Alpha Consumer
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The Rise of Prepaid Credit Cards
Continue reading… 20 CommentsToday's guest blog entry comes from Jeremy Simon, a reporter with CreditCards.com who writes about payment-card-related topics for consumers. He also contributes to Taking Charge, the website's blog.
As the recession encourages less reliance on credit cards by both consumers and banks, some experts predict that prepaid and secured cards could see their popularity grow.
Prepaid and secured cards are typically marketed to consumers who don't have enough credit history to qualify for a regular credit card. However, the current economic troubles mean an increasing number of consumers may find that credit cards have moved beyond their reach. According to Judith Rinearson, a stored value expert and partner with the law firm Bryan Cave, tightening credit could encourage a move toward prepaid and secured products. "I think there will be an increase of interest in these cards," she says.
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Podcast: Bringing 'Frugal' Back
Continue reading… 1 CommentOn this week's Alpha Consumer Podcast, I interview David Blankenhorn, founder of the Institute for American Values and author of Thrift: A Cyclopedia. He explains why frugality used to be "cool" and how it might be coming back into fashion. The Alpha Consumer Tip of the Week focuses on using websites, including Mint.com, 43things.com, and PriceGrabber.com to save money.
For an upcoming podcast, I will be giving budget makeovers to willing participants. If you are interested in being part of it, and are willing to share your basic budget information, please E-mail me at alphaconsumer@usnews.com.
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Sugar Daddies and the New Prostitution Index
Continue reading… 3 CommentsPerhaps the proliferation of stories related to selling sex for money could be dubbed the "Prostitution Index": When times are bad, do women inevitably turn to their bodies to generate extra cash?
First, we had Natalie Dylan, auctioning off her virginity for almost $4 million. Then, we had the DABA (Dating a Banker Anonymous) girls who, while not selling themselves for money, have been quite disappointed in the fact that their banker boyfriends can no longer support fancy vacations and dinners out. And today brings us sugar daddies.
Good Morning America featured an 18-year-old who is dating a 40-year-old in exchange for Las Vegas weekends and Manolos. He's married, but she's fine with the relationship because, as she puts it, "I live much better than the average girl." (No word on how the wife feels about it.)
Is this just a fluke, or is the recession really causing this sudden burst of pseudo-prostitution? -
5 Smart Upgrades for Tight Times
Continue reading… 6 CommentsMy good friend from college and I recently bemoaned the fact that we can't afford all the upgrades we would like, or even that we expected to have by age 30. I thought that by now I would have purchased a home, or at least live in an apartment with a kitchen that's been updated since the 1950s. My friend, who lives in Portland, wishes she had more of an emergency savings cushion.
But the fact that the job market is tight, which means my friend is probably earning less than she otherwise would be, and the housing market is tumultuous, which has made me put off buying a home, has also let us focus on making smaller upgrades that probably make a bigger different in our daily lives.Here are a few of the investments that, though relatively small, pay off every day:
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In a Recession, It Pays to Give More
Continue reading… 3 CommentsWhen I ask money experts or psychologists how we can feel better about our own financial situations, they almost always have the same answer: Become more generous.
In a recession, giving to others becomes even more important, first because people and charities need more help, and second because we can use the psychic boost when we're feeling down on our own luck. But consumers typically reduce their giving by about 2.7 percent during longer recessions, according to the Center on Philanthropy at Indiana University. (The average household typically gives about $2,247 a year.)
Here are six ways to get your giving in gear:
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Inaugural Youth 'Scam' Controversy Continues
Continue reading… 18 CommentsControversy continues to heat up around the Inaugural program for students that some are calling a scam. As parents press for reimbursements and apologies, the organizers are starting to respond by offering refunds and other remedies.
The Presidential Youth Inaugural Conference, held over President Obama's Inauguration, collected up to $2,900 from thousands of high school and college students for four days of lectures and events, some with high-profile politicians such as Colin Powell and Al Gore. But students say they were misled into thinking they would have tickets to the swearing-in and official Inaugural Ball.
In an August letter sent to attendees, the conference organizers said, "On the Mall, you will watch the new President take the oath of office and listen as he addresses the nation. You will then have an opportunity to view the inaugural parade as the new President, Vice President and their families make their way down Pennsylvania Avenue from the U.S. Capitol Building to the White House." -
Cashing In on the Obama-Industrial Complex
Continue reading… 5 CommentsJ. Crew's website crashed from the multitude of visitors inspired by Malia and Sasha's outfits on Inauguration day. The designer Jason Wu, creator of Michelle Obama's Inaugural gown, is now practically a household name. Pepsi posted "all for one" and "yes you can" posters and Ikea broadcast "embrace change" and "domestic reform" messages on the Washington subway during Inauguration. Starbucks invited customers to watch the swearing-in at their local Starbucks and gave free coffee to anyone who pledged to do five hours of community service.
Is there any company that hasn't tried to latch onto the Obama brand?
There's nothing wrong with tapping into the current cultural zeitgeist. That's smart marketing. But at least one company has, in my opinion, crossed the line. -
Snuggie Blanket Captures National Attention
Continue reading… 8 CommentsEvery now and then, a product becomes more than just a product. It becomes a national sensation. It happened with Beanie Babies, and now it's happening with the Snuggie blanket.
The blanket, as seen in the ad below, is built to keep the whole body, including arms, warm. It takes advantage of the fact that more Americans are staying at home to save money, and they want to be comfortable while there. Advertising Age reports the company sold more than 4 million blankets in three months, helped by the fact that Ellen DeGeneres wore one on her show and at least one attendee of President Obama's inauguration used one to keep warm (and was featured on Fox News doing so). The original advertisements have already spawned dozens of parodies and remixes on YouTube.
I don't want to knock it because I haven't tried it, but surely the creators could come up with something that looks a bit more stylish? Or perhaps the unique, monk-like garb is what is driving its popularity.UPDATE: One of my colleagues has just informed me of the Slanket, which is almost identical to the Snuggie. Let the brand wars begin.
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The Ethics of Accepting Freebies
Continue reading… 3 CommentsOn a recent episode of CBS' Gary Unmarried, Gary's pretty new girlfriend brags about getting everything from valet parking to flat-panel televisions for free. Men, she implies, can't help but shower her with gifts because of her good looks and flirtatious personality.
But is it wrong to accept free goods and services? One could argue that in our tight economy, anything that trims costs should be embraced. But I can't help but feel that it's a bit wrong to do so.
First of all, nothing is really free. Accepting a television or even valet parking makes you somewhat indebted to the giver. You have to be extra nice to them, thank them profusely, and accept whatever it is they give you instead of what you may have wanted. -
Can You Afford a Baby?
Continue reading… 28 CommentsWhile I'm on vacation, I'm re-posting some older Alpha Consumer entries that still apply today.
From June 12, 2008:
If you're of a certain age and life stage, then you might be asking yourself: Should I have a baby? Before getting carried away with visions of Baby Bjorns and onesies, consider this: Babies cost more than ever. According to the Agriculture Department, middle-income couples spend an average of $11,000 during the first year of a child's life. By the time that newborn reaches his 18th birthday, he'll have cost his parents around $204,000. (Creative solutions such as relying on grandparents for child care and swapping clothes with friends can help ease the strain.) Here is the Alpha Consumer quiz to help figure out if you're financially ready to become a parent:
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Life on $7 a Day
Continue reading… 0 CommentsWhile I'm on vacation, I'm re-posting some older Alpha Consumer entries that still apply today.
From March 4, 2008:
My friend Zack, who lives in New York City, recently told me that on average, he spends only $7 per day on food. I asked him to share his tips, many of which he gleaned from the personal finance blog the Simple Dollar. Here's how Zack saves money on food:
• Buy in bulk. Zack drives to the suburbs in New Jersey to shop at bulk retailers, such as Sam's Club. He fills large duffel bags of food to bring back to the city and estimates it saves a significant chunk of change each month.
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The Best Credit Cards for College Students
Continue reading… 0 CommentsWhile I'm on vacation, I'm re-posting some older Alpha Consumer entries that still apply today.
From June 6, 2008:
Dear Alpha Consumer,
I'm a college student. Should I get a credit card? Which one should I get? If I'll be able to pay off the card every month, does it matter what the interest rate is? Help!
Despite all the criticism about college students and credit, now is a good time to get your first card and start building your credit history, as long as you can be sure to pay off the card each month. Graduating with thousands of dollars of debt is a bad idea, especially when you're also paying off student loans and trying to make ends meet on an entry-level salary.
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Audio: Obama's Financial Literacy Plans
Continue reading… 5 CommentsOver the weekend, I spoke with WTOP in Washington about ways that President Obama can improve financial literacy. The possibilities -- and recommendations from a financial literacy panel -- include requiring financial education in grade school, providing tax incentives in the workplace, and improving the government's money web site.
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Wife Swap: The Couponing Edition
Continue reading… 78 CommentsLast Friday's episode of ABC's Wife Swap featured women at opposite extremes of budgeting: One believed that a husband should get a second job in order to fund her own spending (and tanning) habits. The other spent an hour using coupons at the grocery store in order to save money.
As usual, the program participants were portrayed as extremist weirdos, but the couponing couple, George and Denise McIntyre of Gaines Township, Michigan, had some useful habits. Among them:- They use the Internet to save money. According to a local newspaper story, they subscribe to the site RefundCents.com to keep track of deals.
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Does Australia Hate Career Women?
Continue reading… 3 CommentsThis ad for Australia, now running on television, is designed to encourage people to find themselves by going Down Under. It depicts a career woman who so stressed out by work that she appears exhausted, unpleasant to be around, and on the verge of ruining her relationship. But then, she goes to Australia, and turns into a pleasant human once again. Her boyfriend tells her that he's glad she's back. As the ad puts it, "She arrived as Ms. K. Mathieson, Executive VP of Sales. She departed as Kate."
Here's my question: Can't a woman be the vice president of sales while also being a pleasant person with a loving relationship? This commercial seems to have such a retro view of modern womanhood that it makes me wonder about the state of feminism in Australia. Still, that waterfall does look enticing. -
Some Inauguration Visitors Feel Misled
Continue reading… 38 CommentsNot all Inauguration visitors have been happy with their treatment here.
Caitlin Armstrong, an 18-year-old sophomore at Auburn University, came to Washington, DC expecting to see President Obama and Beyonce, one of the scheduled performers. She had received a letter earlier this year congratulating her on being “accepted to be among the thousands of students” to “witness first-hand the Inauguration of the 44th President of the United States.”
The letter left her with the impression that she would have tickets to the Inauguration and be invited to one of the official Inaugural Balls. The event’s website specified that the schedule included the official swearing-in ceremony.
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Retrieving Flight 1549 Survivors' Wallets
Continue reading… 2 CommentsThe matter of wallets, credit cards, and other items belonging to Flight 1549 passengers is, admittedly, insignificant in light of the main story: Through some combination of pilot skill and luck, everyone on the flight survived. But as a personal finance reporter, I couldn't help but wonder how, or whether, the survivors will retrieve their valuables.
The staffer answering the US Airways media hotline told me she has no information about such plans and isn't sure if such information will even be released publicly. Anyone interested can continue to check back on US Airways' Web site.
The general protocol on escaping from a downed plane -- or any accident, for that matter -- is to leave your belongings behind. Carrying backpacks or even an iPod could hamper passengers trying to leave a dangerous area. Besides, in a life-or-death situation, keeping tabs on credit cards, cash, and IDs is the last thing on anyone's mind. (Social security cards shouldn't be in your wallet, anyway.) -
E-Mail Fraud Rises, But Does It Matter?
Continue reading… 3 CommentsSymantec's MessageLabs has detected a spike in E-mail fraud and financial scams over the last couple weeks. The company says that messages with subjects such as, "Congratulations New Year Winner!" or "You have won the UK National Lottery" make up about 10 percent of the E-mail sent so far this year. (That's over 43,000 E-mails of the more than 427,000 the company has scanned.) That's three times more E-mail scams than last year.
Here's my question: Is anyone still vulnerable to these types of fraudsters? To me, they resemble junk mail more than any sort of sneaky scam. I receive dozens of such messages a week and delete them within a nanosecond of viewing.
But MessageLabs says there is reason to be concerned, partly because Nigerian scams, which generally ask for help in transferring or claiming money, have become savvier, with E-mail messages that are easier to read and shorter. Paul Wood, senior analyst at MessageLabs, says the recession could also contribute to rising online fraud. "As the economic climate continues to be frosty and the inability to secure credit through official channels remains spammers are tempted by the possibility that consumers facing uncertain futures may be more tempted by some of these hard-to-resist offers," he says.
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Natalie Dylan: Trading Virginity for College
Continue reading… 69 CommentsNatalie Dylan, 22, has decided to auction off her virginity to the highest bidder in order to raise money to send herself to graduate school. So far, the bidding is up to $3.7 million. Putting aside the health, ethical, and legal issues, is this a smart money move?
The cons: For many people, prostitution is something they would never, ever consider. For those people, this topic isn't even worth discussing. Plus, there are a multitude of student aid options that do not involve selling one's body. (How about a Stafford loan?)
The pros: She's raising money for a worthy cause -- school -- which will increase her future earning power. Plus, she's getting so famous through this auction that she could land a lucrative book deal, too. After all, the original Washingtonienne, Jessica Cutler, got a book deal and an HBO series out of her escapades. -
Why We Still Love Our Netflix (and Nordstrom)
Continue reading… 0 CommentsWhether or not we still care about brands or just go for the cheapest product with the best online ratings is a subject of heated debate in the retail world. A new report from Interbrand Design Forum scores points for those who believe in brands with evidence that certain brands -- including Walmart, Amazon, and Victoria Secret -- wield considerable power (and dollars).
Target's red and white bullseye, for example, is recognized by 96 percent of Americans. Anthropologie's power "comes from its ability to entice 25 to 40 year old wealthier women, who are more immune to economic downturns." Nordstrom puts luxury in a department store format.
According to Interbrand Design Forum, the secret to our wallets lies in our hearts. It says:
