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

March 2012


It’s time to plan your holiday travel. That may mean cashing in the travel rewards you’ve accumulated on credit cards — or it may mean starting to use a travel rewards credit card. Chances are you spend money on some necessities, and when you do, tailoring the rewards you receive to your travel needs could end up financially benefiting you and your family even more than a cash back credit card might. Keep in mind, of course, that increasing your spending just to earn rewards doesn’t make sense, and it would be worse if you had to pay interest on your balances.

When you have controlled spending that you can afford, and you pay your credit card bill in full and on time every month, you can offset your costs of travel by earning rewards. Using the travel rewards credit card that best matches your travel needs for the spending you would be doing anyway could save you hundreds or thousands of dollars over the course of a lifetime. For example, some cards offer free flights and hotels while others can soften the blow of foreign transaction fees.

Listed below are the best travel rewards credit cards available today. If you’ve got a card you think deserves to be on this list, let us know and we’ll add it.

Editor’s choice

Chase Sapphire Preferred®. The Chase Sapphire Preferred card offers a bonus after you spend at least $3,000 on the card in the first three months. That reward comes in the form of 40,000 bonus points, which can be redeemed for $500 in travel booked through Ultimate Rewards. When you book through Ultimate Rewards you can get 20 percent off airfare, hotels, car rentals and cruises. Additionally, you can earn double rewards on travel and dining at restaurant purchases. The Chase Sapphire Preferred card has a $0 introductory annual fee for the first year, $95 thereafter. There are no blackout dates or restrictions of any kind when using your rewards points.

For more about the Chase Sapphire Preferred Card 40,000 bonus points introductory offer, visit my Chase Sapphire Preferred Card: 40,000 bonus points review.

Starwood Preferred Guest® Credit Card from American Express.. The Starwood Preferred Guest Credit Card from American Express continues to be one of the best travel reward credit cards you can find. For a limited time, offer expires 6/30/2014, you can earn 10,000 bonus Starpoints® after making your first purchase within one year of card approval and another 20,000 bonus Starpoints can be earned after you spend $5,000 on eligible purchases with your new card in the first six months of Card Membership – combined that would be up to 30,000 bonus Starpoints enough for a weekend getaway at a Category 4 Hotel like the Westin Savannah Harbor Golf Resort & Spa or a six night stay at a Category 2 Hotel. Some hotels may have mandatory service and resort charges.

With this card you can earn up to 5 Starpoints for every dollar of eligible purchases charged directly at hotels and resorts participating in the Starwood Preferred Guest program – that’s 2 Starpoints for using the Card in addition to the Starpoints you earn as an SPG member. Earn 1 Starpoint for all other purchases. When redeeming your points you can select from over 1,100 hotels and resorts in nearly 100 countries and for flights on more than 150 airlines with SPG Flights, with no blackout dates. Some hotels may have mandatory service and resort charges.

The Starwood Preferred Guest Credit Card from American Express has a $0 introductory annual fee for the first year, $65 thereafter. Terms and Restrictions Apply.

PenFed Premium Travel Rewards American Express® CardPenFed Premium Travel Rewards American Express® Card. The PenFed Travel Rewards American Express Card is like no other in terms of rewards, offering consumers 5 points per dollar spent on airfare purchases. If you spend at least $2,500 within the first three months of card ownership, you’ll earn 20,000 bonus points. At least one reward point per dollar will be earned on all other purchases. The PenFed Premium Travel Rewards American Express® Card does not have an annual fee. There is a promotional introductory balance transfer APR of 4.99 percent for 48 months on balance transfers made between July 1, 2014 through September 30, 2014 with a balance transfer fee which will cost a relatively low 3 percent for each transfer. After September 30, 2014, the APR for any new balance transfers will vary with the market based on the Prime Rate and the APR is currently at 9.99%. This transaction is subject to credit approval. You must be a PenFed member to submit an application for this credit card, but if you are not associated with the military, the American Red Cross, or any number of qualifying organizations, a one-time $15 or $20 membership donation to the Voices for America’s Troops or the National Military Family Association will do the trick. Keep in mind membership to the credit union does not guarantee you will be approved for one of their credit cards.

Capital One® Venture® Rewards Credit Card. You earn 20,000 bonus miles on your Capital One Venture Rewards Credit Card after you spend $2,000 on purchases in the first three months of owning your card. You can earn double miles on every purchase, making this card one of the best travel rewards credit cards available today. The Capital One Venture Rewards Credit Card has an introductory annual fee of $0 for the first year, $59 thereafter, and Capital One does not charge foreign transaction fees for any of their cards. This means if you spend money on international purchases, you won’t receive the typical 1 percent to 3 percent fee.

Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author’s alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.

Photo: Kossy@FINEDAYS

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This is a guest article by Jennifer Calonia, Junior Editor at GoBankingRates. In the article, the author offers suggestions for making spring cleaning work for you.

We are officially one week into spring, and many are shedding winter stagnation for more productive ways to save money — and earn money — using items around the home. Spring cleaning gives Americans an opportunity to revive their finances by playing salesman with forgotten and unwanted stuff.

Did you stumble upon a crock-pot from a Black Friday sale that you’ve yet to use? Turn impulse buys into cash in your pocket, instead of letting appliances and other belongings go obsolete or outdated. Finding items for sale in the garage or attic now can help you make as much back on your purchase as possible.

There are many ways to sell spring cleaning finds that are straightforward and take little time. Some of the most important decisions to make when selling your stuff is knowing what to sell, how to sell it and for how much — establishing these three critical factors can determine how much money ends up back in your bank account.

Have items for sale? Here’s what to do

Your selling approach can impact how much you earn on a specific product, so following the right game plan is crucial:

  1. Selecting items to sell. When deciding on which items to sell, it is helpful to create three different piles for donations, yard sales and online sales. Just because you found an abandoned tea bag plate in the cupboard doesn’t mean it’s worth the time to post it on eBay and absorb packaging fees for a $5 sale. Items like a partially used spiral notebook, crayons and well-worn clothing are better served in the donations or yard sale bins, while big-ticket items like an iPhone, leather jacket, new running shoes or a coffee maker will bring higher sales online.
  2. Choosing your audience. There are many ways of communicating to buyers that you have items for sale. Each of the most popular resale options have their pros and cons, so determine which is a practical selling approach for you, depending on what you’re selling and your resources.

    • Yard sales: Like other selling avenues, yard sales are typically hit-or-miss. A benefit of hosting a yard sale is that you’re able to negotiate prices with buyers in-person and can showcase your merchandise in one location, on one day, to get the sale done at once (ideally). The big disadvantage to yard sales is that it eats up a lot of your time. Not only do you have to stand guard on your lawn for potential shoppers, but advertising your sale is a time-consuming, yet necessary, factor for success. This includes posting your yard sale to the classifieds or Craigslist, making street signs and creating price tags or signage for your items.
    • Craigslist: This community listing is a great place to sel big items like a snowboard or toaster oven, when you don’t want to spend money on shipping. To save the most money and keep the profits of the sale in your wallet, try dealing with buyers in your immediate location so you don’t lose money on gas. While Craigslist is a free service, sellers must be prepared for possible haggling (unless the post clearly states the price is “firm”) and be able to meet the buyer face-to-face in a public location.
    • eBay: For over a decade, eBay has been a common selling platform for those with either valuable items for sale, or are selling new items like unwanted gifts. For example, I purchased two new brake pads at $85 each, but sold my car before I got a chance to install them. eBay was a better audience for this type of sale because there’s a higher chance I could get close to my original purchase price, and shipping costs were not budget-blowing. When dealing on eBay, however, there are a few basics to keep in mind for a successful transaction and sale.

Name your price

Before setting up a yard sale or creating a post online of items for sale, conduct a quick search online to see how much similar items are being priced. Remember, there is a difference between being flexible and being hustled. By knowing the price range of each item you’re selling and the lowest amount you’re willing to accept to part with your goods, you are setting yourself up for a fair deal.

Keep in mind yard sales and Craigslist deals will likely present the most back-and-forth price negotiations, as eBay allows sellers to set a reserve price if necessary, which is why you need to have a lowest price-point established ahead of time.

All it takes is a free Saturday to get your spring cleaning underway. Start fresh this spring with a tidy home and a robust savings account by parting with the clutter in your life.

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Since 1966, the Higher Education Research Institute has been conducting a study of first-year college students to determine personal goals and values. This collection of data has offered research a chance to see how priorities change over the years, and there are striking generational differences in the results. Recent research at San Diego State University combined the data from this research with additional studies, and the results were published in the Journal of Personality and Social Psychology.

The most striking generational difference is the change of relative importance of “being very well off financially.” 44.6 percent of baby boomers considered this goal essential or very important. Through the period when Generation X entered college, 1979 to 1999, 70.8 percent of college freshmen believed it was essential or very important to be well-off. For millennials, or Generation Y, with students entering college from 2000 to 2009, this rate increased to 74.4 percent. In 1978, being rich ranked 8th among all the goals listed as choices in the survey, and since 1989, this goal has consistently ranked first.

Other goals on the list that lost ground due to the surge in the desire for financial success above all else include developing a meaningful philosophy of life, declining in importance from 73 percent to 44 percent and keeping up with political affairs, declining from 50 percent to 35 percent. At the same time, some goals that may not be directly related to being rich increased. Creating artistic work (painting, sculpting, decorating, etc.) increased from 15.5 percent to 16.0 percent from baby boomers to millennials. Influencing social values increased from 32 percent to 40 percent.

Why are young people significantly more concerned with financial security, and if this concern is so much higher, why is financial literacy in young people lacking to such a degree as reported constantly in the media including financial blogs?

I see two significant influencers of attitudes in college freshmen. The first is a reaction from their parents’ attitudes. Baby boomers’ parents might have lived through the Great Depression, perhaps as kids. The experience of financial difficulty sticks with this generation as they mature and have families of their own. While one reaction to parents whose philosophies of money have been shaped by hardship would be to put an extra emphasis on financial independence within a family, it’s more likely that financial struggle helped people understand that there is more to life than having money, and this is the attitude that was passed down from one generation to the next.

As the baby boomers built their own success as adults and benefited from the clear economic expansion after World War II, financial success was within reach and became a new goal. Suburbs blossomed, and television opened people’s minds to consumer culture. This openness combined with the ability to earn enough money to cover more than just the necessities shifted the culture, and these attitudes weren’t unnoticed by baby boomers’ children, Generation X and millennials.

The second significant influencer is popular media. As mentioned above, the availability of television shaped American attitudes. National programs offered millions of families a glimpse into the best of what the consumer culture had to offer. It wasn’t just Lifestyles of the Rich and Famous, it was the popular sitcoms that projected an idea of what life should be like in the home. I noticed during the recent recession, television programming tended to reflect more financial escapism. People seem to enjoy watching programs featuring rich and upper-middle class lifestyles, and this type of programming has flourished in recent years.

A combination of these influencers likely contributed to Generation X’s and millennials’ stronger focus on their goal of “being well off financially.” There is still a broken connection between this goal and the behaviors that help individuals reach the goal. Consumer debt is still a problem. College graduates lack understanding of basic financial principles, and often make mistakes that may or may not be corrected by the time they start families of their own. Perhaps the real goal is not being well-off, but appearing well-off. When financial independence seems out of reach, young people are willing to settle for looking or feeling rich. This is an approach focused on the surface, just appearances, rather than one based on making the tough adjustments required to fix the fundamental financial issues. It’s faster, more convenient, and outwardly identical to a point.

It’s perhaps why people who play the lottery are more likely to have low incomes, and maybe it contributes to the appearance that people living on welfare might have expensive-looking phones or other accessories; in a world without hope for financial success, the only way to satisfy the need for “being well off financially” is through objects acting as external symbols of wealth.

Photo: chrisdlugosz
American Psychological Association, via MainStreet

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I’m excited to be participating in today’s Roth IRA movement. There’s more information about this movement towards the bottom of this article.

I wish someone told me about Roth IRAs when I got my first real job. I was a teenager, working in a local Radio Shack store, even though I didn’t even know what a soldering gun was. So many years later, it’s hard to know what would have gone through my mind if someone were to start talking to me about investing part of the money I was earning. I had a bank account, but I’m sure most of the money I earned from working was spent on entertainment with friends. I wasn’t thinking about the future, and I’m not convinced that someone pointing me to an article about a Roth IRA would have changed my approach.

But it might have.

It would have been impossible for me, anyway, unless I had been visited by a time-traveler or I had received a book from the future.

Roth IRAs weren’t invented until years later, while I was in college. (This detail isn’t that germane to the point, as traditional IRAs were available and would have in most respects been appropriate for saving for the future.) Anything other than stock trading was missing from my understanding of investing. Considering Roth IRAs existed by the time I graduated college, why didn’t I know about Roth IRAs when I started my first job after that point? Well, they still weren’t widespread by then, and I was earning too little money to even conceive of dedicating some of it to my future.

I would have been wrong, of course, but I only know that now with hindsight. The problem with trying to educate young people about investing for the future is that it’s easy for them to be stuck in the mindset that other pressing needs deserve attention above investing for the future. Until someone’s mind is open to the possibility of financial security in the future with today’s sacrifice, any information about investing for the future, with Roth IRAs or not, just won’t have a strong effect.

Today, though, there are ways to make this transition easier. The benefits of investing for the future no matter how little an amount have been discussed on Consumerism Commentary ad nauseum, but they bear repeating. I’m not really discussing retirement as a goal. Most discussion about investing for the future revolves around retirement, but it’s unclear that the traditional concept of retirement will be relevant thirty, forty, or fifty years from now.

  • Investing in a Roth IRA with your first job creates a new habit that lasts your entire life.
  • The Roth IRA, with its ease of access, is a perfect gateway to investing for the future.
  • When you intentionally invest in a Roth IRA with every paycheck, you can easily see the effect your choices have on your wealth.
  • When you create an automated transfer plan from your checking account to your Roth IRA, you take some of the stress out of investing.

Good investing habits start with the Roth IRA because it’s so easy. There’s no concern about tax-related issues, because you invest with “after-tax” money. Minimum balances at brokerages are typically low for Roth IRAs because these companies know that these types of accounts are best used by people new to investing. The one step, opening a Roth IRA, opens a world of financial possibilities, and it’s possible to open an account with as little as $100 per month.

It’s easy to blame ignorance when we see young people in their first jobs, earning money but not saving for the future. Here are some typical anti-youth misunderstandings:

  • “If only they had a financial education and understood that the earlier they invest in the stock market, the wealthier they’d be four or five decades in the future, they’d want to invest immediately.”
  • “Today’s kids are focused only on the ‘now’ and don’t think about their future needs.”
  • “The public educational system is to blame for the lack of solid financial knowledge among today’s youth.”
  • “Why can’t parents take some responsibility for instilling good financial habits in their children?”
  • “Get off my lawn!”

There is some relevance to at least four of these misunderstandings, but what makes them misunderstandings is that the point is really about cognitive development. By the time most teenagers have their first jobs at fifteen, sixteen, or seventeen years old, their brains are not yet equipped to consider the concepts of investing for the future. Of course, different individuals experience different rates of cognitive development, but attempting to feed someone knowledge before his or her brain is ready to grasp some of the higher concepts necessary for full understanding is a waste of time.

You can hope that some of the ideas stick with a child long enough for the connections to be made later in develop. That’s why some parents teach and model good financial habits with their children starting in kindergarten or earlier, but when it comes to the practical side of investing, adolescents in their first jobs are often not mentally prepared. As teenagers seeing for the first time how they have control over their lives outside of their parents’ house, there’s a tendency to want to make decisions independently, and without the influence of an adult preaching about prudent financial habits.

In their minds, adolescents may have already weighed the benefits of keeping more of their income for use today against the benefits of saving for the future and decided, independently, that their immediate needs are more pressing. They may believe they’ve already made the right decision.

I don’t know if I can propose a solution. Investing in a Roth IRA is a critical step towards financial freedom because of its ease, accessibility, and habit-making features, but if a young individual doesn’t apply this approach during the critical time when he or she first begins earning income, the barrier grows with time and it can be more difficult to start later on. The numbers have always been obvious; a five- or ten-year head start in investing in the stock market almost always pays significant dividends when it comes time to draw upon that nest egg, but these words are meaningless to young people who have other concerns.

Taking a slice of the paychecks from the first job can be done with little encroachment on expenses; directing 5 percent of each paycheck to a Roth IRA would hardly hurt at all. With a minimum investment of $100 each month, any working kid could find a way to make it happen, if not immediately, then after saving up for a few months and starting with a lump-sum rather than a periodic investment.

It’s not going to happen on its own, though, and it’s still unlikely to happen even after reading an article extolling the virtues of investing and saving for the future. It’s going to happen when the synapses in the brain fire in such a way that saving for the future makes sense and when sacrifice, no matter how small, is an acceptable option. In some ways, the latest guidelines that encourage automatic enrollment in 401(k) plans see this problem and have arrived at a solution: you’re busy thinking about other things, so we’ll get you started automatically. There’s always the argument that this policy benefits the financial industry more than the investors, but it does benefit the investors.

How do you propose encouraging young individuals in their first jobs to begin saving for the future with a Roth IRA?

Thanks to Jeff Rose, a Certified Financial Planner, who initiated today’s Roth IRA movement, involving more than 130 partners, all of whom are taking time today to discuss Roth IRAs on their websites, newsletters, or other publications.

Photo: stevendepolo

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When Your Friends Become Social Sellers and Multi-Level Marketers

by Luke Landes
4385857854_f4fdbab417_b[1]

I can’t completely fault companies like Amway, Mary Kay, and Lia Sophia. They know that friendship results in two important qualities: trust and guilt. These two qualities are important to companies because they make the process of selling products much easier. I find it relatively easy to politely decline — and hang up on if ... Continue reading this article…

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Podcast 153: Life Happens

by Luke Landes

Today on the Consumerism Commentary Podcast, Bryan J Busch talks with Mitch Weiss, author of Life Happens: A Practical Guide to Personal Finance from College to Career (available from Amazon.com on the Kindle). They discuss many of the topics young people need to know in order to avoid the pitfalls of personal finance. Consumerism Commentary ... Continue reading this article…

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Reader Question: Resolving a Dispute With a Brokerage

by Luke Landes

From time to time, Consumerism Commentary readers contact me with questions. I am not an investment professional or a financial planner, and I don’t offer advice related to investing other than my general thoughts on the topic. The questions I receive range from basic investing details like government-regulated limits for investment account types to how ... Continue reading this article…

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Prenuptial Agreements for Cohabitants

by Luke Landes
Relationships couple

I’ve discussed whether couples should sign a prenuptial agreement before marraige recently. A good prenup can protect both individuals in the couple if a marriage were to result in irreconcilable differences. Signing a legal document of this type could be helpful if the couple owns substantial assets or if there is a wide disparity in ... Continue reading this article…

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TIAA Direct High-Yield Savings Account

by Luke Landes
TIAA ATM

Just when you thought the era of new online banks splashing into the market was over, TIAA-CREF is on the hunt for customers’ deposits. TIAA-CREF Trust Company, FSB was established in 1998, and the bank just began offering deposit accounts in the last month. The products, under the name TIAA Direct, are intended to compete ... Continue reading this article…

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Taxpayers Earned $25 Billion on Treasury’s Mortgage-Backed Securities Bail-Out

by Luke Landes
United States Treasury

At the height of the recession, President George W. Bush and the congress authorized a bail-out of banks and investment companies headed for failure. In a similar plan to bail out Fannie Mae and Freddie Mac, the government authorized the Treasury moved forward with the plan to stabilize the financial industry, and to an extent ... Continue reading this article…

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Mets Will Pay $162 Million to Settle Madoff Suit

by Luke Landes
Jose Reyes Mets

As a Mets fan, though these days I try not admit being so, it’s bittersweet to see the organization settling its legal troubles relating to Bernie Madoff’s Ponzi scheme. On the one hand, if the owners of the Mets were found guilty of ignoring the possibility of fraud, it could have spelled the end of ... Continue reading this article…

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The Dangers of Motivating Kids Through an Allowance

by Luke Landes
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Parents who offer their young children an allowance or pocket money are helping to introduce the concept of money at an age when they are susceptible to ideas they will hold for the remainder of their lives. It’s a good idea to allow kids to gain exposure to to concept and application of income and ... Continue reading this article…

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Podcast 152: LearnVest

by Luke Landes

Today on the Consumerism Commentary Podcast, Bryan J Busch talks with Ainslie Simmonds, Chief Marketing Officer of LearnVest. They discuss the free and paid features of LearnVest, how people are using the service and what sets it apart from other methods of financial planning. Consumerism Commentary Podcast LearnVest: S06E21 / 176 Download – RSS – ... Continue reading this article…

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How Do You Preserve Your Money?

by Luke Landes
Money Bags

Preservation of capital is an important aspect of any financial plan, but in today’s economy, this is impossible without taking on some risk. At one time, you could confidently place any money you might need within one year in a high-yield savings account and be relatively confident that your money could buy at least as ... Continue reading this article…

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Best Balance Transfer Credit Cards, August 2014

by Luke Landes

Credit card debt is never fun, and developing a plan to get yourself out of the debt can be exhausting. Credit cards commonly charge interest rates of 20 percent or more, and if you miss a few payments the default rate can be even worse. Fortunately, if your credit is still decent, there is a way ... Continue reading this article…

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Are Stock Gains and Losses Real?

by Rob Bennett
Dollar and calculator

This is a guest article by Rob Bennett, a personal finance journalist and author of the blog A Rich Life. Rob developed the Passion Saving approach to money management; Passion Savers save not to finance their old-age retirements but to enjoy more freedom and opportunity in their 20s, 30s, 40s, and 50s. You naturally get ... Continue reading this article…

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Three Banks and One Insurer Fail Fed’s Stress Test

by Luke Landes
Citi Checking Account Piggy Bank

After the recession, the Federal Reserve developed a stress test for banks and financial firms too big too fail. The stress test looks at the financial condition of these corporations and simulates a new recession. Under the simulation, based on a worst-case scenario, not an actual economic forecast, banks pass the test if the companies ... Continue reading this article…

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Barclaycard Ring MasterCard Sets Its Features Through Crowdsourcing

by Luke Landes
Crowd

Barclaycard, a credit card issuer that primarily furnishes branded credit cards, like the Best Western Credit Card and the Carnival Credit Card, is experimenting with a new business model with a brand new card called Barclaycard Ring. I have to wonder if the “Ring” in the name of the credit card refers to a circus, ... Continue reading this article…

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Should the Government Ban Banks’ Payday Loans?

by Luke Landes
Check

When we think of predatory lending practices, the first thought that often comes to mind is the payday loan industry, catering to people barely, if at all, living paycheck to paycheck. Payday loans service communities with an aversion or without a need for or trust of the mainstream financial industry. Offering short-term loans designed to ... Continue reading this article…

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Podcast 151: ValueMyStuff, Double the Difference

by Luke Landes

Today on the Consumerism Commentary Podcast, Bryan J Busch talks with Patrick van der Voorst, founder of ValueMyStuff, and Tom Dziubek speaks with Ralph Pinto from Chase about their participation in the Drive to End Hunger campaign. Consumerism Commentary Podcast ValueMyStuff / Chase Double the Difference: S06E21 / 178 and 168 Download – RSS – ... Continue reading this article…

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