Watch Out for Possible Credit Card Scams

by David@MoneyNing.com · 15 comments

I am constantly amazed by the creativity of thieves when it comes to ways to scamming people. If we can get those people to apply their ability to constructive activities, the world will be so much better.

Currently in the United States, the credit card companies take the burden off customers for any fraudulent activities. What this simply means is that if someone steals my credit card and uses it, I won’t be charged for it as long as I report the lost in a timely manner. However, companies need to make money at the end of the day. If they are losing money because of fraudulent activities, they will try everything they can to pass the burden to us indirectly. That’s why one of the reasons for high credit card interest rates and service fees is fraud.

So while most of us don’t see the risk of being careless with our credit cards, it comes back to bite us one way or another. Below are some credit card scams that my mom sent me through an email. Hopefully we can all be more careful as we know some of the tactics these people use to get our credit card numbers.

Gym Locker Loser
A friend saw his locker opened after his workout, he thought he locked it but when he didn’t see anything missing in his wallet, he didn’t think too much of it.

A few weeks later when he got his credit card bill, it had a whopping $14,000.
He checked his wallet and realized that instead of his real card, the thief put in a similar looking card that’s already expired.

Shady Restaurant
A man signed for his bill and the waitress folded the receipt and passed the credit card back to him. He looked at the card and it was an expired card of another person.

He called the waitress and she looked perplexed. She apologized and hurried back to the counter and waved the wrong expired card to the counter cashier. Without saying a word, the cashier immediately looked down and took out the real card.

Bad Photography
A lady paid by using my Visa Check Card, and the young man behind the counter swiped the card, then laid it on the counter as he waited for the approval. While he waited, he picked up his cell phone and started dialing.

Then the unthinkable happened, as there was a click that sounded the phone just took a picture. He gave the card back to the lady and kept the phone in his hand and pressed a few more buttons.

What else would he be taking a picture of??

My Friend’s True Story
A few weeks ago, my friend emailed me and said she’s been a victim. She went to the same ATM machine as usual to withdraw cash but noticed that the ATM looked a little different. She didn’t think too much of it, even when she had to force the card through the card slot as she just thought it was a new bad design of the machine.

A few days later, her bank froze her account and notified her that the bank card was compromised as someone spent $6,000 with it in one day.

She is hopeful that she will get her money back but in the meantime, she is still trying to resolve this.

Don’t Let This Happen to You

While it’s impossible to totally be “scam-proof”, being alert is one of the best ways to prevent your credit card information from getting stolen. Always check your card after it leaves your hands, and pay extra attention every time something looks out of the ordinary.

Why is Our Bailout Money Going Towards Paying for Executive Bonuses

by David@MoneyNing.com · 25 comments

executive bonus with our bailout fund

The newest on the corporate corruption front seems to be that the employees at financial institutions are still expecting to be paid employee bonuses. It’s crazy to think that while we have to downsize and try to save more money to anticipate higher taxes for paying off the bailout, it is actually money that is being used for paying executive bonuses.

First, the $700 billion bailout plan was supposed to buy troubled assets. Then $250 billion of it was used to buy stakes in banks because they aren’t capitalized enough to lend, with $125 billion already going to just 9 banks. Now, we are hearing that instead of using the money to lend, the bailout fund are used by banks to buy other banks, give employees a raise and executives a bonus.

I don’t really care that they can legally do this or not because something is definitely wrong when 100 people have to eat less so 1 person can buy a more luxurious car. It just does not make sense to me and it never will.

What congress needs to do is bring those CEOs to a meeting and tell them that if they decide to pay bonuses or use taxpayers money to do irresponsible activities, the government will start stepping in and dictate how businesses should be run.

If the government doesn’t play hardball with these firms, they will just end up wasting our money to make themselves wealthier. If nothing is done, everyone will be outraged and America will get into much more trouble long term.

Stop letting those pigs get all the water.

Home Ownership is Still the American Dream

by David@MoneyNing.com · 15 comments

home ownership is still the american dream

I saw an ad in the paper featuring the new housing development we almost bought in March of 2007. It brought back a flood of emotions when I saw it because while I still very much want to live there, I was glad that I didn’t jump in with both feet because it was being offered at $100,000 off the asking price + $75,000 in free upgrades. It’s just unbelievable that the same house is being offered at $175,000 less now.

I read somewhere that about 12 million mortgage holders owe more than their homes’ current value. No kidding when any down payment less than $175,000 already went down the drain. Actually, experts (if you still believe those people anymore) predicts that one third of all homes with mortgages will soon be under water. Yikes.

But then I think about all these stats and I gotta say.. “so what?” If I own a home and live happily in it, do I really care that my house is under water? Whether my house is worth more or less than my mortgage, my monthly payment is still the same. The same payment, due on the same day. While it might “seem” like I lost money, I am sure I will still enjoy living in my house everyday and seeing progress in paying off my 30 year fixed mortgage.

While the economy seems to be going up in flames and people are worried left and right, homeowners should be happy because they have a place called home. They are still living happily and taking their kids out to the park. While home ownership cost rose 37% in the last decade, rent increases were 50%.

You might not be able to tell these days with all the bad news about the housing market, but it’s still an incredible feeling to own your own home. It’s still worthwhile and it’s still the American Dream.

Don’t lose hope. Our American Dream is still alive.

Overspending When Buying in Bulk

by David@MoneyNing.com · 18 comments

buying in bulk is no good

We’ve all heard that buying bulk is one of the most effective way of saving money. Mathematically, it makes so much sense because buying in bulk means paying less for the same amount but like everything else in life, there are exceptions. Today, let’s explore the other side of this argument.

Starbucks Gift Cards
Over at Costco, I noticed that they are starting to sell Starbucks gift cards. 5 x $20 ($100) worth of credit is only sold for $79. At a glance, it’s such a great deal because we are getting more than a 20% discount but is it really a good deal? If you paid for the gift cards up front, isn’t it much easier for you to give in to going to the coffee shop? If you end up going to Starbucks more often than you would otherwise, haven’t you paid extra?

Spices
Whenever I have a huge container of a certain spice, I always end up using more. It’s pretty apparent because Emma and I can use up the first half of any container of spice (be it soy sauce, salt or pepper) much quicker than the second half (the last 10% always lasts us a looooooooong time)

Ice-Cream
I used to feel that the Hagen Daaz tiny containers are so overpriced (although extremely tasty). With the generic brand which sells for about the same price, there’s 4 times the amount of ice-cream. Then one day, I realized that when I buy the generic brand, I finish it at about the same amount of time (I’m not kidding, I literally eat 4 times the amount). I notice that because of Hagan Daaz’s small container, I end up scooping less out each time. These days, I feel comfort when I buy that more expensive brand of ice-cream because I know I’m not really overspending.

The examples go on and on so what do you think? Do you buy in bulk and if you do so to save money, how do you keep yourself from using more?

What Happened to Your First Stimulus Check

by David@MoneyNing.com · 15 comments

Even though the second stimulus check proposal was voted down a while ago, there are talks again surrounding the need for another one. Personally, I never really thought it was a great idea, as I share the view that we should really be spending money our social programs which are badly imbalanced at the moment.

This also reminds me though of our first stimulus check and I want to ask you this:

[poll id=”20″]

Judging from the people that I spoke with about the check during the past few months, many people actually used the money to buy something which was exactly what the government wanted us to do.  However, I suspect that the poll results above will be a little different since we are a bit more financially savvy.  If anything, at least we won’t believe that it was “free” money from the government as we will be paying it back in later years somehow.

What Do You Think of This?

Another reason why I wrote this post was because of a couple thoughts that suddenly dawned on me about this subject.  Let me know what you think.

  1. If we saved all of the money that the stimulus check gave us and pay it back to the government through tax hikes, aren’t we ahead because we get free interests? I figured that it will be even more beneficial for those that paid down their credit card debt since the interests are much higher there.
  2. Whether the government approves stimulus checks or not, it probably doesn’t have much affect of plans for the social programs. Even if many of us want the government to fix our social securities imbalance, the government’s decision is probably not going to be based on whether we are $0, $150 or $300 billion more in debt because of the stimulus checks.  Sure they will use deficit and what not for excuses, but I doubt that’s the real reason why no one has ever tackled the problems of the social programs.

Although those thoughts popped up in my head, I still vote for no stimulus checks but what do you think?

Why Only Thinking About Affordability Makes You Poor

by David@MoneyNing.com · 39 comments

being able to afford something is not the best way to judge whether you should buy something

In one of our dreaming moments during the weekend, Emma and I jokingly spoke about joining a private golf country club.  It was brand new, relatively close from where we live and also extremely nice.
The financial commitment to enroll were:

  1. $30,000 to join (although that can be negotiated down to possibly $20,000 we heard) and 90% of the current initiation fee can be refunded when we decide to leave the club so we can theoretically even make money on this
  2. $475 monthly dues

So when we talked about whether we could afford it or not, the first reaction from the two of us were YES.  Maybe its not so much of a dream anymore because:

  • We can get our initiation fee back
  • $475 a month is something we could come up with

Think Harder to Stop Wasting Money

Although we could come up with the monthly payment and hence we could “afford” joining, it obviously wasn’t a very sound financial decision for us.  Here are a few reasons why:

  1. We Still Need to Buy a House – We already have a sizable down payment for our house, but we should make sure we borrow as little as possible when we actually make that purchase.  It would be unwise for us to spend excessively right now and then take a larger mortgage payment.
  2. Our Life is Still Ahead of Us – Not only do we have plans to get a house, there will be additional expenses in our lives once we raise children and grow our family.
  3. Expect the Unexpected – 2 months ago, no one could imagine the Dow Jones Industrial Average  losing 30% in a short few weeks but unexpected events like these happen all the time.  Throwing $20,000 into an illiquid asset is not the best way to prepare for emergencies.

Thinking About Affordability is Why So Many Americans Are Poor

I have so many friends that think about nothing but whether they could come up with the monthly payment at the time of purchase. Just today, my coworker was telling me that his friend is paying $650 a month on his car lease. His friend probably didn’t do this but if he takes out his calculator and do a little math, he will realize that he is actually paying $100,000 for a car that’s worth $40,000.

The simple and common example above illustrates the danger of thinking about affordability. Think about all those stories you hear of people who’ve accumulated massive wealth because of their frugal lifestyle. These people don’t buy that new gadget or new car because they don’t see the need, not because they can’t afford it.

A Couple Other Points to Consider Other than Affordability

Despite affordability not being a good sole reason to buy something, it is still something we should consider.  On top of that, here are a couple good questions to ask ourselves when we believe we should buy.

  1. Is it necessary or is it nice to have?
  2. Is there a more economical version?
  3. Would most people in your situation want to buy it?
  4. Would you still buy it if you had time to think about it?  In other words, is it an impulse decision?
  5. How is that going to affect your short and long term goals?

Mind you, I’m not saying that everything you buy have to be necessary.  If it is Emma’s birthday, I wouldn’t hesitate to get her a birthday cake even if it’s not something I will say is “necessary” for our survival.  So just use these questions to challenge yourself to think through every buying decision.

Your Turn

If all you thought about was affordability before, try to broaden your thinking because it will help you keep more of your money. For others that are already experts at this, what’s your secret? How do you determine what to buy and what not to buy?

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