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Credit Card Fees, Spending Sprees, Job Search, Best 373 Colleges, Car Theft
Aired August 7, 2010 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
POPPY HARLOW, CNNMONEY.COM: Well, so much for new rules, credit card companies find new ways to charge you. Don't worry though, we've got you covered.
And also, how do decode that job listing that you've got your eye on. The inside scoop on how to land your next gig.
And also ahead, the list that everyone is talking about this week -- it's all about protecting one of your most prized possessions. It's a show that saves you money and it starts right now.
Well, the card act was passed to protect us all from sneaky credit card fees and sky-high interest rate hikes. But credit card companies -- no surprise here -- are now offering more and more enticing incentives with new fees almost to make up for all that lost revenue. So, what do you need to look out for? Here with great advice, Carmen Wong-Ulrich, a personal finance author and very good friend of this show.
Thanks for coming on, appreciate it.
CARMEN WONG ULRICH, PERSONAL FINANCE AUTHOR: Hi Poppy.
HARLOW: Good to see you. You know, I was looking at this Pew Charitable Trust study that came out, it said credit card fees, when you look at the annual fee, have gone up 18 percent from July 2009 until March of this year. So, even after the card act you have these fees going up higher and higher. Interchange fees and swiping fees. That's a big deal for folks, right?
WONG-ULRICH: Yeah, I mean listen, Credit card regulations losing, as they say, the business over $300 billion -- million dollars. But here is the thing, interchange fees is a little bit of a kind of secret, here. Us as consumers, we think the credit card companies make their money just off of our interest payments or fees or balance transfer fees. They make a lot of money, $20 billion a year, off of the other side of the transaction, the swipe.
HARLOW: That's why some stores only accept cash.
WONG-ULRICH: Every time you swipe, they get two percent to three percent of every transaction you have. Now the reason why a lot of retailers only accept cash is because of that two percent to three percent that they lose on every transaction. But now with financial reform that's gone through, retailers can now charge two different rates. So they can say this costs this much for you, because you're using a credit card, and this will cost less for you because you are using cash. However, will they do it? That is the question. Will retailers give a discount to most cash buyers?
HARLOW: And people like -- I like to use my credit card because I get points, I get airline miles. Some people get cash back. But it's those cash-back cards that you have to be a little more careful with now.
WONG-ULRICH: Well here's the thing, we're being flooded with cash-back offers because what they want to do is -- now remember in the recession, we're using our credit cards less, we are building less credit card debt, we're bringing down our balances. How are they going to make more money? They want us to swipe as much as possible. To encourage that they're going to say, you know what, we're going to give you back two percent to five percent of all of your transactions.
Now here's the thing, you're going to swipe and you're going to get cash back, but now there's a new study that came out from the Federal Reserve of Boston saying that people who use cash are basically subsidizing us, people like you and me, who love those rewards -- and I'm guilty of this, too, I use my card for everything -- because rewards and points because we are basically we are basically getting a discount and they're not. They're paying a higher retail price even though they're using cash.
HARLOW: It's something you have to watch out for. Also, I mean, I get about maybe four credit card offers a week. More and more are these professional or corporate card offers. And you just wonder why are those coming, what does it mean for consumers, do you want to stay away from those?
WONG-ULRICH: Yeah, I mean, here's the thing, well first of all, you want to go to opt out prescreened to make sure you don't get those offers all the time. But, I get three or four a week based on cards I already have for their new professional cards.
Here's the thing, professional cards do not fall under card act regulations. So be very, very careful. Even though it says the name of your business, you are personally responsible and they don't have to follow the rules.
HARLOW: So, they're going to have to address that down the road.
WONG-ULRICH: It is going to be addressed. It's going to be looked at. And also, those interchange, those swipe fees that didn't fall under financial reform, it's going to be looked at in the next eight months or so by the Treasury.
HARLOW: One big protection that passed through Congress because of the card act was giving every consume 21 days between the time you get your bill to the time you pay it before you get charged for late fees at all. But what we're seeing is some credit card companies shortening billing cycles.
WONG-ULRICH: Oh yeah, they're not supposed to do that, of course. So, if they do that and they're doing it with your card, go to BBB.org and file a complaint. But here's the way they're getting around it, kind of legitimately, is that the card act also says that if you are not open for business on weekends or holidays, then the actual due date has to fall on the next business day. Well here's what card issuers are doing, they're saying we're open weekends and holidays so they make you late. So be very careful and don't be afraid to call up and complain if that happens to you.
HARLOW: And finally, interest rates. I mean, people were dealing with sky-high interest rates, but not just at the heights, you can still have a very high interest rate even with the card act. What can you do if you have one to lower it, to bring it down?
WONG-ULRICH: Our chances of getting this done these days, not so good. Not so good. No, no, no. Because rates on the whole have risen so much because credit is so tight. The best bargaining position that you can be in is to make sure that you are good borrower, that you carry a good balance, pay it off on time, your credit rating is good and that you have other cards with lower rates.
If you call up your card company and say I've got another card that has a lower rate, I'm going to flip it over there, threaten them with that, and see what they do.
HARLOW: I've had friends do that. You can really negotiate. They want to keep your business, they're making money off every swipe. That's great advice. Thanks so much.
WONG-ULRICH: Thanks, Poppy.
HARLOW: All right, well, saving is always important, but when it comes to spending, there are ways that you can a lot smarter about what you spend and how you do it. And while it may seem like we've all cut back on our spending in light of the current economy, for some people their spending has actually gotten worse. Our good friend Jeff Gardere is a clinical psychologist here to talk to us about it.
It's all a mind game. Right? It's all about, you know, what you tell yourself you can or can't spend. So, I think the first question, Jeff, is compulsive spending? I was surprised to learn it's gotten worse for people.
JEFF GARDERE, CLINICAL PSYCHOLOGIST: It certainly has, Poppy. What we've seen is that compulsive spending is not based on what you make. A lot of people feel that, well, if you're wealthy, you have a lot of money, then you can just go ahead and buy whatever you want to buy. But it is not really about that. Compulsive spending is almost like a self-medication. It makes you feel better when you go out there and spend.
HARLOW: But, just for a short am of time it makes you feel better.
GARDERE: You get that high right away and then, of course, the crashing low comes when you have to look at your credit card bill later on or realize that you bought something that really is worthless to you and you have about 10 of them in the closet already.
HARLOW: I think the key question is, can I return this. That's a key question. There are also people that will say I'm cutting back on smaller items, I'm going to bring my lunch to work and then I can go out and spend on the big items. Not the case.
GARDERE: Not very smart. All it is an intellectualization where they say, OK, well I'm saving a little bit of money and therefore I can go out and buy higher ticket items. It reminds me a lot of my wife who always says to me, Poppy, "You know what? I saved you a whole lot of money when I went out shopping." And my response to her is, "If you really want to save me money, don't go shopping in the first place. So, stop playing those little mind games with yourself or with me."
HARLOW: It is great input. We're going to have you stick around, please. We want to talk about the difference between impulsive and compulsive spending. Both need to be addressed. We'll address this right after the break, how you can make yourself a smarter shopper. It's coming up in just 90 seconds.
HARLOW: All right, back now with clinical psychologist, Jeff Gardere. Thanks for being here.
GARDERE: It's always a pleasure.
HARLOW: Talking about spending, compulsive versus impulsive spending. What's the difference here?
GARDERE: Impulsive spending is when you're not thinking about what you're doing, you're just going with the high, just going with the feeling. It looks good, let me do this and you aren't thinking about the consequences. Compulsive shopping is a lot more serious. This is an addiction, something that you have to do and more of that self-medication that I was talking about. If you're depressed, if you're anxious, if you have all sorts of other issues going on, you have to shop in order to feel better. And really, what you should be doing is addressing what the real issue is. So, compulsive shopping is much more dangerous, though impulsive shopping is not smart, either.
HARLOW: All right, let's address them both. First impulse of shopping, what can people do to curb this? Because they ultimately have control of their own wallets.
GARDERE: Yeah. I think basically -- and you've heard it from your other experts and you know this -- try not to travel with credit cards. Try to have cash, try to have a debit card. The most important thing is be ready to pay for the consequences right then and there and that may dissuade you from the impulsive shopping, just doing it just for fun.
HARLOW: What about compulsive spending? I mean, you say this is probably a sign of much larger issues.
GARDERE: Yeah, much deeper issues, much more complex psychological issues. First and foremost, understand why you are shopping and why you have to shop, why you want to shop.
And then secondly, look at some sort of support group. Look at other people who are going through the same thing and talk to them about it. Look at getting some sort of professional care. But the other thing is, throw out that habit if you can and replace it with something healthier such as working out or being able to talk with someone about your issues or getting involved in athletics or what have you.
HARLOW: Doing something else with your time other than shopping.
GARDERE: Something that makes you feel much, much better.
HARLOW: I think a lot of Americans don't want to admit they have this issue, but I would assume it is pretty prevalent?
GARDERE: It is pretty prevalent. I work with many patients who are compulsive shoppers and they keep it to themselves, they don't share it, they don't talk to their spouses about it. It is a secret. And it's something that's very shameful for them, they don't want to talk about it. So really, step No. 1 is being able to admit that you have that problem and sharing it with someone who can help you get an intervention.
HARLOW: Help you get over it. This is great advice, thanks a lot, Jeff.
GARDERE: Poppy, thank you.
HARLOW: Thanks for coming in.
All right, well, coming up next, how to read a job posting for exactly what it is, so your resume is the one that's gets noticed.
HARLOW: Well, the jobs report out this week reinforces what we already know, so many people out there are still struggling to find work, and all of you who are out there reading the classifieds know that these job postings can be pretty tough to navigate, sometimes. So, we're going to decode them for you. Yahoo! HotJobs senior editor Charles Purdy joins us from San Francisco to help us do that.
Charles, thanks for coming in, appreciate it.
CHARLES PURDY, YAHOO! HOTJOBS.COM: Thanks for having me.
HARLOW: I think the first question is when it comes to your resume, I've gotten a lot of resumes from folks that are just of form resumes, they don't customize them to the position. You have to do that right now when there are so many people applying for these jobs. Right?
PURDY: That's absolutely true. The days of what we call spray-and-pray where you spray your resume far and wide and pray that someone will call, are over. It's helpful to look at a job posting as a problem that an employer is trying to solve. You have to explain to that employer how you are going to solve that problem for it.
HARLOW: Well, when you look at that, you see all of these qualifications on the job postings. I mean, it's not odd for a job posting to have 10 different qualifications starting with requesting you have 10, 15 years of experience in your field. Do you really need to meet all of those qualifications to apply?
PURDY: I would say no. I look at those lists of qualifications as sort after dream wish list that employers have. The first three or four are the must-haves, usually, and then they go on to describe the perfect candidate who probably doesn't exist. My advice is if you meet the first three or four qualifications and you are confident that you can do the job, then you should go ahead and apply. And use the words that are described in those qualifications to sort of tweak your resume. Those are the words that are likely programmed into the employer's software key word reader, if it has one, that will help you make your resume into the "yes" pile.
HARLOW: Into the pile that they even look at for more than a second. I know I've seen managers just flipping through resumes like that. You want to stand out. So, when you talk about customizing your resume for the specific job responsibilities, what do you think the best way is to do that? You want to talk about experience, right?
PURDY: Absolutely. You want to talk about your experience. Look at the experience requirements that the employer has put in the job posting and again, use the words they use in your resume. If they use the word "supervise," but your resume has the word "manage," change "manage" to "supervise." These things are really important in helping you get past the screeners, whether it's software or a person who's flipping very quickly, maybe having 10 seconds to look at your resume.
HARLOW: What about, Charles, how you apply? I mean, you can't just mail it in and say, oh well, they got it and if they like me, they're going to call me. I mean, you really have to do extra legwork these days, don't you?
PURDY: You do. That's actually something I hear very often from hiring managers and recruiters. People fail a simple test -- the how to apply instructions at the bottom of a job posting. Look at those very carefully. If they say to put specific words in your e- mail subject line, or if they say to contact someone in a specific way on a specific day, pay attention, because failing to meet those requirements, will get your resume tossed out right away.
HARLOW: Thanks for joining us, Charlie, we appreciate it. All right, well, the first step to landing a great job is getting the right education and you are in luck because the 2011 best colleges list is out from the schools with the best professors to the top party schools and where you're going to save the most money. That's straight ahead.
HARLOW: It is the list that teenagers and their parents wait for every year, "Princeton Review's" annual best colleges rankings. For now forget the top party school and focus on what really matters -- how to pay for college. Here it is, "Best 373 Colleges." joining us now, Robert Franek, author of the "Princeton Review."
Thanks for coming in.
ROBERT FRANEK, "PRINCETON REVIEW": Thanks for inviting me, pleasure to be here.
HARLOW: Let's start out first with the school that offers the best financial aid package, because this is critical. College is expensive and if you can get financial aid, it's a big deal. So, what's the best bet there?
FRANEK: No. 1 school in our great financial aid list is Franklin W. Olin College, a small engineering college outside of Boston. It's a fairly new school, about 10 years old, 330 kids undergrad, $52,000 sticker price, but they offer students a half tuition scholarship as soon as they're admitted.
HARLOW: All students.
FRANEK: All students. All students.
HARLOW: That's phenomenal.
FRANEK: And then for those students that demonstrate need after that, they will fill that in for grants rather than loans. For any student, it really is a wonderful bargain.
HARLOW: OK, and when you look at where the professors are the best, because that's a lot of times what you are paying for, is great, great professors, engaged professors. So, what school ranks at the top of the list, there?
FRANEK: No. 1 this year is on our best professor's list is Reed College. And this has been a usual suspect on our list for a number of years. But No. 1 spot, appropriately so, ranked by students. And we reached out to and received information from 122,000 college students to put the book together, this year. But Reed College students talk about their professors, they're their heroes; they're engaging in the classroom, they're accessible outside the classroom. Everything you want in the professor I think that Reed students are unapologetic about.
HARLOW: So, not a lot of skipping classes there, I'm sure, if they call their professors "heroes."
One really important thing at college, I know going through it, is career services. What are the programs, the resources available for you when you start looking for your job as you're getting ready to graduate? What school has the best career services?
FRANEK: No. 1 on our best career services list, and this is only the third year that we put this into the "Best 373 Colleges," is Northeastern University. Now, Northeastern is a lovely school. It is celebrating its 100th year working with the cooperative program. So, to get a degree at Northeastern, it's a five-year undergraduate degree, one full year spent outside the classroom in a cooperative. There's over 2,000 different choices that a student can choose from in 49 different countries to those cooperative leaning. A wonderful leg up when it comes to experience.
HARLOW: Do all students take advantage of that?
FRANEK: Without question. All students have to take advantage of that one year. So, when you go into Northeastern, it is a five- year degree, one year is spent outside of the campus, as well.
What about overall student happiness?
FRANEK: Ah yes, Brown University. And it has been, again...
HARLOW: I think I know why.
FRANEK: Well, you know, it's interesting, and we went directly to who we considered college experts, current college students, and asked them their experiences. Now, they answer simply a question "how happy are you?" But when you start to think about happiness, academic happiness, campus culture happiness, happiness with financial aid, also one of the lists that we have in the book is list of 100 best value colleges, 50 public and 50 private.
HARLOW: And for Brown, you can take it all pass/fail. So, the stress level goes down when you talk about Brown.
FRANEK: You are so right. Once you're admitted to Brown, all of your classes are pass fail and I think that there is a great deal of stress relief when it comes to that. Well said.
HARLOW: The president of CNN went to Brown.
FRANEK: Oh, well, we're a big fan.
HARLOW: The best dorms.
FRANEK: Bryn Mawr. Probably not surprising. Bryn Mawr is a wonderful school, highly competitive academics, an all women's college outside of Philadelphia. About 1,800 students, but the dorms are palatial. Many of the freshman residents, most of them have fireplaces in there, they have wonder widow seats. And it truly is a palace-like setting. So, wonderful things to brag about for Bryn Mawr.
HARLOW: All right, finally, we promised people we'd talk about this: best party school. I know it isn't where I went to college.
FRANEK: University of Georgia is No. 1. And again, it is a usual suspect, has been a usual suspect on our list of top 20 party schools in the book. This is the first year it is in the No. 1 spot. It's a huge school. When we look at our party school list, we look at five different areas. We want to rate or ask the consumption of beer, hard liquor, drugs on campus, hours of study spent outside the classroom and the popularity of fraternities and sororities.
HARLOW: Which is the more they drink beer, the better the party school is? Is that how we rate it?
FRANEK: That is one of the factors, without question. Those are the five factors. And we've had those factors over the last 19 years that we've put the book together. So, our methodology has stayed consistent. And again, reaching out to those students, current college students, and asking them their experience academically and certainly around socializing.
HARLOW: All right, thank you so much, Robert. Great list. Appreciate it.
FRANEK: Great to be here, thank you.
HARLOW: Well, it's almost 10:00 a.m. on the East Coast, 7:00 a.m. out West. Do you know where your car is? We are going to tell you, coming up next.
HARLOW: All right, we're talking grand theft auto. But, we're not talking about the video game. Here is the list of the most stolen vehicles in the U.S., according to the Highway Loss Data Institute. All right, No. 5 on the list, we have the Infinity G-37 Coupe. Coming up at No. 4, the Chevy Avalanche and the Dodge Charger, that comes in at No. 3. And the Chevy Silverado, that truck takes the No. 2 spot. And finally, here, the No. 1 most-stolen vehicle on the list, once again, the Cadillac Escalade. So, no matter what you drive, how can you protect yourself against your car getting stolen? Peter Valdes-Dapena is the senior writer for CNNMoney.com. This is his gallery/
Great list. The Escalade, time and time again, since 2002, that's been at the top of this list. Why?
PETER VALDES-DAPENA, CNNMONEY.COM: You know, well, I talked to GM. They don't know for sure why it's the top of the list. But, here is something interesting. If you look at the top 10 most stolen vehicles, the whole top 10, GM's entire large truck and SUV lineup is represented in the top 10, seven of the top 10. Clearly, there is something wrong here.
HARLOW: And you pressed GM on this.
VALDES-DAPENA: I pressed. They don't know what the answer is. Clearly, it is not surprising the No. 1 would be the Escalade. I mean, it's the one that thieves are going to target the most.
HARLOW: It is flashy, it has rims.
VALDES-DAPENA: It's flashy, it's got the big rims, it's in one (INAUDIBLE) it's the hot one you are going to look at to steal. But clearly, GM needs to look at this and needs to be doing something more on the security on these vehicles to protect them. Because, you know, word gets around and it looks to me like the car thieves are looking at these vehicles as an easy mark, somehow. And GM needs to get on top of that.
HARLOW: It's interesting, when people go out to buy a new car, Peter, do they really look at this list in terms of whether or not they should buy a car? And if not, they probably should because your insurance costs are higher if the car is on this list.
VALDES-DAPENA: Well, what people do do in most case, I hope in most cases, is call your insurance company before you buy a vehicle and run some options over them. If I buy this one, how much is my insurance going to cost? If I buy this one, how much is my insurance going to cost? And that's where this comes out. That is one of the biggest claims that a car can have, because you have to pay for the entire thing. So, this is a big factor in your insurance costs. And defiantly, don't just look at this list, call your insurance company, ask them.
HARLOW: All right, when it comes to the least stolen cars, because this is important, and it's not the cars you'd expect that are just cheap vehicles that no one wants. Here's a list, folks, the No. 1 on that list, the Saturn Vue. Then you've got the Nissan Murano, then at No. 3, the BMW 5 series, pretty nice car there, them the Buick Enclave and finally the Volkswagen Beetle.
So why are these, Peter, the least stolen car?
VALDES-DAPENA: Well, there may be some random fluctuation here, but clearly, it's not the case, as people often think, that thieves go after the more expensive cars. More expensive cars tend to have better security systems. BMW 5, for example, has motion sensors inside and outside the car. If you lock the car and the window is rolled down, as soon as someone reaches in, that alarm is going to go off just from the reaching through the window. It's got all kinds of motion sensors, it's got mechanical locks on the doors that are extremely difficult to get through and get that door open. So, they have gone that extra level to make that car hard to steal. Thieves stay away from it because it's too much trouble.
HARLOW: What are the tips, no matter what car you have, what are the tips to prevent theft? There are some simple things you can do yourself.
VALDES-DAPENA: Right. A lot of it has to do with where you park your car. I don't just mean not parking in a bad neighborhood. Whatever neighborhood you're in, when you're looking for a place to park your car, look for a place where your car can be seen by everybody from every angle that anyone walking around. To a car thief that's going to mess with that car, or try to break into your car, or even steal your wheels, they have to do that knowing that they could be seen any time by anybody. You can have two parking spaces, 10 feet apart from one another, one car gets broken into all the time, the other one cars never gets touched. The difference is, the one where the cars get broken into all the time is obscured by a tree, it's not under a street light, it gives the thief a place to work in secrecy.
HARLOW: All right, a lot of other things you can do, obviously, don't leave your car with the engine running. Don't ever do that. Great tips, Peter. Thank you. Of course, folks can see that list on CNNMoney. Peter, thank you.
All right, well, that's going to wrap things up for us this morning. Don't forget to tune in to YOUR MONEY today at 1:00 p.m. Eastern on CNN.
Right now, thought, time for a check of your top stories in the CNN NEWSROOM. CNN SATURDAY continues, right now.