Bank Fee Whac-a-Mole: New Charges Hit Accounts

Since the CARD act, and new consumer protection laws have been put in to place, you may have noticed some mysterious new fees appearing on your bank statement. You are not alone, almost every major financial institution has added new fees to make up for losses in revenue.

To assist consumers, CNN Money.com put t together a bank-by-bank description of the new charges you can expect. You can find an excerpt below or check out the full post here.

"It's like you've got a sinking boat, where you plug one hole and another one springs up," said Curtis Arnold, founder of CreditRatings.com. "You can shut down one egregious fee, but that doesn't mean other fees aren't just going to start popping up elsewhere."

Here's a bank-by-bank look of what to expect.

Bank of America: Just last week, Bank of America said it plans to raise minimum balance requirements over the next 12 months and charge a monthly account fee for customers who can't maintain those balances.

"We currently estimate over time through these and other items we are working on that we will have the ability to offset a substantial majority of the revenue from the various regulatory changes," Bank of America (BAC, Fortune 500) CEO Brian Moynihan said in a presentation to investors last week.

Customers enrolled in the lender's new eBanking checking account will be charged $8.95 per month if they opt to receive paper statements and visit tellers instead of banking online. Since the launch of eBanking in August, nearly half of all new checking accounts fall into this category.

Earlier this year, annual fees ranging from $29 to $99 were applied to a variety of Bank of America credit card accounts.

Continue reading at CNN Money.com…

Wheat Shortage May Mean Higher Grocery Bills

New reports of a wheat shortage around the world have experts warning consumers to expect higher prices this fall. As this article form ABC News explains, the shortage in Russia has government agencies all over the globe scrambling for wheat in order to avoid the potential economic strain.

Wheat prices spiked Thursday after Russian Prime Minister Vladimir Putin issued a ban on exports as that country confronts grain shortages amidst drought and withering crops, a situation made worse by out-of-control wildfires.

The global ripple effect – other countries possibly hoarding food, grain supplies dwindling, commodities prices rising – is likely to impact a range of food companies and livestock farmers.

Meanwhile, in India, the government there is stockpiling wheat so aggressively that much of it is sitting outdoors under tarps and starting to rot, the A.P. reported Friday.

"A worldwide scramble for wheat supply is on," said Phil Flynn, commodities analyst at Chicago-based PFG Best. "Higher costs for wheat and grains may hurt the economic recovery because a few months down the road it means higher costs for everything from bread to cereal to meat as farmers reduce their herds."

Continue reading at ABC News…

More Americans' Credit Scores Sink to New Lows

From ABCNews.com:

The credit scores of millions more Americans are sinking to new lows.

Figures provided by FICO Inc. show that 25.5 percent of consumers — nearly 43.4 million people — now have a credit score of 599 or below, marking them as poor risks for lenders. It's unlikely they will be able to get credit cards, auto loans or mortgages under the tighter lending standards banks now use.

Because consumers relied so heavily on debt to fuel their spending in recent years, their restricted access to credit is one reason for the slow economic recovery.

"I don't get paid for loan applications, I get paid for closings," said Ritch Workman, a Melbourne, Fla., mortgage broker. "I have plenty of business, but I'm struggling to stay open."

FICO's latest analysis is based on consumer credit reports as of April. Its findings represent an increase of about 2.4 million people in the lowest credit score categories in the past two years. Before the Great Recession, scores on FICO's 300-to-850 scale weren't as volatile, said Andrew Jennings, chief research officer for FICO in Minneapolis. Historically, just 15 percent of the 170 million consumers with active credit accounts, or 25.5 million people, fell below 599, according to data posted on Myfico.com.

New Credit Card Rules Effective August 22. What you need to know

Credit card companies have done their fair share of making sure they make money at your expense. Before now, they had really come up with their own set of rules. Well, there are new consumer credit card protection rules that are set to begin August 22, 2010.

This set of rules is the latest in a series of regulations that implement the Credit Card Accountability, Responsibility, and Disclosure Act (the Credit Card Act). For other credit card rules that already went into effect February 22, although you can go the the website here. You can see some of the provision below. Here’s what you can expect from these new protections:

Reasonable penalty fees

• Today: Your late payment fee may be as high as $39, and you likely pay the same fee whether you are late with a $20 minimum payment or a $100 minimum payment.
• Under the new rules: Your credit card company cannot charge you a fee of more than $25 unless:

1. One of your last six payments was late, in which case your fee may be up to $35; or
2. Your credit card company can show that the costs it incurs as a result of late payments justify a higher fee.

What’s even better, your credit card company cannot charge a late payment fee that is greater than your minimum payment. So, if your minimum payment is $20, your late payment fee can't be more than $20. Similarly, if you exceed your credit limit by $5, you can't be charged an over-the-limit fee of more than $5.

Additional fee protections

• No inactivity fees. Your credit card company can't charge you inactivity fees, such as fees for not using your card.
• One-fee limit. Your credit card company can't charge you more than one fee for a single event or transaction that violates your cardholder agreement. For example, you cannot be charged more than one fee for a single late payment.

Explanation of rate increase

• If your credit card company increases your card's Annual Percentage Rate (APR), it must tell you why.

Plus a Re-evaluation of recent rate increases

• Today: Your credit card company can increase your card's APR with no obligation to re-evaluate your rate increase.
• Under the new rules: If your credit card company increases your APR, it must re-evaluate that rate increase every six months. If appropriate, it must reduce your rate within 45 days after completing the evaluation.

Consumers Say: "In tweets we trust"

According to the second annual Digital Influence Index study, 75% of U.S. consumers are more likely to trust companies that microblog on popular sites like Twitter.com. The study also noted that 90% of consumers use the Internet to either buy, or compare prices on items.

Some 75 percent of people surveyed said they view companies that microblog -- sending short, frequent messages on sites like Twitter or status updates on social networks like Facebook -- as more deserving of their trust than those that do not, according to a survey by Fleishman-Hillard, conducted with market research firm Harris Interactive.

The second annual Digital Influence Index study, released at the Reuters Consumer and Retail Summit in New York, researches the extent to which the Internet affects consumer behavior.

The findings on Twitter are particularly notable in a year where many leading corporations found themselves in crisis mode, from BP's role in the Gulf oil disaster to recalls from Toyota Motor Corp and Johnson & Johnson and a viral campaign against new diapers from Procter & Gamble on Facebook.

"What really matters here I think is that the rules of crisis engagement that we've known for years and years still apply, but they still apply in a much more accelerated way," Dave Senay, Chief Executive of Fleishman-Hillard, told Reuters in a telephone interview.

Continue reading at Reuters.com…

Consumer Prices Dip For Second Straight Month

For the second month in a row, American consumers are seeing lower prices on goods, energy bills, and other services. According to Forbes.com, earlier today the Labor Department reported that the Consumer Price Index dropped 0.2% in May, following a 0.1% decrease last month.

It marked the biggest decline since consumer prices plunged 0.7 percent in December 2008. That was a period when the worst recession since the 1930s stoked fears of deflation. The country didn't get stuck in a deflationary spiral then, and probably won't now, economists say.

Deflation is dangerous. It's a widespread and prolonged drop not only in the prices of goods at stores but also real estate, stocks and wages. America's last serious case of deflation was during the Great Depression of the 1930s.

Meanwhile, "core" consumer prices, which strip out volatile energy and food, edged up 0.1 percent in May, after being flat in April. That meant core prices are up only 0.9 percent over the past year - below the Fed's inflation target.

10 Annoying Charges Consumers Face

No one likes hidden fees, but in today’s economy hundreds of companies have turned to fees in order to make up for lost revenue. Americans all over the country are becoming more aware of these hidden charges. So, to help everyone prepare ahead of time for these expenses WalletPop.com has put together a list of the top 10 annoying fees on consumers. You can find a section of the article below, but be sure to click here for the full list.

Airline Preferred Seat Selection Fee

Airplanes are designed to cram passengers into undersized seats like sardines in order to maximize profits. Savvy (and tall) travelers have long opted for emergency row seats for some precious extra legroom, while others like to be near (or far) from the bathroom. And while the ability to choose a window or aisle seat has traditionally been a standard courtesy while purchasing a ticket, some carriers are now charging for this non-service. According to Expedia, the worst offenders are United Airlines ($14 to $109 for domestic flights, and $89 to $109 for international flights) and Virgin America ($15 to $50), while others, like American and Delta, still let you choose your seat for free, both domestically and internationally. At this rate, pay toilets are probably inevitable. Don't laugh, it's already been proposed by Ireland's Ryanair.

Dealer Preparation Fee

Anyone who's ever purchased a new car has probably noticed a "Dealer Prep Fee" in the sticker, which usually runs anywhere from $500 to $2,000. So what exactly does "dealer prep" cover? Typically, it involves peeling the plastic off the seats and hood, vacuuming the interior, a wash and wax, and maybe topping off the fluids. Most people just pay it, but you can try negotiating or just flatly refusing to pay it, consumer advocates say.

Ticketmaster Service Fees

If you've ever bought a ticket to see a concert, play or sporting event, you've almost certainly dealt with Ticketmaster, which enjoys a near-monopoly on live events in the U.S. Ticketmaster is also notorious for assessing various fees to the price of tickets. For instance, two $90 tickets to a recent Broadway show wound up costing $203.70. That included a facility charge of $1.50 per ticket, a convenience charge of $7.50 per ticket, an order processing fee of $3.20 and perhaps the most egregious one, a "TicketFast" fee of $2.50. "TicketFast" allows you to print your own ticket and save Ticketmaster the cost of printing and mailing them to you.

Tax Day Freebies!

The tax deadline has finally arrived, and although today is not usually a day that taxpayers associate with saving money, many businesses are running tax day promotions to help out consumers strapped for cash. This year there are dozens of businesses offering freebies such as Starbucks, IHOP, and P.F. Chang’s, among others. The Associated Press put together a comprehensive collection of tax day discounts, check out a few of my favorites below or click here for the full list.

• CINNABON: Get two free bite-sized cupcakes from 6 p.m. to 8 p.m. Thursday at participating mall locations as part of "Tax Day Bites!" Flavors include Chocolate Passion, 24-Carrot Cake, Vanilla Bliss and Cinnacake Classic.

• MAGGIEMOO'S: Get one free slice of ice cream pizza — ice cream with red frosting to look like sauce and white chocolate to look like cheese — at participating locations from 3 p.m. to 7 p.m. Thursday.

• STARBUCKS: Get free brewed coffee all day Thursday if you bring your own mug, a promotion the cafe chain says is friendly to the environment as well as taxpayers.

• BOSTON MARKET: For a "last-minute tax break" — one free meal for each one you buy Thursday through Sunday — show this coupon: http://bit.ly/d1YlRO

• IHOP: Expanding on the tax deduction parents get for kids, the restaurant chain is offering free dinner for one child age 12 or younger with each adult meal purchased 4 p.m. to 10 p.m. all month long.

• P.F. CHANG'S: Get 15 percent off food purchases for dine-in or take-out, excluding alcohol and happy hour food and beverages.

• HYDROMASSAGE: Get a free massage Thursday through Sunday at participating locations. The mall-based massage chain suggests calling ahead to book an appointment. Find a location at http://www.hydromassage.com/taxday.

Shrinking Credit Threatens Almost $9 Billion in Sales

This time of year is normally a retailers dream, but according to Bloomberg.com people are spending much less than usual this holiday season. With banks tightening their lending practices before a new credit-card law is due to take effect, large retailers are expected to lose out on nearly $9 billion in lost revenue.

Sales in November and December may fall 1.2 percent to $436.7 billion from the same period in 2008, said Britt Beemer, chairman of consumer polling firm America’s Research Group. If lenders weren’t cutting customer spending limits and rejecting more credit-card applicants, sales would gain about 0.8 percent to $445.5 billion, he said in a Dec. 21 interview.

Target Chief Financial Officer Douglas Scovanner says the credit-card legislation is exacerbating a spending slump just as consumers begin to consider more discretionary purchases they would usually buy with credit. Items such as clothing, jewelry and home goods suffered steeper declines during the recession and are among the most profitable sales for retailers.

“It will mute the impact of the rebound that would have otherwise occurred,” Scovanner said. “Diminished availability of credit equals diminished spending.”

Reduced lending may shave at least half a percentage point off sales at stores open at least a year once more of the Credit Card Accountability, Responsibility and Disclosure Act goes into effect in February, Scovanner said in a Nov. 17 interview in Minneapolis, where the chain is based. In November, Target’s comparable-store sales declined 1.5 percent.

IRS Reminds Car Shoppers about 2009 Tax Break

In their new press release, the IRS reminded taxpayers looking to buy a car before the year is over that they still have time to take advantage of a 2009 tax break that may not be extended next year.

Taxpayers who buy a qualifying new motor vehicle this year after Feb. 16 can deduct the state or local sales or excise taxes they paid on the first $49,500 of the purchase price. Qualifying motor vehicles include new passenger automobiles, light trucks, motorcycles, and motor homes.

Individuals who itemize and those who take the standard deduction can benefit from this tax break. In states without a sales tax, other taxes or fees can qualify if they are assessed on the purchase of the vehicle and are based on the vehicle’s sales price or as a per unit fee.

The deduction is reduced for joint filers with modified adjusted gross incomes (MAGI) between $250,000 and $260,000 and other taxpayers with MAGI between $125,000 and $135,000. Taxpayers with higher incomes do not qualify.

Taxpayers who take the standard deduction need to complete Schedule L and attach it to Form 1040 or Form 1040A to increase the standard deduction by the allowable amount of state or local sales or excise taxes paid on the purchase of the new vehicle. Also, check the box on line 40b on Form 1040 or line 24b on Form 1040A. Individuals who itemize should include the allowable amount of state or local sales or excise taxes from the purchase of the vehicle on Form 1040, Schedule A.