Entries for September 2007

For the third year in a row, the Hip-Hop Summit Action Network, a nonprofit that uses the power of hip-hop music to educate young people, is focusing on personal finance lessons. With help from hip-hop notables such as impresario Russell Simmons and performer Mýa, the organization is hosting a "Get Your Money Right" tour in cities across the country, including Washington, D.C., Miami, and Atlanta. HSAN's president, Benjamin Chavis, spoke with U.S. News.

Dear Alpha Consumer,

I am faced with a real hardship. I am a graduate of the University of Miami, with over $125,000 in student loans. I also have $50,000 in credit card debt. I am trying to get a job to pay them off, but being physically disabled I have been unemployed since May of 1998. I have been deferring my student loans for the past nine years. What can I do?

In Green With Envy: A Whole New Way to Look at Financial (Un)Happiness, Shira Boss asks people—including her seemingly well-to-do neighbors—how they can afford nice furniture, jaunts to Paris, and a lush lifestyle. It turns out that most of the people she interviews are as cash strapped as she is and charge many of their purchases to their credit cards. By peeking into people's bank accounts, Boss aims to deflate money envy.

In theory, borrowers should benefit from this week's Federal Reserve move to cut rates. The Fed sets the rate banks charge each other on overnight loans and the one at which banks borrow directly from the central bank. So, in general, lower rates mean cheaper money. But consumers with credit card debt hoping to lower their monthly interest payments will have to take matters into their own hands if they want to see those savings show up in their own bank accounts. U.S. News spoke with Bill Hardekopf, chief executive of LowCards.com, a website that lets consumers compare credit card rates, about how to gain from the Fed's move.

Dear Alpha Consumer,

I own my home with my husband. Our mortgage balance is $135,000. We also have $30K in credit card debt, which is where the big problem is.

The interest is killing me, and I cannot make a dent in the balances. I no longer use these cards as I am trying to pay them off. Should I refinance and lump this credit card debt into my mortgage? I could get an adjustable rate mortgage at an interest rate of around 5 percent. (My house was recently appraised for $225,000.)

I am also about to get divorced, and it looks like refinancing is the only way I can keep my house, which was a gift from my parents, and also get rid of my debt. But it makes me very nervous to have such a high mortgage balance and be a single parent. The other option I have explored is debt settlement, which my mortgage lender said will look like bankruptcy on my credit report. How long would that affect my credit report and score?

My financial situation is causing me stress, anxiety, and sleeplessness. I would like to resolve this as soon as possible.

Dear Alpha Consumer,

I am going abroad soon and want to bring cash with me. Are traveler's checks still the best way to do that?

Traveler's checks, like VCRs, are on their way out. "No one uses them anymore," says Chris McGinnis, editor of Expedia Travel Trendwatch.