It is a huge deal when banks charge everyone and their mother huge overdraft fees. Bank of America was one of the worst. The bank would hold your deposits or allow small transactions to go through prior to the larger deposit being made. Of course, this led to many overdraft fees being incurred by the customer. For every transaction that the customer made, they were tinged $35.

Bank of America just announced though that on October 19th, it will begin laying off the serious overdraft fees and only begin tinging the account once it reaches a $10 overdraft in one day. This means accumulated and not that you can continue to overdraft as long as it doesn’t go above $10 (at least this is the way I understood it). The account holder also has to have the account back in the black in five days time.

That’s not the most exciting news regarding the overdraft fees in my opinion, though. I like the fact that customers will soon be able to opt out of the program just by visiting a Bank of America branch or calling a yet to be determined phone number. Of course, the program I’m referring to is the one that starts the overdraft problem in the first place. I would much rather be declined at the grocery store than begin incurring overdraft fees at the bank. My embarrassment is less than the  $35 that the bank would charge me for the “overdraft protection”.

Bank of America will also be limiting the number of overdraft fees that can be incurred in a day to four. This is down from 10. The rule that it could charge 10 overdraft fees in one single day was put into place earlier this year. It is nice to see that rule gone and a new, better one in its place.

I don’t know if this will position BofA in a more positive light, but anything helps when it comes to the business practices this company has been doing. I know I talk a lot about the company, but I also hold a credit card from them and have yet to see my interest rates spike or my credit limit reduced. I haven’t had one bad experience with the company (knock on wood, right?).

A lot of public scruitiny has been placed on Bank of America after giving out nearly $6 billion in bonuses to Merrill Lynch executives. Just a week after a trial resulted in a $33 million settlement, in which the bank agreed to pay but admit to no wrongdoing, in the case against BofA, the SEC has decided to go to trial against the company to see that it is properly punished for its actions.

Bank of America was supposed to turn over information regarding the merger yesterday, but instead a top executive is meeting with House Representative Edolphus Towns about the acquisition of Merrill Lynch.

The SEC is looking to charge the bank with additional charges if, through the course of the trial, new evidence is discovered or evidence supports any allegations. It could also begin charging individual executives in the trial.

Bank of America was one of the largest takers of TARP money when the government started dealing out the $700 billion in taxpayer funds. So, of course, when money started going to the companies’ executives the American public got angry. I think it’s a good thing that the SEC has decided to step in because it is nice to know that someone is working on the side of the public…even it is for their own public relations image or to try to damage a company that has embarrassed the system.

Yes, I really do think that Bank of America has done a pretty good job of embarrassing itself and the entire financial system by pulling this very “AIG” move. BofA is really damaging its own reputation with customers and potential customers alike. Anyone who may be a potential customer will probably be so disgusted by the company’s business practices that they will likely turn away and not think twice about banking with the company or getting a credit card through them.

Bank of America is also notoriously bad with current customers as well. Just think about all the stores that have been coming out on TV regarding banks charging overdraft fees over and over against customers; most of the time the bank is BofA. Also, it is in the middle of the “interest rate hike” controversy where the company is raising interest rates for credit card holders and charging the higher interest on previously held balances.

They have yet to do this to anyone I know, but I am fairly skeptical about the company because of all the bad press it has been getting. I am more unwilling to work with the company than I was a year ago, even a month ago. Since the news about the executive pay has surfaced, I’m sure the company has lost a lot of its clientele.

Have you paid for a warehouse club shopping card? Do you feel as though you are treated poorly when you are at the store? Well, you’re not alone. Here are some things from Smart Money that warehouse stores may inform you of but not implicitly TELL you when you sign up for your cards en masse.

1. Now that you’ve paid for your dues, it’s time to get in line. Haha! Now they have you and your cart full of groceries, you have to wait in line for those in front of you who have cases upon cases of mountain dew and Pepsi.

2. You should probably have some kind of construction wear to shop at this store. This means that on more than one occasion, shoppers to warehouse stores have had merchandise fall on their heads while they were trying to shop.

3. Don’t sign up for our credit cards, seriously. A credit card from one of these warehouse stores will eat away at your account with an interest rate of 23.15% APR on average. If you have a Sam’s card, your phone will ring and ring with offers from GE money. I find this one kind of funny because I have a Sam’s card and also am offered a credit card every time I shop at the store, but have never been called and offered the credit card.

4.  We got you with our sparkly jewelry, hook, line, and sinker! Jewelry from a warehouse store is too good to be true. I don’t know what kind of lights they use to make those gems sparkle, but even my five year old engagement ring sparkles under those lights…if only they would follow us at all times, right? Anyway, most of the times when they say the diamonds will appraise higher than retail they won’t.

5. You will leave when we tell you to leave. Here’s where it gets tricky…I have only ever had a Sam’s club card and every time my husband and I have gone to leave a Sam’s Club, we have been stopped at the front door for the person to “check” everything in our cart. Are they really able to check what we have purchased? Probably not, but if that is what makes their day complete, than who am I to get in the way of that? There are many people out there who feel as though it is their right not to have to show their reciept to the “checker” at the door and in the eyes of the law; they are right.

However, you can be banned from the warehouse store if you completely ignore the rules of the store, including having your receipt checked by the checker at the door.

I have a warehouse club card (Sam’s Club) due to the fact that is what my parent’s give Chris and me for Christmas. The card is one of those things that we look forward to every year even though we barely use it throughout.

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Deduct the interest you pay - You can get a tax break on all that interest you pay – up to $2,500 a year.

Know any benefits you get from your job – If you’re teaching at an inner city school you could end up getting up to $5,000 taken off the amount you owe to you Stafford Loans. You don’t have to pay more than you have to so do some homework before you start paying your loans.

Consolidate! – When it comes to student loans, it is wise to put all your loans in one big loan, as opposed to credit cards where it isn’t considered very prudent to do the same. If you consolidate your loans, you end up being covered if rates go up. However, if rates go down you could end up paying more because of the locked in rate you have. You can ask your lender what is the best option for you.

You need to be aware of your repayment options. – To do this, you need to know exactly how much you owe on your loans. You can check this at the United States Department of Education’s National Student Loan Data System. Once you get the final number, you can talk to your lender about payment options an pick the one that fits the best in with your financial goals.

Know how much you will have to pay each month. – So you’re finally out of college and have that diploma in hand. Right now, in your deferment period, you might not know how much you’re going to end up owing per month, but you should. Interest will cost you more than the amount you borrowed, but paying the loan off faster will help offset some of that cost. If you pay the minimum amount each month, then you’re going to end up being a lot less wealthy in the long run. Then again, if you pay the minimum and put the difference you would have paid in a savings plan with a higher interest rate than your loans, you could end up ahead when you pay off the loan.

You can ask to have your interest rate lowered. – Ask and sometimes, you will receive. This works with some loans and credit cards; if you ask for a lower interest rate, sometimes lenders feel generous and give it to you. It never hurts to ask.

If you can avoid it, don’t ever file for bankruptcy. - Declaring bankruptcy may be able to get you out of credit card debt and past due bills, but it won’t get you out of student loan debt.

So you’re trying to take out a loan, get a credit card with a reasonable APR or trying to buy something, anything on credit, but your credit score is too low for your liking? Well, the first place to start when trying to rebuild that score is to find out what exactly makes up your credit score.

35% of your credit score is from paying your bills on time. To help improve this part of your score, start marking due dates on your calendar. This is the single largest section of your credit score. Setting up automatic bill payment is also another way to ensure that your bills are paid on time. This also keeps you from getting interest rate hikes on credit cards and loans. Someone who pays their bills on time, every time, has an average credit score of 706. Someone who pays 99% of the time on time’s average score is 658.

30% of your credit score is how much you owe. You need to make sure that you keep your balances from equaling up to 30% of your total credit line. Your credit score is partly based on the credit utilization ratio. If a credit card company ends up reducing your limit, what you owe actually becomes a larger percentage of your credit line. So, if this happens try to get in touch with your creditor and get the limit reversed to avoid a negative mark on your credit score.

15% of your credit score is the length of your credit history. In this case, someone who has had a credit history for 20 years is going to obviously be doing better than one who just graduated college. A trick to utilizing this 15% is to keep the first credit card you ever open, open. Use it a couple of times a year and pay it off.

10% of your credit score is credit expansion. Here’s a problem, when you apply for too much credit your credit score can be harmed, however having new credit accounts can also help your credit score. Open new accounts over time rather than trying all at once. This will help your credit score in the long run as long as you’re paying your bills on time.

The last 10% of your credit score is credit diversity. If you have all your credit in cards then you’re credit isn’t diverse. However, if you have a variety of credit cards, mortgage, car loans and pay the bills on time while keeping the accounts active, then you’re diversified in this aspect of your credit. The key is to keep the accounts active because not using the accounts won’t help your credit at all.

The hike is said to affect those who carry a balance and have an interest rate below 10 percent. They can expect their interest rate to climb into the double digits starting with June account statements.

Recently the federal government limited how the credit card companies could raise rates. The problems is that the rule doesn’t take effect until July 2010. Congress is trying to make these rules go into effect sooner, but not in time for the Bank of America increase.

So if you don’t carry a balance or you have an interest rate higher than 10% you should be ok.

They are also thinking about taking some “unconventional” ways to help revive the economy.

Specifically, the Fed said it is now “prepared” to buy longer-term Treasury securities if the circumstances warrant such action.

“As expected, the study on buying longer-term Treasury paper is completed,” said Ram Bhagavatula, managing director at Combinatorics Capital. “Now they will buy it if needed. But with all the programs in place to buy risky assets, I don’t think it will be needed in the near-term.”

While the interest rate is the rate charged to banks to lend to each other, maybe the low rate will translate into even lower interest rates for mortgages and loans than now and some families will be able to refinance and lock in lower rates.

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Before it got the bailout money, GMAC was unable to offer low interest rates (or zero percent like its rivals) because it just didn’t have the funds available. It said it will begin offering auto loans to those with a credit score of 620, as opposed to a minimum of 700 which was imposed two months ago.

The new rules will prohibit payments not be late until the borrower is given a reasonable period of time to pay, playing “too-high” fees for exceeding the credit limit because of a hold on the account, double cycle billing, and making deceptive offers.

The new rules will require lenders to give consumers 45 days notice before changes are made to the terms of a credit account. That includes increasing the interest rate or giving higher rates for penalties.

The news is good for the markets, and may cause temporary rallies in some of the financial sector.

The stock market has been volatile with every new news story that comes out. It almost seems like if someone sneezes on Wall Street, stocks will move…but this news is truly good news for the market.

Many analysts were calling for the rate to only be dropped to .5 percent.

Chairman Bernanke said that he, and the Fed, will do everything they can to stave off the worst recession since the 1930′s.

The decision to drop the rate so low is expected to be matched by a reduction in the prime lending rate banks charge for business and consumer loans. Prior to the Fed’s decision the rate was 4%

The rate cut is supposed to be a preventative measure for the economy. It is supposed to keep us from slipping further into a long and awful recession.

Most don’t see the Fed cutting the rate to zero, but depending on the direction of the economy, it may happen.

We, as United States taxpayers, have funded companies with $700 billion. It is OUR loan to THEM. However, the economy is still sub-par and there are no investments that we can put our money in for safety with the guarantee of even a tiny profit.

Short run T-bills have 0% interest rate. From what I’ve learned in my managerial finance class, when the T-bills is at 0% that means the risk free rate of interest on an investment is 0% and anything above that (such as on a corporate bond) included a default and market risk premium. (To me) that means any coupon rate on a bond (corporate, municipal, etc) is all risk…

The point I’m trying to make is that the bailout was supposed to help the economy…so when will that happen. There are thousands, if not millions, who are losing their retirement funds in the market. When will they be bailed out?

Today the Central Bank in Canada dropped the interest rate three quarters of a point to 1.50%

I don’t know if the entire world’s economy is hanging on to whether or not our government is going to bailout the United States auto industry. It just seems like such a small factor to influence the global forecast.

Global forecast becomes bleaker as Canada enters recession

For the other news expected this week and more information see the video below from the New York Financial Press.

The Fed has cut the interest rate by so much, that deflation will certainly become an issue. Deflation was an economic indicator leading up to the Great Depression, and some fear that the deflation going on right now could indicate that the current recession we’re in could be longer than some expected.

I find it odd that just 3 months ago, headlines were saying that inflation was a huge weight on the economy. Since then, oil has declined almost $100 a barrel, and other commodity prices have fallen by 40%.

The Fed Chairman Ben Bernanke said that he and the rest of the board would monitor financial and economic conditions carefully and will act when or if they are needed to promote stability.

The Fed continues to cut rates to try to unfreeze credit markets. However, when the Fed cuts rates banks don’t always pass on the savings (even the discount rate was cut today). Reports are coming out that the banks who are benefiting from the $700 billion bailout aren’t passing on the benefits to the customers and aren’t any more apt to lending.

The survey takes place in 5,000 households and consists of 5 questions to which the answer is positive, negative or neutral. These questions are:

1. Current business conditions
2. Business conditions for the next six months
3. Current employment conditions
4. Employment conditions for the next six months
5. Total family income for the next six months

Now, this has been going on since 1967 and has been no more complicated than before, but is still used and DOES affect the market. I know they say “if it’s not broken, don’t fix it,” but maybe there should be another way to more precisely measure CCI? I mean I can feel different levels of positive and really different levels of negative…

On Thursday, the GDP is also coming out…For many who thought the US economy was on the edge of a recession, the news from the GDP will likely say that we have dove head first into one. For the first time in 7 years, our GDP will show a decline…

This week will be an interesting week in the markets and on the news. Expect the candidates for president to take advantage of the bad news, saying that they can fix it and the other one can’t.

With many professionals calling a bottom today, casual investors should now be investing for the long haul and not the quick rally. As always pigs get slaughtered and right now all the streets look red.

Well, as long as you are being responsible with your spending and paying off the balance, not just the insane interest rates, credit cards offer several benefits.

First, it helps you build a credit history and improve your credit score. Both of those things are important. Poor credit can make your insurance go up (auto and home owner’s) and can even keep you from getting a job. Employers are looking at credit scores now and having a low score could keep you from getting a job or even a promotion.

Second, credit cards offer a lot more protection than a large wad of cash. If your wallet is stolen, all you have to do is call a number and go through a process and all of the money is restored. If you do a lot of online shopping, they are necessary, not only for the ability to purchase items online, but also for the protection they offer.

Also, some credit cards offer rewards that you would not otherwise get. I don’t spend a lot of money on my credit card, but I have built up enough rewards to get a CD or something, but it is a CD I would otherwise not have.