As featured in The Wall Street Journal, Money Magazine, and more!

2010


Whether you’re giving or receiving gift cards, it’s usually a pretty positive experience. Both the giver and receiver are often satisfied because most gift cards allow the receiver to spend money in the way they want, as long as the giver has taken the receiver’s interests into account.

Sometimes a gift card can miss the mark. If you have ever received a gift card that is not useful to you, you might be familiar with the frustration. Rather than spend money on something you don’t want and more importantly don’t need, take a look at Plastic Jungle and cash in your unwanted gift cards.

Sell your gift cards for cash $$$!PlasticJungle.com is an online marketplace for everything related to gift cards. If you have gift cards you need to sell, Plastic Jungle will buy them from you for up to 92% of their value. If you need to buy gift cards, you can do that as well, and often for a significant discount.

Even though this service is fairly new, the merchants serviced by Plastic Jungle number in the hundreds. If your gift card is from a national retailer or restaurant, they will gladly accept it. In the rare chance that no offers are provided for your gift card, you always have the option of using eBay to sell your gift card at auction.

Selling your gift card with Plastic Jungle is simple. All you need to do is enter the following information:

  • Gift card merchant name
  • Gift card amount ($25 minimum is required)

After you’ve completed these quick steps, Plastic Jungle will show you their offers for purchasing the gift card from you. If one of the offers is appealing, accept the offer. The service has several options for paying you for your card. The PayPal option provides an instant payment to your bank account, while a check will take a few days to process. Plastic Jungle pays for postage, so mailing in your gift card to the site is free.

Buying gift cards is just as easy. When visiting Plastic Jungle, you’ll see a long list of gift cards for sale from hundreds of merchants. Each gift card is discounted up to 20% off its face value, and purchasing a card is simple and straightforward. Provide your credit card information to complete the purchase. In a few days, your gift card is on its way. Like the gift cards that you sell to the site, gift cards you buy from this service will be shipped for free.

If you find yourself in the frustrating position of having a gift card you won’t use, check out PlasticJungle.com. You might find a help someone who can use the card and earn some cash at the same time.

Sell your gift cards for cash $$$!

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One of the most popular services available surrounding tax season is also one of the most expensive. Refund anticipation loans (RALs) are great products from a lender’s point of view; they are low risk and they are expensive. From a customer’s point of view, they provide a means to get cash when a household files its tax return rather than waiting for a check from the IRS. Tax preparation services like those offered by H&R Block sell these expensive loans in partnership with banks and other lending institutions. Since most customers who use these products need cash right away, they seem to be more willing to pay the high fees associated with these loans.

With the IRS sending direct deposits faster than ever, one might wonder why these products, and their cousins, the refund anticipation checks, are so popular. Millions of Americans simply don’t have bank accounts. Living paycheck-to-paycheck, these families see little need to store their money somewhere safe because they have nowhere to store it. I am amazed that 40% of H&R Block’s clients used these products last year considering the high fees. I consider refund anticipation loans one of the worst forms of debt, second only to pay day loans.

While I understand the function of thees products in the marketplace, I don’t like the concept of charging someone in a difficult financial situation to borrow his or her own money — and charging the borrower a high fee from an annual interest rate perspective. In a perfect world, no one would be living paycheck-to-paycheck, unable to make the rent or mortgage payment, and one step away from homelessness, but the reality is that many households are facing these troubles.

In 2011, H&R Block will not be offering refund anticipation loans. A federal regulatory agency, the Office of the Comptroller of the Currency (OCC) has barred HSBC from offering these products. HSBC was H&R Block’s exclusive partner for refund anticipation loans. The customers who would be interested in these products will be directed to refund anticipation checks as a similar alternative, although it doesn’t provide the cash as quickly as a loan.

HSBC is not the only bank offering refund anticipation loans, and I am unsure why the OCC has singled out this one bank. If the bank was handling the sales of these loans in a reputable manner, the regulation should be applied consistently across all institutions. For H&R Block, these loans provided a significant portion of revenue, $130 million in 2010. Earlier this year, when HSBC was considering on its own not offering the refund anticipation loans to H&R Block, the tax return agency sued the bank.

Unless the situation changes, competitors like Jackson Hewitt will still be able to offer this product to their customers. TurboTax does not offer refund anticipation loans.

H&R Block, Wall Street Journal, Fox Business

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Whenever you make a purchase with your credit card, the wise move is always to pay off the purchase before the bill is due to avoid interest charges and late fees. If you know that won’t be possible in the short-term, the best thing you could do is keep your interest payments low by choosing the card with the lowest interest rate. The PenFed Promise VISA Card can make sure that you pay as little interest as possible, with one of the best purchase APRs currently available.

PenFed Promise VISA CardThe PenFed Promise VISA Card offers cardholders an introductory purchase APR of 7.49% for 36 months. Unlike most credit cards where the purchase APR jumps after the introductory period, this card only increases slightly, to a variable rate based on the Prime Rate currently at 9.99% variable APR. The purchase APR depends on the prime rate, so if the prime rate increases, you can expect your credit card interest rate to do the same.

Unlike other credit cards, the PenFed Promise VISA Card does not offer a rewards program. Why in the world would you decide to use this card over another that can earn the user cash back or other benefits?

It comes down two key features absolutely no fees, and the interest rate. If you’re planning a big purchase and know you won’t be able to pay the balance in full immediately, this is the card to use. Other credit cards charge between 11.99% and 27.99% depending on your credit history, and if you drag out minimum payments on those cards, your interest payments will be large. While you would receive a substantial reward on another card, the interest you will fork over will most certainly cost you more than the reward you stand to receive. In fact, the difference could be thousands of dollars over time.

The PenFed Promise VISA Card does not carry an annual fee, so the card is always free to own. You need excellent credit as well as meeting other credit standards set by PenFed and you are required to be a member of the Pentagon Federal Credit Union (PenFed) in order to be considered for approval for this card. To be considered for membership into the credit union here are some examples of eligibility criteria:

  • Member of the United States Military or Uniformed Services
  • Member of an eligible military association
  • Employed by the US Government
  • Employed by an eligible place of business
  • Family member of someone in the United States Military
  • Employee or volunteer of the American Red Cross
  • Reside on a military base
  • Make a one-time donation to the National Military Family Association
  • Make a one-time donation to Voices for America’s Troops

This year, one of your many New Year’s resolutions should be to pay absolutely no credit card interest. For those unable to obtain this goal, consider the PenFed Promise VISA Card for big purchases.

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When asked about what it means to be financially independent, most people think about retirement and the amount of money needed in the bank and investments in order to be worry-free for the remainder of their lives. For many, this is why we work, why we suffer through a job we may not enjoy. The reward down the road is worth putting up with micromanaging supervisors, unfair office politics, and uneducated clients. The pattern and habit of earning and saving will help us reach the point at which we can lean back, relax, and live off our nest egg until we die.

The key to the above is that nest egg. If it’s large enough, it can sustain any life through its expenses. How large? Traditionally, experts have suggested taking what you believe your expenses would be in a year of active retirement and multiply that by 25. If the result were, say, $1 million, then that is the amount you should have invested in a broad equity index now in order to be able to withdraw 4% this year and adjust that amount for inflation each your for the rest of your life. Theoretically, you’ll never run out of money. If your first year of living off your nest egg won’t occur for another 30 years, you’d want to adjust your first number, what you believe your expenses would be that first year, by estimated inflation. A necessary nest egg of $1 million today could be more like $5 million down the road.

This type of financial independence doesn’t inspire completely security; stock market crashes could wreak havoc on the supposed 4% safe withdrawal rate. That’s why people like Suze Orman, who have millions of dollars to put away, put their own money in bonds — a much less volatile investment option — but need only 2% or less of their nest egg each year to meet their expenses. And Suze hasn’t stopped working; she’s financially independent now but still writes books and speaks publicly.

You don’t have to stop working completely in order to be financially independent. Another approach to financial independence focuses on passive income sources. That’s not much different from the above example of living off your investments; the gains and dividends that the stock market as a whole returns over time can be seen as passive, if not for the fact that you still need to pay attention to your investments and react to the market in some cases. In fact, most of the income sources generally labeled passive and somewhat active. You could create a business like real estate empire, where you could live off the rent income, sourcing all the “hard work” to contractors and management companies. Even reducing your work, you can never be completely hands-free when you run any business.

The key to financial independence may be finding a calling — some type of career you can do — and do well — while earning a living. You may still work for someone else’s company or perhaps build your own company, but the important thing is that thanks to the fulfillment you get from your activities, you may never want to retire.

As flexible and personal as the definition of financial independence is, I can’t imagine a scenario in which someone can be in debt and consider himself financially independent. Being in debt is like having part of your income owned by someone else. You are not free to do what you want with your money because you are obligated to repay a loan of some kind. This includes all the things traditionally classified as “good debt” like mortgages and student loans.

I asked around to gather more opinions about the personal meaning of financial independence. Here are a few of the responses I received on Twitter and Facebook:

  • It means to have a passive income that gives you the freedom to say, “Go to hell!” to your boss (via @rullopat). I prefer tact, but the underlying message is the same.
  • Sleeping on a big pile of money, because you’re too rich to be bothered with buying a bed (via @gl3media). If Scrooge McDuck were alive today, he’d be smiling.
  • Financial independence is being able to do something you want without worrying about the financial consequences. Can be a candybar for some, vacations for others (via @DanielPacker). Anyone can do something without worrying about financial consequences; in fact, that’s how many people end up in debt. The difference is that with financial independence, you know what the financial consequences are, and you know you can handle them.
  • There’s being financially independent of others, meaning you don’t need cash from Mom and Dad. Or being independent of finances which would mean that your passive/investment income is greater than your expenses (via @calebhicks) This is a great distinction. You could say the college graduate who finally moves out of his parents’ house is now financially independent, but that’s only one of the first steps.

To me, the core of financial independence is being able to make important life decisions without the constraint of your finances. How do you financial independence, and how do you know when you have achieved it?

I apologize to everyone who left a comment on this article on December 30. I needed to restore a day-old back-up of Consumerism Commentary and all of the comments for about 24 hours were lost.

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New Trend: Moving In With Your Parents

by Luke Landes

The recession can shape a generation. With many college graduates over the past few years unable to find jobs right away, many opted to move from campus back home with mom and dad. The proliferation of this trend has led to concepts like the Boomerang Generation and Prolonged (or Extended) Adolescence. Both refer to the ... Continue reading this article…

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Gas Prices: Are You Ready for $5.00 per Gallon at the Pump?

by Luke Landes
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One of the benefits of no longer having a daily commute is I’ll be spending much less for fuel in my car. When I traveled to an office five days a week, and even when my travel schedule was changed to four days a week to allow one day for remote access, I filled up ... Continue reading this article…

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Don’t Get Ripped Off By Auto Mechanics

by Luke Landes

Mechanics are salespeople, and like brokers they often have more knowledge about their products and services than the average consumer. Therefore, they are viewed as professionals and without taking the time to learn about cars, customers have no choice but to trust their recommendations are in the customers’ best interest. Unfortunately, that isn’t always the ... Continue reading this article…

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Goals and Resolutions for 2011

by Luke Landes

Every new year provides an opportunity for self-renewal. The relatively arbitrary custom of recycling the dates on the calendar is like having a second (or a third, or fourth, etc.) chance to change the world. Although its history is a bit murky, the tradition of new years’ resolutions probably stemmed from this feeling. It took ... Continue reading this article…

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20 Ways to Use the Payroll Tax Holiday

by Luke Landes

When Congress passed the Tax Hike Prevention Act earlier this year, it included an economic stimulus in the form of a payroll tax holiday. As Leigh Mutert, CPA explained in our podcast interview, the payroll tax will be reduced in 2011 from 6.2 percent to 4.2 percent. As a result, paychecks will be a little more than ... Continue reading this article…

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Goldman Sachs Will Tie Bonuses to Long-Term Performance

by Luke Landes

A big criticism of Wall Street bonuses throughout and after the collapse of the financial industry has been the idea that executives were awarded over-sized bonuses while their companies fell apart. Wall Street fought back against this criticism, usually with the explanation that bonuses were paid in accordance to contracts that were signed before the ... Continue reading this article…

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Traffic Cameras, Salad Dressing and Capital Losses

by Luke Landes

The snow is falling hard in my corner of New Jersey. After Christmas in Queens, New York, I rushed home last night to stay ahead of the storm. The current weather reports are calling for 12 to 18 inches of the white stuff on the ground by the time the storm has passed. We’ve stocked ... Continue reading this article…

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Podcast 88: Leigh Mutert, H&R Block, The New Tax Laws

by Luke Landes

On today’s episode of the Consumerism Commentary Podcast, Flexo speaks with Leigh Mutert, CPA and Community Manager at H&R Block. Flexo and Leigh discuss many aspects of the new tax laws including the extension of the Bush-era tax cuts, the payroll tax “holiday” and its impact on many self-employed people. Consumerism Commentary Podcast #88 Leigh ... Continue reading this article…

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Quit Your Job in 2011

by Luke Landes

The recession has been tough on everyone, particularly when it comes to the employment situation. The unemployment rate is still high, so we know there are many people who would like to be working but have not been able to find something. Many who are working have settled for jobs that pay less and offer ... Continue reading this article…

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How to Start a Coin Collection For You or Your Kids

by Luke Landes
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Out of all of my favorite interests or hobbies, coin collecting isn’t ranked first. It is something I’ve enjoyed throughout my whole life, however, even if it’s not something that’s been a primary goal or warranted much effort on my part. It is a great hobby for children for a number of reasons. It opens ... Continue reading this article…

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Best Buy Eliminates Some Restocking Fees

by Luke Landes

On the heels of a lackluster sales report during the holiday season, Best Buy has decided to eliminate restocking fees. Until recently, Best Buy charged customers 15 percent of the purchase price to restock an opened item. These returned electronics, if sold, usually feature a sales price of 10 percent off the regular price. It may be ... Continue reading this article…

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Wells Fargo Direct Deposit Advance

by Luke Landes

Consumerism Commentary reader Yana wrote in yesterday to let me know about some changes in the terms for Wells Fargo’s Direct Deposit Advance service. At first, I was surprised that this service exists. At its core, the credit product offered by Wells Fargo is basically a payday loan, though it comes from a reputable financial ... Continue reading this article…

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Evaluating My Progress Against 2010 Goals

by Luke Landes

There isn’t a lot of time left in 2010. As I get older, time seems to move faster. Perhaps now that I am not spending eight or more hours dedicated to a day job, I will be able to slow down the passage of time. With more time, 2011 may be better for me in ... Continue reading this article…

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Readers Gave $8,000 to Charity Since Thanksgiving

by Luke Landes

For the second year in a row, I offered to match Consumerism Commentary readers’ charitable contributions donated during the two weeks following Thanksgiving, up to $5,000. After extending the matching period a third week, and with MoneyCrush‘s offer to match the contributions made between $5,000 and $6,000, we surpassed all goals. After falling slightly short ... Continue reading this article…

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Big Savings for Small Businesses and Shops on Swipe Fees

by Luke Landes

Last week, the Federal Reserve Board announced two proposals for limiting the fees paid to transaction processing companies. MasterCard and Visa would be the most affected if either of these new proposals, set into motion by the Dodd-Frank Wall Street Reform Act, are put into effect. Small businesses and shops that accept debit cards stand ... Continue reading this article…

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Citi® Platinum Select® Card 24 Month 0% Balance Transfer

by Luke Landes

The offer you are interested in has expired. Read our review of other Citi cards.

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