3 in 10 Plan to Borrow to Fund Christmas 2012

According to the latest research* from Equifax, the leading instant online credit information provider, 3 in 10 consumers are planning to borrow money to fund the coming festive season.

As Neil Munroe, External Affairs Director, Equifax explains, there’s nothing wrong with that plan. “But it’s really important that consumers budget so that they can afford to pay off their debts as soon as possible in the New Year. Otherwise they could find Christmas 2012 hanging over them well into 2013 – and costing them a lot more than originally planned.

“Clearly the current economic climate is making balancing finances quite difficult for some families, and it’s understandable that they might want to put financial pressures at the back of their minds so that they can celebrate Christmas. But, with our research revealing that it took between 2 and 6 months for a quarter of consumers to pay off Christmas 2011 debts, it’s a concern that consumers already under financial pressure could be paying extra interest in 2013. And that’s especially the case considering that 1 in 10 consumers said they don’t budget for Christmas spending.”

The fragile state of UK consumer finances is also highlighted by the Equifax research, which found that nearly 65% of consumers have seen an increase in their monthly out-goings in 2012 and three quarters say they now have less disposable income than this time last year. “This could be another reason for any debt incurred for Christmas 2012 having an impact on finances well into 2013”, continued Neil Munroe. “Especially as nearly half of respondents to our survey said that they plan to spend the same or more than last year.”

When it comes to how much consumers plan to spend on their Christmas celebrations, just over 13% will be spending more than £500 although the same percentage plan to spend between just £100 and £150.

The research also provides a revealing insight into some of the steps that consumers are planning to take this year to save on the cost of the festivities, with over 13% planning to downsize on the turkey and 17% aiming to re-use unwanted presents. The enormous popularity of discount vouchers and retailer reward points also appear to be playing an important role in funding Christmas 2012 with half of respondents citing both of these as helping with festive finances.

How will you save on Christmas costs?

Use discount vouchers    51.57% Cashing in retailer reward points    49.38% Set smaller budgets for presents for family and friends    33.50% Buy presents in the sales throughout the year    26.68% Only have my Christmas lights on at night    21.53% Stop buying presents to family/friends’ children who are over 18    19.91% Have Christmas dinner at home rather than eating out    19.46% Reuse unwanted presents    17.39% Give homemade presents    14.21% Down-size my turkey    13.53% Buy from Charity Shops    13.53% Secret Santa – so only buy one gift per family group or friends    7.94% Send e cards rather than use the post    7.27% Not invite as many extended family for dinner    5.48% Wait to see friends and family until after Christmas so you can buy their presents in the sales    2.40%

“Consumers can stay on top of their finances by getting a copy of their credit report which provides a valuable insight into their financial status and current credit agreements as well as enabling them to assess their ability to gain new credit”, concluded Neil Munroe.

Equifax UK

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Avoiding Holiday Debt

Plan now to prevent post-holiday bills.

Festive store displays mean the holiday shopping season is in full swing. While a recent survey by the National Retail Federation is estimating that consumer spending will be conservative this year, the group predicts that the average shopper is planning to dole out $421.82 on family members, $75.13 on friends and $23.48 on co-workers.

“The holidays bring on a feeling of consumption on the part of individuals to provide gifts to families and friends,” said Charles W. Miller, associate professor of finance at Marymount University in Arlington. “Often, when monies are not available, people turn to the path of least resistance which is the credit card.”

To avoid accumulating credit card debt during the holidays, financial experts say plan ahead, develop a strict budget and stick to it.

While the holidays mean increased spending for many, financial setbacks can be avoided. Local money experts offer strategies for those determined to emerge from the season with minimal or no debt.

McLean-based financial advisor Kristan Anderson said, “Avoiding holiday debt is all about setting a budget and being creative about gifting options,” she said. “The budget should be an amount that does not require the additional use of credit cards for short-term financing.”

Potomac, Md. resident Linda Berg-Cross, a researcher and professor of psychology at Howard University suggests, “Avoid developing a consuming style based on what the media is selling. Media literacy is critical for financial savvy in today’s world.”

Berg-Cross recommends that consumers use money-saving tactics like “holiday shopping at resale stores, waiting for sales, cutting coupons, and [internet] surfing to comparison shop.”

Theresia Wansi, Ph.D., professor of finance at Marymount University adds, “You can go to a store like Bloomingdales and look around and then go to a discount store and find the same items at a much lower price.”

“Avoiding holiday debt is all about setting a budget and being creative about gifting options,”

Anderson says avoid waiting until the last minute to purchase gifts. “Starting early…allows you to spread the costs out over a few months or more,” she said. “Some stores are offering layaway, which is another option that avoids increasing credit card debt.

Steve Pillof, Ph.D., assistant professor of finance at George Mason University advises consumers against going shopping without a methodical plan. “Stores have colorful displays and holiday lights that lure shoppers,” he said. “Before going shopping you have to sit down and decide how much money you are going to spend on each person. Make a list and take it with you to help resist overspending. Don’t charge more on credit cards than you can afford to pay off easily in three months.”

For those having financial difficulties Anderson says, “It is worth having a discussion with family members and opting to not exchange gifts outside the immediate family. Or just have a simple gift exchange where each person has only one person to buy a gift for. Don’t underestimate the value of a homemade gift, either.”

Marilyn Campbell

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The CFPB and Credit Report Errors: What New York Consumers Need to Know

Credit report errors are more common than many consumers think but there are options available. The CFPB is now handling complaints and a consumer protection attorney can help with a FCRA claim.

AMHERST, NY, November 26, 2012 /24-7PressRelease/ — Few things can affect as many opportunities as your credit report. Banks, landlords, student loan lenders, and even some employers all consider consumer credit reports when evaluating applications in New York and around the country. A clean credit report can help consumers get access to the best terms on mortgages, credit cards, and student loans. On the flip side, a lower credit score can cause serious damage.

Some industry observers warn that consumer credit reports often include dangerous errors. In another indication that consumers need to be careful about what shows up on these reports, the federal Consumer Financial Protection Bureau is now making itself available to help people fix mistakes.

While the CFPB can help you clean up a credit reporting company’s mistakes, consumers might have to go a step further to receive compensation for the harms caused by bad reporting.

Watching Out For Your Credit Report

Three major companies dominate the consumer credit reporting industry: Equifax, Experian and TransUnion. While the Federal Trade Commission had authority to enforce laws against the credit reporting companies, no agency could create regulations or inspect how the companies operate.

This changed recently when the CFPB received authority to start taking a closer look at this industry. The CFPB can now regulate all credit reporting agencies that make more than $7 million a year. Around 94 percent of the industry falls within this category, meaning that the CFPB can help watch out for problems in most of America’s credit reporting.

The CFPB also recently took over regulating debt collection agencies to make sure that debt collectors are not violating consumer rights under the Fair Debt Collection Practices Act.

Credit Reporting Errors And What Consumers Can Do About Them

This expansion of regulatory authority over credit reporting companies is happening while consumer advocates are warning about the risk of errors throughout the industry.

Recent studies found big mistakes in consumer credit reports. These groups say that between 30% and 80% of reports include errors. As many as 50% of the mistakes were bad enough to harm a consumer’s financial opportunities.

Consumers have some available tools to help avoid these risks. Everyone is entitled to one free credit report from each of the major three companies every year. This includes EquiFax, Experian, and TransUnion. Consumers can request the reports at AnnualCreditReport.com and the FTC recommends spacing the three reports out over an entire year to keep a frequent eye on changes.

Anyone who finds a potential mistake on their report can now file a complaint with the CFPB. While this allows consumers to clean up credit reporting mistakes moving forward, it does not compensate them for the harms they have already suffered.

Instead, consumers can also pursue a claim under the Fair Credit Reporting Act to receive compensation for financial damages or emotional distress as a result of credit reporting errors.

While credit reporting mistakes can cause significant harm to consumers in terms of both lost financial opportunities and emotional frustration, there are ways to fix mistakes and recover compensation. Credit reporting companies may appear to hold the keys to many of the biggest opportunities in New York. The reality, however, is that they must obey the laws designed to protect consumers’ right to accurate reporting.

Anyone who is concerned about credit report error should consult with an experienced New York consumer protection attorney.

Kenneth Hiller

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U.S. Credit Card Debt Rises in 3rd Quarter of 2012

RoadFish.com men’s lifestyle and finance magazine today released their observations surrounding TransUnion’s recent report which revealed a nearly 5% drop in U.S. credit card debt and a 0.04% increase in 90-day overdue credit card payments. RoadFish.com’s take on this issue could prompt Americans to address their debt this season and carefully monitor holiday spending to avoid accruing more debt.

AP Business writer Alex Veiga reported for Boston.com on Monday about a recent TransUnion analysis of consumer-credit data which revealed that American consumers have not only increased the average credit card debt per borrower by 4.9% up from the same time last year, but have decreased timely credit card payments. The TransUnion report showed that the rate of credit card payments which are 90 days or more overdue jumped from 0.71% in the third quarter of 2011 to 0.75% in 2012’s third quarter. Veiga’s article was quick to add that the late payment record is still considered low, with the lowest late payment rate recorded by TransUnion being 0.56% in the mid 90’s.

RoadFish.com is not shocked by the jump in debt, considering back-to-school purchases and end-of-summer travels, but encourages consumers to watch their credit scores for negative impacts as a result. RoadFish.com’s Senior staff writer is quoted as saying, “Credit scores are in part tallied by the credit bureaus taking a look at how much of a consumer’s available credit has been used. So if consumers are using their credit cards more, and getting closer to reaching their credit limit, scores will have a natural tendency to dip as a result. If you haven’t used your free credit report check yet this year, it might be the time to go for it. That way you can assess any damage done and actively work on correcting it. You could even make it part of a New Year’s resolution, but why even wait til the New Year? The sooner, the better to get on it.”

The above-mentioned article states that, despite the increase in credit card usage and late payment rate, it appears as though most consumers are actively working on chipping away at their debt, even if it means giving up certain personal luxuries. TransUnion’s Vice President of the financial services business unit, Ezra Becker, is quoted as saying, “We definitely see consumers being more conservative in their spending and making every effort to pay down the balances and maintain the health of those card relationships.”

RoadFish.com encourages consumers to reign in holiday shopping and carefully monitor their spending to avoid accruing more debt and to keep their personal finances in check. RoadFish.com’s Senior staff writer is quoted as saying, “With credit card usage up, it’s important for consumers to not lose control over the holidays. It’s way too easy to charge holiday purchases like food, new outfits, and especially gifts, with the intention of paying it all off in the New Year. But adding to already existing debt is not wise. I would challenge readers to try their hardest to spend within their means this season, by figuring out their income versus bills, and then calculating how much they have to spend out of their paychecks—not on credit cards. It is entirely possible, although for some it may mean scaling back on expensive gifts and looking for less-costly items that perhaps have more meaning or sentimental value.”

Veiga’s article attributes part of the credit-card balance rise to the fact that banks have been issuing more credit cards to consumers within the past year. According to TransUnion’s data, the rate of bank-issued credit cards was up 3.1% in the second quarter of 2012 from the same time last year.

Roadfish.com

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Delinquencies Rise as Consumers Load Up on Debt

Americans cranked up their use of credit cards in the third quarter, racking up more debt than a year ago, while also being less diligent about making payments on time, an analysis of consumer-credit data shows.

The average credit card debt per borrower in the U.S. grew 4.9 percent in the July-to-September period from a year earlier to $4,996, credit reporting agency TransUnion said Monday.

At the same time, the rate of credit card payments at least 90 days overdue hit 0.75 percent, up from 0.71 percent in the third quarter of last year, the firm said.

While higher, the late payment rate is rising from historically low levels. The lowest late payment rate on TransUnion records going back to the mid-1990s was 0.56 percent, set in the third quarter of 1994. More recently, it was at 0.60 percent in the second quarter of last year.

During the last recession, many Americans reined in spending in favor of paying off debt, particularly credit card balances. The housing downturn also prompted many homeowners to make paying their credit card accounts on time a priority at the expense of other financial obligations, such as their mortgage payments.

And there are no indications that trend has changed, even with the slight uptick in the late payment rate, said Ezra Becker, vice president at TransUnion’s financial services business unit.

‘‘We definitely see consumers being more conservative in their spending and making every effort to pay down the balances and maintain the health of those card relationships,’’ he said.

Americans are also carrying higher card balances, though the third-quarter increase could be due to seasonal factors.

Cardholders tend to use their cards during the holidays at the end of the year and then pay down their balances in the spring. Similarly, many consumers will spend more in the summer and early fall on summer vacations and back-to-school shopping, Becker noted.

The pickup in credit card use also may reflect improved confidence in the economy on the part of consumers.

Consumer confidence increased steadily between July and September, as hiring improved, particularly in August and September. Employers added 171,000 jobs in October.

Another likely contributor to the rise in card balances is that banks have been issuing more cards to borrowers, including those with less-than-sterling credit.

Data on the number of new credit card accounts opened by consumers lags by a quarter, so the most recent figures that TransUnion reports are from the second quarter of this year.

The data show that the number of new cards issued by banks rose 3.1 percent in the second quarter from a year earlier, with more than a quarter of the cards going to consumers with a nonprime credit score, according to the VantageScore credit scale.

A nonprime score is anything below a 700 on the scale, which ranges from 990 to 501. The lower the score, the more of a credit risk a borrower represents to banks.

All told, 29.6 percent of the cards issued by lenders in the third quarter went to nonprime borrowers.

‘‘Lenders are absolutely issuing more credit in the nonprime space,’’ Becker said. ‘‘The size of the pie is bigger and nonprime consumers are getting a larger share of that pie.’’

Banks have become more open to issuing credit cards to higher-risk borrowers due to tight competition for top-rated consumers, many of whom are not signing up for additional credit. That leaves the crop of borrowers with some blemishes in their credit history.

Even so, TransUnion forecasts that severe delinquency rates on cards will remain near current low levels in the fourth quarter.

The Associated Press

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Freedom Financial Network Offers 9 Tips for a Debt-Free Holiday Budget

Credit advocate suggests planning ahead and savvy shopping to stay out of debt

San Mateo, Calif. (PRWEB) November 20, 2012

Only weeks before the winter holidays, and with Thanksgiving weekend here—the official start of the holiday shopping season—now is the time for consumers to plan their holiday gift-giving strategy so they do not go into debt, said Kevin Gallegos, vice president of Phoenix operations for Freedom Financial Network (FFN).

The National Retail Federation’s annual holiday spending forecast, released in October, anticipates that total consumer spending for the winter holidays, across all categories, will rise by 4.1 percent to $586.1 billion. That is the highest projected increase since the start of the recession, although it is a little less than last year’s actual year-over-year spending increase of 5.6 percent. The specific category of online spending is expected to grow even more, rising 12 percent over last year, to as much as $96 billion.

“With those increases on the horizon, consumers need to be careful to stick to their budgets and not over-spend for the holidays,” Gallegos said. “Consumers who are among those planning to do more shopping online should be especially careful to keep their personal information safe.”

Gallegos offered these nine specifics on managing a holiday budget:

1.    Plan ahead. “‘Budget’ is really synonymous with ‘plan,’” Gallegos noted. He suggested consumers take a look at their household budgets to ensure they are up to date. Then they should develop a holiday-specific budget. This budget should include all of the household’s gift recipients, along with gift ideas and estimated costs. Also include cards and postage; decorations; entertaining (including food, drink, special garments, child care, etc.); year-end tips for newspaper carriers, babysitters, housecleaners, doormen, hairdressers and other service providers; gifts for teachers, doctors, neighbors or others; travel costs.

2.    Compare budget to reality. When it comes to gifts, be sure the gift list fits within the budget. “If the budget is smaller than the givers’ generosity, adjust the list before you start shopping,” Gallegos advised.

3.    Search for savings. Starting now, watch the mail, email, newspaper ads and catalogs for discount codes or offers. Coupon codes or promotion codes sometimes are available online. A quick search for the retailer’s name and “coupon code” can turn up a discount code. Smartphone or tablet computer users can try shopping apps that let users compare prices online and offline. Find a way to track deals in a spreadsheet or notebook to find maximum savings, and note expiration dates.

4.    Count the total cost when shopping online. Shipping can destroy a gift-giving budget. Try an online shopping tool, providing a list of online retailers that offer an item, with the list price, shipping costs and total price. That search can help identify the lowest total cost.

5.    Keep debit cards offline. Debit cards can be a good way to stay within budget, because a user cannot spend more than available in a bank account. But when shopping online, debit cards expose shoppers to risk. A debit card number thief can take funds directly from their victim’s checking account. This can create a cascade of other problems while the account owner files a protest and waits for the bank to return the funds. Instead, complete online shopping using PayPal (which can transfer funds directly and securely from a checking or savings account) or use one dedicated credit card, which makes it easier to track spending.

6.    Put away the plastic. In general, it’s best to avoid using credit cards to pay for purchases. Studies show people spend more when they pay with plastic. Switch to cash (or PayPal) whenever possible. Shoppers should tally the amount spent at each store or website, and charge no more than they can pay in full each month. Those who need more spending discipline sometimes find success when they go online immediately after a charge and transfer the charged amount from a bank account to pay off the balance.

7.    Consider a pre-holiday spending fast. A spending fast entails not spending any money except on necessities. That means no extras at the grocery store, no new or used clothing, no dining out, etc. This approach requires a commitment, but can help accumulate savings and avoid going into debt.

8.    Eat out less. For those for whom a fast seems too extreme, trimming daily expenses up to the holidays might seem more manageable. Dining out can be an easy target for many, said Gallegos. The average American spends more than $2,600 each year eating out, which equates to about $50 a week, per person. With a median per-capita income of about $27,000, people spend, on average, about 10 percent of their income dining out. Breaking that habit could put several hundred dollars into a household’s holiday kitty.

9.    Don’t wait till the last minute. For many people, the holidays result in hundreds – or thousands – of dollars in new credit card debt. Starting shopping early can give shoppers more time to find bargains. Gallegos cautions, however, that the key to this strategy’s success is to shop with a list. “Mark off gift recipients on your list when you’ve made purchases, and do not add more gifts,” he said. “It can be tempting to buy ‘just one more thing,’ but doing so for everyone on your list can set your budget back significantly.”

“It is all too common for consumers to go into holiday credit card debt to show others they care,” Gallegos said. “Fortunately, with some advance thought and planning, it is possible to have a happy holiday without getting into financial trouble.”
Freedom Financial Network, LLC (FFN), provides comprehensive consumer credit advocacy services. Through its Freedom Debt Relief, Freedom Tax Relief and ConsolidationPlus products, FFN works as an independent advocate to provide comprehensive financial solutions, including debt settlement, debt resolution and tax resolution services for consumers struggling with debt. The company, which has resolved more than $1.7 billion in debt for more than 140,000 clients since 2002, is an accredited member of the American Fair Credit Council, and a platinum member of the International Association of Professional Debt Arbitrators. The company holds the Goldline Research Preferred Provider certification for excellence among debt relief companies.

Based in San Mateo, Calif., FFN also operates an office in Tempe, Ariz. The company, with more than 550 employees, was voted one of the best places to work in the San Francisco Bay area in 2008, 2009 and 2012, and in the Phoenix area in 2008, 2009, 2010 and 2012. FFN’s founders received the Northern California Ernst & Young Entrepreneur of the Year Award in 2008.

 

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5 tips to steer clear of debt in holiday shopping

Black Friday deals are starting early this year, and that means more pressure to spend. As the holiday shopping season expands and retailers make impulse buys easier, via smartphone and otherwise, consumers have to be extra disciplined.

The National Retail Federation forecasts holiday sales will rise 4.1 percent to $586.1 billion this year. Shoppers are expected to spend an average $749.51 in November and December, with many shelling out much more. Unfortunately, many will take months to pay off the goodies they bought. Among the potential debt traps:

Some credit card issuers have mailed blank checks for their customers to use. Interest rates on these cash advances can run 20 percent or more.

Card issuers are attaching spending requirements to generous rewards and bonus offers, making you spend with their cards in order to qualify. That’s sinking a much bigger hook into the consumer than in the past, when merchants offered peeks at their sales in exchange for Facebook ‘‘likes.’’

‘‘Opening a new credit card just to get a deal is never a good idea,’’ says Jeff Somogyi, a Dealnews.com editor. ‘‘Getting into a new financial entanglement just to get a jump on Black Friday sales is probably an even worse idea.’’

This doesn’t mean you have to shun all holiday sales. But remember: Smart spending isn’t all about finding the best deals. Some tips:

Have a plan. Make a list of what items you hope to find and how much you intend to spend on each person. Stick to it! Start your shopping online, at least to compare prices and look for deals. Avoid impulse purchases. And don’t wait till the last minute to shop; it’s a sure prescription to spend more.

Limit credit card use. If you must use it, put your charges on one credit card — the one with the lowest rate if you carry a balance. Remove all other cards from your purse or wallet. Don’t apply for store cards just to snag one-time discounts. Ideally, don’t charge a single item unless you can pay the next bill in full. At the least, set a target date to zero out any balance.

Resist the bait. Card issuers are tempting consumers by offering no- interest balance transfers, extra perks for meeting certain spending levels, and increased cash back in specified categories. ‘‘No deal is a good deal if you can’t afford it,’’ says the National Foundation for Credit Counseling.

■  Use layaway. Retailers have lowered or waived fees this year that shoppers pay to participate in these interest-free, pay-over-time programs. Debt-conscious consumers can snag gifts at attractive prices while not having to pay an extra fee just to avoid using credit cards.

Be creative. Find it difficult to stick to a budget? Give gift cards and make something personal to go with them. Or give experiences instead of ‘‘stuff’’ — a shared hike or a special home-cooked meal. Or volunteer together at a soup kitchen, homeless shelter, or nursing home if your gift recipient doesn’t want more material items, suggests Pamela Yellen, a financial services consultant and personal finance author. The gifts people remember the most, as she points, are often free.

Dave Carpenter

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Canadian consumer debt rising 400% faster than inflation since 2007

According to a report released Wednesday, Canadian consumer debt grew at the fastest pace since the fourth quarter of 2010. The study found that non-mortgage debt increased 4.6 percent year-over-year in the third quarter to an average of $26,768.

Bank of Canada Governor Mark Carney has been warning households of its growing debt rate and officials are continuing to caution that household spending levels are starting to get out of control. Despite consistent warnings, the consumer’s total debt increased at its greatest rate in two years.

Quarterly analysis published Wednesday by TransUnion found that consumer debt loads have soared 400 percent over the past five years faster than inflation. The report established that while inflation has risen seven percent since 2007, total consumer debt jumped 37 percent.

The increase in total consumer debt has been prevalent throughout Canada, but the most notable provinces with the largest increases are New Brunswick (9.49 percent), Prince Edward Island (8.25 percent) and Newfoundland and Labrador (7.83 percent).

However, four provinces are leading the rest of Canada with total non-mortgage consumer debt in the third quarter of this year: British Columbia ($38,837), Alberta ($33,688), Ontario ($25,937) and Quebec ($19,174). The four biggest factors in contributing to consumer debt are lines of credit ($34,050), installment loans ($22,849), auto captives ($19,228) and credit cards ($3,573).

“At this time last year, we were encouraged to see consumer total debt levels remain relatively stagnant for three consecutive quarters,” said Thomas Higgins, TransUnion’s vice president of analytics and decision services, in a press release.

“One year later, it appears we have reversed course as consumer total debt has increased for three straight quarters, including the largest jump in nearly two years this past quarter. While delinquency levels remain about the same or lower than they were one year ago, it should be noted that in the past five years debt levels have now increased 400% more than the rate of inflation.”

Higgins noted that despite the high debt levels, Canadians across the country have done a good job at maintaining low delinquency rates. “It should be noted that many consumers are taking advantage of the low interest rate environment. Just five years ago, interest rates were significantly higher than they are today.”

These statistics do not include the $17,000 that each Canadian shares in the national debt of nearly $600 billion.

Andrew Moran

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How to Raise Cash to Cover Holiday Spending

Tis’ the season…to rack up holiday debt.

The holidays often mean shopping marathons for gifts, party outfits, food and  decorations that rack up credit card debt. But instead of entering 2013 with  massive debt, consider making some extra cash during the final months of this  years to cover the holiday cheer. If you don’t have time to take on a seasonal  job, there are numerous unique ways to make extra money without burning up all  your free time.

“The National Retail Federation estimates  the average consumer will spend nearly $750 on holiday-related purchases. This  number doesn’t factor in the cost of holiday travel or the time away from your  day job to connect with family and friends,” says Andrea Woroch, a consumer and  money saving expert for Kinoli. “Making extra money is the best way to combat  this significant seasonal expense.”

Get a Seasonal Gig

If you have the time and experience, a seasonal job is the quickest and best  way to increase your budget quickly, says Woroch, who suggests seeking out  retailers, restaurants and call centers for open seasonal positions.

To ensure all your earned money goes for paying holiday expenditures is to  have your paycheck deposit into a separate account used just for holiday  expenditures, she says.

Sell Unwanted Stuff

Scour your home for unwanted goods, outgrown clothes and extra knick knacks  that are in good shape and sell them online to pad your holiday shopping  fund.

According to Tracey DiNunzio, chief executive and founder of Tradesy.com, a  marketplace where people can buy and sell clothes, on average people only wear  20% of the wardrobe while the other 80% just collects dust. Now is a good time  to get started selling your clothes, she says. “Demand goes up around the  holidays.”

If you don’t have unwanted clothes, but have a nice apartment or house with  extra space consider renting it out for parties and events, or to a renter.  There are many websites including Eventup.com and AirBNB that allows people to  list space for rent. According to DiNunzio, she made $28,000 in a year renting  out her living room for dinner parties and photo shoots tht not only covered her  rent but funded Tradesy.com.

Run Other People’s Errands

Whether it’s walking dogs or picking up dry cleaning, you can get paid for  doing other people’s chores. Woroch pointed to TaskRabbit.com, an online service  that pays people to do other people’s chores.

Some of the popular tasks on TaskRabbit.com this month include house  cleaning, assembling Ikea furniture and pet sitting. If you love pets,  particularly dogs, and don’t mind having house guests then you can sign up at  DogVacay.com to pet sit in your home. According to the company, host set their  own rates, but on average earn $25 to $30 per night.

Become a Consultant

For full-time workers, the money doesn’t have to stop once you leave the  office.

“Whether you design websites or crunch numbers, your skills can make you  money beyond 9:00-5:00,” says Woroch. You can find freelance work on a handful  of websites including Elance, ODesk and Freelancer that connect job seekers with  people looking for talent, “making it easy to browse for your next paycheck,” she says.

Change Your Lifestyle

The easiest ways to earn some extra cash is to make your current lifestyle  more frugal. Whether your guilty of getting cash from an out-of-network ATM that  charges fees or you forget to pay bills and get hit with late fees, sometimes  little changes can save big money.

By reigning in the spending on the little things, you can use the savings for  holiday purchases, says Woroch.

Donna Fuscaldo

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With Obama Win, Wall Street Cop Stays On the Beat

This week’s election was a cliffhanger for many people, but the stakes were higher than most for the director and staff of the Consumer Financial Protection Bureau. The agency, which opened its doors in July 2011, was a lightning rod for Republican criticism of how the Obama Administration and a Democratic-led Congress responded to the financial crisis. During the campaign, Mitt Romney had promised that, if elected, he would repeal the Dodd-Frank financial reform legislation that called for the CFPB’s creation.

Although Governor Romney spoke about the need for financial oversight during his first debate with President Obama, he expressed discontent with the current regulatory framework. He has plenty of company in his party; Republican lawmakers agitated for changes to the CFPB’s structure since it was developed by Massachusetts Senator-elect Elizabeth Warren.

Warren was initially considered a shoo-in for the role of director at the CFPB, but Republican backlash prompted President Obama to choose someone considered less controversial: former Ohio Attorney General Richard Cordray, who rose to prominence for his campaign against the foreclosure robo-signing fraud.

Nevertheless, GOP senators held up the appointment of Cordray as CFPB director. Cordray eventually was appointed by President Obama in a controversial recess appointment last winter, a move that gave the CFPB the authority to oversee non-bank financial institutions like credit bureaus and payday lenders and do more in the way of rule-making and enforcement.

The lawmakers who object to the CFPB, along with the banking industry, said it had too much autonomy; they wanted the agency to have its budget controlled by Congress rather than by the Federal Reserve. They also wanted to see it led by a committee rather than a single director. Consumer advocates said both moves would water down the agency’s authority and make it more like existing regulators — the ones that were unable to stop the financial crisis from happening.

Since Cordray took the reins, the CFPB has acted on behalf of the little guy on several different fronts, and has more of the same on its agenda for 2013 and beyond. Here’s a snapshot of what’s likely coming from the agency:

Mortgages Up next on the CFPB’s to-do list is drawing up mortgage rules that deal with issues like the transparency of loan origination, and standardization of mortgage statements. Later this year, it plans to write additional rules addressing closing costs and good faith estimates.

Credit Cards The CFPB has already been aggressive going after credit card companies over deceptive marketing practices. The agency fined Capital One, American Express, and Discover a total of $435 million, which the companies collectively must use to reimburse roughly 5.75 million consumers, plus an additional $101.5 million in penalty fees. This is good news for the roughly 5.8 million people who were lured into buying “credit protection” or a similarly useless product.

The CFPB also collected and published a roster of consumer complaints against credit card companies. This gives people a way to gauge whether or not a card they have or are considering is likely to be a good fit or just a giant headache. Banking analyst Ken Thomas ran the numbers and found that SunTrust tops the gripes list, while USAA has the fewest consumer complaints in proportion to the size of its customer base.

Non-Bank Entities Since companies like debt collection agencies and credit reporting bureaus aren’t banks, they hadn’t been subject to any federal-level oversight prior to the CFPB’s launch. In August the CFPB announced a rule defining larger participants that will be subject to oversight in the credit-reporting arena. Identifying the big players will let them start examinations of the credit bureaus for the first time. More recently, it did the same thing for debt collection companies, announcing a rule that would let the agency define the market’s larger participants in order to oversee them.

Bank Overdrafts CFPB regulators also are taking a hard look at banks’ overdraft fees and the policies used to implement them. A 2010 rule from the Federal Reserve banned the common practice of signing up customers automatically for overdraft programs, so that only customers who opted out wouldn’t have to worry about the possibility of incurring a fee when a debit transaction went through even if the account didn’t have a sufficient balance to cover it. Changing debit card overdraft protection into an “opt-in” service has helped, but banks still raked in more than $30 billion in overdraft fees last year. That got the CFPB’s attention. It’s now conducting a study of how banks’ policies and procedures affect how much and how often customers wind up paying overdraft fees.

Prepaid Debit, Private Student Loans These rapidly growing segments of the financial market fall outside the scope of other regulators’ coverage — and the CFPB says it’s interested in overseeing them to ensure consumers aren’t being taken advantage of. In the case of increasingly popular prepaid debit cards, the big players in the industry voluntarily follow the rules established for account-affiliated cards, but the terms and conditions vary widely, and there aren’t any established standards like the ones the CARD Act instilled on credit cards in 2009.

Private student loans are a growing problem for many new graduates, especially those struggling to find a job in this economy. In collaboration with the Department of Education, the CFPB put together a report on private student loans that was presented to Congress; it highlights issues like the inability to discharge these debts in bankruptcy and the high default rates. The CFPB says this market will be the focus of “ongoing supervisory, enforcement, and policymaking efforts.”

Martha C. White

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