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Lady Gaga tickets aside, should teens have cards?

Filed under: Credit Cards General on March 14, 2014 @ 1:37 pm

Does authorizing your underage teen on your credit card conjure images of front-row tickets to that upcoming Lady Gaga concert, debits from Amazon Instant Video and charges in the hundreds of dollars to your family’s iTunes account?

I know it did for me. That is, until I got talked down off the ledge by Brenna Smith.

You see, Brenna was on her mom’s card when she was about 16, and it wasn’t the picnic a teenager may think it is.

“Growing up, my mom would only pay for my ‘needs’ and not ‘wants.’ †So, if I grew out of a pair of jeans, she would buy that, but if I wanted a new pair of shoes, I had to pay for it,” says the 32-year-old CEO of networking and community website

Brenna had to show she could responsibly handle a card with a — wait for it — $100 limit before the limit increased. Brenna was given her own co-signed card once she turned 18.

Someone under 18 can’t sign into a contractual agreement, so the only way a minor can use a card is as an authorized user, says ClearPoint Credit Counseling Solutions blogger Thomas Bright. That means they get the benefits of improved credit ratings and access to the card, but not the disadvantages, provided the parent has a good credit record, says blogger Greg Meyer of Meriwest Credit Union.

It also provides parents an opportunity to instill good money habits, says Brenna.

She advocates the tough-love approach to card use among teenagers. Here are her tips to a peaceful life with your card-carrying teen:

1) Start with a low credit limit. “Having access to a lot of ‘money’ is very tempting at first, so many teens fall into the trap of spending it like they have it,” Brenna says. “As I learned to spend within the bounds of my card — and pay things off on time — my mother gradually increased my spending/credit limits. Also, you don’t want to get stuck with a $3,000 bill because of one wild and crazy teen night.”

2) Work together. Encourage your teen to develop a budget, track spending, understand where money is going and even do a total at the end of the year. “‘I spent HOW MUCH at McDonald’s over a year?’” Brenna says they’ll ask. “Many teens, and adults alike, have no idea how much they spend on frivolous items, nor do they understand where their money goes.”

3) Stick to your guns. “As my mom would say, ‘Too bad, so sad,’” says Brenna. “If they overspend, have late fees, don’t step in and pay them off. What are you teaching them if you rescue them from their financial issues? They need to feel the repercussions. As a parent, you want to help and protect your child from these things, but I promise, the financial discomfort is a learning lesson.” But what about the unpaid bills impacting your credit score? Keep paying the bill, but require your teen to reimburse you. “The spending habits of the user can be detrimental to the primary account holder if the user runs into trouble,” warns Bright.

4) Don’t be afraid to pull your kid’s card temporarily. As the Department of Motor Vehicles likes to say: “It’s a privilege, not a right.” Remember, this is supposed to be a life lesson, so make it one. Let them make dumb mistakes, and then learn from them.

The dumbest thing Brenna ever did with her card? Cover a friend’s expenses. “I often found myself saying: ‘Oh, I’ll get it, and you can pay me back.’ Ninety-nine percent of the time, I never saw a cent.” What did Mom do? “She let me handle it,” Brenna says. “If that’s what I chose to do, then I would have to pay the consequences in terms of paying for it myself, covering the interest, making sure I didn’t go over my balance. It taught me not to throw my credit card down as quickly.”

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Don’t let financial weaknesses be a money suck

Filed under: Credit Cards General on March 12, 2014 @ 1:59 pm

Knowing your financial weaknesses can help you think twice before buying something that might be a money suck. One of my big weak spots is making big purchases that I think will improve my life, then not using them.

Recently, I came across a product I thought I had to have, but it was very pricy: over $1,000. After thinking about my weaknesses and carefully considering my options, I came up with a free alternative that has been working great.

The item? A treadmill desk. Recently, I’ve been reading about the dangers of sitting for prolonged periods of time. I’m a writer. For me, working equals sitting. †I learned that getting up once an hour and moving around for a few minutes might be as good, or better than, using a treadmill desk. Since I’ve added the extra activity to my daily routine, I feel healthier and more energetic, and I can focus better on work.

If you’re thinking about dropping a chunk of money, look at whether your desire to buy is triggered by a financial weakness, and ask yourself if there’s a cheap or free way to get the same results.

Of course, each person’s must-have items will vary. But, here are some “must haves” I’ve bought or seen my friends buy, along with cheap or free alternatives:

Must have No. 1: A CSA (community-supported agriculture) share

Cheap/free alternative: Grow the veggies you love and trade with friends who also garden.

Must have No. 2: A gym membership

Cheap/free alternative: Walk or run, do yard work, deep clean your house, wash your car or do volunteer work such as building homes for Habitat for Humanity.

Must have No. 3: Dinner at fancy restaurants

Cheap/free alternative: Start a monthly gourmet dinner club with your friends where each person brings one course.

Want to avoid buying a “must have” that’s really not? Here are some tips:

  • Pinpoint your weaknesses. If you don’t already know your financial weaknesses, take time to identify them. Personal finance blog Girls Just Wanna Have Funds recommends looking at when you get a momentary rush out of spending, then feel bad later.
  • Think about the why behind the weakness. David Ning, the blogger behind Money Ning, writes that eating out at restaurants is a weakness for many of his readers. His advice (which applies to just about any weakness): Think about the reasons why you’re tempted. Is it convenience, peer pressure, laziness or something else? I realized that the items I want to buy (or do buy) represent some change I want in my life. Once you understand the why, you can brainstorm ways you can get the same benefit for less.
  • Make sure you’re thinking straight. As Ning points out, it’s harder to avoid temptation and make good decisions about spending if you’re frazzled, overworked and generally not taking care of yourself.
  • Do your research before you buy. Learn more about the product. Read reviews. What do other consumers say? You might stumble on a cheap or free alternative that will give you the same results. One example: When I was researching burr coffee grinders, I learned about hand-crank burr grinders, which typically cost less than $20 — other burr grinders cost $100 or more. So, that’s one more cheap/free alternative to a “must have” item.

Make a game out of spotting your financial weaknesses: Look for more cost-effective ways to get the thing you’re after. Your wallet will be better off, and so will you.

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Why I love debit cards for my teens

Filed under: Credit Cards General on March 7, 2014 @ 11:19 am

There was a buzz last year within the 13-year-old set at my son’s middle school — one of his oldest friends had received a debit card from his parents.

We’ve known Trip’s family since the boys were 3, and have watched him and his 17-year-old sister grow alongside our two sons in north Austin. Trip’s parents are successful business owners and have long instructed their children in good money management. Trip, now a freshman in high school, has been saving for his first car since middle school, mowing neighbors’ lawns in the summer.

So, when my son Byron announced that Trip had been let loose with a debit card, I took notice, and I wanted to know more behind his parents’ thinking.

“We want to get him prepared for when he won’t be under our wing,” mom Tonya explains.

Trip and his sister were each given a card in January of their eighth-grade year. The cards are tied to their checking accounts. Trip is given $100 at the beginning of each month; his sister, Josie Kate, gets $150.† They are expected to use their money for incidentals ranging from transportation with friends to clothing.

“It has been a good way to show Josie Kate the option of getting a book at the library rather than buying a book,” Tonya says.

So far, Tonya has not had to put limits on how the money is spent, although she regularly monitors their accounts, as do they.

Has anybody gone over budget? “Josie Kate has come close,” Tonya says. “She has been down to $5 or $10. I almost want her to run out. I want her to experience that while she’s still here with us.”

It intrigued me not to be nickel and dimed by my kids, so Tonya had my attention. But first, I wanted to know if there was a security risk. I immediately thought of the dangers of a kid’s stolen debit card wiping out his parents’ checking account, if overdraft protection is linked between the accounts. So, I checked in with my credit union.

It turns out the credit union allows you to opt out of overdraft protection. This means if the account has insufficient funds, a merchant will reject your card. I saw great possibilities with that. My kids could learn the embarrassment of overdrawing without damaging their credit.

Tonya, who banks with Wells Fargo, has a similar arrangement for her children’s accounts.

One issue to consider is potential fees. Business Insider warns of prepaid debit cards in part because of the fees. Also, Dave Ramsey recommends that you expose your teen to cold, hard cash first. But the fact remains that a card attached to your teen’s checking account is a tangible budgeting tool, and it’s something you can monitor online.

So, I checked with my credit union, and there were no fees attached to the cards. Add to that, the kids’ credit wouldn’t be impacted by mistakes. I was sold on Tonya’s idea. My husband and I decided on $150 per kid, with the option to veto the purchase of certain items (Byron has been bucking for a mini-fridge and television in his room since he was 9. I’d never see him again if I agreed to that!)

My 16-year-old, George, was concerned that he would not have enough when he needed to buy his next pair of shoes — he rips through them every few months. He was scared he didn’t have what it took to save money. But then, I watched his brain whirl as he figured out that he could save $50 a month for necessities and still have $100 for the fun stuff.

But George didn’t stop there. He decided he wanted to also save for a cheap travel computer. So now, the boy who hasn’t saved his money since he was 8 is forgoing McDonald’s and breakfast tacos for several months.

What about Byron? It’s more likely he will boycott the purchase of new shoes in favor of torn, worn ones, thereby making my husband crazy. But I plan to stand firm. If he really loves the idea of rainwater seeping into the holes of his shoes, he can go for it. But, as Tonya says, you want them to learn these lessons now, while they are with you.

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The truth about Target’s credit monitoring offer

Filed under: Credit Cards General on March 5, 2014 @ 2:12 pm

Consumer Reports has come out with some pretty valid criticism of the free ID theft monitoring service Target is offering for one year for U.S. customers. Nonetheless, I signed up for the service.

Target made the offer as a result of its massive holiday data breach, and I jumped at it in January for two reasons:

1. It’s free. Credit monitoring typically costs between $10 and $25 a month, and it’s a service I don’t buy. I look at my credit reports for free once a year at If Target wants to give me the chance to monitor my credit for a year without paying a cent, I’ll take the offer.

2. I shopped at Target during the breach. Both my husband and I swiped our debit cards there, unfortunately. Our bank issued us new debit cards — likely because of the breach — but I definitely plan to stay vigilant.

The process of signing up is easy, and there are no hoops to jump through. The store is offering the perk to any U.S. Target shopper, but you don’t have to prove you’re a customer.

To do so, just go to Target’s website and type in your name and email address to get an activation code. You need to do this before April 23. After you get an email from Target with your activation code, go to Experian’s, enter the code and complete the sign-up process — you have until April 30 to complete this step.

Once you’ve registered, you can look at your Experian credit report to make sure everything looks fine. Mine did. For one year, you’ll get alerts when anything changes on your credit — for example, if anyone applies for new credit in your name — as well as $1 million in ID theft insurance and access to a fraud resolution specialist.

The Talking Cents blog from American Consumer Credit Counseling Inc. encourages consumers who might be victims of the breach to sign up.

But not everyone agrees that the credit monitoring is a good thing. Consumer Reports published an analysis of the service in February. It concluded that the free credit monitoring could give consumers a false sense of security and has many other downsides, including:

It’s incomplete. You get only your Experian credit report — not reports from all three bureaus. Also, you don’t get your FICO score. I have to admit, I was disappointed that the service — which normally costs $15.95 a month (or over $190 a year) didn’t include my score.

Experian pushes you to buy more. Once you sign up, Experian tries to upsell you. Consumer Reports tallied the additional products pushed and found they add up to almost $75 that a consumer might be persuaded to shell out.

You get limited access to your credit report. You only get free online access to your Experian report for a month unless you become a victim of fraud. Really, that does seem pretty inadequate: I’d expect a good service to offer yearlong access to the report.

So, should you sign up? Consumer Reports recommends that you carefully monitor your debit and credit card transactions via online banking (the service does not do this, by the way) instead, and put free fraud alerts and security freezes (which can cost around $10 depending on where you live and your situation) on your credit. It also advises that you watch out for scammers who are taking advantage of the Target breach, contacting consumers to try to con them into giving out personal information. (Helpfully, Talking Cents includes a link to the legitimate email from Target, and warns readers not to get sucked in by the breach criminals attempting to gain more information.)

My opinion: Consumer Reports has a point, and the free service offered by Target is by no means impressive. However, it can’t hurt to take advantage of it, along with taking other measures such as closely monitoring your accounts. In fact, that’s something all of us should be doing anyway since it doesn’t take a massive data breach to become a victim of fraud.

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Are credit freezes worth your time and money?

Filed under: Credit Cards General on February 28, 2014 @ 2:44 pm

Being the little sister, advice comes in abundance from my two older brothers. It’s immaterial that we are all living in our sixth decade. I’m still the baby.

So, no surprise when there was a recent flurry of email activity between us over the Target data breach brouhaha. The holiday breach was just the beginning of a retail fiasco that included some of the industry’s most prominent names, including Michaels, White Lodging and Neiman Marcus.

So what was the upshot of my brothers’ advice (which I might add, is always well-informed and 99 percent of the time appreciated)? It turns out that one of them recommended a credit freeze. Swears by it. Loves it. Wouldn’t have it any other way.

A credit freeze is an order placed with credit bureaus Experian, TransUnion and Equifax that prevents lenders and other companies from viewing your credit report. When you “thaw” or temporarily lift the freeze, you are allowing the release of your credit report.

Here’s how it works: My brother Byron keeps a freeze on his credit reports with all three bureaus most of the time. This ensures that folks who have no business accessing his credit information don’t get it. When he took out a loan to buy his new house, he “thawed” the freeze temporarily, allowing lenders to access his information so he could get approval for a loan. Once the house was closed on and he moved, he reactivated the freeze.

Byron is a cautious fellow, and it gives him peace of mind to know that an identity thief or other unsavory sort isn’t taking out credit cards in his name.

Freezes, thaws and removals typically cost $10 each time for regular consumers and are free for people who believe they are victims. The costs vary according to state law, however. Senior citizens and kids under 16 sometimes get a break.

Now, $10 times three credit bureaus doesn’t sound like much for a little peace of mind, right? But remember that every time you thaw or reset a freeze, that’s another $10 or so. That was the first problem I saw in my cautious brother’s advice.

So, before I proceeded, I wanted to know more about other downsides. I turned to Experian Director of Public Education Rod Griffin.

Almost immediately, Griffin warned me that freezes aren’t for everyone. In fact, he says, if you aren’t a victim, you probably don’t need one, particularly if you are credit active. For example: “People don’t realize that cell phone companies regularly check for credit. What if you are applying for new service or renewing service or changing providers?” he asks.

Also, he notes, you are removing yourself from the credit marketplace, something you may not mind if card companies are making you crazy with offers. But you won’t get preapproved offers, if that matters to you.

On the other hand, if you are obsessive about protecting your data, freezes can be a good option. “But, you need to take into account all the factors around it,” Griffin says.

In most cases, your credit file can be thawed by telephone, online or by mail, and is typically lifted within an hour or even 15-20 minutes. However, Griffin says, Experian asks that you allow for a day or two, because additional documentation may be needed.

Credit freezes are for those of us who are organized. If you lose the PIN code you get when you sign up and need to thaw your file, there will be a delay for documentation. Also, new parents, students and people in their early 20s are usually credit active, making credit freezes a poor option. “Look at your financial situation and your personality. My file isn’t frozen, and I see no need to freeze it,” Griffin says.

But my brother isn’t alone in loving credit freezes.

Blogger Clark Howard loves the credit freeze option and offers step-by-step instructions on launching freezes with the three credit bureaus.

Financial attorney and debt specialist Leslie Tayne recommends freezes for people who are elderly or ill and can’t regularly monitor their accounts. For example, my dad was a perfect candidate. In his later years, he didn’t have a computer and wasn’t taking out loans, new cards or changing service providers.

Maybe I’ll take my brother’s advice and order credit freezes down the line, but not right now. We are in the market to buy a house, so we’ll be taking out loans and changing service providers soon. But I’m leaving it open as a possibility.

If you want to pursue credit freezes, check out what the three bureaus have to say:

To learn more, go to Equifax, TransUnion or Experian.

You have to work a little harder to find the freeze information on the Experian site, but it has a wealth of information. Go to the bottom of the page and select your state. Or, you can search Google this way: “(Your state) Experian Credit Freeze,” and you get the page for your state of choice.

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Don’t let foreign charges trip you up

Filed under: Credit Cards General on February 26, 2014 @ 1:11 pm

When I’m making credit card purchases online, it’s usually from or another U.S.-based retailer. But I recently made a few international purchases online, and it got me wondering about the ins and outs of using credit cards with international online merchants.

In the past few months, I bought lace window privacy film from a British home goods retailer. I also purchased earrings from an shop in Turkey. And, I got some records from a seller in Spain as a present for my husband. I used my Capital One card, mostly because it’s my go-to card. I also like that it doesn’t charge foreign transaction fees, which can be up to 3 percent when you make purchases outside the United States.

To prevent any foreign purchasing snags or fees, here are some things to know when making a purchase from an online retailer in another country:

1. Let your card issuer know about the purchase. An online purchase from a retailer in another country could trigger a fraud alert, according to Linda Sherry, director of national priorities for Consumer Action. Worst case scenario: You are declined next time you buy groceries or gas, although your issuer might simply call you to make sure the charge is valid, Sherry says.

2. Use a card that doesn’t charge a foreign transaction fee. Many frequent travelers swear by Capital One, which charges no foreign transaction fee and even covers the fee charged by Visa and MasterCard. Other cards, such as Discover It and the Chase Sapphire Preferred Card, advertise no foreign transaction fees.

3. If your card does charge a fee, find out if that applies to online purchases. Your card-issuing bank or credit union might have to pay a fee when you make an international purchase, even online, and might pass that on to you or even charge you more than they pay. For example, Visa charges between 0.15 and 1 percent to its “financial institution partners” for any transactions that require the use of its global payment system, and states that those institutions may decide whether to pass the charge on to their customers. You can check your terms and conditions or call your card issuer for clarification.

4. If you get dinged with a fee, complain. As consumer advocate/journalist Christopher Elliott explains on his blog, your card issuer might refund the fee as a courtesy. That’s what happened to one of Elliott’s readers who got hit with a $27 charge for purchasing an Air Berlin ticket on Try your card issuer first to see if it will remove the charge. But Elliott’s reader had to file a complaint with the U.S. Department of Treasury through, a site that helps consumers handle issues with their banks. Finally, his issuer removed the fee.

I think if I make more international purchases, I’ll tip my card issuer off ahead of time so it knows the charge is valid. It might not be necessary, but I’ve had my card declined at the grocery store after my issuer caught a fraudulent charge made in Africa. Since it’s no fun being told at the register that your card didn’t work, I’ll definitely take that extra step to avoid that hassle.

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A new twist in card perks — FICO scores

Filed under: Credit Cards General on February 21, 2014 @ 9:42 am

Many credit card perks encourage cardholders to spend. So, it’s refreshing to see some card issuers offering a benefit that could help consumers manage their credit better.

Barclays, First National Bank and Discover are giving some customers regular access to their FICO scores through the FICO Score Open Access program, which allows lenders to share the scores they purchase with consumers.

Discover at first provided the perk only for Discover It cardholders, but this month the company announced a rollout to all Discover cards, including Discover More, Discover Open Road, Discover Motiva, Escape by Discover and Miles by Discover cards. And thatís not all: In addition to the score, Discover will include on monthly statements an explanation of the main factors affecting the score so consumers can better understand their credit. According to, FICO spokesman Anthony Sprauve said the company is discussing the rollout of free credit scores at five other large credit card issuers, which he declined to name.

While it is possible to get “educational” credit scores — sometimes referred to as “FAKO” scores — for free, the FICO score is the one most commonly used by lenders. As notes, some free scores might be inaccurate, or you might have to pay to keep getting access after your initial freebie.

For continuing access to your FICO score from, you pay $14.95 a month (after an introductory month at $4.95), or almost $180 a year, for its score monitoring service. Or you can pay for one-time access for $19.95.

Unfortunately, my credit card issuers, Capital One and Chase, aren’t offering this benefit yet. I check my credit reports for free at, but these reports don’t include a credit score.

I’ve used a free trial of’s service to take a peek at my score, but, as the Financial Samurai personal finance blog points out, you have to remember to cancel the trail membership if you go that route, or you’ll get charged.

As notes, the decision by several major card issuers to offer a free FICO score is a huge boon for consumers. Here are three pluses:

1. It gives you a specific measure of your credit. Seeing your score is kind of like stepping on the bathroom scale: You get a cold, hard number that doesn’t lie. On the other hand, when you just look at your credit report, it’s easier to think of it in vague terms. Much like dieting — “oh, my jeans feel OK, so I think I’ll have this hot fudge sundae” — vagueness can hinder progress.

2. It might help keep consumers more engaged with their finances. In a column on on the importance of credit monitoring, money coach Lynette Khalfani-Cox points out that the simple act of monitoring your credit promotes consumer engagement and awareness around credit and finances. While keeping tabs on your FICO score is just one part of monitoring your credit, it’s an important one.

3. It will help consumers learn more about how credit scores work. Consumers will be able to see how certain actions cause their score to change. And Discover spells it out for consumers, listing the top two factors from their TransUnion credit report that affected their score. And Barclaycard will offer a chart showing score history over a year.

I like the idea of this perk so much that I’ve considered applying for a Discover card. But Bloomberg recently reported that more U.S. banks might soon offer free FICO scores. So, for now, I’ll wait and hope one of my credit card issuers follows suit.

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Despite doubts, I’m a newly Mint-ed money manager

Filed under: Credit Cards General on February 19, 2014 @ 8:47 am

I guess Iím showing my age.

Ever the numbers cruncher, I have been intrigued by the financial organizing tools of It helps you budget, plan and track your investments, debts and spending. Nice, right?

Then I found out that I had to share the usernames and passwords of my different financial accounts for the online system to work for me.


And it turns out Iím not alone.

Mint is “a pretty good outfit with lots of online security. [But] it’s only good until someone finds a way to hack it,” says CreditUnionGuy blogger Greg Meyer, who is 54.

Nevertheless, Meyer recommends Mint to clients as a great tool for those just learning how to budget. He’s found that the younger crowd, 35 and under, does well with Mint’s visual and money management tools, such as the email alerts and the handy app. But, the California resident admits he doesnít personally use it. “I don’t want all my information in one place. For me, I want a spreadsheet. I’m old school.” Although Mint doesn’t have demographic data available, it seems to be a generational thing. Alex Matjanec, 30, uses it as a sort of joint account with his wife of two years. For the past year, they have managed their spending with the help of Mint.

The co-founder of MyBankTracker, †Matjanec has observed that the younger set tends to trust online systems more than older users. That said, he notes that his 62-year-old mom uses Mint. MyBankTracker does not partner with Mint.

While Matjanec has found the budgeting tips to be generic, and he notes that some banks don’t participate with Mint, he likes the service’s high encryption feature, iPad and mobile app, and alerts.

OK. I was convinced. The time came for my 51-year-old self to kick Mintís tires. I took a deep breath, created a Mint account and started adding my financial accounts. There was a hiccup with my credit union — it didnít participate with Mint — but the personal finance website promised to try to rectify that. Online brokerage firm ShareBuilder required an extra security step that took about a minute. And my husbandís Citibank card required me to verify his identity by a certain date. In all, it took me about 15 minutes to add my accounts, minus my credit union.

Matjanec points out that when you log in to your Mint account, only your email is visible, and not your name or personal information. That means that even if you step away from a computer while still logged in, someone won’t be able to access your personal information, including account numbers. Also, money canít be transferred between Ė or out of Ė accounts. That made me feel a little better, but what about the siteís other security measures?

Acquired by Intuit in 2009, Mint prides itself on limiting the collection of personal information, offers encryption that Meyer says rivals banks and provides the ability to delete your information from the company’s servers.

InvestorJunkie.comís Larry Ludwig approves of Mintís ease of use. He recommends it for its basic budgeting features, while recommending for those with more than $100,000 to invest. In fact, Ludwig argues that Mint is best suited for Gens Y and Z.

Jason with PhroogalBlog likes the ability to track expenses by category, a feature helpful to those of us trying to cut back. Thatís actually Mintís most valuable feature for my family. A portion of my expenses is paid through credit cards so I can build my rewards points. Mint allows me to track our credit cards in one place, rather than logging onto to several accounts and tracking on a spreadsheet — something Iíve been known to do.

So, in all, Iím willing to test drive Mint. I even coughed up my cell number so they can text me, something I don’t often do. But my spreadsheets are remaining on my laptop. Thatís something I canít bring myself to give up just yet.

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5 ways to tame your medical bills

Filed under: Credit Cards General on February 12, 2014 @ 12:31 pm

Have you ever dealt with a barrage of medical bills? It’s not fun, and worse, it can even ding your credit if you’re not careful.

It’s especially challenging to deal with envelope after envelope from insurance companies and medical providers when so many of us have gotten so spoiled by paperless billing and automatic bill pay. It definitely overwhelmed me and almost led to a black mark on my husband’s credit.

Our medical bill debacle started with several health issues — a shoulder injury and a health scare for me, and severe back strain for my husband. In the span of a few months, we had doctor visits, physical therapy sessions, an ER visit and an array of tests.

That, of course, resulted in a flood of mail from our insurance company and, eventually, a slew of paper bills, many of which were under $20. We were also remodeling our house, and a few bills got misplaced.

At one point, I received a collection agency notice for a lab test bill for my husband. Neither of us could remember getting the initial bill or any late notices.

I immediately asked the collection agency if the notice had been reported to the credit bureaus. They told me that they had just received the account, and it had not been reported. I explained that this had been an oversight. We agreed to pay promptly, and they promised that a collection notation would not show up on my husband’s credit report..

I eventually got a handle on our bills, and developed five ways to keep track of a large number of medical bills.

1. Designate a place for bills

Unless you pay every bill as soon as you get it, it’s important to set up a bill-paying zone in your house. That’s what I used to do before I automated everything, and I’ve found it helps keep bills from getting stashed in a drawer or even tossed. Also, seeing the bill every day reminds you to pay it.

2. Stock up on stamps and envelopes

We use stamps so rarely that we’d gotten in the habit of not keeping them around. I hate having to spend extra to pay a bill. But while some medical providers offer the option of online payment, others don’t. Keeping old-school, bill-paying supplies makes it easier to pay bills quickly.

3. Keep track of bills you’ve already paid

Medical providers are notorious for double billing, so it’s important to stay organized. In fact, a recent bill I received notified patients of a change in billing procedures that “might result in double billing.” I †write “PAID” on each paid bill and stick them in a dedicated folder. Being Mama Bear, a blog about parenting chronically ill children, recommends writing the date of payment on the bill itself and recording the amount in Quicken or wherever you keep track of your finances. Consumer blogger Kerry Taylor, at, recommends a dedicated medical expense spreadsheet, which helps at tax time, too.

4. Read mail from your insurer

It can be tempting to toss those explanations of benefits from your insurer that say “this is not a bill.” Don’t. By reading them, we caught a mistake that listed an in-network lab as out-of-network, meaning the insurer paid less and we owed hundreds of dollars. I called the insurance company immediately and got the error corrected. Personal finance writer Miranda Marquit points out on that medical bill errors are common and often not in the consumer’s favor.

5. Follow up with medical providers

After our brushes with collections, I worried that some bill might be floating around unpaid and later damage my or my husband’s credit. So, I went through the folder of paid bills and called each doctor, hospital and lab to check for outstanding bills.

Finally, you can go high-tech with Simplee Wallet. blogger Elle Martinez suggests the medical tracker if it’s available for your health insurance plan (It wasn’t available to Martinez when she had birth-related medical bills.) If I had known about this tool a few months ago, I probably would have tried it.

But there was an upside to dealing with our medical bills the old-fashioned way: We remembered not to depend on automation and to be a little more hands-on with our money.

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How I kept recurring charges from dragging me down

Filed under: Credit Cards General on February 7, 2014 @ 5:23 pm

Have you ever signed up for a product or service that charged a monthly fee to your credit card, realized you no longer wanted it, but neglected to cancel?

Recurring charges have tripped me up several times lately, and it’s easy to see why. Automatic recurring subscriptions or orders typically work on the same principle as automating your savings, only in reverse.

When you put your saving on autopilot, you will likely sock away money because it requires no additional effort. But if you hand over your credit card information for a subscription — or a “free” trial offer — you’ll likely keep spending because you have to take action to stop.

For example, I subscribed to during our home remodel. I chose to pay $6.95 a month rather than $30 for a year. I figured I’d do my research on major appliances in a month or two, then cancel my subscription. It’s been five months, we’ve purchased our appliances, and I haven’t canceled. I’ve already paid $34.75.

So, I looked at the reasons behind my failure to cancel subscriptions in a timely manner and possible solutions:

  • I’m mentally minimizing small amounts of money. I have to admit, when I look at my credit card statement and see the charge for Consumer Reports, I make a mental note to cancel it, but it doesn’t seem urgent. Why? Partly because the amount is small. The solution: Think in yearly terms rather than monthly. If I go seven more months without canceling, this subscription will cost me almost $84. Yikes.
  • I’m indecisive. Sometimes purchases are about something bigger, such as a wish or dream. When I signed up for a $19.99 monthly subscription to an online service that streams Latin American TV, it seemed to be good use of my “want” money. The big reason why I signed up? I wanted to brush up on my Spanish. But I signed up for the service on a whim and during a super busy time. I’ve watched exactly one Argentine game show and learned three new words. But if I cancel, I feel as though I’m giving up on my goal. The solution: Lean toward canceling; you can always sign up later or find a cheaper way to accomplish your goal. So, I’ve kissed my telenovelas goodbye for now.
  • I’m being lazy. Sometimes, I just put off canceling a subscription. It’s usually because I don’t want to hunt down my account information and figure out how to cancel. The solution: I’ve vowed that any time I subscribe to something in the future, I’ll look at how to cancel and save that information, along with my username and password, and keep it in a safe place.
  • Companies make it hard to cancel. Companies don’t want to see you — and your regular cash infusion — leave. I used a free trial to get my FICO score, and when I called to cancel, a nice lady gave me three different sales pitches to get me to stay. When I canceled my subscription, this message popped up on my screen: “Wait! Don’t leave Ö why cancel your subscription now when you can take advantage of it until it expires? (Your credit card will not be charged again.)” I called and was told that I will get the access through the end of the month, for which I’ve already paid. But that message was confusing, and I can see how it might convince others not to cancel. The solution: Stay strong. If you have to talk to a person by phone, come up with a vague line (“I don’t need this service right now”) and be willing to repeat it several times.

So, what are some other ways you can avoid mindlessly having money siphoned from your account for subscriptions you don’t use? Here are some tips from personal finance bloggers:

  1. Elle Martinez, the blogger behind, recommends reviewing your subscriptions regularly to gauge how much you’re using them and how much value you’re getting. Life changes, and Martinez, who was expecting a baby and anticipated having less free time, canceled a subscription to an online game and downgraded her Netflix subscription.
  1. recommends being careful about getting sucked into “free trial” offers — some are scams and even the legitimate ones often can be a hassle to cancel. Think of them not as a freebie, advises, but as a paid subscription with a free first month.
  1. advises you to “cancel a recurring bill today.” Thousandaire blogger Kevin McKee says he saved more than $1,000 a year by canceling his $60 a month cable and his $40 a month membership to a golf driving range.

So, here’s a challenge: Look at your budget right now and find one subscription or other recurring expense that you don’t want, use or need anymore and cancel it right away. No excuses. Take five minutes to do that and save a big chunk of money over the next year.

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