivers’ savings can be big, both in their hometowns and vacation destinations. Within two miles of Disney World in Orlando, Fla., for example, there’s regular gas as low as $1.42 a gallon and as high as $1.72. That’s $5.80 for an average minivan fill-up or $155 for a year’s average driving. JOBSWho’s Talkin’ Trash? Worst fault? he was a perfectionist." If those job offers keep falling through, the career killer might be a bad-mouthing boss. Nervous job hunters can find out exactly what their former employers are saying about them by hiring one of several new Web-based firms to do a little covert action. For less than $100, Web-based companies like References-etc.com, Jobreference.com, Myreferences.com and Badreferences.com will call references and pretend to be potential employers, asking questions like “Can you enthusiastically recommend this employee?” and “Why doesn’t he work there anymore?” Then they’ll report juicy details back to their clients. What’s next? Maybe they’ll lurk in the washroom and find out what your friends really think, too. WEB WATCHA Reality Check It’s not “the real world.” it’s worse: the Real Budget. Newly minted high-school graduates may not have any idea how much they really have to earn to keep themselves in business clothes, car insurance and pizza. They can figure it out with Reality Check at www.jumpstart.org, an online service that tells young people how much their intended lifestyle will cost. You begin with a brief questionnaire: Are you going to live at home? If not, are you willing to share an apartment with a roommate? What are your entertainment preferences: cable TV? Clubs? Sports events? How are you going to get around: car or public transportation? Will you want manicures? After you answer all the questions, the software will spit out the hourly and weekly salary you’ll need. Those who can afford only partial independence can still do laundry and eat at their parents’ house, the site suggests. How real is that?
title: “Money Notes” ShowToc: true date: “2023-01-29” author: “Claude Mire”
Investors will have access to the ratings for $99 a year on the morningstar.com Web site. But bargain share prices are only as good as the analysts who peg them. “We’ll be wrong about some valuations and right about others,” says Pat Dorsey, who is directing the star system.
RETAIL; Smart-Card Start-Up
Target Corp. wants American shoppers to take up a longstanding European habit: smart cards. Starting next month the retailer will ship millions of computer-chip-embedded Visa credit cards and computer readers to its customers. Shoppers will soon be able to plug the card into the reader and download coupons and special affinity deals. Eventually, they’ll be able to add cash to the cards from their bank accounts and use them in long-distance phones, says Target vice chairman Gerald Storch. American shoppers have been reluctant to use smart cards, notably rejecting them in a New York City test back in 1997. But Storch says he’s not worried: “We’ll make the market.”
Other card issuers are close behind. More than 10 million American Express Blue and Visa Smart cards should be in circulation before the end of this year. Ultimate uses are unclear, but at least they offer cross-marketing opportunities.
THE IRS; Taxpayers, Beware
So what’s the excuse this time: one out of four ain’t bad? When Treasury Department undercover agents posing as befuddled taxpayers went into Internal Revenue Service assistance centers last winter, they found a maze of misinformation: 73 percent of questions met with wrong answers, incomplete answers or even no answers at all, according to a recent report by the Treasury’s inspector general.
The IRS concedes “a problem,” but blames it on having to staff the assistance centers so quickly it didn’t have time to properly train everyone, according to the IRS’s John Dalrymple. “We’ve heard excuses from the IRS for 10 years, and I’m sick of them,” says North Dakota Sen. Byron Dorgan, the sponsor of legislation requiring the undercover “taxpayers” to repeat their covert actions monthly. Maybe by next tax season, the new hires will have been able to read all 20,000 pages of the relevant Treasury regulations–plus the 441 code changes required by the Bush tax cut.
CREDIT CARDS: There’s a Catch
Missed another flight? and those airport chairs are hard and uncomfortable? American Express cardholders can now buy travel-delay protection that will pay them up to $200 a night for a hotel room if they miss a flight or it gets canceled. Read the fine print, though: enrollment is free, but you’re charged an automatic $9.95 for every airline ticket you put on your American Express card. The plan covers rooms only for passengers who can’t get on another flight before 11 p.m. And you have to produce your hotel receipt, an original ticket stub, the new ticket stub and a copy of your American Express card statement reflecting the ticket charge to get reimbursed. Tired travelers could just self-insure by bringing a pillow to the gate.
title: “Money Notes” ShowToc: true date: “2023-01-17” author: “Cathy Brantley”
An era ended last week, when the government held its final auction of one-year U.S. Treasury bills. The federal surplus cut the Treasury’s need to float debt. Investors who loved T-bills’ safety and state tax breaks will have to park their savings elsewhere. But where? Municipal bonds have bigger tax breaks, and bonds issued by quasi-governmental agencies like Fannie Mae have higher yields, says New York money manager Gary Schatsky. Savers shouldn’t abandon hope, though: with a fat Bush tax cut on the way, maybe deficit spending will be back again. And with it, those 12-month T-bills.
CARDS: Using Plastic for Taxes
Taxpayers are saying “charge it” to the Feds. Last year they put more than $660 million in tax payments on plastic in more than 200,000 transactions. This year Delta Air Lines is offering double miles for charging tax payments to a SkyMiles credit card. But don’t forget the fees. Because the government isn’t allowed to pay fees to card issuers, users must pay a 2.5 percent processing fee when they charge their taxes. That means that on a $2,500 tax payment, you’ll get 5,000 miles (roughly one fifth of what’s needed for a coach ticket) but pay a $62.50 fee. It might be cheaper to just buy the airline ticket in the first place, put that on the credit card and pay Uncle Sam in cold cash.
INSURANCE: This Policy Doesn’t Cover the Bridesmaids
Engaged couples think of everything these days. Growing numbers are springing for wedding-insurance policies that pay up if the big day gets ruined–by rain, lost rings, bad film, stolen gifts or any of the other things that can go wrong. According to the Insurance Information Network of California, companies such as Fireman’s Fund and Wedsure sell policies for about $250. But they’ll cover only a fraction of the $20,000 average wedding price tag, and won’t pay up if a cold-footed bride or groom balks.
MUTUALS: Disappearing Funds
Last year a record-breaking 223 mutual funds bit the dust, victims of dwindling assets and lousy performance, reports Wiesenberger, Thomson Financial, a Rockville, Md., research firm. When a fund decides to shut down and liquidate shares, its investors suffer even though they don’t actually lose their money. That’s because the fund sells their shares and mails them a check that is subject to capital-gains taxes. Investors should avoid smallish funds that have few assets (say, under $20 million) or are very concentrated in selected investments, like single-state munibonds or single-industry, single-country funds. Those who insist on being that specialized could just buy the individual stocks or bonds and sell when they want to.
title: “Money Notes” ShowToc: true date: “2022-12-27” author: “Michael Riddell”
He believes that the ticker-symbol confusion phenomenon is due to more than “fat fingers”– investors simply typing in the wrong letters on their computers or phone keypads. Instead, he suggests that investors often know so little about the stocks they buy and sell that they simply guess at what they think the ticker symbol would be and just start trading. Even in a frustrating market, that’s not the best investment strategy.
Marketing
Talk About a Hard Sell
INVESTING
War Bonds for Sale
BABIES
Uncle Sam Helps Out With New Additions
title: “Money Notes” ShowToc: true date: “2023-01-16” author: “Belinda Morreale”
A Cheaper Credit Card Is a Phone Call Away
Pretty please, with sugar on top? Ask your credit-card company nicely, and it’s likely to cut your interest rate. Customers who tried recently said it worked more often than not. They saw their rates reduced from an average of 16 percent to 10.47 percent just by phoning their card companies, according to a new survey by the Public Interest Research Group. Card issuers can afford to be generous. They’ve held rates high despite the Federal Reserve’s 11 straight cuts, and aggressively raised late fees all the way to $35 in the past month. Spreads between cheap and costly cards have widened: rates are a rock-bottom 4.75 percent on Wachovia’s Prime for Life card and as high as 35 percent for some cards aimed at poor credit risks. If your issuer won’t make nice on the phone, shop around.
HOMES
Can You Trust Your Mortgage Broker?
Everyone’s vulnerable–people seeking jumbo mortgages, people with poor credit, even the savviest shopper. A recent study by Harvard law professor Howell Jackson found that 90 percent of customers using brokers agreed to loans with higher than normal rates, typically by a quarter to half a point. That may not sound like much, but a half point on a $100,000 mortgage comes to $12,000 extra over 30 years.
Broker gamesmanship often arises when borrowers want to reduce closing costs. The broker takes a payment from the lender instead of fees from you. That means you pay back the lender through a higher interest rate. But it’s usually preferable to borrow more money than pay the higher rate. Your best bet: shop around on your own and cover closing costs through the loan or the old-fashioned way–ask your great-aunt.
BARGAINS
Long-Distance Talk Keeps Getting Cheaper
The last time E.T. tried to phone home, long distance cost a lot more–about 39 cents a minute in 1982. But he returns to Earth during a real talker’s market, and there are deals everywhere. While well-known companies like AT&T or Sprint charge monthly fees for 5-cents- or 7-cents-a-minute plans, another deal stands out as the cheapest for those who don’t mind using a lower-profile service: OneSuite.com charges 2.9 cents a minute (though there’s a 55-cent surcharge for pay phones). Callers have to prepay $10 or more, and receive a 10-digit dial-around number and a personal-identification number. That sounds like a real pain, but customers can put the dial-around number in their speed dial and skip the PIN if they’re calling from home. At that rate, yakking four hours costs less than a movie ticket. Spend the rest on popcorn.
title: “Money Notes” ShowToc: true date: “2022-12-20” author: “Paula Rodriguez”
Cafeterias Go Plastic (We Don’t Mean Food)
The quickest way to lose money? Las Vegas, of course. But parents face similar odds every morning when they stuff some lunch money into their kids’ pockets before sending them off to school. A new Web site, myLunchMoney.com, lets parents charge those meals to their MasterCard or Visa. The service, currently offered in California, will go national this spring, says School-Link Technologies, the Santa Monica firm that runs the Web site and provides other services to some 10,000 lunchrooms nationwide. Parents might eventually add trip fees and library fines to their tab. This could be bad news for bullies, though, who may no longer be able to count on shaking down skinny kids for extra cash.
BONDS
A Safe Investor Haven Is Getting Crowded
TAXES
Sleepy States Could Boost Your Tax Bill
INSURANCE
Coverage by the Mile
