Credit Advisors-Defeat Debt December 2006

Unwrapping the Reality of Gift Cards

Granted, there are times when trying to decide on the perfect gift for a relative or one of your friends can be a monumental challenge. Of course, sometimes what may first appear to be the easy answer may be more complex than we realize.

This is especially true in the case of what is probably the most popular ‘easy answer’ out there - gift cards.

This year, industry analysts predict that gift cards will reach a record $25 billion in sales, with 7 of 10 consumers purchasing at least one of these retail darlings, making the odds pretty good that even if you don’t buy a gift card you most likely will receive one.

Finding the perfect gift can sometimes be a challenge

Not surprisingly, like most things involving money and finances, there are a few things you should know about gift cards, regardless of whether you’re doing the giving or receiving to make sure you get your money’s worth.

For example, gift cards, depending on the issuer, can be used in a variety of ways. Some can be used only at a specific store while others can only be used on-line. Don’t assume that the gift card you purchase on a retailer’s website can be used at the local store in the mall. You and the recipient of your gift may be disappointed.

Banks and credit card issuers like Visa, MasterCard, Discover and American Express sell what are known as open loop gift cards. These cards can be generally used anywhere the ‘brands’ selling them are accepted. However, many of these types of gift cards have expiration dates (date after which the gift card is no longer good for use), and a variety of fees such as purchase or maintenance fees.

A purchase fee is the fee charged to the gift card purchaser before the card is loaded (process of activating the gift card and assigning a specific dollar value or limit for spending) with funds for the recipient. Maintenance fees include fees deducted from the value of the gift card if the consumer does not make use of the card within a specific period of time.

Obviously, just like any other ‘plastic money’ you need to know the terms of the deal, as well as, which deal is more suitable to the intended recipient. (See what an easy answer this is?)

To help with this dilemma, both The Wall Street Journal on Line and Bankrate provide information that profiles a number of bank, credit card company and retailer’s gift card terms and policies including purchase fees, maintenance fees and replaceability. Reviewing this information may help in making the easy answer actually easy and also the most suitable answer to your gift giving needs.

You might also want to investigate the laws in your state as a number states have recently passed legislation in regards to what terms gift cards may carry.

But don’t think that’s the end of it. Oh no!

Again, like so many things dealing with money and finances, scammers and con artists have figured out some surprising ways to relieve you and the recipient of your gift with little or no value in your gift card.

Ask the cashier for a gift card that hasn’t been out in the open.

Most of us have seen the pretty displays of gift cards in stores. Instead of just one "look" to a gift card, many options in colors and pictures on the front allow you to individualize the card to your heart’s content. It also allows scammers to copy numbers and PIN codes from the cards on these displays. Then, as a shopper purchases the gift card and the cashier activates it, the scammer calls the available 800 number checking for balances and bingo! the scammer goes shopping, leaving you and the intended gift card recipient with a worthless card.

Consumer advocates suggest asking the cashier for a gift card that hasn’t been hanging out in the open. Lacking that option it is suggested that you check the back of the card to be sure the PIN code hasn’t been exposed, as well as checking that the bar code on the card matches your receipt. Another bit of advice if you are purchasing a gift card that is out on display with a specific preprinted dollar amount is to have the cashier swipe the card to verify the dollar amount has not been plundered.

Good luck and good gifting!

Beware Foreclosure Rescue—It could cost you your home

Warning - If you or someone you know has fallen behind on mortgage payments and are now possibly facing foreclosure, don’t make the situation worse by falling for the latest mortgage fraud scam. Known as "foreclosure rescue" scams these individuals and companies prey on homeowners having difficulty with their mortgages by misleading borrowers into transferring title to the home for a period of one to two years to the organization as a way of avoiding further foreclosure proceedings. The owners are then set up to pay rent to the scammers so they can stay in their homes, under the guise that they would eventually ‘buy back’ the house down the road once their financial difficulties are resolved.

Our entire organization joins in sending Holiday Greetings, with every good wish for the New Year.

Unfortunately in many cases, the companies, without the knowledge of the borrowers, have sold the homes to a third party leaving the borrowers in the lurch and often facing eviction.

While it has been around for a long time, mortgage fraud has more than doubled in the last year according to The Federal Bureau of Investigation, with the goal of scammers to get their hands on the available equity growth from the housing value appreciation of the last few years.

Ten states across the US have passed legislation in an effort to deter mortgage and foreclosure fraud, yet the majority of duped borrowers who find themselves entangled in such scams have great difficulty recouping any of their losses.

If you find yourself delinquent on your mortgage there are certain avenues of assistance you can pursue before you become a target for scammers. First, talk to your lender. They are in the best position to be able to work with you to resolve a temporary problem. Second, seek out an approved Housing Counseling organization, like Credit Advisors Foundation. The counseling agency will review your current financial situation and can offer you a variety of options to assist you and may also be able to set up arrangements with your lender to help you get back on track.

Most of all, don’t delay. The situation will not go away, nor will it resolve itself on its own. You can get the help you need, avoid scammers and bigger problems if you take action quickly.

Word Search

Try out our latest Word Search puzzle. Find the words below, taken from the articles in this edition of Defeat Debt that are listed below.

The Kitchen on a Dime

French Farmer Soup

A little attention and not too many ingredients come together in this recipe to make a delicious and satisfying soup. Serve with Italian or French bread for an evening meal.

Ingredients:

1 medium onion

4 medium potatoes

3 cups chicken broth

8 Tablespoons of butter

8 Tablespoons of flour

4 cups of milk

1 (10-ounce) package frozen chopped spinach, thawed and well drained

1 teaspoon nutmeg

Black pepper

Salt

1 Italian sausage per person, cooked until browned and then sliced

Directions:

Chop onion. Dice potatoes into ½-inch pieces.

Put in saucepan and add chicken broth. Cook 30 minutes or until potatoes are tender.

Make a roux* with butter and flour. Add milk gradually with whisk, making sure all lumps are out before adding more milk.

After milk is added, add the chicken broth which has been drained from the potato-onion mixture. Cook mixture over low heat 5 minutes, stirring constantly.

Add cooked potatoes and onions, then the spinach.

Stir in nutmeg, freshly ground pepper, and salt.

Add the sliced cooked sausage to the soup and heat thoroughly

Serves 4-6 at $1 per serving

*Roux: Flour and butter blended in varying proportions and heated slowly over extremely low heat, as for a cream sauce, until beige or pale golden in color, to which milk or broth is added very gradually.