Today, the day after Christmas, I received an email from American Express, stating something to the effect that your account is past due, and please make a payment.

That is never the type of email anyone wants to receive, but I was slightly confounded because I had paid my bill.  In fact, I had paid my bill three weeks before it was due.  So what was going on?

As it turns out, I had used my credit unions Bill Pay Service.  I had made a batch of payments back on December 1st, and for no apparent reason their system completely dropped/deleted/lost my payment to American Express.  I don’t know if it was due to user error, gremlins, a bug in the system, or some reverse lottery system.

All I know is that I had entered the payment, had marked it in my own bookwork along with several other payments made at the same time.  My credit union accepts these payments in batches and so it would seem impossible for the transaction to be lost.  There was money in the account, so this was not an issue of insufficient funds.  The transaction was just lost.

The Notification Problem

In this case, I made my payment on the 1st and it was not due until the 19th.  I assumed that everything was just fine.  American Express did not know there was a problem until 12-20, when they realized that my account was past due.  They sent me an email on 12-26, and sent a new bill.  I got the email but have not seen the bill yet.

The notification problem is that I’m not told about a problem until after it is too late.  After my account has been assessed a late fee and after my interest rate has been increased!

That can be avoided with many different solutions, but I’d like to focus on fixing the notification problem.  When I called in to fix things today, they mentioned that I could use alerts possibly to configure my account to keep me up to date as to what was going on.

So I logged into Americanexpress.com and clicked on this option

This took me to a screen where I could then configure a number of options, including a warning about an approaching due date, and a notification that my payment had been accepted.  With this configuration, if I always work to have my payment sent at least 5 days before it is due, I will know that there is a problem with my payment, if I receive an alert 3 days before the due date!

I also set up a couple other alerts to help protect my account as well.

I should point out that the spam filter on Firefox 3.0 blocked me from setting up these alerts all together as the enroll button triggers a pop up window with the terms and conditions.  I had to instead use Internet Explorer 7 and even then I had to allow the pop up windows completely for this site (not just the one time allow) in order to get this to work.

It has been some time now and we have finally upgraded the look and feel of our website.  The site not only looks better, but navigation and functionality of many of our tools and tips should be easier and faster for our readers.  We’ve got a few more little things to do before the upgrade will be completed, but soon you will be able to benefit from:

• More Frequent Articles
• More Articles helping people navigate the new mortgage environment
• Easier and faster navigation to tools such as mortgage comparisons and other calculators
• Easier Navigation through tagged articles on a wide range of topics
• Faster access to focus segments of news on the mortgage industry.

Image via Wikipedia

The bailout package was signed by Congress, but so far there is no actual plan to apply the cash to any open problem.  The bailout is not a bailout.  It is the collection of an emergency fund and emergency authorities to be given to the Treasury Secretary (who has delegated the $700 billion to his deputy).

Credit Disappearing

In the wake of no action by the government, credit is disappearing.  Sub prime mortgages and later many regular mortgages and home equity lines were the first to go.  Banks that had issued these loans, issued securities backed by these loans and bought or traded in securities from other banks that had issued these loans, rapidly lost their trust in the value of mortgages as an asset. Those banks basically don’t trust the numbers, and now won’t lend to other banks with possibly equally untrustworthy numbers, valuations and balance sheets.

After freezing credit on each other, banks then began to freeze credit on businesses like At&t and Caterpillar.  Simultaneously, major retailers around the country saw their credit lines for purchasing goods to sell during Christmas drop by 40%.  Auto dealers found that they couldn’t sell cars because banks had also frozen credit to car buyers (and now 1 in 5 auto dealers are likely to go bankrupt before next spring.)

College students went off to school this year, paid their tuition with student loan checks issued from major banks that are not in financial trouble, only to be notified several weeks into the semester that those banks had stopped payment on the checks as they ended their own private student loan programs.

What’s Next?  Cutting Up ALL Credit Cards

As we look at the trends, we see that all credit is disappearing across the board unless it is government backed. One of the few areas left is credit cards.  This is a profitable area for banks, but it is also one of the riskiest areas for banks, and banks don’t have the stomach for anything with a hint of risk.  This indicates that banks are going to cancel all those credit cards out there that far too many people in the United States rely on very heavily.

Americans have to prepare for the day when their credit lines will be dropped down to their existing balance and possibly closed or frozen all together.  Many people have already seen their interest rates skyrocket from 4% to 7% to 10% to 25%, and those are people with great credit and no late payment!  If banks can’t get financed, if the biggest companies in the world can’t get financed, if people can’t get a secured loan on a home or a car, its just a matter of time before people can’t get financed on unsecured credit cards. 

Once credit cards are killed off, many areas of the US economy start to break apart from online transactions by all those shopping sites from eBay to Amazon to online auto insurance quotes to identity confirmations based on credit cards to booking travel through major airlines.  We can’t go back to a cash system, because we just don’t have a lot of cash.  So we are going to have to find a different way.

At one point or another, someone has told you that by renting you are throwing your money away. That is true to a certain degree, but if buying a home is going to stretch you too thin, maybe savings should be your focus.

“I’m throwing my money away renting!”

When you decide to buy a home you are beginning to build equity, so in essence you are paying yourself. Well, when you send that check over to your landlord each month, you are paying for your residence as well as buying flexibility and freedom. By flexibility and freedom, I’m referring to the flexibility of being able to pick up and move relatively quickly and easily as well as being free of homeowners expenses which rapidly add up (just ask any homeowner, they’ll tell you). Owning a home isn’t all Christmas parties and swapping egg nog recipes anyway, it is hard work. Don’t jump in for the wrong reasons.

I read a great quote:

“In other words, home ownership is more like marriage; renting is more like living together. Make sure you’re ready to be wedded to a house before you propose to leave behind life as a renter.”

Source: MSN.com

There are a lot of good reasons to buy a home, but in this down market, it is important to examine some of the bad reasoning that sometimes influences those buying a home.

“It’s a good investment!”

Well, that may be the case sometimes, but primarily a house is a place to live. Granted, as an investment, a home can go either way especially nowadays. Take a moment to consider what happened to folks in Boston, Dallas and Detroit during the late 80’s and early 90’s. Many homes purchased in that time faced nearly a 20% drop in value that took almost ten years to recover from.

In addition to potential risk, home appreciation doesn’t add up as quickly as other investments may, think of them as weight loss pills; give it time. More often than not, homeowners who are viewing their home as an investment very seldom take into account the amount of money they are putting in to raise the value. Sometimes homeowners put in more than they could ever get out of the market and experience the dread of “diminishing returns”.

Source: MSN.com

In case you failed to pick up on the news this weekend, the Treasury Department is bailing out Freddie Mac and Fannie Mae.  This is not something that the Treasury Department really wanted to do at all. Sec. Paulson had hoped that simply telling investors that the federal government was willing to back these organizations would be enough for people to remain content that they are safe institutions.

Unfortunately the federal government learned this week that the accounting within these companies had some errors. Accounting errors are not something that breed any type of ease or content in an investor. In fact it’s something that can lead to the rapid evacuation of investors from any company, let alone one that’s already lost billions due to bad underwriting and investments. Throwing some shoddy bookkeeping into the mix is only going to add fuel to the fire and this helps to explain why the federal government had to step in and bail out these two institutions.

That said, I am currently not convinced that a bailout of these two institutions was necessary. It’s true that stockholders of these two companies will receive very very little for their investments if they receive anything at all. However it would appear that the federal government of the United States caved to foreign pressure to bail out these companies as several large foreign investors held significant exposure to these companies. One of those large foreign investors was the country of China. I do not fully understand the ramifications of what would’ve taken place if these two companies have not been bailed out by the federal government. However, I do know that when you enable an investor to invest in a company without having to worry about the repercussions, you are not fostering a healthy market. By enabling China to invest in Freddie Mac and Fannie Mae without any risk of loss, we are not creating a situation whereby a free economy can benefit. We’ve essentially given a risk free investment to China at a cost to taxpayers of hundreds of billions of dollars, and that can’t be too good for the economy either.

You can always find great deals and even one or two situations where you will find the best buy on electronics item at buy.com, but purchasing those products made in China at a good discount is a great deal different than enabling the entire country of China to gamble in the markets and give them their money back even when they lose substantially. I do understand that the people of the United States are not without some blame in this situation, however we do not enter into this situation by ourselves, and the banks and investors including the country of China are partly to blame. So when the United States government representing the people of the United States decides to foot the bill for a mistake made by the country of China, something smells a little fishy to me.

So I’m continuing on with a quick little series to spell out some simple and easy gadgets for accomplishing your goals.  This started with an article I wrote about gadgets that you need to successfully hunt for a house these days.  After hanging out with some family members that are not as gadgetly inclined as myself, I started trying to focus on some relatively easy and where possible cheap or on sale gadgets that would fit the bill for my mother.

So this time I’m talking about, GPS system. On the surface a GPS system can seem rather intimidating.  So I wanted to find a system that was easy to use while you’re driving. Now, I use a technology called voice recognition. What this means is, when I talk my computer types of the words for me.  I have seen a number of GPS systems that allow you to type little bitty numbers on a screen, and you should have this as a fallback option. However when you are driving, it’s a whole and easier to just say a street name.

So when is looking for a GPS system, I went and looked for GPS system that had voice transmission capabilities and came across this great little whizbang gizmo. 

it’s a Magellan GPS system, and it has a long title to describe the specific model number, but if I were telling this to my mother she would start to get faint hyperventilate, and her eyes would glaze over as I listed off the model number, so I am just going to give you the link. :-) 

here it is, the Magellan Maestro.

Now you can literally go to town while you’re looking for a house and you won’t get lost!

I recently recommended some great gadgets for house hunting that people should consider.  Now, I received a couple emails from that article, from people asking what gadgets I use specifically.  I started to respond, but realized that I am not your typical person.

I’m a bit of an early adopter gadget freak and the tools that I use are not necessarily going to be the tools that are right for everyone else.  I had a bit of an epiphany this weekend however when my family and I went to the beach.  It was my wife and three kids, plus my mother and my wife’s parents.

Both my mother and my father-in-law both used slightly different models of the same digital cameras.  Neither one of them are gadget people.  They both resisted getting cell phones for years, my father-in-law ultimately accepting a cell phone when I bought a phone for him and added it to our plan.

Gadgets and computers are not impossible for them to use, but they definitely don’t go out of their way to add another gadget to their bag of tools.

They both use a Kodak Easy Share camera (my mom with the 7 megapixel version shown above, and my father-in-law with a 5 megapixel version that’s a bit older).  They also both use these cameras a great deal.

The camera is easy to use, easy to get fantastic pictures with, and easy to get those computers onto a computer (just set the camera on a docking bay (a little holder/stand thing and it automatically zaps the computer to your hard drive without any other effort required). 

Now, this camera is also pretty cheap.  I might pay several hundred dollars for a camera or more, but my mother and father-in-law (possibly wiser) will not.  This gem of a camera is less than $200 and can be found on sale for about $185 or better from time to time.

I am going to look back over my previous recommendation and see if I can tune things up for non-early adopters next.  For people that buy the latest gadgets the tips are solid.  But for people like my mom, I need to check it to find the good buys and the easy easy easy and practical devices as well.

Considering buying a new home in the near future? Do you have children and want to know how the local school districts rate? I found a great site last weekend when I was viewing homes in the south Austin, TX area called SchoolMatters.com. All you have to do is select a state, choose a town and hit search. The site will then provide a detailed list of schools and how their districts rate compared to others in the region. The website also offers a number of reviews from local parents and teachers alike. Whether you are looking for Lake Travis real estate or real estate in Austin Texas, you should definitely check out this site.

In addition to Austin real estate, School Matters offers many testimonials as well as detailed information from all across America. If you have children and are considering buying a new home, it is important to know that they will not only have a great roof over their heads, but a great opportunity to succeed when they are no longer under that roof. 

Oftentimes, people use the words Realtor and Real Estate Agent interchangeably. Little do most people know, that there is a world of difference between the two. Even though both a Realtor and an agent are both licensed to deal in real estate transactions, only a Realtor is bound by the National Association of Realtors code of ethics.

The code of ethics is harshly enforced and includes seventeen articles that specify actions and standards of practice. Although there is no guarantee that a non-affiliated license holder will deviate from ethical dealings, the National Association of Realtors code of ethics is an attempt by the industry to regulate agents’ actions to protect consumers. 

Source: homebuying.com