Credit-Card Payment Options Riddled with Risk

Dear Mary: May I ask your advice?  I have a credit-card balance of $4,500 at 18 percent interest. My FICO score is 700. I am determined to pay this off in the coming 12 months. Would it be wise for me to transfer this to a new CHASE Slate credit card that offers 0 percent interest with no fees for 15 months? Or should I keep what I have, bite the bullet and just pay it off over the next year? Mary Beth

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Dear Mary Beth: First, let’s look at the numbers. If you keep what you have and pay off the $4,500 at 18 percent interest over 12 months, you will make 12 payments of $412.56 each, for a total of about $4,950, of which $450 will be interest.

If you transfer this $4,500 balance to a 0 percent card, you will make 12 payments of $375 each, saving you that $450 in interest. That’s looks like a no brainer. If it were only a matter of dollars and cents, it would be better to go with the no interest option and keep $450 in your pocket. But there are other things to consider.

You have to think about where this balance came from in the first place. You paid for stuff with credit because you didn’t have enough money. For whatever reason, you saw a revolving balance on a credit-card as a viable option. Apparently, things got out of control. You did not have the financial maturity to make wise decisions and you ended up with a big pile of high-interest credit-card debt.

How to Protect the Kids From Identity Theft

Dear Mary: I have been following your column for years. My husband and I recently signed up for LifeLock based on your recommendations and I thank you for that.  

Just this past week, he has had numerous credit-card offers taken out in his name and the alerts have been coming through. Orders were also placed for several thousands of dollars for computers in his name.

I believe at one time you recommended LifeLock protection year for children in case someone steals their information and tries to open accounts in their names because you might not know their identity has been stolen for a while since they are not applying for loans or credit cards yet.  

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photo credit: Madmezza

We have 6 children and at $5 per month per child, that adds up to $360 annually just for the kids. I value your opinion and would like to know what you think. Robyn

Dear Robin: You recall correctly. Protecting your children’s identities is vital, and for the reason you state. I’ve read case studies of young people applying for their first credit card or home mortgage, being shocked to learn that someone has been using their SS number to open lines of credit for many years—accounts that have gone to collection, been written off and any number of horrific black marks. Before they even get started in life, their credit is ruined.

Sure it is illegal, sure you can fight to get all of that off one’s credit report. But can you even imagine the hassle? The stress, headaches and total nightmare such a thing would be? It kinda’ boggles my mind to even think about it. It can take up to seven years for negative items to finally clear.

They’re Paid Off and Debt-Free!

Dear Readers: Every day, as you can probably imagine, I get a ton of mail. These days, most arrive via email which is convenient and inexpensive. But I still get plenty of cards and letters in envelopes with postmarks and stamps. Your messages are all so encouraging, I wish I could personally respond to each and every one. Imagine my excitement to get the following report from this couple in New Jersey:

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Dear Mary: We just want to say thank you. Your columns, advice, thoughts and ideas helped our family out of debt. On Nov. 1, 2014 we became debt-free and paid off $232,793.59. Your newsletters were encouraging and helpful and we are grateful for your gift. Continue your work and again, Thank You. Judy and Dwayne.

Dear Judy and Dwayne: I get some fabulous mail but I have to admit that after  reading your note (handwritten on a beautiful greeting card, I might add) I had to pick myself up off the floor. Wow. Nearly a quarter of a million dollars in repaid debt. That is remarkable. I am so proud of you. I’d love to know more. In fact I would love to write your story one day. That would be so encouraging to others on their journeys to getting debt-free, and would affirm and validate this amazing thing that you’ve done in your own lives.

Sometimes the Solution is Worse than the Problem

Dear Mary: You are my last resort. Please help. I bought a lovely cedar-lined wood chest at an auction about 10 years ago. Unfortunately, I have not been able to use it for storage of anything due to the brutal smell of mothballs. Obviously, the former owner used them and I cannot rid the chest of this terrible smell. When we first purchased it we left it outside with the lid open for weeks and weeks. That didn’t help at all. Can you suggest anything? Joanne

Dear Joanne: I’d like to wring the neck of the guy who invented mothballs in the first place. To me, that odor is worse than moths. As for your problem, it’s a tough one for sure. The only thing I know for sure that will get rid of that odor is a product called Nok-Out, which has worked for me with a similar problem in a piece of antique furniture.

The trick is that you must completely cover ever square millimeter of the wood surface, as well as the areas in cracks and crevices, with Nok-Out. Then it must be allowed to sit for at least 10 minutes. Nok-Out must come in contact with the offending odor.

I would not be fearful at all of using Nok-Out liberally on and in this chest. It is not toxic, has no fragrance of its own and is clear like water. It doesn’t not need to be rinsed off or removed. I would set the piece outdoors and allow it to air dry. Hint: Use coupon code DPL at checkout for 10% off at NokOut.com

Another option is to sand down all of the cedar lining with fine grit sandpaper. Vacuum away all of the dust. This will renew the cedar fragrance that may be strong enough to overcome the smell of mothballs. Hang in there. I know you’ll find the solution. Just don’t give up.

Car Dealer Spills the Beans on Treating Leather Interiors

Dear Mary: I recently purchased a newer vehicle. The dealer tried to sell me a package where they treat the leather seats. Because of the cost, I opted not to purchase the package. 

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My question is, do you know the type of treatment that car dealers use to treat leather seats? Is it even necessary to do this? The car is an expensive purchase for me and I need to know how to take good care of the interior to make it last.

Thank you for your very enjoyable column.  I read it from top to bottom and always learn or find something I can use daily. Jan G.

In Search of High-Quality Individual Bed Sheets

Hi Mary: You mentioned in a recent column there are times it is advisable to buy sheets separately rather than in a set that includes fitted and top sheets plus pillowcases. I need a king-size flat sheet and two extra long twin fitted sheets for our Tempur-Pedic king-size bed. Could you provide a resource for where you bought single sheets? I have been a faithful follower of  your column since 1998 and I really do appreciate your good advice, recipes, helping hints, etc. Thank you for any help you can provide. Dee C.

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Dear Dee: I have had excellent results ordering Utopia bedding online. These sheets are 200 thread count 100% cotton. This Utopia King flat sheet is currently $17.99. I found the sheets to be lovely and soft once laundered as that removes the sizing, added as part of the manufacturing process.  They launder up beautifully and hold a nice, crisp crease. Ironing is not necessary, unless of course you just happen to love to iron, as I do.

These XL Twin fitted sheets from Atlas with generous 12-inch pockets and 180-thread count are $19.83 each currently, and should fit the bed well. They are 55% cotton and 45% polyester, with great reviews.

Every Kid Should Have a Real Bank Savings Account

Dear Mary: My son is saving cash in envelopes. That seems kind of cumbersome. What is your opinion? Why not in a savings account and keep tract of the amounts for each category? Dick

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Dear Dick: I agree. Kids need savings accounts. In my book, Raising Financially Confident Kids, I recommend that kids be required to save at least 10 percent of everything they receive in a real savings account, in a bank or credit union.

Of course your son could save more than 10 percent, and keep a record for how much in his savings account he is allocating for say “College Savings,” or “New Bike,” “Summer Camp” an so forth.

Since most banks now allow customers to track their accounts online, your son could watch his money closely via computer or other mobile device.

Tell him that I’m proud of him and those envelopes! Not many kids are aware of how important it is to take good care of their money. But now he needs to learn about a real, live bank, too, by keeping some of his money there.

In Search of a Discount on Love

Dear Mary: I work hard every day and don’t have the energy to get out in the evenings. I spend my free time with longtime friends, so I don’t meet single men. I know several people who have found partners online. I’m determined to find a man for myself before the end of 2014. Online dating services may be the way. Are there coupons online for special deals? B.F.

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Dear B. F.: There sure are. Google “Online Dating Coupons” and you’ll turn up a love boat load of online coupon codes for any number of dating sites. Just be careful out there, hear?

Dear Mary: We are better off than most. We have no credit-card debt, we have cash stashed away in a safe in our house and we have about $5,000 in savings. Our 401(k) accounts and Roth IRAs have a total current value of about $50,000. My husband is 41 and I’m 35. We have two kids and college 529 college savings plans for them. Our mortgage is our biggest payment. Should we pay down our mortgage with extra income or put the extra money into our retirement accounts? Peggy

Dear Peggy: My suggestion is that you need to grow your Contingency Fund (emergency fund) first. You need at least enough money in that account to live without any income for six months. That’s probably more than $5,000. I’m thinking at least $20,000. Am I right? Once your CF is fully funded, it’s a tossup on whether you should aggressively invest in paying off your mortgage or invest in the market to build wealth for retirement. I’m sure we could find plenty of experts to argue both options. Personally, I’m really big on achieving 100 percent equity in a home. That means you own it outright, which guarantees you a rent-free retirement. Given the state of the economy and uncertainty in so many areas, that kind of security sounds really good to me.