Thrifty Spending Issue 50

FEATURE ARTICLE:  Banking over the Internet

The Internet offers the potential for safe, convenient new ways to shop for financial services and conduct banking business, any day, any time. However, safe banking online involves making good choices –decisions that will help you avoid costly surprises or even scams.

If you are thinking about or already using online banking systems then the information provided below will help you.

• Confirm that an online bank is legitimate and that your deposits are insured.
Whether you are selecting a traditional bank or an online bank that has no physical offices, it is wise to make sure that it is legitimate and that your deposits are federally insured. Here are tips specifically designed for consumers considering banking over the Internet.

• Read key information about the bank posted on its Web site.
Most bank Web sites have an “About Us” section or something similar that describes the institution. You may find a brief history of the bank, the official name and address of the bank’s headquarters, and information about its insurance coverage from the FDIC.

• Protect yourself from fraudulent Web sites.
For example, watch out for copycat Web sites that deliberately use a name or Web address very similar to, but not the same as, that of a real financial institution. The intent is to lure you into clicking onto their Web site and giving your personal information, such as your account number and password. Always check to see that you have typed the correct Web site address for your bank before conducting a transaction.

• Verify the bank’s insurance status.
To verify a bank’s insurance status, look for the familiar FDIC logo or the words “Member FDIC” or “FDIC Insured” on the Web site. Also, you should check the FDIC’s online database of
FDIC-insured institutions. You can search for an institution by going to the FDIC’s home page at and selecting “Is My Bank Insured?” Enter the official name, city, and state of the bank, and click the “Find My Institution” button. A positive match will display the official name of the bank, the date it became insured, its insurance certificate number, the main office location for the bank, and its primary government regulator. If your bank does not appear on this list, contact the FDIC. Some bank Web sites provide links directly to the FDIC’s Web site to assist you in identifying or verifying the FDIC insurance protection of their deposits. Also remember that not all banks operating on the Internet are insured by the FDIC. Many banks that are not FDIC-insured are chartered overseas. If you choose to use a bank chartered overseas, it is important for you to know that the FDIC may not insure your deposits. Check with your bank or the FDIC if you are not certain

• Know where to get more information about FDIC insurance.
Don’t worry about your deposit insurance coverage if you or your families have less than $100,000 in all your accounts combined at the same FDIC-insured bank. But if your accounts total $100,000 or more, find out if they’re within the insurance limit. Contact your bank for more information. For additional assistance from the FDIC about the legitimacy of an institution or the insurance of your deposits, call the FDIC’s Division of Compliance and Consumer Affairs toll-free at 800-934-3342 or send an e-mail via the FDIC’s online Customer Assistance page at

It is important to note that only deposits offered by FDIC-insured institutions are protected by the FDIC. Non deposit investment and insurance products, such as mutual funds, stocks, annuities and life insurance policies that may be sold through Web sites or at the bank itself, are not FDIC-insured, are not guaranteed by the bank, and may lose value.

• Keep your personal information private and secure;
Some consumers may want to know how their personal information is used by their bank and whether it is shared with affiliates of the bank or other parties. Starting July 2001, banks are required to give you a copy of their privacy policy once you become their customer, regardless of whether you are conducting business online or offline. You may also see a copy of it posted at the bank’s Web site. By reviewing this policy you can learn what information the bank keeps about you, and what information, if any, it shares with other companies. Banks may want to share information about you to help market products specific to your needs and interests. If you do not wish to participate in information sharing, however, you have the right to prevent your bank from sharing your private personal information with parties not affiliated with the bank, except in certain limited circumstances. Your bank should provide a clear method for you to “opt out” of this type of information sharing. You may have heard that some companies track your Web browsing habits while at their site, to understand your interests and then to market particular services or promotions. You may want to ask whether your bank tracks your browsing habits if these practices concern you. Also, your Web browser may enable you to block the ability of outside companies to track your browsing habits. Your bank and your Internet service provider may have more information about how to protect your privacy online.

Help Keep Your Transactions Secure

The Internet is a public network. Therefore, it is important to learn how to safeguard your banking information, credit card numbers, Social Security Number and other personal data.

• Look at your bank’s Web site for information about its security practices, or contact the bank directly.

Also learn about and take advantage of security features. Some examples are:

• Encryption is the process of scrambling private information to prevent unauthorized access. To show that your transmission is encrypted, some browsers display a small icon on your screen that looks like a “lock” or a “key” whenever you conduct secure transactions online. Avoid sending sensitive information, such as account numbers, through unsecured e-mail.

• Passwords or personal identification numbers
(PINs) should be used when accessing an account online. Your password should be unique to you and you should change it regularly. Do not use birthdates or other numbers or words that may be easy for others to guess. Be careful who you give your password to. For example, if you use a financial company that requires your passwords in order to gather your financial data from various sources, make sure you learn about the company’s privacy and security practices.

• General security over your personal computer such as virus protection and physical access controls should be used and updated regularly. Contact your hardware and software suppliers or Internet service

For More Help
Answers to your questions.
Many regulations provide consumer protection for both traditional and online transactions. If you have any questions or concerns, first try to get answers from your bank. If you are still not satisfied, contact the appropriate federal regulator. For a brief overview of the regulations, log on to the FDIC’s Consumer Rights Web pages at If you would like to review the regulations, you can look them up at

Where to file a complaint.
If you know your bank’s primary regulator, you may file your complaint online or via e-mail using one of the following methods. If you are not certain where to file your complaint, you may contact any of the agencies listed below and they will direct you to the appropriate office.
Federal Deposit Insurance Corporation:

Where to report a suspected fraud.
Contact the FDIC at if you have been a victim of banking fraud, or if you have visited a bank Web site that appears to be fraudulent.

For More Information
For more information about online banking in general, write or call the following banking regulators or visit their Web sites:

Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
(800) 934-3342

Board of Governors of the Federal Reserve System
20th and Constitution Avenue, NW
Washington, DC 20551
(202) 452-3693

Office of the Comptroller of the Currency
Customer Assistance Center
1301 McKinney Street, Suite 3725
Houston, Texas 77010-3031
(800) 613-6743


  • Make your own greeting cards.
  • Make your own wrapping paper.
  • Offer to give a service, like a night of free babysitting as a gift, instead of buying stuff.
  • Give baked goods. Everyone loves cookies!

Learn the art of the re-gift. If you get something that you don’t like, keep it and give it to someone else later. However be careful to keep track of who gave you what. You don’t want to give a gift back to somebody.

DID YOU KNOW…that on February 22, 2010 the Credit Card Accountability Responsibility Disclosure Act of 2009 will go into effect?

What does this mean? Before you apply for a new credit card, you may want to wait until after this date because accounts will be simpler to manage and carry fewer whammies from the card issuer.

What you can expect with this CARD Act:

  • No increase of interest rates on existing balances unless the consumer is at least 60 days late.
  • The card issuer will have to provide clear disclosure of terms before the consumer opens an account. This means letting the consumer know if they are signing up with an introductory rate and that these rates must last at least six months.
  • The consumer will have 21 calendar days from the day a card statement is printed to pay the bill.
  • If the consumer makes a payment that is more than the minimum requested, the excess will be applied to the highest interest balance first.
  • No over the limit fees without the consumer’s consent.
  • No charges for payments made by phone, mail or electronic transfers.
  • The elimination of double-cycle billing.  This is the practice of basing finance charges on the consumer’s current and previous balances. This prohibits the issuer from charging interest on the debt paid the previous month.
  • The end of universal default practices.  Here the issuer could raise the consumer’s interest rates for being late with payments to other creditors while staying current on their account.
  • The issuer will have to provide an estimate of how long it will take to pay off a balance at the minimum payment rate.  If this amount of time is too long for the consumer, the issuer will also have to provide a number to a nonprofit credit counseling agency to assist the consumer in paying off the debt faster.

Thrifty Spending Issue 49

FEATURE ARTICLE:  Have a New Born in the Family? Here are Some Easy Ways to Save Money.

As the cost of the most basic goods and services have increased with the size of the American economy, so too has the cost of raising a child. The US Department of Health & Human Services estimates the cost to raise a newborn to the age of 18 to exceed $250,000 with the first two years to be the most expensive. The cost of clothing, medical care, child care and food add up very quickly. Here are a few simple ways to save.

Make Your Own Baby Food
Making your own baby food can be a nutritious and low cost alternative to purchasing commercial brands. Although commercial baby food is safe as well as convenient, it is also higher in starch, sugar and water then what homemade baby food. Additional resources on how to prepare baby food can be found at

Use Cloth Diapers
Using cloth diapers may generate concerns about diaper rash and allergic reactions. However, according to the Journal of Pediatrics, the report of rashes during use of cloth diapers is 10% less frequent then during use of plastic diapers. Even though the plastic diapers will hold larger amount of liquid and won’t need to be changed as frequently, the increased use of cloth diapers from changing still results in a savings of $25 to $55 per month.

Share Toys and Clothing
If friends or family with children may have baby toys or clothes that may be usable. Even if you receive a couple of outfits or toys, the savings certainly add up. Always remember that the first step in preparing a budget is knowing your expenses and what can be reasonably lowered. It is important to make sure that quality isn’t sacrificed, especially with children. Although the cost of raising a child can be high, the joy of a happy and healthy baby is immeasurable.

MONEY SAVING TIP:  Saving for School

  • Check out study supplements from the library. Don’t buy them.
  • Buy used text books.
  • Take advantage of free pens and pencils at business conferences.
  • Keep track of your pens and pencils. You ’ll spend less on them if you don’t lose them all the time.
  • Buy back packs that your kids can use for years. While they might think the Sponge Bob Square pants one is cool in 2nd grade, they probably won ’t think it’s cool in 4th.

Do you know how to Budget for the Holidays?

Thanksgiving will be here quickly and it seems within days Christmas will be here and we know what’s next. Remember last year when you were trying to figure out how you were going to pay for everything and you promised yourself that this year it would be different. It is time to make good on your promise and start planning. Remember that rent, car payments and groceries and other bills you have been paying for the last 11 months must be paid during the holiday season. So if you are going to buy gifts and hold a Christmas or New Year party this season plan for it from now.

Here are a few tips to help you along.

Take out your monthly budget form you have been using for the past year and review how you can reallocate money you can put aside for the holiday season. If you have been thinking about having a Christmas Party, you could have started saving from September. If you are spending $100 per month on entertainment expense you may decide to stay at home and set those funds aside for your party expenses. Tally it up and think hard about whether you can afford to spend that much. If the total figure makes you uneasy, think about areas in which you might cut back. Then stick to your budget.

If you’re buying gifts, start listing items that you plan on purchasing. It’s likely that you don’t know what everyone on your shopping list wants, so start asking. Many people will start their gift buying late in the summer when merchants are slow and the savings are substantial. You may also be able to buy items for your party long before the prices are marked up for the last minute shoppers. Try to buy gifts using cash and keep the credit card at home.

Don’t forget about such minor items as wrapping paper and holiday greeting cards. They’re not widely available yet, but they will be soon. Keep your eyes open for sales. If you start early, you can buy these items a little at a time and store them, instead of having to spend a lot of money all at once.

If you’re planning on serving guests, plan ahead. Things like cake mixes, spices, canned goods, and liquor can all be purchased a little bit at a time and placed aside until it’s time to use them.

Are you creative or artistic? Consider making some of your gifts instead of buying them.

Split the cost of major items with friends or family. For example, if someone you know wants a new TV, pitch in with two or three other people. It will save all of you money, and the person who wants the TV will be happy to get it.

Avoid the mall if you can. Everything is more expensive there. If you must go to the mall, look for sales.

If something is not affordable, don’t buy it. This is often easier said than done, but remember the holidays are not a spending contest, they’re supposed to be about spending time with people you care about. Emptying your checkbook won’t make them any more special.

Buy gift certificates. Let your friends and family get what they want. This not only helps you control how much you spend, you can avoid long holiday lines by purchasing them early.

Leave your credit card at home. You are more likely to make expensive purchases with your credit card than with cash. Credit cards make those expensive purchases even more expensive. For instance, let’s say your holiday shopping costs you $2,000. If your account had an 18% interest rate and you paid the minimum payment due, it would take you approximately 18 years and cost you more than $5,600 to repay. Don’t use your credit cards unless you can pay the balance in full when you get the bill.

During the holidays, it’s very common for stores to offer discounts to anyone who applies for their credit card. Don’t do it. First of all, an entry called an inquiry is made to your credit report every time you apply for credit. If you have too many inquiries, you can hurt your credit rating. Second, store credit cards come with notoriously high interest rates, so unless you pay the balance in full, your “discount” actually results in an unnecessarily high bill.

As you can see, planning ahead and shopping wisely can save you a lot of money and keep your budget intact. Start now!