Archives for June 2010

Discover Card Review

June 28, 2010 By Sherry Tingley

credit-card-company-stocks — Four Major Credit Card Stock Prices

The last five days of growth for Discover Financial Services (DSF), located in Riverwood, Illinois has been well above their credit card competitors, Visa, American Express and Mastercard. Why has this happened? David Nelms, CEO of Discover since 2004 says, “Our very strong results this quarter were driven by a significant improvement in the credit performance of our loyal customer base along with continued solid growth in cardmember spending.”

During the fiscal second quarter, Discover reported a record sales volume at $23 billion. Discover topped their prior year statistics by 6%. Where are the profits coming from?

Discover has three payment services Pulse, an ATM/debit network, Affiliate Banking and Diners Club. Together these services process billions of financial transactions a year.

PULSE is one of the nation’s leading ATM/debit networks, currently serving more than 4,500 banks, credit unions and savings institutions across the country and they have just partnered with MoneyPass which offers thousands of surcharge-free ATMs. It is now the company’s biggest money maker.

Diners Club International was acquired by Discover in July of 2008. Diners Club card entitles consumers to exclusive savings on travel, dining, and entertainment.

Struggling with the new banking rules which prohibit charging late fees over $25, Discover will be loosing between $80 to $90 million a year. To help make up for that they will be focusing on their consumer banking division to make up for lost profits. They have two bank affiliates, Discover Bank and Bank of New Castle. In addition to the credit card division, they also offer personal and student loans, online savings accounts, certificates of deposit and money market accounts.

david-nelms-discover-card-ceo — David Nelms, CEO of Discover Financial Services

With David Nelms as the CEO, this company seems to be doing better and better. In fact, the earnings statement for Mr. Nelms is staggering. For 2009, his salary was $1 Million dollars, restricted stock awards $4,627,613.00, other compensations at $17,150.00 and pension valued at $39,750.00 for a grand total of $5,684,513.00 – over 5 1/2 million dollars a year. Looks like his MBA from Harvard Business school served him well.

The two most significant reasons he gives for the recent improvements have to do with how you and I have improved our credit reliability and continued to use Discover Card for purchases. Some employees from Discover have even suggested ways of making money through the significant rewards program they offer. If you are dedicated to watching your spending and able to actually pay off the monthly balance, you can earn money on what you spend. But that is only for the very self-disciplined spenders. This practice could leave you with nothing more than a huge credit card bill so be wary.

The Ripple Effect of The Gulf Oil Spill

June 25, 2010 By Sherry Tingley

The catastrophic nature of the Gulf spill has affected 14 million residents of the Gulf Coast and could ultimately affect nearby Latin American and Caribbean shores. Predictions have been made that the spill could reach the Mexican coast by December, followed by Cuba, the Bahamas and The Turks and Caicos Islands. The Gulf oil spill has far reaching effects beyond the U.S. borders.

Such a huge disaster has everyone wondering why it happened and how we can prevent it from ever happening again. There are numerous liability issues surrounding the spill. BP’s oil spill cleanup response costs have hit $2.35 billion. It has been speculated that BP could eventually be fined $258 million a day. This would be in addition to payments for cleanup costs and economic damages to businesses.

There is no doubt that the regulatory systems in place for overseeing offshore oil and drilling failed. That system is controlled by an agency called the Minerals Management Service (MMS). It has been reported that they allowed BP to run the oil rig without demonstrating the ability to shut off the flow of gas and oil.

With fingers pointing to the MMS and pressure mounting, the head of the MMS, Elizabeth Birnbaum, resigned from her position. Michael R. Bromwich, a former Justice Department prosecutor and inspector general, has been appointed by the President to restructure the agency to make it a more effective regulator. There is now an independent commission investigating the Gulf oil spill that has been given subpoena power so that better regulating systems can be developed.

Is the United States accepting help from other nations? There may be offers made that haven’t been accepted however there are skimming systems and other assets accepted from Mexico, Norway, Canada, Germany and the Netherlands. The President has also authorized the use of 17,000 National Guard members to help with the clean up.

Massive efforts by various non-government organizations have been taken to clean birds drenched in oil. Some question the wisdom in this. According to German biologist Silvia Gaus, it would have been better if they put the birds to sleep instead of cleaning them since most aren’t likely to survive long term. Experts from other countries also say that this is a better way to treat the animals since they will be suffering liver and kidney failure after ingesting oil.

The economic impact of the oil spill in the Gulf is devastating. The fisheries in the area have been declared as a disaster zone making the seafood-producing states lose money with many businesses failing. Louisiana’s seafood industry supplies up to 40% of the United States’ seafood supply and the price of seafood has risen. Apart from this, wildlife in the area have suffered. Tourism is affected as well since many hotels have reported cancellations in reservations.The toll on a wide variety of human health issues has not even begun to be studied.

Many scientists are hopeful something good will come from this oil catastrophe. Americans have gained a better appreciation for their environment. We have turned to scientists to help answer the questions of why this even happened and how to prevent it in the future. People recognize the importance of a healthy marine ecosystem to our economy, culture and way of life in the Gulf Coast.

Getting Out of Debt

June 19, 2010 By Sherry Tingley

Debt is the single largest self induced headache one can have. We do it to ourselves and we don’t realize the consequences we will pay. When we justify spending money that we don’t currently have, it is like taking a shovel and digging a deep debt hole for ourselves.

Credit card debt is like a cancer. At first you don’t even notice how far down the hole you are going. It starts of small and over time it creeps up on you and before you know it you are thousands of dollars in debt. There are a myriad of excuses that we use to tell ourselves that just this one time, it won’t hurt or I’ll have money next week, the week after that or next month or the next raise. Many of these projections into the future never come true.

The truth is, there are times that using our line of credit is necessary but the problem is, those times aren’t clearly understood by a lot of people. If you don’t understand the difference between needs and desires, you may throw caution to the wind and start digging your debt hole bigger. True emergencies can arise where using our line of credit is our only choice. If that is the case, then the need should truly be necessary for our physical survival and not our mental health survival.

It has often been said that all people are one illness away from bankruptcy. Medical emergencies constitute many of life’s unplanned expenditures. Make sure you have insurance to prevent this from destroying your financial stability.

Snow White – The First Disney Princess

June 15, 2010 By Sherry Tingley

Millions of people all over the world are enchanted with the first Disney Princess, Snow White. The full length feature film, Snow White, took over two years to produce and was first released to the public on Dec. 21, 1937. This artistically animated film was produced by Walt Disney and 600 of his talented staff.

Walt Disney, an extraordinary human being, an avid cartoonist and storyteller constantly worked for perfection in every way imaginable. He hired the best artists in the country, often recruiting talent from well known art schools and provided in house training for them. His working environment was more like a college campus, complete with guest artists as instructors.

One night, he gathered his team together and enchanted them by telling the story of Snow White, a three hour ordeal. He acted out each and every character. Although it was a long evening, he was beginning to prepare them psychologically for the two long years ahead of them. Just exactly how Snow White should look and what type of personality she would have, took months and months of discussions. Everything about the production took longer than expected. There were over 150 women interviewed to be the voice of Snow White. Walt would never see the person before her voice was heard so that he would not be influenced in any way with her appearance.

The creation of the seven dwarfs was also a time consuming project. Each dwarf needed to be a character with their own peculiarities and distinct personalities. Months were spent on names, what people each dwarf would be based on and what voices they would have.

The film was completed and shown for the first time to a private group. The audience’s reaction was highly favorable. Walt Disney’s four year-old daughter Diane, had to be escorted out of the movie because she started crying in reaction to some of the scenes. Others cheered, laughed and cried during parts of the movie. People who watched this first screening of Walt Disney’s film, knew that they had just witnessed something that would be historic. Animation had reach an artistic level that was previously unknown.

The love for Snow White’s feature film had journalists writing things like, “It was among the genuine artistic achievements of this country.” It was the story of young people overcoming hurdles in an adult world and becoming responsible and mature. It was the story of life and it’s challenges. It is no wonder that so many people loved Snow White, the first Disney Princess.

Snow White, the first full length animated film brought in $6.7 million dollars by May of 1939. It was the highest grossing American film to that point, had run in over 49 countries and had been translated into 10 different languages. It truly set the stage for the birth of many new Disney Princesses to be introduced to generations of fans.

Information source = “Walt Disney, The Triumph of The American Imagination,” by Neal Gabler.

Free Personal Finance Credit Counseling

June 8, 2010 By Sherry Tingley

When people get into financial trouble by living on their credit cards, failing to make credit card payments on time or hide credit card bills from their spouse or significant other, they need to seek help.

Generally this help is needed at a time where there isn’t any money left over for additional expenses. Some people seek debt settlement companies. They can negotiate and reduce amounts owed, but they also get into trouble by advising you to stop paying your bills.

Where can you turn to get help from a non-profit organization? The AAA Fair Credit Foundation, founded by Preston Cochrane of Salt Lake City, Utah provides personal financial credit counseling at no charge. They give people help with budgeting and showing them the options they have to improve their lives. They have helped thousands of people learn to live debt free when they practice what the credit counselors advise them to do.

One of their counselors, Tiffany Wagner, was interviewed and gave some good insight into the financial problems many people have and how they overcome them. Read the results of the interview below.

Why Do People Seek Credit Counselors?

Sixty to seventy percent of the people who come in have dug themselves into a hole they feel they can’t crawl out of. Most people come to see a credit counselor because they don’t budget carefully and they live beyond their means. They don’t know how to manage their money properly. Many people make a decent amount of money or they make enough to live within their means. Their problem is generally a lack of budgeting.

People get into trouble when they think they don’t have enough money and then they start to live off their credit cards. They haven’t taken a critical look at their budget to see where they could save money. They haven’t identified the expenditures they could live without.

Economic factors like losing a job brings people in. Construction workers seem to be especially hit hard with the lack of building and remodeling going on.

What Are Considered ‘Worst Financial Habits’?

Some people bring in their unopened bills hoping to get help in organization and finding out where they are financially. Some of these bills have been unopened for six months. The consequences of not paying attention to your bills are astounding. Ignoring bills might seem like the most comfortable option but it is never a good strategy for building wealth.

What Are Your Best Personal Finance Tips?

The best thing we do is to give people a budgeting plan to get themselves out of debt. Their success really depends on the person and how motivated they are to get out of debt. A lot of people are not willing to give up their life style and cut back on expenses. If they aren’t willing to give up something, whatever it may be for that individual client, then there is not a lot we can do to help them.

When you go to a doctor and get a cancer diagnosis are you going to do anything about it? Will you seek treatment? Will you change the way you live? What will you do? Financial problems aren’t typically a life or death situation, but there are some similarities. The solution requires you to act and make changes. Your success depends on what you are willing to do to get yourself out of the situation. A lot of people are not willing to give up anything. If you don’t act on getting your budget within your means, the hole you are digging will get deeper and deeper.

How Many People Take Credit Counseling Advice?

About one out of five people actually do something with the information they are given. They are the people that make credit counseling rewarding. They are the ones who say, I wish I had known about you six months ago.

Where Can I Find A Credit Counselor?

AAA Fair Credit Foundation offers services in forty-four out of 50 states. You can go to their website to find a counselor near you.

The benefits of seeking help can give you a feeling of personal relief and improved family life, by reducing the tension and stress of debt problems. Do something about your problems today.