“New Year, New Strategy – Part 2″

“New Year, New Strategy – Part 2″

Check out Christian Oey's answers on MOZO

NoBankruptcy CEO Christian Oey answers questions relating to debt and credit on financial web site Mozo.com.zu. (MO-ZO stands for Money Zone by the way.)

“New Year, New Strategy”

“New Year, New Strategy”

Debt Free, Cashed Up and Laughing - The Cheapskates way to living the good life: Make a deal

Debt Free, Cashed Up and Laughing - The Cheapskates way to living the good life: Make a deal: "The age old art of haggling seems to have been lost in our day-to-day shopping. Somehow, somewhere we stopped asking for the best deal and i..."

Choice Shonkys put spotlight on rewards credit cards

By Mozo 26 October 2010

Earlier this year we cracked the rewards code to reveal the value Australians were getting for their money with rewards credit cards with the launch of our Rewards Revealer tool. Today, consumer advocacy group, CHOICE, launched the 2010 CHOICE Shonkys, awarding the Commonwealth Bank Awards program a Shonky for low flying jest.

CHOICE singled out the Commonwealth Bank for its shonkiness in how the points are calculated for cards linked to the Qantas Frequent Flyer program. Unlike other rewards credit cards where one rewards point equals one Qantas Frequent Flyer Point, with the Commonwealth Bank card you only earn points at half the rate. It means you have to spend double the amount of money to earn the rewards.

The Shonkys, reminded us here at Mozo HQ of just how important the Rewards Revealer is, and so we decided to take this opportunity to take a look (and highlight) some other shoddy practices and unrewarding rewards programs.

Based on a $12,000 annual spend the three worst performing rewards cards are:

Card	Annual rewards value minus fees
NAB Gold Card	-$90
American Express Qantas American Express Premium Card	-$74
Citibank Gold	-$56

(excluding platinum cards)

Rewarding? Maybe for the banks but certainly not us consumers.

With the NAB Gold Card to earn you a flight from Sydney to London you’d need to spend a mind blowing $937,500 and that’s not the biggest catch. Points expire after 36 months, so unless you are planning on buying a house on your credit card, it’s virtually impossible to accrue enough points to redeem the flight before they expire.

But even more telling is that it’s not just a handful of rewards credit cards that will put you in the red. Of the 71 standard rewards cards in the market, 35 will cost you more than they return in rewards value each year (at $12,000 annual spend after the annual fee).

So, what can you do to ensure you get value from your rewards card? Here are our top tips:

1.      Make sure you are earning more in rewards than you are paying in annual fees.

2.      Always pay off your card in full each month to avoid high interest rates.

3.      If you have a credit card debt, switch to a low rate card instead.

Compare rewards credit cards at mozo.com.au

JUMP IN SENIORS DECLARING BANKRUPTCY SAID MIND-BOGGLING - RECENT STUDY

23 October 2010

Reuters
For more and more seniors, retirement doesn’t mean a debt-free life of leisure. An increasing number of Americans aged 65 and older are declaring bankruptcy, according to a recent study by John Pottow, professor of law at the University of Michigan Law School.
Those aged 65 and older represented seven percent of bankruptcy filers in 2007, a mind-boggling jump from 1991. They are the “fastest-growing age demographic,” according to Pottow’s study.
What’s the culprit for so much debt? Credit cards. Two-thirds of Americans who filed for bankruptcy said credit cards were the key reason for their financial problems, according to Pottow’s research. Besides having more credit card debt compared with younger bankruptcy filers, 44.8 percent of those aged 65 and older also had more plastic in their wallets. “They’re using credit cards as a maladaptive coping mechanism,” Pottow says.
Stephanie Osterland, a supervisor in the bankruptcy department at GreenPath debt solutions, sees an increasing number of seniors living beyond their means. Says Osterland: “They’re just trying to live off of a fixed income, and that’s usually Social Security. Maybe they have a small pension. We find they’ve used credit cards to supplement that income and expenses or they just end up getting into a lot of medical debt.”
In addition to escalating medical expenses, seniors have seen their portfolios hit hard by the lagging stock market. Carolyn Rodi of Saving Your American Dream says those considering bankruptcy should see a credit counselor at a non-profit organization to get their finances in order.
Credit counselors, such as those at GreenPath, help the elderly deal with a stressful situation. “We try to help them focus on what it’s going to look like” after they get out of debt, Osterland says.
Rodi also recommends that potential bankruptcy filers seek out pro-bono legal aid. “There are a lot of elderly people that are being taken advantage of by bankruptcy attorneys and mortgage brokers who are advising them improperly to pay for the bankruptcy, take out a reverse mortgage or to do things that aren’t in their best interest,” she says. ”If you have no income, why should you borrow to pay someone when you can get free legal aid?”
What are the chances of a senior paying off his or her debts? It’s difficult to determine, especially because seniors tend to be on a fixed income. And while finding a job — such as a WalMart greeter — seems like a viable option, it is not necessarily feasible for all seniors to work.
In addition, whether or not a person declares Chapter 7 (which involves the liquidation of one’s assets) or Chapter 13 (which allows debt restructuring) bankruptcy can be a significant factor in determining what one’s lifestyle will be. “If you have to file for Chapter 7 bankruptcy, you may be able to find affordable housing that allows you to just get by,” says Rodi. “Chapter 13 lets you keep your house and doesn’t touch your retirement savings.”
Regardless, filing for bankruptcy is very stressful for anyone. “A lot of our clients in that post-retirement age have a hard time coming to grips with their situation,” Osterland says. “It’s very emotional for them. We try to focus on the future and see if this debt can be lifted off their shoulders.”

Bad banks outed on public list

• By HELEN POW
• From: The Sunday Telegraph
• October 17, 2010

THE worst banks and lenders will be publicly named and shamed by the Financial Ombudsman Service (FOS).

The financial institutions and banks with the most customer complaints for sloppy service, excessive charges or misleading information on products, will for the first time be placed on a public list.

The Ombudsman hopes that by outing the worst offenders, financial firms will improve their service.

"Consumers, the public and the media need to access this information to see who the problem banks are," Consumer Credit Legal Centre principal solicitor Katherine Lane said.

"This sort of reporting is essential otherwise we, the public, cannot scrutinise what is going on and it will just continue.

"We need to know who is worst so we can approach the failing financial institutions and the regulator and ask what is being done."

The FOS received 19,107 complaints in the 2008/09 financial year a 33 per cent spike compared with the previous 12 months.

There was a 33.5 per cent surge in complaints about consumer credit over the year the bulk of which involved home loans and credit cards from 4645 to 6202.

Consumer Credit Legal Centre deals with 16,000 banking complaints each year and another 1000 involving insurance companies.

The centre said it had seen a huge increase in complaints regarding mortgage hardship and repossessions, with National Australia Bank proving the worst offender.

GE Money was also up there in terms of complaints about its interest-free credit cards, which lawyer Katherine Lane said were causing people on low incomes "no end of trouble".

The Australian Bankers' Association chief executive Steven Munchenberg said: "The only reasonable way of doing this, if the FOS has to do it at all, would be to have the number of complaints by institution as a percentage of their total customers.

"Everything we have seen so far gives us real concern that the information will not be fair."

 

 

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