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ID theft thrives by surprise

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SUNNYVALE, Calif. (9/28/11)--The woman on the other end of the line identifies herself as a police officer. A camera caught you running a red light and you owe an overdue fine. You’re facing a hefty late fee, a court date, and possibly jail time. You choose to pay the bill over the phone. Congratulations! You’ve just given away your identity (Yahoo! Autos Sept. 19). The scenario may be new, but the enabling factors are the same for all types of identity theft: Scammers count on the element of surprise and that you won’t do your fact-checking. Fact: The police and most other authorities will not use the phone to obtain your personal information or to collect overdue fines or tickets. They use the U.S. Postal Service or even a personal visit by a law enforcement officer. Even if you’re already on guard about protecting your private information, there’s an emerging market for identity theft that targets a different timeline surprise--your kids (Huffington Post Aug. 22). Children’s Social Security numbers offer identity thieves a clean slate on which they can commit fraud for years without detection. After all, how many parents think to run credit reports on their children? Organized crime is a major player in child identity theft. An undocumented immigrant or even a family member could be using your child’s Social Security number to start a new life, secure credit, get a mortgage, or pay bills. The Federal Trade Commission reports that, in 2010, about 8% of identity theft complaints came from victims age 19 and younger. Your innocent neglect could affect your children for years, but seldom will be detected when the fraud is occurring. Your adult children might discover the problem only when they apply for a credit card or a mortgage loan--and are denied. The damage from identity theft can take a long time and a lot of dollars to repair. Reduce your chances of becoming a surprise victim of identity theft by following this advice from the Consumer Federation of America:
* Don’t carry your child’s Social Security card. Lost Social Security cards are the most common source of information for identity thieves. * Ask before you tell. When asked for your child’s personal information, find out how it will be stored or, if not stored, how it will be destroyed or returned. * Use a cross-cut paper shredder. Before you dispose of documents with your child’s personal information, shred it using a cross-cut paper shredder. * Don’t post, and remove any existing online photos of your children. Identity thieves can use the geocoding features embedded within digital images to find information that helps them steal children’s identities. * Don’t tell your children their Social Security numbers. Wait until they understand how and why to protect themselves from identity theft.
For more information, view the video “How to Prevent Identity Theft” in the Home & Family Finance Resource Center.

Refinancing surge has homeowners scrambling

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WASHINGTON (9/26/11)--If you’re a homeowner thinking about refinancing to cash in on record-low interest rates, you’re in good company. Before you take the plunge, understand all your options, run the numbers, and avoid common blunders, because mistakes could cost you plenty (Kiplinger Sept. 15). In recent years, declining home values have forced homeowners to move from cash-out refis--where they pocketed large sums to pay for home improvements, cars, or luxury items--to cash-in mortgages. This means instead of receiving cash at settlement, they bring checks with them, particularly if they are underwater or facing higher rates on adjustable-rate mortgages, just to reduce the size of their mortgage. Or, they want to boost the equity in their homes to avoid paying private mortgage insurance. If you’re simply focused on making smaller monthly payments, you may be missing out. Many borrowers are switching to shorter terms, such as 15-year loans. Normally such a change would yield higher payments but, because of record low interest rates, the monthly payment may change only slightly. Compare monthly payments and total interest costs for 30-year, 20-year, 15-year, 12-year, and 10-year fixed options, if available. Because your home may be the biggest financial purchase you make, and refinancing at current rates could yield the biggest reduction in overall interest payments you’ll ever get, take time up front to get it right (Kiplinger Aug. 19):
* Clean up your credit. A credit score of 720 or more, plus 20% equity in your house, likely will get you the lowest interest rate available. * Shop for the best rate. Start at the credit union and ask about options and rates. Get good faith estimates to compare offers before you formally apply. * Gather plenty of documentation. You’ll likely need to provide recent pay stubs, two years of W-2s, proof of home insurance, two months of financial statements, and--if you’re self-employed--two years of tax returns.
Avoid common mistakes, identified by the LendingTree Marketplace Survey of Lenders (Dailyfinance.com Sept. 15). Don’t overestimate the value of your home or you’ll get higher-than-expected loan offers that an appraisal won’t support. Don’t assume rates are going to keep going down; if you wait too long before locking in and interest rates suddenly increase, you’ve lost out. And don’t focus only on interest rate. A shorter term, even with a slightly higher monthly payment, could save you tens of thousands of dollars in interest over the life of the loan. Remember that refinancing is not always in your best interest. Ask the lender to do a break-even calculation that shows how long you’d need to stay in your home to recoup closing costs and points. And if you don’t want to pay the closing costs to refinance, you could make extra principal payments on your existing mortgage. Ask the lender to calculate how much extra you’d need to add to the monthly payment of a 15-year loan to pay it off in 12 years, for example. For more information, read “Appraisers Home In on Value” in the Home & Family Finance Resource Center.

HandFF Radio covers online shopping relationship finances

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WASHINGTON (9/23/11)--Sunday’s Home & Family Finance Radio program provides guidance for shopping online, discussing money with your significant other, saving for retirement in tough times, and preparing for natural disasters. The show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:
* “Save Money Buying Online With Special Discount Codes.” Barry Boone, CEO, CurrentCodes.com, Tulsa, Okla., shares moneysaving tools for shopping on the Web. * “Begin With the E.N.D. in Mind.” Scott and Bethany Palmer, The Money Couple, family and couples’ financial advisers and authors, Colorado Springs, Colo., discuss the importance of planning regular conversations about finances with your spouse. * “How to Invest and Save for Retirement During a Recession.” Bill Losey, certified financial planner and author, Bill Losey Retirement Solutions, Wilton, N.Y., offers advice for getting retirement-ready in a challenging economy. * “If Disaster Strikes, Can Your Finances Weather the Storm?” Steven Smith, chairman, president, and CEO, Finicity Corporation, Salt Lake City, explains how to put your financial life in order in case of a natural disaster.
Home & Family Finance is a resource center for personal finance information at the Credit Union National Association (CUNA). The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; and the Defense Credit Union Council and member credit unions, serving those who serve the country worldwide. Home & Family Finance airs Sundays at 3 p.m. ET on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network. CUNA and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA's websites. For more information, read “Couples and Money: Reconciling a Spender-Saver Marriage” and “Preserve Your Family’s Paper Trail: Replace and Safeguard Personal Records” and use the “How to Calculate Your Retirement Needs” calculator in the Home & Family Finance Resource Center.

Bankruptcies hit college grads

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NEW YORK (9/21/11)--A college degree may make you more attractive to employers and improve your earning potential, but it doesn’t protect you from bankruptcy. Those with college diplomas accounted for 13.6% of the 1.5 million personal bankruptcies filed in 2010--an increase from 11.2% in 2006--according to a recent study from the Institute for Financial Literacy, South Portland, Maine (NYDailyNews.com, Sept. 14). The study surveyed more than 50,000 debtors in credit counseling or money management courses. While fewer white collar jobs and reductions in income may be partly to blame for the trend, 70% of those filing for bankruptcy cited being overextended on credit as the prime reason for filing, according to the report. Consumers can’t control the overall impact of the economic downturn, but they can control their debt level. Here’s how you can you prevent being overextended:
* Reduce necessary expenses.It’s easy to cut back on everyday costs. Keeping your thermostat at a steady temperature, purchasing generic items instead of brand name goods, and unplugging electronics when not in use are just a few ways to reduce expenses. * Limit unnecessary expenditures. Rent a movie instead of going to the theater, prepare meals at home instead of dining out, and visit parks and libraries to take advantage of free entertainment. * Curtail credit use. If possible, try not to make any purchases with credit cards. That way you won’t continue to add to your debt level. Instead, use cash, checks, or your debit/check card for purchases. Monitor your online banking account to prevent your account from being overdrawn.
For more help controlling spending, read the Financial Fitness Challenge “Run a Financial Stress Test” in the Home & Family Finance Resource Center.

Mortgage rates hit bottom few qualify

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SAN FRANCISCO (9/19/11)--Headlines read: “Mortgage Rates Hit Record Lows.” With rates lower than they’ve been in more than 50 years, a 30-year, fixed-rate mortgage averages well below 5%, compared with 6.5% five years ago (MarketWatch Sept. 8). Yet, few Americans are able to take advantage of the low rates due to unemployment, stagnant wages, and low credit scores. Many financial institutions are requiring first-time home buyers to have credit scores above 700 to qualify for a mortgage loan. This boils down to about 40% of U.S. households having what it takes to get a prime rate (USAToday.com Sept. 8). To improve your credit score, Credit Union National Association’s Center for Personal Finance says to take these steps to improve your score:
* Pay bills on time, all the time. This means all bills, including utility bills. Stay on top of due dates by setting up automatic payments through your credit union’s online bill payment website. * Don’t max out credit lines. It’s best to use part of available credit on a few accounts rather than all available credit on one account. Keep balances low and try not to charge more than you can pay in full each month. * Don’t open or close accounts as a strategy to raise your score. Opening new accounts can send a red flag to lenders that you’re taking on new debt and might indicate that you won’t be able to pay other debts. * Check credit reports from the three major credit bureaus--Equifax, Experian, and TransUnion--for free, once each year through annualcreditreport.com, and contact the creditor and the credit bureau to correct any errors. * Pay fines. Whether it’s a parking ticket or a library fine, pay up. If debts are reported to a credit reporting agency, they can knock your credit score. * Become an authorized user on someone else’s card. If you’re a young adult and haven’t built up much of a credit history, ask your parents if they’ll include you as an authorized user on their card. You’ll have full charging privileges, but aren’t responsible for payments. The activity will be reported on the primary cardholder’s report as well as yours.
For more information about getting your financial life back in order, read the Financial Fitness Challenge “Earn a Second Chance” in the Home & Family Finance Resource Center.

HandFF Radio Prepare portfolio for market fluctuations

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WASHINGTON (9/16/11)--Sunday’s Home & Family Finance Radio program has advice for investing, teaching kids about money, and managing your mortgage. The show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:
* “Sit Tight! Don’t React to an Impulsive Market.” Nicole Covganka, financial planner, Retirement Planning Group, Riverwoods, Ill., explains how to construct and adjust your investment portfolio to withstand unexpected changes in the market. * “Teach Kids Early About Money.” Julie Murphy Casserly, certified financial planner, author, and founder of JMC Wealth Management, Chicago, offers easy conversation topics to broach the subject of money with kids at any age. * “Financial Education Resources for Kids and Parents.” Madeleine Greene, accredited financial counselor, retired faculty member at the University of Maryland in College Park, and co-author of “The Best Little Money Book,” Barnesville, Md., presents resources parents can use to help their kids become financially savvy. * “Number of Delinquent Mortgages on the Rise Again.” Jordan Goodman, personal finance expert formerly with Money magazine, weekly commentator on “NBC News at Sunrise,” daily commentator on “America in the Morning,” and author of “Master Your Debt: Slash Your Monthly Payments and Become Debt-Free,” New York, reveals new programs and tools that can help you get control over your mortgage.
Home & Family Finance is a resource center for personal finance information at the Credit Union National Association (CUNA). The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; and the Defense Credit Union Council and member credit unions, serving those who serve the country worldwide. Home & Family Finance airs Sundays at 3 p.m. ET on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network. CUNA and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA's websites. For more information, read “Learn to Evaluate Financial Information” and watch the “Talk to Your Children About Family Finances” and “What to Do When Your ARM is Due” videos in the Home & Family Finance Resource Center.

Financial tips for the suddenly single

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NEW YORK (9/14/11)--If you were faced with the sudden loss of your spouse or life partner, would you be able to make sound financial decisions? Here’s one consistent piece of advice from experts and from those who’ve experienced a devastating loss: Don’t move too fast (The New York Times Sept. 2). It’s hard to resist the urge to move forward on important decisions, but committing to a decision-free zone of six months may be your best move (Kiplinger.com Aug. 29). Don’t try to sell your house. Don’t give a lot of money to your children or to charity. And don’t let a salesperson convince you to buy financial products. Grief and emotional stress theoretically can reduce our brain power by as much as 20%, keeping us from thinking clearly, according to experts (CBSDFW.com July 22). To cope, make three lists: things you need to do right away, things to do soon, and things that can be done later. The “right away” list includes finding all relevant accounts and paying bills, but the “soon” and “do later” lists--typically decisions about the home and financial planning--are where many people make costly, often irreparable mistakes. Surviving spouses--who may be in uncharted waters emotionally, spiritually, and financially--may benefit from these recommendations:
* Gather documents and passwords. Items you’ll need right away include birth and marriage certificates, Social Security numbers, current financial statements, company benefit and retirement papers, car titles, powers of attorney, and military discharge papers. Ask the funeral director for up to 25 copies of the death certificate. * Assemble a financial support team. Get referrals for accountants, estate planning lawyers and financial planners. Contact the National Association of Personal Finance Advisors at napfa.org (847-483-5400) for a list of fee-only planners. * Take stock of income and expenses. If your husband had been receiving a Social Security benefit and you were receiving a 50% spousal benefit, your spousal benefit will cease. On the other hand, some expenses will disappear, such as your spouse’s Medicare premiums. * Call the deceased’s employer. The benefits administrator can tell you about benefits you’re entitled to, such as pension benefits, unpaid salary and bonuses, stock options, accrued vacation and sick pay, insurance, and leftover funds in medical flexible spending accounts. With the advice from your financial adviser, consider rolling money from a 401(k) into an individual retirement account (IRA) using a direct transfer. * File a claim for life insurance benefits. Read the fine print, and turn down any option that places your funds in the insurance company’s own money-market funds and gives you a checkbook. Instead, place the money in a federally insured account at the credit union. Get advice from a financial adviser or lawyer if you’re considering guaranteed monthly payments for life. * File a claim for Social Security benefits. Widows and widowers can claim a benefit equal to 100% of the deceased spouse’s benefit, but only if the surviving spouse waits until full retirement age to collect. Before that, the benefit is reduced permanently. You can “step up” to a survivor benefit if you were collecting a spousal benefit before your spouse’s death.
For more information, read “Turning Points: Rebuild Your Life After a Life Partner Dies” in the Home & Family Finance Resource Center.

Keep an eye out for storm-damaged vehicles

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NEW YORK (9/12/11)--Remember those waterlogged vehicles shown on the news during Hurricane Irene’s pass through the East Coast? Those same cars and trucks could end up on a dealer lot near you--even if you live nowhere near the areas affected by the storm (The New York Times Sept. 1). Flood-damaged vehicles could appear on lots all over the country, often priced very low but with no disclosure from sellers about storm damage. You might think you’ve found a great deal but, without a critical eye, you could drive off the lot with vehicle problems waiting to happen. If you’re shopping for a used vehicle, take precautions before you buy:
* Get the history. Obtain a vehicle history report through a service like Carfax, which offers reports for $34.99 each. You also can use the vehicle identification number (VIN) to check out the vehicle’s status through the National Insurance Crime Bureau’s VINCheck tool. * Check for dirt--but also for spotlessness. Thoroughly check the vehicle for soot, grime, and other signs of water damage. On the flip side, if a vehicle looks unusually clean--particularly under the hood--it should be another red flag that something isn’t right. * Trust your nose. Does the car smell musty? Damage from water and sewage can create that odor, which is difficult to mask. Still, sellers may try, so, if you smell strong deodorizer or air freshener, it could be the scent of trouble. * Drive it. Test-drive the car and pay attention to the way it handles and sounds. Listen to the engine and brakes--squeaking or grinding is a bad sign. * Get hands-on. Feel all surfaces for dampness and dirt. Pay close attention to seat firmness, which can be weakened by water damage. * Consult a mechanic. Never buy a used vehicle without having it inspected by a mechanic. With the car on a garage lift, a professional can detect problems that you wouldn’t necessarily notice. A mechanic also can run an electrical diagnostic--an important component of an inspection, since water-damaged cars commonly experience problems in this area.
For more information, read “Best Used Cars: How to Find a Dependable, Affordable Vehicle” in Home & Family Finance Resource Center.

HandFF Radio Student parent resources for new school year

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WASHINGTON (9/9/11)--Sunday’s H&FF Radio program presents back-to-school warnings about identity theft and fraud, back-to-school resources from the federal government, ways to improve your credit profile, and the advantages of using direct deposit. This is a rebroadcast of an earlier H&FF Radio program. The show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:
* “Three (More) Reasons to Use Direct Deposit.” Susan Tiffany, certified credit union financial counselor and director of consumer periodicals, Credit Union National Association (CUNA), Madison, Wis., explains how direct deposit can have a positive impact on your cash flow and overall financial situation. * “Back-to-School Resources on USA.gov.” Sarah Roper, acting director of USA.gov, Office of Citizen Services and Communications, U.S. General Services Administration, Washington, D.C., discusses resources for parents, teachers, and students on the official U.S. government Web portal. * “Seven Tips That Will Improve Your Credit Profile.” Steve Kramer, vice president, electronic payments, Western Union, New York, covers steps you can take to elevate your credit profile. * “Back to School With a Focus on Consumer Issues.” Adam Levin, chairman and co-founder, Credit.com and IdentityTheft911.com, Scottsdale, Ariz., advises students on credit, debt, privacy, and identity theft issues as they head back to school.
Home & Family Finance is a resource center for personal finance information at CUNA. The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; and the Defense Credit Union Council and member credit unions, serving those who serve the country worldwide. Home & Family Finance airs Sundays at 3 p.m. ET on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network. CUNA and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA's websites. For more information, read “Three (More) Reasons to Use Direct Deposit” and watch the “Build Your Best Credit Score” video in the Home & Family Finance Resource Center.

Do you need travel insurance

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NEW YORK (9/7/11)--Hurricane Irene created a massive headache for travelers as it hit the East Coast Aug. 30-31. More than 11,000 flights were cancelled in a series of pre-emptive cancellations performed by airlines to keep people and planes from being stranded, a practice airlines also employ when faced with an approaching blizzard (Bloomberg.com Aug. 29). Cancellations to rail and bus service in the wake of the hurricane compounded travelers’ woes, leaving those in transit with few options to reach their destination until the storm passed and service was restored (Kiplinger.com Aug. 26). Of course, it doesn’t take a hurricane to disrupt your travel plans. What can travelers do during standard travel disruptions--say the kind that happen on any idle Wednesday in the middle of September? Purchasing travel insurance may offer some protection. This information from consumerreports.org can help you decide if travel insurance is right for you:
* Compare. Not all coverage is the same. Compare competing policies to understand exactly what’s covered and how each policy applies coverage. For example, some emergency medical assistance accompanying travel insurance policies provides evacuation to the closest hospital, while other policies allow for evacuation to a hospital at the policy holder’s discretion. This can be especially important when traveling overseas. * Review. You already may have certain travel-related coverage thanks to existing insurance policies, credit card agreements, and membership in automobile clubs or other organizations. Check related documents to see if these provide adequate coverage so you can avoid buying duplicate coverage. * Double-check. Contingencies for travel-related disruptions may be included with your travel arrangements. Read the fine print accompanying reservations and purchase agreements to determine what may or may not be addressed. For example, airlines must reimburse travelers up to $3,300 to each passenger for lost baggage on domestic flights.
For related information, read “Travel Documents Take You Around the World” in the Home & Family Finance Resource Center.

HandFF Radio talks Medicare Social Security

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WASHINGTON (9/2/11)--Sunday’s Home & Family Finance Radio program covers the future of Medicare and Social Security, benefits open enrollment season, dorm decorating, and the financial impact of chronic illness. The show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:
* “Will Medicare and Social Security Be There When You Need Them?” Fred Claridge, senior care expert and director, Certified Senior Guidance Association, and senior advocate, Las Vegas, discusses the outlook for Medicare and Social Security. * “Three Ways to Save on Items That Blow Your Budget.” Manisha Thakor, personal finance expert, author, and financial literacy advocate, Santa Fe, N.M., explains how signing up for certain underused benefits during open enrollment can help you save on out-of-pocket health care, commuter, and dependent-care expenses. * “Win One-Year Tuition, Up to $50,000, in ‘Show Off Your College Pad’ Contest.” Kelley Edwards, design expert, HGTV’s “Design on a Dime,” New York, provides advice for finding deals on back-to-school essentials and decorating dorm rooms on a budget. She also encourages students to enter the contest by Sept. 7. Students can upload original photos of their decorated dorms to ebay.com/gearup or facebook.com/ebay for a chance to win a year of paid tuition. * “Chronic Illness: Toll on Family Finances and Relationships.” Marta Trinkl, producer, H&FF Radio, Washington, D.C., highlights some of the financial and personal effects of dealing with a chronic illness.
Home & Family Finance is a resource center for personal finance information at the Credit Union National Association (CUNA). The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; and the Defense Credit Union Council and member credit unions, serving those who serve the country worldwide. Home & Family Finance airs Sundays at 3 p.m. ET on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network. CUNA and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA's websites. For more information, read “Create Financial Checklist to Ease Transition to College” and “Cope Financially During a Serious Illness” in the Home & Family Finance Resource Center.