Utterly Off Topic Wednesday - Avoiding High Credit Card Fees

Outrageous Fees...

Greg McBride, CFA

Bankrate.com

he fees really add up -- bank fees, credit card fees, loan fees, real estate fees and car rental fees. As a consumer, you get dinged at every turn, it seems. Some of these charges may appear to be reasonable -- while others are clearly outrageous. But you can beat the system if you know how...

BANKING AND CREDIT CARD FEES

Fees charged by banks and credit card companies have skyrocketed in the last several years. Some of the worst...

Doubled-up ATM fees. When you use a machine that belongs to a bank other than the one that issued your ATM card, your bank may charge you a fee (usually $1.25 per transaction), and the owner of the ATM will charge a fee, as well ($1.64 on average). It's common for banks to charge $2 or even more at ATMs in airports, hotels, sports venues and other places where they know you are under pressure to find cash.

Self-defense: Know your bank's policy regarding ATM fees. Use your own bank's machines or national ATMs -- machines within a national surcharge-free network, such as Alliance One (866-692-6771, www.allianceone.coop) and Freedom ATM Alliance (412-261-8146, www.freedomatm.com) -- where there are usually no fees.

Check my company's Web site, www.bankrate.com, for the best ATM fees.

Balance-transfer fees. If you move your credit card balance to another card to obtain a lower interest rate, the new card company can charge you a fee.

Example: Bank of America charges 3% of the balance transferred.

Self-defense: Use a credit card company that has no fees for balance transfers and low interest rates.

Examples: Capital One (888-810-4013, www.capitalone.com) has no balance-transfer fees on most cards... Wachovia (800-922-4684, www.wachovia.com) exempts new customers from balance-transfer fees.

Credit card late and over-the-limit fees. Your credit card company may slap on a fee for paying late or for charging beyond your credit limit, even if your payment record is otherwise perfect.

Example: Providian charges a $39 late fee to any customer with a balance of $200 or more who misses a payment deadline, and $39 to those who exceed their credit line by 2% or more.

Self-defense: To avoid these fees...

Mail your credit card payment 10 days to two weeks before its due date... or if you pay on-line, a few days before it's due.

Ask to have your payment date moved so that the bill arrives right after a paycheck.

Contact your issuer and arrange automatic on-line payments. Citibank, MBNA, Discover, American Express and others have on-line sign-ups to do this.

Pay by phone at the toll-free number on the back of the credit card (there may be a charge from $5 to $15 for this service). The amount will be immediately withdrawn from your bank account and you'll receive a confirmation of the transaction by mail.

What to do: Ask your issuer to waive the fee -- many will do so as a courtesy to customers with good payment records.

Biweekly mortgage payment fee. The "magic" of a biweekly (every two weeks) mortgage payment is that you end up making the equivalent of 13 full mortgage payments in a year rather than the usual 12, reducing the time needed to pay down the mortgage and cutting interest payments substantially. But a biweekly payment plan from a bank often includes an up-front fee of several hundred dollars and monthly fees of about $10.

Self-defense: Instead, make extra principal payments with each of your regular monthly mortgage payments. You'll accelerate the payoff and reduce interest as much as you want to with no extra fees (assuming your mortgage allows this).

REAL ESTATE FEES

When selecting a home, the key is location, location, location, but at closing time, the key is fees, fees, fees...

Closing costs. When shopping for a mortgage lender, consider not only the interest rate but also closing costs. By law, you'll receive from the lender up front a "good faith estimate" (GFE) of closing costs. This is an itemized list of estimated costs to be paid at closing (e.g., the lender's fees, appraisal charges, title insurance premium, a partial month's interest payment).

Self-defense: Apply with three different lenders and compare their GFEs. Filling out applications takes some time, but it costs nothing to apply -- and you could save thousands of dollars. Use the free search engine at Bankrate.com. Then try to get fees waived or reduced or credited toward closing costs. The lender may not budge -- but it's worth asking.

Have your GFE reviewed by an attorney or other professional well before the closing. The privately run National Mortgage Complaint Center (866-714-6466, www.nationalmortgagecomplaintcenter.com) will review it and tell you about any excessive fees. Cost: $45.

Note: Banks should charge the buyer what they paid in appraisal, credit report and inspection fees. Often, they mark those fees up. Ask the lender to seek good deals on these items and pass along the savings to you. It may not -- but it doesn't hurt to ask.

Title insurance. When you get a new mortgage or refinance an old one, you must buy title insurance to protect against such problems as forgery of old title documents and potential interests of missing heirs. The premium is paid once and averages $800.

Self-defense: In some states, such as Texas, premiums are fixed by law. If the premium isn't fixed in your state, search under "title insurance" on the Internet or check the Yellow Pages. Call the companies to ask about their rates and coverage. If you're refinancing your mortgage and have lived in the house less than 10 years, ask to get title insurance at the less expensive "reissue" rate

Bottom Line/Retirement interviewed Greg McBride, CFA, senior financial analyst, Bankrate.com, North Palm Beach, Florida, a provider of interest rate information and personal finance news, articles and commentary (www.bankrate.com).

Utterly Off Topic Wednesday - Did You Know?

If you have been wondering why you are stressed out, if may be because of information overload. A lot of these things, I'll bet you did NOT know, did not want to know, and would have been fine if you never knew. But it is an interesting commentary on the speed of change, and the crush of information that we are having a hard time processing.

TGIF - You Want Me To Do WHAT??

You Want Me to Do What?
TGIF Today God Is First Volume 1 by Os Hillman
Sunday, February 08 2009

..."Throw your net on the right side of the boat and you will find some." - John 21:6a

The disciples were fishing. It was after Jesus had been crucified. Peter had gone through his most agonizing moment in which he had denied Jesus three times. He had lost a friend. No doubt he probably wondered whether the last three years were a dream. What now?

Peter had been prepared three years, but he was not going out to preach; he was going fishing. He had returned to his trade of days gone by. He had a level of experience with Jesus that no other human on earth can boast. This was the third encounter he was about to have with Jesus after His resurrection. Jesus looked to Peter and John in their boat and made a suggestion.

"Friends, haven't you any fish?"

"No," they answered.

He said, "Throw your net on the right side of the boat and you will find some" (Jn. 21:6a).

Now, if you are as seasoned in your fishing as these guys were, wouldn't you be a bit irritated if a stranger suggested that you simply put your nets over the other side to catch some fish? Yet we find that they took this stranger's advice. Once they were obedient, the Lord revealed Himself.

When they followed Jesus' advice, the catch was enormous - 153 fish in total. In most cases such a haul would have broken the net. Jesus invited them to have breakfast with Him - fish and bread; He had already started the fire. I can only imagine that this scene would resemble some buddies going out and camping together.

There is so much that we are to learn in this passage about God's ways. As a workplace believer, we must understand that after we have spent years with Jesus, this does not always mean we must leave our professions in order to fully follow Jesus. Peter went back to his profession - fishing. It was here that Jesus asked him a simple question: Do you love Me and will you feed My sheep? He didn't say to Peter, "Fishing is a waste of time for you now, Peter." This recommissioning was in the area of his original calling - his work. We need not feel that we must go to the "mission field" to please Jesus. Our work is our mission field. We must, however, make a paradigm shift in our thinking about our place in the work world. We must have an overriding sense of mission and ministry that comes out of that work. This is what is meant when we say that we must all be circumcised before we can enter the Promised Land. When this happens, we can expect to see God fill the nets with His blessings. He wants to do this because He now owns the net, and He can trust us to manage it.

Reprinted by permission from the author. Os Hillman is an international speaker and author of more than 10 books on workplace calling. To learn more, visit http://www.MarketplaceLeaders.org