These days, there aren’t many things that are free, or don’t come without a warning from me that there could be a catch.
There’s no catch here: Two opportunities are coming to talk to a financial expert during free call-in advice programs sponsored by the Akron Beacon Journal and volunteer credit counselors from Apprisen and members of the Financial Planning Association of Northeast Ohio.
This will be the sixth year for the program with our partners and I’m so grateful that they give their time to help readers. We started the events after the Beacon Journal’s 2008 series called Reclaim The Dream, which reported on the financial situations of everyday people.
There were financial columns from me and financial makeovers offered to readers. We estimate the experts fielded more than 550 calls in the six years.
We purposely staff the call-in programs with both credit counselors from Apprisen, formerly the Consumer Credit Counseling Service of Northeast Ohio, and financial planners to offer expertise on a variety of topics, from paying down debt to investing money or on topics such as insurance.
Times and dates to call:
• 6 to 8 p.m. Wednesday.
• 9 a.m. to noon Saturday.
The phone is 330-996-3644.
As a prelude, Jay Seaton, area Apprisen president, and I discussed what he calls “Avoiding the Gotchas” — things that are happening in the marketplace that aren’t scams and could be used to a consumer’s advantage.
“The solutions to these things are hiding in plain sight; they’re all around you,” Seaton said.
In an accompanying story, there are details on the first Financial Planning Day sponsored by the Financial Planning Association of Northeast Ohio. It will be the same day as the Beacon Journal’s call-in — Saturday from 9:30 a.m. to 4 p.m. at the University of Akron.
The association wanted to put on an educational program for consumers and thought pairing it with our call-ins would be a way to reach a receptive audience.
So, on to the “gotchas” to avoid from Seaton, with some “additional” information or comments from me:
• Free credit reports: “It’s the Wild West with respect to getting a free credit report,” Seaton said. “Consumers are really interested in their credit report and scores.” Make sure you know that often, the “free” report a company is offering means you are signing up for a monthly credit monitoring service or some other service.
Seaton reminded consumers: “The only way to get your free credit report is through www.annualcreditreport.com.”; Seaton also said people need to know it does cost money to get your credit score and you should get the FICO score, the most commonly used by the industry, instead of the credit-bureau-specific ones. Sometimes, if you are seeking credit, you may be able to get them to share the score with you.
An additional point: Make sure you type in the correct address. The site has a blue bar and pictures of several different people on top, including a soldier and a doctor. According to Ohio law, consumers are entitled to one free credit report from each of the three bureaus a year; ID theft victims get it for free.
• One year, 90 days same as cash, or similar offers: “Those are legitimate offers, but you really ought to understand that if you miss that [payoff deadline] by even a little bit, you will pay all of that back in interest,” he said.
Seaton suggests paying a little on the balance each month so you don’t have to pay everything in the last 30 days.
I’ve taken those offers and instead of paying them early, I’ve put the money aside in a special account each month, so I’ll have the full amount to pay in time. It depends on how disciplined you are to not touch that money.
Seaton said he’s personally taken those offers knowing creditors hope you don’t pay them off in time, so they can charge you high interest fees.
• Extended warranties: Seaton is not a proponent of extended warranties pushed by sales people at the cash register when you buy a product. “The odds are you won’t use it,” he said. “They’re really heavily marketed for everything — automobile maintenance, any appliances. Some may say it saved me $800 when my washer conked out ... I’m very reluctant to use them.”
An additional point: Sometimes the money paid in total over that extended warranty is more than you would pay if you actually paid for a repair. This has to do with financial discipline and whether you can leave that money alone or if you have an emergency fund.
• Gift cards: Learn whether there are any usage fees, expiration dates or value lost on the card for expiration. Seaton found an unused gift card for a well-known hotel chain. When he phoned the toll-free number, he found it still had a significant amount on it. “I almost threw it away because it was so old.”
An additional point: In general, according to Ohio law, gift cards must last at least five years and sellers cannot impose inactivity fees for at least two years after the card’s issue date. For specifics on gift card and reward card rules, go online to www.ohioattorneygeneral.gov and search for “gift card.”
• Balance transfers: These are getting more frequent and competitive, Seaton said. “They can be really helpful to people, but understand what the offer is,” he said. That includes finding out what happens if you use the card. For example, is the promotion only on the transfer and not new purchases? And find out what happens if you don’t pay the balance in the set amount of time?
“If you can make a big dent [in your debt] with a 0 percent interest rate and you don’t use the card for 12 months, it might be worth it,” he said.
• Annual fees on credit cards: Seaton says he has one card he pays an annual fee on and it’s only because he thinks he’s earned a lot of airline miles with it, but he still questions himself every year to re-assess. “For the most part, I am not one to pay annual fees. I don’t care if it comes giftwrapped and gold tinged. They’ll tell you all the benefits and in small print, the first year is waived but it’s $200 a year after.”
• Debt buying: These are third-party folks who buy old debt and send letters that you owe debt from years ago. Some people are scared and just pay it. Stop and assess, he said. “I would ask for evidence that I owe this debt,” Seaton said. “It could save you a lot of angst and money, too.”
An additional point: A spokeswoman for the Ohio Attorney General’s Office said there are many different rules about the statute of limitations for debt collection. I will research those and write a future column.
• Offers that say “Try it a while, cancel later”: Seaton said sometimes the cancellation isn’t easy. “These are things that don’t rise to the level of trickery, but they’re marketing focused and they’re dependent on human nature not being as focused as they need to be [and forgetting to cancel],” Seaton said.
An additional point: I told Seaton of an offer I just accepted for some cookbooks from my husband’s favorite cooking magazine. I usually don’t accept those, but figured these would be nice for him. But I will watch for future bills and books and cancel if we don’t want them.
• Inactivity fees: Some credit cards may charge an inactivity fee if unused for a period of time or if the account is closed. “You want to keep as much of your current credit as you can. In the recession, there were all kinds of lines that were reduced or canceled,” said Seaton, who pulls out one card he doesn’t use very often. He uses it and pays it off. That keeps the credit line open and in the end, since he’s not using the credit, that helps his credit score because he’s using less of his total available credit.
• Credit life insurance: These are marketed as a policy that will pay off your credit cards if you get sick, laid off or die, Seaton said. “Generally speaking, what you pay in the premiums for credit life insurance is far more than what you ever get back,” he said.
• Prepaid cards: Some come with fees to use them. Some employers have begun loading prepaid cards instead of paychecks, but then “you have fees attached to your own paycheck.” Understand there may be costs with these cards.