This Week In Your Wallet – February 15, 2011
Hi – and welcome to my good mood, which is completely and totally a reaction to the fact that it is bordering 50 degrees in my hood and I can actually see patches of my lawn. I know it’s not spring yet. But sometimes, to quote a certain retro hair product, a little dab’ll do ya! This week, a few pieces of stellar financial info to pad your pockets:
The CARD Act is Working…
It was just about a year ago that Congress passed the CARD – Credit Card Accountability, Responsibility and Disclosure – Act, which increased the amount of notice a card company has to give you before changing terms to 45 days, put a halt to interest rate hikes in the first year you have a fixed-rate card unless you go 60 days late on a payment, and allowed you – the consumer – to just say no to being allowed to go over your credit limit and then be assessed a fee for doing so, among other things.
An analysis from my friends at Billshrink.com shows that it’s been a success. To wit:
- In the 12 months before the CARD act, interest rates rose an average of 16% and some card rates went up twice that much.
- In the 12 months after the CARD act, card interest rates rose an average 2%.
- The average credit card user is carrying a balance of just under $7000. That’s down about 4% from last year.
- And, 65% of cardholders paid off their cards in full this January compared to 58% last year.
But Beware, “Frugal Fatigue” May Be Setting In
All of the above is really good news, right? Absolutely. But another study shows we may be getting just the littlest bit tired of not spending money. This one comes from the National Foundation of Credit Counselors (if you or anyone you know needs a credit counselor, use their locator service at debtadvice.org). It says that when asked the question “Do you have frugal fatique?”…
66% of consumers said: Yes, I’m tired of pinching pennies but will have to continue
5% said: Yes, I’m tired of pinching pennies and have decided to begin spending more
8% said: No, I’ve not made any spending changes in recent years
and 21% said: No, I have made lifestyle changes, but they’re positive and I intend to keep them
If you recognize yourself in that first or second category (particularly the second), it’s time to start asking yourself the all important questions at the point of purchase: Do I need this? Do I really, really want it? What happens if I don’t buy it? What happens if I do?
Do The Dishes, Get Some Exercise, Improve Your Marriage
A new book called Spousonomics caught my eye this weekend. It comes from two writers – one employed by the New York Times, the other the Wall Street Journal – who decided to test whether good old fashioned economic theory could be used to improve their marriages. In fact, they report, the answer is yes. Co-author Paula Szuchman wrote a column for the Journal where she laid out five ways the dismal science can give your marriage a boost. Here, in quick form, are two that resonated with me:
- Stop talking so much. You know how having too much information gets in the way of making a smart investment decision – and sometimes any investment decision at all? Well, it turns out, too much yammering about off-point information puts the same monkey wrench in a relationship. Important decisions don’t get made. Lightbulbs don’t get changed any faster. And grudges build.
- Exercise more. 56 percent of the married people the authors surveyed reported that they gained weight after they got married. Why is that? Moral hazard is the answer in the book – they no longer have to put the effort into looking good because they have that marriage license, a safety net, much in the same way, she writes “the country’s biggest financial firms bet the house on subprime mortgages—they knew if worse came to worst, Uncle Sam would be there to bail them out.” The authors are spot on. Moreover, my own research for The Difference showed exercise is one of those things that is tied tightly to wealth – not to mention to your happiness and health.
Finally – as a thank you to those who read all the way through: To the first reader who posts on my Facebook page (facebook.com/jeanchatzky, please “like”) and the first that tweets me (@jeanchatzky, please follow) the name of that hair tonic – a signed copy of Money 911 shipped to your door. (If you have it already, let me know and I’ll swap out another book.)
Jean
