The People’s Transportation Program Helps People Ride for Free During the Recession

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Oh, MTA, you make it remarkably easy for the collective New York City populace to demise you with much fire. When you aren’t jacking up fares, you’re slashing service. While you’re crying broke, you’re digging massive tunnels for new subway lines. Though we begrudgingly recognize that you do get us to work on time at I would assume is a pretty high clip, we’re fed up with your shenanigans. And, according to the Indypendent newspaper, a handful of commuters are royally sticking it to you the best way they know how: by hitting you in the pocket.

The People’s Transportation Program, an assembly of community activists from the Bronx, East Harlem, Queens, and Brooklyn, helps over 600 subway riders per month ride the rails for free every third Saturday of the month. How do they do this?  They throw house parties and open mic nights to raise the necessary cash to purchase single-day unlimited ride MetroCards, and post up in subways to offer people swipes. On the surface, these activities appear quite illegal, but apparently purchasing and swiping others through breaks no laws–you just can’t resell a MetroCard.

Interested in getting a free swipe or offering one? Check out the organization’s home page for dates, time, and contact information. The MTA got its bailout, now help others, and yourselves, get yours.

Photo credit:  PocketAces

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What’s Your Grade? Credit Karma’s Credit Report Card

Credit Karma has launched a new, web-based tool that turns your credit score into an easy to read report card that grades your credit health. Best of all? It’s free.  Credit Karma CEO, Ken Lin, was excited to talk about the new reporting tool that provides insight for consumers who don’t understand their credit score, but actively want to improve it. Taking into account the five major influencers on a consumer’s credit score (credit card utilization, length of credit, on time payment history, etc. ), it grades each metric and gives an overall grade.

“If you look at your credit report it’s anywhere from 8 to 10 pages of data, but no real correlation of your credit rating,” said Lin. “You can’t tell how those 12 pages actually influence your credit score.”

The Credit Report Card gives a clear understanding of where you can improve, simply by looking at any grades that may be down to a ‘C’ and working to make them an ‘A.’ By breaking down a credit report into seven metrics, a person can easily see how each unit relates to their overall score.

The 7 Metrics

Credit Card Utilization – the total credit card debt you have divided by the total available credit on your credit cards

Percent of On-Time Payments – Lin says that this is key since many young consumers don’t realize how important on-time payments are and then they suffer the consequences later in life

Average Age of Open Credit Lines – Old accounts should be open, active, and in good standing.

Total Accounts – Lin stressed that a healthy mix of revolving credit cards, charge cards, installment loans and mortgages will help you credit score.

Credit Inquires – Hard inquires for credit, such as when you apply for credit. **Credit Karma is a soft inquiry and therefore does not affect this metric.

Total Debt – A key metric in reviewing your finances

Debt to Income Ratio – Your DTI ratio compares the difference between your monthly income and the monthly amount you spend to maintain your debt.

Not only can a person log on and check out their grade for each of these metrics, but with just one click, they can see where they rank compared to their peers in the Credit Karma community. This feature is key to gaining a better understanding of how healthy, or unhealthy, your credit score may be.

“When we’re young, there are finance classes that we take and we know the basics, but if we really think about, it no one really tells us how important credit is,” said Lin. “Sometimes [we] learn the hard way.”

With so many people working to get their credit score up to par out of necessity for loan approvals and other major life purchases, Credit Karma’s Credit Report Card has pretty key timing and will no doubt help consumers take a look at the big picture.  “We were so spoiled over the years with credit cards,” said Lin. “The next two years — it’s going to change a lot.”

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Don’t Get Screwed!: Atlantic Ave’s Pro Line Home Theater Sucks It

I’m a proponent of justice; swift, hard, unwavering justice. So when I encounter an out of control predator stalking the meek, the one avenue of control that I have (short of dressing like a bat and executing street vengeance), is to let my fingers and keyboard regulate. Consider it my small, but vital, contribution to society.

This post is one such post of vengeance, inspired by a trip to Atlantic Ave over Memorial Day. Lauren and I wandered into Pro Line Home Theater, an electronics shop on the corner of Atlantic and 4th Aves. Normally, I avoid brick-and-mortar electronics joints like the plague as the tech-related online deals are deep and many, but I had damaged the power cord on my Acer Aspire One netbook in a freak accident  and sought a replacement. Believing that a new power supply wouldn’t cost more than $10 to $20 after a brisk bout of online research the night before, we strode in with confidence that I’d be able to walk out with new cord in hand. Wrong we were, as the salesperson tried to violate my wallet–nay, Brooklyn’s collective wallets–in the most obscene manner possible.

We knew we were in for a doozy of a time when we waltzed into the joint and saw the very same netbook that I own (a $349 computer, mind you) “on sale” for $500. A kindly sticker positioned next to the PC highlighted the sweetness of the deal by showing that the $500 was  “marked down” from nearly $700. Oh, kindly shopkeep, thanks for showing infinite mercy by not charging a full-on grand. It made we warm in special places to witness the fact that your greed isn’t totally unchecked.

So after the shock and awe of the moment subsided, I approached the  clerk that was manning the floor (an Arabic kid in the standard baseball cap/oversized tee/hideously baggy shorts street punk attire) who quickly stated that it would be $69. Now, I understand that some high-end universal chargers with multiple tips and high charge storage are more pricey, but this was your run-of-the-mill laptop charger. When I chuckled and declined, the clerk, sensing that he was losing a sale, asked “how much you wanna pay?” When I mentioned the far more wallet-friendly prices that I found online, all I got was a “Sorry, can’t help you there, bud.” Nice.

Simply put, if you’re coasting down Atlantic and happen upon Pro Line Home Theater, give it the one-finger salute and keep a-steppin’.

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What Does the Credit Card Reform Mean for You?

As you may be aware, Congress just passed a credit card reform bill that helps protect consumers, such as you and I, from the big bad credit companies.   Although this bill has gotten almost unanimous support from law makers, there have been a few who aren’t happy with the new regulations.  Take  Edward Yingling (CEO of the American Bankers Association), for instance, who stated that it would  “undermine the availability of credit” by restricting individual institutions’ ability to price credit against risk.  Oh. my. god.  You mean banks would actually have to only give credit to people who can manage it??  The horror!

It sounds all good and well on paper, but sifting through legislature is a serious bore and rarely dictates how these changes will affect you as a consumer, so we’ve sifted through the muck, picked out the most pertinent changes and explained, in layman’s terms, what these regulations actually mean for you.

Restricts all interest rate increases during the first year

We’ve all applied for a credit card and gotten a 10% interest rate, when all of the sudden you get a note in teeny tiny print stating that for no reason your APR has skyrocketed up to 16%.  Why does this happen?  Basically, because credit card companies can, and without reason.

Now credit companies are not allowed to increase interest rates during the first year, although this does not include variable interest rates “introductory rates” like 0% interest for the first 6 months.  Make sure you read the fine print to make sure you aren’t setting yourself up to get fleeced by insane interest rates after the introductory period.

Increases notice for rate increase on future purchases

Often, by the time you received a notice about a rate increase, it was already in effect or would be by the time you paid your next bill.

The new rules are increasing the notice time from the previous 15 days to 45 days.  You’ll also now have 3 billing cycles to decline the new terms.  However, if you’re under a promotional rate, they have no obligation to mail you a reminder that your APR is going up.  Same thing goes if you haven’t submitted your payment within 60 days of the due date.

Preserves the ability to pay off on the old terms

Prime example of this one is a bank takeover, like Chase’s recent purchase of Washington Mutual.  I had a Washington Mutual credit card with a great APR and free monthly credit scores sent to me.  When Chase took over in March of this year, my APR went up around 5% and my due date was changed — without prior notice.  (I received a notification, but it didn’t arrive at my home until the rate had already kicked in.)

The new rules allow consumers to pay off their old balance on their old term.  For example, if I had a balance of $300 with a 10% APR with Wamu, then once my account switched over to Chase, I would still be paying off the $300 at 10%APR, although any additional credit used on top of that balance would be on Chase’s new terms.

Places limits on fees and penalty interest

This one covers quite a bit, so here are a few bullet points:

• If your APR is increased due to a late payment (60 days after the due date), and you make regular payments on time for six months, they are required to restate your original interest rate.

• You will not be able to go over your credit card limit and be charged fees (unless you specify otherwise).

• No more fees can be assessed to make a payment unless it is going through an outside service rep (like Western Union).

• If card issuers increase the ARP, they must review the account every six months and issue a rate decrease if indicated by the review.  (I really do not see this happening).

• The Federal Reserve Board will issue standards to decide on reasonable and fair fee levels.

• There will be no more “2 cycle billing” — this is pulling charges from two billing cycles when assessing interest, which would obviously increase interest payments.

Requires fair application of payments

You know how, when you take out a cash advance on a credit card, the interest rate suddenly pops up from 10% to something excruciatingly high, like 23%?  Then, when you go online and try to pay off the cash advance, lo and behold there is no way to break up your payments to pay off the higher interest portion first.  Your payment is automatically applied to the lower interest balance, which can really screw you over if have a large balance that you can’t pay off in full.

Now credit card companies will be forced to apply any payment you make to the highest interest earning portion of your balance.

Provides sensible due dates and time to pay

Right now credit card companies are only required to send out billing statements 14 days prior to their due date, resulting in a higher chance that you’ll send in the bill late.

The reform mandates that they send out statements 25 days prior to the due date to give consumers sufficient time to receive and pay their bill.

Protects young consumers

Remember when you signed up for that credit card in college and got a free t-shirt and a meal coupon for signing your life away?  Credit card companies are going to have a harder time pulling this one off now.

Young consumers (under the age of 21) must have either a co-signer above the age of 21 on the account, or must have an independent means of repaying extended credit: ie not daddy’s pocket.  Furthermore, they won’t be able to increase the interest rate on cards with cosigners without the written consent of the cosigner.  They’ll also be restricted from sending pre-screened offers to anyone under the age of 21 and exchanging gifts for filling out applications on campus.

While this most likely won’t stop lots of kids from getting credit cards too early, it will certainly make it more difficult and could lower the amount of credit students are approved, especially since risk will be taken more into account.

*These changes should go into effect within 9 months.

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Prepaid Discover Card Keeps Spending in Check

Jeremey over at GenXFinance reviewed the new Discover Prepaid Debit Card.  The card is focused on teaching teenagers about controlled spending and maintaining balance limits, which is great.  But what about those Gen X and Gen Y’ers who don’t trust themselves with their plastic?  A good way to impose restraints on unruly spending?  We think so.

After interviewing the founders of Thrive (interview tk), the free online PF management site, Avi Karnani (CEO) mentioned that at a recent speaking engagement at a university, three girls in the front row went as far as to say that they distrusted themselves with money so much so, that they would welcome a card that somehow shocked them whenever they were about to make a purchase.

We’ve discussed bad spending habits that spiral into disorders, and this seems to fit the bill pretty well.  But if there are people suffering from a shopping addiction, imposing stringent spending limits could very well be a workable solution.  I doubt anyone is going to come up with a credit card that shocks you into financial submission, but having a card that automatically cuts you off at a certain limit could at least pose such an embarrassing situation that one would be unlikely to repeat it.

The Discover Prepaid Debit Card does something like that by allowing cardholders to:

• have the ability to set daily, weekly and monthly limits
• set restrictions for certain stores or types of stores (ie – clothing stores, bars)
• email and text activity alerts (which could work really well if you’ve enlisted a friend or relative to hold you accountable for your spending)

And since there are downfalls to all that is good, the cons for the card are pretty much what you’d imagine: Fees.

• monthly fee of $5 (or $50 annually)
• .50 ATM transaction (with 4 free transactions per month)
• statements by mail cost $5

It seems like it might be a bit of a hassle to set up; however, if you’re serious about putting some intense restrictions on your spending, this card offers some pretty cool features.  Being able to block yourself from making purchases from a store that you have a habit of letting loose in is a pretty smooth option, and one that I haven’t seen from any other credit companies.  But what would really be great is if this started a trend with other banks and credit lenders — allowing you to block certain stores and impose daily spending limits on cards that you already have.

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