Credit Card Debt, Digital TV, and More Ways to Save

Watch your credit limits, and try the new online savings tools.
By Janice Lieberman, From Reader’s Digest

Credit card companies giveth, and credit card companies taketh away. And now they’re reducing credit limits without advance notice. That’s what happened to Virginia Barlow, MD. She bought a computer monitor online, but it wasn’t until Christmas Eve that the Coudersport, Pennsylvania, resident learned her card had been declined and her son wouldn’t be getting his present.

American Express, it turned out, had reduced her $9,000 limit to $7,600. The purchase of the monitor would have put her over her limit. American Express confirmed that Barlow had no missed payments or delinquencies. Rather, it was her payment history with other lenders that prompted the company to lower her limit. (American Express admits it is carefully monitoring cardholders: The company recently offered some customers $300 to pay off—and cancel—their Amex accounts.) Frustrated, Barlow plans to pay her balance in full and cut up her card.

Linda Sherry, a spokesperson for Consumer Action, says companies are simply trying to manage their risk. To protect your credit score, Sherry suggests, do the following: Ask why your balance was reduced. If you’ve been paying your bill on time, ask if the decision can be reversed. If not, ask if any fees can be waived until you’ve reduced your balance below your new limit.

Come July 2010, Federal Reserve rules will require lenders to give 45 days’ notice before changing the terms of an account. Until then, check your balances and limits every month.

How to Pay It Down
While most American households owe around $2,000 on their credit cards, about 15 percent owe more than $9,000. Figuring a 14 percent rate, they’re paying over $1,000 in interest a year. Many have no idea how to dig their way out.

DebtGoal, a free online debt-management service, can help with that. Once you type in your creditors and amounts owed, DebtGoal sets up a payment plan and a target date to end your debt. Track your progress with charts and graphs, e-mail experts, and exchange tips with other users. For $10 a month, DebtGoal will upload your account information and update your debt plan daily; by year’s end, it will pay the bills automatically too.

A certified public accountant in Le Mars, Iowa, started the New Year with $50,000 in credit card debt. He found money-managing tools time-consuming and switched to DebtGoal. In three months, he has paid off $20,000 of his debt. “The program is very user-friendly,” he says.

Home Security Alert
It’s hard to believe, but $3 will open just about any door with a conventional pin tumbler lock. All you need is a special bump key, widely available on the Internet. Security expert Marc Weber Tobias says these keys are legal and simple to produce. “Even a 15-year-old kid can do it, and it’s almost impossible to prevent their distribution or use,” he says.

His advice? Make sure the perimeter of your house is well lit, and install a high-security lock like the Kwikset SmartKey ($30) or the Schlage Primus ($75 to $100).

Have You Switched?
On June 12, all TV stations will broadcast in digital, but there are still 3.8 million households with analog TVs. If your set doesn’t have a digital tuner (check the labels on the back), you’ll need a converter box, which costs $40 to $60. Go to dtv2009.gov before July 31 for a $40-off coupon (you’re entitled to two per family). The coupons expire 90 days after they’re mailed.

3 Sites for Savings

  • beatmyprice.com: Find the best price on just about anything. Results are pulled from user submissions as well as other search engines.
  • checkingfinder.com: Plug in your zip code for the nearest high-yield checking account (some up to 6%).
  • lowcards.com: Compare rates, rewards, and rebates on more than 1,000 credit cards.
  • Watch Janice Lieberman on the Today show and send her your questions.

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