Twila Van Leer

Millennials Confident For Future

July 22, 2015 By Twila Van Leer

That group of Americans who became young adults just as the new century arrived – collectively known as Millennials in the current vernacular – are probably more job-savvy than their older peers and more optimistic about their role in the nation’s economy.

By 2025, they’ll make up 75 percent of the nation’s workforce. They see the future through rose-colored glasses and have confidence in their ability to find the job they want. They put a high premium on rapid advancement in their chosen field and they want to be well-paid for what they do. The necessity to repay student loans is impetus for some of their expectations.

Looking at their high degree of confidence, some of the economic experts are scratching their heads. The millennials came of working age right at the peak of the worse economic downturn in the country since the Great Depression. Perhaps, they reason, this generation came to the job market with more expectations that things could only get better after several years of recession.

The current job market seems to bear out their optimism. The recovery has been slow and spotty, but nationally, applications for jobless aid have fallen to a 15-year low, one of a number of indicators that suggest the United States is back on track.

The number of new jobs being offered is another sign that the Millennials will be able to keep themselves busy over the predictable future. In May, some 280,000 new job opportunities were posted by American employers.

The more robust economy has sent more shoppers into the stores. Spending for the month of May was up, an indication that workers are not so leery of what will happen next. Cheaper gas prices also added momentum to spending on other things.

Current trends seem to support the Millennial view that life will be good for those who will be the employment majority for the foreseeable future.

Fraud And Liability Charges For Merchants

July 21, 2015 By Twila Van Leer

EMV credit cards are being accepted at over 78,000 merchants.

More and more credit and debit cards containing fraud-busting chips are showing up at the point of purchase. Creditcard.com reports 78,800 merchants have installed EMV technology. That’s good news for most individuals, but have become a source of concern for small businesses that can ill afford the equipment needed to handle the new cards.

Banks and credit card companies hail the advanced technology as a way to sharply reduce fraud opportunities. They are distributing the cards and phasing out magnetic strip cards that are easier targets for thieves. But the cost of refitting to accommodate the new chip cards is hurting small businesses. The cost can range from the low hundreds to tens of thousands of dollars, depending on the required equipment. Merchants who don’t have the EMV processing equipment and then have a fraud issue could face a charge-back so big, it could put them out of business.

The retailers are under notice that they must make the transition by Oct. 1, 2015 when the magnetic strip cards will be phased out. If they don’t comply, the credit card giants, such as MasterCard, Visa and American Express will make them liable for transactions made with phony chip cards.

The small companies have a double whammy. They don’t have the volume of business to underwrite the costs of new equipment and they don’t qualify for the discounts that those who sell the equipment offer to larger businesses.

A consumer sees only a small part of the payment processing system. Software in the merchant’s computer only receives the transaction information. It then goes to a processor, which posts a charge or debit to the cardholder’s account and a credit to the merchant’s account.

Even the simplest card readers used in stores and other small businesses cost at least $100. At the outset, the readers also will be able to read magnetic strips and/or handle so-called contactless payments made with services such as Apple Pay or Google Wallet and other electronic wallet applications. More complex reading systems will run into the thousands. They manage inventory and customer/vendor information. Restaurants and businesses with multiple locations are likely to have the most complex systems and so the highest expenses.

Besides the costs of reading equipment, many small businesses will have to hire the expertise needed to accommodate the upgraded technology. Such experts charge $100 an hour or more to install systems and ensure that they work.

But with the growing concerns for the amount of fraud that has beleaguered retailers and their customers, the handwriting is on the wall. The expectation that the chip-embedded cards will make inroads into the problem will likely trump any other concerns. Small businesses will have to make the leap, regardless of the cost.

When To Close A Credit Card

July 12, 2015 By Twila Van Leer

Keep the number of credit cards you have to a minimum.

If you are like most Americans, you are besieged with offers to try a new credit card, often offering a lower interest rate or more rewards than the one you are currently using. How to decide, short of accumulating a fistful?

Closing out one of your current cards to accommodate another may make good economic sense, but it also can have a downside. Closing out a card you have had for a long time may cause a temporary dip in your credit rating. Some card holders opt to hold onto their old, established cards rather than swap for a lower-interest option because of that reason.

However, experts at Experian, one of the three big credit bureaus, say that excessive concern about the effect on your credit rating should not be the exclusive reason for not changing cards. It is one of the factors you should consider, but there are others.

Credit bureaus look at a range of factors when they create a score for you, said Experian’s Rod Griffin.

Credit utilization is one of the factors. That means how much of your available credit you are actually using. If you have four cards, each with a limit of $5,000, you have total credit available of $20,000. But if you have two cards that are about maxed out and no balances on two of the cards, you are only utilizing about 50 percent of your capacity. That’s what the credit bureau looks at. Cancelling one of the cards would have a small impact on your overall score. And if you continue a long-running record of timely payments, it is likely to recoup quickly.

Even so, if you are planning to apply for a home or auto loan or any other in which your credit score will be relevant, wait until that transaction is complete before dropping a card, Griffin advises. In general, it takes three to six months for your rating to be affected by the cancellation of a card.

If you are concerned that cancelling a card will immediately eliminate its credit history, don’t be, he says. The credit bureau will include that card’s history in its considerations of your rating for at least 10 years if there is no negative background.

Your next credit report will note that a card was closed at your request, which is not likely to be a red flag for a potential lender.

If you want to evaluate your credit cards and determine if they are all necessary, the questions you should ask include whether or not a particular card is financially beneficial to you. Consider the interest rate, fees, incentives and rewards and make comparisons to determine if you want to eliminate one or more of the cards. Ideally, you will retain only cards that you use on a monthly basis, paying them off in a timely manner.

Occasional pruning is a good idea, particularly if you are carrying a lot of cards that have low limits and relatively high interest. For instance, that card you signed up for in college for the sake of the free T-shirt. As your credit history matures, you have more leeway for low-interest cards that offer more incentives.

What Can I Do If My Credit Card Application is Denied?

Digital Wallets Replacing The Pocket Bulge

July 9, 2015 By Twila Van Leer

Smartphones are the new digital wallets.

What has happened to the traditional wallets that were a pain in the hip pocket or another item to lose in your purse? As predicted by tech gurus for years, they are being displaced by smartphones which can be digital wallets.

Even those who still rely on cash or plastic when they shop may soon succumb to the newer, more efficient digital wallets that are being offered by the tech companies.

Store-issued credit cards and store rewards programs are coming via Apple Pay and it really gets into the mobile payment services it began last fall. Google is standing by with a similar service that will enhance its smartphone options to run on its Android software. Samsung has in store for its newest Galaxy smartphones a service that it says will be accepted in more stores than either the Apple Pay or Android Pay.

The goal, according to company spokespersons, is to replace the standard wallet.

The improvements are almost ahead of the demand. Last year, some 16 million Americans used smartphones to pay for about $3.5 billion in store purchases, says eMarketer, a shopping research firm. The total includes Apple Pay purchases, PayPal and merchant-sponsored options from Starbucks, Dunkin’ Donuts and others.

Sounds big, but it’s just a small part of the $4.3 trillion Americans spent in stores last year. The researcher group expects that the digital wallet component will grow to $27.5 billion in 2016 as the option catches on with more shoppers.

The move to digital pay has been slowed by failure among the major tech providers to agree on technical standards, security measures and financial terms. And some large merchants have balked, saying they would prefer to develop their own systems.

Despite the roadblocks, Apple Pay made inroads when it was endorsed by major banks and retail firms. The system only works on the latest models of iPhones and Apple Watch. Users create a link to their iPhone with a credit card or bank account. When that has been accomplished, the user just has to hold the phone next to a device on the store counter to make a transaction. The phone and the counter device communicate wirelessly, with the purchaser authorizing payment by pressing the phone’s fingerprint sensor. No card to swipe. The user’s financial information is protected by encrypted codes.

Apple’s next update will facilitate credit purchases and allow purchasers to tap into loyalty points at major stores where they routinely shop. Agreements between the phone providers and popular shopping spots such as Walgreens will add options. Walgreens expects that in the near future, more customers will pay with smartphones or watches to tap into the stores’ Balance Rewards program. They will be able to use their loyalty points with Apple Pay. J.C. Penney stores also are banking on many iPhone shoppers opting into their store-label credit cards. The in-store credit card already is snagging more transactions than any other payment card. Customers earn points with each transaction.

Google, which has struggled to compete in the digital wallet arena, believes it will gain ground with the introduction of Android Pay, due to be released this year. Google will add store rewards, but does not plan to work with store credit cards, at least initially.

Not to be left behind in the race to digital wallet pay, Samsung Pay will also be released this fall. Its technology will work with traditional store credit card readers. Stores initiating the services from other tech companies have to invest in equipment to receive data.

The move obviously is on and pay-by-phone is here to stay.

Teaching Children To Give Back

June 28, 2015 By Twila Van Leer

Charity is not the exclusive domain of adults. Children, many of whom are over-indulged in today’s society, should be taught that they, too, have a responsibility to society.

There are opportunities for community service year-round, although most charitable service seems to be saved for the annual holiday season. Even toddlers can help gather food items for a community pantry. School children can be encouraged to clean the closet now and again and see that usable but outgrown items are taken to a charitable outlet where they can do double duty for others.

On birthdays or holidays, teach a lesson in charity by encouraging your children to evaluate their toys and games to see if some are expendable now that new ones are likely in the offing. If they see their parents doing the same periodically, they will be more likely to follow the example. Many communities have conveniently located bins where donations can be made.

If possible, however, don’t make charitable giving a “sanitized” activity. Children need to have concrete experiences that bring home the fact that they have it much better than many of their peers. Even those who don’t have an excess can find ways to help others. You have to be very poor not to be able to find ways to improve your community. Often, your presence is as important as anything material you can contribute.

Have youngsters join the adults in providing services to a local school, hospital or nursing facility. Participate together in a community activity such as helping to build homes for the needy or cleaning up and improving pubic parks and grounds. Just be certain the relevant officials are notified and supportive before you show up. Learning empathy for others less fortunate often becomes a lifelong habit.

Occasionally, the media spotlights a young person who has learned early to recognize the needs of others and take steps to help provide relief. Some of their efforts are so phenomenal they provide a pattern worthy of adult emulation. Fund-raisers often provide an opportunity in school or church groups for children to participate.

You may like to help your children and friends conduct a bake sale or other event to raise money. Be certain at the outset what the objective is and give the children a sense of pride in having contributed time, effort and products to such events. A “book roundup” to benefit the local library would be worthy cause.

Usually, charitable service gives youngsters a positive glow. If there is an opportunity for them to share their experience, such as discussing their efforts with family members or giving a report in their class at school, try to make such opportunities available. Like the measles, it’s catching.

Twila Van Leer

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