NEWS Column

From banking rate news to the latest legislation, we try to bring you time sensitive personal finance news that affects your money. This column covers personal finance news and is staffed by our capable team of money writers. If you have a tip for a breaking news item, please share it with us!


You are currently reading an archive section.
To see the latest articles, please visit the homepage.

 NEWS 
50
comments

Durbin Amendment: Limit Interchange Fees to 12 Cents

The Durbin Amendment to the Dodd–Frank Wall Street Reform and Consumer Protection Act is set to be official in a little over a month. The amendment would have the Federal Reserve limit interchange fees on debit transactions, the fee a bank charges to process card transactions, to a mere 12 cents. It’s a proposal they put out for comment late last year and it’s drawn a lot of criticism. There are two alternative interchange fee standards:

  • Fee standard based on the costs with a safe harbor at 7 cents per transaction and a cap at 12 cents per transaction.
  • A standalone cap at 12 cents per transaction.

By the Fed’s own calcluation, this is 70% lower than the 2009 average and the rule is set to take effect on July 21st, 2011. In addition to putting this 12 cent hard cap, the regulation would prohibit an issuer from restricting on which networks the debit transaction could be processed

What does this mean for consumers? If the banks are to be believed and 12 cents is below the cost of doing business, banks will severely curtail the use of debit cards or find some other way to charge for the convenience of debit cards, which generates $16 billion a year. If you rely on your debit card, you may find that there will be new fees or restrictions associated with it if the banks are to recover some of this revenue.

 NEWS 
19
comments

Zecco Stops Commission Free Trades

Zecco sent an email out to customers last Friday about a huge change in their account. It turns out that offering commission free stock trades is not a sustainable model and Zecco will be moving away from that as of March 30th, 2011. When I first learned about Zecco in mid-2007 and their offer of free stock trades, I was skeptical and wondered if Zecco was a scam (it’s not). When they moved to require a minimum $25,000 balance in an account to get 10 free stock trades, I suspected that it was only a matter of time before free trades are gone.

Businesses can lower their bottom line when they operate online and online banks have proven this with their high interest savings accounts for years. Unfortunately for brokers, stock trades aren’t free and there’s still a minimum cost associated with that transaction.

While Zecco hasn’t had the best reputation in terms of customer service (according to Smart Money), it’s clear that they care because the CEO has been active in their forums. Unfortunately for them, their new pricing structure looks a lot like that of TradeKing, 7 spots higher on the Smart Money rankings. TradeKing also offers a $150 transfer fee reimbursement… that doesn’t bode well for those looking to jump off the Zecco ship.

Here was the email:
(click here to continue reading…)

 NEWS 
33
comments

Some Americans Plan Fun for Tax Refund

The National Retail Federal did a survey recently that asked Americans what they were going to do with their tax refund this year. 13.2% said they would be buying a big ticket item like a new television or some furniture, up from 12.5% last year. 11.9% plan on taking a vacation, which is more than the 10% who planned on taking a vacation with it last year. 29.7% went with the ho-hum answer of spending it on everyday items.

Before you start complaining about people being irresponsible, it turns out that most people will either pay down debt or put it towards savings. 41.9% will use their tax refund to pay down debt, 42.1% will be using it for savings. What’s interesting is that since 2007, the percentage of respondents who said they’d pay down debt went up and then down, peaking at 48% in 2009. 41.9% is the lowest it’s been since 2007, when it was 43.1%. Savings rates, however, have been steadily increasing since 2008. (One caveat, this was a survey of what people planned on doing with their refund… how many actually saved or paid down debt is another story!).

 NEWS 
6
comments

American Express Eliminating Some Foreign Transaction Fees

American Express announced this month that they would be eliminating foreign transaction fees for Platinum and Centurion cards starting at the end of the first quarter of 2011. Foreign transaction fees are fees tacked onto purchases made in another currency and one of the big reasons why we opened up a Capital One credit card prior to our trip to Europe last year.

As an added bonus, if you’re a Platinum or Centurion cardmember, you get $200 in airline fee credits that can go towards airline fees from food to changing a flight to airport lounge day passes to checking a bag.

According to an updated list of foreign transaction fees at CreditCards.com, Capital One is still your best bet for avoiding a foreign transaction fee (unless you have a Platinum or Centurion American Express card).

 NEWS 
15
comments

Social Security Closes Free Loan Loophole

Social Security CardBefore the Social Security Administration published new guidance to change it, you could effectively take an interest free loan against your Social Security benefit if you were eligible to receive benefits. Once you were eligible to receive benefits, you could start taking your benefits early (and thus a reduced benefit) and then withdraw your benefit application once you hit full retirement (and thus maximum SSA benefits). Once you withdrew your application, you’d have to pay back the benefits you received. Once you did that, you were all square with the SSA and you could continue to wait until full retirement age, when you’d receive the maximum benefit. The end result was an interest free loan.

(click here to continue reading…)

 NEWS 
28
comments

New $100 Bill Printing Problems

$100 BillThe fancy new $100 bill, with all its security bells and whistles, is so complicated that even the official manufacturers of those bills can’t get it right. CNBC reported earlier this week that $110 billion worth of $100 bills are currently wrapped in storage at Fort Worth because of a defect. During production, the paper may fold over and leave an uninked portion of the bill face… which is bad news. The bills are in “cash packs” of 16,000 bills per pack.

They’re currently looking at ways to mechanically scan the bills for defects because looking by hand would take twenty to thirty years. Until they can sort it out and fix the manufacturing problem, they’ll be producing more of the old $100 bills.

As for the new bills themselves, it costs about twelve cents to produce which puts the total bill of the bills, so far anyway, at $120 million. That really drives home the phrase “it takes money to make money.” :)

 NEWS 
31
comments

Bush Tax Cut Extension Appears Likely

Update 12/9: House Democrats rejected the deal, so we’ll have to see what happens from here.

Update 12/6: A deal has been made – Bush tax cuts will be extended for two years for all income levels and unemployment benefits will be extended.

It appears that a compromise on the Bush tax cuts is likely and that compromise will take the form of an extension. CNN Money quoted Senator Orrin Hatch (UT-R) as saying that neither “side” has enough votes to pass the plan they want so they’ll probably extend the cuts another two years and deal with it then. Senator Ron Wyden (OR-D) is also referenced as calling for a one year extension of the tax cuts to give Congress more time to put together a deal.

What does this mean for the tax brackets? The brackets would stay the same and the ranges would increase to track alongside inflation, as reported by the BLS. Capital gains rates would also stay the same at 0% and 15%, depending on your marginal income tax rate.

Sadly, this seems to be the modus operandi of Congress on issues like this – just take a look at AMT and how often “relief” has been extended as a stop gap measure in the waning minutes of the year.

 NEWS 
28
comments

House Votes to Partially Extends Bush Tax Cuts

The House of Representatives passed a bill that would extend the Bush tax cuts for individuals making less than $200,000 and married couples making less than $250,000, the plan that Democrats and President Obama have favored. The vote was 234 to 188 with votes on mostly party lines. 20 Democrats voted against the bill and 3 Republicans voted for it (the remainder, of course, voting along party lines). The next step is for the issue to be voted on in the Senate, and if a bill is passed, the two much be reconciled, and then signed by the President. While that may be unlikely, at least looking at it now, this is the first tangible action towards settling the issue of what to do with the Bush tax cuts.

(click here to continue reading…)

Advertising Disclosure: Bargaineering may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website.
About | Contact Me | Privacy Policy/Your California Privacy Rights | Terms of Use | Press
Copyright © 2014 by www.Bargaineering.com. All rights reserved.