Tag Archives: Atlantic City

A Few Scary Stories from the U.S.

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After a week in Kansas, I wanted to share a couple of U.S. stories from the world of finance and credit. They’re certainly insights that make you think or just shake your head:

You knew this day had to come: Atlantic City is the #2 gambling destination after Las Vegas in the US. Within ten hours of Atlantic City, there are more than 100 million people to draw from, and that’s a pretty huge market. While it’s possible to get cash advances from credit and debit cards in every casino on the planet, Atlantic City has gone one big step further. Gaming laws have now been amended to actually allow people to use their credit cards right at the blackjack and craps tables for a cash advance! Yes, you heard that correctly. Just sit down at the blackjack table and pull out your credit card. So far, only the Trump Taj Mahal has implemented it. But you know it’s only a matter of time before every casino in Atlantic City, and then Vegas, will roll this out, just to keep up.

JP Morgan Chase, one of the big six credit card issuers who control two-thirds of all credit cards, just announced doing away with a bunch of affinity cards. Those are cards for a specific retailer, where the merchant receives a kick-back. Gone are the Avon card and Starbucks. And if you’re a basketball fan, they also couldn’t get enough interest in the credit cards for the Detroit Pistons and Orlando Magic. Gee, you think the world can do without a few more credit cards??

On television, there’s more and more happy talk about the U.S. economy. While that may be true, in some areas, the foundation of people feeling more secure about their finances is always the value and equity in their homes. And that isn’t getting much better in many of the so-called “bubble states, where there are still over 3 million foreclosures expected this year alone.
But the no-service Bank of America is now seeing the light, and are prepared to do principal reductions of up to 30% on people under water. That is, they’re actually now prepared to help, after writing off billions of dollars in foreclosures. Principal reductions means they will actually cut the balance that people owe on a home that may be worth half of their mortgage. It’ll apply only to sub prime mortgages with insane interest rates, but it’s a start to actually help people and give them concrete hope. They finally figured out that they didn’t need to lose tens of billions of dollars kicking families out of their homes, and then take a massive bath on trying to sell literally millions of empty houses. This is going to be less than half as expensive for the bank in the long run. Too little too late for a ton of families but better late than never…

More Heads Up and Updates (Part II)

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According to the Washington Post, the on-line cost of hiring a hacker to break into someone’s e mail accounts is now down to $30. And hackers have an almost 100% success rate. But the majority of the buyers from these hackers are actually boyfriends, girlfriends, or spouses. The point is, that for your on-line banking, or anything on-line, you need a better password than most people have! Because the most common password is still 1234 and that’s nuts.

When is a deal actually a deal when we’re financing huge amounts of money? Here, and in the U.S., I keep seeing ads for houses and lots that are supposed to be incredible deals at 50% off. Off what? I’ve seen these ads in Ontario, and for resorts in BC. Lots that were originally listed at $500,000 are now half price. But that’s a phony figure, because the original price of the lots are just made up, and hoping that someone will pay it. What matters is what the house or the lot is appraised at TODAY, not what it’s listed for. Whether you’re selling your home, your car, or anything else, it’s the TODAY value, no what it was somewhere in the past! Careful with that, and don’t get trapped in the hype of an advertisement.

Kelly Blue Book just published their 2010 list of vehicles with their retained value and depreciation: Less than HALF of all new vehicles this year are projected to be worth 20% or more after five years. That is a staggering figure. The brands that will best hold their values:
Number one is Lexus, followed by Toyota (and that’s not accurate anymore with their current problems) and Honda. The only European brand in the top tier of vehicles that hold their resale value is BMW, which is fourth, and Subaru rounds up the top five.

Overall, the average vehicle will be worth 32% of new vehicle price in five years. So remember that the longer you keep the vehicle, the less it matters. But the shorter buying cycle, or anyone fleasing…I mean leasing the vehicle, the more you will feel some real financial pain of paying for the depreciation.

Have you heard of the Visa Black credit card? Well, they just sent me an invite. It’s a great looking, high quality, wedding-type invitation. But inside, it’s just another credit card application with great marketing. You are hereby invited to join an exclusive club limited to only one percent of the population. But at 13.25%, the rate isn’t very exclusive, and the annual fee is $495. But the card is made with actual carbon and guaranteed to get you noticed. Really? Is that why I need a credit card? It also talks about “fantastic rewards,” but doesn’t list any of them at all. I’m afraid I’d be getting a plain burger for the price of a steak.

Good old CBC is now getting into the product placement market. A lot of it will be with TD/Canada Trust. The bank will show up (OK, not show up – pay to be included is more like it) on Being Erica, Little Mosque on the Prairie and Hartland.