Freedom Debt Relief ~ Over Draft Protection : Good Or Bad
Volume 4 #5
Overdraft Protection: Good or Bad? • Spare Change
Recent Grads Face Bleak Economy • Money-Saving Gas Tips
Are You Financially Prepared for a Disaster?
Summertime Tips To Keep Cool & Save Money
Welcome to the Freedom Debt Relief monthly newsletter! As part of our
ongoing goal to enhance our services, we will be sending you a monthly
newsletter ﬁlled with interesting articles and helpful ﬁnancial tips and
advice. We hope you enjoy this issue, and that you ﬁnd the enclosed
1-800-655-6303 information helpful as you continue on the road to ﬁnancial freedom.
Good or Bad?
he term “bounce” or “bouncing” can charge an annual fee or cash advance fee for this these programs, but the new proposal does not
refer to fun children’s games or a cute service. With most overdraft protection plans, require banks to obtain permission to “opt-in”
newborn baby. However, when the banks usually deduct money from the linked the overdraft programs before enrolling account
word bounce is used to describe a check, negative account in certain increments. For example, if holders in the systems.
thoughts may come to mind. your account is about to be overdrawn by $10, According to a recent Center for Responsible
Let’s face it. Most of us have inadvertently your bank may still take $50 from a line of Lending (CRL) survey, consumers want, but
miscalculated our checking account or forgotten credit. Therefore, banks encourage you to spend are not getting the choice of whether or not
about an automatic deduction. It can happen and borrow more money than you really need. their checking account will include a fee-based
to even the most budget-conscious individuals. Much controversy surrounds the issue of overdraft loan feature. Interestingly enough,
Unfortunately, these simple oversights may have overdraft loan products. As you may know, even respondents to the survey reported that they
resulted in an overdrawn account and costly fees. if you do not have a linked account for overdraft would overwhelmingly prefer that their debit
According to the Center for Responsible Lending protection, banks will still allow you to overdraw transaction be denied at the checkout counter
(CRL), a $100 overdraft with a $34 fee has an your account when you make check payments, if approving it would cost them a $34 fee. The
APR of 884% if the overdraft lasts 2 weeks. withdraw money from an automated teller CRL survey also found that 16% of
In addition, your bank may also charge you a machine, or use a debit card. respondents pay 71% of overdraft
daily fee, averaging $2 to $5, for each day your Then, they routinely fees.
account has a negative balance charge overdraft Keep in mind that overdraft
Overdraft protection may help you avoid some fees. Legislation was protection is intended to help
you out in case you accidentally
of these fees and aggravation associated with recently proposed in
overdraw your checking account
bounced checks. You usually have to sign up for an attempt to end this
once in awhile. According to
this service and have an additional account with practice. However,
your bank. If your account becomes overdrawn, representatives from
experts estimate that
overdraft protection kicks in and obtains funds ﬁve major consumer
approximately 50% of
from a savings or checking account, a credit card, advocacy groups are
consumers that have
or a home equity line of credit. Because of your disappointed with
overdraft protection use
limited access to credit, you may consider using the outcome issued
it every month. If you ﬁnd
an additional checking or savings account for by the Oﬃce of Thrift
yourself using this service this
overdraft protection. Supervision, the Federal
frequently, you may consider
When it comes time to re-establish your credit, Reserve Board, and the
keeping better track of your
you may want to reconsider using a credit card or National Credit Union
expenses. Our tips on how to balance
line of credit for overdraft protection. Bankrate. Administration concerning bank
your checkbook listed below may help
com states that consumers may incur 18 percent overdraft loan products. The new
you bounce less checks and use overdraft
or more in interest when they use credit for proposal will require banks that allow
protection as little as possible.
overdraft protection. Some banks may also overdrafts to provide a right to opt out of
Tips on Balancing Your Checkbook
of us have busy schedules.
$When shopping or running errands, keep all
receipts in your wallet or another convenient
$Check your account balance on a regular basis.
place. Log all expenses in your checkbook
Take advantage of services such as online and
when you have a free moment. This is
telephone banking. Also, contact your bank
especially important if you use your debit card
to see if they oﬀer any type of automatic alert
service. Your bank may be able to alert you via
phone or e-mail if your account falls below a
$Mark all of your automatic deductions in your certain amount.
calendar. These can be easy to forget since most
Spare Change: 687,000 tons of Medicare premiums, health care, utility bills,
paper would be and in-home services. For more information on
saved every year this program, visit www.BeneﬁtsCheckUp.org.
News, ﬁnancial tips, and other – enough to
circle the Earth Consumers are owed free credit
information regarding personal 239 times.
reporting. TransUnion recently announced
ﬁnancial freedom that it will soon begin providing eligible U.S.
Web consumers up to nine months of free credit
site allows monitoring and related services. The oﬀering
Study reveals that consumers
seniors to search for assistance. A is part of a preliminary settlement of a class
still cling to paper statements. A action lawsuit that has been pending for many
signiﬁcant amount of the elderly population,
new report released today by Javelin Strategy years and arose from a business TransUnion
especially those with limited incomes and
& Research examines green banking issues, discontinued in 2001. The Class includes
resources, are living in poverty. For example,
including consumer habits, green banking individuals who had an open credit account
some 5 million seniors experience some form of
behaviors and recommendations for ﬁnancial or an open line of credit from a credit grantor
food insecurity. Many others struggle everyday
institutions seeking to attract environmentally (including, for instance automobile loans, bank
with meeting their basic needs. The National
conscious consumers. Researchers found that credit cards, department store credit cards,
Council on Aging’s (NCOA) BeneﬁtsCheckUp®
although most consumers expressed an interest other retail store credit cards, ﬁnance company
strives to change that. Through its free,
in adopting green banking behaviors, three out loans, mortgage loans, and student loans)
conﬁdential online service, Americans 55 years
of four consumers still receive paper statements. located in the United States anytime from
and older can determine if they qualify for help
According to Javelin, if every U.S. household January 1, 1987 to May 28, 2008.
with the costs of groceries, prescription drugs,
stopped receiving paper bills and statements,
Obtain health insurance. Because you
are no longer a full-time student, many health
Recent Grads insurance plans will not cover you under your
parent’s insurance. If you secured a job with a
company that oﬀers health coverage, consider
Face Bleak Economy joining their group plan. In most cases, it is
less expensive than an individual plan. Keep in
mind that most companies have a designated
probationary period before you are eligible for
ecently, many young adults have you may want to obtain renter’s insurance, as health insurance. In the meantime, you may
graduated from college and are getting many leases require it. Landlords usually have want to contact a local insurance agent for more
ready to make the transition from insurance on the building, but not your personal information on temporary or short-term health
college life to the “real world.” Unfortunately, a belongings. coverage.
recent data report from Demos, a public policy
organization, indicates that this generation of
Control credit card debt. According
Develop a plan to pay student
young adults may be the ﬁrst not to surpass the
to Truth About Credit (www.truthaboutcredit.
loans. According to statistics from the National
living standards of their parents. Factors such
org), a student public interest research group,
Postsecondary Student Aid Study, the average
as declining incomes, growing debt, the high
college students are graduating with an average
student loan debt among graduating seniors is
cost of homeownership and healthcare costs all
of close to $4,000 in credit card debt. If you have
$19,237. Because many students defer payments
impact this prediction. Below are some tips for
obtained a student credit card(s) during college,
while attending school, this may be the ﬁrst
young adults as they begin to make important
consider establishing a plan to reduce your debt.
time that they see how much their education
ﬁnancial decisions in the current economy. If
Refrain from using credit to charge expenses such
really costs. Although it may take time to pay
you are a recent graduate, congratulations and
as food and gas, unless you are able to pay the
oﬀ your student loans, you may have options
we hope this information helps you launch the
balance in full each month.
if you are not able to make payments. Contact
next chapter of your life. As for parents, use these
your lender immediately to see if you qualify for
tips to guide your son or daughter in the right
a forbearance or deferment. Avoid defaulting on
direction or pass this article on to them.
your student loans because it may result in wage
garnishment or the inability to obtain additional
Find a place to live. Although it may
student loans to further your education in the
not be an ideal situation, you may consider living
at home temporarily until you are able to save
enough money for your own place.
Transportation has hidden costs.
Your job location will also inﬂuence where
Many young grads are eager to purchase a new
you live. If you must rent an apartment or a
vehicle. Be careful not to take on more of a car
house, this cost will probably consume the
payment than you can aﬀord. If you are under
majority of your income. According to a study
25, you will probably pay premium insurance
from the Center for American Progress, more
rates because of your age. Also, some apartment Helpful Sites for Grads
young people are considered “housing burdened”
buildings and cities require you to purchase
because they are paying more than 30% of pre-
parking passes. You may want to consider public
tax income on rent.
transportation if it ﬁts into your work schedule.
Realize that living on your own not only
It may not be as convenient as driving your • www.creditcardnation.com
involves rent and housing costs, but you will
own car, but it may help you to save money
also have to pay for items such as food, cleaning
on gas, insurance, and car payments. In fact,
products, and other incidentals that you may
in large metropolitan cities such as Chicago
have taken for granted while living at home. • www.youngmoney.com
and New York, owning a car may be more of a
Consider renting with roommates or friends to
defray some of the housing expenses. As a renter,
atural disasters such as hurricanes lower your homeowner’s insurance premium.
Summertime Tips To
can cause devastating damage. According to the Insurance Information
Hurricane season recently began on Institute (III), it is a good idea to make sure you
Keep Cool & Save Money
June 1 and runs through November 30. Experts have enough insurance to rebuild your home
at the NOAA Climate Predication Center are and replace all of your personal belongings.
s the temperature rises during the
projecting a 65% chance that the Atlantic You may also want to consult your insurance summer months, air conditioners
hurricane season will be above normal this year. company about Additional Living Expenses unleash comfortable cool air,
AIR Worldwide Corporation, a leading risk (ALE) coverage, which pays for the additional soothing people from the scorching heat.
modeling company that helps clients manage costs of living away from home such as hotel This modern day convenience seems
the ﬁnancial impact of catastrophes and weather, bills and restaurant meals while your house is impossible for most people to live without...
report that hurricanes and earthquakes have the being repaired or rebuilt. until the electric bill arrives. The ideas listed
potential to cause approximately $500 billion Fires may aﬀect any home, so installing smoke below may help you reduce your electric bill
of total economic losses. Although it may not detectors may be a good idea. The American Red this summer so your balance does not heat
be possible to completely protect yourself from Cross recommends that you contact your local up with the weather.
the wrath of mother nature, below are some ﬁre department to see if they make free house
precautions and valuable information that may calls. In some cities, a ﬁreman may visit your Contact your utility company for
help you recoup a portion of your loses if you home to evaluate your property and make ﬁre information about money saving energy
are a victim of a natural disaster. safety suggestions. plans. Most energy companies oﬀer
budget payment options. In most budget
Visit www.ready.gov, the plans, your utility company will bill you
According to the Federal Emergency oﬃcial web site of the U.S. Department of in equal monthly amounts, which results
Management Agency (FEMA), ﬂooding Homeland Security (DHS), for a printable in more consistent payments. These
is the number one natural hazard. Many emergency supply list. In addition to items plans allow you to budget your money
people have the like prescriptions so you will not receive any surprisingly
misconception that and non-perishable high bills. Any overpayments are usually
their homeowners food, USHS also credited to your next bill.
insurance will cover recommends that
ﬂood damage; you include copies of If you are experiencing a hardship that
however, it does insurance polices and prevents you from paying your electric
not. In fact, FEMA bank account records bill, you may qualify for energy assistance
indicates that only in a waterproof plans based on your income level. It is
25 percent of the 10 container. Although essential for you to frequently update
million homes that you may be on a your utility company on your situation.
lie within high ﬂood budget, you may In most cases, they will be willing to
risk zones carry consider keeping work with you without interrupting your
ﬂood insurance. In a small amount of service.
order to obtain ﬂood cash on hand or a
insurance, you must live in one of the 20,000 small roll of quarters in case phone lines are If you are purchasing a new air
communities that participates in the National down and you have to use the pay phone. For conditioning unit, select an energy-
Flood Insurance Program (NFIP), a component insurance reasons, you may also want to make a eﬃcient model. Although they may
of FEMA that handles ﬂood insurance, list of your valuables. The Insurance Information cost more, it will save you money on
ﬂoodplain management, and ﬂood hazard Institute also recommends consumers visit the your monthly electric bills. Visit www.
mapping. For useful information about ﬂood site www.knowyourstuﬀ.org to download free energystar.gov for more details.
insurance, visit www.ﬂoodsmart.gov, the oﬃcial home inventory software.
web site of NFIP. Use this resource to determine
Install a programmable thermostat. This
your area’s ﬂood risk, estimate your premium,
device may help you adjust settings to
and helpful FAQ’s concerning ﬂood insurance. FEMA oﬀers many assistance
keep your house warmer than normal
programs to those aﬀected by disasters. Visit
when you are out and cooler when you are
www.fema.gov and click on the “Apply for
Depending on which disaster Assistance” link to familiarize yourself with
is more likely to strike in your geographical the procedures. Depending on the type of Protect room air conditioners from direct
area, take steps to reduce the risk of damage. emergency situation, you may qualify for a sunlight. If the unit does not feel hot, it
For example, if you live in an area that is number of their programs including Disaster will not have to work as hard.
prone to hurricanes, install hurricane shutters Legal Services, Disaster Unemployment
on your windows. In regions that experience Assistance Program, and the Emergency Food Contact your utility company for any free
earthquakes, secure objects like bookcases that and Shelter Program. Your local branch of the maintenance or check-up services for air
could easily fall. You may also want to consult American Red Cross may also provide you conditioners. You may also try to install
a building inspector for suggestions on home with basic needs such as food and clothing new ﬁlters in your unit.
repairs that could prepare your home for a immediately following a disaster. Visit www.
disaster. Certain home improvements may also redcross.org for more information.
vehicle to burn too much gasoline.
Consolidate trips. Reduce drive time and
keep needless miles oﬀ the odometer by
Do not completely ﬁll your gas tank. A
ﬁnding one location in which you can bank,
gallon of gas weighs about 6.2 lbs. If you
grocery shop, and run errands. Visit www.
have a 20 gallon tank, you are carrying an
aaafuelcostcalculator.com to calculate road
extra 124 lbs of weight at ﬁll-up. The extra
weight aﬀects your mileage and adds wear
and tear to the vehicle.
Comparison shop. Find the best gas price
with the help of Gas Buddy (www.gasbuddy.
Keep your tires inﬂated. A third of all
com), a web site in which local price watchers
vehicles have one improperly inﬂated tire.
post current prices in your area. It is frugal
For every pound per square inch (PSI) that
to shop for the lowest possible price, but do
your tires are under-inﬂated, you are lowering
not waste gas by traveling to a distant ﬁlling
Money-Saving Gas Tips your fuel economy by 1 to 2 percent per tire.
station just to save a few cents.
Multiply that number by four and that could
equal a lot of wasted fuel.
Slow down. The faster a vehicle travels, the
ccording to the American Automobile more gas it burns. Driving faster than posted
Lighten the load. Do not haul extra weight
Association (AAA), the current national speed limits is also dangerous and increases
in the passenger compartment, trunk, or
average price for regular gasoline is stress. Leave enough time to reach your
cargo area of your vehicle. A heavier vehicle
$4.06 at the time of this printing. The Energy destination at a proper speed.
uses more gasoline.
Information Administration predicts that the
average will peak at $4.15 in August. Below Avoid quick starts and sudden stops.
Check your vehicle owner’s manual. If your
are some helpful tips to help you conserve fuel This wastes fuel and wears out vehicle
vehicle does not require premium or mid-
during this diﬃcult time. components. You may also increase your
grade fuel, purchase less expensive regular
chances of having a traﬃc accident.
Leave the gas guzzler at home. Do you
have more than one vehicle? Is one of them Maintain your vehicle. Keep moving
Carpool when possible. If commuting is
a truck, SUV, or van? If so, use the more components lubricated and get regular tune-
costing you a bundle in gas, consider sharing
fuel-eﬃcient vehicle as often as possible. ups to ensure your ignition and emission
a ride at www.erideshare.com. This web site
If you plan on making a vehicle purchase, systems are operating properly. This routine
allows you to search for local commuters
remember that fuel prices are part of the maintenance will help your vehicle achieve
that are going the same route or you may
total cost of vehicle ownership. It may be maximum fuel economy and extend its
post your own listing. All services are free of
more cost-eﬀective to choose small energy- life. Poorly maintained spark plugs or
conserving vehicles. malfunctioning fuel sensors can cause your
1875 South Grant Street
San Mateo, CA 94402
Phone: (800) 655-6303
FAX: (650) 897-8800