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

November 2013


Someone I know is boycotting Wal-Mart. I would not be able to boycott Walmart myself, as I never shop there in the first place. My absence from Wal-Mart does not have any effect. I believe I’ve stepped inside the store twice in the past decade or longer, and I don’t remember why. The basis for avoiding the store came from visits long ago, while I was in college, and was reaffirmed by at least one of those visits in the past decade.

The stores are designed like bazaars, the people I encountered were rude and sometimes dirty, and the prices were no better than those I could find elsewhere. That’s enough to keep me away. The fact that the company does not respect its employees is another reason to avoid the retailer, but beside the point of my personal experience and preference.

Again this year, Wal-Mart stores featured brawls and arrests as people fought their way for a limited supply of marked-down items like iPad Minis. The store, and other stores like it, are not completely to blame. Yes, retailers manipulate the market to induce high demand and short supply, and this creates hysteria.

Why stores are open on the holidays.

Which comes first? Are stores, like those that open on Thanksgiving, forcing retail employees to spend less time with their families on this holiday, just responding to consumer demand? Or has the retail industry created this monster by hyping up materialism as a piece of American culture since the late 1940s through advertisements (including product placement in entertainment), changing how people living in the middle and lower classes expect to live their lives? Or has the public in the United States simply accepted this type of commercial messaging without wide criticism of behavior or philosophy?

That we’ve ended up with people trampling and killing others at Wal-Mart, like the incident in 2008, is a sad commentary on the state of American culture. The reasons that got us here are complex and intertwined. No, this type of activity, the mass hysteria surrounding the ever-expanding Black Friday time period, is not representative of everyone in the United States, however bad it looks to the outside world.

I not concerned that my not wanting to shop at Wal-Mart, for the reasons I cited above, makes me seem “elitist.” I also don’t shop in stores on the other end of the consumer spectrum, so I’m confident in the sensibility of my tastes.

“I pledge not to shop on Thanksgiving.”

This year, a popular campaign spread through social media: “I pledge to not shop on Thanksgiving. If I’m shopping, someone else is working and not spending time with their family. Everyone deserves a holiday.” A Facebook friend of mine responded to this campaign by welcoming the retail industry to the world he already lives in as an emergency responder. He, like doctors, firefighters, and police, work on holidays, but that’s understandable. If you’re in the business of saving lives, the calls can come at any time. Retail workers do not save lives. Do they deserve to be home with their families more than first responders do?

Others are calling for the government to intercede and force businesses to keep their doors closed on holidays. It’s an interesting concept; states and local governments have often historically required businesses to remain closed on Sundays. Officially, the reasons for these laws tend to be so employees can remain home with their families once a week, but you can’t ignore that the concept stems from a religious influence on government.

If shoppers led the way by refusing to shop on holidays, businesses would see no choice but to remain closed. But because every shopper wants to believe they’re scoring a deal, enough will take advantage of every opportunity. There will never be the a popular protest large enough to force stores to remain closed, but there will also never be the support for laws to do the same thing. We are headed towards a society where the retail industry will be open 24 hours a day around the holiday frenzy season.

Maybe working on holidays won’t be considered to be such a social problem in the future, if retail workers are replaced by robots (and if assaulting a robot becomes a punishable offense — there are many variables to consider). The prevalence of online shopping has probably prevented the adventures in brick-and-mortar shopping from being more deadly than it has been.

But isn’t “saving money” good for Americans?

It’s amazing that with all this focus on so-called saving money, Americans aren’t in better financial shape. Spending with discounts and bargain-hunting is far removed from “saving money.” Of course, it’s not amazing at all, because the prevalence of advertising and a culture of bargain-scouring results in more spending, not less.

As an individual, and certainly as a Consumerism Commentary reader, you may be able to exercise some control. You’re more likely to wait for only the best deals, buying only what you need, but overall, this approach to promotions, including advertising Black Friday deals and opening early, benefits the retail industry more than the purchasing public.

If these deals didn’t make tons of money for the retail industry, the shopping season would not be getting more intense every year. At the same time, a healthy retail industry is supposedly one of the keys to a booming economy. Then again, what worked in the years after World War II may not be as effective today. Retail profit margins are thinner than ever. Much of the profit goes to the manufacturers who are likely to be based outside the United States.

Can “Small Business Saturday” help?

Over the last few years, American Express has tried its own marketing campaign, supposedly to aid the economy. The company’s Small Business Saturday encourages Americans to spend money on the Saturday following Black Friday — after all their money has been spent, anyway — by patronizing local businesses. These are the businesses who can’t discount prices on the same merchandise found in large stores, but can perhaps offer products you can’t find elsewhere.

Small Business Saturday is however just an excuse to get consumers to use American Express cards more often, so the large financial corporation can increase its profits on swipe fees. Many small businesses do not accept American Express cards because the swipe fees (fees the retailer pays to credit card processing companies for each transaction) are higher than those for Visa and MasterCard, but then again, premium Visa and MasterCard credit cards, like those offering rewards and concierge services, can rival American Express in terms of high swipe fees.

So if you really want to help your local business and local economy, shop from small business as often as possible, and use cash.

How did you handle shopping through this year’s Thanksgiving holiday? Did you go shopping and did it take time away from your families? Did you use a Black Friday outing as a way to bond with your family like Erin did? Are you planning to shop locally on Saturday? Does Cyber Monday exist this year? What can society do to change today’s consumerism-focused situation, if you believe it does need to change? Can boycotting accomplish anything?

Regardless of what you’ve done on the consumer side of your life, I hope you — all Consumerism Commentary readers who celebrate Thanksgiving — had an enjoyable and thankful day.

Photo: Flickr/jbhthescots

{ 13 comments }

To most Americans, Louisiana means great music, good food and some crazy Super Bowl moments. However, keen observers of the credit card industry also know Louisiana as the home of Iberiabank, a solid regional lender that’s been chugging away in cities like New Orleans and Lafayette for more than 125 years. An early adopter of remote banking, Iberiabank offers cards like its Visa Select to consumers with excellent credit all over the country, even if they’ve never been south of I-10.

Iberiabank Visa® Select is the only of Iberiabank’s credit cards that carries an annual fee, albeit a modest one. It’s also the only Iberiabank card with a consistent zero-APR introductory purchase offer, zero percent or 7.50 percent introductory purchase APR for one year from the account open date. After that your assigned purchase rate will apply. Applicants with excellent credit may qualify for one of the lowest variable go-to rates in the country. Even the second- and third-tier APR ranges spelled out in this card’s terms and conditions beat most other cards on the market. Keep in mind other factors, aside from your credit score, may also play a role in the approval process. With a 3 percent balance-transfer fee on each transfer amount and a 12-month introductory balance-transfer APR of either 1.99 or 7.50 percent, this card becomes a good place to park a balance that you know you’ll need to pay off over two or more years. After the introductory period, your APR will be the same as your assigned purchase rate, based on your creditworthiness.

Beyond that, the Iberiabank Visa Select operates like many of the no-frills credit cards you’re used to seeing from national lenders like Chase, Capital One and Citi. Therefore, the real reason you might ever consider this card would be the fact that most of Iberiabank’s larger rivals have merged with each other over the past few decades. By making their best balance-transfer deals available only to first-time customers, some big banks have shut out potential business from consumers who may have once held a card at an acquired institution.

Although banking industry gossip hounds occasionally name Iberiabank as a takeover target for any number of predators, there’s little guarantee that will ever happen. If anything, the bank has used the years since the financial crisis to justify its conservative underwriting approach and to expand its regional branch footprint. Therefore, little Iberiabank looks like a welcome haven for customers who have tried just about every big name in the credit card business.

However, that’s one of the paradoxes that shielded Iberiabank from major damage during last decade’s credit crunch. The kind of consumer who would typically qualify for this credit card probably doesn’t need a destination for a balance transfer. If anything, they’re paying an annual fee in the same price range for a more comprehensive rewards credit card, like a Capital One Venture Rewards Credit Card or a Starwood Preferred Guest Credit Card from American Express.

Still, if you’re a fan of the underdog and you’re happy to spend a little money each year to keep a line of credit on standby for emergencies, you can do far worse than the Iberiabank Visa Select card.

Click the card name link Iberiabank Visa Select for rates, additional information and application page.

{ 1 comment }

In Naked With Cash, seven anonymous Consumerism Commentary readers publicly track and analyze their finances on a monthly basis. For almost a decade, I tracked my own finances on Consumerism Commentary; now I’m sharing the benefits of public accountability with the participants. I’ve partnered with financial planners who will offer some guidance along the way. Read this introduction to learn more about the series.

Calvin is in his early 40s, earning an annual salary of $120,000 plus bonus as an IT project manager in New Jersey. He recently finalized a divorce and has a teenage child. Read his bio here. Calvin is on Team Sara, with Certified Financial Planner Sara Stanich.

The net worth report below and following commentary refer to the last full month, October 2013. Last month’s report analyzed Calvin’s progress during the month of September. Continue reading this article to see Calvin’s latest net worth report for the month of October, including his own analysis.

Calvin’s thoughts are followed by Sara’s feedback and advice.

Sara Stanich, CFP appears courtesy of Stanich Group and Cultivating Wealth.

Read the full article →

{ 6 comments }

The conclusion begins this article. If you’re shopping online, it’s better to use your credit card, not your debit card, in almost all cases.

For someone just beginning to focus on improving one’s finances, this seems to be the wrong conclusion. After all, in theory, with a debit card you can spend only what’s in your bank account (or deposited into the prepaid debit card account), while with a credit card it’s much easier to spend money you don’t have. If this hypothetical individual followed some money guru’s advice to cut up all credit cards to remove the temptation to spend, the debit card may be the only choice for buying products online.

Credit cards have a number of advantages over debit cards. Some benefits vary across issuers, so it’s good to check your account agreements for some of the details. Overall, the credit card concept is better for spending than the debit card process.

Credit cards create an extra layer between your real money and other people. A debit card is linked directly to your money. This creates additional, unnecessary risk. It’s no different than paying with your cash — as soon as you make a purchase, your money is gone. If there is a problem with that purchase, you have to work with the seller to resolve the dispute. Once you give your money away, you cede almost all of your negotiation power. Entities like the Better Business Bureau exist to give some power back to you, but it’s not much.

When you use a credit card, you have a company that is, from at least this one perspective, on your side. I experienced this first-hand last month when an unauthorized charge appeared on my credit card activity. I attacked this problem on both sides. I called the phone number listed with the charge on the list of activity and determined with 100% certainty that the charge was not a result of anything I did and began the process of getting the charge refunded by the vendor.

Immediately following that call, I called my credit card to make them aware of the fraudulent charge. Even though the vendor said they would process a refund, that could take some time. The credit card issuer reversed the charge pending the refund, so even if the statement period closed, I would not be responsible for that charge.

With a debit card, the situation would be very different. The amount of the charge would already have been deducted from my bank account — my actual, real money. Most debit cards offer some sort of protection against this situation, but if my account balance was low, it could have triggered a series of overdraft fees, which could be a pain to reverse. If an unauthorized charge prevented my rent check from clearing, I could get in trouble with my landlord, all before having the chance to dispute the fraud.

For habitual spenders, credit cards are still better than debit cards. One of the frequent objections to using credit cards as a primary form of payment is that the advantages are, for most people, outweighed by disadvantages. It is true that many consumers can’t handle credit cards without spending more than they can afford. The result is high interest fees, ruined credit ratings, and a cycle of debt that can destroy a life.

But a debit card with so-called overdraft protection is much worse. The overspending issues with plastic or electronic forms of payment are roughly the same, whether the tool is a credit card or a debit card. Multiple overdraft fees can cost more than credit card interest and late payments, and your precious bank account sees the effects immediately. With a credit card, you can close your account and work out a payment plan, but with a debit card, options like this don’t exist.

Use a credit card wisely, and collect the rewards. For those with control over their spending, credit cards can actually be profitable. Credit cards are more likely than debit cards to offer cash back or other rewards you might like to acquire. Credit card issuers can afford to pay some customers for using plastic because of the incredibly profitable nature of the mix of late fees, interest fees, and interchange (swipe) fees.

Over the last few years, debit card issuers have experimented with rewards, but for the most part, these experiments have failed.

Credit cards and debit cards may eventually be replaced by virtual currency, like Bitcoin. I experimented with Bitcoin back when the technology was new. It required installing an application on my computer, and the more processing power you devoted to the currency, the more you could have. Today, I believe there are some limitations in place so that how much currency you could create isn’t influenced by how many computers you have working for you. These days, the value of one Bitcoin has increased so much relative to the US dollar that people are looking at the currency as a speculative investment. Like any other investment, I sure regret not sticking with Bitcoin.

Because I did have an early Bitcoin wallet and did create some currency, I’m wondering if I can recover what I had. That’s a project for another day.

Once some of the kinks are worked out and the value stabilizes, this virtual currency could be the best way to handle all transactions, online and offline. But until then, online shoppers should stick to credit cards.

Do you use credit cards or debit cards for shopping online?

{ 5 comments }

SteveDH, October 2013 Net Worth

by Luke Landes
SteveDH Naked With Cash - October 2013

In Naked With Cash, seven anonymous Consumerism Commentary readers publicly track and analyze their finances on a monthly basis. For almost a decade, I tracked my own finances on Consumerism Commentary; now I’m sharing the benefits of public accountability with the participants. I’ve partnered with financial planners who will offer some guidance along the way. ... Continue reading this article…

0 comments Read the full article →

Anonymous S, October 2013 Net Worth

by Luke Landes
Anonymous S October 2013 Net Worth

In Naked With Cash, seven anonymous Consumerism Commentary readers publicly track and analyze their finances on a monthly basis. For almost a decade, I tracked my own finances on Consumerism Commentary; now I’m sharing the benefits of public accountability with the participants. I’ve partnered with financial planners who will offer some guidance along the way. ... Continue reading this article…

1 comment Read the full article →

Kathleen, October 2013 Net Worth

by Luke Landes
Kathleen's Net Worth, October 2013

In Naked With Cash, seven anonymous Consumerism Commentary readers publicly track and analyze their finances on a monthly basis. For almost a decade, I tracked my own finances on Consumerism Commentary; now I’m sharing the benefits of public accountability with the participants. I’ve partnered with financial planners who will offer some guidance along the way. ... Continue reading this article…

3 comments Read the full article →

Black Friday Deals: Don’t Fall for These Dirty Tricks

by Luke Landes
Black Friday Dirty Tricks

For some reason, this year I’ve been bombarded more than any other year by advertisements for Black Friday deals. The marketing is coming from helpful people who just want to share the good news with their friends, people who are clearly paid to spread the messages, and retailers who simply want people to buy as ... Continue reading this article…

8 comments Read the full article →

LastDollar, October 2013 Net Worth

by Luke Landes
LastDollar Net Worth October 2013

In Naked With Cash, seven anonymous Consumerism Commentary readers publicly track and analyze their finances on a monthly basis. For almost a decade, I tracked my own finances on Consumerism Commentary; now I’m sharing the benefits of public accountability with the participants. I’ve partnered with financial planners who will offer some guidance along the way. ... Continue reading this article…

0 comments Read the full article →

Money Systems That Lead to Success: Make Your Budget Fantastic

by Luke Landes
Make Your Budget Fantastic

You can’t discuss financial systems without addressing the elephant in the room: the budget. As much as everyone hates the process of creating and adhering to a spending plan, the budget is simply the best money system for building wealth over the long term. The underlying principle of a budget is the key to all ... Continue reading this article…

6 comments Read the full article →

JW, October 2013 Net Worth

by Luke Landes
JW - Naked With Cash October 2013

In Naked With Cash, seven anonymous Consumerism Commentary readers publicly track and analyze their finances on a monthly basis. For almost a decade, I tracked my own finances on Consumerism Commentary; now I’m sharing the benefits of public accountability with the participants. I’ve partnered with financial planners who will offer some guidance along the way. ... Continue reading this article…

5 comments Read the full article →

Money Systems That Lead to Success: Always Ask Questions

by Luke Landes
Always Ask Questions

Last Thursday, I drove to the place that was my home for four formative years of my life, my undergraduate university. I’ve written before about how the degree and overall course of study during college isn’t directly related to what I do today. Nevertheless, I still feel strongly about the importance of music and arts ... Continue reading this article…

2 comments Read the full article →

Anne and Matt, October 2013 Net Worth

by Luke Landes
Anne and Matt, Naked With Cash

In the series Naked With Cash, seven Consumerism Commentary readers share their financial progress on a monthly basis. They are joined by Certified Financial Planners who provide feedback on their journey. Read this introduction to learn more about the series. Anne and Matt are twenty-seven years old, living in the Midwest, with two children. Read ... Continue reading this article…

1 comment Read the full article →

PenFed Promise Visa Review

by Joe Taylor Jr.
PenFed Promise Visa Card

By offering a suite of services originally designed to help military families make ends meet, Pentagon Federal Credit Union has grown into one of the country’s largest nonprofit financial institutions. Unlike credit unions that require geographic or employer-related eligibility, PenFed extends membership to any citizen with a family connection to our national defenses. You can ... Continue reading this article…

0 comments Read the full article →

MONEY’s Best Banks in America 2013

by Luke Landes
MONEY's Best Banks in America 2013

The MONEY magazine published its annual analysis of the best banks in America, and I count at least one surprise among the list of 15 categories. Just last month, personal finance bloggers voted on their favorite banks in the Fourth Annual Plutus Awards, and came up with a list with some notable differences, although the ... Continue reading this article…

2 comments Read the full article →

Money Systems That Lead to Success: Extreme Calendaring

by Luke Landes
Extreme Calendaring

As a child with an inquisitive mind, I was fascinated by calendars and how we organize and measure time. I tried to learn why, throughout history, culture accepted new calendars to replace the old. Much remained — and still remains — a mystery to me in this topic; my interest in calendars waned as I ... Continue reading this article…

6 comments Read the full article →

Money Systems That Lead to Success: Food Planning

by Luke Landes
Money System for Your Meals

The diner is a New Jersey staple of the restaurant industry. Once you sit down at a diner, you are presented with a thick menu, enumerating more dining options than you could possibly handle. If there’s any indication that having more choices makes the selection process more difficult, it’s the diner menu. The story of ... Continue reading this article…

8 comments Read the full article →

Money Systems That Lead to Success: Automatic Savings

by Luke Landes
Make Savings Automatic

Last month, I wrote about the opinions of Scott Adams on his eventual success as the creator of the comic strip Dilbert. I focused on the failure aspect of the article he wrote for the Wall Street Journal, and I only touched lightly on the success factors. A system, a methodical way of approaching any ... Continue reading this article…

5 comments Read the full article →

Now Casting Naked With Cash Season Two

by Luke Landes

This year, the Naked With Cash series has been a great success. Through December, we will continue to hear from our seven participants and the three Certified Financial Planners assigned to them as they track their finances and share their latest net worth reports. This concept was the initial inspiration behind Consumerism Commentary. I wanted ... Continue reading this article…

3 comments Read the full article →

The Myth of Early Retirement for the Middle Class

by Luke Landes
Is early retirement a myth?

Financial independence has become an important topic for me over the course of my adult life. It’s been a progression. First, I discovered the concept of spending less than I earn — simple mathematics but a behavioral change — and how that, in addition to making better choices, could eventually lead to financial independence through ... Continue reading this article…

21 comments Read the full article →
Page 1 of 212