If car shopping is in your future, then checking out the reliability ratings for the cars you are considering should be on your to-do list. Whether you plan to buy a new or used car, the car’s reliability rating is a strong indicator of how much money you’ll spend on repairs — a key factor in determining your overall car ownership costs.

Car reliability data are released annually by Consumer Reports, the independent product-testing organization, which surveys 1.3 million car owners each spring. Then, its experts analyze the data to calculate each specific model’s reliability, taking into account any changes in the model’s design.

While looking at the overall reliability ratings for the brand you are considering offers some guidance, reliability can vary from one model to another within the same brand. For example, in the recently released 2011 Annual Auto Survey, Ford had the biggest drop of all the car brands, down 10 spots from last year to 20th place. This is a big change because in recent years, its quality has rivaled the Japanese brands, which have led the reliability ratings for several decades. But Ford’s decline in this year’s survey was largely due to the redesigned Explorer and Focus models as well as the new Fiesta. Remaining models continued to have strong reliability.

Looking at the data for the specific car models also provides specifics of the problems in the 17 areas the survey assesses. Being aware of whether the issues are associated with squeaks and rattles, engine problems or the car’s electronics will help you understand the severity of the problems reported and perhaps sway you toward or away from purchasing that particular car. While a new car will have most of the problems covered under warranty, there is still the time and other hassles associated with repeated repair visits — such as being without your car.

If you are shopping for a used car, reliability ratings are even more useful since you are more likely to find yourself faced with a repair that is not covered under warranty. Looking at the reliability ratings for the specific model year and those slightly older and slightly newer also can be enlightening. It’s quite possible to see reliability ratings that vary widely for the same car between model years. Use that data to make a decision to buy a different model year. If you buy one model year newer, it may cost you a bit more, but paying out-of-pocket for repairs on the same car in a less reliable model year could certainly be higher.

Bankrate’s content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrate’s Terms of Use.

Reuters

Today’s parents are paying substantially higher out-of-pocket costs for higher education than their parents did 30 years ago. And the public has noticed. Three out of four Americans say college is unaffordable for most people, according to the widely publicized survey Pew Research Center survey “Is college worth it?”

A four-year degree is becoming increasingly difficult to attain due to several factors:

–College costs are rising at nearly three times the rate of inflation, according to FinAid.org.

–More than 1 in 10 students graduate with more than $40,000 in undergraduate student debt, according to the Project on Student Debt.

–Fewer entry-level jobs are available for students once they do graduate.

While scholars debate whether mounting student loan debt approaches the magnitude of the mortgage crisis, the students themselves are just looking for a financial break. Here’s how to determine if college is worth it for you.

Who’s drowning?

Certain cohorts of students are more likely to get in over their heads than others, says Sandy Baum, a consultant for the College Board and senior fellow at the George Washington University School of Education.

“Students enrolled in for-profit institutions, almost all of them borrow and they borrow more than similar students enrolled in other institutions,” she says.

According to the Department of Education, students attending for-profit private institutions are nearly twice as likely to default on student loans as those attending public institutions. Baum adds that students who don’t graduate from college are also more likely to default. Among students who default on student loans, nearly 75% dropped out before graduation, according to FinAid.org.

Among undergrads, first-generation college students, low-income students and adult students working full time are less likely to graduate and more likely to have problems paying off student loans than their peers, says Alisa Cunningham, vice president of research and programs for the Institute for Higher Education Policy in Washington, D.C.

“Graduate students, too,” she says. “It’s kind of amazing how much (private loan debt) they’re taking on.”

Unfortunately, financial aid isn’t keeping up. According to Education Trust, an education research nonprofit in Washington, D.C., government aid is losing its buying power. The Pell Grant — the federal government’s largest grant program — covered 77% of college costs in 1979. Today it only covers 34%, forcing more families to rely on loans.

Why Borrowing Is a Problem

Unlike credit card or mortgage debt, student loans usually can’t be dismissed in bankruptcy. This means taking on high college expenses could be a lifelong problem. Should your loans go into default, lenders have the right to garnish your wages, take your federal and state tax refunds, lower your credit rating, tack collection costs onto the amount you’ll have to pay back and sue you for the remainder of the loan, according to the Department of Education.

The grave consequences of student loan default illustrate exactly why it’s so important for students, especially those in high-risk default groups, to carefully evaluate what kind of student loans they’re taking on, says Haley Chitty, director of communications for the National Association of Student Financial Aid Administrators in Washington, D.C.

While federal student loans come with borrower protections, including loan forgiveness and income-based repayment options that lower or eliminate borrowers’ monthly payments, private loans don’t have these protections. If borrowers get in over their heads, it may be impossible to reduce payments on a private student loan.

Chitty adds that students should also consider how much debt they can reasonably handle.

Calculating a Reasonable Debt

“(Students) really have to look at what they can expect to make coming out of college,” Chitty says. “If you figure out what your monthly (loan) payments will be and estimate what you can expect to make, that’s a good place to start.”

When choosing a school, Cunningham recommends that students brainstorm a few career options that interest them and research starting salaries. If the future monthly payments on their student loan are substantially higher than 8 percent of their future monthly salary, students should think carefully about whether they’re taking on too much debt.

Students also need to consider a school’s graduation rate as part of the larger financial picture, says Pamela Fowler, executive director of the University of Michigan’s Office of Financial Aid.

“You should be able to get out in four years or less,” Fowler says. “The longer you’re in, the more you borrow.”

The good news is that if students stick to Stafford loans and take out the maximum $31,000 that dependent undergrads are entitled to, they will be in a good position to pay their loans back after graduation, says Baum. The reason: Student loan debt is an investment, one that still has substantial payoff for students who finish college.

The controversial Pew Research Center survey, cited earlier, reaches a similar conclusion: 86 percent of college graduates say their college education has been a good personal investment.

“There are certainly individuals for whom the money they spent on college turned out not to be worth it,” says Baum. “But for most individuals, it turns out to be the best investment they could possibly make.”

Reuters

A new study questions the wisdom of putting for-profit companies in charge of traffic safety.

More than 60 million Americans live in the 700 or so communities that have outsourced their street and highway traffic cameras, says consumer watchdog U.S. Public Interest Research Group in a report released Thursday. In return for a share of the revenue, cities allow private companies to place automated devices in strategic locations to catch speeders, red-light runners, and those who make only rolling stops before right-hand turns. Cameras capture a license-plate image, and a ticket is sent to the owner of the offending vehicle.

Those drivers face automated enforcement that emphasizes profit and in some cases heightens safety issues rather than solved them, the group says. (A recent Washington traffic analysis found a dramatic increase in rear-end collisions at an intersection patrolled by an automated red-light camera.)

“Automated traffic ticketing tends to be governed by contracts that focus more on profits than safety,” Phineas Baxandall, the report’s co-author, told the Associated Press.

Contracts with cities and towns often take safety decisions out of the proper hands, USPIRG says. For example, contracts can prevent cities from extending the length of yellow lights, or demand that cities issue a certain number of tickets. Politically savvy vendors lobby successfully not only to place automated systems, the group says, but to protect the programs from citizen pushback.

Cities that have voted to undo their automated enforcement programs can face huge penalties, USPIRG notes.

You broke the law: Pay up

The Insurance Institute for Highway Safety, on the other hand, remains a firm proponent of red-light cameras. Its June 2011 survey found a majority of drivers favored their continued use, even in cities such as Houston where voters had rejected them.

The bigger issue, the IIHS maintains, is safety. Its analysis compared cities with cameras to those without, attributing 159 saved lives to their use.

Forty states allow automated traffic enforcement, but not all treat tickets the same way. Many handle the mailed citations as they do parking tickets: Pay up and it’s over. But others consider them to be moving violations, with the possibility of points against a driver’s record and penalties from the driver’s insurance company. (Here’s a list of current laws and penalties for states with automated enforcement, courtesy of the Governors Highway Safety Association.)

Those who perceive a flash as they cross an intersection usually wait up to two weeks to find out whether they’ve been nabbed. And then, they can look forward to their next insurance renewal, when they can find out whether this is the violation that puts the cheapest car insurance rates out of reach.

Changing the system

U.S.PIRG offered these recommendations to cities considering automated enforcement:

Consider alternative safety options first, without regard to potential revenues.

*Ensure that contract language is free from potential conflicts of interest.

*Avoid direct or indirect incentives for vendors that are based on the volume of tickets or fines.

*Retain complete public control over all transportation policy decisions.

*Retain the option to withdraw from a contract early if dissatisfied with service or its effects.

*Ensure that the process of contracting with vendors is completely open, with ample opportunity for meaningful public participation.

• Make information about the operation of privatized traffic law enforcement fully transparent and accessible online.

*Do not permit information about individual vehicles and drivers gathered by camera vendors to be used for any purpose other than the enforcement of traffic laws.

*Consider establishing state standards to help cities avoid contracting for automated enforcement systems that are not justified or when alternatives make more sense.

The original article can be found at CarInsurance.com:
Report attacks use of red-light cameras

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Early in October, the office of British Prime Minister David Cameron released a draft of a speech he planned to make. It included the sentence: “The only way out of a debt crisis is to deal with your debts. That means households – all of us – paying off the credit card and store card bills.”

Credit card debt essential to recovery

There was immediate and widespread outrage (and not just over the redundant article), which led to that sentence being amended. Some of the furor was strictly political. Cameron is a multi-millionaire from a highly privileged background, and his opponents suggested that the remark showed he was out of touch with a financially challenged electorate.

But others were appalled by the likely impact of a sudden reduction in credit card debt on the British economy. Nick Pearce, director of the Institute for Public Policy Research, an influential UK think tank, told The Guardian newspaper that “if all households paid off their credit card debts, consumer spending in one quarter would be reduced by 25% and GDP by 15%.”

On a macro-economic level, the impact in the U.S. of consumers diverting cash from spending into paying down debt could be as acute as in Britain. A couple of years ago (and there’s little to suggest that things have changed significantly since then), The Boston Globe carried an article that observed:

Especially in the United States, consumer spending is essential: It drives about 70% of economic activity – more than for most European nations and well above the rates in developing countries such as China.

Credit card balances not optional for millions

On a more practical level, there effectively seems to be zero chance of any mass paying down of card debt. Indeed, when FICO, the company that devised America’s most widely used credit scoring system, polled risk managers in banks during the third quarter of 2011, fully 49.8% forecasted that the average credit card balance would rise over the following six months. Some 39.7% expected credit card delinquencies to increase too in the same period.

That’s likely to surprise few, given that millions are still struggling (and sometimes failing) to make ends meet. In a report published on Oct. 10, Sentier Research found that real median household income fell more during the recovery than during the recession. By June 2011 it had plummeted overall by 9.8% to $49,909, down from $55,309 in December 2007.

Credit cards and the economy

In an email dated Oct. 11, Comercia Bank chief economist Robert A. Dye summed up the situation for many:

The U.S. economy barely dodges a bullet, and avoids a back-to-back recession. But that is cold comfort to the millions of unemployed and under-employed workers caught up in a still-wounded labor market. It is also only a faint ray of hope for ailing housing markets across the country. This is an expanding economy, but it is not yet a recovering economy for millions of U.S. households.

Some might think Dye brave in saying that the economy has dodged a bullet; plenty of others still believe that a double-dip recession remains a real possibility. And you can see why. On Oct. 5, Discover unveiled the latest findings of its ongoing U.S. Spending Monitor survey. These found that, in September, a record number of respondents (57%) perceived their personal finances as getting worse, while 28%, another record high, described their personal financial situation as “poor.”

Nearly half (44%) said they expected to have no money left over once they’d settled September’s monthly bills, and more than half reported that they were planning to cut back that month on home improvements, major purchases and going out. Yet another record was broken when a whopping 45% told researchers they had no plans to save or invest that month. If consumer confidence continues to dwindle in this way, the possibility of our double-dipping our collective toes in the icy waters of recession looks worrying.

Credit card rates key to paying down debt

If you’re among the lucky ones who still have spare cash, you may well think that you should pay down some or all of your card debt while you still can. It may not help the economy, but few would blame you if you thought your family should come first.

Here are a couple of tips to help you on your way:

1) Consider signing up for a balance transfer credit card. At least during the 0% APR introductory period (anything up to 21 months), every cent you pay on one of these will reduce your balance, and none should be taken by credit card companies in interest.

2) Prioritize your accounts in order of the credit card interest rates you pay. Start with the highest, and leave your low interest credit cards until last. That way, you eliminate your most expensive borrowing first.

At the end of the process, you might still not be as rich as Prime Minister Cameron, but you could be better able to weather any future financial storms than his country is.

The original article can be found at IndexCreditCards.com:
Why paying off all your debt is a bad idea

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Death is a fact of life, and when someone dies, the deceased’s family naturally may wonder what will happen to his or her mortgage, auto loan, credit card bills, unpaid income taxes and other debts.

The simple answer is that debts become part of the deceased’s estate and typically should be paid before the remaining assets are distributed to the heirs.

Beyond that, debts after death are a very complicated subject, best approached with professional help, says Martin Shenkman, an estate and tax planning attorney in Paramus, N.J.

“When somebody dies, the executor or personal representative, different lingo is used depending on which state you’re in, is charged with marshaling the assets for the estate and paying all the debts.” Shenkman says.

Finding Debts

Exactly how debts should be paid depends on the nature of the debt, the terms of the deceased’s will and state law. For example, a loan collateralized by an asset usually stays with the asset, which means someone who inherits a house might get a mortgage as well. Someone who receives a car might get an auto loan to go with it. However, sometimes a debt may be paid off by the estate.

Executors and heirs also need to consider the possibility of hidden debts. To find out about undisclosed loans — or to ensure there aren’t any — an executor can monitor the deceased’s mail, search for P.O. boxes in the local area, review recent bank statements and speak with the deceased’s financial advisers, Shenkman says.

Credit card bills can be among the easier debts to resolve, unless the estate is insolvent. That’s because credit card companies may reduce or stop the accumulation of interest and fees on an account once they’re notified of a death. They might even, as Shenkman says, “accept a flat payment and call it a day” since they know resolving an estate can take months.

Debts also can come to light when a legal notice is published, as required by law in most states, says Michael Halloran, a wealth management adviser at Estate Strategies Group in Jacksonville, Fla.

“Before the estate can go through the court system, you have to publish, ‘Mike Halloran died, and I’m the executor or personal representative of the estate, and if we owe you anything, you need to tell me,’” Halloran says.

Creditors usually have a 60- or 90-day period in which to respond to a notice.

Jointly Owned Assets

Debts after death can become even more complicated if the deceased owned a business or guaranteed or co-signed someone else’s loan, Shenkman says. The estate may be responsible for such debts, depending on the ownership structure of the business and the legal wording of any loan guarantees. Again, legal advice is a wise investment.

Another complication is some assets may be shielded from certain creditors. For example in Florida, a life insurance policy is safe from most creditors, Halloran says. In other states, no assets are protected. Again, the word “may” should be emphasized due to differing state laws.

Assets transferred through joint ownership or community property generally don’t escape the rules, though collection may be more difficult for creditors, in some cases. In other cases, the asset may simply be repossessed. “Say I own a car jointly with Sue, and I die,” Halloran says. “If the bank has the collateral on the car, they can say, ‘Sue, you have a choice. Mike died, but if you don’t pay us, we are taking the car back.’”

Not Enough Money

If an estate is insolvent, meaning the assets aren’t enough to pay off the debts and the bequests in the will, the executor must sort out some tricky and sensitive issues. Shenkman says he’s seen an increase in such situations due to the poor economy.

“If there is insufficient money to pay off all the debts being claimed, you need to know legally what the priorities are of who gets paid or who doesn’t,” he says.

Such situations can get ugly because people may be grieving the death of the relative.

“When someone dies, it’s a very emotionally charged event for the family and loved ones. When you combine that with the potential of not getting an inheritance but instead having to deal with debt, you’re really talking about a hypercharged situation,” Shenkman says.

If you’re feeling intimidated by your life insurance options, you’re not the only one. A 2010 study by the National Association of Insurance Commissioners shows less than half of American consumers feel confident about making insurance decisions. Perhaps more frightening is only 2 out of 5 U.S. consumers could answer basic questions about insurance coverage.

Get informed about your policy and the company issuing it by asking your life insurance agent these 10 questions.

Whom am I Buying From?

Before getting into the major questions of how much life insurance you need or whether you want term or permanent insurance, do some homework on the company, says Allen McLellan, associate dean and assistant professor of insurance at The American College in Bryn Mawr, Pa.

“You need to know how long the company has been in business, the size of it (and) its ratings,” he says. “You also want to ask the agent, ‘What are your credentials for being a life insurance professional?’”

McLellan says consumers can research the financial strength of their life insurance company by checking out their fiscal ratings through organizations such as A.M. Best Co., Standard and Poor’s and Weiss Ratings. When it comes to the life insurance agent, McLellan says to look for designations such as Chartered Life Underwriter, Certified Financial Planner and Chartered Financial Consultant.

“These designations take up to 10 semester-long courses to acquire,” he says. “Those who come out of those courses are, at least knowledgewise, going to be quite professional.”

Consumers will also want to know if their agent sells insurance from one particular insurance company or multiple firms.

How is My Need Determined?

How much life insurance you’ll need involves two major factors: how much it will take to pay your debts off, including the mortgage, and how much your dependents will need to maintain the same lifestyle after you’re gone. Though all companies factor those two variables in, insurance providers frequently use different formulas for determining your specific insurance need, says Bradley Behrendt, a CFP with Tax & Financial Group based in Newport Beach, Calif.

“(Consumers need to ask) how did the adviser come up with the (appropriate) amount of insurance?” Behrendt says. “Was it a ballpark figure? Was it based on an analysis? If so, how deep was the analysis?”

Understanding how your need is determined is crucial, especially for families with unusual debts, such as high medical bills, that may not be considered in a rudimentary-needs formula. Once policy shoppers are sure their insurance agent is taking all of their current and future fiscal needs into consideration, they can purchase a policy that fits their family.

Does the Policy Provide Living Benefits?

You’ll want to ask about the basics of the policy, including how long the policy will last, what your premiums will be, what the policy’s rate of return is and how the death benefit works. If you’re purchasing permanent insurance, you should also ask about what kinds of benefits the policy provides while you’re living, says Kim D. H. Butler, author of “Live Your Life Insurance.”

“You’re basically looking for four things: control, liquidity, use and equity,” she says.

Control means the policyholder is clear on who owns the policy, who’s funding it, who gets to decide the beneficiaries and whether the policy stays open or closed, says Butler.

Liquidity means the policyholder is clear on how much money he or she can take out of the policy and how fast. “You can get the cash value of whole life insurance within seven days,” she says.

As for use and equity, Butler says policyholders should thoroughly understand what money taken from their account can be used for and what the rules are on borrowing against it if you need to take a policy loan.

What’s Guaranteed?

If purchasing a permanent policy, consumers need to pay careful attention to their life insurance illustration, says McLellan.

“Another question (consumers should) ask is ‘What are the guarantees associated with this product?’” he says.

While life insurance illustrations frequently provide several projections on how your policy could pay out down the road, McLellan says the numbers that really count are the “guaranteed” figures, which show how much you’ll make regardless of fluctuations in the market or fiscal problems the insurance provider may encounter in years to come.

When Can I Expect Returns?

This won’t be a question for term purchasers, but those eyeing permanent policies should be prepared to wait several years before their policy will start generating positive returns.

“Expect that 100% of your first-year premiums will go to issuing the policy,” says Behrendt, adding that most of it will be paid to the agent as commission.

He says permanent life insurance policies are designed as long-term savings vehicles and can take anywhere from five to 10 years to generate positive returns. New purchasers who see green in their immediate future could be sorely disappointed.

What if My Health Changes?

Unless you’re buying a guaranteed-issue policy or purchasing life insurance through your employer, you’ll probably have to endure a medical evaluation. The problem is that over the duration of your policy, your health could change for better or worse.

“If you don’t get the highest (health) classification when you apply for the policy, you need to ask if there is the ability to improve on that rating if your health increases,” says Behrendt.

Behrendt says people who have had health risks such as a heart attack, DUI or smoking habit in the past can have between 10% and 20% knocked off of their life insurance premium if they undergo new medical underwriting after a certain period of time. Policyholders, especially those with term insurance, will also want to know what happens if their health decreases or if they become uninsurable.

What’s Covered if I Become Disabled?

Even if you don’t purchase a disability rider or a separate disability insurance policy, some life insurance policies provide some benefits for policyholders who become disabled.

“Usually those benefits are a disability premium waiver,” says Adam Sherman, CEO of Firstrust Financial Resources life insurance advisory firm in Philadelphia. “For example, if you have a $5,000 (annual) premium and you were deemed to be disabled, the company would provide that $5,000 for that policy.”

Sherman is quick to point out that insurance companies have different definitions for “disabled.” While some providers define it as an inability to perform your specific occupation, others define it as an inability to perform any occupation at all. Being clear on what defines disability and whether your life insurance waives premiums in the event of catastrophe can help you find the right policy and determine your need for additional riders.

Will the death Benefit Adjust for Inflation?

“If we’re talking about (a death benefit) that’s anywhere from 20 to 80 years away, we need to talk about having that death benefit increased (over time),” says Butler.

A $500,000 death benefit may seem enormous today, but 30 years down the road, it will only be worth approximately $200,500 after adjusting for inflation. With inflation increasing approximately 3% each year, time alone can severely erode your life insurance policy even if you never miss a payment. While some policies automatically adjust to keep pace with inflation, some companies sell that feature as an additional rider. Before signing onto a policy, Butler advises shoppers to ask their life insurance agent if the policy automatically factors in inflation and allows them to buy more insurance later on if necessary.

What Happens if I Can’t Pay the Premium?

If you run into financial trouble, knowing your options is invaluable. Butler says term policyholders who can’t pay their premiums typically have a 60- to 90-day grace period to come up with the money, but permanent policyholders have more options.

“(Permanent policyholders) can take an ‘automatic premium loan’ and borrow against the cash value of the policy to pay the premiums,” she says. “If you’re going to borrow against the cash value, you’ll want to ask what the loan rate is, and those are usually anywhere between 5 (percent) and 8%.”

The added bonus of borrowing against your policy is you don’t have to pay it back, but you should understand how borrowing against a cash value policy could affect your future returns and death benefit.

What Happens as I Age?

Your fiscal needs will change as you age. The terms and conditions of your policy might as well. While most term policies will eventually allow you to convert to a permanent policy, Sherman says you may not want to do so.

“Usually you have to convert by age 70,” Sherman says. “For people in their later years, it’s very, very expensive. For example, if I’m a 45-year-old and I buy a term policy for $1 million, that could cost $1,300 (per year) today. If I wanted to convert that same policy at age 65, the premium could be $15,000 a year.”

To save thousands of dollars down the road, ask your life insurance agent about the future of your policy.

When we’re young and stupid, we don’t think about how decisions will affect us ten years down the road. Many of us have often said something like, “If I had known then what I know now.” The thing about clichés is that they’re usually founded in truth.

When I graduated from high school, I wanted to be as far away from my family in Virginia as possible, just like every other college-bound teenager. I wanted to live in New York again, so instead of working my way through and paying in-state tuition, I decided to go to the Rochester Institute of Technology. They had a great internship support program, and I thought that would be important when I found a career.

To “save” money, I lived with my grandparents in Syracuse and attended a community college whose credits would automatically transfer to RIT after two years. By my second year at community college, I was already taking out loans.

The loans begin
My first loan was roughly $5000 because the out-of-state tuition there was triple the in-state cost. The second semester, I had to get my dad to take out a Plus loan for another $5000. After that, it was time for the big guns. I transferred to RIT, and by the time I finished school I had about $45,000 in college debt.

I was okay with that. I’d be able to pay back the $15,000 per year with the fantastic career I was going to get because of the internships I’d find by going to RIT. My first year out of college, I was only making $7.50 an hour as a programmer. Most of that was because I wasn’t looking very hard, but you can’t pay college loans back on $7.50 an hour.

I’m still paying on those loans.

Loans get in the way of life
In 2007, on a whim, I took a mission trip to a school in Paraguay. In just two weeks, I fell in love with it so much that I couldn’t wait to go back. There’s a program that allows North Americans in my church to teach English at the school. In October 2008, I found myself in Paraguay committed for a year.

Before moving to Paraguay, I paid off my credit card debt, had already owned my car, and had found renters to cover my mortgage. The only debt I had to worry about were my college loans. In ten years, I’d managed to pay the balance down to a bit under $30,000. I was able to get a deferment on one and a forbearance on the other. I had enough money in the bank from donations to live in Paraguay for just about exactly a year, but not enough to pay down my debt.

Then my life really changed. I fell in love with a girl who actually wanted to marry me! I’ll say this now: if I didn’t have any college loans, I would have stayed in Paraguay to marry her. For the first time, I felt like my debt was controlling my life and my happiness.

I’d been happy as a clam before. I had a good job, I was able to pay my debts, save a bit here and there, and never want for anything. Now all of a sudden I found myself in desperation because I’d found the woman I wanted to spend the rest of my life with, but she didn’t want to spend it in the U.S. I was completely fine with that, but my debts were in the way.

It’s not all bad, but it could be easier
So now we get to my point: Don’t make decisions without really thinking about them long-term. I’m now faced with a situation where I have to structure my future around an irrational decision that I made fourteen years ago.

I wanted to share my experience with you as an encouragement on your own journey towards financial freedom.

In the end, my girlfriend and I spent a year apart working on her paperwork because she realized she couldn’t live without me. We’re now married and living in the U.S., but our dream since we were dating has been to go back and start a foster home in a poor area of Paraguay. But we can’t. I still owe too much money.

Don’t misunderstand: I’m not whining about my lack of foresight when I was 18. I just want to get you to think hard before you start borrowing money you think they’ll be able to pay back quickly.

These days our budget is tight and the debt is disappearing, but we’re still a few years out from being debt-free. In the meantime, our dreams will have to wait.

Don’t ever let debt make your decisions for you. Be free to dream, free to live your life!

Reminder: This is a story from one of your fellow readers. Please be nice. After more than a decade of blogging, I have a thick skin, but it can be scary to put your story out in public for the first time. Remember that this guest author isn’t a professional writer, and is just learning about money like you are. Henceforth, unduly nasty comments on readers stories will be removed or edited.

The original article can be found at GetRichSlowly.org:
Reader Story: How Debt Put My Dreams on Hold

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Reuters

Being sick is bad enough even without the question of whether the prescription drugs you’re taking are legitimate.

But with the proliferation of counterfeit medicine, a growing number of Americans who use online pharmacies may be at risk for taking fake pills that can result in serious health problems or even death.

According to the Federal Drug Administration, drugs sold on bogus websites may contain the wrong ingredients, incorrect quantities of ingredients, or may be composed of materials like drywall and eggshells.

And the trend shows no signs of slowing.

Last October, FDA Commissioner Margaret Hamburg said in a speech that “in some parts of the world, somewhere between 30% and 50% of drugs to treat serious diseases are actually counterfeit. And even still, it’s hard to really know the full extent of the problem.” She pointed to the pharmaceutical industry’s shift in moving manufacturing operations and supply sourcing overseas as a main driver of the increase in fake drugs.

Adding to the troubling scenario is that there are currently more than 200 drugs on the FDA’s shortage list, a number that has steadily grown over the last five years, and could lead to more counterfeit production.

Drug prices in the U.S. tend to be significantly higher than other parts of the world, forcing cash-strapped patients to turn to the Internet to fill prescriptions. But according to the National Association of Boards of Pharmacy (NABP), the agency that certifies reputable online pharmacies operating in the U.S., of the more than 8,300 online pharmacies reviewed in July, a tad more than 3% appear to be legitimate.

We checked in with experts in the pharmaceutical industry to get answers to the most commonly asked questions about counterfeit prescription drugs and how you can protect yourself.

Which drugs are most commonly counterfeited?

The first counterfeit prescription drugs to hit the market were the kind people had a hard time getting prescriptions for, or were too embarrassed to ask their doctors for, according Roger Bate, author of Making a Killing: The Deadly Implications of the Counterfeit Drug Trade.

“Drugs like Viagra and pain killers were the prime focus for counterfeiters until the last 10 years or so, but now people are involved in faking a variety of drugs, including cancer drugs, blood pressure medicines and cholesterol medicines,” he says.

According to the FDA, drugs like Ambien, Xanax, Lexapro, and Ativan are also being faked. In the last year, the agency said some individuals who ordered these drugs online received drugs made of Haldol, a powerful anti-psychotic drug that can be deadly.

The most commonly-counterfeited drug continues to be Viagra, which is manufactured by drugmaker behemoth Pfizer. Pfizer Vice President and Chief Security Officer John Clark says the erectile dysfunction drug accounted for 57% of global seizures of counterfeit drugs in 2010, and that many online pharmacies claim to sell “generic” versions of Viagra, which doesn’t even exist in the U.S.

According to Clark, in the last decade there have been counterfeit versions of 22 Pfizer medicines discovered for sale online including Celebrex, Lipitor and Zithromax.

And although the focus is typically on counterfeit pills, Bate says that it’s not impossible for things like inhalers and cough syrups to be faked as well.

“Of course the most important thing to a counterfeiter is to be able to fake packaging, so for inhalers, having the box look right would be the most important piece of the puzzle.”

What are some indications my drugs are counterfeit?

For some pills, it’s almost impossible to tell what’s real and what’s fake, says Carmen Catizone, executive director of the National Association of Boards of Pharmacy (NABP).

“The best indication would be if it tastes different, appears different in color, or reacts differently in the way it dissolves or breaks,” says Catizone. “If anything appears abnormal, people should call their pharmacy or doctor immediately.”

Pfizer’s Clark says that any indication of abnormality in a drug should be a red flag, and that the size and shape of the pill should always be examined before consumed.

“If you have a chronic condition that requires treatment every day, you can more readily spot change in the pill,” says Bate.

Am I in danger of buying counterfeit drugs when I get a prescription filled at my local pharmacy?

“The odds are very low,” says Bate. “The U.S., generally speaking, has a very secure supply chain, and over last decade there have been very few breeches.”

Who is the most at risk for getting counterfeit drugs?

NABP’s Catizone says the people most at risk are those who think they know everything about buying drugs online.

“There are some people who think they are great at getting good deals and finding legitimate drugs online and half the price, and they think they are going to outsmart the criminals,” says Catizone. “It doesn’t work that way.”

Senior citizens are also at risk, particularly those looking for a bargain on multiple types of medication, says Catizone.

“Thankfully, we haven’t seen as many seniors being taken advantage of since Medicare Part D began offering more subsidies for prescription drugs, but because they know less about the internet and are less experienced with online scams, seniors are still a high-risk group,” he says.

Terri Mock, vice president of Global Marketing for OpSec Security, an anti-counterfeiting technology company that works with the major U.S. pharmaceutical companies, says that unfortunately bargain-hunters are also in the at-risk category.

“If you think a deal sounds too good to be true, it probably is. When it comes to medicine, too many people are willing to ignore that inner flag that gets raised,” she says. “With the economy the way it is, consumers are trying to save money. They may be more willing to try an online pharmacy because they can avoid the process of seeing a doctor.”

How can you protect yourself?

If you must buy pharmaceuticals online, Bate says the odds for getting a counterfeit drug falls rapidly if you take a few steps. The National Association of Boards of Pharmacy issues reputable Internet pharmacies a seal indicating it has met state licensure requirements called the Verified Internet Pharmacy Practice Sites Seal, or VIPPS Seal.

“The seal tells consumers this is a safe, legal pharmacy,” says Catizone. “If someone tries to copy the seal, we have programs that detect that. Also, any site bearing the seal has a security feature that when you click on the seal, it links back to the NABP site.”
People looking to buy drugs online shouldn’t make a sudden decision to do so, says Bate.

“If you do 20 extra minutes of research, you can find a credentialed site to get what you need. But there are huge dangers if you just pick one at random.”

What should you do if you think you got a fake prescription drug?

“If you receive a suspect drug from your local pharmacy, definitely take the drug back to your pharmacist,” advises OpSec’s Mock. “If you purchase your drug from an online pharmacy, call the number listed on the site.”

Consumers can also contact the FDA’s Division of Drug Information at 888- 463-6332 or druginfo@fda.hhs.gov.

Reuters

Dear Debt Adviser,

I have horrible credit, but I have recently righted my ship as far as trying to pay it all off. A few months ago, I paid off one of my outstanding debts. On my credit report it is listed as “Payment after charge-off/collection.”

My question is this: Can I get this completely removed from my credit report, or is there something else that I can do to look better? Also, my credit score is pitiful. Will it start to go up once I get all my bad debts and charge-offs completely paid?

– Donald

Dear Donald,

As you have learned, one of the consequences of not paying what you owe is “horrible credit.” However, with time your credit will improve, and it is hoped you will have learned some valuable lessons that will prevent you from defaulting on future financial obligations.

Your credit score will not immediately improve when you pay your charged-off/collection accounts. And in reality, it shouldn’t. Why not? Your credit score estimates the likelihood you will repay your next loan on time and as promised. You have demonstrated you don’t do what you promise, and when you do it is late. In your case, the payments are very late. A charge-off usually doesn’t occur until after a bill is overdue by four to six months.

But, you are doing the right thing by paying your debts for a couple of reasons. For one, you will be looked upon much more favorably by potential lenders if your accounts are paid should you need to access credit before your credit history is completely restored to its former glory. Lenders like to see you paid what you owed, even if it took you longer than it should have to do so. In fact, in a tight credit market, you may not qualify for the credit you want at all (or for any price) if your accounts are unpaid.

Two, if you need to change jobs or are up for a job promotion, an employer may check your credit report as part of the hiring or promotion decision process. Employers know everyone makes mistakes. By paying what you owe, you are illustrating to employers and others viewing your credit report you made a mistake but put things right in the end. So while the paid charge-off may look bad, an unpaid charge-off would look much worse.

In general, accurate negative information cannot be removed from your credit report until the reporting period (seven years from the first date of delinquency) has expired. Some bill collectors may be willing to remove their negative credit report entry from your credit report in exchange for a fast, full, lump sum payment, but the Fair Credit Reporting Act says that is a no-no.

When your credit score is calculated, your past two years of credit history are given the most weight. So the further out from the charged-off accounts you get, the better your score. Since you can’t change the past, you need to concentrate on changing your future. Get some positive credit history added to your reports by paying your current accounts on time and as agreed. Add new credit from a secured card or a passbook loan, and your credit score will improve with time.

While you are putting time between you and your past credit mistakes, I would recommend you start or add to an emergency savings cushion of six to 12 months’ of living expenses. Without a savings cushion, it is unlikely you will be able to become financially sound and secure.

Good luck!

Bankrate’s content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrate’s Terms of Use.

Reuters

Homebuyer, beware the skeletons in the closet.

The house you’re eyeing might hide some spooky secrets — perhaps a murder that happened upstairs, a body buried in the backyard or even a ghost in the basement. You might or might not find out about these through disclosures during the purchasing process. But you don’t have to be caught off guard by these nasty homebuying surprises.

According to the National Association of Realtors, 47 states and Washington, D.C., have laws requiring sellers or listing agents to disclose or answer questions about a property’s condition or home’s history, which could include death, violence or mysterious things that go bump in the night.

The laws vary in stringency in each state, but many Realtors believe it’s just good business to be upfront.

“I don’t want anybody to find out something negative about a house that I sold whether I knew it or not, because it’s going to hurt my reputation,” says Diane Saatchi, associate broker and senior vice president at Saunders & Associates in Bridgehampton, N.Y. “And more important than that, it would make the buyer uncomfortable.”

Got a creepy feeling about a house you just can’t shake? The first step is to check your state and local government’s laws on what must be disclosed to you as the buyer. Ask Realtors to explain the laws. Then conduct your own investigation using Google and the city’s newspaper archive at the library, Saatchi says.

Also, many police reports are public record, so search the address of the house to see whether it’s listed as a crime scene. Then knock on doors.

“Here’s your best source of information for any buyer: the neighbors,” says Joan Cota, broker and owner of RE/MAX Professionals in Sioux Falls, S.D. Sometimes you must take what they say lightly, she says, but neighbors may tell you what you need to know.

Haunted or Coincidence?

And sometimes, the ghouls will alert you.

Bob Davis, a Realtor in Brandon, Fla., says he bought a mobile home and lot as investment property about 10 years ago. Last year, he got a call from the tenant, who identified herself as a medium who can communicate with the deceased. She said she kept hearing sounds, voices and screaming. She asked whether someone had been killed on the site.

“I told her that, as a matter of fact, somebody had been killed there,” Davis says. “But it was in another mobile home that was on the same lot, and I had since changed it out. It was very odd. It makes you wonder.”

As a Realtor in Florida, Davis didn’t have the duty to disclose the death, but he did disclose when asked. But in states such as South Dakota, sellers must provide information about murder, suicide or any other felony that occurred in the past 12 months, Cota says.

Digging for Bottom-Barrel Prices

Some people who hear about a home’s violent history aren’t worried about a haunting, says Mary Pope-Handy, a Realtor in Los Gatos, Calif., who sells normal houses but blogs about haunted real estate.

“Most of the time when people ask me to help them buy a haunted house, it’s because they think they’re going to pay 10 cents on the dollar for it,” she says. “They’re really bargain hunters.”

It’s true that the prices of stigmatized houses can be dramatically affected. In 2000, two Wright State University professors conducted a study on what they called “psychologically impacted” houses. They looked at sales across Ohio and found that stigmatized homes sold for about 3% less than nonaffected ones but languished on the market about 45% longer.

Many times, the price difference is more dramatic than a 3% dip.

Take Davis’ example. He is trying to sell a foreclosed home in southwestern Florida. Usually this upgraded house on the water in an upscale St. Petersburg, Fla., neighborhood could sell for about $400,000 if there were no issues. But he guesses that it might go for a meager $75,000.

Blame it on the American Indian burial ground in the backyard.

“(The house) is worth essentially nothing right now,” Davis says. “It’s too close to the Indian burial ground, and the home should not have been built. I don’t know how they got a certificate of occupancy because you need permitting and all that stuff to build a home.”

He guesses the Indians were Calusa or Seminole, but either way, he must disclose the burial ground because it’s a material fact about the physical condition of the property. The buyer will need to move the house to another location, he says.

Another Turn at Bat

Even in states where sellers and listing agents aren’t required to disclose certain facts, homebuyers may have legal recourse if they believe the house has been misrepresented.

That can include an undisclosed infestation of bats. In the Sioux Falls, S.D., area, a bank-owned house became the new home to a colony of the critters. They swooped down and chased out an inspector, who “feared for his life” during a routine check, Cota says.

“The buyers wrote a letter to the bank and wanted out of the contract, and the bank gave them their earnest money back,” she says.

However, Cota says, another family found bats in a different house and simply paid to have them removed.

“What bothers one person doesn’t bother the next person,” Cota says. “That’s just true with anything in real estate.”