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CACC Moneywise Monthly Budgeting & Savings News You Can Bank On
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September 2010
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Growing Your Money
This
month we want to remind you of the importance of growing your money!
Not only is it a very smart thing to do, but it can be easy to get started right away. People
who put even a small amount of money into a savings account as often as
they can and leave it untouched for years may be amazed at how big the
account grows. The reason? A combination of saving as much as possible
on a regular basis and the impact of interest payments (what the
financial world calls "the miracle of compounding"). Here's how
you can slowly build a large savings account and experience the miracle
of compounding. Let's say you put money into a savings account that pays
you interest every month. After the first month, the interest payment
will be calculated based on the money you put in. But the next time the
bank pays you interest, it will calculate the amount based on your
original deposit plus the interest you received the previous month. Later,
that larger, combined amount will earn more interest, and after many
years it becomes a much larger sum of money. The earnings are called
compound interest. You can earn even more in compound interest if you
make deposits regularly and stretch to put in as much as you can and
leave it untouched. See the chart below, which is based on a savings
account started with $50 and earning interest at a rate of 3.5 percent
each month. If you add just $10 each month, the account can grow nicely
to $714 after five years. If you instead put in a slightly higher
amount-$15 each month-you'd have a balance of $1,042 after five years.
But if you had increased your deposits to $50 a month, those extra
dollars plus the compounding of interest would give you a balance of
$3,333 after five years. 
CACC Counseling and Customer Service teams are here to help you!
Take Action!
Start
thinking of ways you can save $10 each week. Pick at least one way to
save money and open a savings account within the next 7 days.
Thank you for choosing Consumer Advocates Credit Counselors. We welcome your comments and suggestions for future issues. Please email education@caccdebt.org with your ideas.
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New rules for ATM and Debt Card Overdrafts
New
Federal Reserve rules give debit and ATM card users additional options
regarding overdrafts. Banks, credit unions, and other financial
institutions must offer you the ability to make decisions about
overdrafts for transactions made with your debit or ATM cards.
Expect
your bank to send you an explanation about how it treats overdrafts;
Here are some key things you need to consider when reading the notice:
The basic facts
An
overdraft occurs when you make a purchase or ATM transaction but don't
have enough money in your account to pay for it. For a fee, your bank
will cover you when you become overdrawn. This fee can apply each time
you overdraw your account.
Generally, banks can cover your overdrafts in one of two different ways:
* Standard overdraft practices. Your bank will cover your transaction
for a flat fee of about $20-30 each time you overdraw your account. For
example, if you make a purchase with your debit card for $150 but only
have $100 in your account, your account will be overdrawn by $50 and
your bank will charge you a fee. If you then make an ATM withdrawal for
$50, your account will be overdrawn by $100 and you will be charged
another fee. In this example, if the fee your bank charges for its
standard overdraft practices is $30, you will pay a total of $60 in
fees.
* Overdraft protection plans. Your bank may offer a line of credit or a
link to your savings account to cover transactions when you overdraw
your account. Banks typically charge a fee each time you overdraw your
account, but these overdraft protection plans may be less expensive than
their standard overdraft practices.
The new rules
* You choose. In the past, some banks automatically enrolled you in
their standard overdraft practices for all types of transactions when
you opened an account. Under the new rules, your bank must first get
your permission to apply its standard overdraft practices to everyday
debit card and ATM transactions before you can be charged overdraft
fees. To grant this permission, you will need to respond to the notice
and opt in (agree).
* Existing accounts. If you do not opt in
(agree), as of August 15, 2010, your bank's standard overdraft
practices won't apply to your everyday debit card and ATM transactions.
These transactions typically will be declined when you don't have enough
money in your account, but you will not be charged overdraft fees.
* New accounts. If you opened a new account on or after July 1, 2010,
your bank cannot charge you overdraft fees for everyday debit card and
ATM transactions unless you opt in. If you opened a new account before
July 1, 2010, your bank will treat you as an existing account holder:
you will receive a notice about your bank's standard overdraft practices
and will have to decide if you want them for everyday debit card and
ATM transactions.
* Flexibility. Whatever your decision, the new overdraft rules give you
flexibility. If you opt in, you can cancel at any time. If you do not
opt in, you can do so later.
* Checks and automatic bill payments. The new rules do not cover
checks or automatic bill payments that you may have set up for paying
bills such as your mortgage, rent, or utilities. Your bank may still
automatically enroll you in their standard overdraft practices for these
types of transactions. If you do not want your bank's standard
overdraft practices in these instances, talk to your bank; you may or
may not have the option to cancel.
For
more tips, information, and resources on budgeting, saving strategies,
ways to combat debt and use credit responsibly, call an ACCI Certified
Credit Counselor toll-free at 1-877-969-3328.
** For more tips, information, and resources on budgeting, saving strategies, ways to combat debt, and how to use credit responsibly, call Consumer Advocates Credit Counselors toll-free 1-800-763-1874.
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Get the most out of your Debt Management Program!
To get the most out of your Debt Management Program you must continue to be part of the process. Here are some smart things you should do to make sure that you are getting the maximum benefits from each and every monthly payment you make.
Thinking of applying for new Credit accounts?
Think again!
Once
your creditors accept your enrollment into a Debt Management Program,
the idea is for you to use the program as a way to pay off your current
debts and get back on your feet financially. The last thing creditors
want you to do is take on new debt obligations that could jeopardize
your ability to make your monthly DMP payments on time.
Remember,
credit and loan applications show up on your credit reports as
inquiries. When your current creditors do their regular account reviews,
they will be able to see the fact that you have applied for new loans
or credit and they may decide to drop you from the DMP.
Stick
to the DMP plan and pay off your existing debts. As you do, your credit
score should improve and when you graduate from the DMP, not only will
you be debt free and in good financial shape, but you will be very
credit worthy once again.
For CACC Customer Service call 1-800-763-1874.
Do you know someone who would benefit from money management
strategies and information? Please forward this email to them!
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How to avoid bounced check fees
The best way to avoid overdraft and bounced-check fees is to manage your account so you don't overdraw it.
* Keep track of how much money you have in your checking account by keeping your check register up-to-date. Record all checks when you write them and other transactions when you make them. And don't forget to subtract any fees.
* Pay special attention to your electronic transactions. Record your ATM
withdrawals and fees, debit card purchases, and online payments.
* Don't forget about automatic bill payments you may have set up for utilities, insurance, or loan payments.
* Keep an eye on your account balance.
Remember that some checks and automatic payments may not have cleared yet.
* Review your account statements each month.
Between
statements, you can find out which payments have cleared and check your
balance by calling your bank or by checking online or at an ATM. Be
sure to find out the actual amount in your account-your account balance not including any funds available to you through "courtesy overdraft protection," or "bounce coverage," plans.
Sometimes
mistakes happen. If you do overdraw your account, deposit money into
the account as soon as possible to cover the overdraft amount plus any
fees and daily charges from your bank. Depositing money into your
account can help you avoid additional overdrafts and fees.
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Give yourself Credit
The FCRA protects consumers and helps you build credit.
The
Fair Credit Reporting Act (FCRA) promotes the accuracy, fairness, and
privacy of information in the files of the nation's credit reporting
companies. The FTC enforces the FCRA with respect to these companies.
Recent amendments to the FCRA expand consumer rights and place
additional requirements on credit reporting companies. Businesses that
provide information about consumers to credit reporting companies and
businesses that use credit reports also have new responsibilities under
the law
Under
the FCRA, both the credit reporting company and the information
provider (the person, company, or organization that provides information
about you to a credit reporting company) are responsible for correcting
inaccurate or incomplete information in your report. To take advantage
of all your rights under the FCRA, contact the credit reporting company
and the information provider if you see inaccurate or incomplete
information on your Credit Reports.
1.
Tell the credit reporting company, in writing, what information you
think is inaccurate. Include copies (NOT originals) of documents that
support your position. In addition to providing your complete name and
address, your letter should clearly identify each item in your report
that you dispute, state the facts and explain why you dispute the
information, and request that the information be deleted or corrected.
You may want to enclose a copy of your report with the items in question
circled. Send your letter by certified mail, return receipt requested,
so you can document what the credit reporting company received. Keep
copies of your dispute letter and enclosures.
Credit Reporting agencies now also provide options for disputing incorrect items online.
Credit
reporting companies must investigate the items in question - usually
within 30 days - unless they consider your dispute frivolous. They also
must forward all the relevant data you provide about the inaccuracy to
the organization that provided the information. After the information
provider receives notice of a dispute from the credit reporting company,
it must investigate, review the relevant information, and report the
results back to the credit reporting company. If the information
provider finds the disputed information is inaccurate, it must notify
all three nationwide credit reporting companies so they can correct the
information in your file.
When
the investigation is complete, the credit reporting company must give
you the written results and a free copy of your report if the dispute
results in a change. (This free report does not count as your annual
free report under the FACT Act.) If an item is changed or deleted, the
credit reporting company cannot put the disputed information back in
your file unless the information provider verifies that the information
is, indeed, accurate and complete. The credit reporting company also
must send you written notice that includes the name, address, and phone
number of the information provider.
If
you request, the credit reporting company must send notices of any
correction to anyone who received your report in the past six months. A
corrected copy of your report can be sent to anyone who received a copy
during the past two years for employment purposes.
If
an investigation doesn't resolve your dispute with the credit reporting
company, you can ask that a statement of the dispute be included in
your file and in future reports. You also can ask the credit reporting
company to provide your statement to anyone who received a copy of your
report in the recent past. Expect to pay a fee for this service.
2.
Tell the creditor or other information provider, in writing, that you
dispute an item. Be sure to include copies (NOT originals) of documents
that support your position. Many providers specify an address for
disputes. If the provider reports the item to a credit reporting
company, it must include a notice of your dispute. And if you are
correct - that is, if the information is found to be inaccurate - the
information provider may not report it again.
Remember... www.annualcreditreport.com is the only Web site, mandated by Federal Law, where you can get a truly free copy of your "Big 3" credit reports once every 12 months. Other web sites offering free credit reports are usually selling some type of membership or monitoring service in return for giving you a credit report. These services can cost as much as $200 a year.
Under the Free File Disclosure Rule of the Fair and Accurate Credit
Transactions Act (FACT Act), each of the nationwide consumer reporting
agencies is required to provide you with a free copy of your credit
report once every 12 months, if you request it. To access your free
report visit:
www.annualcreditreport.com or call 1-877-322-8228.
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Money $aving Ideas
Simple, Everyday Things You Can Do to Save MoneySet
goals. "Saving money now for use in the future gets easier if you know
what you want and how much you'll need," said Janet Kincaid, FDIC Senior
Consumer Affairs Officer. It helps to set savings goals you can easily
achieve. If you want to buy a $500 item within the next year, plan to
save $50 a month for 10 months, which is just $12.50 a week. (We're not
including any "interest" you could earn on your savings.)Have
a strategy for saving money. Every time you receive money try to
automatically put some of it into savings instead of spending it. That
approach to saving money is known as "paying yourself first."Here's
one suggestion: Consider putting about 25 percent ($1 out of every $4)
or more into savings that you intend to let build for a few years.
Separately you can save a similar amount of money for clothes or other
items you might want to buy within the next few months. With what's
left, keep some handy for spending cash.Cut
back, not out. Are you spending $5 a week on snacks? If you save $2 by
cutting back, after a year you'll have $104 to put in a savings or
investment account that earns interest.Have a money saving idea that you'd like to share?
Send it to us for possible publication in this newsletter! education@caccdebt.org |
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Americans need Debt Relief in record numbers!
They need your Help! CACC is a non-profit, IRS approved 501(c)(3) educational and counseling organization. Our expenses and operations are supported through generous contributions from corporations and individuals like you. Will you please consider providing some financial support so that we can continue our mission? The donation you make today will help fund debt relief programs, education and client services while providing help and hope to thousands. Won't you help us give the gift of Debt Relief?
YES, I'd like to help fund CACC's Debt Relief and Education efforts with a contribution of:
( ) $25 ( ) $50 ( ) Other $___________.
Please Mail your Donation to:
CACC Education Development
23123 U.S. 441, Suite 236A
Boca Raton, FL 33428
Thank you for your generosity!
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Free Workshops and Seminars 
As a non-profit Credit Counseling and Financial Education organization, CACC is dedicated to reaching out to the community. CACC provides financial education seminars and workshops at community centers, local organizations, and companies.
Popular Topics Include:
- Managing Money in Tough Times
- Creating and Using a Spending Plan
- Managing Debt
- Fighting Identity Theft and Financial Fraud
- Understanding Your Credit Report and Boosting Your Credit Score
- Creative Ways to Teach Kids About Money
- How to Get Out of Debt
Ask about customized seminars for your group, staff, congregation, organization, or club!
Call 1-800-763-1874 or e-Mail: mikes@caccdebt.org
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Consumer Advocates Credit Counselors, Inc. is a 501 (c)(3) non-profit credit counseling organization providing credit counseling, financial education, and debt management services. Please visit our website at: www.caccdebt.org
Additional consumer resources:
National Drug Abuse Hotline
1-800-622-HELP
National Domestic Violence Hotline
1-800-799-SAFE
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| Contact Us:
phone: 1.800.763.1874
CACC Director of Education and Money Wise Monthly Editor in Chief:
Mike Schiano, "The DebtBuster"
mikes@caccdebt.org
'Til Next Month,
Consumer Advocates Credit Counselors, Inc.
This newsletter is designed to provide accurate and authoritative information with regard to the subject matter covered. This information is given with the understanding that neither CACC nor the Editor and Writers are engaged in rendering legal, accounting, or other professional advice. Since the details of your situation are fact dependent you should always seek the services of a competent professional before making any financial decisions.
Copyright©Consumer Advocates Credit Counselors, Inc. 2010. All Rights Reserved.
Use of all or part of this newsletter is allowed with proper attribution and link: Source: Consumer Advocates Credit Counselors, Inc. www.caccdebt.org |
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