Dear Liz: I’m trying to transfer some credit card balances to existing accounts that are now offering 0% for 12 to 18 months. If I come close to maxing out the credit limit using one of those offers, will that affect my credit score adversely? Or, should I open up a new card, since I’ve gotten several 0% offers recently?
Answer: Using all or even most of your credit line on any revolving account can hurt your credit scores.
Although opening a new card may ding your scores a few points, it’s usually preferable to spread your debt over several accounts rather than pile it all on one card. This advice assumes you plan to use these offers to pay off your debt as rapidly as possible, rather than as an excuse to continue carrying balances.
If you can’t pay off your balances before the teaser rates expire, consider getting a three-year personal loan from your local credit union and using that to get free of debt. The interest rate you pay may be somewhat higher initially but you’ll likely save money in the long run.
Today’s top story: Essential tips for navigating Obamacare. Also in the news: How to boost Millennials’ retirement savings, when couples should separate their finances, and how to monitor your credit after a data breach.
10 Essential Tips for Navigating Obamacare
How to find your way through the Affordable Care Act maze.
The Obamacare Trick Early Retirees Should Know
Subsidies could be a game changer for early retirees.
Two Surest Ways to Boost Millennials’ Retirement Savings
Teaching Millennials’ the importance of planning ahead.
Video: When Should Couples Separate Their Finances?
Navigating personal finances with your spouse.
How to Monitor Your Credit After a Data Breach
Keeping an eye out for suspicious activity.
Aid & Attendance: This benefit helps pay for nursing home, assisted living and home health care for low-income vets. The benefit can be $1,700 a month for the veteran, $2,000 a month for a couple and $1,000 a month for a veteran’s widow. Yet few people take advantage or even know about this benefit, and the VA isn’t always forthcoming. A New York Times article last year said only about 38,000 of the 1.7 million World War II vets alive in 2011 were receiving it. The site VeteranAid.org has details on how to apply.
Family Caregiver Program: Eligible Post-9/11 veterans can opt to receive home health care from a family member, and that family member may be eligible for a stipend, mental health services, respite care and access to health care insurance. Family Caregiver program application are available at www.caregiver.va.gov and Caregiver Support Coordinators are stationed at every VA medical center and via phone at 1-877-222 VETS (8387) to help with the application process.
VA Mortgages: These mortgages aren’t exactly unknown, but Terry Savage wrote in a recent Huffington Post column that 70% of younger veterans had yet to take advantage of this program which offers zero down payment home loans at attractive rates. Find out more from the VA mortgage loans help desk at 800-983-0937.
Post 9/11 GI Bill: Again, not a hidden benefit, but one that’s probably underused. This version of the GI bill has paid college expenses for nearly 1 million veterans of the Afghanistan and Iraq wars, but there are nearly 6 million vets from those conflicts. At a time when college educations are all but essential for staying in the middle class, more vets should be looking into this program, which provides up to 36 months of benefit, including full tuition and fees for in-state schools plus possible help with housing and books. You’ll find details here.
Today’s top story: Planning for Black Friday. Also in the news: How the CARD ACT saved consumers billions, five factors that could increase your insurance rates, and three tax moves you should make before the end of the year.
Score on Black Friday by doing research now
Developing a plan of attack could save you a lot of money.
CARD Act Helped Consumers Without Limiting Credit Access
Saving consumers over $20 billion a year.
5 Factors That Could Raise Your Insurance Rates
You might want to put out that cigarette.
3 Tax Moves to Make Before the End of Year
It’s time to get your investments in order.
DHS Secretary warns of Obamacare scams
Your personal information could be at risk.
Today’s top story: The best online budgeting tools. Also in the news: How to choose between a 15 or 30 year mortgage, what to do when your home is underwater, and simple ways to raise your credit score.
The 5 Best Online Budgeting Tools to Help You Save Money
Tools that could help keep more money in your wallet.
30-year mortgage, or 15? 5 questions to help you choose
Deciding which mortgage works best for you.
What to Do if You Owe More Than Your Home is Worth?
How not to drown when your home is underwater.
Simple Ways to Raise Your Credit Score
It’s easier than you think.
Will Paying Bills Before They Arrive Help My Credit?
If paying bills late hurts your credit, shouldn’t the opposite be true?
Today’s top story: Re-Evaluating your airline miles credit cards. Also in the news: Saving money on school expenses, avoiding awkward money conversations at the holiday dinner table, and finding the best life insurance plan to fit your needs.
Do You Need to Re-Evaluate Your Airline Miles Credit Cards?
Changes to several programs has made some frequent travelers unhappy.
How to Save More Money on School Expenses
Don’t let school supplies drain your wallet.
How to Navigate Awkward Money Conversations at Your Family’s Holiday Dinner
AKA “How to avoid a food fight.”
Tips for Picking the Right Life Insurance Plan
Making sure your plan best suits your needs.
Will FlexScore Replace Credit Scores?
A new way of determining credit worthiness is on the horizon.
The conservative Wall Street Journal opinion page is not where you’d expect to see a piece headlined “In defense of food stamps.” Yet there it is, written by William A. Galston of the Brookings Institution.
Galston recounts the facts: that nearly half (47%) of the people on food stamps are children, that the typical income for families with children on food stamps is 57% of the poverty line (less than $11,000 for a family of three) and that 91% of food stamp benefits in dollar terms go to households living in poverty. Galston writes:
The large increase in the program’s cost over the past decade mostly reflects worsening economic conditions rather than looser eligibility standards, increased benefits, or more waste, fraud and abuse.
The only area where Galston concedes food stamp critics have a point is regarding relaxed requirements for able-bodied adults without children. He thinks those should be toughened up.
As for the argument that food stamps breed dependency? Galston disagrees:
The final complaint is the broadest: Food stamps are welfare, and welfare increases dependency. But the most rigorous research (summarized in a 2011 NBER paper, “An Assessment of the Effectiveness of Anti-Poverty Programs in the United States”) has found SNAP’s effects on work effort to be “small,” “statistically insignificant,” or “zero.”
What will get people off food stamps, he writes, is an improved economy. Now there’s a thought: Congress could focus on ways to help businesses generate jobs, rather than on beating up those who have lost them.
Deal sites. Garage sales. Thrift stores. All can be a part of a frugal lifestyle. Or they can just be substitutes for a more expensive shopping habit. The question to ask: Are these thrifty alternatives really thrifty for you? Or are they just feeding that lust for acquisition that leads to too much stuff and too little money?
In a terrific article for LearnVest titled “How I maxed out my retirement savings while making $28,000 a year,” writer Leah Manderson puts her finger on the problem:
I tried a stint at being frugal; shopping the sales and searching out deals on food, entertainment and other activities. What I discovered was that a lot of deal-hunting activities are attempts at “keeping up with the Joneses on less,” and, not surprisingly, they made me feel like a lesser version of the Joneses.
That feeling did not make me want to save money for my future—it made me want to spend more money on “deals”!
Manderson found more peace, and more savings, by unsubscribing from deal sites and making do with what she had: “I let my hair grow out, I made new outfits with clothes already in my closet, I rearranged my home decor to change my surroundings, I reread old books that I loved, and I got comfortable with living on less.”
Most of us have more than enough. Recognizing that can help tame the beast within that insists we “need” the new shiny thing that just captured our attention.
Or you can just remember something my grandmother said while laughing at retailer signs that promised big savings. “You’re not saving,” she said. “You’re spending!”
Today’s top story: 8 tax breaks expiring at the end of 2013. Also in the news: How to monitor your credit after a data breach, when it makes sense to have credit card debt, and could cheaper insurance convince you to buy a self-driving car?
8 Tax Breaks Expiring at the End of 2013
Teachers aren’t going to like this.
How to Monitor Your Credit After a Data Breach
Vigilance is key.
When Does It Make Sense to Have Credit Card Debt?
Credit card debt isn’t always a bad thing.
Will cheaper insurance sway you toward a self-driving car?
Are you ready to let someone (or something) else do the driving?
10 ways to avoid car-buying gotchas
Be prepared to walk away.