Kevin Trudeau and Debt Cures They Don't Want You To Know About

When financial reporter Chuck Jaffe calls me it's usually for one of his MarketWatch "Stupid Investment of the Week" columns, and we always end up in an "interesting" conversation to say the least. But I was just floored when he called me last week for a story he was working on about infomercial Kevin Trudeau's latest book: Debt Cures 'They' Don't Want You to Know About.

I immediately recognized the name. Trudeau sold a wildly popular book on "secret" health cures that a friend lent me some time back. While I am very interested in alternative health, I found his book one of the worst I'd read on the topic, full of unsupported rantings and ravings.

Now he's the debt expert.

I haven't read the book, so I can't comment on it. But Chuck Jaffe has, and you can see what he has to say here.

And if you check his radio show website quickly enough you'll get to listen to his "Infomercial Journey Through Hell" review of the program.

Save your money. Hop on over to Credit.com and we'll help you out for free.

More on the Citibank/Macy's Card Switcheroo

If you have had a Macy's card, you will want to read the lastest news describing how Macy's cards were replaced with Citibank cards, and how that can hurt your credit rating. This excellent blog post by my colleague Emily Davidson explains why your credit rating may have dropped as a result.

Card issuers are not allowed to send unsolicited credit cards in the mail -- but they are allowed to send replacement or substitute cards. And that is what happened in this case.

What do you think? Should card issuers be allowed to switch your card without your OK first?

Choosing the Right Credit Card

Last week I had the opportunity to be interviewed by Susan Jhun for television station NY1 News, as part of my work with Credit.com. The topic was choosing a credit card and avoiding credit card traps.

You can watch the video here.

Just click on the dial up or broadband icon at the top of the story to play the video. Your comments are welcome!

Fastest Way Out of Debt?

"Mya" writes:

I need help. I am a recent college grad. I have $26500 in credit card debt. I am trying to decide how to get out of debt the fastest and with the best credit score afterwards.

My credit score is only 650 right now, so I am wondering if the non-payment part of debt settlement will make it worse. Or if after debt settlement my score will increase.

I would like to buy a house in 5 years. I am scared that debt settlement and specifically the negative payment history it causes will make getting a home loan difficult. However, I imagine 20k in debt 5 years from now (that is my calculation based on making minimum payments) getting a home loan will be equally as difficult.

Would you recommend debt settlement in my case or another method? I can't afford credit counseling in my current situation.

My Answer:

Your goals -- the best credit score and getting out of debt fast -- may be at odds with each other. You may have to focus on the debt part of the equation first, then focus on the credit score when you are debt-free.

Normally, my recommendation for someone with a lot of debt is to first see if credit counseling is an option. But you have already indicated that it is not. Other than paying off your debts on your own, that option has the least impact on your credit score.

So your next options are debt settlement, do-it-yourself debt settlement or bankruptcy. All of those will have a significant impact on your credit in the short term. However, as soon as you have paid off your debts (or erased them in bankruptcy) you can start rebuilding your credit. Generally, it will take about two years of on-time credit references for you to be ready to buy a home. Sure, you might be able to rush it faster, but you also want to make sure you are prepared financially for the responsibility of homeownership.

I would recommend you take a look at those three options, but don't procrastinate or over analyze. Choose one, and then move forward. It sounds like you are young and have many working years ahead of you. While it may be no fun to be going through this, if you use the experience to your advantage, you'll get through it much sooner than many of your peers -- who may face similar hard times down the road.

Also, while it is great to have the goal of owning a home in mind, don't let that cloud what you need to do today. In five years a lot can change. Make your first goal to get out of debt, establish a strong income, then save as much as you can toward your first home.

I wish you the best of success!

PS: I read a quote today that I thought may help:

There are risks and costs to a program of action.
But they are far less than the long-range risks
and costs of comfortable inaction.

-- John Fitzgerald Kennedy

Catching Up On Your Questions

I haven't answered questions this week. I've been in New York attending Money Magazine's 35th anniversary event. What a great time! I was the guest of Curtis Arnold, my friend and colleague who runs one of my favorite sites: CardRatings.com. I also had the opportunity to be a guest on Jean Chatsky's radio program on Oprah and Friends. She has the coolest radio studio I have ever seen -- we sat in lounge chairs, looking at a flat screen TV view of the Harpo radio studio in Chicago.

In the meantime, I've fallen behind on answering your questions, and promise to do that soon!

Must Be Nice to Get Paid for NOT Selling a Service!

Since I have both a landline and a VOIP phone, along with many features I don't use on my landline, I decided to save myself money and cut off my full service plan with Verizon and go to a simpler plan. However, I discovered they charge me a $2.50 monthly fee for NOT using long distance! The fee is to block long distance. They asked me if it is OK. Of course it is not, but I don't really have a choice!

Why should I have to pay them each month for something I don't want? Read more about these outrageous fees here.

Medical Records Stolen For ID Theft

Today the Sarasota Herald Tribune reported that two people were arrested after stealing medical records from an office building where they cleaned, and using that information to steal their identities.

Eerily, I was just talking about this very scenario in a radio interview I did for a program called The Objective Edge. You can listen to the interview here.

This is serious stuff for your business. If your client records are compromised, the ensuing legal bills could put you out of business. Read my previous posts on this topic and take steps now to secure client records!

Rebate Rip-Offs

I am ticked.

I bought an MP3 player through Buy.com at Christmas time. It came with a supposed $30 rebate. I followed all the instructions to fill out the rebate request and sent it in.

It was just denied. Why? Because it says it fell outside the purchase window. Problem is I did purchase it before the rebate expired but Buy.com's shipping receipts don't state that. (They only list the ship date which is later.) And the rebate instructions said Internet receipts don't count. So that means there is NO WAY to get this rebate unless the item was bought AND shipped within the rebate time frame. Of course Buy.com says they have nothing to do with the rebate, but the whole deal is very misleading.

I haven't finished pursuing this yet, but in the meantime, this article from one of my favorite money-saving experts just came in, and so I thought it would be the perfect time to run it.

By the way, The Dollar Stretcher was just featured as top site in the book Navigating the Financial Blogosphere by Russell Bailyn. The recognition is well deserved.

Beating Rebate Rejection
The Dollar Stretcher
by Gary Foreman

After Epson failed to send my promised rebate and ignored my follow-up letters, I stopped buying items with rebates. If they want to put something on sale, they can lower the price to the consumer. The rebates are just a racket and I refuse to play their game. I make sure I tell the sales clerks this when they recommend a product with a rebate.
GG in CA

We've all done it. We're tempted to purchase an item with a rebate. The after rebate price is good. But, we wonder whether we'll really receive the rebate. Because without it, the price offered is not the best deal available.

Although estimates aren't easy to find, it's generally assumed that between 40 and 60% of all rebates go uncashed. Some consumers forget to send them in. Others have their rebate requests rejected. Still others neglect to cash the rebate check when it arrives.

Any rebate that's not cashed is pure profit for the company. This is definitely a case where your loss is their gain. And it's a big gain. Published industry estimates conclude that rebates are worth $6 billion each year. So there's roughly $3 billion uncashed rebates yearly.

Most companies generally do not process their own rebates. They hire a fulfillment company to do that job for them. These firms are experts at what they do. There was a time when fulfillment centers bragged about how many rebate requests they disallowed. They're less open about it today.

Many rebate forms are designed to be complicated. Their purpose is to trip you up. Fulfillment centers know what mistakes consumers are most likely to make in submitting rebates. And they have the legal staff to tell them what mistakes can disqualify a rebate. The instructions are often written with the intent of making it hard to collect the rebate.

So what's a consumer to do? Start by shopping around. A little patience could turn up a sale without rebate or a similar product at a price that's competitive to the rebated item.

Look for "Instant Cash" rebates. They're not subject to the same problems as regular rebates. Typically they're paid out when you pay for the item. So any doubt about collecting the rebate is eliminated.

It would be nice to know which companies deal honestly with consumers on rebates. A quick Google search only turned up a couple of sites attempting to track a company's rebate performance. The only way to deal with the uncertainty is to do business with reputable companies. This is surely a case where the offer is only as good as the reputation of the company offering it.

There are some rebates to avoid. Any that require your original receipt or do not provide contact information.

Follow the rebate directions exactly. If it says to staple this to that, make sure that's what you do. And, no, a paper clip isn't the same as a staple.

Submit rebates as quickly as possible. Make copies of everything that you send in. If the rebate is sizeable, send it via certified mail with return receipt.

Save product boxes until the rebate is paid. And track your rebates. A simple folder for the copies you made will do the job. Be prepared to write follow-up letters if necessary.

If your original rebate was rejected, send in copies or your original application with a polite letter demanding the rebate. Keep a copy of your letter in the 'open rebate' folder.

You can also take your complaint to the manufacturer. Fulfillment centers are set up to handle (ignore?) customer complaints. The manufacturer may be more willing to help you. You can usually find their contact information by searching on the company name and 'customer service department'. Be polite but persistent.

If the company is unwilling to help, there are outside authorities you can call on. The Federal Trade Commission recommends that "if the rebate never arrives or arrives late, file a complaint with the Federal Trade Commission, the state Attorney General or the local Better Business Bureau." You can reach the FTC at 1-877-FTC-HELP or ftc.gov.


Should rebates be a part of your frugal shopping toolbox? That's really up to you. Some shoppers enjoy the thrill of the game. Their letters demanding a rejected rebate be paid are literary works of art. Their quest for the elusive rebate check would please Indiana Jones.


But, if you're not the adventuresome type or very short of time, stick to sales and coupons. No rebate checks for you. But you just might keep your sanity!
_________________


Gary Foreman is a former purchasing manager who currently edits The Dollar Stretcher.com website and newsletters. Each week thousands use The Dollar Stretcher to help them live better...for less. Visit TheDollarStretcher.com today to see how much farther your day and dollar will go!


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Frugal Tip: Replacing your ipod battery

I am not known for the best gifts (it's probably more the opposite), but year before last I gave my husband an iPod nano and it's been one of the best gifts I've chosen for him, given how much he uses it. Unfortunately, his iPod battery won't hold a charge anymore. Apple requires him to send it back for a replacement at $59 plus $6.95 for shipping. Being somewhat frugal, I decided to see if there wasn't a cheaper alternative.

I found the iPod nano battery and a replacement kit with instructions could be ordered through our local Batteries Plus for only $29.95. We ordered it. But even though my husband is very handy, he realized there was no way he was going to safely replace the battery. He had to return it.

I went back to the Internet and found iPodJuice.com which offers both self-replacement kits as well as battery replacement service. On their instructions page I found this warning about replacing batteries on first generation iPods:

"The battery inside the iPod nano is soldered to the motherboard, and is quite challenging for the average consumer to replace. That is why we don’t sell a do-it-yourself kit for the iPod nano." Grrr...wish BatteriesPlus had told us that in the first place!

We called iPodJuice and they were very helpful in explaining their battery replacement service. The price ($59.95) was in the ballpark with Apple's (iPodJuice's price includes the new charger my husband needs)but they offer a 10-year battery guarantee, which we couldn't pass up.

If we had a newer generation iPod, we'd probably go for one of their self-replacement kits. If you've replaced your own iPod battery, I'd like to learn how it went.

So we've shipped the gadget off and hope to have it back soon, ready to go. And I get to start thinking about what to buy him this Christmas.