Credit Cards: Picking Your Plastic

Credit Cards: Picking Your Plastic

Pay closest attention to the financial terms – not the perks of the hype

If your mailbox seems to fill up with new credit card offers every time you turn your back, you are not alone. Fueled by a growth in consumer spending over the past few years, the credit card market is booming. Yet while bargains abound, you need to be aware of your own spending patterns to pick the best card for you.

About two-thirds of all Americans regularly carry a monthly credit card balance, and the average unpaid balance hovers over $2,000. For many people, attempting to control their credit card spending is a constant battle. A zero balance for a month or two is frequently followed by a longer period of debt that is carried over at substantial interest rates.

If that’s your pattern, credit cards promising no annual fee probably are not your best option. No-fee cards tend to carry higher interest rates, making them more costly to cardholders who maintain a balance. As a rule, consumers should look for cards with an interest rate calculated at no more than six or seven percentages points above the prime rate.

On the other hand, if you’re among the one-third of cardholders who pay off their balance each month, a no-fee card could be just the ticket. More than half of all bankcards charge no annual fee. In case you come up short one month, you should look for no-fee cards with the lowest rate on unpaid balances.

You may also be tempted by a card that offers perks (say, frequent flier miles) or rebates. Most of these cards have annual fees and high interest rates and you have to be a pretty big spender to accumulate a free tick or a sizable rebate. Bet credit cards experts generally steer people away from cars with lots of bells and whistles. You’re better off just keeping the money in your pocket.

New Jersey. Photo by Elena

In all cases, consumers who are considering transferring their credit card balance to a bank that offers better terms should contact their own car issuer firsts. Banks spend upwards of $200 per customer to attrarct a new account. In this increasingly competitive market they are usually willing to negotiate more attractive terms to retain your business.

Above all, cardholders should be skeptical of pre-approved offers with “teaser” interest rates and fees or fancy perk promotions. The proof is usually in the “fine print” found in the disclosure box printed on the back of most credit card applications. Read it carefully.

Nor is collecting cards a smart idea. Two cards are more than enough formost consumer’s needs.

Your Credit Report

One in four people who review their credit report, find an error. If you have been denied credit within the pas 60 days, you can check on your report at no cost. Send a copy of the denial letter to the credit agency along with your request.

Most Popular and Best Credit Cards

The interest rate chaged can vary, but you’d be wise to check before signing up in all cases: fees and perks for gold cards tend to be higher, but anyway you should check the rank of the biggest credit card issuers, the best low-rate cards, the best cards with no annual fees (the number of credit card issuers that wave their fees continues to increase, but since no fees are included, this means a higher interest rate, and consumers who run a monthly balance should beware). Check on the largest rebate programs, fro merchandise to investments in money markets. To get the greatest benefit, cardholders should plan to make yse of the rebates and charge all of their purchases to their cards. Check the largest frequent flyer cards, as many issuers have generous tie-in programs, and some companies offer mileage points that can be applied to a number of airlines (althogh it takes longer to qualify for rewards). You can also check the best-secured credit cards – indeed, for many, including studens and those with bad or nonexistent credit histoires, getting a credit card is a hurdle. “Secured” card require cardholders to make a deposit to be held as collateral on which interest is paid. Interest rates tend to be high, and credit limits low, but there are dals to be had.

Final note: Today the quickest way to pay your bills is to pay them electronically. The cost of paying with pen and check book is comparable to paying electronically, but the amount of time you spend at least triples.

First You Use'em, Then You Lose'em

First You Use'em, Then You Lose'em

Many household products contain hazardous chemicals that, if not discarded properly, can do lasting harm to the environment. Here's how to dispose of them and some homemade alternatives that you can use the next time around.

Household chemicals

Corrosive, irritant, contains trisodiumphosphate, ammonia, and ethanol.

Disposal: Rinse container thoroughly, then it may be sent to landfill; also check with water treatment plants – certain bacteria may detoxify the material.

Alternatives: Use baking soda or borax, or rub area with half a lemon dipped in borax (toxic to children and pets).

Ammonia-based cleaner

Corrosive, irritant, contains ammonia and ethanol.

Disposal: Same as abrasive cleaning powder.

Alternatives : Use undiluted white vinegar in a spray bottle.

Bleach Cleaner

Corrosive, contains sodium or potassium hydroxide, hydrogen peroxide, sodium or calcium hypochlorite.

Alternatives : For laundry, use ½ cup white vinegar, baking soda, or borax per load.

Transportation Authority. Photo by Elena.

Disinfectant

Corrosive, contains diethylene or methylene glycol, sodium hypoclorite, and phenols.

Disposal: If products are fully used and rinsed, and no waste remains in container, it may go to landfill, if necessary.

Alternatives: Mix ½ cup borax with 1 gal., boiling water. Not a disinfectant, however.

Drain cleaner

Corrosive, contains sodium or potassium hydroxide, sodium hypochlorite, hydrochloric acid, and petroleum distillates.

Disposal: Store until community organizes hazardous waste program.

Alternative: Pour in ½ cup baking soda followed by ½ cub vinagar; let set for 15 minutes, follow with boiling water; snake or plunger.

Furniture polish

Flammable, contains diethylene, glycol, pettrolium distillates, and nitrobenzne.

Disposal: Same as drain cleaners.

Alternatives: Mix 3 parts olive oil to 1 part vinegar. For water stains, use toothpaste on damp cloth.

Household battery

Contains mercury, zinc, silver, lithium, and cadmium.

Disposal: Recycle your waste, bring to a gas station or reclamation center.

Alternatives: Solar power, wind-up watches, rechargeables (may contain toxic heavy metals).

Mothballs

Contain naphtalenes and paradischlorobenzene.

Disposal: Same as abrasive cleaning powder.

Alternatives: Cedar chips or blocks; clean clothes well, put in air-tight storage bag.

Oven cleaner

Corrosive, contains potassium or sodium hydroxide, and ammonia.

Disposal: If products are fully used and rinsed, and no waste remains in container, it may go to landfill, if necessary.

Alternatives: Let mixture of 2 tbs, castile soap, 2 tsp. Borax, and 2 cups water set in oven for 20 minutes; scrub with baking soda and salt.

Photographic chemicals

Corrosive, irritant, contain silver, acetic acid, hydroquinone, sodium sulfite.

Disposal: Should be safely stored until community organizes a hazardous waste program.

Alternative: Unknown.

Pool chemicals

Corrosive, contain muriatic acid, sodium hypochlorite, and algicide.

Disposal: Rinse container thoroughly and it may be sent to landfill; check with water treatment plants, as certain bacteria may detoxify the material.

Alternatives: Disinfectants: Ozone or UV-light system. PH: Consult baking soda box for amount to add for proper pH.

Rug and upholstery cleaner

Corrosive, contains naphtalene, perchloroethylene, oxalic acid, diethylene, and glycol.

Disposal: Store until community organizes a hazardous waste program.

Alternatives: Clean immediately with soda paste, then vacuum.

Toilet bowl cleaner

Corrosive, irritant, contains muriatic (hydrochloric) or oxalic acid, paradichlorobenzene, and calcium hypochlorite.

Disposal: Same as oven cleaner.

Alternatives: Coat bowl with paste of lemon juice and borax (toxic to children), let set, then scrub.

Soho, New York. Photo by Elena.

Paints

Enamel or oil-based paint

Flammable, toxic. Contains aliphatic and aromatic hydrocarbons, some pigments.

Alternatives: Latex or water-based paints.

Disposal: Recycle wastes by bringing to service station or reclamation center.

Latex or water-based paint

May be toxic. Contains ethylene, glycol, glycol ethers, phenyl mercuric acetate, some pigments, resins.

Disposal: Waste can be disposed of at some wastewater treatment plants where bacteria can detoxify the chemical, also may be recycled.

Alternatives: Latex without the above ingredients or limestone-based (white-wash) paint.

Rust-proofing coating

Flammable, toxic. Contains methylene chloride, petroleum distillates, toluene, xylene, some pigments.

Disposal: Should be safely stored until community organizes a hazardous waste program.

Alternatives: Unknown.

Thinners, turpentine

Toxic, flammable. Contain alcohol, acetone, esters, ketones, turpentine, petroleum distillates.

Disposal: Check for disposal at local water treatment plants.

Alternatives: Use water in water-based paints.

Paint and varnish remover

Flammable, toxic. Contains acetone, ketones, alcohol, xylene, toluene, methylene, chloride.

Disposal: Wastes should be safely stored until community organizes hazardous waste program.

Alternatives: For lead-free paint, use sandpaper or scraper and heat gun.

Wood preservative

Flammable, toxic. Contains copper or zinc naphtenate, creosote, magnesium cluorosilicate, petroleum distilates, chlorinated phenols (PCP).

Disposal: Wastes should be safely stored until community organizes hazardous waste program.

Alternatives: Use water-based wood preservative. (May still contain some of the above ingredients).

Stain and varnish

Flammable, toxic. Contains mineral spirits, gylcol ethers, ketones, toluene, xylene.

Disposal: Wastes should be safely stored until community organizes a hazardous waste program.

Alternatives: Use latex or water-based finishes.

History of Long-Distance Calling

History of Long-Distance Calling

(An amazing text coming back from 1995 about those old time forever gone since that):

It’s not as confusing as you think. Rule 1: sign up for a discount plan

There’s no place to hide from the marketing blitz by long-distance phone carriers trying to lure new customers. Some 25 million phone users switched in 1994 alone, but half of all phone users stuck with basic long-distance rates. To switch or not to switch? That’s the question.

The answer is that you will save by choosing a discount calling plan over the basic rate, no matter what the company. Prices among the big three companies – At&T, MCI and Sprint, which have a nearly 90 percent share of the $61 billion market – are very close. At&T is only marginally more expensive than the other two. Certain programs may fit your calling pattern more effectively than others, however.

In searching for a carrier, don’t overlook the smaller long-distance phone companies or the resellers, some 400 companies that buy long-distance capacity from the majors at special rates and then resell the time cheaply. The smaller guys usually charge a flat per-minute rate. Some require a $50 or so monthly minimum. If your long-distance bills are less than $10 a month, you can probably get a better deal with cut-rate carriers (the average long-distance bill for an AT&T customer is $17 a month).

To locate a local reseller, call VanTek Communications. The service, which is funded by resellers, is offered free to consumers.

History of Long-Distance Calling. Photo by Elena.

Keeping up with frequent rate changes in the industry is neither difficult nor time-consuming, once you know your calling habits and can easily see which increases affect you. One way to do so is by picking up a copy of Teletips Residential Long-Distance Comparison Chart. The $3 chart is put out by the Telecommunications Research & Action Center, a non-profit group in Washington, D.C. Another way is to take advantage of company programs such as MCI’s Proof of Savings. You provide them with the numbers you call most often and they’ll give you a comparison of costs between MCI and AT&T rates.

Comparing the Big Three

Base rates at At&T and MCI are nearly identical. Daytime rates are between 27 and 28 cents a minute. Evening rates are 16 to 17 cents, and late-night and weekend rates are 14 to 15 cents. Sprint has a flat rate policy. Some popular discount plans:

At&T: True USA and true savings. True USA gives a 30 percent discount on domestic long-distance calls if you spend $75 or more per month. Charges of $25 to $74,99 are cut by 20%; $10 to $24.99 gets a 10 percent discount. True savings offers 25% off $10 to $49.99 and 30% of $50 and more. No monthly charge or sign-up fee.

MCI: New friends and family. Make $10 or more on domestic calls and get a 25 percent discount from MCI’s basic rates, more than $50 a month gets 30 percent off. No fees. A further 50 percent off if you call other plan members.

Sprint: Sprint sense. Flat rate fee of 10 cents per minute from 7 p.m. To 7 a.m., and weekends for domestic calls. Daytime – 22 cents. No minimum.

Conglomerate Boom

The Conglomerate Boom

Synergy Generates Energy

The market shook off its losses and settled down to ponder its next move. It was not too long in coming.

Part of the genius of the financial market is that if a product is demanded, it is produced. The product that all investors desired was expected growth in earnings per share. And if growth wasn’t to be found in a name, it was only to be expected that somene would find another way to produce it. By the mid-sixties of the 20th Century, creative entrepreneurs had discovered that growth was a word and the the word was synergism.

Synergism is the quality of having 2 plus 2 equal 5. Thus, it seemed quite plausible that two separate companies with an earning power of $2 million each might produce combined earnings of $5 million if the businesses were consolidated. This magical, mystical, surefire profitable new creation was called a conglomerate.

While antitrust laws at that time kept large companies from purchasing forms in the same idnustry, it was possible for a while to purchase firms in other industries without inerference from the Justice Department.

New York, Chinatown, Mosco street. Photo by Elena.

The consolidations were carried out in the name of synergism. Ostensibly, mergers would allow the conglomerate to achieve greater financial strength (and thus greater borrowing capabilities at lower rates); to enhance markteing capabilities through the distribution of complementary product lines; to give greater scope to superior managerial talents; and to consolidate, and thus make more efficient, operating services such as personnel and accounting departments. All this led to synergism – a stimulation of sales and earnings for the combined operation that would have been impossible for the independent entities alone.

In fact, the major impetus for the conglomerate wave of the of the 1960s was that the acquisition process itself could be made to produce growth in earnings per share. Indeed, the managers of conglomerates tended to possess financial expertise rather than the operating skills required to improve the profitability of the acquired companies. By an easy bit of legerdemaind, they could put together a group of companies with no basic potential.

(Source: Burton G. Malkiel. A Random Walk Down Wall Street, including a life-cycle guide to personal investing. First edition, 1973, by W.W. Norton and company, Inc.)

The Bubble in Concept Stocks

The Bubble in Concept Stocks

Performance Comes to the Market

The next speculative mania came into being during the mid-sixties, when there was heightened competition among mutual funds for the customer’s dollar. In such an atmosphere, it is obvious that it would be easier to sell a fund with stocks in its portfolio that went up in value faster than the stocks in its competitors’ portfolios.

And perform the funds did – at least over short periods of time. Fred Carr’s highly publicized Enterprise Fund racked up a 117 percent total return (including both dividends and capital gains) in 1967 and followed this with a 44 percent return in 1968. The corresponding figures for the Standard & Poor’s 500-Stock Index were 25 percent and 11 percent, respectively. This performance brought large amounts of new money into the fund, and into other funds that could boast glamorous performances. The public no longer bet on the horse but rather on the jockey.

How did these jockeys do it? They concentrated the portfolio in dynamic stocks. Take the Dreyfus Fund and the growth-oriented Fidelity Funds. Jack Dreyfus, a high-stakes bridge player, got a running start on the performance record by investing heavily in Polaroid during the company’s most rapid growth stage. Fidelity, run by Edward Johnson and Gerald Tsai, also held large blocks of stock in a relatively few rapidly growing companies, however. At the sing of a better story, they would quickly switch. Both funds chalked up impressive successes in the mid-sixties and this led to many imitators. The camp followers were quickly given the accolade “go-go”funds and the fund managers were often called “the youthful gunslingers.” Nothing succeeds so well as success,” Talleyrand once observed, and this was certainly true for the performance funds in their early years – the customers’ dollars flowed in.

Concept stocks. Photo by Elena.

The fickleness of men like Gerry Tsai extended even to their own relationships. Feeling he could make a better story on his own. Tsai left Fidelity inn February 1966. In retrospect hi ambitions were modest: He felt he would be able to raise $25 million in an initial offering for his own fund, the Manhattan Fund. His underwriters, Bache & Co., agreed and opened their subscription books for orders. Both found out that Gerry didn’t know his own multiple: $274 million was subscribed on the first day. Within a year, Gerry Tsai had more than $400 million to manage. Tsai became the first superstar of the performance game and brokers could sound wise by watching the ticker tape and saying. “Ah, Gerry is buying again.”

The performance game was not limited to mutual funds. It spread to all kinds of investing institutions. Businessmen who had to make constantly larger contributions to their workers’ pension funds to meet retirement obligations began to ask pointedly whether they might be able to reduce their current expenses bu switching more of the fund from fixed-income bonds into common stocks with exciting growth possibilities. Even university endowment-fund managers were pressured to strive for performance. McGeorge Bundy of the Ford Foundation chided the portfolio managers of universities:

It is far from clear that trusties have reason to be proud of their performance in making money for their colleges. We recognize the risks of unconventional investing, but the true test of performance in the handling of money is the record of achievement, not the opinion of the respectable. We have the preliminary impression that over the long run caution has cost our colleges and universities much more than imprudence or excessive-risk-taking.