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Articles by Miranda Marquit

Gift Cards: Watch Out For Scams

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One of the best gifts you can give to others is the gift card. I'm a big fan of gift cards. Unfortunately, no matter what you are buying, or where you are buying it, it always seems as though there's some scammer out there trying to take advantage — and the same is true when it comes to gift cards.

There are gift card scams out there, and you need to be ready. Be careful this holiday season, and carefully scrutinize your gift cards ahead of time.

Discounted Gift Cards

One of the most obvious places you need to look for scams is with discounted gift cards. I love discounted gift cards. They can make great gifts — and you can get more for your gift-giving buck. However, not every purveyor of discounted gift cards is honest. Major sites, like City Deals, Groupon and Living Social can provide you with legitimate gift cards at discounted prices.

gift card scamsWhere you need to be careful is on gift card exchange web sites. In some cases, the gift card exchange site is simply a marketplace. The site that facilitates that transaction doesn't guarantee the gift card. That means that you could pay money for a gift card, and then not receive it. Or, perhaps, the seller has an expired gift card. You pay for the card, and when it arrives, it's useless. When shopping gift card exchanges, it's important to check the conditions of the site. Find out whether the site guarantees the gift cards sold on the site, and what recourse you have if things aren't as they are represented.

Buying Gift Cards in the Store

Some scammers are really smart about their gift card perfidy. Golden Gate BBB warns that some scammers actually go into stores and write down gift card numbers — and PINs. It's then possible to wait until the cards are activated. There are web sites that offer information about gift card balances. Scammers just have to check regularly to see when the cards are activated, and then go on an online spending spree with your gift card.

Before you purchase a gift card, Golden Gate BBB recommends that you check to make sure the package hasn't been tampered with, and that the PIN is still covered — not scratched off. It is also recommended that you avoid grabbing the first gift card you see prominently displayed; ask for the cards stored elsewhere, since they haven't been available to the public and there is less chance that they have been tampered with.

Bottom Line

Increasingly, you have to be careful about how you go about buying your gift cards. As technology and convenience grows, so, too, does the ingenuity of scammers. You need to be on top of things, and be vigilant, even when purchasing gift cards from a store. With a little caution, though, you should be able to find gift cards that are safe to give, and that might even be discounted to a point that saves you money on your Christmas shopping.

Retirement: Know Your Housing Options

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As you prepare for retirement, one of your challenges is going to be figuring out where to live. The process of aging means that you might need special care as you get older. Where you live can affect the sort of care you get, as well as your ability to access services that you need — especially in terms of health care.

What Are Your Preferences?

Before you end up in a position where you are forced into a decision, it's a good idea to determine your preferences ahead of time. Some people expect that, once their children grow up and move out, they will downsize to a smaller home. Others expect to remain in their house forever, particularly if they have bought the home and expect it to be a retirement asset. In some cases, a fixed domicile is unattractive, if the goal is to travel. My grandfather has a small trailer in a park in southern Arizona. It's a park populated by retirees escaping the winter. During the summer, he pulls out the truck, hitches up his camp trailer, and travels all over, visiting family, and going on hunting, fishing and camping trips.

Housing in retirement

Your first task is to figure out what living arrangement will work best for you. After you know that, you can begin to make plans for the future.

Considering Costs

Initially, your retirement housing is unlikely to cost very much. Chances are that you will be reasonably healthy, and have no special requirements. However, you will eventually need a transition plan for your living arrangements. You might decide to move into a retirement community, an assisted living facility, or even a nursing home. The bigger your health needs, the costlier your living arrangements will be. A properly structured long term care policy can help you prepare for the costs associated with assisted living, or with a nursing facility.

It is worth noting, too, that you can receive care at home. There are home care options available, in which health care specialists come to you, in order to ensure that you have the help you need. However, if you don't want to eventually rely on family members to care for you at home, you might have to eventually make arrangements for living in a more permanent facility.

Another possible cost has to do with a reverse mortgage. Some people choose these financial products in an effort to get a little more cash flow each month. If you die in your home, it usually works out fine for you — although your heirs will have to deal with selling your home to pay off the mortgage. If you end up moving, though, even if your health fails and you move to a nursing facility, your loan becomes due. Being stuck trying to pay off a reverse mortgage is the last thing you want to deal with as you are trying to transition to a new retirement living arrangement.

Bottom Line

Now is the time to consider your situation, and your preferences. Think about where you might want to live, and how much it is likely to cost. Then, create a plan that allows you to maximize your retirement so that you spend more living where you want.

3 Tips For Giving Gift Cards This Holiday Season

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Are you getting ready to provide gifts this holiday season? If you're anything like me, you've started your Christmas shopping already. I actually give gift cards a lot during the holidays. For my little nieces and nephew, I do a little more and buy actual toys.  But for the adults — my siblings (and their spouses) and my parents — I like to get gift cards.

CardHub.com put out a list of great ideas for buying gift cards during the holiday season. Some of the items on the list include selling your unused gift cards to recoup some of the cash, and using wish lists to ensure that you get cards that others will use — or that you get a card that you will use. If your giftee has a wishlist at a particular retailer, there is a good chance that a gift card to that store will be appreciated.

Here are some of my favorite tips from the CardHub article, along with my own observations about purchasing gift cards for others during the holiday season:

gift card for christmas1. Get Something Uniquely Enjoyable

This is related to the wishlists. Sure, you can get an all-purpose gift card that can be used by the recipient anywhere. But part of the fun of holiday gift-giving is that you give something frivolous and unique. I like to think of an experience that someone might enjoy. I find a local restaurant that the recipient might like — but not feel comfortable visiting on his or her own. Or, I get tickets to the movie theater because I know that the recipient would enjoy a movie. The idea is to make it fun and enjoyable for the recipient, in addition to being something he or she would use.

2. Discounted Gift Cards

I loved that HubCards included this item. I occasionally buy discounted gift cards using sites like GiftCardGranny.com, Cardpool.com, or purchasing through CityDeals. You can get more bang for your buck, and you can treat the recipient to something even better. Make a list of possibilities for the different people you are buying gifts for. Then, keep an eye out for discounted gift cards, as well as pay attention to social sites like Groupon and LivingSocial. You never know when the perfect discounted certificate or gift card will come along.

3. Know The Terms Of The Gift Card

The Credit CARD Act of 2009 prohibits gift cards from expiring less than five years from when the gift card was issued or last reloaded, so that's nice to know. But, as CardHub points out, there are other items to be on the watch for. Gift card issuers can charge up front fees (many all purpose cards from AmEx and Visa come with activation fees you pay at the register). Read the disclosures about the gift card to make sure that you are getting what you expect.

Also, if you buy discounted gift cards, make sure they will be valid where they are likely to be used. I once almost bought a discounted gift card to a franchise chain restaurant. Just before completing the purchase, I noticed it was a local discount, offered only at the restaurant owned locally. It would have been useless elsewhere. Be sure you know the terms, how much is available on the discounted card, and other details.

Do you give gift cards?

Consumers May Have Won This Round, But The Bank Fee War Is Far From Over

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It's true that consumers appear to have won a battle against bank fees. Bank of America announced that it will not go through with its intention to charge a monthly fee of $5 for debit card usage. Thanks to  great deal of outcry, and people actually moving their money, Bank of America is back-pedaling on its decision to charge for debit card usage. Consumers have seen what they can do, and the big banks are honoring their wishes (at least with regard to debit card fees).

At least for now.

The bank fee war is far from over, though. While it's true that banks still make money off taking the money you deposit (at low yields) and lending it out to others (at higher interest rates), banks have become more and more focused in the last few years on revenue from fees. And, as caps on overdraft fees and debit card transaction fees are introduced, banks look for additional ways to make money off fees. Fees bring in billions of dollars for banks, and they aren't going to stop looking for ways to raise them — no matter how profitable they are.

new bank fees coming

On The Lookout For More Fees

No, you probably won't see debit usage fees anytime soon. But you might see other attempts to raise revenue from fees. Here are some items to look out for the next time you receive a bank statement or other communication from your bank (you should read everything your bank sends you):

  • Hikes to current fees: Be on the look out for increases to existing fees. ATM fees might go up by $1, or you could see a small increase in your monthly checking account fee. For free checking accounts, you might become subject to an activity minimum, or a balance requirement. These small changes don't make as big an impact in the media, but they can affect you.
  • New, smaller fees: Perhaps you are going to be (quietly) charged a small fee for paper statements. If yo make transactions via phone, a fee might be added. These new fees are likely to be small and somewhat unnoticeable, but banks are hoping they will add up.
  • Credit card changes: Instead of hiking bank fees, some institutions are likely to look for revenue increases from other products, like credit cards. An interest rate increase to your credit card issued by your bank, or perhaps the addition of an annual fee, might be considered in order to help raise more revenue.
  • Reduced perks: Sometimes, banks look to boost positive cash flow by cutting back on perks. You might not see an increased fee, but banks are increasingly getting rid of debit card reward programs. Other perks, like free notary services, might also disappear for bank consumers.
  • Lower deposit yields: And, of course, in order to boost revenue some banks might decide to reduce the yield they pay on deposits. Interest yields are being cut on savings accounts, money market accounts, HSAs, CDs and interest checking accounts.

In the end, banks are for-profit businesses, looking to make money. You have to be on your toes constantly if you expect to stay ahead, and get the most value for your money.

Is It Time to Reconsider the ARM?

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Right after the mortgage meltdown, adjustable rate mortgages were vilified far and wide. You couldn't find anyone, anywhere, recommending an ARM. Now, though, some are saying that ARMs have had a bad rap. After all, the ARMs that were especially devastating were those with extra low teaser rates, or interest-only ARMs that featured large balloon payments.

While no one thinks that those types of ARMs are a good idea now, there is some talk that it might be time to consider more “traditional” ARMs — especially with rates that can be below 3%, depending on the type of ARM you sign up for.

Arm Mortgage

When An ARM Might Make Sense

During the heady days running up to the mortgage market crash and financial crisis, many people decided on ARMs because it allowed them to “afford” the payments on a home that they really couldn't afford at all. These ARMs were sometimes structured so that no equity was built in the home, and a balloon payment (to make up for the fact that no principal was paid during a specified period) was practically unaffordable. To get around this problem, many mortgage lenders told borrowers they could refinance before rates re-set, and before balloon payments had to be made. Unfortunately, with no equity, and falling home values, refinance was out of reach for many, and we ended up with the mortgage market implosion.

Today, though, mortgage lenders are more cautious — and borrowers are, too. And this is the sort of climate in which an ARM might work out. Indeed, my parents recently refinanced their home to an ARM. It is an ARM with a rate that re-sets every year, depending on market rates. Since they got the loan two years ago, their rate has lowered each year as mortgage rates have fallen. This has worked out well for them, allowing them to accelerate their mortgage repayment, since they pay the same amount every month, regardless of the rate. So, as the rate falls, more of their payment goes to principal.

There are other types of ARMs that are a little more reasonable as well. There are ARMs that come with an initial fixed-rate period. You could choose a fixed-rate period of three, five, seven or 10 years. The advantage of these types of ARMs comes in if you think you might move soon. You could choose a five-year ARM, with a rate of less than 3%, and take advantage of the low mortgage rate. Then, when you move in four or five years, you sell the home before the rate re-sets.

A carefully chosen ARM can also help you in terms of refinancing to a fixed rate later. Choose a hybrid ARM with a longer fixed-rate period — seven to 10 years — and you can make significant strides in building equity as a larger portion of your monthly payment reduces the principal. Then, if you decide to refinance to a fixed rate at the end of the period, you should have significant equity built up, making the process a little easier.

Bottom Line

An ARM isn't for everyone. However, when used properly, an ARM can save some homeowners quite a bit, and help them build equity to boot.

What’s Next For Employer-Sponsored, Tax-Advantaged Retirement Accounts?

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Everyone seems rather focused on the deficit right now. This isn't surprising, considering the fact that we have a serious budget crisis brewing in the U.S. However, a lot of the plans to “fix” the problem involve getting rid of tax incentives for the people who need them most.

One of the issues on the table is getting rid of some of the tax advantages associated with employer-sponsored retirement accounts.

Your Tax Deduction Could Disappear

One of the ways that some lawmakers hope to improve revenue is to stop providing the ability to contribute to employer-sponsored retirement accounts with pre-tax dollars. Another plan is a cap on the combined employer/employee contribution limit, reducing it to the lesser amount of $20,000 a year, or 20% of income. (Currently, the corresponding amounts are $49,000 a year and 100% income.) There are different suggestions as to how to change the tax advantages associated with retirement contributions, but all them have the possible effect of reducing the amount workers set aside for retirement.

Additionally, there are concerns that reducing the tax benefits that employers get for setting up these retirement plans would have the effect of reducing the number of plans even available. Employers are already feeling the pinch from the rising costs of health care benefits. They might not be so willing to continue offering retirement plans if the tax incentives to do so began disappearing.

Would You Still Contribute To A Retirement Account Without The Tax Benefit?

Already, there are concerns that Americans aren't saving enough for retirement — and that's with fairly decent tax benefits to do so. What happens when that incentive goes away? If you thought the retirement savings rate in America was bad already, just wait until there's no reason to sock money away in a tax-advantaged retirement account.

The flip side, of course, is that there are some people who would contribute to a retirement account no matter. If you are preparing for your future, you know that you will need to set money aside — whether or not the government gives you a tax break. While it certainly is nice to receive the tax benefits associated with retirement plan contributions, if they disappeared tomorrow, I'd still make retirement account contributions. (Of course, I contribute to a Roth IRA, so I don't get a tax deduction anyway. But we will soon be contributing to a 403b through my husband's job, so a deduction could be a very real possibility soon.)

Bottom Line

Any number of suggestions are being floated as ways to reduce spending and boost tax revenue. This means that there are a number of tax deductions and credits on the table, many of them affecting individuals and businesses. From retirement account contributions, to the mortgage interest deduction, you could soon see some of your tax breaks disappearing. This means that you will need to plan for the possibility. Decide what's important to you, and what you can handle without the tax break. Hopefully, you will decide that it's still important to make contributions to your retirement account, even if there is no tax break associated with it.