Here is the ad that was on my bank's site. Notice the rate has fallen to 1.76% from 2.01%.

Like most people, I don’t like to mess with my day-to-day banking or investment accounts so I took some time to mull over whether I should bother with the high yield account or just leave well enough alone. Though it took me a few days, I finally decided to go over to my local branch of Central Jersey Bank and talk to them about the high yield checking account option.

There’s no great “POW!” moment to end this portion of the entry, so be forewarned. I went over to the branch and the woman who assisted me was excellent and showed me how my usage qualified for the high yield checking account. We talked about the different checking account options and I opted to go with this account. So now my checking account is earning 1.76% (the rate went down a few days ago and will probably continue to go down each month – hey, I know it’s a promotion, but it’s a good one).

While I was talking to the woman at the bank, I thought I might open up a savings account, too. I haven’t had a savings account at a brick-and-mortar bank in a long time – probably dating back to when I was in my first or second year of college (which, terrifyingly enough, was over a decade ago). For a long time now I’ve had a savings account at ING Direct and I’ve been very happy with its performance. Of course, the initial interest rate that I was receiving over at ING Direct was something like 4.50% and that’s dropped down to 0.90%, but I understand that the drop was more a function of a poor financial market than factors inside ING Direct (or any other bank for that matter). Anyway, I wanted to open up a savings account and two issues stopped me dead in my tracks.

I wound up staying with ING Direct

A $3 fee for not keeping at least $1,000 in a 0.30% savings account? Yeah right! Give me a break.

Instead of dealing with that hot mess, I decided to just stick with my ING Direct account as my only savings account. I would liked to diversify and have a second savings account, but silly restrictions like the one noted above are not something that I have the time or the inclination to worry about. With respect to savings accounts, though, I’m thinking about looking into Ally Bank since they’re offering a similar rate to ING Direct (0.85%).

This process did get me thinking, though. In particular, I started thinking more about the checking account that I use for Usable Web Solutions, LLC. I keep most of the funds for my small website business in Sovereign Bank, but I really haven’t been thrilled with their service since they were acquired by Santander a few years ago. Certain things have become a hassle that shouldn’t be a hassle. For example, they rebranded and changed their debit cards and so they sent me a new one to use. Like any new debit card, I had to activate it over the phone. The problem was that the phone activation system forced me (automatically for some reason) to an operator for final activation. Then this woman on the activation line may have asked me 50 questions to get this stupid card (which I didn’t want, request, or need) activated.

I'm not sold on Santander's customer service

And then TD Bank came in and crapped all over Commerce Bank’s customer-friendly reputation, but that’s another story.

In any event, this entire process has me thinking about some of my other banking and investment accounts. I’ve scheduled a meeting with my company’s 401k agent to talk to her about my asset allocation in my 401k account. For some reason, I’ve got a gut feeling that now is the time to invest heavily in aggressive, struggling funds. Yeah, they’re probably going to go down again, but I think they’re going to come roaring back in the next 2 – 3 years. I guess we’ll see, but I want to meet with the agent to be sure that my feeling is reflected adequately in my asset allocation.

Ahhh... the good old days!

Since the only thing keeping me hanging on to this credit card is the Worldpoints feature, I’ve been researching other “cash back” credit cards and all of the reviews point me towards the Freedom Chase card. Sure, the interest rate is a bit high and variable (both unacceptable for someone who isn’t a credit risk at all), but I don’t carry a balance anyway so I wouldn’t be paying the interest. Plus, there are a variety of ways to double, triple, quadruple, and quintuple (that’s “multiply times five,” folks) the amount of points that you get for certain purchases with the Freedom Chase card.

So I’ve been thinking about possibly getting that card. And I’ve also been looking into the Barnes & Noble MasterCard because, you know, I’m a Barnes & Noble fan. They’re big draw is that for everyone 2,500 points you earn (i.e. every $2,500 you spend on the credit card), you get a free $25 Barnes & Noble gift card sent to you. You also get 5% off everything at their store. There are some months where I spend more than $2,500 on my credit card, so getting that monthly gift card would be nice. But then again, it would also be nice to build a whole bunch of points with Freedom Chase and get cash back instead of a gift card.

Nothing wrong with one of these big, massive banks sending me a check every once in a while, you know?

Anyway, what about the rest of you? Is anyone else out there reassessing where they put their money and which financial products they use during this cloudy economic climate?

To some degree I have to consider this progress. Yet, when I look at that number it is still staggering. Even if I liquidated some assets and made a large payment to NJHESAA I’d still owe multiple thousands of dollars. Due to the new public service forgiveness program, I don’t plan on overpaying my USDOE student loan payments to any great degree (I think I send in an additional $50 each month).

But it’s that private loan from NJHESAA that keeps me up at night sometimes. I have to get that thing paid down or paid off completely. Right now it sits at a little bit more than $43,000. That’s a big nut to crack in a short period of time, but I’m going to make it one of my financial priorities to completely pay that thing off sooner rather than later.

Some of you may know that I plan out my budget on a yearly basis and then adjust my weekly and monthly budgets on an almost daily basis to figure out where my funds can be best utilized throughout the year in order to meet my financial goals. In the coming year, I’m going to really zero in on that NJHESAA loan and find a way to make a major dent in it.

Anyway, I’m in the $98,000 range now and my student loan debt continues to slowly, but surely, get lower.

But my aggravation this morning comes from the Bank of America. You see, once upon a time I opened up a credit card account with a group whose name I can’t remember now. Then that group was purchased by a company called MBNA. Then MBNA was purchased by the Bank of America. And thus I have a credit card with the Bank of America. In general, I don’t have many complaints about the Bank of America, but I think in their attempt to do the right thing, they’ve managed to bring me some added aggravation.

Apparently, some Bank of America credit card numbers were compromised the other day and the bank did the right thing by immediately eliminating those account numbers and issuing new ones. However, they didn’t send the new credit cards out until yesterday. Why the delay? Yes, I understand that these cards needed to be printed and shipped (and, hopefully, checked for accuracy along the way). Yet, this delay in sending the new credit cards has left me here on Tuesday morning with a credit card that doesn’t work (the old one with the old number). This wouldn’t be a problem except for the fact that I intend to use my credit card this Friday night. And since my official mailing address is in North Jersey while I live in Central Jersey, I am now faced with the problem of getting this credit card into my little hands before Friday night when I have a packed schedule for the rest of the week.

So – like I said earlier – Bank of America did the right thing by having a new credit card issued, but dropped the ball by not sending the replacement card much earlier than yesterday. That’s okay, though. It’s good to know that at least one bank out there is trying to do the right thing by its customers.

Anyway, the Project on Student Loan Debt released a press release the other day regarding some alarming trends on private student loans. I’ve included it below for your information.

As Student Debt Rises, More Undergraduates Go Straight to Most Dangerous Loans

New Analyses Find Disturbing Trends and Inadequate Disclosure Rules

Berkeley, CA – In 2007-08, nearly two-thirds (64 percent) of undergraduate students who borrowed private student loans did not take out all they could in safer, more affordable federal loans, according to an analysis released today by the Project on Student Debt. In addition, the proportion of all undergraduates who took out private loans increased dramatically – from five percent in 2003-04 to 14 percent in 2007-08.

“Private student loans are one of the riskiest ways to pay for college,” said Lauren Asher, president of the Institute for College Access & Success, home of the Project on Student Debt. “Both the federal government and colleges should do more to prevent students from taking out unnecessary private loans.”

Like credit cards, private loans usually have variable interest rates that are higher for those least able afford them – as high as 18 percent in 2008. But unlike credit card debt, private loans are nearly impossible to discharge in bankruptcy. They also lack important consumer protections that come with federal student loans. Private loan borrowing has slowed since the credit crunch, but these risky loans remain available from major lenders.

Among the Project’s findings:

• While experts agree that private loans should be used only as a last resort, the share of private loan borrowers who could have borrowed more in federal Stafford loans increased dramatically, from 48 percent in 2003-04 to 64 percent in 2007-08.

• Private loan borrowing is not limited to students at high-priced schools. In fact, the majority of private loan borrowers (63 percent) attend colleges with tuition and fees of less than $10,000.

• Among all racial and ethnic groups, African Americans are now the most likely to borrow private student loans. The percentage of African-American undergraduates who took out private loans quadrupled between 2003-04 and 2007-08, from four percent to 17 percent.

New Disclosures Inadequate
“Without stronger consumer protections, students will continue to be vulnerable to aggressive private loan marketing tactics and inadequate information about their borrowing options,” said Asher. The Federal Reserve Board recently finalized regulations for new consumer disclosures for private student loans, as required by Congress last year. However, the Project’s analysis of the new rules reveals the Board did not go far enough to warn consumers about private loans and make them aware of other options.

“We are very disappointed by the Federal Reserve Board’s decisions. The disclosures will not have the effect that many in Congress had hoped,” said Asher. “These weak regulations underscore the need for mandatory school certification of private loans so schools can intervene when a student has better financing options, and for a consumer financial protection agency that would more effectively protect students and families from dangerous private student loans.”.”

If you’re in need of a student loan, I strongly urge you to go with government programs over private ones.

For me, though, I like this time of the year because I get to prepare my course that I teach at the local college. Since it is an “American National Government” course, I always have new information to put into my PowerPoints and new documents to make copies of for handouts. And, given the age group of the students that I’m teaching, I always get a lively discussion no matter what the topic. New topics for extended discussion this semester will include healthcare and paternalistic governments versus those governments that take a more hands-off approach.

I also enjoy getting a reading from the students on where they fall along the political spectrum. The reason why I enjoy this is because most of them consider themselves to be liberal, but once we start talking about an issue they advocate for traditionally conservative positions – a clear example that many of our young minds today are focused on doing what everyone else is doing…or what the loudest voice is doing. From the last couple of years teaching this course, I’ve discovered that most of the vocal students lean left, but that the best written papers are from those who lean right. Pretty odd occurrence, I think.

This semester I’ll also be teaching an online course for one of the oldest online colleges in the nation – Thomas Edison State College. TESC pioneered the idea of having older folks receive their Bachelor’s Degree via submitting a portfolio of their professional experience and receiving credit for it instead of actually having to go to class. Plus, they were the first online-only college (and they’re highly regarded, too).

The class that I’m teaching at TESC is an undergraduate course in nonprofit leadership. I’m looking forward to that one since it ties in directly with my own academic research as well as my day job. Should be a lot of fun coming up in the next few weeks!

In addition to lowering monthly student loan payments, IBR forgives any remaining debt — including interest — after 25 years of payments. Most borrowers will pay off their debt before then, but under current law, if there’s anything left after 25 years, the amount forgiven would be taxed as income to the borrower.

A bipartisan bill in the U.S. House of Representatives, H.R.2492, would prevent debt forgiven through IBR from being taxed as income. Loan forgiveness is supposed to wipe the slate clean for responsible borrowers, not create a new financial obligation.

Many of you have already taken action, helping to persuade over 20 Members of Congress to sign on in support of the bill. We need your help to bring more on board! If you haven’t already, please take a moment to urge your representative to support H.R. 2492.

If you are interested in taking action (and I really hope that you DO choose to take action), you can click over to the IBR website and use their pre-formatted web page to send a message to your Representative. Please do so and help fix a bogus loophole in this Bill!

Sure, it’s not the most exciting thing in the world to celebrate – especially considering I still have about $99,984 left to repay – but it’s still an achievement. Plus, I’m pretty proud at my ability to mix frugality into my daily life. There are some people who run up huge student loan bills (or credit card bills or any other type of consumer debt) and they push them off, refuse to deal with them, or make the minimum payments. I choose to do the opposite.

Repaying some $22,000 over the course of three years is pretty impressive for a guy right out of graduate school. It’s all about sticking to a budget, being able to say “no” to unnecessary expenses, and embracing a realistic lifestyle. So there’s the big news – my student loans are now less than $100,000 combined.

As a result of a change in our business practices, your Annual Percentage Rate(s) will use a variable rate formula based on the U.S. Prime Rate. If the Prime Rate changes, your APR(s) will vary accordingly.

In other words, my reward for being an excellent credit card borrower with an excellent repayment history and a credit score either at or a few points shy of 800 is to have my fixed rate changed to an adjustable rate. Once I received this notice, I immediately began searching for a new credit card. But while I did find some great choices for a new credit card, I’m going to hold on to this one for the time being. Here are my two justifications.

First, I have a large amount of “reward” points built up on this card. In the past year and a half, I’ve charged about $20,000 on this card and repaid it all within 30 days of using the charge card. That’s pretty damn impressive given some of the consumers in this economy. I don’t want to give up the 20,000 or so reward points that I have so far when I can cash them in for everything from cash to magazine subscriptions to small electronics.

Second, I always pay back my charges within 30 days of making them. Since I don’t really carry a charge as a balance beyond 30 days, I don’t pay finance charges.

Those two points aside, I will probably wind up switching my credit card company in the coming year. My thought process is that as an excellent borrower, I deserve more than this from Bank of America. If they want to treat their best borrowers with such disregard, then I reserve the right to find a new company that will treat me with the respect that my credit history and credit rating deserve.

Forgiving student loan debt would have an IMMEDIATE stimulating effect on the economy. Responsible people who did nothing other than pursue a higher education would have hundreds, if not thousands of extra dollars per month to spend, fueling the economy NOW. Those extra dollars being pumped into the economy would have a multiplying effect, unlike many of the provisions of the new stimulus package. As a result, tax revenues would go up, the credit markets will unfreeze and jobs will be created.

Let me be clear. This is NOT about a free ride. This is about a new approach to economic stimulus, nothing more. To those who would argue that this proposal would cause the banking system to collapse or make student loans unavailable to future borrowers, please allow me to respond.

You can go read Applebaum’s group page to see how he responds to the obvious criticism. What strikes me is that that aggregate student loan debt in America is roughly $600 billion. The government passed $700 billion in stimulus spending last October (which has been a failure) and another nearly $800 billion last month. Plus there is a spending bill currently before the Congress that would increase the number of dollars being spent on ridiculous earmark projects. By some estimates, in total we could be spending $2.3 trillion on stimulating the economy…with little of that actual money going directly to benefit the middle class.

Applebaum’s suggestion is an interesting one and given the personal nature of the suggestion, each person who supports or rejects it will have specific reasons why. Many of those who reject it will project their life experiences on the stories of those who support it (a common, aggravating problem in the student loan world). Likewise, many of those who support the proposal will have a level of debt that could likely be paid off after a few years of hard work and saving. But there were always be exceptions that drive the argument forward in some people’s minds. You can find some of those exceptions by reading the a petition currently on The Petition Site calling for Applebaum’s plan to be put into action.

I signed the petition and added a little bit of my story, which I think suggests why enacting a student loan forgiveness policy would be beneficial for me. Here is my little blurb, reprinted for your reading:

I graduated with $118,000 in student loan debt. Without taking out these loans, I would have never been able to receive the high quality education that I did. All I did was pursue the American Dream…and now I pay about $1,000 each month because of those student loans. I have a great job and I still can’t buy a home – heck, I can’t even buy a new car! I’m still making my payments and I’m still paying down my debt (down to $104,000 now). But if I could use that extra money each month to buy a home or a new car, I would do it in a heartbeat. However, on the path that I’m on now – neither purchase will be possible for at least the next ten years. Great…

I’m not sure if either purchase won’t be available for the next ten years, but repaying at the rate that I’m currently going (which is above and beyond the minimum monthly payments) will certainly put me on that timetable. Something needs to be done and though I have a few different ideas about how I plan on addressing this debt (can’t keep a good man down!), it would be so much more effective if the government stopped collecting it’s 4.75% interest rate off of the $50,000+ that I owe it in principle.

I don’t want a handout and I know that if things don’t change, then I’ll be able to payoff my student loans in due time. But during a time when Wall Street executives are getting million dollar bonuses for failing and when banks, insurance companies, and the automakers are getting money hand over fist from the government, you would hope that – at some point – someone in Washington steps back and says, “Whoa! What are we really doing here?!” If somebody would do that and champion this cause over the current bailout causes, I think it would truly stimulate the economy.

And, as always, the credit report is an interesting thing. I should note that I didn’t ask for my credit score because 1) they charge you for that and 2) when I moved into the new apartment in the summer they ran a credit score on me and it was 790 – I’ll take that number any day! However, there were two discrepancies in my credit report that needed immediate attention.

First, the New Jersey Higher Education Student Assistance Authority (NJHESAA) once reported that I paid 30 days late on one of my student loans (back in 2006). The problem, though, was that the loan was still in deferment and was not due for payment at the time. Back in 2007 when I pulled my credit reports, I noticed this problem and called NJHESAA and while they agreed that this was a mistake on their part, they also said that they couldn’t contact the credit bureaus to have it fixed. So I contacted Experian to get the mistake removed from my report and they took it off without any problems. My mistake in 2007, though, was that I didn’t ask TransUnion or Equifax to remove the discrepancy. So when I pulled up my reports the other day – guess what was sitting there staring at me on those two reports. That’s right – the NJHESAA mistake strikes again!

I sent messages to both TransUnion and Equifax and as of today, Equifax removed the problem and TransUnion is still investigating. I pulled up my Equifax credit report to confirm that they fixed the mistake and I can confirm that they, in fact, did fix the problem. They were very quick and very efficient at addressing this problem.

The second interesting thing that I found on my credit report was an open credit card account that was actually a sub-account off of one of my mother’s credit cards from many years ago. This account was only reported on two of the three credit reporting agencies. Since this account was closed and replaced with a different sub-account (not for me), I submitted disputes with the two agencies that still listed it as open. To date, both agencies are still looking into this one.

The reason for this post is to encourage you to go online and check your credit report at AnnualCreditReport.com. Even if you have excellent credit and a perfect credit history like I do, you may be surprised at what you find.