Tag Archives: US

Credit Card Jungle

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Credit Card Jungle was how Mike Hogan described the situation in a Barrons article earlier in the year. Even though there are some good business credit card deals to be found, it is very much a case of Buyer Beware.

If you’re among the two-thirds of credit-card holders who carry an outstanding balance, you might have noticed that your interest rate was hiked recently, or your billing cycle shortened. Failure to navigate card providers’ labyrinthine payment terms successfully can earn you one of several consumer-unfriendly fees.  These aren’t really new gambits. But they are being pursued with such gusto lately that they’ve generated a record number of consumer complaints.

That word jungle conjures up phrases like Nature Red In Tooth And Claw or Survival of the Fittest.  You have got to keep your wits about you, if you wish to stay ahead of those claws.  Hogan was describing the situation in the US but you will find similar discontent with the credit card suppliers in the UK and in Canada.

Consumers are often riled by two key hot button issues in most cases:

  1. The way the interest is calculated on their balance owing often creates lots of surprises for consumers
  2. The way any money that is paid is then applied to interest-bearing amounts owed is another cause for concern

It all comes down to the small print that is added to credit card contracts and it is not surprising that many feel there are hidden ‘gotchas’ in these contracts.

There is a popular wish for action so it is not surprising that you will find that politicians are now taking up this cause not only in the US but also in the UK and in Canada.

Even if tighter regulations are instituted they will never cover all problem issues. The wise user of credit cards will always do a detailed comparison of what the different credit cards are offering and what may be in the small print.

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Online Lottery Scams Target Seniors

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According to the RCMP, several Calgary residents tricked 24 elderly or disabled Americans out of about $3 million over a three-year period by telling them they had won a lottery. This lottery scam targeted U.S. seniors.

Between 2005 and 2008, the victims were contacted by letter or phone and told they had won a lottery or sweepstakes but were required to pay taxes, administration fees or lawyers’ fees before they could collect winnings, which didn’t exist.

One person sent in between $500,000 and $1 million, with the scam collecting about $3 million in total. Some people lost their life savings, and have been ostracized by family or have been forced to remortgage their homes. Others in their 70s had to return to work.

Investigators have arrested four people from Calgary, one from Burnaby, B.C., and one from Toronto. Canada-wide arrest warrants are outstanding for three other suspects who police believe are in the Calgary area.

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Tax deductible mortgages

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Any one in the US or the UK will wonder why such a post is necessary. They all automatically have their mortgage interest payments tax deductible. Not so in Canada. However with a little work, even in Canada you may find that Tax deductible mortgages are worth the hassle. According to Jonathan Chevreau, Financial Post, the Canada Revenue Agency is unlikely to challenge if they are done properly.

Why it should take such effort is unclear. It is accomplished by applying the so-called Smith Manoeuvre, popularized first in British Columbia by Fraser Smith in a book of the same name. It has now spread across the country, apart from Quebec. Smith developed and packaged a variation on the standard tax-permissible strategy of selling off non-registered securities; using the proceeds to pay off the mortgage; then reborrowing to repurchase the securities, thereby creating legally sanctioned tax-deductible debt.

A major competitor to Smith, TDMP or Tax Deductible Mortgage Plan, has been named one of Canada’s fastest-growing companies by Profit magazine. It ranked 88th on the 21st annual Profit 100 ranking.

TDMP has a $39 per month fee charged to homeowners, a fee which is itself tax deductible. For this, TDMP takes on all the back-office work and saves the homeowner the bother of having to move the money around every month in order to make their mortgage payments and purchase securities. The fee is considered a carrying charge for administration of income from investments.

Why Canada does not follow the lead of the UK and the US on tax deductible mortgages is unclear. Such an approach does help the residential housing construction market, which can create large numbers of jobs. However until it does, the TDMP approach seems a good way to proceed.

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Frugal Tips For Thrifty Seniors

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In these hard times, everyone is having to learn how to do more with less.  For some seniors there is little change.  If they have had to get by on Social Security then they often lived a lifetime of frugality.


Long before the recession deepened, they were experts at making ends meet. Long after the recovery comes, they’ll still be masters of frugality.

Many retirees worked their entire adult lives but never qualified for a pension or earned enough to put anything aside. Others started retirement with a nest egg but never thought it would have to last 20 or 30 years. 

Now they are also becoming models for younger Americans forced by the recession to trade in their spendthrift ways for a leaner lifestyle.

On the Web there are quite a number of places to read how these seniors have learned to cope with hard times.  For example, you can find 5 Thrifty Tips From Our Mothers and Grandmothers.

  • Repair, Don’t Replace.
  • Cut Grocery Bills In Half by Cutting Out Cleaning Products.
  • Refurbish Your Closet Without Hitting the Stores. Repair or remodel or arrange a clothing swap
  • Skip the Drug Store and Make Your Own.
  • Cut Energy Bills by Hanging Wash and Closing Vents.

Perhaps the 12 Thrifty Tips to Stretch Every Dollar on Frugal Living may be more useful to you.

  • Tip #1: Think before you buy.
  • Tip #2: Know what things cost.
  • Tip #3: Grow your own food.
  • Tip #4: Unplug the “Energy Vampires” in your home.
  • Tip #5: Embrace the simple pleasures.
  • Tip #6: Hold an annual “Swap Party.”
  • Tip #7: Take advantage of free entertainment.
  • Tip #8: Get maximum mileage from coupons.
  • Tip #9: Shop smart.
  • Tip #10: Get free stuff.
  • Tip #11: Eating day-old bread won’t kill you.
  • Tip #12: Treat yourself once in awhile.

If you’re looking for even more ideas, then why not check out what Beth VanHoose, the Thrifty Guru at LifeTips has assembled.  She boasts she has a collection of 631 Thrifty tips with more being added weekly.

Finally if you’re looking for thrift, we should not overlook the thrift stores as they’re called in the US.  The Thrifty Chicks blog showcases the Thrift Store Gurus, a nation-wide network dedicated to a more robust global repurposing market.  This is win/win as your dollars work even harder than in regular stores.

At the other end of the spectrum, if you would prefer to be finding ways of making more money rather than making your money go as far as possible, then perhaps the Smart Cookies may be able to give you advice that is more to your taste.

Footnote: If you have any particular thrifty tips for seniors, why not add them in the Comments.  Someone may very well be very appreciative of your idea.

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Phony Money

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Apparently more and more people are using phony money.

That is not the kind of phony money that appears in that Denny commercial.  No, we are talking about ‘real’ counterfeit money.  It is not surprising that in economic hard times, more people are resorting to using fake money.

Counterfeiting arrests in the USA jumped 28% in 2008 over 2007 — the highest number since 2004, according to the US Secret Service, a division of the Homeland Security Department that safeguards the nation’s currency. Counterfeiters passed $64.4 million in fake cash into the economy, a 5% increase over 2007 and also a five-year high, according to Special Agent Darrin Blackford, spokesman for the agency.

It’s not just the criminal element, but we’re also seeing more students that maybe use a counterfeit $20 bill to buy pizza or someone trying to do it to purchase gas to get to work,” says Brian Marr, Secret Service special agent. Reports of fake bills spiked this year when gas prices hit record highs.

CosmoLoan has some interesting information about counterfeit money.

  1. More people are faking it
  2. Coin Clipping used to be prevalent
  3. Death to all counterfeiters was the rule less than 400 years ago
  4. The US Secret Service was originally founded to suppress the major counterfeit currency racket going on in 1865
  5. Attacking countries with their own fake money has been used as a means of warfare
  6. Catch Me if You Can is the story of the world’s greatest check counterfeiter, Frank Abagnale.
  7. Superdollar or Note Family – C14342 has been able to fool many experts who were unable to tell it apart from legitimate currency.  It is believed that 1 out of every 10 000 bills in circulation in the US is a Superdollar.
  8. You must accept counterfeit money and then turn it in without reimbursement
  9. In Canada today many businesses still refuse 50 dollar and 100 dollar bills following a huge counterfeiting operation in 2001.
  10. Poor quality Ink-jet printed money represented 60% of the counterfeit currency collected.

The Bank of Canada takes counterfeiting very seriously and responds by a number of measures to help in Counterfeiting prevention.

  • researching and developing new security features that are difficult to copy and easy to use;
  • working with law enforcement to monitor and respond to counterfeiting activity; and
  • showing Canadians, especially those who handle cash regularly, how to verify bank notes to make sure they’re genuine

They even now have an exhibit in their Currency Museum that showcases the history of phony cash.  The exhibit opened Jan. 6 and is called The Good, The Bad, and The Fake.

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Chief Performance Officer (CPO)

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Athletes think of performance all the time.  They are constantly working on how to do their very best.  It is a concept that many of us could think about more frequently.  Most of us need something like a major recession and belt tightening to bring it on the radar screen.

Today’s headlines therefore are hardly a surprise.  Congress Urges Spending Restraint.  Facing Largest Deficit Since 1945, Obama Names Official to Help Retool Budget

He announced the appointment of Nancy Killefer, an assistant secretary of the Treasury in the Clinton administration, to serve as “chief performance officer” (CPO) in the White House budget office. In the newly created post, Killefer will be tasked with retooling budget practices and slashing unnecessary programs.

“In order to make these investments that we need, we’ll have to cut the spending that we don’t, and I’ll be relying on Nancy to help guide that process,” Obama said. He said Killefer, a senior director in the Washington office of McKinsey & Co., “is an expert in streamlining processes and wringing out inefficiencies so that taxpayers and consumers get more for their money.”

This is one area where management consultants can perform a most useful function.  From their knowledge of what typically happens, they can suggest what is doable and what is not.  That is why Accenture’s tagline High Performance Delivered makes so much sense.

That brings to mind the old joke about the Broadway banner sign, Performance Pronounced Success.  Performance is indeed the only way to get success.  Behind that is that other important notion,  You can only manage what you can measure.  Let us hope the new US Chief Performance Officer will help to bring success to the US economy.

There is a message for all of us in this announcement.  We too should adopt the chief performance officer role for ourselves.  Make a detailed budget.  Look at every line and see whether you can get higher performance.  The three R’s of recycling give a good start here. Reduce, Re-Use, Recycle.  Even small performance improvements can make a serious impact on your personal bottom line.

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US Bailout Now $8 trillion

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The $8 trillion bailout is the CNN headline this morning.  The latest slice seems to have a different objective:

Many details of Obama’s rescue plan remain uncertain. But it’s likely to cost at least $700 billion – and that would push Uncle Sam’s bailouts near $8 trillion.

Obama’s estimated $775 billion plan could serve as the next step in the recovery efforts. While most of the Fed’s programs have been aimed at boosting lending, Obama’s economic stimulus plan is aimed primarily at job creation and consumer spending.

These huge numbers are mind-boggling and so far away from the reality that most seniors face as they attempt to balance their budgets and live within their means.  Nevertheless it is fascinating to contemplate President Elect Barak Obama’s dilemma faced with all those economic levers that might be used.

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