Folks often feel overwhelmed when it comes to credit card debt. Someone will amass 20,000 in credit card debt and suddenly they feel like they just can’t get ahead and that they are trapped in what seems a never ending pile of debt from which there is no escape.

Oddly enough, this same person may have a vehicle loan for the same amount but they don’t feel the same way about it. Why?

The reason is that the vehicle note has an end game. You know it will be paid off in 4 or 5 years and you watch the balance rapidly decline. So why doesn’t it work that way with a credit card?

The credit card company presents you with a lure with a nasty hook in it called the “minimum payment”. As you make payments on the card, this “minimum” will keep dropping and if you take the bait and make the minimum payment, you will have automatically extended the loan and the amount of interest you pay.

Credit card companies are now required by law to disclose the disastrous results of this and you will see it on the statement where it says “if you only make the minimum payment the balance will be paid off in 25 years” or something like that. It gets even worse if you charge anything else adding to the cycle of never ending payments.

It is very easy for a financial planner to get you out of credit card debt by simply setting up a schedule (like with the car payment) where you make the same payment over a fixed period of time to pay off the loan. Usually, the card is frozen or destroyed to make certain no additional purchases are made and sometimes a lower interest rate can be had just for the asking.

If you have a credit card balance that can’t be paid off each month, it is simply debt like any other and you should establish a plan to get it paid off. With a plan, you will find that you can get out of an even a seemingly impossible amount of debt fairly quickly.

Gas was already going up fast as a result of current policy. Now with the war sanctions coming full circle, prices of fuel are going to go up even faster.

It would be one thing if the only price affected was what you paid at the pump. However, every business that uses fuel will also have to raise prices to compensate for the higher costs. This will only feed an already high inflation.

If the govt isn’t careful, we are now in danger of two things happening, the first is hyper inflation which will be hard to get under control and the second is that awful word recession.

It is truly hard to believe that we have fallen so far economically in a year, but elections do indeed have consequences.

We now have ample evidence that all the lock downs, mandates, restrictions, etc.did absolutely nothing to stop the transmission of covid and imposing those haphazardly has been almost comical So why do they persist?

On the one hand politicians don’t want to give up all the power they claimed in the name of the pandemic. On the other hand, removing all the restrictions and simply declaring a covid victory could win political points in an election year (which is why many states have done exactly that) but run the risk that things could actually get worse if there were yet another new strain.

Thus, it certainly isn’t at all about any “science” (if it ever was). It is simply a political game and the people are merely pawns being played at the whim of those in charge.

The “pandemic” will end when it is politically expedient for it to end. That much has become quite clear.

Inflation is higher in America than it is in Mexico, and yet the Federal Reserve maintains a fed funds rate of 0%

With CPI data showing a 7.5% jump in prices in January, inflation is at its highest level since 1982. Food prices were up 20% year-over-year, while rent and energy prices were up 10%-20% and 40%-50%, respectively. Yet instead of tightening monetary conditions in the face of rising inflation, the Fed is still easing, having bought about $200 billion worth of bonds over the past month

The simple fact is that the Fed is way behind the curve and has somehow bought into the political rhetoric that inflation is temporary and failed to adjust last year. Now we are faced with possibly emergency measures that won’t bode well for the markets nor the economy in the near term.

I was recently on an American Airlines flight when the flight attendants announced an offer: Apply for an AAdvantage credit card and receive 60,000 air miles.

Almost nobody on the flight took them up on this offer (who needs another credit card right?). However, 60,000 miles is enough for a main cabin round trip ticket for two people pretty much anywhere in the US. That’s the equivalent of someone offering you about $1,000.

So most folks can’t spend a couple minutes (while flying no less) to apply and get a free $1,000? I found that rather interesting. Do they plan to never fly again?

I understand the arguments against in that it may hurt your credit, you don’t need the card, etc. However, the fact remains that this is simply free money for a temporary couple point reduction on a credit report. I couldn’t sign up fast enough and after I use the miles, I will simply cancel the card (it’s a high interest rate with an annual fee and there are better miles cards out there).

You can bet that if on that next flight they offer it again, I will have my wife sign up and we’ll do it all over again. Not all offers are scams or gimmicks and, as I said, sometimes you should take the deal.

When Covid first hit, there were ominous predictions about infection and mortality rates. Sadly, many of those predictions came to pass despite everything that was done.

Lockdowns accomplished absolutely nothing. We now know that they did nothing to slow the spread and according to a new study, did not save a single life. What it did was disrupt lives, set our kids back, create supply chain problems, and increase crime and the public debt.

Mask Mandates did nothing. We now know that such mandates did nothing to stop the spread or save lives. Where mandates went into effect, infection rates never went down. Some cities that imposed the most draconian mandates had the worst infection rates. Even the CDC now admits that cloth masks were essentially useless.

The much hyped vaccines didn’t work. It is readily admitted that vaccinated people can still get and spread the disease. Thus the vaccines were largely ineffective at stopping the spread of the disease.

What we have actually learned going into our third year of constant Covid attention is that natural immunity works best and that, just like with the common cold, there may not be an answer and it is something that people are just going to have to learn to live with.

All of the mandates and restrictions should be removed and the focus should be on fixing the problems we created in response to a virus that may not have needed a response at all.

I am still surprised at the number of people I encounter that don’t understand that there are different credit scoring models out there and that this may lead to surprises (both positive and negative) when the time comes to use it.

Almost all banks, credit card, and car finance companies, etc. use the standard FICO score for your credit. Thus, you should always know what your true FICO score is. Many banks and credit unions now provide this for free and you can check your credit report and score here for free:

https://www.annualcreditreport.com/

The other score (some refer to as the FAKO score) is the Vantagescore created by the three credit reporting agencies. This is the score used by sites such as CreditKarma, Credit Sesame, etc. The problem with the Vantagescore is that (as pointed out above) it isn’t widely used and therefore can mislead as to the true credit score.

Let’s use a real world example to show the differences in the scoring models:

I have a rewards card with a $1500 limit. If I max this card with a purchase just to get the rewards, my total credit utilization will be about 3%. My FICO score will remain largely unchanged by this event. However, my FAKO score will drop -30- points in a single day because I have 100% utilization on this one card. So now I have this huge disparity between the two scores as a result of a transaction that is insignificant to my overall financial situation. .

That isn’t to say the Vantagescore is useless. It does give a guideline as to your credit and it is commonly used by landlords, employers, and others to do a quick credit check.

Your credit is important. Thus, it is a good idea to know what is in your credit reports and your score under both models so there are no surprises when it comes to your credit.

1. The Consolidated Appropriations Act, 2021

At the end of 2020, the Consolidated Appropriations Act became law. With its passage, several included tax provisions will affect how Americans prepare their taxes for at least one more year.

The package includes many extensions of expiring deductions and credits, extensions, and expansions of certain tax relief provisions provided as part of the national response to the pandemic and various disaster tax relief provisions.

Among the many included items, the law provides:

• $600 advance payments of a tax credit per taxpayer ($1,200 for married filing jointly) plus $600 for each qualifying child. The credit, like the first stimulus checks, phases out starting at $75,000 of modified adjusted gross income ($112,500 for heads of household and $150,000 for married filing jointly)
• an extension of the ability for businesses to deduct 100% of certain meal expenses
• a clarification that personal protective equipment is a deductible expense for qualified teachers as part of the $250 qualified educator tax deduction
• an extension of the $300 deduction for cash charitable deductions if you claim the standard deduction. For 2021, the deduction is increased to $600 for joint filers.
• clarification that gross-income will not include an amount equal to any forgiven amount of a Paycheck Protection Program (PPP) loan and that expenses paid with forgiven PPP loans are fully deductible.

The American Rescue Plan passed in 2021 also included some notable changes

Roughly 85% of Americans will receive a $1,400 payment, including:

• Americans who earn less than $75,000 annually
• Americans who earn up to $112,500 as a heads of households
• Couples filing jointly who earn up to $150,000 ($2,800 total, or $1,400 per person)

Expanded the Child Tax Credit

The child tax credit was expanded by the American Rescue Plan Act of 2021. The previous credit of $2,000 per child ($1,400 of which was refundable) was expanded to $3,000 per child ($3,600 for children under 6). The expanded credit was deemed fully refundable for 2021; a tax credit is “refundable” if any excess of the tax credit over a taxpayer’s total tax liability is paid to the taxpayer as a refund.¹ In addition, half of the credit will be prepaid; advance monthly payments will be distributed over the six-month period from July 2021 through December 2021 with a maximum of $250-$300 per child. The other half will be credited after filing a 2021 tax return.

Income eligibility phaseouts for the expanded portion of the credit begin at over $75,000 for individuals ($150,000 married). Phaseouts for the original $2,000 credit per child remain at $200,000 for individuals ($400,000 married).

The expanded credit is for tax year 2021; the credit reverts to previous amounts in 2022.

We’ve been spoiled for some time with very low interest rates and almost non existent inflation. However, Inflation is once again here at historic levels and interest rates will continue to climb in order to try and combat it.

I hope everyone had the opportunity to re-finance all of your existing loans (1st mortgages should be no more than 2.5% for 30 years) and extend them for as long as possible. Nobody should have a 15 year mortgage at these rates because you can almost certainly get a better return with investments

Those who acquired rental properties before the housing cost boom really made out. The cost of borrowing was really low and you had the added benefit of a huge value increase. There is still time (as interest rates at 3% is still great) but finding properties may prove very difficult.

Also, rising interest rates have a way of turning a strong bull market rather bearish, so those wonderful returns in the markets may be behind us for awhile.

This was a problem of our own making as we flooded the economy with dollars in order to combat pandemic policies. Whether you agree with those policies or not, the bill now comes due.

As almost everyone knows, our government has been spending trillions of dollars. The effect of this on the national budget has largely gone unnoticed as interest rates have been historically low. It appears that is about to change

With the Fed now poised to start raising interest rates, the interest on the federal debt also goes up and starts to consume more and more of the budget (which then requires more debt to feed). As anyone who has experienced credit card debt should know, this is not a sustainable cycle.

With the national debt now at 30 trillion, every small increase in interest takes a big bite out of the national budget. We are now looking at the possibility that interest payments on the debt will soon exceed ALL of the personal income taxes collected In other words, this country is poised on the brink of bankruptcy.

As elected officials continue a path of reckless spending and giveaways, they will continue to ignore this lingering problem until it becomes a crisis. I would argue, the crises is already here and, as a nation, we need to take notice.