As a massive human tragedy unfolds in Haiti, relief organizations are soliciting credit-card donations through their hotlines and websites. About 97 percent of these donations will actually make it to the designated organizations — but the other 3 percent will be skimmed off by banks and credit card companies to cover their “transaction costs.”

Thanks to this hidden fee, American banks and credit card companies are making huge profits — somewhere in the neighborhood of $250 million a year — off of people’s charitable donations, according to a Huffington Post analysis.

Those profits rise sharply after major disasters, when humanitarian relief organizations such as Oxfam and Operation USA take in more than 85 percent of their donations via credit card — and the credit card providers, with only a few exceptions, refuse to waive their fees.

Credit card companies have only been willing to waive their processing fee for charity once, Richard Walden, the CEO of Operation USA, tells the Huffington Post, and that was for the tsunami disaster of 2004.

“After the tsunami, we had thousands of donations, and American Express and I think one other company temporarily waived their fees. So if this thing ramps up, we’ll try to get in touch with these banks and see if they’ll waive the fee again for us.”

Bowing to enormous public pressure in the United Kingdom after the tsunami, British credit card companies have pledged to “waiv[e] interchange fees for all cross-charity and disaster or emergency appeals,” according to the UK Card Association website.

We pause here for a song about money for nothing…

One notable exception to the rule in this country is Capital One bank. Through its “No Hassle Giving Site”, the bank waives transaction costs for holders of its Visa or MasterCard cards, so that 100 percent of people’s donations goes to their chosen charity.

“We are pleased to be able to donate these costs, and we believe this will generate customer loyalty and an enduring customer franchise,” said Pam Girardo, a spokesperson for Capital One.

Ben Woolsey, director of marketing and consumer research at Creditcards.com, says the hidden processing fees tacked onto all credit card donations cover far more than the transaction costs, allowing the issuing banks, as well as companies like Visa, MasterCard and American Express, to generate significant profits off of online charitable donations.

“They certainly profit off of these fees,” Woolsey said. “Charities are treated like any other merchant. The credit card company bleeds a few percentage points off each transaction; that’s central to their business model.”

Non-profits are reluctant to criticize the credit card companies that are providing them a crucial service because there is too much money at stake, and they have no lower-cost options because the four major credit card companies have a small monopoly on the industry.

Peter Larson, director of annual giving at the Washington Humane Society, said: “It’s unfortunate that a portion of our individual contributions are eaten up by processing fees, but that’s the nature of business. We have no choice but to use credit cards because without them, we would lose a great deal of money in donations.”

Some charities are able to negotiate a lower processing fee than regular merchants, whose rates can run as high as 5 percent. Habitat for Humanity reports that it pays about 2.15 percent of its donations to credit card processing companies, St. Jude’s pays about 2.5 percent, and all charitable organizations that qualify for American Express’s “Giving Express” program get a 2.25 percent processing rate. But even these fees are far greater than the marginal cost of the online transaction.

“I have no doubt that millions and millions of dollars are being made off of people’s donations, and it’s extremely inefficient and wasteful,” said Ken Berger, President and CEO of Charity Navigator, an independent charity evaluator. “It would be great if credit card companies could reduce their profit knowing its going to an organization with a mission to help people. They need to step up to the plate and take a lead role in voluntarily cutting their fees.”

Spokespersons for Visa and American Express declined to say whether they would consider waiving their fees for the Haiti disaster, or for all charitable donations. But Bill Strathmann, CEO of the online charity portal Network for Good, says they won’t: “The reason credit card companies don’t waive fees for charities is that they have so many corporate partners who drive high volume through their system. A company like Walmart could say, ‘Hey, you’re giving them a bettter rate? Last I looked I was passing billions of dollars through your company.’”

According to Strathmann, whose company partners with Capital One to encourage cost-free donating, legislators may have to take the issue into their own hands.

“I’ve always wanted to take this to Capitol Hill,” said Strathmann. “There was legislation that made charitable donations tax-deductible, and there’s going to have to be similar legislation that either subsidizes those credit card fees for non-profits or bars the fees altogether. There’s got to be a better model for encouraging donations.”

Right now, the government’s only role is to actually subsidize the credit-card skim; charitable donations are 100 percent tax deductible, even when only, say, 97 percent of the donation goes to charity.

Without a legislative solution, the only option for charities is to petition banks to voluntarily waive their fees.

“We don’t want a corporate contribution from the other side of American Express, we want them to say to legitimate NGOs that they’re waiving the bank fee,” said Walden. “It’s probably a good week to ask, because they’re about to give out their bonuses.”

Update at 9:03 AM Friday: Visa, MasterCard, American Express and Discover have now all announced that they will waive fees for some donations related to the crisis in Haiti.

   Now we know you have heard the old saying “money can’t buy you happiness.”  So imagine our surprise when we found the opposite with MSN.com’s 7 Ways to Buy Happiness. Keep reading…

By MP Dunleavey

By Mary Pilon , The Wall Street Journal

It used to be that credit-card companies lured customers with cash rewards. Now American Express /quotes/comstock/13*!axp/quotes/nls/axp (AXP 42.39, +0.05, +0.12%) Co. is paying to get rid of them. The card issuer is offering selected customers a $300 AmEx prepaid gift card if they pay off their balances and close their accounts.

The unusual move underscores how quickly conditions have deteriorated in the credit-card market. The current economic morass was provoked by spiking mortgage defaults. But as the economic crisis widens and unemployment climbs, there is growing concern that credit-card defaults will soar into the stratosphere as well.

“This is a huge paradigm shift,” says Curtis Arnold, founder of CardRatings.com, a credit-card review Web site. He says he expects other large companies to follow suit with offers to entice consumers to pay off their balances, as card issuers cope with increasing defaults.

Selected members — the company wouldn’t disclose how many — began receiving letters with the voluntary offer earlier this month, according to Molly Faust, an American Express spokeswoman. “It’s a relatively small number of cardmembers who have sizeable balances and little spending and payment activity,” she says.

AmEx declined to disclose the specific criteria used to determine who is eligible for the offer. However, Ms. Faust did say that it was offered only to retail credit-card holders, not corporate accounts. Customers who received the offer have until Feb. 28 to respond.

Each letter came with an RSVP code that, when submitted online, immediately cancels that member’s card. Members have from March 1 to April 30 to pay off their balances and receive the prepaid card. During that time, the balance is subject to the same interest rates and fees that it would be if they chose to keep their card. If customers don’t pay off their balance by April 30, they will not get the gift card and their accounts will still be closed, says Ms. Faust.

   We pause here to remember the world’s greatest entertainer…

Closing a line of credit generally hurts customer credit scores, even if the customers do it themselves. As soon as eligible AmEx customers sign up for the offer, they lose all Membership Reward points accumulated while they were customers, Ms. Faust says. That means customers should use up their points before agreeing to the offer.

“The intention is to help cardholders lower their debt and encourage responsible management of their credit,” says Ms. Faust. It’s being promoted as a means for customers to “simplify their finances.”

Consumer advocates see it another way. “It’s a nice way of saying, ‘We want you out and we want to entice you financially to get out,’” says Mr. Arnold of CardRatings.com. “It’s not about them handing out $300 out of the kindness of their hearts.”

AmEx is one of several credit-card issuers that have closed accounts and increased late fees and interest rates for cash advances in recent months. After converting into a bank-holding company late last year, AmEx received $3.4 billion from the U.S. Treasury’s Troubled Asset Relief Program in exchange for a stake in the company.

(see story as posted at http://www.marketwatch.com/story/amex-encourages-cardholders-to-leave and if you have credit card debt of $10,000 or more call our friends at freedomdebt.com 800-834-9515 today)

Obama proposes bank fee, slams Wall Street

WASHINGTON (Reuters) – President Barack Obama on Thursday proposed Wall Street banks pay up to $117 billion to reimburse taxpayers for the financial bailout, as he slammed bankers for their “massive profits and obscene bonuses.”

Striking a populist tone, Obama called for a fee on the biggest U.S. banks to “recover every single dime” the government spent rescuing the financial sector from its worst crisis since the Great Depression.

“My determination to achieve this goal is only heightened when I see reports of massive profits and obscene bonuses at some of the very firms who owe their continued existence to the American people,” Obama told reporters at a White House event.

Obama and his Democratic allies in Congress are seizing on the chance to cast Wall Street as its political foil in a congressional election year when their party is worried Republicans might weaken its majority status.

Obama, who has labeled financial executives “fat cats” for the huge bonuses they have received, is taking an increasingly tougher line against the industry.

Democrats hope that will resonate with an American public furious at multimillion-dollar bonuses being handed out by banks as the middle-class struggles with double-digit unemployment.

The fee is also aimed at helping to reduce the ballooning U.S. budget deficit.

Democrats in Congress signaled they would quickly take up the legislation.

Senate Finance Committee Chairman Max Baucus praised Obama for “working to ensure taxpayers see a return on their investment.”

“I remain committed to working with the president, and my colleagues across the aisle, to make sure this proposal is right,” he said.

But Republicans may try to block it. Some of them have criticized the bank fee as a tax that would be passed on to small businesses and Americans with savings accounts.

(see full story here: http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=OBR&date=20100114&id=10986827)

   So here is a salute to the President for continuing to take on Wall St. for the American people. As legendary singer Issac Hayes sang…who is the man who will stand up for his brother man…

p.s. Don’t let the financial industry pass along that tax to you by burying it in higher credit card fees and interest rates. If you have $10,000 or more in credit card debt, call our friends at freedomdebt.com at 800-834-9515 and let them take on the Wall St. fat cats for you. They may be able to help you cut your debt in half.

“Debt collectors generate more complaints than any other industry. Here’s what they can and can’t do legally. Since 1998, the FTC has brought 21 lawsuits against illegal debt collection practices, often obtaining tough permanent injunctive relief, such as banning some defendants from engaging in debt collection. The FTC also has obtained large amounts in monetary relief, such as a record $10.2 million judgment ordered in a case in 2005. We recently become even more aggressive in our debt collection actions, including seeking preliminary relief and more significant monetary relief.

Most recently, Academy Collection Service, Inc. and its owner, Keith Dickstein, paid $2.25 million to settle FTC charges that Academy collectors violated the FTC Act and the FDCPA while collecting debts, and that Dickstein failed to stop the violations. The settlement order announced today, negotiated by DOJ and the FTC, imposed civil penalties of $375,000 and $300,000, respectively, on Albert S. Bastian and Keith L. Hurt III, who oversaw Academy’s Las Vegas collection center. The judgments were suspended upon payment of $7,500 each, based on their ability to pay. The full judgments will become due immediately if the defendants are found to have misrepresented their financial condition.

   Call it the fed’s big payback for consumers. We break to offer up a salute to the godfather of soul here from a live performance in 1974… 

According to the FTC’s complaint, filed by the Department of Justice on the FTC’s behalf, the defendants participated in, or controlled, the actions of debt collectors whose unlawful practices included false or deceptive threats of garnishment, arrest, and legal action; improper calls to consumers; frequent, harassing, threatening, and abusive calls; and unfair and unauthorized withdrawals from consumers’ bank accounts. The complaint also alleged that the defendants failed to adequately investigate consumer complaints or discipline collectors, and collectors who were terminated for violating the Fair Debt Collection Practices Act (FDCPA) often were rehired within a few months.

   In short, the FTC is on it! And they have a nice FAQ about how to handle nasty debt collection agencies.  A few are below.

For more check out the Federal Trade Commission’s website at  http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre18.shtm

Some of the FTC’s FAQ’s on debt collecters

Can a debt collector contact me any time or any place?

No. A debt collector may not contact you at inconvenient times or places, such as before 8 in the morning or after 9 at night, unless you agree to it. And collectors may not contact you at work if they’re told (orally or in writing) that you’re not allowed to get calls there.

How can I stop a debt collector from contacting me?

If a collector contacts you about a debt, you may want to talk to them at least once to see if you can resolve the matter – even if you don’t think you owe the debt, can’t repay it immediately, or think that the collector is contacting you by mistake. If you decide after contacting the debt collector that you don’t want the collector to contact you again, tell the collector – in writing – to stop contacting you. Here’s how to do that:

Make a copy of your letter. Send the original by certified mail, and pay for a “return receipt” so you’ll be able to document what the collector received. Once the collector receives your letter, they may not contact you again, with two exceptions: a collector can contact you to tell you there will be no further contact or to let you know that they or the creditor intend to take a specific action, like filing a lawsuit. Sending such a letter to a debt collector you owe money to does not get rid of the debt, but it should stop the contact. The creditor or the debt collector still can sue you to collect the debt.

Can a debt collector contact anyone else about my debt?

If an attorney is representing you about the debt, the debt collector must contact the attorney, rather than you. If you don’t have an attorney, a collector may contact other people – but only to find out your address, your home phone number, and where you work. Collectors usually are prohibited from contacting third parties more than once. Other than to obtain this location information about you, a debt collector generally is not permitted to discuss your debt with anyone other than you, your spouse, or your attorney.

What practices are off limits for debt collectors?

Harassment. Debt collectors may not harass, oppress, or abuse you or any third parties they contact. For example, they may not:

• use threats of violence or harm;
• publish a list of names of people who refuse to pay their debts (but they can give this information to the credit reporting companies);
• use obscene or profane language; or
• repeatedly use the phone to annoy someone.

Debt collectors also are prohibited from saying that:

• you will be arrested if you don’t pay your debt;
• they’ll seize, garnish, attach, or sell your property or wages unless they are permitted by law to take the action and intend to do so; or
• legal action will be taken against you, if doing so would be illegal or if they don’t intend to take the action.

   Ok  Money Matters with Greg Bowens listeners check this out.  A Oregon TV station is reporting that a debt collector actually threatened to kill a lady if she did not pay her bill.

 Wow, talk about debt collectors gone wild! You don’t have to put up with harrassing phone calls anymore. The Federal Trade Commission has this great video about how to deal with debt collectors. Check it out here and tune into Money Matters with Greg Bowens everyday from 4 pm to 5 pm to learn more tips on how to take your phone and financial life back.

    For more information, check out the FTC website at http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre18.shtm and feel free to call Devin Brown and our friends at freedomdebt.com  at 1-800-834-9515 to help you get rid of most of your unsecured and credit card debt of $10,000 or more.

  Every cloud has a silver lining. And sometimes it has a heart too like the one in the picture above. It’s not always easy to see that silver lining or heart shaped cloud when you are consumed with worry. And “Money Matters with Greg Bowens” fans let’s face it,  worry about bills, credit card debt and finances will make you have a stroke. To make matters worse bad news about the economy is everywhere. We hear it afer our favorite song on the radio. We hear it from co-workers, neighbors, family and strangers in an elevator.  The economy is bad, we’re downsizing, Joe lost his house, blah, blah, blah.

   Bad news travels fast. Fear travels even faster. So how are you suppossed to move forward financially if you are being bombarded with bad financial news?

You have to learn to chill, clear your mind and let go of the fear. One way is to learn how to meditate. Here is a nice technique you can do anytime and anywhere. It’s called the one minute meditation from our friends at buzzle.com.

An Easy Meditation Technique

Breathing through your mouth expands your chest, but if you breath through your nose you’ll notice how your abdomen extends. You see, nose-breathing causes the diaphram to pull air to the bottom of your lungs. This delivers a good dose of oxygen into your bloodstream and brain. It also tends to relax you.

Breathing through your nose is healthier, and it’s the basis of this one-minute meditation. You simply close your eyes, let the tension go out of your muscles, let go of your thoughts (to the extent possible), and take four slow, deep breaths through your nose, paying attention to your breathing.

Is Meditation This Easy?

You’re not likey to get you into a deep meditative state with this simple exercise. You will get benefits, though. These will almost certainly include a clearer mind and a reduction in stress.

Try to develop a “trigger” for your meditation. You can do your four breaths when you get into the car, for example, or right after lunch each day. A trigger is a place or time that reminds you, so your meditation becomes a habit.

Some may say this isn’t “real” meditation, but there’s nothing wrong with enjoying the relaxation you’ll get from this technique. You can always pursue deeper meditation later, if you wish. In the meantime, remember that not everything has to be difficult to be of value. Why not do an easy one-minute meditation right now?

Steve Gillman writes on many self help topics including boosting brainpower, losing weight, meditation, habits of mind, creative problem solving, learning gratitude, generating luck and anything related to self improvement. You’ll find more at http://www.SelfImprovement Now.com.

   There you have it. Meditation in 60 seconds. It’s good for you and your financial health to get a more positive outlook on life. Trust me folks. It’s a wonderful world…

p.s. If you got $10,000 or more in financial debt, do the one minute meditation and give the folks at freedomdebt.com a call at 1-800-834-9515. They can help.

TURN INTO THIS…

That’s right Money Matters with Greg Bowens listeners. The hot new threat to you hanging onto your money is “card-jacking.” Banks and credit card companies are gearing up to jack your credit card with new fees and interest rates. Industry pundits blame changes in the credit card law. But we know better. They want to keep the money coming right out of your bank account and into their bottom line.

Meanwhile, Washington is reportedly about to give the finance industry another excuse to add a little more to fees and interest rates. The Obama administration is mulling over a plan to charge banks fees in order to recoup taxpayer dollars used to bail them out. See it all here at USA Today… http://content.usatoday.com/communities/theoval/post/2010/01/obama-budget-may-include-fees-for-bailed-out-banks/1

Now which high finance executive do you think is going to come out of his/her annual bonus to pay that money back? You guessed it — zippo, not-a-one, zero, nada, goose egg… The money is more likely to come from another point or two inserted into the credit card fee and interest calculations that will be reflected in your monthly statement.

So watch out listeners for the “card-jacking” move coming to a mailbox near you. To help you see what is going on, we have the “card-jacking” list of new trends coming from the credit card industry. Special thanks to http://www.thewisdomjournal.com/Blog/top-10-consumer-credit-events-of-2009/ where you can find even more information.

1. Credit card companies charge for not using credit cards regularly, even if you carry a balance. In January, Chase began charging $10 a month to 400,000 customers who have large balances but little account activity.

2. Credit card companies change minimum payments at anytime with minimal notice. Chase increased the minimum payment from 2 percent to 5 percent for cardholders with large balances

3. Credit card interest rates generally increased for all major card issuers and even doubled or tripled for consumers who pay their bills on time. Citi sent some cardholders letters notifying them that the variable APR for purchases on Advantage Citicard’s would increase, in some cases to a 29.99%. The hike on interest rates has prompted Senate Banking Committee chairman Chris Dodd to step in and propose an immediate interest rate freeze on the estimated 700 million credit cards in circulation. No word yet on when it when or if it will happen.

4. Rewards programs are less rewarding. Citi’s Thank You Rewards program added a $39 fee for all tickets redeemed through its CitiMiles program. American Express’ Delta Sky Miles dropped its “Always Double Miles” program. Though many rewards cards are available, they’re getting harder to find.

5. Credit card companies lower limits or cancels cards altogether. Analysts expect credit card companies to cut limits by $2 trillion by mid-2010.

6. Creditors add annual fees to existing credit cards. In October, Bank of America announced it would start charging cardholders who pay in full each month an annual fee of $29 to $99 a year. Citigroup started charging annual fees to card holders who don’t put more than a specific amount on their cards, typically $2,400 a year.

If you have had it up to here with high credit card debt, these guys may have the solution…

Hello Money Matters listeners! It’s not always easy to start living financially free and clear of crushing bills and debt. People worry. They get stressed. They can’t see how they are going to get ahead. That kind of stuff will make your blood pressure rise faster than a credit card interest rate! Money Matters is here to help. If you want to change your circumstance, first change your attitude about about the situation.

And trust me. Nothing is a better attitude changer than laughter. Laughing helps people cope with the most difficult circumstances and it’s good for your health too. Don’t believe me? Check out this article from WebMD at http://women.webmd.com/guide/give-your-body-boost-with-laughter

So, stop moping about your bills. Start laughing your way to a new life. Money Matters with Greg Bowens presents (drum roll please)…

YOU KNOW IT’S TIME TO PAY OFF YOUR CREDIT CARD WHEN…

 
10. The 10,000 on your credit card statement is not how much you get in credit but how much you owe!

9. Your card is stolen but you don’t report it because the thieves are spending less than you.

8. You are watching a late night talk show host interview the world’s richest man. When asked how he got so rich the man says, “Well, first I invented the credit card but that only made me a millionaire. Then I got smart and invented credit card collection agency. That made me a billionaire. But then I got really smart and invented credit counseling! That put me over the top.”

7. You get credit card offers in the mail that say “pre-approved delinquency.”

6. You swipe your credit card at the pump to pay for gas and the screen says “quit playing!”

5. You use your credit card for a cash advance at the ATM and the cops show up.

4. You’re on a first name basis with the guy from the credit card collection department.

3. You call the 800 number to check your balance and the automated phone system starts laughing.

2. Your wallet is stolen and the thief mails it back with a note that says “never mind.”

1. A computer hacker steals your identity online, apologies and emails you his instead.

Now that’s funny. If you still need your funny bone tickled, check out this comic and her jokes on the economy…

p.s. Now that y0u are able to get a new perspective, get moving and learn more about getting rid of credit card debt. Check out www.freedomdebt.com

Hey hey dear listeners! I often search for news you can use in your quest to live the kind of financial life you have always dreamed. Today’s tips come from Fox Business News.

I think it’s interesting and hope you will too…