The Dirty Little Secrets of Gift Cards

by Gerri Willis

It’s hard to ignore the convenience of gift cards. No muss. No fuss. No messy wrapping paper and tape. Plus you get the ultimate flexibility because the recipient actually makes the hard choices.

But there is a big debate out there about whether gift cards are an overdone trend or the hottest thing since sliced bread. According to a survey conducted by the Consultancy Deloitte LLP, the proportion of people who say they will buy gift cards this holiday season – 43 percent – is down sharply from a peak of 69 percent set back in 2007. Yet, the vast majority of Americans – 72 percent – say they have given gift cards in the past, and according to Mercator Advisory Group, Americans spent $6 billion on gift cards last year.

Retailers, for their part, are adding bells and whistles to the old-fashioned gift card to make them even easier to use. Nearly 60 percent are now offered over the web adding to their appeal.

Keep in mind, though, that gift cards have downsides. All general-purpose gift cards – and by that we mean ones issued by banks and other financial institutions – carry a purchase fee ranging from $3.95 to $6.95, that’s according to a survey by Bankrate. Only 7 percent of store cards carry purchase fees. Losing a gift card or having the store you bought it from go out of business is something to think about as well.

Bottom line, gift cards work for that person on your list that is hard to buy for, but I’d try to find out where they shop and buy the store card rather than pay a fee to a bank for the privilege of buying one. 

How to Get The Most From Online Holiday Shopping

by Gerri Willis

The proportion of holiday shoppers who will buy from their laptop or mobile device is growing. Nearly half or 44 percent of shoppers will stay close to home to shop. And, that brings its own set of issues.

The Internet savvy know that web merchants change prices on high-demand goods nearly constantly, which means the onus is on you to get the best deal. What’s more, after last year’s Target debacle over the holidays, consumers are concerned that retailers – online or otherwise – will be hit by hackers, and customer financial information will go to the bad guys.

Fortunately, there is a good side to online shopping. It’s convenient and fast. And, even if you worry that the item you are buying isn’t just right, you can often chat with a live sales associate to ask questions. What’s more, many merchants will offer some of their best prices, especially for electronic equipment on the web.

To combat the downsides, Kinoli consumer analyst Andrea Woroch suggests comparing prices with apps like PriceGrabber, Google Shopping and The Find. Also, clear your browser’s cookies. By doing that, you can stop retailers who track your purchasing and browsing patterns so they can target you with higher prices.

Get the promotions by following your favorite store brands on social media, where you’ll be offered exclusive coupons and can track prices. You can even Tweet a brand or send a Facebook message to get a coupon extended.

To keep your private information just that, private, be sure to use different passwords for every shopping site you use. Check your credit card website frequently – and I mean daily during the holiday season – to make sure someone isn’t using your card without your knowledge. And, keep the debit card in your wallet. Fraud on your debit card is a far more serious matter than fraud on your credit card.

Bottom line; keep track of your purchases. Remember, when you are roaming around online it can be difficult to remember exactly what you purchased and for how much.

The Best Strategies for Holiday Shopping

by Gerri Willis

Christmas shopping used to be so simple. Wait until the very last possible minute and score the best deals. But a shift in trends is underway. After two years of less-than-stellar results, retailers are priming the pump by offering deals earlier than ever. According to Adobe, the steepest discounts during last year’s holiday season actually came on the Sunday before Thanksgiving. Adding to shopper woes, some retailers ran out of the most popular products by Black Friday.

And, this year, retailers are getting even more aggressive. Forget Black Friday. As we’ve reported, JCPenney, Macy’s, Best Buy, and Sears are among the many stores opening on Thanksgiving Day. Kmart is setting a record by staying open 42 consecutive hours starting at 6 a.m. Thanksgiving. And, according to research from Adobe Systems, the biggest prices cuts online may well come before Black Friday. In other words, get shopping now.

But, of course, the devil is in the details. Part of when you shop depends on what you are shopping for. Shop for cheap electronics on Black Friday rather than Cyber Monday, according to Matthew Ong, a senior retail analyst for NerdWallet. Others say that clothing deals will emerge on Cyber Monday.

To score the best prices, you’ll have to comparison shop. Keep in mind, online retailers change prices continuously on the most popular items. For example, the fitness band Jawbone Up24, was on sale in October for as little as $110.05 at Amazon, but the price also bounced up to $129 on the same website in the same month. Walmart’s website showed similar price moves, and at Sears, the price for the same product climbed as high as $149.

In other words, prices are a completely flexible thing and you simply can’t count on prices staying the same. For that reason, personal finance expert Vera Gibbons suggests using price comparison apps like ShopSavvy or PriceGrabber.

Finally, late shoppers may do well at the very end of the season when retailers attempt to clear inventory though it may be difficult to find the exact item you’re searching for. Flexibility is key for late shoppers. If there is a specific retailer you plan to patronize, follow the stores on social media where you can track sales. Ask about return policies in advance and whether the store matches lower prices from competitors. The trends shaping up now indicate a good year for shoppers, if not store operators.

           

Medicare Open Enrollment: What You Need To Know

by Gerri Willis

Medicare Open Enrollment is on and there are big changes underway recipients need to know. Bottom line: Many seniors will see higher costs and fewer options. For example, according to the Kaiser Family Foundation, there are fewer Medicare Advantage plans for 2015. In fact, 320,000 enrollees are enrolled in plans that are exiting the market.

What’s more, enrollees in six of the 10 most popular plans this year will experience double-digit premium increases if they stay in the same plan for 2015.

The good news is this: The Part D “donut hole,” that is the coverage gap for prescription drug plans continues to shrink. Those who enter the coverage gap in 2015 will get a 55 percent discount on brand-name drugs and a 35 percent federal subsidy for generic drugs.

If you are considering keeping the same plan you have right now, be sure to check whether there are any changes in your plan. You may find a drug you need isn’t covered or not to the level you expect. Don't miss our User's Guide to Choosing the Best Health Insurance 5pmET on FOX Business.

Health Insurance: Workplace Enrollment

by Gerri Willis

It’s that time of year again. Companies are opening enrollment in health insurance plans, and if you haven’t gotten a peak at the 2015 changes, be advised, you may get sticker shock when you do. Deductibles will rise 7 percent this year as companies forecast higher healthcare costs.

Premiums and copays are likely to rise as well. If you work for a small company, watch out because your prices may rise even more than that 7 percent average.

The changes are more of the same. According to Kaiser, worker contributions to health care coverage have nearly doubled since 2003, from $2,412 to $4,565. Deductibles have jumped from $584 a decade ago to $1,217 today.

As you begin to compare plans, don’t assume your plan from last year is the same this time around. Plans are converging and looking more and more like each other. While HMOs, or health maintenance organizations, originated the co-pay, now PPOs or Preferred Provider Organizations are charging them as well.  Given that, you’ll want to think about what services you’ve used in the past and are likely to use again as you shop.

And, remember that premiums aren’t the sum total of everything that you will pay. Check out deductibles, co-pays, and whether you have to pay co-insurance even after paying your deductible.  If you are not a big user of health care, you might want to think about a high-deductible plan which will give you lower premiums. If you choose this route, consider setting aside money in a health savings account to cover your costs.

Don’t miss our User’s Guide to Choosing the Best Health Insurance tonight 5pmET on FOX Business

Ready or Not, Here Comes Round No. 2 of Obamacare

by Gerri Willis

Ready or not, here comes Round No. 2 of Obamacare. And, as much as I’d like to start this blog with an analysis of costs, details such as premiums for Obamacare 2015 policies won’t be made public until open enrollment starts Nov. 15, conveniently after the election. So forget getting your arms around price tags. At least for now.

To be sure, though, some details are already out. First off, there is a new website where you’ll go to enroll for the first time. Given the original healthcare.gov website’s glitch-plagued rollout a year ago, this could be a good thing. But, again, we don’t know because this website is still being tested. (Want to know how the testing is going? Again, forget it. That information isn’t being shared.) To their credit, the website designers have managed to shorten the number of screens in the online application from 76 on the original site to just 16 on the new site.

Unfortunately, if you bought Obamacare coverage last year, you’re stuck with the old website which is famously unreliable. Some of our sources maintain the backend of the website still isn’t complete a year after launch. And, re-enrollers will face a time crunch. They’ll have just one month – until Dec. 15 – to get on the site and update their financial information – a move that is required to have coverage beginning Jan. 1, 2015. You’ll want to have handy a 14-character identifier number to keep any current insurance policy. If you don’t re-enroll, you may be reassigned to your old plan, but you’ll also get this year’s subsidy amount, which may be smaller than they would be entitled to for 2015.

On top of all of this, it’s possible that several hundred thousand people across the country may face cancelled health insurance policies because those policies are not in compliance with Obamacare. Initially these policies were granted a reprieve, but break time is over. Thirteen states and the District of Columbia plan to cancel policies that don’t offer the level of services required by the Affordable Care Act. Federal law requires a 60-day notice of plan changes, so if you’re getting bad news in the mail, it will probably come no later than Nov. 1 (right before midterm elections.) 

So, truth be told, Obamacare Year 2 remains a mystery, though Health and Human Services Secretary Sylvia Burwell has already said that it won’t be perfect. That’s reassuring.

Don’t miss our User’s Guide to Choosing the Best Health Insurance all next week 5pmET on FOX Business         

 

How To Avoid The Flu This Season

by Gerri Willis

We are closing in on flu season. The Center for Disease Control says that prime time for flu is between December and February. With all the hysteria about Ebola and enterovirus, it's easy to overlook the fact that seasonal flu kills anywhere from 3,000 to 49,000 people every year.  With that in mind, The Willis Report set out to track where you are most likely to pick up the germs that could land you in the doctor’s office.

Turns out, humans are veritable petri dishes carrying some 500 difference species of bacteria at any time. Harmful bacteria, the kind that makes you sick, gets passed by touching surfaces. And, if you work in an office, everyday exposure is as easy as walking in the front door. Just one door contaminated with a virus spreads the germ to about half the surfaces and about half of employees within only four hours, according to a University of Arizona study.

Working with Dr. Kelly Arehart, a scientist at Kimberly-Clark, we swabbed and tested break rooms, copiers, candy machines, computers, phones, elevator keypads and escalator handles. We found the surfaces most likely to be infested with germs may surprise you. First, forget the bathroom. Those surfaces are cleaned regularly. Much more problematic are smart phones, break room surfaces like buttons on a microwave and common area computers, especially keyboards. The trouble typically resides on surfaces and in areas which are not routinely cleaned. Water fountains and coffee stations are typically places where bad bugs hang out. And, keep in mind, most common respiratory viruses can survive on a surface for a maximum of two to four days.

The good news is that it is cheap and easy to keep yourself healthy. Just because you are exposed to a virus, doesn't mean you will get sick. Experts say washing your hands regularly is the most effective way to stay healthy, According to the CDC, 20 seconds of scrubbing with soap, or about the time it takes to hum the song "Happy Birthday to You" twice, should do the job. And, getting a flu shot, well, of course, is a good idea too.

How to Fire Your Financial Advisor

by Gerri Willis

Deciding to fire your financial advisor is no easy thing. Sure, the financial crisis of 2008-2009 was used as a catalyst by many to change advisors. But even in good times, problem advisors surface. Last year, the Financial Industry Regulatory Authority received more than 2,300 complaints from investors and suspended 670 individuals.  Consumers would do well to consider whether they are getting good service before the inevitable market meltdown.

Setting aside for a moment that your advisor is not the next Bernie Madoff. You did check him out at http://brokercheck.finra.org/ before hiring him, right? There are some behaviors that will not serve you well that you should be aware of. Questions to consider are these: Is your advisor capable of explaining the investments he’s promoting in a clear way, and helping you understand their risks? Is he accessible and does he listen to you? Has he provided you a written road map that describes your goals and how he intends to get you there?

If you answer no to any or all of these questions, it may be time to consider making a change. Before you do, decide where your money will go next.  Are you hiring another advisor? Minding your money yourself?  Either way, your money will need a new home. Ed Butowsky says the process is straightforward. “It’s very easy to fire your advisor,” says the Chapwood Investments managing partner. “Simply write an email, and say as of this date please stop any buying or selling in my account. I am transferring my assets to another firm.” Butowsky advises copying the firm’s compliance officer and office manager to make sure everyone knows you are leaving.

Even if you are frustrated, be nice. Even if you are ending the advisor’s relationship managing your money, you will still have to rely on the firm’s office to provide tax information.

PIMCO: What You Should Know

by Gerri Willis

Chances are that Bill Gross’ exit from PIMCO, the mutual fund company he founded 43 years ago, may have barely raised an eyebrow in your household. But this is one fund industry story you’d be wise to pay attention to. The idiosyncratic Gross ran the planet’s largest bond mutual fund with $222 billion in assets. His PIMCO Total Return Bond fund has been the plain vanilla of the ice cream mutual fund parlor. It is everywhere. More than half of nation’s 401(K)s offer the fund. In short, PIMCO Total Return is nearly as likely to appear in your 401(K) as an S&P 500 index fund.

Got your attention? Today’s question is this: Should you follow the herd of institutional investors who are dumping shares of the fund today?

Here’s what I think: You don’t have to do anything. Not right away. Look, PIMCO appointed fund managers that are top notch and were, frankly, already doing a lot of the day to day work of the fund. Mark Keisel was voted Morningstar’s Fixed Income Manager of 2012.

True, a lot of institutional investors have already pulled their money. Estimates of those lost assets range from $10 billion to 25 times that. But a bond fund isn’t a stock; you don’t lose value because investors are selling. The cautious strategy is to sit back and watch for six months and make sure that the fund performs as well as rivals.

If you’re not the cautious sort, you might consider flipping your bond investments into a bond index fund. All the major fund companies, like Vanguard and Fidelity, have a fund that mimics the index. The good news: You keep your costs low. Fees and expenses are low on index funds. The bad news is that if the Federal Reserve decides to raise rates, you are stuck in a fund that will suffer as the bond market suffers.

My suggestion is to take a look at your 401(K) statement from 2013 – a really stinky year for bond funds. If any of the bond funds you invested in recorded a positive return for the year, you might consider putting your new bond investment dollars into that fund. Chances are that fund is going to be what they call multi-sector, flexible or strategic. That means that the fund manager has the freedom to move around to different asset classes, government bonds, global bonds, etc., depending on where he finds returns.

Ultimately, you’re going to want to find a place you are comfortable, because the next few years could provide some serious change to the bond world as the Federal Reserve considers changing its easy money policies.

How to Pay for Your Second Home

by Gerri Willis

All things being equal, we’d all pay cash for our second homes. No muss, no fuss. But in reality, many of us will finance at least a portion of the costs of a second home.

And, naturally, as a second-time buyer, you’ll find the process pretty similar to when you got the mortgage for your primary home. The lender will require the same information on your income, W-2s, checking and savings account statements. Plus, the lender will gauge your ability to repay by checking your credit scores and evaluating your total debt levels. That’s where all the similarities to the process of your first mortgage ends.

In fact, you may be surprised how different the process is. You’ll be required to have a higher down payment, as much as 20 percent or maybe more to buy that second home. You’ll face higher rates of interest and that means higher mortgage payments. The reason for these escalating costs is that if you are buying a vacation home, which is to say a property you won’t be living in fulltime, the lender assumes your commitment to paying that mortgage will be a lower priority. By putting down more, you demonstrate your commitment to buying the house and paying it off. Interest rates are higher as well, as much as a quarter to a half point, and for much of the same reason.

The good news is you’ll find lots of different options for financing. Traditional mortgages, 30-year fixed rate loans, are popular for second buyers, but if you can put down 50 percent or more of the purchase price when you buy, you should consider a 15-year mortgage. Paying your debt faster means your interest rate costs will plummet. Adjustable-rate mortgages are still available as well, but with rates near lows, you might as well lock in today’s interest levels, unless you plan to quickly flip the house.

Some folks opt to add a second mortgage, either a home equity line of credit or a home equity loan, onto the mortgage for their primary home to pay for the second house. Understand that doing this puts both of your properties at risk if you were to default. Some seniors use reverse mortgages to tap their home equity but this strategy, too, has problems because you essentially are handing over your primary home to the bank. Soon-to-be retirees are well advised to consider buying that retirement home while they are still working since lenders will calculate your credit worthiness on your pre-retirement income.

In short, there are plenty of options for second home buyers and the good news is that rates remain relatively low.

 

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