The majority of financial advice on credit cards falls into one of two categories:

• Credit cards are evil and you should cancel them and never, ever use them again.
• Credit cards are fantastically convenient when used responsibly and can actually make you hundreds a year in rewards.

Both are wrong.

Been burned by credit cards? It’s tempting to do what Matt did: Close ‘em, shred ‘em, and forget ‘em. If you’re either so mad at the card racket or think you can’t trust yourself with credit, then cancel ‘em. But before you do, consider this: Canceling credit cards makes it harder to maintain good credit. Hope to apply for a mortgage? (Or even an apartment?) You’ll want good credit.

Some money wizards recommend shredding your cards; others say “credit cards are greeeat!” After all, card rewards earn you a couple hundred extra bucks a year. Unfortunately, most rewards-seeking spenders will actually spend more money than they’ll earn in rewards using a rewards credit card. Let’s take a closer look at both of these fallacies. Read more…

Posted on Oct 20th, 2009 by David Weliver in Credit
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All worked up about identify theft? Don’t be. This post concludes my four-part series on identity theft in recognition of “Identity Theft Protection Awareness Week” which is coming up. It’s a revision of a post I did a while back originally titled “Identity Theft: How to Prevent it and Stop Worrying.” Some comments on the original post raised a good point—you can’t ever totally “prevent” identity. There’s always a chance your identity will be compromised. You can, however, take steps to protect your identity every day.

Have you ever heard the old advice: “If you can’t do something about it, don’t worry about? If you can do something about it, then do it.” This holds true for identity theft. There’s always a chance criminals can get their hands on your credit card numbers or, worse, your Social Security number, and run up fraudulent charges or debts in your name. It’s not worth losing sleep over as long as you’re taking a few simple steps to make scam artists’ jobs harder. Read more…

Posted on Oct 16th, 2009 by David Weliver in Consumer Protection
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All this talk about the Dow Jones Industrial Average closing above 10,000 points on Wednesday has me crazy. As if it matters! Yes, the stock market is rallying. That’s a good thing for investors. But what about the double-digit unemployment that still plagues our nation? It will still be a long time before employment returns to pre-recession levels, and there’s no guarantee that good news in the stock market will pave the way for good news in other economic sectors. We can hope, but that’s all. Finally, readers who have come across my investing mindset already know what I’m going to say: Don’t let any stock market index passing some arbitrary number influence your investment strategy. Invest consistently and invest for the long run. That is all!

That said, since the Dow crossing 10,000 was so important to the media this week, I want to focus my weekly roundup on other bloggers’ reactions to this landmark (however arbitrary I think it is). Read more…

Posted on Oct 16th, 2009 by David Weliver in Roundups and Carnivals
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When Forbes named Portland, Maine the most livable city in America this year, it didn’t surprise my wife and I or any of Portland’s other 64,000 denizens. With a low cost of living, great culture and dining (we were also named Bon Appetite’s “foodiest small town”), and easy access to the ocean and mountains, Portland freaking rocks.

The only big thing Portland lacks for well-educated, ambitious twentysomethings? An abundance of career options.

Finding a job is tough anywhere in this economy, but it’s always been tough here. Especially for college grads who want a professional career. It’s not as hard to get a retail or service gig here in town, but higher-paying jobs are few and far between. Read more…

Posted on Oct 15th, 2009 by David Weliver in Career
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If you have an e-mail account, you’ve probably gotten an e-mail that looks like it is from a financial institution that reads something like this:

In a routine update of our customer records, we couldn’t confirm your information. Please click here to verify your customer information.

If you receive such an e-mail, watch out! It’s definitely not from a bank. It’s fraud called “phishing”. Read more…

Posted on Oct 15th, 2009 by David Weliver in Consumer Protection
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This is the second year in a row Money Under 30 is participating in Blog Action Day. This year’s theme is climate change.

When it comes down to it, a big component of building wealth is learning to stop being wasteful. We need to stop wasting money (so we can save and invest it), but when we stop wasting money, we also stop wasting the things we use money to buy. And when we buy less of things that leave carbon footprints when they are produced and transported across the globe, we in fact help slow climate change. Read more…

Posted on Oct 15th, 2009 by David Weliver in Personal Finance
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Talk about serendipitous. I’ve been planning today’s post on credit card and ATM “skimmers” (jerry-rigged little devices criminals use to steal your card numbers), and yesterday my brother tells me he spotted one of these suckers at a rest area on the New York Thruway. He alerted managers, who called the cops, who confirmed it was a skimmer. It just proves that skimmers are a real threat out there. Skimmers give fraudsters easy access to unwitting victims’ credit and debit card numbers—even PINs. Here’s what you need to know to avoid these nasty things.

How Skimmers Work

There are two big ways criminals use credit card skimmers to steal your information:

• They stealthfully install a skimmer on an ATM or self-serve kiosk and capture your card information when you swipe your card at the kiosk. Sometimes the machine still works, and you never know anything is wrong. Sometimes the skimmer disables the machine, but you’ll just assume it’s out of order and move on.
• Or, they get a hold of your credit card and skim your card manually (an easy racket for an unscrupulous waiter who could do this when you hand over your card to pay the bill).

Read more…

Posted on Oct 14th, 2009 by David Weliver in Consumer Protection
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I know what you’re thinking: “I’m young, I’m Web-savvy, I don’t need to worry about identity theft.” Street smarts alone may not protect you from every identity theft trap; this stuff can happen to anybody! What follows are seven signs that you may be at-risk.

Note: Next week, the National Foundation for Credit Counseling and the Council of Better Business Bureaus will promote “National Protect Your Identity Week”. This article kicks off a four-part series on Money Under 30 featuring simple steps you can take to protect your most precious virtual asset—your identity!

• Today: Seven Signs You’re At-Risk for Identity Theft
• Wednesday: Beware Credit Card Skimmers and How to Spot Them
• Thursday: Beware Phishing Attempts and How to Spot Them
• Friday: Everything You Need to Know About Protecting Your Identity

Read more…

Posted on Oct 13th, 2009 by David Weliver in Credit
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Tired of worrying about your credit, and being punished for having a low credit score? The eight steps listed below will lead you to financial freedom. Some are easier than others, but by following even some of them your credit score will rise.

1. Be Patient

This one’s so easy, you don’t actually have to do anything! The older your credit file, the more stable it will be. If you have a proven, positive credit history, lenders will feel more comfortable extending credit to you. Your credit report is an ever-changing file: every time you use credit or make a payment, your credit profile and your score change. That means that any flaws you have in your credit history will disappear over time. Focus on handling your credit accounts in a positive manner and your credit report and score will improve.

2. Don’t Close Old Accounts

Even if you haven’t used an account for a long time, leave it alone; it will only help your credit score. The longer your positive track record and the lower your overall utilization rate (or the amount of credit you’re using compared to the amount of credit that’s been extended to you), the higher your credit score will be. Read more…

Posted on Oct 13th, 2009 by Carrie Dodson Davis in Credit
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I know the whole subject of buying a home and mortgages doesn’t apply to everybody under 30 out there…certainly if you’re still in school you’re probably not thinking about owning your own home just yet, but you might be. But given that this year’s tax credit opportunities along with depressed home prices makes it a good time to buy a home…especially for first timers (who may well be in their twenties), I decided to find some great articles about home buying and mortgages this week.

The Dough Roller (@doughroller) posted 7 Lessons Learned from a Failed Attempt to Refinance. Great reading if you’re thinking about refinancing to take advantage of ridiculously low mortgage rates.

The Debt Kid (@debtkid) talks about how “you can save literally tens of thousands of dollars in interest payments over the life of the loan by [making extra mortgage payments]” in Paying Down Your Mortgage Faster Reaps Big Benefits. Once you’ve got a mortgage, there’s no reason why you have to take a full 30 years to pay it off! In fact, you’ll grow much richer if you can do it faster!

Get Rich Slowly (@JDRoth) presents an extremely helpful look at comparing 15- and 30-year mortgages in Pros and Cons: 30-Year Mortgage vs. 15-Year Mortgage. This article is a good companion to the one on prepaying your mortgage, as a lot of people ask “why take a 15-year mortgage instead of taking a 30-year home loan and prepaying it?”

Personal Dividends has another look at What You Need to Qualify for a Home Mortgage Loan. It’s a topic I’ve written about a bit, but definitely an important one to understand before you jump into the mortgage market!

Finally, thanks to Studenomist for hosting this week’s Carnival of Personal Finance. Happy weekend! (And a long one if you’re lucky!)

David @MoneyUnder30

Posted on Oct 9th, 2009 by David Weliver in Roundups and Carnivals
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