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In this issue:

Introduction

Accident Ahead: 10 Credit Card Traps
courtesy of truthaboutcredit.org

My Story: Refocused Holidays
by Barbara Block

Love Is Blind, But Creditors Aren't
by Gary Foreman

Broken Cabinet Hinges
The Natural Handyman

Tips, Quips, Quotes & Questions

On www.Stretcher.com This Week

Introduction
by Gary Foreman
gary@stretcher.com

Hello to all my Frugal Friends!

Time for a short break. After that first burst of holiday activity we all could use a brief rest. So pour a cup of cider or hot chocolate, find your favorite easy chair and enjoy this week's issue. Oh, and when you're through, don't forget to forward a copy of the newsletter to a frugal friend!

All the Best!
Gary

Accident Ahead: 10 Credit Card Traps
courtesy of truthaboutcredit.org

1. More Late Fees
Credit card companies are reaping more profit from late fee income than ever before, for three reasons: (1) the average late fee more than doubled between 1992 and 2000, from $12.53 to $27.61, (2) companies have decreased the amount of time between when they mail a bill and when payment is due, and (3) nearly two-thirds of companies have eliminated leniency periods, (the time after a payment's due date before a late fee is assessed).

2. Higher Over-the-Limit Fees
In 2000, only one card charged a fee of less than $20 to consumers who had exceeded their credit limits. The highest fee was $35. In contrast, a 1995 survey found only one bank that charged a fee of $20 or more. Many companies assess this fee to cardholders who exceed their limits by as little as $1.

3. Hidden Transaction Fees
Fees for cash advances, balance transfers, and quasi-cash transactions like the purchase of lottery tickets significantly raise the cost of these transactions. But the terms governing these transactions are buried in the fine print where consumers can easily miss them. Minimum fees, also stated only in the fine print, allow credit card companies to guarantee themselves high fee income regardless of the transaction amount. For example, if XCard has a transaction fee of 3% and a minimum of $10, a cardholder who receives a $50 cash advance will be charged the minimum, $10, which amounts to an actual transaction fee of 20%.

4. Punitive Annual Percentage Rate (APR) Increases
The average penalty APR—a higher interest rate triggered by a late or missed payment—is nearly eight percentage points higher than the average regular (non-penalty, non-introductory) APR. In 1998, by contrast, penalty APRs were an average of 4.5 percentage points higher than regular APRs.

5. Declining Grace Periods
While grace periods (the time during which a transaction does not accrue interest) historically were a full month long, they now average 23 days. Some cards have no grace periods at all.

6. Introductory APRs
Fifty-seven percent of card offers advertised a low introductory APR. The average introductory APR was 4.13% and lasted an average of 6.8 months. But credit card companies use low, short-term introductory APRs to mask regular APRs that are an average of 264% higher. These sharp rate increases are not prominently disclosed.

7. Low Minimum Payments
Low minimum monthly payments are designed to sound attractive to consumers, but they encourage cardholders to pay more in finance charges as the length of time required to pay off a balance increases significantly. Credit card companies have decreased minimum payments in recent years from the historic industry standard of 5% to a current standard of 2% to 3%.

8. "Fixed" APR
Despite their name, so-called "fixed" interest rates can be raised with as little as 15 days notice to cardholders.

9. "Bait and Switch" Credit Card Offers
Direct mail credit card offers generally advertise the premium card the bank has to offer, yet the fine print includes the caveat that the company can substitute a lower-grade, non-premium card if the applicant does not qualify for the premium card. The lower-grade card costs more and offers less attractive terms, facts which are rarely mentioned in the official disclosures of the offer.

10. Tiered Pricing
This new, anti-consumer practice is catching on quickly with credit card companies. In an offer, the company quotes a meaninglessly-wide range of possible APRs: Providian's Aria card, for example, quotes a range of 7.99% to 20.24%. The company then assigns an APR to each applicant once the card is issued, based on the applicant's credit history. Consumers are thus being denied the right to know the terms of a credit card before they accept an offer.

U.S. PIRG serves as the national lobbying office for state Public Interest research groups. PIRGs are independent, nonprofit, nonpartisan consumer and environmental advocacy groups with members around the country. U.S. PIRG's website is www.uspirg.org and the special state PIRG credit card education website is www.truthaboutcredit.org.

My Story:
Refocused Holidays
by Barbara Block - Columbus, Ohio

The holidays are right around the corner, and many people may be wondering how to shop and still be frugal. Maybe it's time to look at things differently.

With the recent tragedies that have struck our nation and world recently, it just doesn't seem right to have an all-out, over-materialistic Christmas. This might be a good year to re-focus on the true meaning of Christmas and help others instead of ourselves.

Although I grew up very poor, my husband and I have enjoyed a very comfortable prosperity in recent years. Despite this, I never shook my frugal tendencies. After the third Christmas when we gave beautiful, expensive gifts, we decided to pare down Christmas to focus on the right things instead of material goods. This was a few years ago, and we have never looked back.

Instead, we buy each other just three gifts and we set a limit of $75 total. This forces us to buy unique, meaningful, and thoughtful gifts. It takes just a few minutes to exchange them, and then we play beautiful music and have a nice breakfast alone, discussing our blessings of the passing year and what we have to be grateful for.

We don't have children, and I understand how this kind of approach might be difficult for children to understand. However, if you put pressure on yourself to provide an all-out Christmas, I think you're teaching children false values.

This year, a frugal plan is especially meaningful. People all over the world are suffering. Instead of buying a loved one an expensive good, make one simple gift for them, or donate to a charity in their name. Work in a soup kitchen or homeless shelter on Christmas instead of eating second and third helpings and watching television.

This is a good lesson regardless of the state of our economy or the level of terror in the world. Use the lessons of September 11 to re-prioritize and consider what's really important to you. Your heart and your pocketbook will be lighter.

"My Story" is a regular feature of The Dollar Stretcher. If you have a story that could help save time or money please send it to MyStory@stretcher.com

Love Is Blind, But Creditors Aren't
by Gary Foreman
gary@stretcher.com

Dear Dollar Stretcher,
I am getting married next year and have a question concerning our individual credit histories. I have good credit and my Fiance does not. I have worked hard to maintain a good credit rating, paying more than the minimum amount due each month. My Fiance however is not good at paying his bills and unfortunately his credit is suffering because of it. I basically have to remind him what's due, how much, etc. If we get married will whatever he has owed previously (before me) affect my credit or not? I don't want responsibility for something I had no involvement in. I understand that whatever we do together after we are married is "ours" but what about before? Can you please tell me what is right?
Amber

Amber's right that just by getting married you do not assume the credit history of your spouse. His bad record will not automatically contaminate your good one. Your credit rating is only affected by what you do. Anything that you do yourself or jointly with someone else will be reflected on your record.

But Amber is also correct that events after the marriage will effect both of their credit files. And as time goes by their credit histories will begin to look similar.

Much as we'd like to, you can't marry just part of someone. We marry all of them. That includes their good and bad points. Also their assets and liabilities.

Unless Amber keeps all of her financial affairs completely separate it will be almost impossible to avoid the influence of his debts. For instance, he may have agreed to pay half of the rent. But he could end up in a position where he's legally required to pay back a debt before he honors his commitment to Amber.

Before the wedding I'd recommend putting together a joint budget. Just filling out a budget form together should be a real learning experience. Take plenty of time to discuss how each of you relate to money. Come to an agreement as to what's acceptable money behavior. Any couple planning marriage should do the same thing.

Remember that it's very difficult to avoid getting tangled up your spouse's problems. Whether your mate snores or has a financial troubles, it's pretty tough to ignore. And it will affect your relationship and home life.

Amber's fiance isn't just bringing debts with him to the alter. He's also bringing promises to make future payments to different creditors. It's just like Amber is also saying "I do" to his payment schedule. The marriage doesn't release him from any commitments to repay debt.

The creditors won't attend Amber's wedding reception but they will expect to be repaid. So if he falls behind they'll go after any money that legally belongs to Amber's fiance. That includes anything that's owned jointly with her.

There are several types of joint ownership. Space doesn't allow for a detailed discussion. But be careful. Many joint accounts (for instance a joint checking account) allow for either person to access all of the money. That means that all of the money is also available to creditors.

Amber's husband-to-be may not want to tap into a joint account. But if he falls behind his creditors could get a judgement and force him to. Courts generally don't care who contributed to the joint account. If he can legally access the money it's also fair game for creditors.

Keeping Amber's finances separate isn't going to be easy. Want to buy a home? You'll need to plan on doing it in your name alone. Joint ownership would make the house a target for creditors. Even if Amber supplied every single dollar that went into the house.

This isn't going to be popular advice, but I'd suggest that Amber postpone the marriage until her fiance has better control of his debts. If the relationship is really important to him, he'll gladly make the sacrifice. If he's reluctant you need to know before the wedding.

Anyone who's been married for awhile will tell you that you won't change your spouse's habits after the wedding. Don't expect him to adjust his ways later. If anything, tendencies become more ingrained.

I don't mean to dump on somebody that Amber holds dear, but it's irresponsible to neglect to pay bills on time. Grown-ups don't do that type of thing. It could be symptomatic of an immature outlook on life.

Starting a marriage with this type of handicap is a real challenge. Remember that today's "reminder" will become tomorrow's "nagging". My guess is that if he ever starts getting calls from collection agencies he's not going to be very receptive to Amber's "reminders".

Hopefully Amber and her fiance will be able to set a solid foundation for a happy life together.

Gary Foreman is a former Certified Financial Planner who currently edits The Dollar Stretcher www.stretcher.com website.

Broken Cabinet Hinges
The Natural Handyman

Dear NH,
My pantry doors do not stay flat when I close them... they pop forward and remain slightly open. Is there an adjustment I can make with a screwdriver to fix the problem? (P.S. The doors are fitted in a 36" opening and are quite heavy!)
B from Phoenix, AZ

B,
It depends on the type of hinge that holds your doors. If they are standard "self-closing" cabinet hinges with no adjusting screws, they are probably damaged and need replacement. Heavy doors can distort light-weight hinges. And just plain wear-and-tear can cause the metal spring that operates them to break. Telltale evidence of this is when the hinge makes a sudden "cracking" sound and little pieces of plastic or metal shower to the floor. Even though the doors may still open and close, there is no force keeping them shut so they stay partially open or even resist complete closing. Light weight doors can still self-close with one functioning self-closing hinge... heavy doors rarely do.

There is a second type of common cabinet hinge... the so-called "Euro" hinge. Euro hinges are complicated-looking mechanical hinges that defy understanding... at least at first glance! However, if you examine them with patience, you can figure out how they function. Unlike standard cabinet hinges, Euro hinges can be adjusted to both align the doors and to close completely (assuming they are not broken, of course).

A Euro hinge may have two or even three methods of adjustment, depending on the manufacturer. You will notice that there are a number of visible screws on the body of the hinge. (You might have to pop off a decorative plastic nameplate to get to some of the screws.) Each screw performs a function. Some just hold the hinge together, some are for adjustment only and others perform both functions at the same time. Tightening or loosening the screws is required to adjust the hinge. If the screw offers you the option of using a Phillips or slotted screwdriver, use the slotted... it gives more turning power with less slippage!

Some of the possible functions of the screws are:

1) to hold the hinge to the door or cabinet frame. These may be visible OR may be hidden under the hinge mechanism. Some Euro hinges have two parts... the actual hinge and a "base" plate that is mounted onto the cabinet.

2) to adjust the cabinet doors up or down. These screws may also hold the hinge to the cabinet OR the hinge to the "base" plate (as described in (1) above). Obviously, if a door needs vertical adjustment, ALL hinges holding the door must be adjusted together to move the doors.

3) to adjust the cabinet doors left or right (towards or away from each other). This is the hallmark adjustment of Euro hinges, allowing you to align the doors even if the face of the cabinet is not square. Adjusting one hinge will tip the door... adjusting both will move the doors towards or away from each other. If the door has more than two hinges, the adjustment becomes more complicated. One solution is to temporarily disconnect the center hinge(s) and make adjustments with the top and bottom only. Once the door is aligned, reconnect the center hinge(s) so that it does not change the alignment. Can be tricky but definitely doable!

4) to remove the hinge "body" from brackets attached to the cabinet. This adjustment is also used to move the doors closer or further from the cabinets when the doors are closed.

If a visual inspection doesn't give you a clue as to the screw's function on your hinges, make careful changes in their adjustments and see what happens. Right... good old trial and error! Just be sure to work on the "bottom" hinge only when experimenting. You'll have less chance of a door falling into your lap if you make a mistake!
NH

Tips, Quips, Quotes and Questions

Here are some suggestions for raising quick cash:
1. Overtime
2. Christmas always means stores are taking on extra workers. Get a temporary second job. If you get it in the right place, they also provide discounts on their merchandise for employees, meaning you can get your Christmas gifts for less.
3. Since you have one child college age, I am going to assume you may have others over 16. Get them into the act - family emergency, help out your sibling. Get them to contribute or maybe get that job at the store temporarily, and you will repay them with interest after the emergency.
4. Loan from a family member - be sure to put it in writing.
5. Home equity line of credit - be sure you have a plan to pay it back!
6. Loan from retirement account. I do this on occasion and pay 3% interest - right now that is a better deal than most of us are getting from the stock market!
7. Garage sale.
Virg

more suggestions on how to raise cash quickly at www.stretcher.com/stories/01/011203a.cfm

There are several places to obtain cost of living comparisons. The one I've used most in the past is http://homefair.com/index.html. We have been asked to move by our company three times in six years. We started with Homefair and the resources there, and then followed up by visiting sites for the locations we were investigating such as the Chamber of Commerce, tax department, and home pages for the cities we were asked to moved to. All three times, the cost of living calculators and follow up research helped us decide that the cities we were asked to consider were all too expensive for the compensation offered. Also there are number of magazines that offer cost of living surveys every year that could be tracked down through a search engine.
Tammy
Martinsburg

more ways to find inexpensive places to live at www.stretcher.com/stories/01/011203b.cfm

Living in Central Florida, Palmetto bugs are a part of life! I'm not fond of insecticides, especially in pet areas, so I have started using a trick my Mother discovered YEARS ago!
Take an old, clean jar. I use one quart Mason or mayonnaise jars. Grease the upper half of the inside of the jar with solid shortening. Place a small slice of ripe banana in the bottom of the jar. The bugs smell the fruit, climb in the jar for a feast, but are unable to climb out. They just S-L-I-D-E back down to the bottom of the jar.
Once a week, I'll gather the jars, take them out in the back yard and fill the jars with water from the garden hose using strong water pressure. Sometimes the little critters are stuck to the bottom and you'll need to let the jar soak for a few minutes. I don't usually even have to wash the jar before reloading with another slice of banana! My local songbirds often feed on what was washed out of the jar! Bye-bye bugs!
Linda E.

For the last 27 years we as a large family (5 married children and 16 Grandchildren) celebrate Thanksgiving the day after Thanksgiving. When our first child married 27 years ago, we made up our minds that they would not have to go to each parents' house and stuff themselves to please the families on the day of Thanksgiving. So we let all the children and the grandchildren go to the in--laws house for the day of Thanksgiving. This makes the in-law families think they are special -- because they are. And the next day all the children and the grandchildren come to our house. It has worked for 27 years. Everyone is happy.
L.

Our family has a tradition that started about 10 years ago and as our family has grown to 6 over the years, so has the tradition.
Once or twice a week we go as a family and sing carols to our friends. We give them each a small candy cane and we hand them their Christmas Card. That saves on postage. Over the years we have added friends to the list. Some we have sung to every year. The kids think its silly but fun and love doing it even though they are teens.
Try this time-honored activity--it costs very little and brings joy to those sung to and those attempting to do the singing.
Pat

I save all the Christmas cards from the previous year. I use this as my base to mail off our current cards and then I cut off the fronts and use them as gift tags for my gifts this year.
Jill in Michigan

Please send your tips to Tips@stretcher.com If we use your tip or reply to 'Can You Help' in any of our publications we'll send you the next three issues of our print newsletter as a 'thank you'.

On www.Stretcher.com This Week

Accident Ahead: 10 Credit Card Traps
courtesy of truthaboutcredit.org
Avoid wrecked finances
http://www.stretcher.com/stories/01/011203c.cfm

My Story: Refocused Holidays
by Barbara Block
What's really special to you?
http://www.stretcher.com/stories/01/011203d.cfm

The Cost of...
Christmas trees
http://www.stretcher.com/brm/01/011128.htm

Love Is Blind, But Creditors Aren't
by Gary Foreman
When your fiance brings debts with them
http://www.stretcher.com/stories/01/011203e.cfm

Simple Family Holiday Ideas
by Deborah Taylor-Hough
A simply memorable holiday
http://www.stretcher.com/stories/01/011203g.cfm

Crock Pot Mock Lasagna
Chet's Crock
They'll think you were cooking all day
http://www.stretcher.com/stories/01/011203h.cfm

My Story: Clutter Stole Her Life
by Pam Magouirk
Pretty soon it was taking over everything
http://www.stretcher.com/stories/01/011203j.cfm

Should you get PMI or a self-insured mortgage?
http://www.stretcher.com/brm/01/011130e.htm

The Courageous Traveler
Airlines are offering deals to reluctant travelers
http://www.stretcher.com/brm/01/011126.htm

Save early and often
http://www.stretcher.com/brm/01/011126a.htm

Should I pay points to get a better rate in a refinance?
http://www.stretcher.com/brm/01/011126b.htm

Quiz
Check your tolerance for taking investment chances
http://www.stretcher.com/brm/01/011127.htm

Where to invest college education money
http://www.stretcher.com/brm/01/011127a.htm

Long-Term Care Insurance
12 questions to ask
http://www.stretcher.com/brm/01/011128a.htm

Getting a conforming mortgage for a four-unit building
http://www.stretcher.com/brm/01/011128b.htm

Figuring out what's taxable in a workers' comp settlement
http://www.stretcher.com/brm/01/011128c.htm

Don't use an IRA for a bridge loan
http://www.stretcher.com/brm/01/011129.htm

The ABCs of Roth IRAs
http://www.stretcher.com/brm/01/011129a.htm

Taxes on cash gifts from non-U.S. citizens
http://www.stretcher.com/brm/01/011129b.htm

Holiday Tipping
How much is enough?
http://www.stretcher.com/brm/01/011130.htm

Special Report
Year end money guide
http://www.stretcher.com/brm/01/011130a.htm

Economic Recovery
Expect a bumpy ride
http://www.stretcher.com/brm/01/011130b.htm

Jumbos Just Got Bigger
Allowing buyers to get bigger houses without paying the higher jumbo rate
http://www.stretcher.com/brm/01/011130c.htm

Raising Cash Quickly
Any ideas for serious savings in a short amount of time?
http://www.stretcher.com/stories/01/011203a.cfm

Cheaper Cities
How would you find a place with a lower cost of living?
http://www.stretcher.com/stories/01/011203b.cfm

Curbing deficit spending to save for kids' college
http://www.stretcher.com/brm/01/011130d.htm

Taking required IRA distributions from a CD
http://www.stretcher.com/brm/01/011130f.htm

Good deeds can produce tax savings
http://www.stretcher.com/brm/01/011130g.htm

Broken Cabinet Hinges
The Natural Handyman
Is there an easy fix?
http://www.stretcher.com/stories/01/011203f.cfm

Changing Anti-Freeze?
Ask Bob: The Auto Answer Man
How can you tell if it's still good?
http://www.stretcher.com/stories/01/011203m.cfm

Readers' Tips
http://www.stretcher.com/stories/01/011203t.cfm

Home or Small Business

Selling Used Books
by Marcy Johnson
A good part-time, at home income
http://www.stretcher.com/stories/01/011203k.cfm

Mosaic Marketing
Appealing to multicultural customers
http://www.stretcher.com/brm/01/011126h.htm

1-2-3
Watch out for financial missteps when buying a dance studio
http://www.stretcher.com/brm/01/011127h.htm

Office Friendships
Don't discourage employee fraternization as a waste of company time
http://www.stretcher.com/brm/01/011128h.htm

Not Too Narrow!
Define your market broadly to ensure success
http://www.stretcher.com/brm/01/011129h.htm

Hiring in the 21st Century
Affecting how your build your work force
http://www.stretcher.com/brm/01/011130h.htm

20 illegal interview questions
http://www.stretcher.com/brm/01/011130j.htm

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