Holiday Spendthrifts: Credit Card Hangover Coming

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ECONOMY - FINANCE - MONEY / CHRISTMAS HOLIDAY BLOWOUT -- PLASTIC MONEY SPENDTHRIFTS BUYING LOADS OF EXPENSIVE ELECTRONIC HOLIDAY GIFTS WITH MONEY THEY DON'T HAVE

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Irresponsible Spending-On-Credit Sprees Falsely Portray Government Economic Figures As "Robust," Without Regard For Subsequent Individual Financial Consequences and Losses...

Federal Reserve Corporation Bankers Take Advantage of Plastic Money Consumers With Excessive Credit Card Interest, Late Payment Rates, Doubled Minimum-Due Payments And Over-The-Limit Fees ...

Many budgets are already squeezed by the new minimum payments. The typical monthly minimum doubled -- rising from about 2 percent to 4 percent . That can equate to a hefty increase for someone paying off the average debt of $9,000 -- as much as $400 per month more. So it's important to be conscious of the debt you're incurring to buy gifts for friends and loved ones during the holiday season.

Annual percentage rates on your credit card can, and often will, skyrocket if you make late payments. Rates have been known to jump to as much as 30 to 40 percent, should you make a late payment. On top of this, consumers can get hit with late fees ranging from $25 to $50 and over-the-limit fees ranging from $25 to $39.

If holiday shoppers using plastic money would stop a moment to think about the average 14.55 to 16.34 percent additional interest rates they are paying on the price, sales tax, and/or shipping and handling charges of gifts they are purchasing with money they don't have, in addition to any other late payment and over-the-limit fees they may also accumulate, they would come to the realization that they are not really getting that advertised sale bargain after all.

Business News

Holiday Spenders Beware: Credit Card Hangover Coming

~ December 12, 2006

For many Americans, it's an annual tradition that goes hand-in-hand with eggnog and mistletoe -- millions of people will charge millions of dollars on their credit cards this holiday shopping season. Of course, it's easy to pull out the plastic in the weeks leading up to the holidays, but much more difficult when those bills come due in 2007. More than 115 million Americans carry monthly credit card debt, with the average American debt around $9,000, according to Cardweb.com. And many of those paying off a high balance were surprised when the minimum monthly payment due rose during the past year. The Office of the Comptroller of the Currency, a bureau of the U.S. Treasury Department and a watchdog to protect consumers from abusive and deceptive credit card practices, cracked down with tougher guidelines on interest rates, marketing tactics, and account management practices. The higher rates will help consumers pay off their debt more quickly, but many budgets were squeezed by the new minimum payments. The typical monthly minimum doubled -- rising from about 2 percent to 4 percent . That can equate to a hefty increase for someone paying off the average debt of $9,000 -- as much as $400 per month more. So it's important to be conscious of the debt you're incurring to buy gifts for friends and loved ones during the holiday season.

Find the Lowest Rate, and Pay On Time

For starters, it's best to choose a credit card that has the lowest possible annual percentage rate, or APR. Read the credit card agreement closely to find out what, if any, annual charges you'll have to pay on top of the finance charges. Keep in mind that the annual percentage rate on your credit card can, and often will, skyrocket if you make late payments. Rates have been known to jump to as much as 30 to 40 percent, should you make a late payment. On top of this, consumers can get hit with late fees ranging from $25 to $50 and over-the-limit fees ranging from $25 to $39.

Under current credit card structures, financially strapped consumers making minimum payments each month are not able to get out from under the layer of penalties and interest rates. Federal banking officials are pressuring banks to reduce interest rates, which would be a huge victory for consumers.

What Can You Do Now?

Read the fine print. Your credit card agreement is one document you absolutely must read. All actions the credit card company is entitled to take regarding your credit card will be spelled out in fine print. Pay careful attention to the wording around interest rates, late fees and payment dates. Additionally, if there are sections or clauses you do not understand, highlight them and call your credit card company before using the card and get clarification before falling victim to a very costly misunderstanding.

Pay highest balances and high interest rates first. If you have more than one credit card, pay off the card for which you are closest to your credit limit. Your credit score takes a hit when credit card balances climb high and approach the maximum. Also, pay off the cards with the highest interest rates as every extra dollar can add up quickly.

Keep only one credit card. With so many credit card options, it is important to choose the card that best suits your finances. For example, if you know you are definitely going to carry a balance, select a card with a low interest rate, or if you may be tempted to spend beyond your means, go with a card with a low spending limit. Additionally, keeping only one card makes it much easier to keep track of your card's rules and allows you to avoid the paper chase of multiple cards.

Negotiate a Lower Rate

If you're stuck with a card that has a high interest rate, it might be possible to call your card provider and negotiate a lower rate. The best way to navigate the fee maze and negotiate the best rate and fairest payment terms is by calling your credit card company directly. For example, if you have good credit and a track record of paying on time and you miss one payment for any reason, a call to the card company can usually stave off any finance charges or an interest rate increase for a one-time occurrence. In one study, more than half of the people who tried to negotiate a lower interest rate were successful with just a five-minute phone call. Last year, three "Good Morning America" staffers tried to lower their rates and were successful.

The "GMA" test found that negotiating was more successful when you had a standard credit card without incentives like frequent flier miles or cash back. It also helped to know your credit score, so you know how attractive a customer you are to the credit card company. It also helped to mention the myriad of competing credit card offers you were getting in the mail.

Negotiating a lower interest rate can save you a lot of money. For example, if you have $10,000 worth of debt and you lower the interest rate by 6 percentage points, you can save $600 a year in interest payments.

If a credit card company will not lower its rates, it may be time to consider a new credit card. There are some nonprofit groups that track credit card companies that offer low interest rates. For more information, visit www.federalreserve.gov/pubs/shop/survey.htm or www.cardweb.com/perl/cardlocator/survey/lowrate.

Credit Cards and Travel

If you have holiday travel plans, particularly travel abroad, there are some key tips: For years, the big credit card companies have levied a 1 percent fee on international transactions. And the banks that issue those cards have been known to tack on additional fees of 1 percent to 2 percent. These are often called "currency-conversion fees" or "foreign transaction fees." (You'll also be charged a fee for withdrawing cash using your ATM card, so there's no way to avoid fees completely.)

So, how can a smart traveler avoid -- or at least reduce -- these fees? Here are a few suggestions:

Ask about fees. While fees sometimes are built into the price on your statement, it's increasingly common that they're broken out as line items to help you know what they are paying. Even so, it's smart to make a call before your trip to get the whole story. Carefully quiz your bank or credit card company about what "international" fees come with using your card overseas. Even if your credit card company charged you no fees the last time you went to Europe, there's a good chance it does now. Call and ask before you go.

If you're getting a bad deal, get a new credit card. Some companies offer far lower international fees than others -- and a handful don't charge any fees at all. Capital One has a particularly good reputation for international transactions (www.capitalone.com) -- for now. If you're going on a long trip, do some research and consider taking out a card just for international purchases.

The bottom line. Here's the best formula for saving money as you travel: Pay for as much as possible with cash, using a bank that charges low rates for international ATM transactions.

Some Help May Be on the Way

In the last four months, the Federal Reserve Board has not raised intrest rates, reversing a two-year trend of interest rate hikes to slow inflation. The Fed funds rate affects many consumer credit vehicles, including credit cards. Some economists believe that the Fed could begin lowering rates next year, which could ease the burden of those high interest rates that many consumers are paying on credit card debt. A Wall Street Journal poll of prominent economists shows that, on average, most expect a quarter-point rate cut by June of 2007. That will mean an instant benefit for people carrying a balance on their credit cards. Most card rates are based on the prime rate, which moves up and down when the Fed funds rate changes. It is typically 3 percent above the Fed funds rate, which currently sits at 5.25 percent. CardWeb.com says the national average for variable rate cards is 16.34 percent today (14.55 percent for fixed rate cards). Those averages would likely come down slightly as soon as a Fed rate cut is announced. But of course, the best remedy to all of these post-holiday credit headaches is a simple one: don't overspend. And as always, that's often easier said that done. ABC News personal finance contributor Mellody Hobson contributed to this report.

© 2006 AT&T Knowledge Ventures. All rights reserved.

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Housing Market Continues To Collapse

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HOUSING - REAL ESTATE / HOUSING MARKET CONTINUES TO COLLAPSE - POSSIBLE FINANCIAL MELTDOWN FORESEEN

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Communist Democrat's Socialist Economics 101 ...

Despite the growing dangers, substantial risks to the economy and financial markets from the deepening recession in the housing market, and possible mortgage-finance crisis, Democrat Rep. Barney Frank, incoming chairman of the House Financial Services Committee, welcomes the housing market crisis, indicating that recent large drops in home prices make housing more affordable for young people and minority buyers.

"... If a few speculators get burned, that's just icing on the cake," says Frank.

Risky Mortgages Imperil Market

~ By Patrice Hill
THE WASHINGTON TIMES
December 12, 2006

The risk of a financial crisis is growing as home prices continue to fall and questionable mortgages made in the past two years go into default, finance officials warned yesterday.

Banks and mortgage brokers have been passing along to unwary investors as much as $600 billion a year in risky mortgages they made through untested channels in the junk-bond market. That raises the threat of a financial crisis beyond the ability of the Federal Reserve to remedy, said Lewis Ranieri, the Wall Street guru who is widely credited with creating the multitrillion-dollar market for mortgage-backed securities in the 1980s and 1990s.

Bank regulators told the National Housing Forum here yesterday that they have found major banks punting to investors questionable mortgages they could not legally keep in their own loan portfolios. Mr. Ranieri said brokers on Wall Street have raised the risks by repackaging the mortgages in deceptive and opaque ways so that the small investors and foreigners who buy them are unable to understand the risks.

"No securities market can stand if we do not have true disclosure, and we do not have true disclosure" of the growing risks of exotic mortgages whose payments can double overnight and force buyers into default, said Mr. Ranieri. "This stuff doesn't just get sold to [professional] money managers. It gets sold to the public and to foreign investors who don't have a clue what to look for."

Allen Sinai, chief global economist at Decision Economics; Richard A. Brown, chief economist at the Federal Deposit Insurance Corp.; and several other economists and regulators attending the forum also emphasized the substantial risks to the economy and financial markets from the deepening recession in the housing market and possible mortgage-finance crisis.

Despite the growing dangers, Rep. Barney Frank, incoming chairman of the House Financial Services Committee, indicated he saw no reason for federal legislation to better regulate the mortgage markets to prevent a possible financial meltdown.

He said he welcomes recent large drops in home prices because it makes housing more affordable for young people and minority buyers.

"Housing suffered from irrational exuberance" during the first part of the decade, though it fell short of being a full-blown bubble, the Massachusetts Democrat said. "The end result of a 10 percent drop in many parts of the country will be a more rational housing market. ... If a few speculators get burned, that's just icing on the cake."

Mr. Frank noted that a few years ago, consumers were expected to devote about 25 percent of their income to house payments. Today, however, consumers expect their homes to contribute 25 percent to their income -- through cash-out refinancings and other techniques that have come into vogue, he said. "Let's get back to the normal situation."

A top national bank regulator said many banks are continuing to offer consumers loans they cannot afford when their teaser interest rates expire and payments rise to reflect market conditions. Some banks are selling the questionable loans to investors to avoid keeping them in their portfolios, where they would be unacceptable to regulators, said Kathryn Dick, deputy comptroller at the Office of the Comptroller of the Currency.

Consumers also may be unaware of the risks inherent in these adjustable-payment loans, she said, because they are not getting full disclosure or are getting information too late to prevent them from closing on the loans.

Mr. Ranieri said the riskiest loans were made in the past two years as banks and brokers strived to help consumers qualify for high-priced homes that were beyond their reach. Loan innovations and loose lending standards have continued despite efforts by a group of five federal banking regulators to limit such loans, he said.

"We have a tremendously powerful mortgage-backed securities market. This market is unfettered in its enthusiasm and unchecked by regulation," Mr. Ranieri said. "The interagency task force can't touch it. The capital is coming from international markets."

Mr. Ranieri said that brokers are even bypassing the traditional market for mortgage-backed securities that he helped create. Instead, they are bundling the riskiest mortgages together and offering them as "collateralized debt obligations" on the corporate bond market. The offering documents often do not explain the serious risks involved with the mortgages in a declining housing market, he said.

One recent offering failed to disclose to investors that the homeowners not only were faced with high adjustable payments that they might have difficulty paying, but they had financed 100 percent of their purchase and had no equity in their houses -- something that greatly increases their likelihood of default.

Mr. Ranieri said the quality of loans has fallen so much recently that his firm has stopped buying whole mortgages for repackaging into mortgage-backed securities. He recently rejected some mortgages offered to the firm. He said he asked what the broker would do with the loans, and was told they would be sold to investors in the junk-bond market.

The only federal regulator with jurisdiction over the burgeoning market for such securities is the Securities and Exchange Commission, Mr. Ranieri said. But the SEC seems to be largely unaware of what's going on in the mortgage market, he said.

Copyright © 1999 - 2006 News World Communications, Inc.

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Criticism Of Religion Reflected In Ignorance

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RELIGION / HARSH CRITICISM OF ORGANIZED RELIGION REFLECTS CULTURAL AMNESIA, IGNORANCE, INDIFFERENCE AND INTOLERANCE OF WHAT CONSTITUTED RELIGION FROM ITS BEGINNING

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ZENIT
The World Seen from Rome

- Daily Dispatch -

"In nearly all prosperous liberal democracies, atheism is strong."

"Apart from the crass vulgarity of some student speakers, what shocked me most was the apparent ignorance of many speakers about what constituted religion in general and Catholicism and Christianity in particular."

So many things that are taken for granted today -- education, hospitals, the very notion of a person, the distinction between sacred and secular -- owe their origin to Christian inspiration. "Cultural amnesia is a dangerous condition for any society."

"Tolerance, however, must never be confused with indifferentism, for any form of indifference is radically opposed to the deep Christian concern for man and for his salvation." A concern that means the Church will not allow itself to be intimidated by those who wish it to remain silent.

Religion In The Cross Hairs

Secular World Attacks Organized Belief

~ By Father John Flynn

LONDON, NOV. 26, 2006 (Zenit.org) - Organized religion is coming in for harsh criticism in many parts. English singer Elton John said religion turns people into "hateful lemmings." He also accused it of lacking compassion. His comments came in an interview with the Observer newspaper's Music Monthly Magazine, published Nov. 12.

The aging pop star's criticisms were sparked off by the matter of how religion deals with homosexuality. "I think religion has always tried to turn hatred towards gay people," he said.

He is far from being alone in this view. In the United States, talk-show host Rosie O'Donnell likened Christianity to radical Islam. Her attack, in a nationally broadcast program in October, was not well received, according to a Nov. 13 press release by the California-based Barna Group.

A nationwide survey by the Barna Group found that although few Americans would challenge O'Donnell's right to make such statements, just as few share her point of view.

Across the Pacific, Pamela Bone, writing in the Australian newspaper on Aug. 15, rejoiced over data which, she argued, showed that "in nearly all prosperous liberal democracies, atheism is strong."

Bone accused religion of being "directly responsible for countless world conflicts, resulting in the loss of millions of human lives." Religion is still a danger today, she contended: "The truth is that it is now too dangerous for religion to be given the special status it has always had."

Bone added: "The best hope for a less religious and thus safer world is for religion -- all religion -- to be open to rational and stringent examination and criticism, and yes, to ridicule."

Meanwhile, in Canada, author Christopher Hitchens recently explained why he "hates religion," reported the National Post on Nov. 18. Speaking at the University of Toronto, Hitchens declared he hates Islam because it exhibits a "horrible trio of self-hatred, self-righteousness and self-pity," while making a "cult of death, suicide and murder."

He also hates Judaism, because it leads to Christianity. His negative view of Christianity is well known, particularly after his infamous attacks on Mother Teresa of Calcutta in the 1990s.

In the midst of declaring his multiple hatreds, Hitchens declared: "I am absolutely convinced that the main source of hatred in the world is religion."

Anti-Religious Books

During the Toronto address Hitchens gave some details of his forthcoming book, "God Is Not Great." The book, he said, is "a general case against religion."

Anti-religious books are in fashion these days. American author Sam Harris has just published a brief (112-page) sequel to his 2004 book, "The End of Faith." At a recent presentation at the New York Public Library, Harris condemned the God of the Old Testament, in addition to the New Testament, "likening the story of Jesus to a fairy tale," the Washington Post reported Oct. 26.

For good measure Harris also attacked the Koran, calling it "a manifesto for religious divisiveness."

According to the Washington Post, "The End of Faith" has sold more than 270,000 copies. In that book, Harris described religion as "a desperate marriage of hope and ignorance." He also slammed religion for promoting intolerance. Nor was his argument limited to extremist groups. "One of the central themes of this book," Harris declared in the opening chapter, " … is that religious moderates are themselves the bearers of a terrible dogma."

In a curious use of religious terminology, Harris concludes the book by describing faith as "the devil's masterpiece." The book also appeals for a sustained campaign against religion, and faith in general: "We must find our way to a time when faith, without evidence, disgraces anyone who would claim it."

British author Richard Dawkins also recently published a book decrying religion, "The God Delusion." Dawkins is well known for his hostility to religion. "The celebrated atheist and high priest of popular science" is how a review of the book in the Observer newspaper on Oct. 29 described him.

Dawkins is not limiting himself to publishing. The Sunday Times on Nov. 19 reported that he plans to set up a charity that will subsidize the publication of educational materials for distribution in schools.

His organization, according to the article, will also attempt to divert donations from the hands of "missionaries" and church-based charities. His foundation, which is in the process of seeking registration in the United Kingdom and the United States, will have a database of charities free of "church contamination."

The Times article cited the concern of Anglican clergyman John Hall, dean of Westminster. Hall criticized the project as not being based on reasoned argument.

Dawkins and other critics of religion have often come under fire for their superficial view of religion. This was repeated recently by Verbite Father Vincent Twomey, a retired professor of moral theology at St. Patrick's College, Maynooth, Ireland. He took part recently in a debate at the College Historical Society in Trinity College Dublin, on the topic "That Religion Is a Block to Progress."

"Apart from the crass vulgarity of some student speakers, what shocked me most was the apparent ignorance of many speakers about what constituted religion in general and Catholicism and Christianity in particular," Father Twomey noted, writing in the Irish Times on Nov. 13.

So many things that are taken for granted today -- education, hospitals, the very notion of a person, the distinction between sacred and secular -- owe their origin to Christian inspiration. "Cultural amnesia is a dangerous condition for any society," he observed.

Bring Forth Treasure

While not referring to these recent attacks specifically, Benedict XVI recently addressed the issue of how religion is portrayed as a negative force. "So often the Church's countercultural witness is misunderstood as something backward and negative in today's society," he commented to visiting Irish bishops on Oct. 28.

What the Church needs to do in these circumstances, the Pope recommended, is to act like the wise householder who brings forth from his treasure "what is new and what is old" (Matthew 13:52). In this way the faithful will be able to discern what society offers them today. "Help them to recognize the inability of the secular, materialist culture to bring true satisfaction and joy," the Holy Father continued. "Be bold in speaking to them of the joy that comes from following Christ and living according to his commandments."

Moreover, even though the bishops need to warn against the evils around us, "we must correct the idea that Catholicism is merely ‘a collection of prohibitions,'" Benedict XVI said. In order to do that Catholic teaching must be formulated in such a way that it communicates "the liberating power of the Gospel."

The Gospel is good for society, the Pope argued in his Sept. 28 address to the new German ambassador to the Holy See. Commenting on the favorable reception by the German people to his recent pastoral visit, Benedict XVI noted: "Wherever society is growing and people are strengthened in good, thanks to the message of faith, this also benefits social coexistence, and the readiness of citizens to assume responsibility for the common good is reinforced."

This message is not imposed by the Church, and therefore faith exists in the context of tolerance. "Tolerance, however, must never be confused with indifferentism, for any form of indifference is radically opposed to the deep Christian concern for man and for his salvation," the Pontiff pointed out. A concern that means the Church will not allow itself to be intimidated by those who wish it to remain silent.

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Copyright 2006, Innovative Media, Inc.

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