Debt, Credit Card & Consolidation Current News Digest

I had a conversation over the weekend with a friend of mine who likes to keep a little bit of cash at home in the event of a zombie apocalypse. As I reminded him that zombies don’t take US dollars, I thought a little to how we like to keep some cash on hand at home too. My friend was talking a thousand dollars or two, we keep maybe a hundred bucks. While he was trying to up his chances of survival, we do it to avoid an unnecessary trip to the ATM if we find our wallet or purse a little light one day.

That led me to wonder where the best places to hide you rmoney at home was and fortunately the web did not disappoint.

First, there’s is no limit to human ingenuity. Just spend a few minutes looking through the slideshow WalletPop put together on the craziest places people hide their money and you’ll see things like inside a fake i-beam, the cookie jar, their attic, a fake roll of toilet paper, under the litter box, mason jar buried in the garden, and my favorite, an empty can hidden in the pantry. Hopefully all those people can get to their cash when the zombies start rolling in.

Now that you have a list of potential places, you need a strategy. Putting all of your cash in one secret spot works as long as the thief doesn’t find it. If they find it, then they have all of your money. Why not spread your loot over several secret hiding spots? If a thief is short on time and starts flipping over everything, they may quite after finding one stash. Thieves don’t have a ton of time so giving them a little offering like that may stop them from finding all the pieces.

Next, remember why you’re keeping the money at home and be smart about how much. We want to avoid the ATM so we keep less than $100 at home. We could keep $1,000 but that would be way more than we need, plus it’s interest we’re not earning by not having it in a savings account. So keep the amount logical, how much cash do you really need at home? Probably not as much as you think. Remember that in the event of a fire, you don’t want to feel compelled to save your money.

I feel obligated to point out this story of a woman throwing away a mattress that, unknown to her, held a million dollars of her mother’s savings. Saving money is good, saving a million dollars is great, but saving it in your mattress is a horrible idea.

Lastly, don’t be so creative that you forget where you hid it.

(Photo: alancleaver)

Best Places to Hide Money At Home from personal finance blog Bargaineering.com.

Not all high interest savings accounts or money market accounts are alike. If you look at it from the standpoint of savers who decide to open such accounts, you’ll find that we’re all prompted to select savings accounts according to various reasons and criteria.

Based on where we are in our lives, we tend to choose accounts according to specific requirements. Younger people in their 20’s may be particularly interested in what kind of returns to expect from their savings, and whether an account has an associated debit card or ATM bank card. Older people with some money tucked away will be more interested in the ability to easily move their money around and between accounts — perhaps from cash accounts to investment accounts and vice versa. In this case, they’d be more interested in online bank account features such as ACH, wiring and account linking.

Given these concerns, I thought it would be good to present this comparison table that shows how various high yield savings accounts rank and score on a variety of characteristics and features. I sourced this data from a couple of reports (from WTDirect and EverBank, in particular).

Best High Yield Savings Accounts

Bank Features	EverBank	Ally Bank	FNBO Direct	ING Direct	WTDirect
Top Savings Account	EverBank	Ally Bank	FNBO Direct	ING Direct	WTDirect
Rates / Balances
APY (as of 02/04/10)	2.51%	1.49%	1.40%	1.20%	1.41%
Maximum Balance	10MM	Unlimited	Unlimited	1MM	Unlimited
Minimum Balance	$1,500	$0	$0	$1	$0
Service
Live Person Answering Phone	Yes	Yes	Yes	No	Yes
Mobile Banking Availability	Yes	No	No	Yes	Yes
Account Types / Transfers
Totten Trust Accounts Offered	Yes	Yes	Yes	No	Yes
# of External Bank Links	Unlimited	Unlimited	3	3	Unlimited
ATM Card	Yes	No	Yes	No	No
Next Day ACH Transfer		No	No	No	Yes
Can Initiate Transfers From Another Bank	Yes	Yes	Yes	No

Personal Savings Rates: Some Observations

These days, many of us question the interest rates that are earned in these popular savings accounts — could you even consider these to be “high yield” returns? I’ve often mentioned that the term “high yield” is used relatively, because you’ll find most rates at banks and financial institutions to be set at even lower levels, resulting in an average APY of 1.001% for money market and savings accounts.

Granted, our current interest rate climate is not the most exciting at this time, but the expectation here is that our savings account rates won’t be staying down for too long.

Also, the good news is that these low returns have not fazed us, as a nation. The U.S. personal saving rate (or how much money we sock away each year) has doubled over the past few years compared to how it used to be. Here’s a chart that shows this information.

Clearly, the state of the economy and the credit industry has had quite an impact on how we save as a nation. Question is, will this positive savings trend continue once our economy fully recovers or will we return to our spending ways as soon as we see an upswing?

Best High Yield Savings Accounts

What some call America’s most notorious hidden fee is about to be dealt a serious blow, as new rules kick in that will eliminate many of the booby traps that lead to bank account overdraft fees. 

Already, in advance of the Federal Reserve regulations coming in July, many banks are allowing consumers to opt out of the "courtesy" overdraft coverage and associated, cascading $35 fees.

But it should come as no surprise that there's a catch. In fact, there are lots of them. Topping the list: Consumers who opt out of overdraft protection now may find themselves in the worst of both worlds. Their transactions will be denied and they will face a $35 insufficient funds fee anyway.

"My card is being denied and checks are being returned, but the fee remains, “ wrote Ginnie Logan, who banks at Elevations Credit Union in Colorado and recently opted out of what the organization calls courtesy pay. "Essentially the issue hasn’t gotten any better. In fact, it has gotten worse."

Logan’s sentiment would sting consumer advocate groups who spent years fighting high bank overdraft fees. Expect a new round of consumer frustration  this year as insufficient funds fees make a comeback and consumers try to understand why. We'll try to explain.

Much of the frustration with overdraft fees came from the element of surprise.  While most consumers understood the danger of writing a check that might send their account balance into the red, few realized that they could overspend their balance by swiping debit cards or withdrawing cash at ATMs. The new regulations are designed to end those surprises: Beginning in July, banks will not be able to honor the last two kinds of transactions charges and assess the overdraft fee unless those consumers have opted in to a overdraft protection program.

Bank of America, JP Morgan Chase and a number of other institutions already have announced that consumers may call and opt out of overdraft coverage now.  Most consumer advocates, including Consumers Union staff attorney Lauren Bowne, recommend that account holders immediately do so.

That, however, can lead to an unnerving conversation with your bank.  During a recent call to Bank of America, an msnbc.com reporter was told, "You may still incur overdraft charges in some cases," ever after opting out. That’s because lags between credit and debit transactions and the time they are posted to your account can still cause headaches.

It's possible, for example, that an online bill payment could be sent when a checking account balance is above zero, but not debited until later, after a series of other withdrawals have sent  the balance to zero.  That would still result in an overdraft fee, because the bank could not have known the "true" balance of the account would dip below zero when it initiated the e-payment.

In addition, there are numerous circumstances under which opting out would case transactions to be denied, triggering an insufficient funds fee.

Wire transfers or checks would bounce the old fashioned way, for example. At Bank of America, the insufficient funds fee is $35 – same as the overdraft fee.

Still, the Bank of America operator gave assurances that opting out would eliminate the possibility of debit card purchases leading to overdraft fees.

That should reassure consumers who aren’t so sure. Several have e-mailed msnbc.com recently suggesting they are still seeing overdraft fees related to debit card swipes after opting out.  The confusion is understandable, given the complexity of the systems involved. It doesn’t help that Bank of America operators won’t provide paper documentation of the procedure, its terms and conditions, or confirmation of the account change. The only way to confirm overdraft protection had been removed is to call after five days and ask another customer service representative to check, she said.

At operator at Logan's credit union gave a less black-and-white answer to the debit purchase/overdraft question.

"From what I've seen that's not happening," he said. "But it is possible."

 He described some potentially thorny time-lag situations. Not all merchants immediately process transactions — many transmit transactions in batches every hour or two, for example –  so it would be possible for a consumer to swipe their debit card four or five times in different stores during a day before the bank realizes the account holder's balance had gone south of zero.

Consumers who use ATMs outside their own banks' network could also face this problem, as some ATMs perform what are called "stand-in" authorizations, and don't transmit transaction information until later in the day.  That could also result in an overdrawn account.

Still, he said such situations were extremely rare.

The American Bankers Association offered several warnings about this kind of confusion last year while arguing against overdraft reform. But Nessa Feddis, spokeswoman for the trade group, said much of the confusion should be cleared up by the time the new Fed rules kick in this summer.

"The rule is very consumer-oriented,” she said. “… The Fed did a lot of testing and the rule forces banks to do things the way consumers would want them in each situation.” After July, she said, banks will not be able to charge a fee because of a lag in batch transactions, for example, because the Fed decided that consumers could not be expected to know about merchant transmission procedures.

The new rules aren’t perfect, however. Many consumers would want small debit card transactions or ATM withdrawals denied when their balance is at zero (saving a overdraft $35 fee), but prefer that checks be honored (since they would result in an insufficient funds fee anyway, and they would also lead to additional fees from the jilted merchant).  But many banks' systems can't handle such a split decision, Feddis said. Overdraft protection must either be on or off.

Consumers who misunderstand their overdraft protection has been removed may wind up bouncing a lot of checks.

"There are a lot of operational issues that still have to be solved," Feddis said.  "Some of these things will be resolved, but it might be through a different kind of product.” One possibility: banks will offer incentives to customers to keep larger minimum balances in their accounts to avoid overdraft situations, she said.

Despite the confusion, and the "worst of both worlds" possibility, the Consumer Union’s Bowne said she's sticking by her initial advice.

"Overall, I still think it is sound advice to opt-out of overdraft, when possible, as we wait for the rule to go into effect," she said.  "I cannot envision a scenario where a bank would charge a consumer for ‘attempting’ a debit or ATM transaction in which the consumer never completes the transaction. … That being said, nothing much surprises me with respect to these bank practices and without seeing the actual terms and conditions from the different banks it is hard to be certain."

Red Tape Wrestling Tips
You should opt out of overdraft protection now if you bank allows it. The end goal here is to avoid overdrawing your checking account through debit purchases or ATM withdrawals. You never want to pay $40 for a $5 hamburger, as has happened to many people in recent years. But there are hazards.

If you have overdrawn your account in the past year, think before you opt out. A bounced check can have more far-reaching consequences than an overdraft fee.  You might end up in the ChexSystems database and lose check-writing privileges, for example.  So don't opt-out until you are ready to stay out of the red.

Consumers who live near a zero balance will find that so-called “account holds” placed on debit purchases by gas stations and some other businesses can cause headaches in a post-overdraft-fee world.  Holds, which exceed the transaction price, can freeze funds for days and cause confusing time lags. Be cautious using your debit card for purchases at firms that place holds.  One tip: If you must use debit, use a PIN instead of a signature. PIN-debit transactions generally are processed faster than signature-debits, so that will help you keep your account balance up to date.

When July comes, look for a mandatory notice from the bank about the new procedures. Don't fall for comes-ons advertising "courtesy" protection.  If you do nothing, you won't have it. And that's probably your best choice.

After you opt out, and the fed rule kicks in, when might you be hit with a fee?  When the bank has to “return” an attempted payment to you – a bounced check, for example, or an e-payment that can’t be honored. 

The safe way to protect yourself from overdrawing your checking account is to link it to other accounts – your savings account, a credit card, or even a line of credit. Everyone makes mistakes. Yours will be less costly if you borrow your own money through linked accounts than if you borrow the bank’s money through a “courtesy.”

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Many of us use our credit cards to buy airline tickets, rent vehicles, earn rewards, and as a convenient way to pay our bills. Chase is one of the more popular card companies around: they have several cards to fit the needs of consumers, which I’d like to take a look at more closely.

Chase Freedom Credit Card

If you enjoy credit card rewards, then this card can benefit you quite a bit. To start off, you’ll earn 1% cash back on every purchase you make, wherever you use the card. That means your tanks of gas, groceries, and the morning coffee can earn you cash back. Although there are some exclusions on what items you can earn cash back from — such as cash advances, balance transfers, and travelers checks — you’ll be able to earn rewards for purchases online and at the bricks and mortar stores you already visit.

Bonus. In addition, you can get $50 back after your first purchase, which includes purchases, balance transfers, and checks used to draw on the account; but note that cash advances don’t qualify.

Rewards. It’s also possible to earn 3% cash back on certain rotating categories if you’re eligible. And if you shop through Chase’s Ultimate Rewards Mall, you might find yourself earning as much as 10% to 20% cash back, depending on the merchants.

Rates & Fees. Better still is the lack of an annual fee. The introductory APR is 0% for 12 billing cycles (or one year) if you qualify for Elite or Premium Pricing. You may be eligible if you have a strong credit history. After the introductory period, the APR for Elite Pricing readjusts to 13.24% variable, and for Premium it’s 18.24% variable. If you qualify for Standard Pricing, the introductory APR is 0% for six months, then it’s 23.24% variable.

Security. If you find unauthorized purchases on your account, there’s Zero Liability. So if a thief lifts your card and helps themselves to a shopping spree, you won’t be the one paying for it. Just be aware that ATM transactions and PIN transactions that aren’t processed by MasterCard aren’t covered by the Zero Liability policy.

For a more detailed review, check out this coverage of Chase Freedom Credit Card.

Chase Slate with BluePrint

Although Slate lacks the rewards of other cards, you might appreciate what it can offer: to start with, it has no annual fee just like all the other Chase cards, and you can benefit from the Zero Liability policy for purchases you didn’t authorize. You’ll pay only 0% APR for 12 months (or 12 billing cycles) if you are an Elite or Premium card member (e.g. one who has good credit). After this introductory rate period, the APR increases to 13.24% variable for Elite, and 17.24% for Premium Pricing. If you’re eligible for Standard Pricing, your APR will be 22.24% from the time you open the account.

There’s also the unique Chase Blueprint feature that’s available on several of the Chase credit cards. Blueprint lets you manage your financial categories and how your payment’s applied. You can opt to:

• Pay off certain spending categories in full each month (Full Pay feature).
• Create a custom payment plan for large purchases on your Chase card (the Split feature).
• Create a custom payment plan to pay down your entire credit card balance (the Finish It feature). This feature is designed to help you pay down your balance more quickly.
• Track your spending goals and review your spending history (the Track It feature). This feature allows you to see how your purchases are categorized.

Another useful benefit of the card: email and text alerts. Receiving those alerts can help you manage your account wherever you go.

Chase Sapphire with Ultimate Rewards

Chase Sapphire is another credit card that promises rewards. As a bonus, you can earn 10,000 points on your first purchase. And the points add up because you earn 1 point for each $1 in eligible transactions. If you use your Sapphire card at Chase’s Ultimate Rewards Mall, you can earn up to 10 bonus points from participating merchants and services. Use the Travel Booking Tool and you might end up with double points for the airfare you book.

The point rewards you receive from Chase Sapphire may be redeemed for cash back, gift cards, travel, shopping, dining, entertainment and more. Travel benefits include trip cancellation insurance, travel and emergency services, and travel accident insurance. Whereas protection and security benefits include identity protection, Zero Liability, extended warranty protection, and other services.

This card also comes with a few other features such as no preset spending limit, a choice of your payment due date and the aforementioned Blueprint. You can easily ask for additional cards. As for interest rates, the APR is 12.24% variable for purchases while it’s 19.24% variable for cash advances.

I think that Chase has a good list of cards here. But before you sign up for any credit card, take a moment to consider how it will fit into your financial plan. Too many people are enamored by 0% APR credit card offers without taking a good look at the underlying terms and conditions. But not keeping an eye on when those rates jump can become troublesome later on. So ask yourself the questions: can you afford the payments and the APR (even if adjustments are applied)? Are there annual fees involved and what is the interest rate change after an introductory period? Are you going to pay the credit card bill off each month, or will you need to carry a balance? If you pay your monthly balance in full, you should definitely get a credit card that rewards you for using it.

Chase Credit Cards: Review of Freedom, Slate & Sapphire

Warning those who use ATM/Credit cards KGET 17 Local gas station owners and their customers are on alert as police continue their search for two suspects in an identification theft ring. … and more »

This is a guest post from Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the advisor for The Motley Fool’s Rule Your Retirement service. He contributes one new article to Get Rich Slowly every two weeks.

I must confess to a new habit: I collect discarded ATM receipts. It all started when I walked by the bank in the building next to Motley Fool Intergalactic Headquarters, and found one such receipt blowing in the wind. I was shocked by how little the person had in her/his bank account, and how much she/he paid to get what cash was available.

To see what I mean, check out the stats on seven receipts I’ve recently picked up:

What comes to your mind when you look at those numbers? Here’s what comes to my mind:

• Some people have very small bank accounts. Only one of those accounts is substantial. Of course, this may not be the only bank accounts these people have. But if it is… well, these people are living on the financial edge. I suspect they have other accounts with much bigger balances: their credit card accounts.
• Some people are willing to pay a lot to get their cash. Three of these people paid three bucks. In the case of the last person, that $3 ATM fee was 15% of the withdrawal and 4.5% of the entire bank balance.
• Some people don’t give a hoot about polluting. I don’t dig through the garbage for these receipts; they all have been thrown on the ground. Some people take the time to rip them up and then throw them on the ground (even though there’s a trash slot under the ATM). I have considered the possibility that the receipts I collect aren’t indicative of banking customers in general but a self-selecting sample — specifically, people who have little regard for their community also have little regard for their own personal finances. Just a theory…

What’s your ther-money-stat?
Here’s another theory I have: We each have an internal level of financial stasis that involves having a certain amount of money in the bank, a certain level of debt, and a certain amount of each paycheck going to savings — an internal “ther-money-stat,” if you will. If we somehow find ourselves in a better situation than our regular level of financial comfortability, we turn up the spending. Perhaps it’s due to a raise, or a bonus, or an unexpectedly large tax refund. But as historian C. Northcote Parkinson wrote, “Expenses rise to meet income.”

On the flip side, there’s a level at which we freak out. Our financial condition drops below our internal ther-money-stat, and we swear off restaurants, movies, vacations, and anything but the necessities. (By the way, a difference in these internal levels is one of the biggest sources of conflict between couples.)

If I had just a few hundred dollars (or less) in the bank — as is the case for plenty of people, according to the ATM receipts I pick up — I would immediately cancel the cable and the cell phone, turn down the heat and layer up the sweaters, and likely get a second or third job. I would barely be able to sleep with that little in the bank.

Of course, I don’t know the stories behind these receipts, but my guess is that these folks have a much lower ther-money-stat than I do. The question is, can it be changed? Can someone who is willing to pay $3 to withdraw $20 from a $71.04 bank account turn into someone who would not rest until there’s three to six months’ worth of living expenses in an emergency fund?

I think it’s possible; you GRS readers have told us before what got you to become fiscally fit. But I bet it’s not easy.

Season’s depletings
I suspect that many of us (myself included) tend to get a bit self-righteous when we see evidence of people making bad financial decisions. However, I can’t help — especially at this time of year — to also feel sorry for these low-balance bank customers. There are plenty of people who are experiencing tough times due to no fault of their own. I can even conjure images of parents withdrawing from their measly accounts to buy gifts for their kids. (I’m a sucker for a holiday sob story.)

So whatever the reason for these folks’ modest bank accounts, here’s to hoping that they — and you — have an enjoyable holiday season, and that 2010 brings bigger bank balances to us all.

—
Related Articles at Get Rich Slowly:

• Programmable Thermostats: A Three-Month Review
• Take Small Businesses to the Next Level
• How to Slash Summer Energy Costs
• Cheap Ways to Stay Warm this Winter
• Where’s George? The Dollar-Bill Tracker

Many people turn to their local bank when seeking a personal loan. But banks aren’t the only places  borrowers can get money. Credit unions also offer personal loans, so borrowers may want to investigate what kind of deals these institutions offer.

What Is a Credit Union?

Credit unions are nonprofit cooperatives that are owned by members. Some credit unions are offered through specific employers, churches, and other community groups. Others are open to anyone in the community. These institutions are governed by mostly by volunteer boards. Banks are owned by outside stockholders and are controlled by board members who are paid. Credit unions pay dividends to members.

About 90 million people belong to credit unions, and membership in them grew 11% just in the third quarter, according to CBS News. More people have turned to credit unions after becoming fed up with poor service and loads of fees from banks.

Personal Loans vs. Payday Lenders 

While many banks have pulled back on making personal loans, credit union loan portfolios have risen. That’s due in large part to the fact that credit unions did not get hit by problems related to sub-prime mortgages. In many cases credit unions are able to offer lower interest rates and fewer fees on personal loans than banks.

Some borrowers have even turned to credit unions for short-term loans instead of borrowing from payday lenders. But the National Consumer Law Center recently warned that some short-term credit union loans have high rates of interest that aren’t much better than payday loans. People should make sure they look at the annual percentage rate (APR) of a loan to get the true cost of borrowing money.

Other Credit Union Services

In addition to loans, credit unions offer savings and checking accounts, auto loans, and credit cards. They also offer ATM cards with accounts, but it may be tough to find credit union-owned ATM. Some credit unions waive or reimburse for fees related to using ATMs at other institutions.

In some cases when people are turned down for personal loans they may be able to appeal to a credit union loan committee have their application reconsidered. “While your credit history, income and expenses play the biggest role in whether you get a credit card or loan from us, we’re also looking at your motivation and desire,” Jeremy Trull, a marketing specialist for Idahy Federal Credit Union in Boise, Idaho, told Creditcards.com. “Maybe you had some bad financial luck in the past, and you’re on your way up again. We’ll take that into account.”

A few years ago, if you told someone that you put your savings into an online bank, people would look at you funny. They ask whether or not your money was safe and secure, as if your dollars were actually locked away in a vault at the local bank. They’d ask whether you could talk to a human being if you needed to or if the banks themselves were safe (”because they’d heard stories”).

Well, years later, after enjoying yields of 5% or more, the general public is starting to pick up on the fact that just like buying books and CDs online, you can find better prices for your savings by shopping online.

It’s only natural that after savings and certificates of deposits, the next bank deposit product to start percolating the interwebs would be checking accounts. Most checking accounts do not bear any interest and often cost consumers money in various fees, from overdraft to ATM fees.

So what if I told you that you can get an online checking account, pay virtually no ATM fees, and increase your interest rate all at the same time? Well you can… online checking accounts offer just that.

In fact, some of the online checking accounts I list below may give you a higher interest rate than your brick and mortar savings account!

EverBank – Best Interest Rate

EverBank’s checking account offers the highest APY of the group – a 2.51% 3-month bonus rate on deposits up to $100,000 and then a 1.51% APY thereafter. There is a minimum opening balance requirement of $1,500 but afterwards there are no minimum required to earn interest, no monthly fees, free check writing, debit cards, online banking, plus unlimited ATM fee reimbursement if your balance is at least $5,000. Billpay is free if you maintain a minimum monthly balance of $5,000.

Schwab High Yield Investor Checking – Kiplinger’s Pick

Named the “Best Checking Account” by Kiplinger’s Personal Finance in 2008 and 2009, the Schwab Bank High Yield Investor Checking account tops our list of the best online checking accounts. Like the other banks on this list, you get FDIC insurance up to $250,000, plus no ATM fees (plus ATM fee rebates up to $9 per statement), free online bill pay, and no minimum balance. Add to that a yield of 0.75% APY, which you won’t get from your brick and mortar checking account, and it’s obvious why this checking account leads the way.

Only one downside, according to Kiplinger’s you need to link it to a Schwab One brokerage account, which doesn’t have a minimum either.

If you have an E*Trade account, they also offer a Max-Rate checking account with a 0.30% APY on accounts $5k+, ATM fee refunds, free billpay.

PerkStreet Financial – Best Rewards & Bonus

PerkStreet Financial, run by The Bancorp Bank, is another online checking account worth checking out because the debit card offers rewards of 1% cashback. Debit cards rarely offer cashback features (allegedly only 17% of debit cards offer rewards, according to the BAI/HItachi 2008 Study of Consumer Payment Preferences) and that’s what is notable about this non-interest bearing online checking account. If you’re anti-credit card and use only debit, consider this online checking account because of the opportunity to earn rewards.

There are no minimum balance requirements beyond the $25 initial deposit, you get free online banking and billpay, along with a PerkStreet $50 promotional bonus offer for new accounts. The big draw of this checking account is the rewards, not the promotional bonus.

ING Direct – Best Package Deal

Finally, you have ING Direct, the grand daddy of online savings accounts and their checking account offer, Electric Orange. I mention them because of how feature-rich ING Direct’s savings accounts are and how easy it is to open. The yield on balances up to $49,999.99 is only 0.25% APY but if you can break $50,000, you can appreciate a yield of 1.50% APY. You also get FDIC insurance, free online bill pay, free debit card, and access to the Allpoint ATM network.

If you want to get an online checking account and already have an ING Direct savings account, you can save yourself some hassle by going with a company you’re already working with. To truly maximize your savings, keep money in your savings account and only transfer them over to the checking when you need it.

With those four options, each with compelling reasons why they’re one of the best, you should be able to find the one that matches your needs.

Is there a better online checking account I missed?

Best Online Checking Accounts from personal finance blog Bargaineering.com.

This post is from GRS staff writer April Dykman.

I haven’t tracked our expenses since June.

Not to appear completely incompetent, I do check our accounts on a regular basis to verify the charges and withdrawals. But I can’t tell you how much we spent on groceries in August or how much we spent on fuel in October without printing out some statements and manually doing the math.

For a long time, I dutifully downloaded our statements at the end of each month and uploaded them into Quicken on my desktop (I have an old version of Quicken). I’d go through each expense, verifying its category. The process took an hour or so, mainly because I’d have to go online to look up check payees, but I did it without fail.

Then I fell behind a month. And one month turned into two. The more I fell behind, the more I dreaded updating our accounts since I knew my procrastination meant the process would take much longer. How could I remember in October why we withdrew $40 from an ATM in August?

This month, my husband enrolled at a trade school. His schedule will change after starting school, and that will translate to a change in his salary. We’re trying to figure out our best option. The first thing we needed to look at was our budget. But without some recent figures, we had no idea what we’ve been spending in each category.

Budgeting FAIL.

After getting those numbers the really-hard-and-no-fun way (manually), I started to think about joining Mint.

Why I didn’t join before
I held out for two reasons. One was security concerns. But in the comments of Get Rich Slowly’s early review of Mint, Founder and CEO Aaron Patzer wrote: “You’re safer on Mint than with online banking. Mint has a read-only connection to your bank; there’s no money transfer in Mint.”

He also pointed out the physical security, proactive account activity alerts, and that Mint uses Yodlee on the back-end. (Yodlee has been in operation for 10 years without a major security breach.)

I was still nervous about typing in my passwords, but after reading through the security precautions on the Mint website, I decided to try it. Obviously the old method of downloading statements was not working for me, and it would be silly to pretend that was going to change.

The other reason I resisted joining Mint is that I had tried Yodlee for a few months, and the system had so many bugs it was unusable:

• For example, I had a category set up called “personal.” I used the category for items like toothpaste, toilet paper, etc. Shortly after setting up my accounts and categorizing months of transactions, Yodlee reported that I had spent $425 in the personal category. Normally, it’s under $25. When I clicked on the category to view the transactions, the system would time out. I logged into my bank accounts to verify that the $425 was incorrect (it was). No matter what I tried, the $425 wouldn’t go away, and the system would not list the individual transactions.
• Second, Yodlee had it in for my ING Direct accounts. It quit pulling account information one day, showing an error. I tried many times to get Yodlee to connect with ING Direct, even deleting the account and adding it back, but it was a no-go. I contacted customer service about these issues, but didn’t receive any actual help fixing the problems.

With Yodlee misreporting my transactions and rejecting my ING Direct accounts, it was no longer a feasible option for tracking my expenses.

Why I’m giving Mint a chance
Despite my experience with Yodlee, I’m willing to give Mint a chance (and my fingers are crossed that the bugs have been fixed) because some of Mint’s features might help me avoid what kept me from dutifully tracking my expenses, such as:

• It’s online. I can log onto Mint during my lunch break and modify transactions, if needed. Before, I’d have to do this at home, usually on the weekend, which meant I’d forget about it or avoid it.
• It’s simple. When I open Mint, the accounts are listed down the left-hand side and the budget is on the right. The budget is a bar graph showing how much I’ve spent in each category for the month and how much was allotted for that category. That’s really all I want from my personal finance software. The detailed reports in Quicken were fun, but I didn’t use them. All I want to know is how much I’ve spent in each budget category.
• It has alerts. These were annoying until I took the time to tell Mint which alerts I wanted, but they can be useful. You can set up alerts for the low balances, bill reminders, credit available, unusual spending, over budget, interest rate changes, trade commission charges, bank fees, large deposits, and large purchases.

So far, I like Mint. The budget planning is exactly what I wanted. There are still some issues with my ING Direct accounts, though. When I log in, I get an error and have to enter the answers to two security questions. Inconvenient, yes, but after a few minutes my accounts do actually update, so I can deal with that.

For now, it seems like a good solution.

Do any of you Mint users experience these issues? And what kind of experiences have you had with other online personal finance software?

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Related Articles at Get Rich Slowly:

• Coins Cost More to Make Than Face Value
• Get Rich Slowly Advertising Policy
• Mint: A Fresh New On-Line Personal Finance Tool
• links for 2007-06-12
• An Introduction to Quicken Online

A young lady I know would like to make online purchases, but doesn’t have a traditional credit card or bank account yet. Someone else might have poor credit and be unable to qualify for a regular Visa or MasterCard. Or a student you know may want to have a way to pay for books and necessities while in college.

“No Credit” Credit Cards To The Rescue?

For people in these situations — those who have no credit or are still working to build their credit history — certain types of credit cards may help. A lot of people start off with a prepaid or secured credit card which can be used in place of traditional credit cards, whether it be at stores around town, online purchases, or for monthly bills.

So what do these types of cards offer? You can consider them to be credit card “training wheels” so to speak.

Secured Credit Cards To Build Credit

Secured credit cards are cards that extend you a line of credit based on some amount you deposit with the card issuer. These cards will often have a set limit that may be increased by additional deposits or by maintaining a good payment history. These cards are a great way to build credit for those who have no credit (or have bad credit). Some popular examples:

When you need to (re)build a good credit history, you’ll need a secured credit card that’s reported to the credit bureaus. Check with the creditor, because not all (although most) companies report their accounts to the credit agencies. If your credit standing is good, some banks might be willing to convert a secured credit card into an unsecured account. Ask your creditor if that’s an option for your secured card.

To stay on the safe side, the FTC warns those looking for secured credit cards to watch out for scams. In particular, avoid offers that involve calls to 900 numbers and promises to fix your credit, which can be exorbitantly expensive. You can repair bad credit on your own by establishing good credit management skills and by managing your debt responsibly.

A Look At Prepaid Credit Cards

Prepaid cards function somewhat like debit cards: hence they’re given the name “prepaid credit” or “prepaid debit” cards. They work by having the cardholder deposit some funds into an account — funds which can then be drawn against when the card is used. Here are some popular examples:

Note that ordinary debit cards are typically linked to your bank account and aren’t intended to help you build credit. On the other hand, prepaid cards are reloadable cards with their own accounts and may, in some cases, be used to help you establish credit. They can be a way for teens, students, and other spenders to learn money management skills without having to juggle cash (or lose it, as is often the case for me). You’re limited to spending only up to the amount you put into your prepaid card account.

Prepaid credit cards are also available through many retailers now — you can buy them in certain denominations and use them like gift cards or prepaid phone cards. Supposedly, prepaid cards have become popular in part because consumers want to avoid overdraft fees on their checking accounts, which can be as high as $35 each instance.

Before signing up, check on the fees incurred by using such cards, such as an activation fee you may need to pay.

Be Aware of Credit Card Fees & Charges

Although these cards can be a convenience, you should watch out for fees and charges before signing up. These fees can range from monthly to annual fees, ATM fees, or even fees for making purchases. Another charge you might run into is an application or activation fee.

I would carefully read the terms and conditions for any card I’m interested in, prior to handing over an application. Given that these cards are usually intended for those with less experience with credit or are just starting afresh as cardholders, new customers should make sure that they can handle the payments and interest rates for these cards. Note that APRs can change for a variety of conditions, such as a late payment or failure to pay.

If the fees for your prepaid cards or secured credit cards are too much to handle on a monthly basis, it might be worth the time to investigate alternatives like a debit card that’s linked to a high yield checking account or high interest savings account with a bank or credit union.

Whichever card you select, make sure you use it as an effective financial tool that can help you (and not hinder you).

“No Credit” Credit Cards: Are Prepaid or Secured Cards The Way To Go?

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