The three little pigs built their homes to withstand the Big Bad Wolf. One built a home out of straw, another out of sticks, and the last little piggie chose bricks. From this perspective, it’s easy to choose a house.

As adults we know home ownership — and its funding — is a lot more complicated. Take for instance the current mortgage crisis. This week Greenspan called a bottom to the housing market, and The Wall Street Journal ran a poll:

Do you agree with Alan Greenspan’s forecast for house prices to stabilize in the first half of 2009?

You can weigh in yourself at The Big Picture blog.

Pigs have a bad reputation for being stupid or greedy. In reality, science shows that pigs are just as intelligent and social as the family dog. Unfortunately, descriptions like “greedy pigs” creep into discussion about who is at fault when discussing the mortgage crisis.

The short answer is that everyone is partially at fault — our culture for being more accepting of debt, our banking and government systems for relaxing rules, and our media for encouraging too many of us to take brick houses and turn them into straw.

An in-depth series in The New York Times explores the role of advertising in the mortgage crisis. Specifically, how advertisers (industry self-described “ad-holes”) literally re-wrote the language of credit to make borrowing against your primary asset more palatable. And, coupled that with images of the “good life”.

And is this debt crisis situation as “American as apple pie”? Unfortunately, no. Here’s a British take on the recent housing troubles:

A crumbling sign on the first house boasts it is “For Rent” but, given that it doesn’t even have a door, it seems unlikely the owner, if there is one, will be getting too many inquiries.

Read more.

And another explores how we Americans are exporting our credit card addiction:

“People who would kill their sisters or daughters for bringing shame on the family would do anything to avoid being labeled a debtor,” said Nazim Kaya, the president of Consumers Union, an advocacy group that helps those who fall into debt.

But in a cultural shift that has swept aside centuries of tradition, credit cards have become commonplace here. Only three decades ago, Turkey had fewer than 10,000 cards; today it has more than 38 million.”

Read more.

So is your “financial house” made of straw, sticks or bricks?

With 11 major company’s information being hacked into, including Barnes and Noble and OfficeMax, consumers have even more reason to be concerned about identity theft and how they can protect themselves.

Although this is a problem in itself, an even bigger problem is that one of the biggest leaks of private information is that from the U.S. government. According to an article from MainStreet.com, there were more than 230 security lapses from local, state, and federal governments between 2005 and 2008. This breach of security caused the exposure of more than 44 million records!

This is a much bigger problem than some could imagine. It is strange to think that the people you would think to trust in the government are somehow leaking the personal information of thousands of people.

But, let’s be honest, it is definitely not all the governments fault. There are things that we can do to protect ourselves from identity theft as well.

It is much easier for people to get a hold of your information than it used to be. With consumers using online banking, putting their passwords into public computers, and using their credit and debit cards at retailers more than ever, it seems easy to see how people would find a way to hack into this massive amount of information.

Try to do some of the following:

Monitor Your Bank and Credit Card Accounts – This one really is not that hard to do. Everyone can now check their accounts online and banks have made this procedure really simple. Check your account every few days to make sure that your card has not been compromised with charges that are not yours. Also, try to check your accounts from your personal computer and not a public one. You don’t want people to get your passwords or information because you forget to log out of your account.

Pay With Cash – Whenever possible, don’t use your credit card or debit card. I know this is not always convenient, but if you are buying something from a store or location that you may not trust their security, then use cash! It is always better to be safe than sorry.

Don’t Carry Important Documents With You – Make sure to leave things like your social security card, passport, and resident card at home so that if your wallet or purse gets stolen, this extremely important information is not in there. Also, try to keep the minimal amount of cards in your wallet as well. You don’t want to carry all your cards with you every time you go out just in case.

Use a Shredder – Once you put your trash on the street or sidewalk to be collected, it is on public property not your own private property. Shred your information so that people cannot find it in the trash. I know this may sound a little bit skeptic of people, but honestly, think of all the private information you throw away everyday! And not all shredders are expensive either. My mum bought me one the other day (with a store rebate) for only $20. Shop around! Having a shredder can really help you out.

I know that sometimes it isn’t always easy to do the above, but you really want to try to protect your identity as best as possible. Although you can’t control everything, you are able to control certain things that will help you to protect yourself. Better to be safe than sorry!

Photo: Jane M. Sawyer

Related Articles:
How to Protect Yourself From Hacker Data Scams
Vanishing Money: Consumer Debt Attacks
How to Know if Your Bank is Safe

In this day and age, it is easy to work yourself into debt. Saving seems to be difficult when gas and other prices are on the rise. Regardless of how you got into debt, if you are trying to get yourself out you need to make sure you are trusting in the right people.

The best way to organize things and work through your bad credit is to try and do it yourself. But for several reasons, this doesn’t always work for everyone. A lack of complete understanding as where to start and sometimes a lack of time can both contribute.

The next question then is who to trust?

If you are looking to take out a loan or anything similar, you first want to check out your credit report. According to an article from our partners at TheStreet.com, about 75% of all credit reports contain some type of error. These errors (either small or large) could prevent you from getting the loan you need. Its like those commercials for freecreditreport.com where they don’t check their credit report first and end up in some type of bad/crazy situation!! Make sure to check your credit report in advance so this doesn’t happen to you! Even if you think your report should be pretty close to perfect, it is better to be safe than sorry (as they always say).

Good Guys
Be Careful Who Fixes Your Credit on TheStreet.com helps you sort through the “good guys” vs. the “bad guy” in the credit world. The Credit Repair Organizations (CROs) will do much of the “dirty” work for you such as contacting the credit bureau (but all of this can also be done by yourself).

In the article, Peter McDougall states that a legitimate CRO should provide the following items in any contract you might sign:

Payment terms and services, including their total cost

A detailed description of all of the services that will be performed

A timeline for the performance of these services

Any guarantee the company or organization offers

The company’s name and business address (preferably something more than a post office box)

Make sure that you consider all of your options and understand the conditions before signing any type of contract.

Bad Guys
It isn’t always hard to pick out the bad CROs (or those individuals who are simply trying to scam you out of your money). Make sure you aren’t doing anything illegal. Also, know what you can do on your own for free…you don’t want to get charged for something that you can do by yourself without a fee. Understanding what the legitimate CROs can do for you should be able to help you eliminate those who are doing things illegally.

As always, do your research! It is good to ask for help if you think you need it, but make sure that you are asking the right people!

Having bad credit can be frustrating enough…in the end, fixing it should be a huge relief and weight off your shoulders. Make sure to use all the Geezeo features such as your budget and personal goals to organize your finances and not get yourself into further trouble!

Photo: Kevin Rosseel

Related Articles:
Vanishing Money: Consumer Debt Attacks
4 Tips To Control Your Mortgage in Topsy-Turvy Times
Is Your Cash Safe At the Bank?

Here are four tips for your home mortgage during economic “topsy-turvy” times:

1 - Read the fine print. Do you have an adjustable rate mortgage? And are your rates climbing? Time to pull out the paperwork. You may have signed it years ago and now it’s time to review and explore your options. Consider refinancing to a fixed rate.

2 - Raise your credit score. Now is the time to read up on what it takes to raise your score. For example, do not open new lines of credit. Do not close any long-standing credit lines. Pay down your cards. Aim for a score of 700 or above. With a high score you’ll have the best negotiating power and financing alternatives. Request a copy of your score from Equifax, Experian, and TransUnion. (This step also protects you from identity theft. See: (Did someone buy a Jaguar with your good name?)

3 - Pay off those credit cards. Minimize the stress. If you can’t change your mortgage, turn your attention to what you can control. Work to charge less, pay more, and pay them off.

GEEZ TIP: Load your credit cards up into Geezeo and monitor their balances daily. Click here.

4 - Give your HELOC the heave-ho. A home mortgage loan (pronounced Hee-lock) can be a great tool. But, now is the time to STOP borrowing from it. Many home values are dropping. You don’t want to end up owing more on your home than it is worth.

GEEZ TIP: Bring your mortgage balance into your Geezeo account and monitor it, too. Click here.

I have always heard rumors that cutting up credit cards doesn’t help your credit score at all…but then again, if you keep running up your bills on several different cards and can’t pay it off, that also doesn’t help you much!

A question and answer at YoungMoney talks about how closing a credit card does not make your credit score go up. It explains that you shouldn’t use your cards until you get your debt paid off, but that you should keep your accounts open.

At BankRate.com it explains several ways that you can and probably should cut up your credit card. If you have found yourself with a ton of credit cards that you just keep putting purchases on, you should limit yourself to your top 2 or 3 and stick to just those.

Tips for when to cut up your credit card:

1.) Pick an EMPTY card to cut up. Don’t cut up credit cards that still have a balance on them. Make sure to pay off your debt first otherwise this could lead to troubles for you.

2.) Don’t let the credit card company know that you are planning on closing your credit card until all of your debt is paid off. Occasionally some companies raise your interest rate when they know you are planning on doing this…giving you more money to pay off! According to Steve Rhode, President of Myvesta.org (a consumer finance assistance website), “If you close an account when you maintain a balance, they increase the interest rate to the maximum allowed as a penalty.”

3.) Bankrate.com also explains that if you are planning on taking out a mortgage or car loan or anything of the like, canceling your credit cards can actually hurt your chances of getting approved…or getting favorable terms and conditions.

Before making the rash decision to cut up all your credit cards (like they make Rachel do on Friends)…think twice about whether this will help or hurt you! You don’t want to cancel and cut them out just to find out that you made the wrong decision.

On average, college students graduate school with about $4,000 in credit card debt. Thats crazy…think about all that interest that goes into that and you end up paying back a ton more than you actually got to spend.

There is this campaign now called “The Truth About Credit” which is trying to put a stop to “out-of-control marketing and unfair practices of the credit card industry, with a focus on college campuses” according to their website.

I think this is a really great thing! Although college students are responsible for their own debt, many don’t know what they are getting themselves into. Swiping a credit card to me always feels like “free cash” because at the end of the day when you looking at your checking account, you still have cash in there…sometimes forgetting that you still need to pay off that pricey credit card bill that you have racked up!

I think with the campaign focusing on college campuses is really important because students don’t take the time to do the research they need to know for the credit cards that they are considering opening. Without their parents around to advise them, many students end up making a poor decision and graduate with a serious amount of debt on their different credit cards. The credit card companies are known to pull students in by giving them free things — food, t-shirts, mugs, etc…and everyone gets sucked in at one point or another!

Check out their website, I guarantee you will learn a lot more than you thought you would know about credit cards, debt, and how the credit card companies scam you! The Truth About Credit Campaign website offers tips, information, statistics and facts and a lot of other interesting things.

The following blog is taken from a post in the Geezeo group Quarter Life Crisis by Her Every Cent Counts.

Looking into my wallet, I noticed I had several credit cards, but NO CASH!! That got me thinking… Where is all my cash going?

I went online that night and looked at each one of my credit cards – some had an APR (annual percentage rate) as high as 24% (average APR is 14.53 %*)!!! That is literally just throwing money away!

I called up my father, who is ex-military (you get the idea), and told him about my lingering financial problem. He immediately looked at his calendar and scheduled a meeting with me the next Friday night – not my idea of fun to start off the weekend! He instructed that I bring all 4 of my credit cards and print my statements offline.

Friday night rolled around and I showed up with all of my credit card information in tow. He instructed that I sit down and we end this craziness right away. He got on the kitchen phone, and I got on the cordless phone.

I picked the first credit card out of my wallet, a Citi Bank card, flipped it over and dialed the customer service number on the back. After at least five minutes of automated, and annoying, prompts, and after waiting on hold for another five minutes, I was put in touch with a representative. She asked how she could help me, and I asked her what my annual percentage rate was. She said 15%, which, although close to the average, is still a lot. My dad immediately chimed in with, “That is crazy! You’re going to have to lower that or cancel her card.� A little startled, she typed on her keyboard and said that she could change it to 13%. “That’s not good enough, cancel the card!� was my dad’s response.

She said that she was sorry that she couldn’t get us a better APR, but would put us in touch with Citi Bank’s financial representative. After another few minutes of holding, a man came on the phone and said that he would lower my APR to 7.9% and thanked me for being a customer.

Wow – I just almost cut my interest rate in half. Feeling better it was on to the next credit card…

Two hours later, when we were both exhausted, we had cancelled one card (couldn’t lower the APR enough), and significantly reduced the other three. I’m in the process now of finding the best card to transfer my closed account balance to. I know that closing my credit card hurt my credit score, but at this point, I can use the extra cash and feel that I’m young enough to rebuild the reduction quickly!

I guess the lesson here is: Ask – Depending on your debt, you could be saving hundreds, if not thousands of dollars by making one phone call!

*March 2, 2007 survey:
http://www.consumer-action.org/news/articles/2007_credit_card_survey/

Credit Cards by Hannah Waters from the Boston University Geezeo Facebook group!

Being home at my house for the summer is interesting, I get at least 3 offers from credit cards every single day. When Im at school, I obviously dont see these…my mum just automatically rips them up!

But with all these credit card offers coming to students on a daily basis, its no wonder that people get into trouble and a huge amount of debt!

Dont fall into this trap. I understand that sometimes big purchases (i.e. spring break, furniture, books, etc.) need to be purchased, and so having a credit card for those reasons is really beneficial. But why swamp yourself with 6 or so credit cards!?

Make sure you can pay off whatever money you are putting on the card within the month. Otherwise you’re just digging yourself into a never-ending hole.

Stick to one credit card…its that simple! You dont need to be paying several bills every month, that will never work out. Just dont fall into the trap of signing up for a new card everytime you get an offer, just throw the offer away instead.

Every day that you open your mailbox, chances are there is at least one credit card offer waiting for you. Tempted by the gimmick of music, electronics, and air travel and we apply for the low interest rates and free balance transfers. We open up Pandora’s Box with the first swipe of the plastic.

I was one of these people. I signed up for my first credit card as a freshman in college and received a trinket that I cannot even remember. Over the course of my college career I would add a few more cards to my stable, promising me rebates on gasoline, periods of miniscule interest, and progressively higher credit limits. I was able to buy things I never thought I could afford — clothes, electronics, and vacations, but I did not realize the consequences of my actions. I understood that my spending was becoming uncontrollable, but hid from the problem. Once I asked for help it was too late, amassing close to $14,000 in credit card debt, on top of student loans.

I will never forget the day I began my journey into financial solvency. It was a few weeks prior to graduation and I casually mentioned to my family how much debt I was in and how I had no money to pay my bills. I had already been delinquent for one to two months, removing any opportunities I had to negotiate with my credit card companies. My only option was to contact the Consumer Credit Counseling Service, and enroll in their debt management program. I was nervous from all of the horror stories I had heard about these programs, but research had showed they were the most reputable. The company does not pay off your debt, but negotiates special rates — mine were reduced by 20%, and disburses payment to your creditors. In return, you give up your credit cards and have your enrollment in the program attached to your credit report. It is a small price to pay to put yourself back on track but the story continues.

At this point I was just out of college, starting a new career, and had little disposable income. I had to make serious lifestyle changes which included selling my car, eating in, and relying of free forms of entertainment. I created a detailed budget for myself outlining every expense I had and when payment was due. I created a spreadsheet in Excel which categorized all of my income and expenses, and gave me an easy view of where I was spending my money. It was tough — it flat out sucked, but I continued along, paying down debt.

Although I am on the right path, there are several ramifications of my previous mistakes. I do not have the luxury to cover cash deficiencies between paychecks, which requires precise budgeting of my paychecks. One mistake and it means I will need to rely on friends and family until my next paycheck. I realized a month ago how difficult it is to rent a car when you do not have a major credit card. Also, the blemishes on my credit report will make it difficult for me to open new lines of credit once I am ready to do so.

It has been two years since I have put myself on the road to financial solvency. I am not debt free, but I have paid off one of my four credit cards, and reduced my total debt by over $8,500. The road has been difficult and turbulent, but the difficult part is behind me. Throughout the past two years, I have learned how to budget, save, and exercise general financial responsibility. As my disposable income has increased, so have my debt reduction efforts. I’m glad to say that with my planning, I can look forward to being out of debt in the next six months, at which time I will focus on my student loans.

David

Freshman year, I began pledging for a sorority. For one of the fundraisers, we had to get 50 people each to sign up for a citibank credit card. I walked around campus and made all of my friends sign up for them. I was still about 7 people short. There was no way that I wanted to walk back into that sorority house with only 43 people signed up. I decided that I would just sign up for the last 7.

Bad Idea.

Within the next month, I had received credit card after credit card until I had 7 citibank cards in my possesion. I figured that it can’t be so bad to have that many credit cards. I’ll just charge a little bit on each card and pay them off, and eventually I would have the best credit score! I guess I didn’t think it through, because first of all, I did not ask my father for permission to have any credit cards, and second, I had no money to pay ANY of them off.

Anyway, a month went by, and my dad received a bill in the mail. He was a little bit happy that I took the initiative to sign up for a credit card so he did not have to give me cash every time I saw him. The second bill came in the mail. Dad freaked. By the time I got the 4th one in the mail, he was on the phone with citibank asking how on earth they would let an 18 year old have 4 of the same credit cards. The last 3 came, and all 7 were then cut up. It might have been the worst next 6 months in terms of money.

I was not allowed to have a credit card for about a year. Eventually I was able to get a debit card. Since then, life has been pretty peaceful…