How to Protect Yourself From Identity Theft

Identity theft is big business. In 2007 alone there were over 670,000 reports of consumer fraud and ID theft.

So how do you protect yourself? What can you do to prevent identity theft from happening to you?

While you may not be able to protect yourself from all cases of fraud or identity theft, there are a few simple things that you can do to help keep your information out of criminal hands. If you make these steps your regular habits, they will serve as a shield for your personal information, and make the possibility of identity theft a lot less likely.

Shred Your Personal Information:

Most of us already know that we should be doing this - but very few of us do! You can buy a cheap shredder at any office store, and run every single personal document through it before you throw it away.

Honestly, the possibility of an identity thief spending time sorting through your garbage is becoming more and more remote. There are just easier ways to steal someone’s personal information. However, it does still happen! So it’s still a good idea to protect your identity by shredding your documents and mail. Make sure anything with a bank account number, credit card number, social security number, or even your date of birth gets destroyed before it goes into the trash.

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Make Your Credit Card Company Work For You!

Right now the credit card industry is a little haywire thanks to the economic meltdown we’re in.
Companies are cutting people’s credit limits without notifying them, and in some cases, even closing credit accounts without reason.

So, what should you do? I say turn the tables! Make your credit card companies work for you, instead of the other way around! If you pay your bills on time and have good credit, there are tons of ways to get a better deal out of your credit card companies - all you have to do is ask.

Each and every one of the strategies below can be accomplished with a couple of simple phone calls to your credit card companies. The amount of money you can save should more than make up for the time you have to spend on the phone!

You will almost certainly have to talk to a customer service manager to get these types of deals, so don’t waste too much time with the representative who answers the phone - just ask to speak with their manager or supervisor.

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Easy Method to Quickly Start Budgeting Money

Budgeting your money is one of those things many of us dread to do. If you haven’t experienced it already, living paycheck to paycheck isn’t ideal. So, if you haven’t made a budget for your money yet, today is the day to start one. It isn’t as hard as many people think. Money Tree created a brand new software application that I believe will help beginner budgeters. Here are the benefits of this software as opposed to other methods of budgeting:

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9 Outrageous Things To Know About the Bailout

We all realize that something needs to be done to help our economy, but I’m still not comfortable with what has been done. When the bill was first drafted, it was a wide open door for one man, Henry Paulson, to have unlimited power and control of all the bailout money. Limits have been added since then, but check the things out below that still remain in the bill.

As a reminder of how your government operates, the Senate cannot originate a spending Bill. Article 1, Section Seven of the Constitution says, “All bills for raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other Bills.” So what the Senate did was pass amendments to the H.R. Bill 1424 that was passed by the House of Representatives. The bill starts out with an amendment to the Employee Retirement Income Security Act of 1974.

When I heard that the bill is 451 pages long, I wondered how they had time to read it since they have been in meetings most of the time. Actually the bailout part is from page 2 to 113, so it is only 111 pages. That is still a lot to read.

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How to Manage Too Many Credit Cards

Recently a friend asked me the following question: “If I have 4 Visa cards, 1 American Express, and 3 Store Cards, is that too much? I am never late and pay off almost all of them. Should I be closing some or just keep them open without using them?” -Jeffery

The Answer
The amount of credit cards you have open do not directly impact your credit score. However, your amount of debt to credit ratio does. For example if you have $10,000 worth of credit and $2,000 worth of debt, then you debt to credit ratio would be 20%. The higher this percentage is, the lower your credit score will be. It is a good rule of thumb to use less than 30% of your line of credit on any single credit card.

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What Went Wrong in the Mortgage Industry

We have all heard about ARMs - Adjustable Rate Mortgages and Interest Only Mortgages and Balloon Mortgages, but how did this debacle start? In 1929 the Glass-Steagall Act was passed to prohibit banks from accepting both deposits and underwriting securities. In 1999, the Gramm-Leach-Bliley Act was passed which effectively repealed this separation for many large financial institutions.

Investment banks had previously assisted lenders in raising more lending funds. They had the ability to offer longer-term fixed interest rates by converting loans into bonds. The banks would make house loans in the form of a mortgage, and then use the investment bank to sell bonds to fund the debt. The money from the sale of the bonds can be used to make new loans. This is called securitization. The banks began to securitize loans themselves, and the investment banks also became lenders.

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Is the Secretary Paulson and Ben Bernanke Bailout a Good Idea?

There are many saying that Secretary Henry Paulson’s bailout plan is not the best way to deal with the credit crunch crisis. Paulson came from Goldman Sachs. Is he trying to protect his buddies? Are they taking advantage of the fact that the administration of the country will change soon and then the new leaders can blame their predecessors?

The bailout shifts the burden of the losses to the taxpayer. Another problem with that is that we are not even getting fire-sale prices. They say the bailout will not be effective if bottom dollar is paid. So they are trying to speculate on what it will all be worth in the future.

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The Secret to Living Without Credit

Devil’s Advocate It’s funny how everyone has fallen into the credit world of credit cards and credit score. Credit cards are like tricky games of who can out smart who and credit scores are just silly numbers that companies and institutions with trust issues use to size you up. Wouldn’t your life be so much better if you never have to worry about juggling your money on credit cards or have to stress about getting a high credit score? Wouldn’t that be great?

If you think it is impossible, then I am glad to tell you that you are wrong because people live without credit every day.

The Secret
The secret to living without credit is…

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Which Debt Should I Pay Off First?

There is good debt and bad debt. Good debt is called good debt because it is tax deductible if you itemize your taxes. This includes mortgages, some types of student loans and business loans. It makes no sense to speed up paying off low-interest, tax-deductible debt if you have any other kind of debt. You should first pay off your highest-rate, nondeductible debt first. Do not pay more on your mortgage at the expense of not saving more for retirement. The sooner you start saving for retirement the more you will save because of compounding. Plus you can’t get back an opportunity to contribute to a tax-advantaged retirement plan once you have missed your chance. Withdrawing from your retirement early should never be considered. The money you will lose in the long run, plus the taxes and penalties that you will have to pay now make this a very bad choice. You will sacrifice 1/4 to 1/2 of what you withdraw to taxes and penalties. Borrowing from your retirement is a bad idea also. An additional risk to borrowing from your 401(k), is if you lose your job, you have to pay back the loan in a short amount of time or it will be taxed and penalized as a distribution.

A Mortgage is Good Debt - Don't Pay It Off Credit Cards are Bad Debt - Pay Them Off

If things get really bad and you end up in bankruptcy, the credit card debts can be wiped away. You don’t want to risk losing your retirement money also.

Focus on paying off bad debt which consists of credit cards, unsecured loans, and loans that are not tax deductible. Start with the highest interest bad debt and pay more towards it each month until it is paid off. Then focus on the next highest.

Are You Prepared for the Worst?

Hank Paulson the Treasury Secretary, and the government are working on a plan today to set up a government facility to take on bad debts from financial institutions to prevent the global credit crisis from worsening. They say that the problem is that companies who borrow to keep their businesses running cannot get credit. There are questions as to how fast the government can actually implement such a plan. Some say it could take weeks. I don’t know what the repercussions of a move like this would be other than we the American taxpayers would be taking on more debt.

White House spokeswoman Dana Perino questioned whether doing something in the middle of a market correction was wise and acknowledged it could be difficult to approve something quickly.

The government says that the facility would be similar to the Resolution Trust Corporation which was set up on 1989 to take on all the failed thrift assets during the savings and loan crisis.

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