This video from an angry Bank of America credit card holder is making the rounds. It’s an interesting video (and one with a couple of swears), and it illustrates a depressing situation that many people find themselves in. It’s a strident call for action, and she makes some good points, but we would do well to remember a couple of things:

In many cases, credit card debt is self-imposed, and we have created our own bonds.
Credit card companies can legally still do pretty much whatever they want with your terms. They just have to give you 45 days notice now, and …read more

What will happen to interest rates as the economy recovers?

Could an ARM be right for you?

Bernanke has an economic stimulus exit strategy that should, theoretically, limit inflation.

A few months ago, President Barack Obama announced a foreclosure prevention plan called Making Home Affordable. The plan included provisions for those who wanted to refinance, but couldn’t because of their loan to value ratio. Refinancing would be encouraged for those who had a loan to value ratio of between 80% and 105%. The idea was to help those whose home values have dropped in response to housing market troubles.
Unfortunately, the program has been seeing limited success. It relies on voluntary help from mortgage lenders, and it excludes those with even higher loan to value ratios. Yesterday Obama made a …read more

Upon further inquiry a couple days ago (just making sure the payment went through this time), I discovered that this one indiscretion resulted in a default rate of 27.99%. My regular rate on this card is 9.9%. I was furious.

With the Fed rate effectively at 0%, direct interest rate intervention is not practical. So the Federal Reserve has turned to quantitative easing, buying mortgage-backed securities and agency debt.

I received this question via email, regarding the “30% rule” when making your mortgage or rent payment:
I know that you’re supposed to stay around 30% of your income for housing costs per month. Is that 30% of net or gross, and is that only for the housing, or do they recommend staying under 30% for housing and all utilities?
This is an interesting question without a straightforward answer. “They” say many things, but from what I can tell from talking with some other financial types and consulting my common sense, the basic rule is 30% of your pre-tax (or gross) earnings, …read more

My current concern is whether or not to refinance.

Today, the Federal Reserve is widely expected to cut the Fed Funds rate. Because the economy seems to be heading toward recession, the overriding goal is to stimulate the economy. And this means — as far as the Fed is concerned — making it cheaper for everyone to borrow money.
Because our economy runs on consumption fueled by debt, a Fed rate cut is expected to help stimulate the economy be stimulating more borrowing. Here’s one example of how it’s supposed to work for you and the economy:

The Fed cuts its rate, which influences consumer loans (including credit cards). This happens …read more