Fannie Mae conducts a monthly survey on consumer attitudes called National Housing Survey; the latest was conducted in December 2011. It was a phone survey of 1,000 Americans to assess their attitudes toward owning and renting a home, mortgage rates, homeownership distress, the economy, household finances, and overall consumer confidence.  Attitudes on some issues have improved somewhat since November 2011.

There was a 38 percent increase in those who said the economy is on the right track, but that was only 22 percent of the responders, compared to 69 percent who felt we were on the wrong track. This is the first time, since February 2011, that more thought their personal financial situation would improve over the next 12 months. More said their income was higher than 12 months ago. They expected home prices to increase by 0.8% over the next 12 months, which is an increase of 0.2% from November 2011. read more »

…other than not pay your taxes today on your credit card!!

There are tools that can help you determine which bill to pay off and there are many different opinions from industry experts on which card you should pay off first.  Some consumers want to pay off the card with the lowest balance, so they can feel accomplishment in paying off the bill.  Others want to pay off the one with the highest interest rate and others the one with highest balance. I have addressed paying those with the highest interest rate and those with the highest balance.

Pay off those with highest interest rate first

The fastest way to pay off your debt is pay at least the minimums and put any extra toward the cards with the highest interest rates first. Take all of your credit cards, list them on an excel spread sheet, rank by interest rate and then attack the most expensive debt first. You don’t have to use a fancy tool developed by a company to do this. You still have to use the same information in your spread sheet such as the interest rate and balance, as you do for the fancy tool. Either way you have to provide this data, because you are the only one that has this data. When you pay off one card, take that payment and put it toward the next highest interest rate card along with the minimum payment and so on until everything’s paid off. read more »

There are two primary attributes to consider when shopping for a — its value to you financially and its value to you credit-wise.  Is it helping you save money and boost your credit score?  Here are seven things to consider when you shop for a credit card:

1. Be wary of store cards. The main advantage you get with a retail card is discounts and special sales. If you carry a balance, the interest rate is higher on retail cards and can only be used at that particular merchant. If you have cards that can only be used at one place, you have to have a lot of them. If you open many new accounts in a short period of time, it can hurt your credit score.

2. Pick a flexible offering. You want a card that is convenient and can be used anywhere such as gas stations, grocery stores, department stores, restaurants, hotels and airlines. In addition, you want cards that offer the best terms including interest rates. read more »

I love how some of my readers think. They’re always looking for weaknesses in the fence when it comes to credit scoring.  I got this one late last week:

Q: John, I always pay my credit card balance in full every single month without fail. I know that one of factors in my FICO score is the ratio of my credit limit that I’m using. I know from reading your blogs that even if I pay in full each month my balance is still greater than $0 on my credit reports because of the lag time in reporting.  So, what if I pay MORE than I am due to pay so that I have a negative balance in my credit card account? Can that be reflected on my credit reports and help my FICO scores? read more »

Equifax, one of the three national credit reporting agencies, released their latest National Credit Trends Report for December 2011. This report shows reduction in credit card write-offs compared to 2010.  This is based upon consumers paying their retail and bank card accounts on time and paying down their balances.  This downward trend has continued for the past 18 months.

Changes in past 18 months

Bank card write-offs were at their peak in July 2010 at nearly 13 percent. As of December 2011, write-offs were 5.53 percent, which was 39 percent lower than 2010 levels. read more »

This is the last year tax filers will be able to get a refund anticipation loan (RAL) offered by banks.  As of 2012, the Internal Revenue Service (IRS) will no longer provide tax preparers, banks or lenders with the “debt indicator”, which lists any outstanding debts that will be deducted from the refund, such as delinquent student loans and child support. This information was the basis used to approve refund anticipation loans.   Because of a lawsuit, only one bank, Republic Bank and Trust Company of Louisville, Kentucky can offer these loans until April 15, 2012.  After that, no bank will be able to offer this loan.

What are Refund anticipation loans?

These loans are right up there (or down there) on my list with prepaid debit cards…they’re poor choices.  These loans are secured by the taxpayer’s expected tax refund. These loans are offered by one bank now through a few tax preparers.  The loan is usually for a short period of 7 to 14 days, until the Internal Revenue Service pays the refund. The tax payer is charged very high Interest rates and additional fees.  Since this loan is offered through a tax preparer, there is a tax preparation fee, interest on the loan and fee to open a temporary bank account. There may be additional fees such as application, administrative, e-filing, transmission, or “processing.” read more »

Now that the banks have stopped charging for debit cards, they are finding other ways to make up for the loss of revenue from the decrease in swipe fees that merchants pay for debit card transactions.   Some banks have increased fees for checking accounts and other services.

Additional fees charged

Here are some examples:

Fees charged to close account too soon, which can be 90 or 180 days. This is a new fee.

Fees charged for paper statements, which were free previously. read more »

In late February 2012, the Obama administration revealed a new Consumer Privacy Bill of Rights regarding personal data and will work with Congress to get it into law.  It would be enforced by the Federal Trade Commission. The key components are: consumer control over data that is collected and how it is used, company transparency of their privacy and security practices, consumer access to their data, limit the data collected, and companies adhere to the “bill of rights”.

1. Individual Control: Consumers have a right to exercise control over what data companies collect from them and how they use it. Companies should offer consumers clear and simple choices, presented at times and in ways that enable consumers to make meaningful decisions about personal data collection, use, and disclosure. read more »

Experian Automotive, a division of Experian (one of the three major credit bureaus), released their fourth quarter 2011 automotive credit analysis. The overall dollar volume of loans at risk dropped to $18.5 billion, which was a $1.862 billion drop from fourth quarter 2010.  Total auto loan volume increased by $23.9 billion in fourth quarter 2011 to $658 billion.  There was continued improvement in this market – interest rates were the lowest since 2008; there was an increase in lending to consumers with lower scores; longer loan terms were offered; repossession rates dropped; and average charge-off rates dropped.

Interest rates, scores and loan amounts
Average interest rates for new vehicle loans were 4.52 percent in fourth quarter 2011, compared to 4.84 percent in fourth quarter 2010. Average interest rates for used vehicle loans were 8.68 percent in fourth quarter 2011, compared to 8.71 percent fourth quarter 2010. read more »

For nine years, Javelin Strategy & Research has conducted an annual analysis of identity fraud trends.  The latest report is named: The 2012 Identity Fraud Report: Social Media and Mobile Forming the New Fraud Frontier.  The survey was conducted in October 2011 with 5,011 U.S. consumers, who were selected based on their address. The purpose of the survey was to identify important findings about the impact of fraud, uncover areas of progress, and identify areas in which consumers must exercise continued vigilance.

Four Fraud Trends

The study found four overall fraud trends:

1. Identity fraud incidents increased while amount stolen remained steady. Identity fraud increased by 13 percent or 1.4 million adults in 2011 compared to 2010.  Javelin defined identity fraud “as the unauthorized use of another person’s personal information to achieve illicit financial gain”.  Surprisingly, the total amount lost did not change; consumer out-of-pocket costs have decreased by 44 percent since 2004. read more »