Reuters Money

Will retailers give debit cards a new life?

As an expert on the credit industry, John Ulzheimer spends his days thinking about credit cards, debit cards and credit scores. So imagine his surprise when he picked up lunch at a restaurant near his house in Atlanta, then later went on a beer run, and was directly confronted with the consumer fallout from the hot-button issue of the day in his profession: new fees for debit card purchases imposed by government regulations.

“The liquor store has an entirely new pricing structure – the cash/debit card price was 5 percent less. And, at the restaurant, for the first time ever, they asked me if I was paying by cash or debit card or credit card, even before I ordered my meal,” he said, and sent along picture at right from the liquor store.

Since the start of October, the credit industry has been focused in on debit cards, as the Durbin Amendment kicked in federal limits on how much card issuers could charge merchants per transaction, and which last week translated into some major banks imposing monthly fees on users for using their debit cards for purchases. Bankrate.com also released a new study that showed reward offers for debit card usage declined 30 percent in the past year.

It seemed as if the industry was conspiring to turn those cards from a popular payment method back into a piece of plastic you only use to get cash from the ATM. And some said good riddance. “There’s absolutely no reason that consumers need to use a debit card. And I was in that camp before this legislation,” said Odysseas Papadimitriou, CEO of credit card comparison site Cardhub.com, which just released its own study on how the new fee limits will affect consumers.

But the end of debit cards as we know them may be forestalled by retailers, as Ulzheimer noticed in his real-world forays. (Bankrate’s senior financial analyst Greg McBride noted also that smaller community banks and credit unions will also keep debit cards afloat, as they are not affected by the Durbin fee structure changes.)

Some merchants are already willing to pass to along to consumer their newfound savings in fees from the bank. Others will not, but may participate in merchant-funded reward programs, which seem to be taking prevalence in the dwindling space overall of reward programs for debit cards.

“It’s a noticeable shift,” said McBride. “We see that 29 percent of offers are now merchant-funded, versus 13 percent last year. It’s a shift you expect not just to hold, but also to continue.”

Online privacy leaks worsen; “Do not track” gains steam

Are you being tracked right now? If you thought you were just browsing aimlessly, doing a little shopping or checking sports scores without identifying yourself, you could be mistaken about your level of privacy.

A new study from a Stanford University researcher has found that a lot of  the little bits and pieces of supposedly anonymous data being deposited by your web browser are actually being gathered and reassembled by dozens of companies and sold. And stopping that from happening takes more than a little bit of effort, helped by a growing movement for “do not track” legislation.

More companies know more about you than previously thought and stopping them from secretly building profiles of you is a lot harder than just pressing a button, researcher Jonathan Mayer says.

He adds:

“Click the local Home Depot ad and your email address gets handed to a dozen companies monitoring you. Your web browsing, past, present, and future, is now associated with your identity… Keep tabs on your favorite teams with Bleacher Report and you pass your full name to a dozen again. This isn’t a 1984-esque scaremongering hypothetical. This is what’s happening today.”

Mayer, of Stanford’s Computer Security Laboratory, says more than half of the sites surveyed share your information with other sites. As an example, he notes that  even when you’re on a typical commercial news site there will be multiple companies collecting information as a matter of course: including the site itself, a video delivery service, advertising networks and social networks.

Previously, privacy advocates suggested that opting out of so-called behavioral advertising was a means of avoiding having your online usage patterns tracked. But Mayer says that stopping targeted advertising doesn’t stop the data collection.

Consumers Union regulatory counsel Ioana Rusu says companies can not only find out who you are and where you’ve been, but also alter offers that you see based on nothing other than the websites you’ve visited — something that can paint a grossly distorted picture of someone. She cited the example of a credit card company that presented different offers to users based on their online profile.

Want to put your kid on road to Millionaire Row by 21? Here’s how

While some youngsters long to become rock stars or Hollywood heavyweights, others now gravitate towards another stripe of pop-cultural celebrity: the whiz kid who becomes a millionaire before age 21.

That’s not hard to fathom now, given the likes of Facebook’s Mark Zuckerberg and other tech hotshots. But for Susan Beacham — founder of Money Savvy Generation — steady strokes and ingrained habits set kids on the course to riches. And Beacham should know: She practices what she preaches with her two teenage daughters, Allison, 19, and Amanda, 17.

“If you know how to behave like a millionaire by the time you’re 21, you may not have the cool million in hand, but you’ll be on your way,” says Beacham, whose Chicago-area company develops products that teach basic personal finance skills to school-age children. “You’ll have the seed money and have established the good behaviors.”

What follows are five key tips from Beacham, wealth management experts and at least one tyke tycoon who made his first million as a teen. Follow them and chances are excellent your child will have the tools he or she needs to make a million — along with a good chunk of starter funds to boot.

Delay gratification Kids learn early on to spend and enjoy the fruits of consumer society. But Beacham says wealth builders master their urges and live modestly. She cites a study of 1,000 kids published by the National Academy of Sciences that followed children from birth to age 32. The most impulsive “were roughly three times as likely by adulthood to report multiple health problems and addictions, earning less than $20,000 a year, becoming a single parent or committing a crime.”

“Self-control is the key to wealth,” Beacham says. “And the good news for those of us who have kids who weren’t born with the ability to delay gratification is that self-control can be learned.”

Work “Warren Buffet wasn’t a millionaire by age 21,” Beacham says, “but by the time he finished college, he’d accumulated more than $90,000 in savings, measured in 2009 dollars.” Buffett was a hard worker, and by this Beacham doesn’t mean to get a mind-numbing job, but rather to learn the ropes of wealth — especially as an apprentice or entrepreneur.

Spending less could make recession a “self-fulfilling prophecy”: Analysts

Mark and Kathy Swezy of Englewood, Colorado embody what many Americans would call a rock-solid work ethic. Mark is a full-time purchasing manager at JoaQuin Manufacturing, while Kathy splits her time between her own graphic design business and a job at Nosh Nest, a high-end cookware and food shop in downtown Denver, Colorado.

Yet to hear Kathy Swezy tell it, the last two months have meant belt tightening on top of more belt tightening. “Over the last 60 days it’s been a little bit better, because I’m starting to get more graphic design work — but I really had to cut my rates, too,” she says. “So I’ve been buying school clothes at thrift stores, I’m using outdated software,and basically we don’t go out to dinner much at all.”

The Swezys reflect in their behavior what analysts are seeing across a large swath of the American economy. According to Bankrate.com’s September Financial Security Index, 40 percent of Americans have reduced their spending in the past 60 days, a condition that Bankrate senior financial analyst Greg McBride believes could pave the way for another recession.

“That sort of cutback of spending, if sustained for any length of time, would make a recession a self-fulfilling prophecy,” McBride says. “August was in many ways a perfect storm: We had a barrage of poor economic data, a downgrade to the U.S. credit rating, the fiasco over the debt ceiling and a stock market correction. And Europe has been an ongoing issue as well.”

All of that has led to deteriorating financial security among American consumers, who only make things worse when they spend less. “Seventy percent of economic output comes from consumer spending, and any sort of cutback can ripple through the economy very quickly,” McBride says.

Just in case you think McBride’s fishing for headlines, his words are more or less echoed by Clifford L. Caplan, founder and president of Neponset Valley Financial Partners in Norwood, Massachusetts. “With the lukewarm domestic economy, high unemployment and continued problems in housing, few — including myself — see a silver lining to the current malaise,” he says. “Obviously if this reduction in consumer spending continues, the U.S. economy will slide back into recession.”

As for holding out on hope, “Consumers are now shopping in the present tense,” says Jean Chatzky, a New York-based financial expert and author of “Money 911.” “What this environment has taught consumers — for better or for worse, and from my perspective it’s for worse — is that there is no good way to plan for the long term. So when the Dow has a good day or week, they open their wallets. And when there’s more bad economic news from Greece or France or Italy, they close them tight.”

Passion or obsession? Collecting can add up to serious dollars

You could say that Jay Pomerantz is a fan of the New York Jets.

You might suspect that from the room in his Long Island house, decorated wall-to-wall and floor-to-ceiling with memorabilia from the NFL team – game-worn cleats, bloodied jerseys from the 1960s, old playbooks and even Super Bowl rings. Some of the items are so rare and valuable that the team itself displays some of Pomerantz’s collection in its front office.

He’s spent about $200,000 over 20 years as he’s amassed over 1,000 Jets-related items –

It’s a passion that he estimates takes up to 400 hours a year, and even involves things like picking up former players from the airport. And his wife? “She gave up about 18 years ago,” laughs the 44-year-old, who runs a successful baby accessories business. “If she could close her eyes and make a wish, she’d probably do away with the whole thing. But she’s come to accept it.”

It’s a peculiar human trait, the collecting bug. And it’s not just limited to the Archie comics or baseball cards of your childhood. Adults collect, too — and with adult salaries, such passions can add up to serious dollars.

“Some people get so wrapped up in collectibles, that they think about it all the time,” says Dr. Tom Manheim, a financial therapist in Del Mar, California and author of Money Trouble. “They’re always on the prowl for the next piece. Even if it puts them over budget, it’s about something greater than money.”

If you’re Jay Leno or Jerry Seinfeld collecting vintage cars, or Debbie Reynolds amassing 40 years of movie memorabilia, that’s one thing: money is no object. For the rest of us, living on more modest means, a pricey collection can be a budget killer.

Back-to-school spending tests your wallet and your patience

Remember when you could outfit a kid with roughly $20 in school supplies? Now there’s a lesson in ancient history, folks.

In present-day Chicago, the list of required items for two public school students can easily top $200. And the author of this article, a father of two, has a fresh receipt to prove it: The total at Office Depot last week to outfit a fourth-grade boy and a second-grade girl came to $196.13 before cashing in a $20 coupon.

All that spending on pencils, paper, wipes and markers, by the way, doesn’t include what many moms, dads and kids also consider fall necessities—items from new school clothes to smartphones for older kids. Parents are frustrated with school district supply lists that grow even as their income shrinks or stagnates. It’s no longer just a matter of pencils and notebooks, but tissues, hand sanitizer, wipes, paper towels, academic planners and much, much more. A student’s back-to-school arsenal can also include new footwear, clothing and computer equipment. And on the tech side, more kids demand smartphones (even if they’re not getting them) and e-readers.

What’s a parent to do, then? Experts say you can fight the back-to-school shopping blues in many ways, and offer powerful tips for doing so:

1. Comparison shopping apps. A smartphone app like RedLaser scans barcodes to find the lowest price on any item. “It uses product results from Google, eBay, Half.com and others and it’s free,” says Farnoosh Torabi, a personal finance expert and author of “Psych Yourself Rich.”

2. Rewards programs. We all dread junk email but getting on the mailing lists of retailers you frequent can yield sales alerts and money-saving coupons. Joining Office Depot’s Worklife Rewards allowed access to that $20 coupon mentioned earlier.

3. Online sales. About 30 percent of families plan to comparison shop online, says Arianna Georgi, vice president of marketing at Flank Digital LLC, the parent company of CheapSally.com. “Online coupon sites are only adding to this push, since many offer large discounts on items such as clothes, books, backpacks and electronics.”

Royal flush: 5 luxury bathroom items to boost your home value

While $250,000 could land a vacation home in some markets, these days, you could also spend that amount on the most amazing bathroom money can buy. Think of the re-sale value that could add to a home!

It’s long been standard real estate advice that updating kitchens and bathrooms increases the value of a home.  G. Stacy Sirmans, a real estate professor and department chair at Florida State University who co-authored a report on “The Value of Housing Characteristics” for the National Association of Realtors in 2003, says this is still true today, but that what now constitutes and “upgrade” on an upscale house is like describing bathrooms on steroids.

“You can find bathrooms now that have these big semicircular showers without a door, where you just walk in,” Sirmans says. “You’ll see separate tubs, fireplaces, TVs. You have all sorts of things in bathrooms these days.”

Here, we spotlight some of the most luxurious features of 21st Century uber-bathrooms. Judge for yourself whether they should make your home improvement A-list.

1. Fully automated toilet

Cost: The Kohler NUMI costs up to $4,800, the Toto Neorest 600 up to $3,800.

How it works: The NUMI’s touch-screen remote controls every variable you can imagine, and a few you didn’t. “It can spray you, dry you, heat you, light you — and play music for you,” says Blanche Garcia, owner of B. garcia designs in Montclair, New Jersey

In the world of high-priced purses, beware quality fakes

Lan Tran, a systems analyst in Boston, wanted a Louis Vuitton purse which retails for about $1,500, but thought the price was a little too steep for her. So when she saw one listed on eBay for $300 from a top seller with only good feedback, she struck.

“With all those years shopping on eBay, I had my mind rest that it was truly a real deal,” Tran says.

Then she looked at some of the detailed photos and realized something about the stitching didn’t quite look right. She asked Cassandra Connors, whose company Bella Bag, is built around the idea making sure clients are getting the real deal, whether she could authenticate that the bag was, indeed, a real Louis Vuitton. Connors concluded it was a fake.

“I was extremely disappointed,” Tran says.

When it comes to designer handbags, as the price rises, so does the quality of the fakes. When a new bag sells for $300 or $400, there’s not enough profit margin in investing in building a quality phony product. But when you get into the $5,000 to $15,000 range, sophisticated counterfeiters join the game.

“There are truly good counterfeits and there are bad counterfeits,” says Connors, whose Atlanta-based company sells previously-owned purses — some have never actually been used — that range from $200 to $15,000 (she just sold a limited edition Channel bag for $9,800). She also offers an authentication service; for a fee, they’ll tell you whether you got a great deal or a great fake.

Connors says she has seen counterfeit bags selling for $1,000 in an attempt to replicate one that sells new for $12,000.

Annual golf, spa getaways still thriving despite slow recovery

Every year, 54-year-old William Palumbo, of Bronxville, New York, takes a week-long golf trip with three of his closest buddies. For the last several years, he’s gone all the way to Scotland to play at the “Home of Golf,”  St. Andrews, one of the oldest and most prestigious courses in the world (not to mention, a “favorite” of legendary golfers from Bobby Jones to Jack Nicklaus to Tiger Woods).

It’s an expensive trip – Palumbo estimates it costs them each about $8,000 (plus food and drinks) using one of the area’s top tour operators – but he simply makes it happen. “It’s something we plan for six months or a year out so we make that commitment early on. The thinking is: just save your pennies and go!”

Newcomb Cole, of Boston, Massachusetts, echoes that sentiment. He, too, travels regularly to the UK with his buddies — no questions asked.

While many Americans are now forgoing lavish trips and vacationing closer to home (if at all), this is one luxury that avid golfers like Palumbo and Cole, 45,  refuse to give up.

And they’re not alone. An online survey of Golf Digest magazine’s readers shows that 65 percent of the more than 2,600 respondents take an annual buddy trip despite the down economy; 44 percent said they would still go even if their household income dropped by 25 percent; an astounding one in 10 said they would go even if their income fell by half.

The big draw? 59 percent say it’s about camaraderie, according to the survey. “Golf is the reason for the trip, but being together, and doing something everyone enjoys doing is important, too,” says the magazine’s senior editor, Peter Finch. “It’s a blast.”

As men hit the links (an estimated 80 percent of buddy trips are taken by men, says Finch), women hit the spas — only for slightly different reasons. “We all work really hard to juggle everything – the kids, our work – and we give ourselves permission to ‘pause’ because we deserve it,” says Lynne McNees, president of the International Spa Association. “We’re not willing to compromise on anything that alleviates stress and recharges our batteries.”

Traveling abroad or taking a cruise? Avoid huge roaming charges

If you’re about to take a trip overseas or going on a cruise and just can’t leave home without your trusty phone (smart or otherwise) or your laptop, there are a few things you should know to avoid bill shock went you get home.

Travelers face steep roaming charges when on ships or wending their way around the globe. When you add data usage to the mix, the costs can be staggering. Roaming charges can run well over $2 a minute and data charges can run $20 per megabyte. A relatively small attachment to an email can easily be 1 MB, so $20 can pile upon $20 very quickly.

Most wireless companies offer some kind of package that allows customers to buy a discounted block of time ahead of their journey. AT&T, for example, sells a $25 a month plan that gets you 50 MB of data in about 200 countries. It offers other plans for those who plan to use more.

This isn’t an exercise that can be done at the last minute. You need to make sure the data plan is in place before you leave. And usage needs to be monitored closely because overages can be costly.

A few horror stories:

A couple of years ago a man on a cruise ship docked in Miami was charged nearly $28,000 for streaming a football game on his laptop. It seems his computer latched onto the wrong signal. After an intervention by a newspaper, the charges were wiped out.

On a trip to Germany, Rick Palmer — iPhone in tow — went about his business and came home to a $2,400 wireless bill. Palmer, an engineer by training who manages the education department at Jive Software in Portland, Oregon,  thought he had prepared his cell phone plan to avoid just that sort of problem.