Mr Credit Card : Welcome to the Carnival of Personal Finance #121 - Columbus Day Edition. Today’s event is a Q&A session with our leading presidential candidates. As the presidential candidates from both parties continue their campaign, the carnival of personal finance is pleased to announce that Senator Obama, Senator Clinton, Ex-Governor Guliani and Senator McCain have agreed to appear before personal finance bloggers for a question and answer session with regards to their policy platform. Please give our guest a round of applause.

Let us now begin.

Everyday Finance : I would like to direct this question to all of you. I am concerned about the weak dollar and how much it has depreciated against other currencies. The question I have is is the weak dollar driving US companies into the arms of foreigners? And are any of you concerned about this?

Senator McCain : We have to let the market forces determine the level of the US Dollar. But having said that, I am concerned about the dollar but I also think that once we get the war under control and our budget deficits under control, we will start to see a turnaround of the dollar.

Senator Clinton : In the 90’s, the United States had a strong dollar policy. Having said that, we were in a much better shape than the present. Right now, we have a massive deficit and an administration whose sole concern is the war and the dollar is suffering from this benign neglect.

Exjackly : This question is addressed to the two democrat candidates. I am a business owner and I am concerned about the democrats inclining to raise taxes. Since you took over congress, you have raised the minimum wage and it has affected many small businesses including mine. My business hires mainly students and simply cannot see why students should be benefiting from this bill!

Senator Clinton : As a society, those of us who are much better off cannot afford to overlook those at the bottom of the rung. But I would say that it is not just your business that will be affected, but even your competitors will be affected. I believe that in starting a business, all you need is momentum

Bewildement from the audience.

Mayor Guliani : As a republican, I really believe in letting the market forces determine what should be the appropriate wage. I fully understand the position of business owners like yourself. In fact, I can even show you how to live on minimum wage?.

Finance is Personal : The senate finance committee has recently questioned certain practices by credit card companies and as a result, we have practices like the universal default clause not being practiced anymore. I would like to ask all of you if you have any thoughts as to how we can change America to become a nation of savers rather than being a nation of debtors? Also, do you think will consumers warm up to credit freezes? since we have to pay for these services?

Senator McCain : All of us want Americans to be a nation of savers. Unfortunately, we are also a free country and that means that consumers should be able to choose whether to use credit and businesses are able to extend consumers credit. What I think is important is that perhaps we improve the means where consumers can get better educated on issues like how much credit is optimal?, or even how to fight back against debt collectors.

Senator Obama : I have to agree with Senator McCain on this issue. I think what the Senate Committee of Banking and Finance have done with regards to the credit card industry is very good. We have to ensure that credit card and finance companies provide more disclosure, eliminate fine prints and ensure they adhere to honest advertising. Consumers ultimately have to be responsible in how they use credit. When I was in college, I read brochures about tips for using credit cards. I can even tell you how we chose our credit card!

Home Finance Freedom : This question I have is this : Do anyone of you think that the mortgage tax deduction that we Americans have is distorting the housing market? Is this encouraging Americans to buys homes when they shouldn’t? Why should we get this tax break at all? This to me is an entitlement. In fact, because of the mortgage tax deductions, most Americans fall into what I call the debt free deception - housing myth. Most of us would be better off to pay off your mortgage and lose your tax deductions. For many people, buying is for suckers and why renting is the way to go.

Senator Clinton : The mortgage interest tax deduction has been around for a long time and the premise behind that is that we want to encourage home ownership among Americans. Home ownership is very much part of the American dream.

Mayor Guliani : Bear in mind that about 39% of Americans rent. Hence, I do not think the mortage interest tax deduction distorts home prices.

Phil For Humanity : What are your thoughts on the recent subprime mess? What should regulators do to prevent such occurances again? Look at how Netbank has closed down. And what happens to property taxes of customers with bankrupt lenders?

Mayor Guliani : I honestly think in this situation, it is a new experience for every central bank and regulator. I’m pretty sure that regulators will look more closely at how banks mark to market their structured investments and also at sales practices by mortgage brokers. However, we have to let the market correct itself from any excesses. In fact, now may be the best time to purchase bank foreclosure properties.

Senator Obama : I can also show you a visual guide to finding HUD foreclosures

To laughter from the audience.

Flexo : One of the things that really alarm me is our budget deficit. Yes, we do have a war and I am really disappointed in Republicans who have not really kept an eye on spending. Yet, I am so concerned about the democrats love for social programs and the potential higher taxes that await us? This is probably a sweeping statement from me, but how would all of you respond to the huge budget deficit?

Senator McCain : I really think we have to go back to basics. I think the next administration and congress really need a budget you can stick to. And that means fiscal discipline. Yet there is the balancing act of making sure the economy grows.

Mayor Guliani : I always remember what my dad taught me about money, which is to never spend more than you earn. And I think we politicians have to get back to basics and all of you have to make us keep feeling guilty to spend money on anything. The budget deficit is simply unsustainable.

Senator Obama : I agree that we have to seriously figure out how to get out of debt?. The fiscal situation has gotten out of control. A big reason is obviously the war in Iraq. While we cannot rush a total troop withdrawal, we have to be extremely conscious about the fiscal situation.

Gather Little by Little : I would like to address this to the two Democrat Senators. Both of you mention about fiscal responsibility, but yet at the same time, both of you are proposing univeral health care. Who is going to pay for it? Wouldn’t that be already adding to our fiscal problems? Or is this an easy pitch to get elected?

Senator Clinton : The fact remains that 48 million Americans have no insurance and for such a great nation like ours, this is simply unacceptable. If the Canadians and Europeans can do it, shouldn’t we be able to provide health care for everyone?

Senator Obama : Our current system is broken and heath care inflation is running out of control. We have to make health care affordable again.

Mayor Guliani : I think we have to be very careful when we are talking about health care. There are no easy fix. But I suspect that every party has to accept certain changes to make our health care more affordable. I think incrememtal steps are needed in this area rather than a large sweeping move taking us into the unknown. It is also a question of uncovering the truths about needs and wants of the American people with regards to health care. I do not think we are willing to accept the sacrifices and consequences of a universal health care system.

Senator McCain : I’ll give you a few tips for getting low cost health insurance after this is over! But seriously, the proposals from the democrats fail to explore the shortcomings of the Universal system. Americans I think, do not have the patients to wait for their treatment as most patients in the Universal Health Care system do. Many of the 48 million also choose not to have insurance because costs are too high.

Senator Clinton : I question if is penny pinching really the road to wealth?. We also have to address the issue of fairness and equity of those who are less well off in our society.

Laughter from audience.

Free Money Finance : This is not a question, but just a comment and request. I am absolutely sick and tired of how partisan things get when a president nominates a supreme court judge. I get my fair share of strange interview questions, but the questions and scrutiny that a supreme court judge nominee has to go through is ridiculous.

Mrs Micah : This is another comment. But I am simply disillusioned by all politicians. Every campaign promise is never really fulfilled. They are just made to simply get votes. Even if you have the best intentions, the influence of lobbyist simply results in all of you selling and sucking your soul.

Chief Family Officer : Since President Bush passed his “no child left behind” scheme, I just wanted to get a perspective on how we are progressing as a nation. Where my family is, public schools are still not up to scratch. That is why we are sending our kids to private school. And man, you would believe what we’re giving up for private school and why.

Senator McCain : I think we are making progress on that front. Studies have shown that we are behind many countries, especially in the area of math. Progress will not be uniform across the board though.

My Wealth Builder : I’ve retired in my forties, but given the amount of student debt that students carry after the graduate, I think that early retirement may not be optional for twenty somethings. I question is how can we contain the inflation in education costs?

Money Walks : I would like to ask all of you how does your portfolio look like? An d what money lessons have you learned in your personal life?

Senator McCain : Firstly, in terms of attitude and metality, I thinkit is very important for us to understand why everybody should think like a CEO when it comes to their personal finance.

As far as investments goes, I have a money market account. Stop asking yourself do I need an emergency fund? Off course you do. You should start saving and let money build right away. I would not even waste my time day trading or any of that as I think that trading is for losers. Instead, I would learn how to pick an index fund with low initial investment.

Mayor Guliani : After what happened on 9/11, I would say that the first thing you have to do is to figure out how much life insurance do you need?

Once you have taken care of your emergency fund and your insurance (your back up plans), I would then educate myself as much as I can on personal finance and invest wisely. I recomend reading A weekend with Warren Buffet and other shareholders meeting adventure and lessons from Fire Finance top 100 pf blog list. Most important of all, be patient. Remember that the 1st Million is the hardest to make and that once you cross that hurdle, everything is much easier.

Always know in your mind the 25 mutual funds every investor should know. Somrtimes, the investments I don’t have is more important than what I have. As you get more affluent, consider a Roth IRA if you think you will be in the top tax bracket when you retire. Also consider hiring a financial advisor and do some advanced portfolio building

Senator Obama : If I had a personal finance time machine, I may do things a bit differently. With the internet and the explosion of different investmtent and money magazines, I would have educated myself a lot more when I was younger. But evolution of my online personal finance regimen has gone through a lot of changes. I now do all my banking online and enroll in various automatic bill payments.

Being Frugal when you are starting out in life after graduation is very important I think. You should always buy stuff you can afford. Do not follow the example of the US government! For example, I never have a car payment. However, you definitely want to be learning how to be a gazelle intense without going crazy. You also want to watch yourself and make sure you do not have the making of a cheapskate!

Senator Clinton : One of the most important things in my opinion is that you have to do the right things for yourself and your circumstances. Let me give you a few examples.

If you are in debt, you have to ask yourself if consolidating your debt is worth it? Only you can answer this question. Or if you have to file for bankruptcy, then learn to rebuild your credit score after bankruptcy. I even know people who sell coupons to pay for diapers! Bill even recently told me about the 3000 Mile Oil Change Myth. Even things like setting up a virgin prepaid cell phone or
prepaid electricity can save you money

Where you decide to live also has huge bearings on you finances. I can tell you it is definitely cheaper to live in Arkansas than in New York. If you are living in a high cost area, and moving is going to save you a ton of money, then consider doing it.

Communications and personal finance relationships is also very important. You have to be able to communicate your finances with your spouse or partner. This became very important for me since becoming the bread winner. Strive to become debt free and pass your personal finance tips to others. Remember, we all go through ups and downs and sometimes, you have to be looking at life from a stock market perspective!

Dough Roller : I would like to ask the four of you what are your favorite personal finance books? or at least what have you read in this arena?

Senator McCain : My favourites include 30 ways to use one hour to improve your finances by the The Simple Dollar, 5 things that can appreciate in value by Finandom.

Mayor Guliani : My favorites are free your inner spender, 10 tips for dealing with a lost wallet, and the tortured lives of Mr and Mrs Jones.

Senator Obama : My favorite personal finance book is 7 steps to a smooth car sale, how convertible bond arbitrage works (laughter). Yes, it’s true, I am really facinated by the financial markets. I also think that Benjamin Franklin is the original personal finance blogger.

Senator Clinton : My favorites include my son came across a pyramid scheme and is this really what we want to teach our kids?.

Mr Credit Card : We have finally come to the end of his fantastic Q&A. I would like to thank our guest who have taken their time to come here and answer questions from the personal finance bloggers, who along with being concerned with their own financial well-being, also care a lot about our nation’s finances. Thank you to everyone for participating. Thanks also to the Carnival of Personal Finance for organizing this event.

Mrs Credit Card was planning for our annual vacation. We had originally wanted to fly to San Diego and stay with our friend, see the San Diego Zoo and all the other California attraction. However, our plans had to change as our friends will not be around. So Mrs Credit Card made the executive decision to go to Florida and DisneyWorld.

As she was my supplementary card holder of my Amex Platinum Card, she made some calls. We received a promotional flyer that advertised their Platinum Travel Service and the number listed is 1866-310-0684. The phone service was courteous and best of all you don’t have to wait long. However, the agent said at this number they will take our profile when we call the first time & assists in our requests. Subsequently, we should call 1800-443-7672 ! OK, she took down our details, and answered all her questions regarding using our points to redeem free air tickets. Mrs Credit card did express my frustration about having to call another number & what’s the difference ? She assured her that this number is mainly to take down the member’s profile.

Basically, 2 ways :

1) Paying with reward points - no restrictions. If you have 70000 points, you could redeem $700 towards a ticket.

2) If using airlines miles for Continental, Delta, Southwest etc, more restrictions but less points required. For example, 15000 Reward points can exchange for 1 Rapid Reward point for Southwest. Then, you are subject to the airline’s closed out dates. But first, we have to transfer the Platinum reward points to the selected airline frequent flyer program - that will take about 3 to 5 days.

Mrs Credit Card hanged up the phone & called me to discuss the issue. Then she called Southwest to check flight availability. It was available at our preferred dates but we need to transfer the points quickly and we can only make the bookings when the points are in the members account. So, Mrs Credit Card called 1800-443-7672 (the number that they told me to call subsequently) and guess what ? They asked her to call 1800-297-3276 - the Amex Platinum Membership Hotline. Only they can check the points & transfer points. Mrs Credit Card’s patience is obviously wearing thin but thankfully, she didn’t wait long for an agent to answer my call.

It turns out that I have about 72,000 membership reward points at the moment. However, because she was a supplementary card holder, she needed my “authorization” to give her the ability to use my membership reward points.

As easy as this sounds, it turned out to be a slightly complicated process. The Amex clearly has seperate departments. So I had to call each department and give Mrs Credit Card authorization to access my account and charge stuff to my card. The first stop was the membership rewards department. I had to call them up and authorize Mrs Credit Card to use my membership reward points.

Then I had to call up the travel concierge department to allow Mrs Credit Card to book flights and charge it to my card (note : she could simply charge them to her card - but she still needed my authorization to use my membership rewards points).

The process took quite a bit of time (call it about twenty minutes). I was quite disappointed that I could not call one number and simply have Mrs Credit Card fully authorized to do whatever she wanted with my account. Also, on the last stop (travel concierge), I was asked to verify my password. I said the correct password but the system rejected it the first time. I was pretty sure I had the correct password and the system accepted it the second time. Even the operator was “surprised”.

At least, Mrs Credit Card can now book our vacation (it is always a chore to do so for me). Plus with 77,000 points, we can get three Southwest Airline tickets for free. And I almost forgot, we could try to get the “free companion ticket”. Let’s see how this works out. We just have to pay for two other tickets and obviously the hotels. I will update the final plans soon.

Money doesn't have to be boring! Each week, CreditBloggers.com takes a look at the lighter side of the personal finance world in a series called Funny Money Friday.

I love Halloween! The spookiness, the candy, the costumes. According to the National Retail Federation, I'm not alone in my love for this fall holiday. Consumer spending on Halloween increases 10-20% each year. The average person is planning to spend $64.82 this year, compared to $59.06 in 2006 and $48.48 in 2005. This breaks down to:

• $23.33 on Halloween costumes, including kid and pet costumes.
• $19.84 on candy.
• $17.73 on decorations.
• $3.92 on greeting cards.

An estimated $5.07 billion dollars is going to spent on Halloween in the US this year. That's a whole lot of candy corn and a nice way for retailers to launch the holiday shopping season.

If your kids are gearing up for trick-or-treating this year, you might consider a little karmic balancing by sending them out with UNICEF donation boxes as well. You can order a free Trick-or-Treat for UNICEF collection kit online today and it should arrive before the Charlie Brown special airs. Have a great weekend!

Emily Davidson – Credit.com's Communication Director and former TransUnion credit expert. Emily writes about credit reports, credit cards, loans and personal finance as the CreditBloggers.com moderator.

First a confession - I’ve never been a techie sort of person. I have never had the latest phones or any hardware. For the longest time, I carried a very old fashion phone. Then a few weeks ago, my colleagues at work started to tell me how great having a blackberry phone was. They could “sync” their Microsoft Outlook with their blackberry and also their calendar. This made it great for work purposes.

However, just a couple of months ago, I had just exchanged my phone with Verizon Wireless to a better phone with a camera and this new VCAST things where you can download music. The only reason I did this was because I lost my cell phone on a plane. This was not the first time I had lost my phone.

So I decided to head to verizon and see if they could upgrade Mrs Credit Card’s phone and then swap numbers. First, we were told that I could “upgrade” my phone to a blackberry for $249.00. However, if I were to upgrade Mrs Credit Card’s phone to a blackberry, swap phone with her and have our cell phone numbers swapped, it would cost $299.00. Well, it is a “system thing” - said the salesperson. He then told Mrs Credit Card she could upgrade her phone and it would potentially cost less than $299 than if we had swapped phone numbers.

After much deliberation, Mrs Credit Card persuaded me not to get a new blackberry. These were her reasons :

1. I am constantly losing my phone! - she was right. I have lost more phones than I care to remember.

2. Because I seem to always lose my phone, she suggested I carry a dairy instead whenever I went out to meet clients. She even reminded me that I had ordered the American Express Blue Cash dairy!

3. It cost an extra $45 (I think) to be able to access the internet and have unlimited data transmission with Verizon (or as with all cell phone networks). I would save money simply by carrying a dairy.

In the end, we walked out of the Verizon Wireless store without getting the blackberry. I was not in a hurry and I thought I’d try out with the dairy first and see how it goes. If this works, I’d probably be saving quite a bit on my cell phone bills.

To all you blackberry folks, can you live without it? Will a simple diary do? Should I change my mind and get a blackberry? Please share your thoughts.

I have spent over 25 years watching people make decisions about buying and financing their homes.  Having watched so many people in action, I especially enjoy writing about the way they gather information, evaluate it, and make decisions.  I used to wonder why so many people came to my office, told me what they wanted, yet ultimately settled in on some other loan.  The reason was flawed decision-making.

In fact, one of the most satisfying parts of my career has been getting my clients "straightened out." Makes me feel as if I really do some good. They had to unlearn what drove them to choose something that was usually wrong, then we'd through a process to get them what they needed, a loan that would help them achieve their goals.

It's no different with people when they make investment decisions.  A stockbroker friend told me once, "Intelligent Investing is an oxymoron." Most stockbrokers have told me that their number two job was keeping people from doing stupid things.

Over the past few years I have written a number of articles about this topic, drawing when I could on research that found links in what was happening in peoples' brains as they made decisions. I wish I had done a lot more work because if I did, I might have written Your Money and Your Brain: How the New Science of Neuroeconomics Can Help Make You Rich .  But I didn't.  Jeffrey Zweig did.

A review in Publishers Weekly said it pretty well.

"Our brains are pretty self-deceptive, it turns out: we have difficulty admitting our lack of knowledge about finances; we overestimate our own wisdom and performance; and our preference for mistakes of action rather than inaction often leads us to irrational investment decisions."

A book like this will help the modest number of investors or homeowners who might read it, but I think that its impact will be greater with investment counselors and mortgage loan officers. It will be a great resource for those who want to help their clients make better decisions.

It's refreshing to see a book like this come along.  For those who want to learn more, click on the link.
http://www.amazon.com/Your-Money-Brain-Science-Neuroeconomics/dp/074327668X

After 6 years in the credit business, you start to get used to credit card companies occasionally burning customers by raising their rates or instituting crazy new terms. It's not often that a credit card issuer will do something so bad that it gives even a hardened credit expert pause.

If you haven't already heard: Macy's agreed to give Citi access to their inactive (24-48 months without a purchase) cardholders. Citi used this opportunity to mail out letters in July to the users notifying them  that, unless they opted out, they'd be getting a new Citi card in the mail. The cards are starting to hit now and the story is surfacing. Consumerist.com has the best details so far.

It's fairly common to see retail cards transfer to ownership with a larger bank. For example: your Nordstrom card may become a Nordstrom Visa through Chase. But in these cases, the tradeline record on your credit report is just updated. This Macy's/Citi situation doesn't follow that pattern. Instead of the card transferring, they're actually closing one account and opening a new one.

This is a particularly low blow and a very weird marketing strategy. Using an opt-out mailer as an opportunity to establish new accounts? Without verifying addresses? Sure, they can legally do it under the fine print of the consumer terms agreement but this is definitely a step too far.

From a credit score standpoint, the impact of these new accounts could be severe. Your credit score could be harmed by:

• The closure of the old Macy's card. Especially if the card was one of your oldest or one of only a few card you had open.
• The inquiry for the new Citi card. This will remain on your credit for two years.
• The opening of the new Citi card causing your average credit account age to drop.
• The new Citi card having a lower credit limit than the old card.

Even if you close the Citi card as soon as you receive it, it's possible that the account has already been reported to the credit bureaus. Closure won't delete the record, it will still remain on your credit history for 7 years.

Are you a Macy's cardholder whose account was closed and replaced with a Citi MasterCard?  If so, we'd love to hear your story. Post your comments below or send an email to emilyblog@credit.com.

Emily Davidson – Credit.com's Communication Director and former TransUnion credit expert. Emily writes about credit reports, credit cards, loans and personal finance as the CreditBloggers.com moderator.

Thanks to regulations that went into effect on Monday, the interest rate on payday loans to members of the military and their family cannot exceed 36% a year. That may not sound like good news, but since these loans typically carrying 400% rates, it’s definitely progress, and will save money for many members of the armed services.

Also in the good news department: Payday lenders can no longer use military members’ personal checks or electronic access to their bank accounts as collateral. This will reduce stress and make it less likely that military families will be trapped into one payday loan after another.

Payday lenders lie in wait for military folks with money troubles. To find out why they pick on people the rest of us would help if we could, I called Carol Hammerstein at the Center for Responsible Lending, one of the key nonprofits that has been exposing the excesses of payday lenders. As Carol explained it, military bases are targeted because they have a lot of “young, financially inexperienced families in a small area.”

No matter that they are willing to die for our country, they’re a captive audience of cash-strapped young people with steady paychecks. No matter that the military member of the family is about to be deployed, regardless of her views on the war. Who cares if the car breaks down, and she wants to leave her mate with a working vehicle so he can get the kids to day care?

She needs a quick loan with no credit check and is unaware of her other options. As she’s about to drive onto the base, she passes some of the payday lenders with their military-sounding names. Her emergency too soon becomes guaranteed income to a payday lender. That disgusts me.

Know Anyone in the Military?
Please make sure they know about Military OneSource, which offers them free, confidential financial guidance, toll-free, 24/7 at (800) 342-9647. Chances are, they’ll find out that there are payday loan alternatives right there on the base.

You can help them find out about other alternatives and share Credit.com’s “Truth about Payday Loans” with them.

When 36% a Year Isn’t Enough
You’d think that earning 36% a year off of military families would be enough. No way, say payday lenders in Utah, who stopped loaning to the military on Monday because of the "low" rate. Like I said, disgusting.

The nonprofits want the Pentagon to tighten the regulations and remove loopholes. Sounds like a good idea to me. What say you?   

Nancy Castleman – Co-author of "Invest in Yourself: Six Secrets to a Rich Life" and founder of Good Advice Press. Nancy has spent the last 23 years teaching people how to get out of debt, save money, and live better on less. She writes on all these subjects for CreditBloggers.com.