Market Wrap: Stocks Tumble as Greek Debt Crisis Woes Worsen

June 29, 2015, 9:55 am

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Filed under: Market News, European Union, Banks, Insurance Industry, World Markets

By Sinead Carew

NEW YORK -- U.S. stocks fell sharply Monday in heavy trading, and the S&P 500 and the Dow had their worst day since October after a collapse in Greek bailout talks intensified fears that the country could be the first to exit the eurozone.

The European Central Bank froze funding to Greek banks, forcing Athens to shut banks for a week to keep them from collapsing.

And Greece appeared to confirm it was heading for a default after a government official said the country wouldn't pay a 1.6 billon euro loan installment due Tuesday to the International Monetary Fund.

U.S. investors also worried about Puerto Rico's debt problems and a bear market in China the day before quarter-end and ahead of Thursday's U.S. jobs report and the long weekend for U.S. Independence Day.

"None of that bodes well for people stepping in and buying the dips as has been the mentality most of the year," Michael James, managing director of equity trading at Wedbush Securities in Los Angeles who said U.S. shares could fall again Tuesday.

"Could that reverse itself tomorrow? It's going to take a lot of good news from Greece," he said noting that portfolio managers wouldn't want to show risky equities on their books at the end of the second quarter.

The Standard & Poor's 500 index (^GSPC) and Dow Jones industrial average (^DJI) had their worst days since Oct. 9 and both turned slightly negative for the year to date. The last annual decline for both indexes was 2008. The Nasdaq had its biggest one-day percentage decline Monday since March 25.

Volatility rose sharply and all 10 S&P sectors retreated while the Global X FTSE Greece exchange-traded fund, which tracks the Athens stock market, fell 20 percent. In Europe, the blue-chip Euro Stoxx 50 index had suffered its biggest one-day fall since 2011.

There is no mechanism to be ejected from the European Union. This has never happened before.

"There is no mechanism to be ejected from the European Union. This has never happened before," said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago. "When you don't know what could happen you sell. You get on the sidelines."

While the Greek economy is small and most U.S. corporations have limited direct exposure, investors are concerned about the fallout across Europe if Greece exits the eurozone.

A snap Reuters poll of economists and traders found a median 45 percent probability that Greece would leave the eurozone.

Chinese stocks had closed sharply lower after a volatile day of trading despite surprise monetary easing by the central bank.

On top of this, U.S. territory Puerto Rico faces a restructuring of its $73 billion debt burden.

The Dow Jones industrial average fell 350.33 points, or 1.95 percent, to 17,596.35, the S&P 500 lost 43.85 points, or 2.09 percent, to 2,057.64 and the Nasdaq composite (^IXIC) dropped 122.04 points, or 2.4 percent, to 4,958.47.

The CBOE Volatility index, a measure of the premium traders are willing to pay for protection against a drop in the S&P 500, jumped 34.5 percent to 18.86, its highest level in almost five months

S&P 500 Index (Closing) - 1 Year | FindTheData

Financials was the worst S&P sector with a 2.44 percent decline. U.S. banks have an exposure to $12.7 billion of Greek debt.

JPMorgan Chase (JPM), down 2.5 percent, was the biggest drag on the S&P financial sector followed by Wells Fargo (WFC), down 2.4 percent. Goldman Sachs (GS) weighed the most on the Dow with a 2.6 percent decline.

Assured Guaranty (AGO) fell 13.3 percent and MBIA (MBI) fell more than 23.4 percent after BTIG downgraded the insurers on concerns over Puerto Rico's debts.

Declining issues outnumbered advancing ones on the NYSE by 2,874 to 282, for a 10.19-to-1 ratio on the downside; on the Nasdaq, 2,469 issues fell and 367 advanced for a 6.73-to-1 ratio favoring decliners.

The benchmark S&P 500 index was posting 2 new 52-week highs and 25 new lows; the Nasdaq composite was recording 48 new highs and 126 new lows.

About 7.3 billion shares changed hands on U.S. exchanges, compared with the 6.3 billion average for the month-to-date, according to data from BATS Global Markets.

-Saqib Ahmed contributed reporting from New York.

What to watch Tuesday:

• ConAgra Foods (CAG) reports quarterly financial results before U.S. stock markets open.
• Standard and Poor's releases the S&P Case-Shiller home price index for April at 9 a.m. Eastern time.
• The Institute For Supply Management-Chicago releases its survey of purchasing managers for June at 9:45 a.m.
• The Conference Board releases its Consumer Confidence survey at 10 a.m.

 

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The Pros and Cons of Sharing Your Money Goals

June 29, 2015, 10:00 pm

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Filed under: Identity Theft, Technology, Personal Finance, Ripoffs & Scams, Internet Fraud

By Kimberly Palmer

After Matthew Robinson heard about Linkagoal, a social networking site for people who want to share their goals, he decided to join. He posted that he wanted to start a clothing brand, and soon afterward, heard from a friend on the site who said he could help him with that. He began sharing more goals, from taking his dad to a San Francisco Giants game to getting an A on a final exam, and felt motivated by the encouragement from others on the platform.

"I feel like it helps create more ambitious people by giving them something to write their goals down on," says the 23-year-old San Jose, California-based​ college student. Writing down goals also helps him stay focused on them, he adds, and he'll often log into the platform to review what he's written down.

If you can team up with others who are facing similar challenges, next steps or financial goals, they can be the biggest help.

Robinson's results reflect findings by academics on goal-setting and achieving. "Research has consistently shown that making public statements about your goals is an excellent 'commitment strategy,'" says Christine Whelan,​ a consumer science faculty member and director of the Money, Relationship and Equality initiative at the University of Wisconsin-Madison School of Human Ecology. In other words, she says, people are more likely to follow through on something if they tell others about their intentions.

Social media platforms can help people reach like-minded users and share progress toward goals. "If you can team up with others who are facing similar challenges, next steps or financial goals, they can be the biggest help," Whelan says. To find a group that offers support, she suggests starting a private Facebook group with a few friends. You could invite your larger network through a public post like "Who wants to join me in paying off $1,000 worth of credit card debt in the next three months?" she says.

Financial goals, such as saving $1 million​ or paying off credit card debt, are popular on Linkagoal. Users can also add smaller steps below each goal to help them break down what they need to do. ​"Our mission is to improve people's lives across the globe by having them achieve their goals," says founder and CEO Mohsin Shafique​. Since launching last year, Linkagoal has accumulated 875,000 users and recently became available in app form. Like Twitter, you can follow others using the app or Web-based platform, and they can follow you.​ Shafique's Linkagoal profile is filled with 44​ goals ranging from learning code to meeting up with school friends, and he says the support of other users has helped him achieve many of those goals, including quitting smoking.

"Most of us try to go solo and don't know where to start," Shafique says. Social networking can help people form supportive connections around topics of mutual interest and figure out the next steps they need to take to meet their goals, he adds. A Linkagoal survey of 1,171 U.S. adults earlier this year found that 3 in 4 people who set goals in the previous year failed to meet them. One reason was they didn't know where to start; a bigger reason was a lack of motivation.

Paula Pant,​ contributor to the U.S. News Frugal Shopper blog and founder of AffordAnything.com, says she often shares her money goals online through her blog or social media accounts. "When I publicly commit to a goal, I know that I'll face the embarrassment that comes from not sticking to what I stated -- and that knowledge forces me to stick to my original goal," she says.

A few years ago, after Pant and her partner decided to live on one income and invest the other, she wrote about their plans on her blog and followed up with frequent updates. After a few people left comments suggesting there was no way she could reach her goal, she felt extra motivated to follow through with it. "It felt great to prove them wrong," she says.

Still, social media and goal-setting experts urge people to show some measure of restraint when sharing personal ambitions with strangers online. "Use a 'gut check,' " Pant suggests. "If you feel queasy about your best friend or neighbor knowing some fact about you, then don't reveal it online. I have no problem detailing my investment returns or revealing how much my home and car cost, but I'm never going to admit my weight."

Pant is also careful to avoid revealing her home address, mother's maiden name and last four digits of her Social Security number online. She suggests that anyone concerned about identity theft should remove their date of birth from their Facebook profile as well.

Shafique has built in some privacy measures to the Linkagoal platform by offering the option to keep goals private or shared only among a small group of friends. "The platform understands that there are some personal things you don't want to share, but you still want to write it down," he says.

For users who share their goals publicly using their full names, their Linkagoal accounts can come up for anyone who runs a Web search on their name -- something hiring managers are likely to do. When Robinson graduates and starts job hunting, his future boss might learn about his ambition for saving money and getting good grades. As long as he's posting professional goals that aren't embarrassing, his public profile probably doesn't pose much of a risk. If he changes his mind, though, he can always opt for greater degree of privacy.

Whelan suggests that before anyone sets a goal, they ask themselves why they want to achieve it. "Beginning with your larger purpose helps keep you on track for success and makes accomplishing the goal more meaningful," she says. "For a financial goal, what does it mean to you to pay off your debts? ... Those bigger purpose-based questions are what will keep you going as you work toward your goal."

Kimberly Palmer is a senior editor for U.S. News Money. She is the author of the new book, "The Economy of You." You can follow her on Twitter @alphaconsumer, circle her on Google Plus or email her at kpalmer@usnews.com.

 

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5 Best and Worst Things to Buy Generic

June 29, 2015, 10:00 pm

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Filed under: Retail, Shopping, Consumer Goods, How to Save Money, Products

By Caroline Hailey

Whether you're single or married, have a large or small family, finding ways to save money is always a challenge. And with so many generic options out there, it's often tempting to just buy cheaper products and save your money for something else.

But cheaper doesn't always mean better.

So, how can you know what brand names are worth the higher price tags and which ones just aren't? Follow these tips so that the next time you go shopping, you'll known when to go for quality and when to focus on your bottom line.

5 Best Things to Buy Generic

1. Cereal. Eating a bowl of cereal each morning is a quick and cheap way to make sure you and the kids get breakfast before dashing out the door. For every brand name of cereal out there -- Cheerios, Raisin Bran, Corn Flakes, Apple Jacks and so on -- there seems to always be a generic version right next to it on the shelf with an almost identical name. And it's not just the name that's nearly identical; the product itself normally is, too. So why bother spending more just to get the name brand?

Take Corn Flakes, for example. The brand name version is Kellogg's Corn Flakes cereal and it will run you $2.98 for an 18-ounce box at Walmart. Go for Great Value's Corn Flakes cereal instead, and you'll only spend $1.98 for the same-sized box. There isn't much difference in taste, and some people even prefer the generic brand. Depending on how much cereal your household goes through in a month, this small change could add up to serious savings.

2. Spices and Seasonings. Skipping dinners out and cooking at home is a great way to save money. You don't have to pay tax and tip, and the food itself isn't only cheaper, but probably healthier as well.

To try to make your meals taste as good as the food you get at a restaurant, you'll want to take advantage of a variety of spices to use on chickens and other meals. But just because spices can make a big difference in the kitchen when it comes to taste, that doesn't mean you should be spending more than you need to on them.

If your recipe calls for basil, you could be paying $2.96 for the McCormick brand name bottle at Walmart. Instead, grab Great Value's generic brand, and you'll only have to pay $2.24. It might not seem like a huge difference, but those 72 cents can add up over time.

3. Diapers. When it comes to babies, all parents want what's best. It certainly makes sense to buy the brand name of baby food and other baby products, but not everything we buy for our babies is worth the brand-name price. Because babies go through so many diapers each day -- not to mention each month -- the generic brand will do just fine and save you a pretty penny.

If you buy the 88 pack of Huggies Little Snugglers, you'll be shelling out $24.99. Choose the Target generic brand instead, called up & up, and you can get 144 diapers for $28.99. When you break down the price by individual diaper, that's about 28 cents a diaper versus about 20 cents a diaper. You'd save almost a dime each time you change your baby's diaper.

4. Medications. Many of us take medications, and many of us spend much more money on those medications than we should. As Business Insider points out, brand-name and generic drugs are both well-formulated, effective and have to go through the same rigorous tests for approval. But the difference in pricing is often staggering.

Take aspirin and ibuprofen, for example. At Walgreens, you can buy a bottle of Advil with 100 tablets (200 milligrams) for $9.99. Its store brand bottle of 100 tablets (also 200 milligrams), however, only costs $7.29. That's a savings of $2.70.

5. Gas. For commuters who drive to work every day, gas can be a major monthly expense. It can also be an opportunity to save when you choose the generic brand at certain places, like Costco.

Fill up your car at a Chevron located in California, and you might pay $4.79 a gallon for regular gas in some parts of the state. Opt instead for the Costco brand, and you'd only spend around $2.85 a gallon, saving you $1.94 a gallon. If your car holds 15 gallons of gas, that would equal a savings of $29.10 each time you fill up.

5 Worst Things to Buy Generic

1. Trash Bags. While it might be okay to buy the generic brand of some cleaning and kitchen products, skimming when buying trash bags can end up costing you.

A box of Glad Tall Kitchen Quick-Tie Trash Bags costs $11.99 for 106 bags at Target, slightly more than the up & up brand, which goes for $10.79 for 110 trash bags. You'll save more than $1 on each package by buying up & up, but you don't want to sacrifice quality when you're talking about keeping smelly trash contained. The Glad trash bags have gripping drawstrings and are more heavy duty; the up & up bags are flexible, but they have less-reliable flap ties.

2. Toilet Paper. Just like with trash bags, don't be too cheap when buying toilet paper. Brand name toilet paper is much better quality, won't break apart and is less likely to cause irritation when using it. As an added bonus, you can often find brand name toilet paper at a great price.

If you go with the up & up generic brand at Target, you would pay $6.79 for 24 regular rolls of toilet paper. Go for the brand name Quilted Northern Ultra Plush version, and you will only have to pay 20 cents more. Trust us, your you-know-what will thank you.

3. Major Electronics. While you can save some serious bucks when choosing the cheap version over the brand name for big electronics, you won't be getting the bang you want. The extra money spent on brand-name TVs and other electronics is worth it, considering these items typically come with much better customer service and support than the cheaper options.

So, although a 40-inch Insignia TV at Best Buy would be nearly $190 cheaper than the Samsung one ($279.99 vs. $469), you'll be regretting your money-saving decision when you have to deal with the less-reliable customer service as soon as something goes wrong.

4. Batteries. Much like major electronics, cheaper batteries can cost you in the long run. Yes, you can save a lot when it comes to buying the generic brand. It costs only $3 for eight DG Home AA batteries at Dollar General compared to $6.37 for Duracell at Walmart. But when you're powering items like speakers, generic batteries might not have enough juice to make them work properly. And with other products, the brand-name batteries will typically last you much longer.

5. Cheese. While good cheese can definitely be a bit pricey, it's one food product that is worth the extra money. For cheese lovers, the generic taste just won't cut it though, and as many of us know, there aren't too many things worse than bad cheese.

An 8 oz. package of Great Value Sharp Cheddar Sliced Cheese can cost $2.47 at some Walmart stores. Meanwhile, Sargento's 8 oz. package of Natural Deli Style Sharp Cheddar Cheese slices can cost $2.50. It's only 3 cents more -- go with the Sargento cheese. Your taste buds will thank you later.

This story originally appeared on GOBankingRates.com.

 

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How Does Your 401(k) Stack Up?

June 29, 2015, 10:00 pm

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Filed under: Careers, Personal Finance, Retirement Plans, 401K

By Emily Brandon

A good 401(k) plan can help propel you to a secure retirement. Your 401(k) plan often gives you a tax break, employer contributions and investment growth, all at the same time. But some 401(k) plans have such high costs and poor investment options that much of the tax break is canceled out. Here's how to tell if your 401(k) plan is worthwhile.

The 401(k) match. Most Vanguard 401(k) plans (94 percent) provide employer contributions, according to a Vanguard analysis of 1,900 401(k) plans with 3.6 million participants. The most common 401(k) match is 3 percent of pay, which 37 percent of companies offer to savers who meet the requirements. The analysis found a match of 4 percent of pay (18 percent) and 2 percent (14 percent) are also common. A few firms (14 percent) provide employer matches worth 6 or more percent of pay.

Savings needed to get the match. In order to get a 401(k) match, you often need to meet specific savings goals. The most popular savings requirement for Vanguard 401(k)s is 6 percent of pay (44 percent of plans), but 4 percent (15 percent) and 5 percent (19 percent) are also common requirements to get the entire 401(k) match on offer. Some plans even ask employees to save 10 percent or more in order to get the maximum possible 401(k) match. "The most import thing is making certain you meet your match," says Carolyn McClanahan, a certified financial planner for Life Planning Partners in Jacksonville, Florida. "A lot of people who don't put anything in their 401(k) plan are missing out on free money."

The plan's match formula also plays a role in how easy it is to get the 401(k) match. Vanguard administered 401(k) plans with 225 different match formulas in 2014. The most common 401(k) match is 50 cents for each dollar saved up to 6 percent of pay, and 25 percent of plans have this match. Using this formula, a worker earning $60,000 per year would need to save $3,600 to get the maximum possible 401(k) match of $1,800. If that worker is only able to save 2 percent of pay, or $1,200, he will only get a 401(k) match of $600, and will be forfeiting the additional $1,200 he could have gotten if he were able to save more. New workers are frequently automatically enrolled in 401(k) plans at a default savings rate that is typically lower than what you would need to save to get the entire match. "If you are being automatically enrolled into a plan, something to be aware of is that default is likely going to be significantly lower than what you could set it at to get the maximum match," says Barbara Butrica, a labor economist and senior fellow at the Urban Institute.

When eligibility begins. Just over half (58 percent) of 401(k) plans allow employees to contribute to the plan with their first paycheck. But some employers make workers wait between two and six months (21 percent) or even a year (15 percent) before they are eligible to contribute any money to their 401(k) plan, Vanguard found. The waiting periods are even longer to get a 401(k) match. Just under half (47 percent) of employers immediately begin paying a 401(k) match to new hires, but over a quarter (27 percent) of plans require a year of service before providing any employer matching contributions. "Often there is a waiting period to get a match, and sometimes there is a waiting period to be eligible to participate in the plan," Butrica says.

How soon you can keep your match. Watching employer contributions accumulate in your account does not necessarily mean you will get to keep them if you quit or are laid off from your job. Company contributions don't belong to you until you are vested in the 401(k) plan. Just under half (47 percent) of 401(k) plans offer immediate vesting of employer contributions, Vanguard found. Some 401(k) plans don't allow you to keep any of the 401(k) match until you have a specific number of years of job tenure, such as three years (10 percent). Other employers allow you to keep a gradually increasing percentage of the company contributions based on your years of service, but you typically don't get to keep all of it unless you stay with that employer for five (18 percent) or six (14 percent) years. "You can always get back your own contributions, but the different vesting periods will determine how long you have to wait before you can get back the employer match," Butrica says.

Additional employer contributions. In a minority of 401(k) plans there are other types of employer contributions, such as profit-sharing or company stock. These contributions might be made regardless of whether the employee saves in the plan. The median non-matching contribution was 4.4 percent of pay, but 16 percent of employers contributed 10 or more percent of pay. Half of plans provided these contributions based on a percentage of pay, while others varied the contributions based on age or job tenure. Just over a third (37 percent) of Vanguard 401(k) plans provide both matching and non-matching contributions.

The Roth option. Slightly more than half (56 percent) of Vanguard 401(k) plans now offer an after-tax Roth 401(k) option, up from 42 percent in 2010. While you can't deduct Roth 401(k) contributions from current income, withdrawals from these accounts in retirement can be tax-free. "The people that are most likely to use it are younger people and people with shorter job tenure," says Jean Young, a senior research analyst for the Vanguard Center for Retirement Research.

Low-cost investment options. Selecting low-cost investment options will help your money grow faster. "Individual participants can now learn more easily what all the fund expenses are," says Joel Kelley, a certified financial planner for Woodstone Financial in Asheville, North Carolina. Index funds are growing in popularity as 401(k) participants aim to keep their investment costs low. About half (52 percent) of Vanguard 401(k) plans provide at least four low-cost index funds as investment options, up from 28 percent in 2005.

Vanguard plans offered an average of 27 investment options in 2014, up from 19 in 2005, largely due to the increased use of target-date funds. But the average number of funds actually used by participants has declined to 2.9 last year from 3.5 in 2005. "Participants are using fewer funds. At the median it is two, and sometime this year we expect it to go to one," Young says. "They are using a single target-date fund or a single balanced fund."

Emily Brandon is the senior editor for Retirement at U.S. News. You can contact her on Twitter @aiming2retire, circle her on Google Plus or email her at ebrandon@usnews.com.

 

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Travel Checklist: 7 Money To-Dos to Tackle Before Your Trip

June 29, 2015, 10:00 pm

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Filed under: Family Money, Travel, Credit Cards, Lodging, Vacation Planning

By Emma Miller

The lead-up to a much-awaited vacation can be thrilling -- from researching the best day trips to ogling a resort's online gallery of amenities. Three outdoor pools!

But to successfully leave real life behind and guarantee a carefree vacation, you need to do more than just book your hotel and check things off your packing list.

Before you hit the highway or take to the tarmac, it pays to get your money matters in order, too.

So we enlisted the help of travel pro Lee Abbamonte -- who traded a career in corporate finance and wealth management for full-time globe-trotting -- to help us craft a checklist of money to-dos that will ensure your next trip goes off without a hitch.

To-Do No. 1: Contact Your Credit Card Company

A declined credit card can deflate vacation euphoria in an instant, whether you're shopping for souvenirs in Switzerland or dining out in San Francisco.

By alerting your credit card company about your travels in advance -- even if you're just staying within the U.S. -- you can avoid wasting precious time explaining away a fraud alert. (Yes, it really was you buying all those beer steins.)

Plan to swipe your debit card overseas? Keep in mind that fees can range from 1 to 3 percent for each transaction, so contact your bank ahead of time to find out about its international rates.

Abbamonte points out that credit cards can often provide more perks when you're adventuring abroad. "Not only can you find no-foreign-transaction-fee cards," he says, "but you can earn miles and points with your purchases."

To-Do No. 2: Research Transit Options From the Airport

Weary, just-arrived tourists can be prime targets for private car and transfer companies looking to cash in. But there are plenty of alternatives that can save you the hassle of brushing off such questionable offers -- while saving you money.

"Do a little research on trains, buses, shared-ride vans and taxis," suggests Abbamonte. "Generally, taxis are the most expensive method of transportation, but that said, they also take you directly to your hotel."

His preferred way to go? Uber -- now operating in 57 countries -- or its offshoot UberPool, which enables people who request a similar route to split the ride and the cost in Paris, San Francisco, New York, Los Angeles and Austin.

To-Do No. 3: Know Your ATM Options Before Heading Overseas

"It's always cheapest to withdraw cash at an ATM when you get to your destination," Abbamonte says. "Consider changing a little bit of money at the airport on arrival, and then take advantage of the better exchange rates once you get into town."

To avoid pesky ATM fees, scope out the ATM Global Alliance, a network of banks that allow customers to use their ATMs without having to pay international access fees. One caveat: you may still be charged a transaction fee, say, 3 percent of the converted dollar amount. Abbamonte suggests checking your bank's website to find out which overseas banks they partner with and to clarify their fees.

"The general rule outside the U.S. is that tipping is not expected. In most countries, for a taxi ride or a meal, I usually just leave the small amount of extra change."

To-Do No. 4: Get the 411 on Foreign Tipping

Not everyone is as tip-happy as Americans.

"The general rule [outside the U.S.] is that tipping is not expected, but it's appreciated if a small one is given," advises Abbamonte, who, at just 36, has already visited more than 190 countries.

But he cites the U.K. and Canada as exceptions, where service providers may expect a 10 percent gratuity. "In most other countries, for a taxi ride or a meal, I usually just leave the small amount of extra change as a tip, which is customary," he says.

Resources like the GlobeTipping app offer destination-specific tips that can take the guesswork out of this sometimes-stressful topic.

And once you're in town, Abbamonte says, you can always just ask a local about tipping expectations, whether it's your hotel's concierge or someone sitting the next bar stool over. You'll look like a respectful, responsible traveler -- and you might make a friend in the process.

To-Do No. 5: Come Up With a Plan for Data Usage

You've read the horror stories: An unsuspecting traveler returns home to a five-figure cellphone bill -- the result of overseas (and excessive) usage fees.

Fortunately, it's an easily preventable scenario.

Abbamonte points the finger at confusing cellphone plans that users can't easily interpret.

"Mobile companies sell their customers X amount of megabytes, but who actually knows what a megabyte equates to?" he says. "For example, uploading one picture to Facebook might use up four megabytes. If you only paid for 10 megabytes and you upload three pictures, you've gone over."

For Abbamonte, the solution has been T-Mobile, which provides the straightforward option to sign up for unlimited international data usage. "That, along with their cheap phone call rates, has been a godsend for me, and would be for anyone who travels outside the country more than one or two times a year," he says.

If you're not a T-Mobile subscriber, call your provider to see if you can negotiate a limited-time data plan to use internationally. AT&T and Verizon Wireless, for example, offer tiered travel packages tailored to customers' different usage needs.

Or simply seek out a free Wi-Fi connection and call or message those back home via free web-based services like Whatsapp, Skype and Viber.

To-Do No. 6: Look Into Claiming VAT Refunds Overseas

A Value Added Tax, or VAT, can increase the cost of an international purchase by 15 to nearly 30 percent. The good news is that many countries allow nonresidents to claim refunds for goods bought while visiting. (Business travelers can even collect refunds on hotel-related VAT.)

Yet each year, travelers leave behind millions of dollars in unclaimed VAT money.

"The amount you get back depends on the amount you spent on goods, and if you bought from a participating retailer," Abbamonte says. "Street vendors, for example, won't give you the necessary receipts and forms."

Trips that are especially expensive, far-flung or active are good candidates for considering the purchase of a comprehensive travel insurance plan.

To claim your VAT refund, you'll be required to present your passport while shopping, obtain required forms and receipts from the vendors you visited, and submit it all to a designated agent at your departure point, such as an airport or cruise port.

VAT rates, minimum qualifying amounts, and refund requirements vary by country. But major airports' websites and government websites typically spell out everything from submission deadlines to purchases that don't qualify.

To-Do No. 7: Consider Purchasing Travel Insurance

When things go wrong on vacation -- and they often can -- the right insurance can help get you out in a pinch.

"The main reason to get travel insurance if you're leaving the country is that no medical insurance will cover you abroad," Abbamonte says. "The other reason is to protect yourself in case of a trip cancellation or interruption."

Trips that are especially expensive, far-flung or active are good candidates for considering the purchase of a comprehensive travel insurance plan, says Abbamonte, adding that they can cost as little as $80.

"And if you travel outside the country more than once or twice a year, consider getting an annual policy," he says. "Typical annual plans can range from $400 to $650 or so."

Wherever you're headed, you can compare plans at sites like InsureMyTrip and SquareMouth. Abbamonte, who travels with a comprehensive Allianz plan himself, says the relatively small expense "is well worth it for the peace of mind."

 

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Incomes Rise for Bottom 99% Even as Inequality Worsens

June 29, 2015, 10:00 pm

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Filed under: Economic Indicators, Unemployment Rate, Job Market, Economy

By CHRISTOPHER S. RUGABE

WASHINGTON -- Solid job growth is finally boosting paychecks for the rest of us.

Incomes for the bottom 99 percent of American families rose 3.3 percent last year to $47,213, the biggest annual gain in the past 15 years, according to data compiled by economist Emmanuel Saez and released Monday by the Washington Center for Equitable Growth.

"For the bottom 99 percent of income earners, this marks the first year of real recovery from the income losses sparked by the Great Recession," Saez, a professor at the University of California-Berkeley, said in a summary of his findings.

The increase likely reflects robust hiring last year when employers added 3.1 million jobs -- the most since 1999. That lowered the unemployment rate to 5.6 percent from 6.7 percent a year earlier. Strong job gains and a falling unemployment can help broadly raise incomes as businesses are forced to offer higher pay to attract workers.

With more money in their wallets, Americans are spending more freely. Auto sales reached the highest level in nearly a decade in May. Sales of clothing and building materials also jumped last month. And home sales are at an eight-year high.

Still, income inequality worsened in 2014. The richest 1 percent of Americans posted a much bigger increase in pay: their incomes soared an average of 10.8 percent to $1.3 million. The wealthiest 1 percent also captured 21.2 percent of all income in 2014, up from 20.1 percent the previous year.

The top 10 percent of income earners also boosted their share in 2014, receiving 49.9 percent of total income, up from 48.9 percent in 2013.

Yet there was progress outside the richest 10 percent. Families in the bottom 90 percent of income-earners saw their incomes increase 2.8 percent, or about $900, to $33,068. That matched 2007's increase as the largest bump up since 1998.

Most Americans still have a long way to go to recapture the sharp losses they suffered during the 2008-2009 recession. Average incomes for the bottom 99 percent plummeted 11.6 percent to $45,269 in those two years, Saez calculates. All figures are adjusted for inflation. They have so far recovered just 40 percent of their losses.

The inequality figures are likely a big reason that many Americans remain concerned about the economy. The nation has 3.3 million more jobs than before the recession and the overall economy is larger than it was in December 2007, when the downturn began. But for most families the recovery is far from complete.

Saez's figures are compiled from IRS tax data, using pre-tax income that excludes government transfer payments, such as Social Security retirement income. Saez and another economist, Thomas Piketty, have closely documented the growing share of income captured by the richest 1 percent. Their data fueled the Occupy Wall Street protests in 2011.

Some critics of their work have pointed out that excluding government benefits exaggerates income disparities. But other sources, such as the Congressional Budget Office, have included the impact of taxes and benefits and found wide, if less-pronounced, wealth gaps.

-AP economics writer Josh Boak contributed to this story.

 

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After Resisting for Years, JetBlue Adds Checked Bag Fee

June 30, 2015, 1:33 am

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Filed under: Travel, Travel Industry, Consumer Issues, Airfare, Vacation Planning

By SCOTT MAYEROWITZ

NEW YORK -- The era of free checked suitcases on JetBlue (JBLU) has come to an end.

The airline proudly proclaimed itself a holdout on fees for years, allowing passengers to check one bag for free. Now it will charge up to $25 for checked luggage.

The move leaves Southwest Airlines (LUV) as the only major U.S. carrier not to charge a bag fee.

JetBlue Airways had announced the change in November but didn't detail how it would be implemented until Tuesday. The fee only applies to new bookings; existing reservations still get one free bag.

Passengers will pay less if they plan ahead. Those with the cheapest tickets will pay $20 each way if they check in online or at a kiosk. The fee jumps to $25 if they go to the counter. A new fare class that costs about $15 extra each way would include one free bag.

Fees for a second checked bag and reservation changes are being lowered.

Some of these changes are going to help pay for what's the biggest product upgrade JetBlue has had in the history of the company.

The airline plans to reinvest the millions of dollars it will collect from bag fees into new seats and TVs, according to Marty St. George, JetBlue's executive vice president of commercial products and planning.

"Some of these changes are going to help pay for what's the biggest product upgrade JetBlue has had in the history of the company," he told The Associated Press in advance of the announcement.

Under pressure from investors and Wall Street analysts, JetBlue has been slowly adopting the practices of other airlines. It has launched and then expanded a first class product called Mint. It has reduced legroom on some planes to fit more passengers. Now it is charging for bags, something other carriers started doing in 2008.

The New York-based airline still stands out in other ways. By the end of next year, it will offer free Internet on all its Airbus A320 and A321 jets. Passengers also get free access to more than 100 channels of live satellite TV and radio and JetBlue still has more legroom than its competition.

JetBlue doesn't have a fixed bag fee like other airlines. Instead, it has rolled out three new fare classes. The cheapest, called Blue, doesn't include a checked bag -- although passengers can always add one later at a higher cost. The next fare, Blue Plus, includes one free checked bag, more frequent flier points and lower fees if passengers want to make changes to the reservation. The most-expensive tier is called Blue Flex and comes with two free checked bags and allows changes without penalty.

The fare difference between Blue and Blue Plus will change based on route and demand but should be "about $15," according to JetBlue. Blue Flex would cost about $100 more each way than the cheapest tickets and is fully refundable.

Online travel agencies like Orbitz (OWW), Priceline (PCLN) and Expedia (EXPE), will -- for the foreseeable future -- only sell the cheapest fares, those that don't include a checked bag. Passengers will still have to pay at the airport for their checked bags but St. George notes that about 75 percent of passengers book directly with JetBlue.

Some fees are being cut. The charge for a second checked bag will drop from $50 each way to $35. JetBlue used to charge $75 to $150 to make changes to a reservation, based on the price of a ticket. That fee is dropping to $70 to $135 for the cheapest tickets and $60 to $120 for the Blue Plus fares.

 

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Case-Shiller: Home Prices Rise in April

June 30, 2015, 2:08 am

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Filed under: Mortgages, Real Estate, Housing Market, Inflation, Economy

By Michael Connor

NEW YORK -- U.S. home prices increased at a solid clip in April, led by double-digit jumps in Denver and San Francisco.

The Standard & Poor's/Case-Shiller 20-city home price index rose 4.9 percent in April from 12 months earlier, roughly the same annual pace as March, S&P Dow Jones Indices said Tuesday.

Strong job growth and low mortgage rates have prompted greater demand for housing, boosting home values. The continued gains are at roughly double the pace of wage growth, but current levels appear more manageable than the double-digit home price increases seen during parts of 2013 and 2014.

"These gains are probably sustainable," said David Berson, chief economist at Nationwide Insurance. "They're not so rapid as to cause worry that people won't be able to afford to buy the average home."

Prices in the Denver metro areas climbed 10.3 percent, while home values in San Francisco rose 10 percent. Values increased more than 7.5 percent in Dallas, Miami, Seattle and Tampa. But price growth was tepid in the Boston, Cleveland and Washington, D.C., areas, where prices were up by 1.8 percent or less.

The Case-Shiller index covers roughly half of U.S. homes. The index measures prices compared with those in January 2000 and creates a three-month moving average. The April figures are the latest available.

Other measures are showing faster increased in prices, reflecting a shortage of homes available in the market.

May sales figures from the National Association of Realtors found that median home prices increased 7.9 percent over the past 12 months to $228,700, about $1,700 shy of the July 2006 peak.

The market has just 5.1 months' supply of homes, versus an average of six months in a healthy market.

Driving much of the growth has been a steady improvement in job growth and relatively low mortgage rates.

Employers have added 3.1 million workers over the past 12 months, new paychecks that appear to be flowing into real estate.

At the same time, the average for a 30-year, fixed rate mortgage was 4.02 percent, according to mortgage giant Freddie Mac. Still, that average has been steadily rising from a 52-week low of 3.59 percent, creating more pressure for buyers to close deals now before higher borrowing costs make homes less affordable.

 

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Consumer Reports Finds Some Newer Cars Burn Too Much Oil

June 30, 2015, 2:30 am

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Filed under: Automotive Industry, Consumer Issues

DETROIT -- Newer cars aren't supposed to burn oil, but Consumer Reports magazine found that some engines mainly from Audi, BMW and Subaru force their owners to add a quart as often as once a month.

In the magazine's annual survey of car owners, significant numbers reported what the magazine considered to be excessive oil consumption. Consumer Reports focused on 2010 to 2014 models and called on automakers to make repairs under the powertrain warranty or to extend warranties.

The companies should be willing to step up and take responsibility for their products.

"The companies should be willing to step up and take responsibility for their products," said Mark Rechtin, the magazine's cars content team leader.

Owners of newer cars, he said, shouldn't have to carry oil around and worry about adding it. Most cars, he said, have dashboard lights warning drivers if their oil gets too low. But failing to pay attention to that light eventually can cause engine damage. The magazine's survey didn't find any link between oil consumption and other engine problems, but it found that cars that burn oil early consume more as they age.

It's normal for cars to burn oil a little oil as they age toward 100,000 miles, the magazine said in its August issue. But for a late-model car to burn a quart or more between changes is not acceptable, Rechtin said.

The magazine focused on survey data from 498,000 owners of 2010 to 2014 models, finding that 98 percent didn't have to add oil between changes. But even if the problem happens to only 2 percent of owners, that equals 1.5 million cars from the five model years, Rechtin said.

Several engines from the three manufacturers were the main offenders, according to the magazine, including Audi's 2.0-liter turbocharged four cylinder and 3.0-liter V6; BMW's 4.8 liter V8 and 4.4 liter twin-turbo V8; and Subaru's 3.6 liter six-cylinder and 2.0- and 2.5-liter four-cylinder engines. The Subarus burned less oil than the others.

Affected models include Audi's A3, A4, A5, A6 and Q5; BMW's 5, 6 and 7 Series and X5; and the Subaru Outback, Legacy, Forester and Impreza.

The magazine says that standards for certain Audi and BMW cars say that it's reasonable to burn a quart of oil every 600 to 700 miles. Subaru considers one quart burned for every 1,000 to 1,200 miles to be acceptable, Consumer Reports said.

Audi spokesman Bradley Stertz said a class action lawsuit against Audi over oil consumption by the 2.0-Liter turbocharged four-cylinder engines is close to being settled without the company admitting liability or wrongdoing. The settlement affects 2009 A4, 2010 A4 and A5, and 2011 A4, A5 and Q5 models. With the other models, Audi hasn't been able to identify an abnormal number of oil consumption complaints on the other models, he said.

Subaru spokesman Michael McHale said oil consumption can vary depending on how a vehicle is used. The vast majority of Subarus, he said, performed within specifications, and the company's vehicles have improved from 2010 through the current models.

Messages were left for a BMW spokesman.

 

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Obama Plan Would Make 5 Million More Eligible for Overtime

June 30, 2015, 4:24 am

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Filed under: Labor, Job Market, Barack Obama

By Christopher S. Rugaber and Josh Lederman

WASHINGTON -- Salaried workers who earn nearly $1,000 a week would become eligible for overtime pay under a proposal President Barack Obama unveiled Monday, lamenting that too many Americans are working too many hours for less pay than they deserve.

The long-awaited overtime rule from the Labor Department would more than double the threshold at which employers can avoid paying overtime, from the current $455 a week to $970 a week by next year. That would mean salaried employees earning less than $50,440 a year would be assured overtime if they work more than 40 hours a week, up from the current $23,660 a year.

"We've got to keep making sure hard work is rewarded," Obama wrote in an op-ed in The Huffington Post. "That's how America should do business. In this country, a hard day's work deserves a fair day's pay."

To keep up with future inflation and wage growth, the proposal will peg the salary threshold at the 40th percentile of income, individuals familiar with the plan said. They requested anonymity to discuss the proposal ahead of the official announcement.

The president was to promote the proposal during a visit Thursday to La Crosse, Wisconsin.

Obama's proposal aims to narrow a loophole that the president has long said some employers exploit to avoid paying overtime.

Employees who make above the salary threshold can be denied overtime if they are deemed managers. Some work grueling schedules at fast food chains and retail stores, but with no overtime eligibility, their pay may be lower per hour than many workers they supervise.

The existing salary cap, established in 2004 under President George W. Bush, has been eroded by inflation and now relegates a family of four making just above the cap into poverty territory. Obama has long charged that the level is too low and undercuts the intent of the overtime law.

The proposed changes will be open for public comment and could take months to finalize. They can be enacted through regulation, without approval by the Republican-led Congress.

Although the Labor Department's estimates suggest the proposal would raise wages for 5 million people, other estimates are far higher. The Economic Policy Institute, a liberal think tank, recently estimated that a threshold of $984 a week would cover 15 million people.

"This is by definition middle-class people. This reverses decades of neglect," said EPI President Larry Mishel, adding that the proposal would also likely create jobs for hourly workers.

Under the current threshold, only about 8 percent of salaried workers are eligible for 1½ times their regular pay when they work overtime. The EPI estimates that doubling the salary level would make up to 40 percent of salaried workers eligible.

Yet many Republicans have opposed Obama's plans to increase the threshold, arguing that doing so would discourage companies from creating jobs and dampen economic growth. Sen. Lamar Alexander of Tennessee, who chairs the Senate's labor panel, has derided the idea as designed "to make it as unappealing as possible" for companies to create jobs.

The U.S. Chamber of Commerce said Monday that Obama's plan "will negatively impact small businesses and drastically limit employment opportunities. Additionally, many reclassified employees will lose benefits, flexibility, status and opportunities for advancement."

Chamber senior vice president Randy Johnson said the Obama administration is "completely divorced from reality."

Obama, in his op-ed, argued the exemption was intended for highly paid, white-collar employees but now punished lower-income workers because the government has failed to update the regulations. He said the proposal would be good not only for workers but also for employers that pay their employees what they deserve, because they will no longer be undercut by competitors who pay their workers less.

"Will we accept an economy where only a few of us do exceptionally well? Or will we push for an economy where every American who works hard can contribute to and benefit from our success?" Obama said, setting up a populist argument that Democrats are likely to embrace in the run-up to the 2016 presidential election.

The beneficiaries would be people like Brittany Swa, 30, a former manager of a Chipotle restaurant in Denver. As a management trainee, she started as an entry-level crew member in March 2010. After several months she began working as an "apprentice," which required a minimum 50-hour work week.

Yet her duties changed little. She had a key to the shop and could make bank deposits, but otherwise spent nearly all her time preparing orders and working the cash register. She frequently worked 60 hours a week but didn't get overtime because she earned $36,000.

The grueling hours continued after she was promoted to store manager in October 2010. She left two years later and has joined a class-action lawsuit against Chipotle, charging that apprentices shouldn't be classified as managers exempt from overtime. A spokesman for Chipotle declined to comment on the case.To keep up with future inflation and wage growth, the proposal will peg the salary threshold at the 40th percentile of income, individuals familiar with the plan said. They requested anonymity to discuss the proposal ahead of the official announcement.

The president was to promote the proposal during a visit Thursday to La Crosse, Wisconsin.

Obama's proposal aims to narrow a loophole that the president has long said some employers exploit to avoid paying overtime.

Employees who make above the salary threshold can be denied overtime if they are deemed managers. Some work grueling schedules at fast food chains and retail stores, but with no overtime eligibility, their pay may be lower per hour than many workers they supervise.

The existing salary cap, established in 2004 under President George W. Bush, has been eroded by inflation and now relegates a family of four making just above the cap into poverty territory. Obama has long charged that the level is too low and undercuts the intent of the overtime law.

The proposed changes will be open for public comment and could take months to finalize. They can be enacted through regulation, without approval by the Republican-led Congress.

Although the Labor Department's estimates suggest the proposal would raise wages for 5 million people, other estimates are far higher. The Economic Policy Institute, a liberal think tank, recently estimated that a threshold of $984 a week would cover 15 million people.

"This is by definition middle-class people. This reverses decades of neglect," said EPI President Larry Mishel, adding that the proposal would also likely create jobs for hourly workers.

Under the current threshold, only about 8 percent of salaried workers are eligible for 1½ times their regular pay when they work overtime. The EPI estimates that doubling the salary level would make up to 40 percent of salaried workers eligible.

Yet many Republicans have opposed Obama's plans to increase the threshold, arguing that doing so would discourage companies from creating jobs and dampen economic growth. Sen. Lamar Alexander of Tennessee, who chairs the Senate's labor panel, has derided the idea as designed "to make it as unappealing as possible" for companies to create jobs.

The U.S. Chamber of Commerce said Monday that Obama's plan "will negatively impact small businesses and drastically limit employment opportunities. Additionally, many reclassified employees will lose benefits, flexibility, status and opportunities for advancement."

Chamber senior vice president Randy Johnson said the Obama administration is "completely divorced from reality."

Obama, in his op-ed, argued the exemption was intended for highly paid, white-collar employees but now punished lower-income workers because the government has failed to update the regulations. He said the proposal would be good not only for workers but also for employers that pay their employees what they deserve, because they will no longer be undercut by competitors who pay their workers less.

"Will we accept an economy where only a few of us do exceptionally well? Or will we push for an economy where every American who works hard can contribute to and benefit from our success?" Obama said, setting up a populist argument that Democrats are likely to embrace in the run-up to the 2016 presidential election.

The beneficiaries would be people like Brittany Swa, 30, a former manager of a Chipotle restaurant in Denver. As a management trainee, she started as an entry-level crew member in March 2010. After several months she began working as an "apprentice," which required a minimum 50-hour work week.

Yet her duties changed little. She had a key to the shop and could make bank deposits, but otherwise spent nearly all her time preparing orders and working the cash register. She frequently worked 60 hours a week but didn't get overtime because she earned $36,000.

The grueling hours continued after she was promoted to store manager in October 2010. She left two years later and has joined a class-action lawsuit against Chipotle, charging that apprentices shouldn't be classified as managers exempt from overtime. A spokesman for Chipotle declined to comment on the case.

 

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Consumer Confidence Index Climbs in June

June 30, 2015, 4:56 am

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Filed under: Economic Indicators, GDP, Job Market, Economy

By MARTIN CRUTSINGER

WASHINGTON -- Consumer confidence showed a solid gain in June following a modest increase in May, supporting the view that strong job gains are giving a boost to the overall economy.

The Conference Board said Tuesday that its consumer confidence index rose to 101.4 in June, up from a May reading of 94.6. The June level matches the level in March. The index took a tumble in April.

The index is now 17.4 percent higher than it was a year ago, evidence that the economy is poised to enjoy stronger growth in coming months.

After a brief setback, consumer confidence appears to be surging anew.

The June gain, which was stronger than economists had expected, was supported by increases in consumer views about current conditions and the labor market. Those expressing the view that jobs were plentiful rose to 21.4 percent, up from 20.6 percent in the previous month.

"After a brief setback, consumer confidence appears to be surging anew," said Jim Baird, chief investment officer at Plante Moran Financial Advisors. "Continued improvement in job market conditions and income growth should help sustain an optimistic mood and provide fuel for spending growth."

After a dismal start to the year, the economy has been showing signs of a rebound. In June, the labor market created 280,000 new jobs and economists believe job creation will top 200,000 when the July jobs report is released Thursday.

The expectation is that stronger job growth will boost consumer confidence and lift consumer spending, which accounts for 70 percent of economic activity.

"Overall, consumers are in considerably better spirts," said Lynn Franco, director of economic indicators at the Conference Board.

The economy went into reverse in the first three months of the year with the gross domestic product, the broadest measure of economic health, contracting at an annual rate of 0.2 percent.

Analysts are predicting a better performance in the April-June quarter with forecasts of growth rebounding to 2 percent or better and accelerating even further to growth of around 3 percent in the second half of the year.

A separate survey of consumer sentiment compiled by the University of Michigan that was released last week showed a gain to the highest reading since January.

 

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Maximize Your Trip to the Outlets -- Savings Experiment

June 30, 2015, 4:58 am

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Filed under: Savings Experiment, Shopping

As we all know, outlet malls are a great way to save money on brand name items. However, if you don't have a good shopping strategy, you could end up overspending or missing out on a great deal. So, before you hit the road, here are a few things to look out for while shopping at the outlets.

First, watch out for the different types of stores you'll find there. Most outlet malls have factory stores, which tend to sell lower-quality clothes, and true outlet stores, which usually carry overstock from last season. But among these shops are regular retail stores that sneak into outlet malls to take advantage of the big crowds they draw. Don't be fooled -- the deals at these stores are no better than what you'd find in their other locations.

Another way to get the most out of your trip is by knowing when to shop. Your best bet is going during the middle of the week. Not only will you avoid the huge crowds, you'll have a much better chance at finding a one-of-a-kind deal. In fact, at Simon Premium Outlets, which has dozens of locations around the country, shoppers age 50 and up get an additional 10 percent off on Tuesdays. Take advantage of those mid-week deals!

Finally, before you leave, go online and take advantage of coupons that most outlet malls offer. For example, at PremiumOutlets.com, you can sign up for their VIP rewards program and get coupons and vouchers for free. The best part is you can usually combine these coupons with in-store sales, which means you'll double up on the discounts.

Remember these tips to get the most out of your outlet shopping trip. You'll see that by doing a little bit of planning before you leave, you'll be able to save a lot more while you shop.

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5 Digital Music Options That Are Cheaper Than Apple Music

June 30, 2015, 6:20 am

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Filed under: Apple, Internet, Mobile Technology, Consumer Electronics, Music & Entertainment

Digital music services were hot before, but now they're even hotter with Apple's (AAPL) launch Tuesday of Apple Music. The world's most valuable consumer electronics company is hoping that music fans will pay $9.99 a month for a new platform that combines several of its earlier offerings into a premium service that blends a subscriber's existing music library with the breadth of Apple's iTunes catalog.

Apple's presence will validate digital streaming. It's the ultimate tastemaker. It will inspire a new audience to explore the possibilities of carrying virtual jukeboxes -- millions of tracks deep -- wherever they go.

However, before you budget $9.99 a month for Apple Music, let's consider a few of the online music services that will be easier on your pocketbook.

1. Pandora Media (P)

Pandora has been pushing out customized tunes since before music streaming was cool, and now it's sitting in the pole position as the country's most popular platform. There were 79.2 million active users of the app, and those listeners are getting more engaged. They're taking in an average of 22.3 hours of content a month, pushing total usage to more than 5.3 billion hours streamed during the first three months of this year.

Most people consume Pandora for free, putting up with ads in exchange for complimentary tunes that are selected by Pandora based on user preferences. Folks who want to skip the ads can pay $4.99 a month for Pandora One, the premium platform that offers other perks including higher-quality streams.

2. Google Play Music

Google's (GOOG) initial foray into digital tracks is Google Play Music, where $9.99 a month offers access to 30 million songs across any device. However, in response to this week's launch of Apple Music, Google Play Music now offers expert-curated radio stations for free.

Folks can't pick their own tracks like they can on the premium version, but it's hard to knock something that's free. Google has struggled to draw an audience to its premium product, so it may as well give Pandora's model a shot to see if that sticks.

3. YouTube

Let's not forget YouTube, especially for folks who like to catch music videos. There are ads that play before many tracks, but it's free. Folks can also set up customized playlists consisting of music videos, so technically this is an on-demand service along the lines of Spotify but with ads.

If you find yourself only interested in the music, you probably wouldn't be the first person who streamed a YouTube video playlist in a buried tab on your PC without watching the eye candy.

4. iHeartRadio

One of the more popular streaming apps started out as a terrestrial radio station giant trying to regain relevancy in the new normal. Clear Channel (CCO) began offering streaming versions of its AM and FM radio, giving anyone in the country access to hundreds of its stations.

iHeartRadio evolved. It began to add more radio stations, and then tapped into a digital catalog of more than 20 million songs to offer customized playlists. iHeartRadio also offers comedy and live music events, making the most of its terrestrial appeal to publicize its platform.

5. A World of Apps

Apple is going to draw a wider audience for digital music, but eventually folks are going to check the music category of Apple's own App Store -- or the app marketplaces of other smartphone operating systems -- and realize that there are plenty of free or nearly free options out there.

Some of the more popular free streaming apps these days include SoundCloud, SongFlip, and TuneIn. The list of top apps changes over time, so it pays to stay current.

Amazon.com (AMZN) shoppers who are part of Amazon Prime can also take advantage of access to Prime Music, the online retailer's catalog of ad-free music that it makes available to Prime members at no additional cost.

This doesn't mean that Apple Music won't be worth every penny; that may very well be the case. However, for folks looking for music on the cheap, we live in a world of bountiful and booming choices.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Amazon.com, Apple, Google (A and C shares) and Pandora Media. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.

 

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Market Wrap: Stocks Rise on Hopes of Greek Debt Deal

June 30, 2015, 9:50 am

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Filed under: Currency, Market News, Economic Indicators, European Union, Stocks

By Sinead Carew

NEW YORK -- U.S. stocks finished up after a choppy trading day as investors held out hope Tuesday for deal to keep Greece in the euro even as it veered close to a potential debt default.

Greece, hours from missing a 1.6 billion euro ($1.8 billion) payment due to the International Monetary Fund, submitted a new aid proposal to its creditors, calling for debt restructuring in what seemed like a last-ditch effort by Athens to resolve its impasse with lenders.

The Greek government indicated that it could change its stance on a referendum it scheduled for Sunday if a new loan request could be agreed, eurozone sources told Reuters.

It could still blow up. There's still nervousness in the market.

After starting with a rally and then turning negative along with European equities, Wall Street reversed course again in the afternoon on hopes that Greece's Prime Minister Alexis Tsipras was showing signs of willingness to talk.

"I think [Tsipras] was a little defiant and arrogant and he overplayed his hand," said Kenny Polcari, director of the NYSE floor division at O'Neil Securities in New York. "It could still blow up. There's still nervousness in the market."

U.S. corporations have limited exposure to Greece, but investors are concerned about the fallout across Europe if the country exits the eurozone.

Volatility picked up Tuesday also due to the expiration of quarterly options. The expiration of weekly options is a day early due to Friday's Independence Day holiday.

On Monday, U.S. stocks had fallen sharply in heavy trading and the S&P 500 and the Dow had their worst day since Oct. 9 due to worries about Greece.

The Dow Jones industrial average index ended Tuesday with a decline for the first half of 2015. The S&P 500 benchmark showed its first quarterly decline in 10 quarters but Nasdaq showed its 10th consecutive quarter of gains.

The S&P, the Dow and Nasdaq all closed lower for the month.

Economic Gains

Dramatic headlines out of Greece have overshadowed U.S. data so far this week. Single-family home prices rose in April from a year earlier but at a slower pace than forecast, a closely watched survey said Tuesday.

A separate report showed an index of consumer confidence rose more than expected to 101.4 in June. The consensus was for a reading of 97.3.

The Dow Jones industrial average (^DJI) rose 23.16 points, or 0.1 percent, to 17,619.51, the Standard & Poor's 500 index (^GSPC) gained 5.48 points, or 0.3 percent, to 2,063.12 and the Nasdaq composite (^IXIC) added 28.40 points, or 0.6 percent, to 4,986.87.

Seven of the 10 major S&P 500 sectors rose, with the telecommunications services, utilities and consumer staples sectors showing very slight declines.

Advancing issues outnumbered declining ones on the NYSE by 1,894 to 1,226, for a 1.54-to-1 ratio on the upside; on the Nasdaq, 1,742 issues rose and 1,058 fell for a 1.65-to-1 ratio favoring advancers.

The benchmark S&P 500 index was posting 4 new 52-week highs and 25 new lows; the Nasdaq composite was recording 30 new highs and 108 new lows.

About 7.5 billion shares changed hands on U.S. exchanges, compared with the 6.3 billion average for the last five sessions, according to data from BATS Global Markets.

-Siddharth Cavale in Bangalore, and Ryan Vlastelica and Caroline Valetkevitch in New York contributed reporting.

What to watch Wednesday:

• At 10 a.m. Eastern time, the Institute for Supply Management releases its manufacturing index for June, and the Commerce Department releases construction spending for May.
• Automakers release vehicle sales for June throughout the day.

 

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What's Cheap to Buy in July?

June 30, 2015, 10:00 pm

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Filed under: Retail, Holiday Shopping, Shopping, How to Save Money, Deals

By Raechel Conover

In case you're wondering, there are simple answers to what goods are worth buying in July. The Independence Day holiday is a turning point and once past, retailers start setting their sights on fall, which makes July a good month to snatch up deals on mattresses, paint, jewelry, grills and more. July is also National Ice Cream Month and National Hot Dog Month, as well as the height of the summer fruit and vegetable season. If you want to be really frugal and enjoy fresh produce for months to come, stock up now and freeze for later.

Furniture and Mattresses. Come August, the second semi-annual wave of new furniture models will hit stores. To make room on the showroom floor, furniture retailers must rid themselves of current inventory. Look for big discounts on furniture this month. As far as mattresses go, the July 4 holiday, like Memorial Day and Labor Day, is a fine time to take home a cheap mattress.

Computers. New computer models come out in June, meaning July will see a plethora of discounts if you don't mind buying last year's model. July also falls right before the big back-to-school shopping season, so if you wait until later in the month you could score big when it comes to savings on a computer.

Jewelry. The December and February holidays are half a year away and jewelers are experiencing the summer doldrums. Eager to draw in buyers, they're dropping prices and running sales. Remember, what you buy in July makes a welcome gift in any month and that includes presenting a Valentine's Day diamond.

Tools and Paint. Like the weather, tool deals heat up come July. With Father's Day over and done, retailers such as Lowe's and Home Depot are offering up tool sets, large tools and accessories for less. This is good news because the weather is right for completing some of those outdoor projects on your list. But who wants to paint in the heat of summer? Not many people, so home improvement stores regularly entice consumers to buy paint in July with hefty discounts. Even if you don't want to take on this chore now, take advantage of the specials and put the paint in storage for a while.

Summer Gear. While the best sales on swimwear, sandals and summer apparel will blossom in August and September, you'll start seeing low-price offers as retailers make way for back-to-school clothing.

Grills. Once the July 4 holiday has passed, retailers no longer want to hold cheap grills in their inventory and deals will pop up in anticipation of the fall onslaught of goods.

Outdoor Furniture and Yard Decor. Along with grills, outdoor furniture and decorative yard items will start displaying discount prices after July 4. Still, for the best deals, wait until later in the summer and on into fall. September and October typically see the best outdoor furniture and yard decor prices.

Sunglasses. Sunglasses are hot, hot, hot right now and therefore priced at their peak. The best deals on sunglasses don't typically appear until the off season, starting in September and extending into December.

Foods in Season. This month is the middle of the prime growing season for many fruits and vegetables. Fresh fruits to buy in July include blueberries, strawberries, raspberries, cantaloupe, watermelon, peaches, apricots, plums and kiwi. Vegetables that ripen this month and sell for dirt cheap prices are corn, green beans, cucumbers, tomatoes, summer squash and lettuce.

National Food Holidays. July is National Ice Cream Month as well as National Hot Dog Month. Scoop up sweet ice cream coupons and deals to use at the grocery store. While the entire month is focused on the frozen creamy treat, you may score a bigger deal on July 18, National Ice Cream Day, from local ice cream shops and chains such as Baskin-Robbins, Graeter's, Cold Stone Creamery, Marble Slab Creamery and Maggie Moo's Ice Cream and Treatery. You might even come across deals for an in-home ice cream maker. Meanwhile, look for coupons and discounts on hot dogs leading up to National Hot Dog Day on July 23. And check Sonic, 7-Eleven and QuikTrip, which have all offered free or discounted franks in the past.

 

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When Money Gets in the Way of Major Life Decisions

June 30, 2015, 10:00 pm

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Filed under: Family Money, Personal Finance, Debt Assistance, Saving, Financial Education

By Emma Miller

For many of us, tomorrow's to-do list is getting longer. A survey from the American Institute of CPAs finds that 51 percent of Americans have delayed a significant decision because of financial anxiety -- a huge uptick from the pre-recession stat of 31 percent in 2007.

Of these delayed milestones, higher education was most frequently postponed, with 24 percent of people putting off college due to financial concerns.

Another 22 percent held off buying a home in the past year, while 19 percent decided to forgo an expensive medical procedure and 18 percent deferred their retirement plans. Even family life was affected, with 12 percent making the decision not to move ahead with marriage plans.

Lack of savings is the primary culprit (cited by 60 percent of respondents), followed by concerns about the U.S. economy, difficulty paying bills, a need to care for parents or other relatives, and concerns about paying down credit card debt.

Ernie Almonte, the chair of the AICPA's National CPA Financial Literacy Commission, believes the recession also taught hard lessons.

"When you peel the onion back, you start to see that what they have experienced -- their parents, friends losing their homes or jobs, or people in so much debt they file for bankruptcy -- stuck with them," he tells MarketWatch. "People are looking at things now and saying 'I don't have enough savings for that' or 'I will put it off for a year or two until I'm financially stable.' "

This increased caution may still pay off in the long term: the vast majority (85 percent) of respondents reported having made positive changes to their financial behavior since the recession, such as following a monthly budget, increasing savings rate and adding to an emergency fund.

And despite 13 percent of respondents delaying having kids, U.S. birth rates are up slightly for the first time in seven years -- suggesting a rosier economic outlook.

If money worries are keeping you up at night, check some of the most common financial fears -- and learn to banish them.

 

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Ask Stacy: When Can I Stop Paying Mortgage Insurance?

June 30, 2015, 10:00 pm

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Filed under: Mortgages, Personal Finance, Home Buying, Home Loans, Consumer Issues

By Stacy Johnson

Hopefully you have home, health and car insurance. But there's one kind of insurance you might pay for that you'd rather not: private mortgage insurance, otherwise know as PMI.

Here's this week's question:

I asked JPMorgan Chase if they could stop charging me mortgage insurance. They want me to pay for an appraisal. Since when did banks start charging clients for appraisals? I am already getting ripped off for the mortgage insurance. Is there no end to their greed? Is there any way around this? -David

Understanding PMI

Private mortgage insurance is simply insurance your mortgage lender takes out to protect against the risk that you default. In other words, if your house goes into foreclosure and is sold for less than the mortgage amount. PMI reimburses the loss suffered by the lender. It is typically required if you put less than 20 percent down when you buy a house, and you'll keep paying it monthly until your equity reaches 20 percent.

PMI: You Must Pay It, but You Can't Shop It

PMI benefits the mortgage lender, but you pay the premiums. And unlike virtually any other insurance policy you buy, you don't get to shop around for the best deal. The cost varies depending on your credit score and down payment, but it typically ranges from 0.3 percent to 1.5 percent of the original loan amount every year. So if you borrow $300,000, you're paying between $900 and $4,500 annually: That's not chump change.

As I said above, PMI is typically required unless you have at least 20 percent equity in your home, also known as an 80 percent loan-to-value ratio. For example, if your home is worth $100,000 and you owe $80,000, you have an 80 percent LTV and 20 percent equity. There are three ways to achieve the magic number:

• Put 20 percent down when you buy your home.
• Make payments until you've paid off enough of your mortgage to achieve 20 percent equity. At today's rates, this will take about 10 years of minimum payments on a 30-year mortgage.
• Your house appreciates in market value to the point that your loan-to-value ratio drops to 80 percent or less.

PMI is typically bundled with your regular monthly mortgage payment, so unless you're on the ball, you'll forget you're paying it. This used to be pleasant for those collecting the premiums, because until the passage of the Homeowners Protection Act of 1998, they didn't have to let you know that you'd achieved 20 percent equity and no longer had to pay PMI. Instead, they'd collect your PMI premiums every month for the entire 30 years if you let them.

Now the law requires lenders to cancel PMI when your loan-to-value ratio reaches 78 percent of the original value of your house. Cancellation is automatic: As long as you've paid down your mortgage enough to achieve a 78 percent LTV, your lender must cancel PMI regardless of your home's current market value.

If you think your home has appreciated enough to give you an 80 percent LTV, you can start the process of terminating PMI. To terminate PMI yourself, however, you'll have to prove you've got the necessary equity with an appraisal at your expense.

And that brings us to David's question: "Since when did banks start charging clients for appraisals?" Since as long as I've been covering this topic, David, which is 20-plus years.

Got an FHA Loan? It Gets Worse

An FHA loan is one insured by the Federal Housing Administration. They're popular because they require lower down payments than some other types of loans and are generally easier to qualify for. However, that convenience comes at a cost.

FHA requires two mortgage insurance premiums: one upfront as a lump sum and one paid monthly. The upfront part is currently 1.75 percent of the loan amount. So if you borrow $200,000, you'll either pay $3,500 upfront, or you'll have that amount added to your loan. The second premium is like the one discussed above: paid monthly as part of your mortgage payment.

Unlike other monthly PMI premiums, however, the FHA doesn't let you off the hook when you reach 20 percent equity. Instead, for loans approved on or after June 3, 2013, borrowers who put less than 10 percent down will pay the monthly PMI for the life of the loan. The only way to get rid of it is to get rid of the loan by refinancing it.

If your FHA mortgage predates June 3, 2013, you're in luck: You'll stop paying PMI when you reach 78 percent equity.

How to Get Rid of PMI

If you suspect your equity is approaching 20 percent, contact your lender or loan servicer and ask them what you'll need to do to get rid of it. The hoops you'll have to jump through will differ by lender, so it's important to ask and start getting your ducks in a row in advance. Here are the requirements, courtesy of the Consumer Financial Protection Bureau:

• Your request must be in writing.
• You must have a good payment history and be current on your payments.
• Your lender may require you to certify that there are no junior liens (such as a second mortgage) on your home.
• Your lender can also require you to provide evidence -- for example, an appraisal -- that the value of your property hasn't declined below the value of the home when you first bought it.

One Strategy to Avoid PMI

There is one common way to get around PMI, and I've used it before: You take out a second loan, known as a piggyback, so the first mortgage won't require PMI.

Example: If you're buying a $100,000 house, you'd take out an $80,000 first mortgage. Since that mortgage has an 80 percent LTV, no PMI is required. Then you take out a $10,000 second mortgage from a different lender and come up with a $10,000 down payment to complete the transaction. Result? You've put only 10 percent down and you've eliminated PMI. This is called an 80/10/10 loan: 80 percent first mortgage, 10 percent second and 10 percent cash.

The problem? Second mortgages nearly always have a higher interest rate. So part of what you save in PMI you lose to a higher rate. In addition, the process is more complicated, and you may have to have a higher credit score to get it done. To find out if it's worth doing, compare the additional cost of the second loan with the cost of PMI.

Got a Question You'd Like Answered?

You can ask a question simply by hitting "reply" to our email newsletter. If you're not subscribed, fix that right now by signing up now.

The questions I'm likeliest to answer are those that will interest other readers. In other words, don't ask for super-specific advice that applies only to you. And if I don't get to your question, promise not to hate me. I do my best, but I get way more questions than I have time to answer.
About me

I founded Money Talks News in 1991. I've earned a CPA (currently inactive), and have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate. Got some time to kill? You can learn more about me here.

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How to Earn a Six-Figure Income in the Sharing Economy

June 30, 2015, 10:00 pm

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Filed under: Careers, Labor, Job Market, Career Change, Economy

By Mia Taylor

NEW YORK -- It may be time to quit your day job. Just ask Redd Horrocks.

Two and a half years ago the Las Vegas resident was making about $52,000 a year as a stage manager for an event production company and was in search of a second job to help pay off debt.

Before long she came across Fiverr, an online marketplace for individuals selling creative and professional services, everything from graphic design, to writing, translation, illustration and marketing.

Horrocks, who has a degree in communications and worked in theater for years after college, offered voiceover services on the site. Business was slow initially; she received just a few orders here and there. But before long orders increased exponentially and after one year, Horrocks had more work than she could handle.

"Two and a half years later, it's my full-time job," says Horrocks. "I work between 30 and 40 hours a week, but I never work more than five hours a day. And I'm making twice as much as I was making before at a regular day job. I'm working 30 hours a week and making six figures."

It may sound too good to be true, but it's not. Horrocks is just one example of individuals who are earning decent money from booming sharing economy websites such as Fiverr and TaskRabbit.

Secondary Income

Fiverr officials say the site has tens of thousands of users who generate a steady secondary income stream through its gigs, money used to pay for various life expenses -- everything from down payments on a home, to buying new cars and paying child adoption fees.

Millennials in particular are attracted to the income and freedom of working as micro entrepreneurs for a site like Fiverr, which says 76 percent of its sellers come from that generation.

Launched in 2010, Fiverr is now doing business in 190 countries and offers 4 million services for hire. Used primarily by freelancers, the site provides such sellers with a global marketplace.

While many people get caught up on the fact that sellers must initially offer services for a mere $5, that's just a starting point explains Fiverr's Chief Revenue Officer David Manela.

"By starting at $5, it creates a no brainer purchase -- it's an easy purchase," says Manela. "For buyers to try something at that price is very reasonable. It's a very easy purchase. And often, getting that first customer is the most difficult. Once you get a customer and do a good job, it turns into more and more revenue."

Offering that initial service at $5 also removes the strain of haggling over costs or pay rate, simplifying things.

Real Money

The real money however, appears to be in the premium gigs through which advanced sellers can augment their services, charging a higher price for additional services. For example, if you're a copy editor, perhaps you charge $5 for editing, but additional fees for formatting, layout or a rush turnaround. That's when the income starts to add up.

The site also allows for what it calls "custom offers," a mechanism through which a seller can put any price on a service -- as much as $7,000 to $10,000.

"My rates start at 125 words for $5," says Horrocks of her voice-over services. "But I have tons of clients who need 2,000 words or 4,000 words, so that can add up. About 75 percent of my projects are bigger then 125 words."

"You still get the $5 jobs," she adds. "I do people's voicemail greetings for $5. But I can do them so quickly; it's very little time investment. And I can do about 30 to 35 of those types of orders a day."

Not to be overlooked, for those considering offering their services on the site, is the fact that Fiverr takes 20 percent of all transactions. TaskRabbit, meanwhile, provides another eye opening example of how much money is being made via sharing economy sites.

Big Earners

The site currently has about 30,000 taskers spread throughout the United States and London. Between 10 to 15 percent of those taskers make a full-time income performing odd jobs through the site, says spokeswoman Jamie Viggiano. And when she says full-time income, Viggiano is talking about people who are grossing $6,000 to $7,000 a month.

"One guy even netted $12,000 in a month," Viggiano adds. "But those are active taskers. For the 85 percent of taskers who aren't that active, or who have a full-time job and are just looking for extra income, what they're doing is managing to pay two or three bills a month from the income they bring in working nights and weekends as taskers."

Not a bad deal no matter how you look at it. Run a few errands, perform a few odd jobs and earn the money to pay a handful of bills.

One of the major differences between Fiverr and TaskRabbit is that in order to be a tasker, the site must approve your application. There is a formal vetting process. Anyone can offer his services on Fiverr.

About 4,000 people a month apply to be a tasker, says Viggiano. And it's a well-educated crowd. More than 80 percent of applicants have a bachelor's degree or higher. There are doctors, lawyers and a variety of other working professionals using the site to make extra income.

"We have people who are musicians and are between gigs and just need some income," Viggiano continues. "Or actors and actresses who are in between jobs, using this make some income."

The gender breakdown of taskers meanwhile is split evenly between men and women. The 10 percent to 15 percent who earn a full-time income, however, are mostly male and are typically those doing construction or handyman tasks, says Viggiano.

Those working through TaskRabbit are allowed to set their own pay rates, which can be adjusted at any time.

"We don't predetermine anything," Viggiano says. "As a result we see some of the highest hourly rates in the sharing economy. Taskers make an average of $30 per hour."

Handymen tend to make around $50 an hour, but depending on the zip code, they sometimes charge up to $100 an hour.

The variety of services offered through the site runs the gamut from packing, to party planning, to grocery shopping, and even includes such things as writing and editing.

When it comes to maximizing your earnings on the site, Viggiano has a few key tips and words of advice.

Market Rate

First, she says, continually adjust your hourly rate. Figure out what the market will bear. As you obtain more experience in your chosen service category, increase your rate. If you start offering services in a category that is new for you, bring your rate down and then increase it as you move forward.

Viggiano's second bit of advice is basic, sound business practice - deliver great service to clients. TaskRabbit service providers are ranked based on client reviews, ratings and recommendations.

"People get paid the rate they want based on how they're performing," Viggiano explains. "Reviews are key to the site."

Emily Cherin, a 49-year-old Jersey City tasker, offers her services in a variety of categories on the site including writing, editing, personal assistance, shopping, organization, packing and moving, elder care, pet sitting, cooking and baking.

She turned to TaskRabbit when a traditional job search proved fruitless.

"I was sitting in my apartment job hunting like a crazy woman," says, Cherin, who has a graduate degree in broadcast journalism. "Literally I put in more than 100 applications and was getting no response. I had no idea the job market would be so challenging. My 82-year-old aunt had heard about TaskRabbit and suggested I look into it."

Those desperate days of job hunting are now long gone. Since signing on with the TaskRabbit in November, Cherin has completed so many tasks and earned such rave reviews from clients that she's been named one of the site's 'elite' taskers.

Cherin has three steady clients and picks up numerous other tasks each day and week. For one of her clients, Cherin manages all bills and receipts.

"I put them all into a spreadsheet for her every month, that she has to turn into her employer," Cherin explains.

Busy Bee

For another client, a Maryland-based grant writer, Cherin manages correspondence regarding grants. She also visits an elderly Greenwich Village resident every week, where she opens and organizes bills.

"It takes me about an hour, and she pays me for four hours," Cherin says.

Other jobs she has performed include editing film scripts, writing bios, organizing closets, helping people to unpack and event staffing.

TaskRabbit is Cherin's full-time job. She earns about $4,000 a month. As an elite tasker she typically charges about $65 an hour. From that, TaskRabbit takes 30 percent for the first task performed for a client and 15 percent from subsequent tasks with the same client, she says.

Cherin couldn't be happier with life these days as a result of her flexible and lucrative gig.

"This has totally changed my life," she says. "It totally saved me. All of sudden I was out and about, all over the city, meeting super interesting people. It was amazing. I could not have created a company that was more suited to me personally because I don't like to sit still. I have such a diverse skill set and this is really fun. It allows me to do so many things and learn and grow."

 

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How a Quick Call Can Change 4 Things About Your Credit Card

June 30, 2015, 10:00 pm

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Filed under: Banking, Personal Finance, Credit Cards, Interest Rates, How to Save Money

By Matt Schulz

A simple phone call can potentially save you hundreds of dollars, improve your credit score, score you extra frequent flier miles and more -- and your chances of success are higher than you'd imagine.

Most people never make that call, though. Maybe they're too busy. Maybe they don't know what to say. Maybe they don't think it will matter.

It does matter -- and consumers' reluctance to make that call can cost them.

Of course, not everything can be fixed with a phone call. For example, if your payment is late for the fourth time in six months, don't expect the bank to cut you any slack. But many things can be tweaked or improved if you take the time to call your card issuer.

Here are a few examples:

Late Payment Fee

A CreditCards.com survey last year showed that 86 percent of cardholders who asked to have a credit card late payment fee waived got their wish.

The problem is only 28 percent of cardholders have asked. While not everyone has been late with a payment, chances are lots of cardholders are paying those fines without knowing that a simple call could get them out of it.

Some card issuers -- Discover being perhaps the most prominent among them -- advertise that they won't charge a late fee on your first late payment. Many other card issuers will waive the fee for some of their cardholders, but only if the cardholder asks.

A good record of on-time payment can help seal the deal. When you call, make sure the bank knows you're rarely late and that it won't happen again.

Interest Rates

That same survey also revealed about 2 in 3 cardholders who requested a lower interest rate got one, but just 23 percent had ever asked. Again, that means a large number of cardholders are missing out on a large amount of savings.

How big? Consider this:

• If you have a $5,000 balance on a credit card with a 20 percent interest rate and pay $150 a month, you'll pay $2,359 in interest before paying the card off over 50 months.
• Lower that interest rate to 15 percent and keep everything else equal, you'll pay $1,508 in interest in just 44 months. That's a savings of $851!

Could you get your card issuer to lower your APR as much as 5 percent? Maybe or maybe not. But even lowering that APR to 18 percent -- just a 2 percentage point drop -- would save you about $375 in interest.

Credit Limit

An increased credit limit can do wonders for your credit score. That's because it can quickly shrink your credit utilization ratio -- how much debt you have compared to your available credit. For example, say you have $5,000 in available credit and $2,000 in debt. That means your credit utilization is 40 percent, well above the recommended goal of 30 percent or less. However, if you can increase your credit limit to $7,000, your utilization rate suddenly drops to an acceptable level of 29 percent. Your credit score is likely to improve as a result.

Be cautious, though. Don't expect the bank to double your credit limit. You can likely improve your odds of success if the increase is a baby step rather than a giant leap.

One temporary downside: Your credit card issuer might do a hard pull of your credit when deciding whether to increase your limit. With any hard pull, you will likely see a small, temporary decrease in your credit score. However, the long-term benefit of the higher credit limit will likely outweigh any brief hit your credit might take.

Sign-up Bonuses

This is a move you'd need to make before you actually get the card, and you'll need to do some homework to make this work.

Say you've received an offer in the mail from your bank for a card that you really like. The card comes with a low APR, no annual fee for the first year, no foreign transaction fees and a 20,000 point sign-up bonus. Sounds great, right? Yes, except for the fact that you've gone online and seen other offers of 40,000 or 50,000 points.

Well, if your credit is excellent, there's a good chance that you can have those points. Just give your bank a call, tell them about the other great offers that you've seen and ask the bank to match the offer. Again, if you've got strong credit, you've got a good chance of success.

No Guarantee of Success

As mentioned, data has shown that cardholders are more likely to have their requests granted than they'd expect. But that doesn't mean any of these are a slam dunk. The reality is that people with the best credit get the best treatment, the best rewards, the lowest APRs and the most fees waived.
Before you pick up the phone to talk to your bank, be sure you know where you stand with your credit. Get a free copy of your credit report from AnnualCreditReport.com, and dispute any errors or omissions you find. Get your FICO credit score. And of course, pay your bills on time, every time, in the weeks and months leading up to your request. These moves can help increase the chance that the next request you make will be a success.

Matt Schulz is the senior industry analyst at CreditCards.com, a site dedicated to helping people make smart decisions about obtaining and using credit. You can follow him on Twitter at @matthewschulz.

 

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Bullish Employment, Factory Data Brighten Growth Picture

July 1, 2015, 1:50 am

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Filed under: Labor, Economic Indicators, Job Market, Career Change, Economy

By Lucia Mutikani

WASHINGTON -- U.S. private employers hired the most workers in six months in June and factory activity accelerated, providing fresh evidence the economy was gathering solid momentum after contracting at the start of the year.

The brightening growth outlook was also bolstered by other data on Wednesday showing auto sales remained strong in June and construction spending rose in May to its highest level in just over 6-1/2 years.

The recent raft of upbeat data supports views of a September interest rate hike from the Federal Reserve, although market-based forecasting tools suggest lift-off may not occur until late in the year or even in 2016.

A strong June jobs number would make it clear the economy can absorb a rate hike and the Fed can move at any time it wants.

"The economy has shifted back into solid growth mode. A strong June jobs number would make it clear the economy can absorb a rate hike and the Fed can move at any time it wants," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.

The ADP National Employment Report showed 237,000 private-sector jobs were created in June, beating the median expectation among economists surveyed by Reuters for a gain of 218,000 jobs. Private payrolls increased 203,000 in May.

June's gain marked the third straight month of improvement since the pace of hiring had slumped to a 14-month low back in March. Job increases last month were led by small businesses and the services sector.

Employment in the construction industry increased 19,000 jobs, though down from the 28,000 jobs added in May. Manufacturing payrolls rose 7,000, more than recouping the 2,000 jobs lost in May.

U.S. stocks rose on the economic data. Sentiment was also buoyed by Greece's apparent willingness to accept most of creditors' bailout terms. The dollar firmed against a basket of currencies, while prices for U.S. Treasury debt fell.

The ADP report, which is jointly developed with Moody's Analytics, came ahead of the government's more comprehensive employment report on Thursday.

According to a Reuters survey of economists, nonfarm payrolls likely increased 230,000 in June after a robust 280,000 gain in May. The jobless rate was forecast dipping one-tenth of a percentage point back to a seven-year low of 5.4 percent.

Factories Humming

"The U.S. job machine remains in high gear. The current robust pace of job growth is double that needed to absorb the growth in the working-age population," said Mark Zandi, chief economist for Moody's Analytics in West Chester, Pennsylvania.

In a separate report, the Institute for Supply Management said its national factory activity index rose to 53.5 in June, a five-month high, from a reading of 52.8 in May. It was the second straight month of gains in the index.

A reading above 50 indicates expansion in the manufacturing sector. A gauge of new orders received by factories increased for a third straight month.

Eleven out of 18 industries, including furniture, fabricated metal products, computer and electronic products, and electrical equipment, appliances and components reported growth in June. Four industries, including petroleum and coal products, and primary metals, reported activity contracted.

Last month's pickup in factory activity is a welcome development for the sector, which is struggling with the lingering effects of dollar strength and lower energy prices.

Factory activity could get a boost from strong demand for automobiles.

Early reports from auto manufacturers Wednesday showed strong demand for sport utility vehicles and trucks in June helped General Motors (GM)) and Ford Motor (F) offset slowing demand for sedans by allowing them to raise prices on their trucks.

A Reuters survey forecast auto sales slowing to a still-robust seasonally adjusted annual pace of 17.2 million units in June from 17.8 million units in May.

Economic reports, including employment, consumer spending, confidence and housing, have assumed a strong note in recent months, suggesting growth was gaining steam after gross domestic product fell at a 0.2 percent annual rate at the start of 2015.

The economy was hit by bad weather, port disruptions, a strong dollar and spending cuts in the energy sector in the first quarter.

In a third report, the Commerce Department said construction spending increased 0.8 percent to an annual rate of $1.04 trillion in May, the highest level since October 2008.

Gains were broad-based, but more pronounced in the private nonresidential segment. Economists said that should offset the drag on second-quarter growth from weak oil and gas drilling.

"Construction spending looks set to add significantly to second-quarter GDP growth," said John Ryding, chief economist at RDQ Economics in New York.

-Dan Burns and Richard Leong contributed reporting from New York.

 

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